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By the turn of the century, thousands of Finns had settled in Fitchburg and more were arriving regularly on steamships. They lived in crowded apartments, spoke their own language and their skills were limited. Because a strong co-op union had been organized in Finland by 1899, many Fitchburg Finns, inspired by this movement, organized similar associations.
In a special three-part series, the Review examines the history of a cooperative; its failures and its successes. Excerpts from Savele Syrjala's "The Story of a Cooperative" provided background material.
The Finnish people have contributed greatly to the Fitchburg community. There is the United Farmer's Cooperative, and the Worker's Credit Union. And, after many, many years of existence, it is a sad fact that some major co-op organizations, such as the Co-op Store, Main Street, Fitchburg, had to close their doors. The Finnish immigrants, poor and searching for freedom traveled to Fitchburg with an idea that materialized and served the community for many years.
To understand the Co-op, operation, one must return in time to the immigrants - to Finland, some 5,000 miles from Fitchburg, where the founders of the United Co-op society migrated to America.
Lived under Swedish rule Finland was an independent nation until the twelfth century when they were conquered by the Crusaders of Sweden. For the next 600 years, Finland lived under Swedish rule until Russia, in 1809, defeated the Finnish army in battle, and took over the country. With the ascension of Nicholas II to the imperial throne in 1894, a marked change took place in the policies of Russia toward Finland. Nicholas was determined to be an absolute ruler and instituted a merciless campaign to Russianize the Finns.
Finland's political freedom and independence was shackled. The press was muzzled, wires were tapped, citizens were spied on, and the mail was censured. The Finnish army was disbanded in fear that they might rise to defend their country.
These oppressive steps to Russianize the Finns gave birth to a nationalistic and labor movement. The Finns joined together to fight the iron rule of Nicholas II. One of the most outstanding events occurred in October, 1905, known as the "Great Strikes", when for five days the nation's economic life was at a standstill as a protest against the policies of the Tsar.
California Gold Rush
During this time, news reached Finland of the California Gold Rush in America. Seeking freedom and a better economic position caused many young Finnish men to emigrate to America. As far as it is known, no Finnish immigrants arrived in Fitchburg until sometime after the Civil War. However, by the turn of the century, several thousand Finns had settled in Fitchburg and more were arriving regularly on steamships from Northern Europe.
The Finns arrived in Fitchburg, living in crowded apartments, speaking only their own language, and having no skills. Because a strong coop union had been organized in Finland by 1899, many Finnish immigrants; inspired by this movement, organized similar associations. The first such association, called the Labor Society Saima, was organized in 1894 by a group of local members of the Finnish Temperence Society. Although the members recognized the evil of alcoholism, they believed that temperence alone did not offer a complete solution to the ills of modern industrial society. They felt that labor must organize both politically and economically to improve present day society.
The Saima Society became an important influence in the political, social, and cultural thinking of the Finnish community in Fitchburg. It molded the opinion of many Finns to an acceptance of cooperation.
First Coop Store
The first Finnish Cooperative store, called Pellervo, was founded in 1905 on Rollstone Street. However, one year later it closed its doors due to insufficient capital and "apparent" lack of confidence in cooperation. A second attempt was made in 1906, when a Swedish grocery store at the corner of Main and West Main Streets was bought and converted into a cooperative. Several months later, the store moved to the corner of Elm and Harwood Place, now the site of the B. F. Brown school.
Known as Aitta, which means storehouse, the cooperative was managed by Alfred Hautamaki for three years, until it closed. Failure was attributed to insufficient capital, lack of experience, too liberal credit policy, and the public's lack of sufficient knowledge and confidence in consumer cooperation.
One year later, in 1910, a third cooperative was undertaken. At this time, West Fitchburg Finns were being served by a Finnish grocer in Fitchburg who charged high prices and offered a poor quality of merchandise. Originally, a group of Finnish residents was formed to improve the service by working to negotiate with other grocers. However, the committee was sidetracked from this original purpose and began, instead, to organize a cooperative.
On February 26, 1910, a group of Finns met in West Fitchburg and decided to establish a cooperative store called the Yrittaja Company. The name was later changed to the Into Grocery Co. At the committee's third meeting, it was reported that $1,225.00 has been raised in pledges, and it was decided that the store would not open until $2,000 has been raised.
Short of Money
Anticipating that the money would be raised soon, a committee was formed to investigate possible store locations and to seek a manager. The committee made strong appeals to the public, however, capital did not accumulate rapidly. Many who had witnessed two failures were doubtful as to whether a cooperative was practical. And, many felt their donations were needed elsewhere. The Labor Society Saima had just built a new hall, and the Finnish newspaper, Raivaaja, was currently struggling for existence. It is felt that these two projects cooled the interest of some who were otherwise favorable to a cooperative philosophy.
In spite of these difficulties, enthusiasm reigned and a five year lease was signed with the owners of Unity Hall at 161 Ashburnham Street in West Fitchburg, to rent the building at $15 per month, with the understanding that the Co-op would make the necessary repairs. Meanwhile, John J. Syrjala was hired as manager.
