Americanization, when we compel our foreign-born workers to live in hovels that a respectable pig would reject. In some sections of Europe the cooperative societies are actually providing houses for their members on the basis of a year's rent for a week's wages. They have absolutely eliminated graft and speculation in furnishing the people with good homes.

Cooperation also promotes social welfare by distributing the national income more equitably. Where the people have sufficient money to get the decencies and necessities of life, social relief is not only unnecessary, but social progress becomes possible.

Finally, cooperation trains the common people for intelligent civic leadership and service in a democratic state. I have been amazed time and again by the hidden capacity and ability of ordinary workingpeople, who have never had a chance to use their talents for their fellowmen because of an autocratic industrial system. By implanting in hundreds of thousands of people the ideal that the good of each is inseparable from the welfare of all, cooperation has proved itself a vital social force in constructing the way toward a better tomorrow.

Producers' cooperation: the way to industrial democracy.—Industrial unrest is world-wide. The workers are no longer satisfied to be mere cogs in the economic machine. They are demanding something to say about the constitution of industry-the conditions and continuity of their employment. They want a voice in directing the destiny of the industry in which they have invested all that they are and have their labor and their lives. They are no longer content with the mere husks of hours and wages. They are not satisfied with an economic system in which millions of little children and overburdened mothers are compelled to work in order to eke out an existence; a world in which millions more of able-bodied men are starving because they are unemployed; a world in which the captains of industry and politics are already talking glibly about producing materials for the next war while one-fourth of the human race is weltering in misery and poverty as a result of the last war.

Cooperative production simply means democracy applied to industry. It is the ownership and operation of an industry by the workers actually engaged in it, who distribute its earnings cooperatively among themselves in proportion to each man's contribution.

The socialist would endeavor to abolish autocratic and monopolistic industry from above, by authority of the state; the cooperator accomplishes it from below, by voluntary action, building up, bit by bit, the experience and efficiency necessary to run industry cooperatively better than it is now run competitively. For this reason cooperation satisfies both the violent revolutionary and the staid conservative; on the one hand, it destroys the root of private-profit capitalism by producing goods primarily for service instead of for profit; and on the other hand, cooperation proceeds slowly and orderly, taking control only so far and so fast as it can perform industrial services better and more efficiently than existing private-profit institutions.

The social justification for cooperative production and the growing trend toward industrial democracy is that the man who invests his life and his labor in an industry takes a greater social risk and should have a greater voice in it than the man who merely invests his money. When you stop to think about it, the man who only invests his money always keeps something back for a rainy day. The capitalist never risks poverty and starvation by placing his entire fortune in one industry. The worker, on the other hand, invests all that he has in an industry when he ties himself down to its routine. If the industry fails, he may find himself thrown out on the street in his old age, utterly unable to gain a livelihood in any other occupation. Gradually society has abolished autocratic control over political government, education, and religion. The last remaining citadel of autocracy is in industry. With cooperative production providing a safe and efficient road toward democracy in industry, there can be no social justification for the continuance of autocracy here.

The moral basis for cooperative production is the dictum of Paul to his fellow-Christians at Corinth-"He who does not work, neither let him eat." Or, in the words of Abraham Lincoln, "No man has any right to eat his bread in the sweat of another man's brow." The cooperator believes there is only one valid moral claim to the right to consume goods, and that is to have produced goods for the satisfaction of the wants of one's fellow-men.

The practical foundation for cooperative production is the hard-headed matter of industrial efficiency. Absentee ownership of industry is criminally wasteful and inefficient. You will recall that three years ago Secretary of Commerce Herbert Hoover, as president of the Associated Engineering Societies of America, appointed his famous commission on waste in industry. The report of this commission shows that the average American industry is only about 20 per cent efficient. That brilliant electrical and human engineer, Mr. Walter Polakov, asserts that this estimate is entirely too high-that if the latent productive capacity of the worker were further taken into consideration, modern industry is scarcely more than 7 per cent efficient.

