Reading #25 Co-op History/Discussion Club Oct 2, 2011
Governance of a Cooperative 50 Years of the Amalgamated Experience
by Dr. Sol Shaviro President Emeritus, AHC
(Written in 1977)
To newcomers, the Amalgamated cooperative community is a place to live. To
the pioneers, it was a way of life. To historians, it is a unique
experiment. From another point of view, it has been a mini-State, a
neighborhood principality, and a little body politic. A fiftieth birthday
is not a bad time to examine the growth and development of this little
body politic and the way it has been governed.
The Amalgamated experience was a unique combination of cooperative
democracy and strong leadership, a somewhat inconsistent combination.
While the tenants, as owners of the cooperative, had ultimate control of
its affairs, there was one man, Abraham E. Kazan, who wielded enormous
influence and gave direction to the cooperative. As both the full-time,
paid manager and the President of the cooperative as well, Kazan had a
clear perception of the needs of the fledgling community and insisted on
his way. It was said that the nearby Sholem Aleichem cooperative community
of 250 families was more democratic, but the Sholem Aleichem failed to
survive the test of the great depression, as did other and larger
cooperatives. Amalgamated did, and Kazan was largely responsible for its
survival.
The reasons for dominance of Kazan were many. He was brilliant, daring,
decisive, and of unquestioned integrity. The members of the Board of
Directors, in the early day, were all prominent citizens, not residents of
the cooperative. Men like Sidney Hillman, Robert Szold, Adolph Held, Jacob
Potofsky and Charney Vladeck served as directors because they had faith in
the cooperative idea. Burdened with many other responsibilities, and
lacking a detailed knowledge of routine organizational affairs, they
granted Kazan great independence in administering the project. Yet despite
grumbling about entrusting too much power to one man, even the most severe
critics of management could not doubt his effectiveness. Nor could it be
said that his dominance excluded member participation in decision-making.
One assurance of democratic activity was the early creation of an elected
"House Committee", an 'invention' of Kazan's to increase cooperator
involvement in the daily operation of the development through regular
meetings with management. At first this informal body did not challenge
the legal powers of the Board of Directors. In dealing with local, daily
issues affecting the general welfare of all members of the community, the
House Committee slowly grew in importance till later in the life of the
cooperative it became the de facto governing body. While the board dealt
with the major business problems of Amalgamated, the House Committee in
the early 1930's was instructive. Many of the meetings were concerned with
a review of the pleas by an unending stream of unemployed cooperators who
could not meet the carrying charges during the height of the Great
Depression In every case in which the member seemed to be making a bona
fide attempt to find a job and displayed a desire to meet his obligations,
the Committee permitted him to remain in the community, despite rent
arrears as long as a year.
The cooperative did survive financially, and an important by- product was
a spirit of community interest and mutual aid.
In addition to the activities of the House Committee and the Education
Committee (which dealt with affairs like the Library, the Day Camp,
publication and a wide variety of cultural and recreational programs,) the
cooperative was bustling with democracy. Every issue was hotly discussed
by the members. Stockholder meetings were well attended and members did
not hesitate to take the floor or pages in the "local journal, in critical
debate. Yet cooperators enthusiastically elected the prominent outsiders
to the Board, as well is a majority of pro-management' committees.
In those days, stockholders' meetings had an informal flavor. Prior
nomination to positions on governing bodies was considered to be
inconsistent with "Town Meeting" personal Democracy and smacked of
politics. All directors and committeemen were nominated from the floor.
The reason that floor nominations worked well was the fact that the
cooperative was small and people knew one another. The group was fairly
homogeneous in political involvements, occupations and national origin. Of
course, political homogeneity did not mean one-party dominance. But the
overwhelming majority of cooperators shared positions well left of center.
Socialists, Communists and Anarchists, trade unionists all, warred against
each other on political issues, but shared a consensus that the
cooperative program was at least an acceptable route to their cherished
Utopian state, if not a permanent alternative.
One reason Kazan's ability to keep factionalism from hurting the co-op was
his insistence on keeping politics out of housing affairs. He won the
applause, if not affection, from those who would have torn the cooperative
apart if political parties had chosen sides on house management issues.
The bete noire was the "Communist Coop" on Allerton Avenue where political
involvement prevented the members from paying full attention to sound
management and economic survival, and which soon led to bankruptcy. Like
the trade union movement that also eschewed political action in favor of
bread and butter" unionism, Kazan worried about in-come and expenses and
pulled Amalgamated through the Depression.