Realized Small Profit
Although only $1,350 had been raised, instead of the planned $2,000, the doors of the Co-op opened to the public just four months after the organizational meeting. After a few weeks in operation, with only two clerks and one manager, the co-op's financial report revealed an earning of $62.35. This created a great deal of discussion among committee members. Some members wanted to distribute these earnings as patronage refund, or as interest on shares. However, the majority voted to put these earnings into a surplus reserve. It was a wise decision, for these meager earnings were important to the struggling business.
In the second year, the Co-op began to show losses and the manager resigned. Fortunately, the second manager, Alexander Lahonen, was an experienced businessman and was able to bring the coop under control. However, he resigned soon after to return to Finland, and the new manager, Matti Mattila, took over in April, 1912.
In 1911, what might have been a small incident turned into a momentous development for the Co-op. A Finnish newsman for the Raivaaja, Emil Parras, spoke to the Labor society and stressed the importance of supporting the Co-op. His words had effect, for a committee was soon formed to talk to members of the Into, and finally, after one year of discussions, it was decided to open a branch store of the Co-op that would be closer to the Finnish population.
The union of these two groups was an important step forward in the history of the Into Grocery Company and to the future cooperative organizations in Fitchburg. Two separate groups might have materially hindered any cooperative development. However, united, they worked together and combined their ideas and energy.
Part III of the "Finns in Fitchburg" examines the establishment of the Worker's Credit Union and the dissolvement of the Main Street Co-op Store.
"A cooperative is more than a store or a business. It is part of a social movement worldwide in scope, building toward a better world in which our economic life will be organized on a use and service basis rather than on the profit motive of capitalism. The cooperative aim is that all shall be able to enjoy the plenty which our modern machine age can produce."
The above quote was written over thirty years ago by Savele Syrjala, the present editor-in-chief of the Finnish newspaper, Raivaaja, and his words explain the basis for a cooperative. A cooperative is a consumer owned business, controlled by the customers who purchase moderately priced shares. After each year's bills and taxes are paid, reserves set aside, and dividends paid, the balance is returned not only to share holders, but also to all patrons on the basis of their purchases.
The principles, including a refund to patrons, also includes unlimited membership, cash business, democracy control where each member has one vote, neutrality in political, religious, and other controversial subjects, and expansion into other fields of service
Theworld-wide cooperative movement dates its origins to 28 pioneers in Rochdale, England. In 1844, these pioneers began the first cooperative. The principles used to establish this co-op are called the "Rochdale principles", and have been adopted by many cooperatives through the years.
It was the Rochdale principles that the Finnish immigrants used to set up a cooperative store in Fitchburg. After two failures, a co-op was finally managing to succeed. And, in 1912, a branch store opened at 9 Rollstone Street in Fitchburg. The "branch store" experienced a rapid growth and, as a result, became officially recognized as the main Store.
Began Losing Money
Throughout 1913, the Co-op began to lose money and this created disatisfaction among members. Manager Mattila resigned and Ville Salmi was chosen as the replacement. Contributing $800 of his own money and $500 from a personal friend, Salmi was able to restore credit of the Co-op among wholesalers and supply houses.
In 1915, Kustaa E. Grandahl took over the managership and remained in that position for two decades. Then, in June of 1916, the Into reorganized under the Cooperative Laws of Massachusetts as the Into Cooperative Store, Inc.
Coop Idea Spread
Meanwhile, cooperative principles were being applied elsewhere in Fitchburg. A cooperative boarding house was begun, as was a milk distribution cooperative, known as the Maitorengas, which means milk circle. Both of these cooperative establishments existed until World War II.
By 1917, the main and branch store of the cooperative were servicing a large number of the population. In order to provide better service, two new branch stores were opened, one on Rollstone Street, and the other on Mechanic Street, which later moved to Elm Street. It was soon realized that the main store was outgrowing its capacity and would need larger quarters. It was decided to organize a separate corporation which would own and operate the new building proposed for the main store. This was the beginning of the Finnish Socialistic Building Co. in 1916.
A new site for the main store was found on Main Street in Fitchburg, facing the upper common. Building renovations began in 1917, however, the work was not completed until March, 1918, due to delays caused by World War I. When the cooperative opened in its new building, there were many occupants. Besides the main store and offices, the building also contained a men's clothing store, a bakery, the cooperative boarding house, the milk distributing cooperative and three tenants.
"Million Dollar" Coop
As cooperatives grew in Massachusetts and in other New England states, numerous conferences were held to begin the United Cooperative Society, which involved cooperatives in Fitchburg, Maynard, Gardner, Worcester, Quincy, Peabody, Norwood, New Ipswich, N.H., and Milford, N.H. In 1920, all of the local cooperatives joined together and operated as a part of this larger "million dollar" cooperative. However, in the summer of 1921, the organization was dissolved and each local cooperative returned to their own independent operations.
