Askov American., 1914-12-03


rnunity composed almost entirely Of
insolyent Indlyisaals"
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, 1909. by the Irish Agricul-
turai Organization society and has
been reguIarIy audited and Inspected
by that body ever since Although
we had at first only &c E2z0 of working
capital. ws have now D reserve OF
E26, les 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 Che
people In the district. We want the
time TO come when every man can
walk up the street In Dungiow and
say he owes nothing"
Gaplfaia1inG Character.
These cooperative banks have, as
II were. capitalized character. The
early organizers Of cooperative credit
associations held, and experience has
confirmed the opinion, that "a the
poorest communities there Ii a per.
fectly safe basis of security in the
honesty and industry of it's members.
This security is not valuable In the
ordinary commercial sense. The or.
dinary banker has no intimate knowi.
edge OF the character of those who
appiv for . loan. Neither has he any
way OF testing whether or not those
who borrow for productive purposes"
actually apply the loan to snch pur.
poses. The borrower must bring two
snreties. who like the borrower him
self, must be men of approved char.
acter and capacity. The character Of
these three mem lie the sole basis OF
credit. I'D
The rules proyide~and this 10 the
characteristic feature OF the system
that loan shall be made for a PRO
ductiye purpose" only. That II, the
borrowed money must be used for .
purpose which. In the Judgment oi
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 SOW to raise pigs:
hs must have fertilizers; he needs
some hsgh-grade seeds: he wants tn
build better shelter for his cow-~all
these are productive purposes. In one
case money TO send the borrowers
boy to school for eight months so as
TO Increase his earning capacity was
considered q productive purpose justi.
tying loan. as II 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, II 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 O single, instance anywhere
throughout the sntire island Social
and moral influences seem to be quite
sufficient to secure obedience TO the
rules and regulations OF the society.
Cooperative Credit Is Good.
There are other advantages. The
regular bank Ii generally miles away
Ii costs money for the borrower to ge
and take his sareties. paying car fare,
meals and maybe drinks, while the Co
operative association is right at hand
The bank win loan for only 80 days,
while the cooperative society will
make Il UP TO year. And . 90-day
loan gives the farmer no chance TO
realize on seed or fertilizer or stock
bought with the money borrowed. But
here In the local credit bank lf D man
il honest he can get the loan he needs
He must bring two sureties, but CO
operation breeds and develops neigh,
boriy helpfulness and they say no
honest man ever fails because he can
{ ret NO suretles.
|. Neither the association nor It's mem.
bers have any considerable capital
When they organize they begin by Dor
rowing sum OF money on the joint
and several liability of the members
Deposits are received from both mem,
bers and non.memhers. The society
usually borrows at four or fiye per
cent, and lends at ave or six per cent.
I'm some cases government funds have
been loaned to them at three per cent,
thus enabling them to make a very
low loan to their members. The ex.
pense of administration In almost moth.
ing.
Laason for Rural America.
IL IL such societies as these that are
putting the gombeen men out OF bust
ness In ireland. We have in rural
America gombeen men. They are not
80 called. but American loan sharks
and credit men are first cousins to the
Irish gombeen men.
The question We Americans are try,
ing to answer IL this: Have Irish rural
credit methods q lesson for the rural
sections In our own iand9 Can our
loan shark. whether In city or country.
ha fs.t8kf ana ernnel ssoA nv .alrsAftar