We talk about securing a higher level of comfort for the people, but this can never be brought about until we produce more goods and those goods are distributed with economic justice. Producers' cooperation fulfils both of these ends. It is a practical success because the worker will not release his best creative energies merely for money wages. He will not throw his soul into his job until he has a responsible interest in it. The most criminal thing about the modern industrial system is the way it has dehumanized the worker, making a mere routine machine out of him, and destroying that God-given creative instinct which makes labor a joy instead of a drudge. We talk about the superb craftsmanship of the workers of the Middle Ages, which is lost to modern industry. It can only be replaced when the worker again owns and controls his own employment, as did those guildsmen of the Middle Ages. And this in turn can only be brought about by cooperative production.

The average person in America is unaware that cooperative production has already made tremendous headway in this country. Cooperative producers' societies among farmers now number over 10,000 according to the 1920 census, handling the products of more than 500,000 farms, valued in excess of a billion dollars annually. In manufacturing industry and in coal mining there are also a number of successful producers' cooperatives in this country. A group of cigar workers were locked out in Tampa in order to beat down their wages, and they replied by establishing their own cigar factory, with remarkable success. Milkwagon drivers and dairy employees in Cleveland and Minneapolis faced a similar situation with the same remedy, and today we have cooperative dairies in these two cities doing a business of from a half million to four million dollars per year, respectively. In Chicago and St. Louis cooperative glove factories have also secured union wages and working conditions for a considerable group of workers.

Perhaps the outstanding industrial achievement of cooperative production during the past year is in coal mining, where several groups of workers have taken over mines which could not be operated profitably by private owners because of high overhead costs and the inefficiency of absentee ownership, and have thereby secured for themselves good employment at union wages.

In Europe cooperative production has often gone hand in hand with consumers' cooperation, the producers actually running the factories, but taking the consumers' societies into partnership on the distributing end. In England and Wales there are ninety-one successful producers' cooperatives, with over 25,000 workers and an annual business of $26,000,000,000. These societies, after paying a good wage to all workers, contribute hundreds of thousands of dollars to education, charities, and social improvement, besides dividing any surplus among themselves. In France there are over two hundred workers' cooperative societies, centering largely in the printing industry, where they surpass privately owned shops in successful operation.

In Italy cooperation has enabled the producers to own farms and ships and factories, to construct and operate a successful railroad, to build a great canal connecting Milan with the river Po and the Adriatic Sea, and actually to take over the control of a large part of the metal-work industry throughout the nation. Perhaps the greatest success of all has been achieved in Russia, long prior to the revolution. For a generation the peasant cooperators have produced their handicraft for the outside world, and this movement has been rapidly extended through city industries since the revolution.

Producers' cooperation will not gain control of our industrial system overnight. There are first such difficult problems to be solved as the acquisition of sufficient capital through labor cooperative banks, the industrial education of the workers, and the development of technical experts in sympathy with the cooperative ideal.

Yet the producer is going to be the cornerstone of any industrial democracy worth while. He will not be content merely with hours and wages. He is going

to demand a larger and larger voice in even private industrial enterprises. The railway workers want the Plumb Plan, which will make them partners with the public in the transportation industry. The progressive mine workers ask for public ownership with cooperative production, along the lines of the "American plan" urged by John Brophy. And so for the other industries. There will not and should not be industrial peace, let alone industrial efficiency, until the men who do the hard, heavy work of the world secure democratic control over their lives and livelihood through some form of cooperative production.

Cooperative banking the key to economic progress.—A highly educated business man recently asked me, "Do you think cooperative banking will succeed? Isn't it dangerous to experiment with anything so untried in the financial field?" This man had never heard that cooperative banking had been successfully practiced ever since the Middle Ages and that there are now over 65,000 thriving people's banks in operation throughout the world. He expressed great amazement and interest over these facts, and frankly admitted that his university training had contained not one hint of the existence of the cooperative movement.