What would cause such a large organization to dissolve? One reason was that a number of poorly managed co-ops were losing money and this created friction. The successful co-ops felt it was unfair to their members to make up the deficit of weak cooperatives out of their earnings. Yet, there was possibly an even larger factor that caused the organization to dissolve. The Finnish community was in the midst of a bitter internal controversy.
Swung Toward Communism
News had reached the Finnish in America of the overthrow of the Tsar of Russia. Remembering the iron rule they themselves had to live under, the American Finns gave their sympathy to the Revolutionaries. However, some of the Finnish took a strong swing toward Communism, and tried to seize the Raivaaja, the Saima, and even to organize their own cooperative on Academy Street.
Within a year, the cooperative run by the communists closed its doors. The setback suffered by the Into from this competitor had finally ended.
The depression years from 1930-1933 caused a decline in business but at no time did the society operate in the "red". In fact, during this time, the Co-op managed to expanded into offering the public services in coal, fuel, oil and gasoline. They bought out the co-ops in Gardner and in Milford, N.H., to be used as branch stores. And, in 1934, the society opened a gasoline station and repair shop for its fleet of trucks.
Arvo Mandelin, chief of the auditing department of the Central Co-op Wholesale of Superior, Wisconsin, became the new Co-op manager in 1936 and remained in that position until 1947. Many changes were taking place to improve the Co-op structure. In 1941, the Into reorganized as the United Cooperative Society of Fitchburg. And, in 1942, the main store was remodeled to include selfservice. These changes were later undertaken in some of the branch stores.
The War Years
World War II brought food rationing, shortages of merchandise, and strict government regulations. Yet, the Co-op managed to maintain its business. However, due to the war, they did have to discontinue grocery and bakery deliveries to members living in the countryside of Fitchburg. The elimination of this service alone meant a loss in annual sales of about $100,000.
By 1947, the United Cooperative Society was reaching a prominent status in the community. Not only had they built a successful store, but also a Worker's Credit Union and a cooperative for area farmers. Everything was going well, or, so it seemed.
Conclusion of A Threepart series of the history of a co-operative.
"During the 37 years since its founding, a solid and firm foundation has been laid. It has not been built on borrowed capital. The members own it. It has a membership who understand cooperation and are loyal to their business. Few cooperatives or other businesses are as well prepared as the Fitchburg Co-op to face whatever adversities may come in the future."
Savele Syrjala spoke these words in 1947. And, at the time, it was true. The Co-op had survived two preceeding failures. It had survived the depression and the World Wars. But it could not survive through the year of 1977, when its doors were sadly closed.
Worker's Credit Union
Although the Co-op store dissolved, it gave birth to two other cooperatives that have grown rapidly through the years. In 1914, the Worker's Credit Union was founded by some of the pioneers involved in the early stages of the Co-op store. The Finnish immigrants needed financial help to buy homes, pay hospital bills, and to stay out of the hands of loan companies. The immigrants found it hard to obtain credit, and the Fitchburg bankers did not speak Finnish.
Therefore, they established a Worker's Credit Union, and by 1964, it was the second largest credit union in Massachusetts.
In 1929, many members of the Co-op store who owned farms in the area joined together to form the United Cooperative Farmers, Inc., to solve their marketing and purchasing problems cooperatively.
"It originally started with Finnish immigrant farmhands who were selling blueberries to a man in Boston, when they realized they were not getting enough from him", said Syrjala, "Then they formed the cooperative and expanded into other areas, like poultry raising."
"The farmer's co-op has good management and all the members are close and belong directly. This gives them more incentive to control the organization", added Syrjala.
Reason For Store Closing
The Worker's Credit Union and the Farmer's Cooperative has survived. The Co-op store, by 1970, had more than 10,000 members from all ethnic backgrounds. What happened to dissolve the Co-op store? One reason, according too Syrjala, was the competition caused by increased numbers of supermarkets. This created difficulties not only for the Co-op, but for other stores. Syrjala also feels that the management, the Board, and the members contributed to its downfall.
"The management was slipping. We had a five billion dollar business with no assistant manager", said Syrjala, "The managers were against it, perhaps to protect their own positions. But, as a result of not offering new positions, young men who might have been helpful to the Co-op, left."
According to Syrjala, the Board was negligent in their role. They no longer questioned any actions or events occurring to the Co-op. Gradually, the deficits became large, the debts were closing in and the mortgage was "huge". The Co-op had to close the store, the oil business, the Gardner operation, and the gas station.
"Until about ten years ago, we were returning a good refund to members", said Syrjala. "But, about five years ago, the writing was on the way. There wasn't the loyalty that was needed for a co-op, not the same as with the founders. And, membership was falling." Syrjala said that now "everybody" still misses the store, not only for the good buys, but it was also a meeting place for the now scattered Finnish population in the community.
The Finnish immigrants came to America with a dream for freedom and cooperation. Now, generations later, that dream has scattered in as many directions as the immigrants' descendants.
Published in Montachusett Review, April 4, 11 & 18, 1979.
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