Such was the curious doctrine which captured the leaders of the organized wage earners in 1867.  The way had indeed been prepared for it in 1866, when the wage earners espoused producers’ cooperation as the only solution.  But, in the following year, 1867, they concluded that no system of combination or cooperation could secure to labor its natural rights as long as the credit system enabled non-producers to accumulate wealth faster than labor was able to add to the national wealth.  Cooperation would follow “as a natural consequence,” if producers could secure through legislation credit at a low rate of interest.  The government was to extend to the producer “free capital” in addition to free land which he received with the Homestead Act.

The producers’ cooperation, which offered the occasion for the espousal of greenbackism, was itself preceded by a movement for consumers’ cooperation.  Following the upward sweep of prices, workmen had begun toward the end of 1862 to make definite preparations for distributive cooperation.  They endeavored to cut off the profits of the middleman by establishing cooperative grocery stores, meat markets, and coal yards.  The first substantial effort of this kind to attract wide attention was the formation in December 1862, of the Union Cooperative Association of Philadelphia, which opened a store.  The prime mover and the financial secretary of this organization was Thomas Phillips, a shoemaker who came from England in 1852, fired with the principles of the Rochdale pioneers, that is, cash sales, dividends on purchases rather than on stock, and “one man, one vote.”  By 1866 the movement had extended until practically every important industrial town between Boston and San Francisco had some form of distributive cooperation.  This was the high tide of the movement.  Unfortunately, the condition of the country was unfavorable to these enterprises and they were destined to early collapse.  The year 1865 witnessed disastrous business failures.  The country was in an uncertain condition and at the end of the sixties the entire movement had died out.

From 1866 to 1869 experiments in productive cooperation were made by practically all leading trades including the bakers, coach makers, collar makers, coal miners, shipwrights, machinists and blacksmiths, foundry workers, nailers, ship carpenters, and calkers, glass blowers, hatters, boiler makers, plumbers, iron rollers, tailors, printers, needle women, and molders.  A large proportion of these attempts grew out of unsuccessful strikes.  The most important undertakings were among the workers in iron, undoubtedly due in large measure to the indefatigable efforts of William H. Sylvis, the founder of the Iron Molders’ International Union.