It is not a significant comment on the superficiality of popular education, both in the schools and by the press, that they teach and report next to nothing about cooperative banking, which may well bring about greater freedom and happiness for mankind, through economic liberation, than the Declaration of Independence conferred politically? Perhaps this seems an overstatement. Consider for a moment the importance of credit in the industrial civilization amid which we live. Credit is the monarch of our whole economic organization. It determines what men shall work and what men shall starve; what industries shall prosper and what industries shall fail; what nations shall be free and what nations shall be enslaved. In some cities, I am told, money power even determines what social agencies shall exist and what agencies shall be suppressed. For credit is power, and no other power in our age possesses such a control over the lives and happiness of men. As Major Douglas, the British economist, has truly said: "The hand that writes the bank draft rules the world."

The important question is whether this tremendous power of credit and banking is to be used for the benefit of a small class or for the welfare of the people as a whole; whether it is to be under monopoly control or democratic control; whether it is to be employed to exploit the people or to enable them to produce a greater prosperity and abundance of life for themselves.

When the first cooperative labor bank in America, the Brotherhood of Locomotive Engineers' Cooperative National Bank of Cleveland, opened its doors four and one-half years ago, many of the learned editors of the country, including such oracles of wisdom as the New York Times and the Wall Street Journal, warned against the dangers of such an "untried experiment" and "financial fad." They did not seem to know that cooperative banking and community banking antedate the National Bank Act by several thousand years;

that long before Columbus discovered America, community and public banks were the only banks in existence, since the issue and control of currency were regarded as an inalienable right of sovereignty. Thus, the free cities of the Middle Ages operated their own banks for the welfare of all their citizens. The great Bank of Naples, dating back to the thirteenth century, is essentially a cooperative institution. It is one of the three banks of modern Italy empowered to issue its own currency. Its profits do not go to private individuals, but must be used for the benefit of the people of the province of Naples. Its officers are public servants, responsible to the people for the faithful discharge of their trust.

These free banking institutions, publicly owned and operated for the prosperity of all the people, prevented exploitation and usury and financial imperialism in Europe for many centuries. Europe's financial troubles and great public indebtedness began when unscrupulous monarchs wanted to raise more money for foreign wars, and surrendered over into the hands of the Rothschilds, the Fuggers, the Lombards, and other wealthy individuals the sovereign power of the state to issue and control currency. Thus, the Bank of England is not a public institution, but was organized in 1691 by private parties under a special charter from the King of England in return for a loan of one million pounds to prosecute a war against France.

Similarly, in the United States the first banks were community banks, managed by trustees who served without compensation, as school trustees now do. Several hundred of these mutual savings banks are still in existence. They have no stockholders, their profits are shared cooperatively with the depositors, and they use their resources for the development of the community. In consequence, the failure of one of these mutual banks is practically unknown. They show a record of far greater safety and soundness than do the private-profit banks of America.

About eighty years ago the movement for small cooperative credit institutions to benefit workers and farmers was started in Central Europe. Today there are over 65,000 of these little people's banks, with resources actually reaching into billions of dollars, and run so soundly that their losses are less than one dollar in a million. A few years ago the United States government sent a commission to investigate rural credits in Europe, and the commission reported that these cooperative credit unions had actually solved the farmers' financial problems. These little people's banks naturally unite in district cooperative banks, and the district banks form a national central cooperative bank with tremendous resources. Among these great national cooperative banks are the powerful Narodnie Bank of Moscow, with branches throughout Russia long before the revolution; the Dansk Andelsbank of Copenhagen; the Central Agricultural Loan Bank of Germany, with a credit balance of several hundred million dollars; the 1,450 Kampelicky cooperative banks of Czechoslovakia, with a reserve fund alone in excess of 100,000,000 kronen; to say nothing of the great Cooperative Wholesale Society Bank of England, with its business of $2,500,