Iron County record. [volume] (Cedar City, Utah) 1893-1982, 1914-02-24

miracle OF giving solvency to a com
munity composed almost entirely of
insolvent individuals"
Paddy Gallagher in telling us how
the association operates here at Dun
glow, says: "A credit society in Dun
glow was organized and established in
October, 1903, by the Irish Agricul-
tural Organization society and has
been regularly audited and inspected
by that body ever since. Although
we had at first only G220 of working
capital, we have now a reserve OF
e26, los. The members are equally
responsible for the success or failure
of the society. Each man has one
vote no matter how much or how
little his investment in the concern Is
They take such keen interest in II
that during its nine years working
there has not been an over due loan at
the end of the year. The society is
Undoubtedly of great assistance to the
people In the district. We want the
time to come when every man can
walk up the street in Dunglow and
say he owes nothing"
Capitalizins Character.
These cooperative banks have, as
it were capitalized character. The
early organizers of cooperative credit
associations held, and experience has
confirmed the opinion, that n the
poorest communities there Is a per-
fectly safe basis of security In the
honesty and industry of its members.
This security is not valuable In tho
ordinary commercial sense. The or
binary banker has no intimate knowl-
edge of the character of those who
apply for loan. Neither has he any
way of testing whether or not those
who borrow "for productive purposes"
actually apply the loan to such pur-
poses. The borrower must bring two
sureties, who like the borrower him
self, must be men of approved char.
acter and capacity. The character Of
these three men Is the sole basis OF
credit.
The rules provide-and this is the
characteristic feature of the system
that a loan shall be made for prs
ductive purpose" only. That Is, the
borrowed money must be used for a
purpose which, in the judgment of
the committee. will enable the Dor
rover to repay the loan out of the
results of the use made of the money.
The farmer buys a SOW to raise pigs;
he must have fertilizers; he needs
some high-grade seeds; he wants to
build better shelter for his cow-an
these are productive purposes. In one
case money to send the borrower
boy to school for eight months so a.
to increase his earning capacity was
considered a productive purpose justi-
flying a loan, as it proved to be when
the boy himself repaid the loan. The
rules OF the cooperative society pro-
vide for the expulsion of member
who does not apply the money to the
agreed purpose. 1t Is said, however,
to the credit OF the Irish members OF
these societies, That there has never
been the necessity Of putting this rule
in force in a single instance anywhere
throughout the entire island. Social
and moral influences seem to be quits
sufficient to secure obedience to the
rules and regulations of the society.
Cooperative Credit Is Good.
There are other advantages. The
regular bank is generally miles away
II costs money for the borrower to &c
| a,d taLa bio ouratiaa pavinp oar faro
meals and maybe drinks, while the co
operative association is right at hand
The bank will loan for only 80 days
while the cooperative society will
make 1t up to year. And 90-daS
loan gives the farmer no chance Il
realize on seed or fertilizer or stoce
bought with the money borrowed. Hu
here in the local credit bank If a maj
is honest he can get the loan he needs
He must bring two sureties, but CO
operation breeds and develops neigh
borly helpfulness and they say NJ
honest man ever fails because he ca:
get no sureties.
Neither the association nor its mem
bers have any considerable capital
When they organize they begin by boz
rowing sum of money on the join
and several liability of the members
Deposits are received from both mem
bers and non-members. The societ,
usually borrows at four or five pc
cent. and lends at five or six per cent
In some cases government funds hav
been loaned to them at three per cent
thus enabling them to make a yer,
low loan to their members. The eS
pense of administration is almost moth
ing.
Lesson for Rural America.
II is such societies as these that ar
putting the gombeen men out OF bus
ness in Ireland. We have in rura
America gombeen men. They are no
so called, but American loan shark
and credit men are first cousins to tn
Irish gombeen men.
The question we Americans are try
ing to answer is this: Have Irish rura
credit methods a lesson for the rura
sections in our own land? Can GU
loan shark, whether in city or country
be fought and conquered by simila
American cooperative societies?