As a scheme of industrial regeneration, cooperation never materialized.  The few successful shops sooner or later fell into the hands of an “inner group,” who “froze out” the others and set up capitalistic partnerships.  The great majority went on the rocks even before getting started.  The causes of failure were many:  Hasty action, inexperience, lax shop discipline, internal dissensions, high rates of interest upon the mortgage of the plant, and finally discriminations instigated by competitors.  Railways were heavy offenders, by delaying side tracks and, on some pretext or other, refusing to furnish cars or refusing to haul them.

The Union Mining Company of Cannelburg, Indiana, owned and operated by the Order as its sole experiment of the centralized kind of cooperation, met this fate.  After expending $20,000 in equipping the mine, purchasing land, laying tracks, cutting and sawing timber on the land and mining $1000 worth of coal, they were compelled to lie idle for nine months before the railway company saw fit to connect their switch with the main track.  When they were ready to ship their product, it was learned that their coal could be utilized for the manufacture of gas only, and that contracts for supply of such coal were let in July, that is nine months from the time of connecting the switch with the main track.  In addition, the company was informed that it must supply itself with a switch engine to do the switching of the cars from its mine to the main track, at an additional cost of $4000.  When this was accomplished they had to enter the market in competition with a bitter opponent who had been fighting them since the opening of the mine.  Having exhausted their funds and not seeing their way clear to securing additional funds for the purchase of a locomotive and to tide over the nine months ere any contracts for coal could be entered into, they sold out to their competitor.

But a cause more fundamental perhaps than all other causes of the failure of cooperation in the United States is to be found in the difficulties of successful entrepreneurship.  In the labor movement in the United States there has been a failure, generally speaking, to appreciate the significance of management and the importance which must be imputed to it.  Glib talk often commands an undeserved confidence and misleads the wage earner.  Thus by 1888, three or four years after it had begun, the cooperative movement had passed the full cycle of life and succumbed.  The failure, as said, was hastened by external causes and discrimination.  But the experiments had been foredoomed anyway,—­through the incompatibility of producers’ cooperation with trade unionism.  The cooperators, in their eagerness to get a market, frequently undersold the private employer expecting to recoup their present losses in future profits.  In consequence, the privately employed wage earners had to bear reductions in their wages.  A labor movement which endeavors to practice producers’ cooperation and trade unionism at the same time is actually driving in opposite directions.