Time passed, and many changes took place. For years the Board of Directors
continued to meet on rare occasions, and more and more management problems
were handled by the House Committee. Almost invariably the Board accepted
the policies of Kazan who they trusted implicitly, and acted upon the
advice of the House Committee which presumably represented the voice of
the people. Seldom did the directors assert themselves. For example, on
one occasion the Board was called to a special meeting on one hour's
notice, just before a stockholders' meeting. Later, absent members signed
waivers of notice, so as not to invalidate the actions of the meeting. In
fact, the action taken on such short notice was a perfunctory formality.
Nevertheless, easy Board acquiescence could be dangerous in other
settings.
During these years, the role of House Committee slowly increased. Kazin
did not always welcome this growing power, and conflicts grew common at
Committee meetings. On occasion, Kazan would refer thorny issues, probably
to be severely questioned by the House Commit-tee, directly to the Board
for decision in the belief that sup-port in the higher body was more
likely.
THE OLD ORDER PASSETH
Meanwhile, other changes were taking place. With the admission of Park
Reservoir and Mutual Cooperatives into the Management, as well as the
integration of families living outside the three developments, into
various community activities, Amalgamated became less insular. The effort
to stay clear of politics became more difficult as government regulation,
especially by the New York State Division of Housing and Community
renewal, slowly increased, and the cooperative found it necessary to deal
with legislative bodies and public officials on complex matters. Some
members questioned the dogma of political neutrality according to the
Rochdale principles, noting, for example, that a cooperative (political)
party existed in England, home of the Rochdale pioneers. Today, members
are called on regularly to join in political actions for legislation
affecting members. A prime example is the senior citizens rent subsidy
bill. Moreover, some officers of the cooperative engage directly in overt
political action as individuals, pointing out that as lay officers, their
activities do not reflect upon or involve the organization.
At another level, the role of the Board has also changed. The size of the
Board has been increased to permit involvement by more cooperators. The
non-resident directors have dropped out, with the exception of the
representative of the Commissioner of Housing, who acts more like an
observer than a participant. Unlike the early days, the Board meets on a
regular monthly basis and often at extra sessions. Subcommittees of the
Board meet between meetings on the full Board, so that directors are busy
with the affairs of the cooperative many evenings every month.
In the early days, the members of the Board, particularly the outside
members, often asked for the recommendation of the House Committee before
acting themselves. Later, with all the directors sitting as full members
of the House Committee, it was no longer necessary to ask such questions.
However, House Committee members, not serving on the Board, were not
happy. The tradition had been an inactive Board, but now the House
Committee members faced a superior legal body, making independent
decisions on all matters facing the organization. They believed they had
been neglected on some occasions, particularly when the Board took action
contrary to their recommendations.
Members of the House Committee argued that the directors were not familiar
with the details of certain internal issues. For example, the directors,
burdened with financial and legal problems, often missed meetings of the
Apartment Allocations Committee, a subcommittee of the house Committee.
Failing to convince the directors that they had a legitimate grievance,
most of the members of the House Committee resigned. It was impossible to
get nominations for the House Committee at the following Stockholder's
Meeting. Cooperators accepted the "fact" of House Committee impotence if
not the specific details of the argument, and the old House Committee
became extinct.
More recently, however, a new committee has been formed to fill the vacuum
left by the demise of the House Committee. It is known as the "Liaison
Committee," and its purpose is to provide a continuing channel of
communication between the Board and the cooperators. The new committee
consists of two representatives from each building, a concept that flies
in the face of previous practice that all committee members should be
elected at-large, since the local interests of each building were deemed
to be identical with the interests of the entire community. But meaningful
communication required representatives living close to their own
constituents; hence the plan for building representation. Moreover, the
age gaps and diversity of buildings, from the modern "Towers" to the old
walk-ups, negates the argument of identical interests.
AN EVOLVING PROCESS...
Another change during the post-war period was the growth of the
cooperative and the increased heterogeneity of its members. With widely
dispersed buildings, separated by major differences in rent, and apartment
amenities, differences in age, income, occupation and political
orientation, the earlier homogeneity was gone and new forms of governance
became necessary. For example, with many recent cooperators as yet
strangers to one another, floor nominations at Stockholder's Meetings are
no longer feasible.
