The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-09-03
CREDIT UNIONS HELP NEEDY
BY LOANS WITHOUT SECURITY

are made to borrowers on a basis OF
character plus earning power.
Small Borrowers Needs
Now Well Provided For
Quoting again from Mr.. Hams adj
dress, delivered at the conference of
York November %, 1917, we find that
ramifications along this line of pro-
viding facilities for small borrowers is
progressing nicely and in recent per-
sonal interview with the writer he
stated that the growth of credit unions
since then has been remarkable. He
says:
THE credit union is an adaptation
of the European cooperative bank or
credit society. 1t is just an extension
Of the cooperative banking principle
which. starting in Germany nearly
seventy years ago, has spread to prac-
tically every European and many
Asiatic countries, taking on new names
and some new characteristics to suit
local conditions. but always preserv-
ing the elements which have caused
its steady growth and phenomenal
success.
Laws authorizing the organization
of credit unions have been enacted in
Massachusetts,, New York, Rhode ISL
and, North Carolina, Wisconsin. Texas,
Utah and Oregon. Under these laws
about 100 credit unions, rural and ur-
ban, have been organized: so in Mas
sachusetts. 40 in New York, IA in
NJ 49, 4 ,la,-
scattered among the States OF Oregon,
Rhode Island and Texas. OF the Mas
sachusetts credit unions all except one
have been formed in urban centers;
of the New York credit unions 80 are
urban GA in New York city, and are
rural. In addition to these number
of credit unions have been formed as
voluntary associations In the States
OF Connecticut and New Jersey. In
New York city alone there are scores
of mutual savings and loan associa-
tons which are virtually credit unions,
though not Incorporated under the
law.
THE incorporated credit unions in
New York now have membership of
10000 with assets Of nearly half a
million dollars. Their bases OF men,
bership include: % employment In
industrial, mercantile and public SER
vice corporations: Federal State and
municipal departments; (2) member
ship in fraternal and religious or
CARNATIONS; CD membership in neigh
borhood associations and (4) group
acquaintanceship based on racial lines.
Under the law of New York-and
this is typical of the credit union laws
of all States-a group of persons OF
good character who are identified with
the same factory business or religious
or fraternal association, or other or
ganization that may be selected as
the basis Of membership, may join to-
gether to form a credit union. Once
organized under the authority of the
banking department they may add to
its membership other persons with
whom they are associated or ac-
quainted. A safe and attractive
medium of investment of the saving
members is offered by the installment
share OF the credit union, for at least
one of which each member must SUBJ
scribe. Such shares are of small par
monthly installments. Each member is
encouraged to subscribe for as many
shares as he can afford.
Money is also received on deposit as
a savings bank. The shares encourage
regular periodic savings for distant
expenditures. while deposits are saw
ings for more imminent needs. Inter
est is allowed on deposits at or slightly
above the savings bank rate and divi-
dends are paid upon shares. Most
credit unions that have attained full
Roadway pay a dividend rate of from
5 to or even 8 per cent. per annum.
Loans to Members Made
For Approved Purposes
Out of the funds so accumulated
loans are made to members for pro-
ductive purposes or purposes that will
effect a saving or supply an urgent
need. Loans are commonly made for
not more than a year and are repayable
in weekly or monthly installments
Ordinarily loans are secured by the
promissory note of the borrower with
or without the Endorsements OF fellow
/ iUCilDtio vi bAh'i St'uills. on ciildli
loans Endorsements are usually not re-
quired. The character of the bor-
rover, appraised when he is admitted
to the credit union as a member and
again appraised when he becomes an
applicant for a loan. determines the
amount OF credit extended. His finan-
cial solvency plays but a small part
in the matter
Thus we have from the foregoing
statement Of the nature OF credit
unions, borrowed from Europe, the
reason for the decline in the business
! of the pawnbroker. particularly of the
private pawnshop keeper who thrivcs
on the borrowings OF class OF people
who are being taken care OF more and
more by these cooperative agencies.
In Europe the municipal pawnshop
long ago drove the private pawn
broker from the field. AS far back as
the Middle Ages the three balls was n
symbol patronized by many. To com
bat them "Monts de Picte." originating
in italy, a semi Governmcnt or char.
table loaning institution. spread all
over Europe. The present municipal
pawnshop of Paris. known as tho
"Monts de Piete." IL Of this type. mod
ernized. and conducted by the munich