87 
IV.—CONVERSION OF ORDINARY BUSINESSES 
INTO CO-OPERATIVE SOCIETIES. 
In the great majority of cases the Industrial Co-operative 
Societies are undertakings initiated, and from their commence 
ment owned and managed, mainly or entirely, hy working-men. 
But in a few cases undertakings originally established by 
employers in the ordinary way have, hy the admission of the 
workpeople employed to a very extensive share in the profit, 
capital, control, and responsibility, and by the adoption of co 
operative principles of organisation, been converted into Co-opera 
tive Societies. A short account of the three principal cases in 
which a change of industrial organisation of this nature has taken 
place will be of interest in connection with the subjects dealt 
with in the present Report, 
WM. THOMSON & SONS, LTD., HUDDERSFIELD. 
The earliest example is that of the business of woollen and 
worsted manufacturers carried on under the name of ¥m. 
Thomson & Sons, Limited, at Huddersfield. The owner of this 
concern, Mr. George Thomson, turned it in October, 1886, into a 
Society, which was registered under the Industrial and Provident 
Societies Act. 
The property was taken over from the firm by the new Society 
at a valuation of £19,713 including £10,628, value of raw 
materials and unfinished and finished stock, £4,226, book 
debts, and £4,859, value of machinery and fixtures. It was 
paid for partly in shares but mainly in loan stock, carrying 5 per 
cent, interest and repayable only if such interest should not be 
paid for two consecutive years. 
After providing for interest on loans and for depreciation (at 
the annual rate of 10 per cent, for fixtures and 2\ per cent, for 
buildings), the rules of the Society provide* that the dividend 
on the shares shall be limited to 5 per cent.; but if at any time 
the profits of the business do not allow of such dividend being 
paid in full, the deficit (but without interest) is a first charge on 
the subsequent profits. 
Out of the balance remaining after satisfying the claims of 
the shareholders the rules require that not less than 10 per cent, 
shall be carried to reserve, until this fund amounts to 10 per cent, 
of the capital. 
The Committee may, if they think fit, devote a portion of the 
profits to a fund to be called the Assurance. and Pension Fund 
against sickness, accident, and infirmity, in which case the 
following scale shall apply: — 
(1.) Whenever the net profits realised in any year are equal 
to 5 per cent, of the wages paid during that period, 
a sum equal to 1 per cent of such wages. 
* The Rules are stated in their present form. The provisions in regard to the 
Assurance and Pension Fund were inserted (with consequential amendments of 
the other provisions with respect to the division of profits) in 1892.