. Co-operative
societies of this kind are simply Joint-Stock Companies, the shares of
which are held by the men employed. Of course the shareholders must
choose directors from among themselves, and they must also have managers
to arrange the business. The managers and directors ought to be well
paid for what they do, and have a considerable share of the profits, in
order to make them interested in the success of the works, and therefore
active and careful. Incompetent or negligent management will soon ruin
the best business.

A great number of co-operative companies of this kind have been formed
in the last twenty years in England, France, America, and elsewhere; but
most of them have failed from want of good direction. The working-men
shareholders do not generally understand what a great deal of skill and
judgment is required in the conduct of a business; they are accustomed
to see work going on as if it went of its own accord, but they do not
see the constant anxiety and the careful calculation which is requisite
to make the work profitable. Hence they usually fail to secure good
managers, and they do not sufficiently trust those whom they appoint.
Moreover, many of the so-called co-operative companies are not really
co-operative; they frequently employ men who are neither shareholders
nor receivers of a share of profits, and they pay their managers by a
small fixed salary. #Such co-operative societies are badly-managed
joint-stock companies, and cannot be expected to succeed well.#

Another difficulty with such companies is, that they rarely have enough
capital, and, when bad trade comes, they are unable to bear the losses
which will sometimes occur for several years in succession. They can
borrow money by the mortgage of the buildings and machinery belonging to
the company, and this is usually done; but no banker will give credit to
such companies without the security of fixed property. Thus they
frequently fail when bad trade comes, and those who buy up their
property cheaply reap advantage. It is to be hoped that at a future time
all working-men will become capitalists on a small scale, and when
education and experience have been acquired, co-operative factories of
working-men may succeed. At present it would be better to leave the
management of business in the hands of capitalists, who are not only
experienced and clever men, but have the best reason to be careful and
active, because their fortunes depend upon s