Another problem was the difficulty of getting legal quorums at
Stockholders Meetings. It seemed that only a major crisis could bring the
members out. As a result, new election procedures were introduced, from
controlled, advance nominating petitions, to "Meet Your Candidates
Nights," to elections, which mailed ballots and directed proxies,
administered by the Honest Ballot Association. These new-procedures were
adopted with the support of a new breed of cooperators, the younger
professionals, who were more concerned with the techniques of democracy
than the pioneers, and less trusting of the goodwill of a reform-minded,
idealistic community than their fathers.
One other change has taken place. At first, Kazan and later I, served
concurrently as President of the other local Boards, the Bronx Consumers
Cooperative which operates the Supermarket, Pharmacy and Optical Center,
as well as A.H. Consumers Society, owner of the shopping center and
guardian of the Reserve Fund. The common Presidency served as a link
between the three organizations. Today three different Presidents have
been elected to their respective Boards. Close ties still remain. There
are interlocking directors on Amalgamated and A.H. Consumers, which
interests. Bronx Consumers, on the other hand, includes a large membership
from neighborhood shoppers who do not live in Amalgamated. The close ties
between A. H. Consumers and Bronx have been weakened by the fact that
there are a number of differences between the taxpayer board and the
market board, e.g. on the rent. Only time will tell whether the issues are
resolved as friendly cooperatives with close interest, or as pure business
ventures in potential conflict.
During the days when the leadership of Kazan was unquestioned, the Reserve
Fund, maintained by A. H. Consumer's Society, was sacred. Suggestions that
the fund be used directly by Amalgamated Housing were forcefully rejected.
Today, with separate Presidents and ever-increasing rents, the cries to
consolidate the Amalgamated and A. H. Consumers funds are heard more
loudly.
WHAT NEXT?
The practical arguments over the Reserve Fund, in place of the idealistic
concerns of earlier days may be a key to understanding the Amalgamated
today. This is not to say that the early idealism is entirely gone. Yet
the spirit is different.
In the early days Amalgamated was unique. The cooperative was a democracy,
despite the fact that one man dominated the affairs of the community.
Kazan's strength came from the consent of the governed. There was no
repression of dissenters nor suppression of facts. The cooperative was
alive with argumentation and sated with discussion.
More recently, the forms of democracy have been strengthened. No single
person dominates the Boards. Election procedures assure all candidates for
cooperative office equal time and exposure. The community is still very
much alive, still evolving and maturing. Most cooperators understand their
role, so that despite its heated grumbling over rent increases and
imperfect management, there is a sense of responsible realism reflected at
Stockholder's Meetings. The dominance of one person, albeit with the
consent of the people, is not possible today with the better-educated,
professional membership that characterizes the Amalgamated.
Yet there is a difference. The formal actions to assure democratic
meetings were not necessary in the early days. The three cooperatives were
closer in spirit. The Reserve Fund challenge was defeated more easily.
Today, the members are not asked specifically to vote to increase their
own rent. The careful election procedures were not needed in a close
community in which the members knew one another. Nor did communications
depend on a Liaison committee. Moreover, there was an enthusiasm and
interest among the pioneers that is missing today. Perhaps the
unemployment of the Great Depression gave the members time to argue about
the housing company. Perhaps their political orientation gave them a sense
of urgency to participate in a social experiment. Today, a degree of
skepticism pervades not only among the Amalgamated cooperators, but among
other people across the country; idealism is out of fashion.
In any event, perfect democracy did not exist then, or at this time.
Perhaps such perfection is neither possible nor necessary. As citizens of
a democratic nation, we demand the highest level of democracy, for the
nation as a whole has absolute power over every aspect of our lives,
including its sacrifice. Not so in a single purpose organization like a
union, or a fraternity, or a cooperative where undisciplined member
involvement might well destroy the effectiveness of the organization.
After all it is easier to leave a housing cooperative than to renounce
one's citizenship.
We are left, then, with a continuing process of democratic activity,
however imperfect, rather than a final judgment as to the democratic
perfection of the little body politic. Our mini-state is still
experimenting with a number of forms of governance, so far with success.
After fifty years the neighborhood principally is still dynamic and
consciously democratic though faced with many divisive issues, fueled by
inflation and public cynicism. How it will end cannot be known, but this
participant in part of its history is willing to bet that Amalgamated will
celebrate its 100th Anniversary as a cooperative democracy.
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