The Winslow mail. (Winslow, Ariz.) 1893-1926, 1924-11-21
COOPERATIVE PLAN
BANKING IS CALLED
THE BASIS OF TRADE

Houston Thompson, chairman of the
Federal Trade commission, speaking
before the banking session of the Co.
operative Leagues fourth congress in
New York recently, defended the COM
petitive system on which American
business is based. He asserted that
sit is in the fiber of this country
and has been upheld by the United
States supreme court.
Assuring his hearers that "the laws
of the United States are the most
liberal of any government, excepting
possibly Finland, in aiding co-opera-
tive groups" he urged decentraliza-
ton of business. Government and
business in the United States" Mr..
Thompson said, "is too centralized.
1t needs to be localized, and one of
the ways to do this is to keep money
in local circulation through credit
unions. The cooperative movement
keeps money in the country in which
it is made and builds up business and
industry"
The speaker cited Denmark as an
example of the stability Of cooper
alive banks, when the leading bank
failed four years ago for $4,000 600
while the cooperative banks surviv-
ed because their funds were held in
local communities. The same situa-
ton was true in Estonia, he said,
where crashes of private banks did
not affect the co-operatives. He also
said that the cooperative banks do
not hurt the private banks.
Turning to the monopolies of GER
tain industries, Mr.. Thompson touch
ed on "the Pittsburgh plus" system,
whereby customer in Chicago whose
place might be directly opposite a
steel mill, would have to pay freight
rate from Pittsburgh even though the
steel actually was manufactured in
Chicago. His theme was the neces
sity for decentralization, the benefits
of which he AYERS have already be-
come apparent in the cooperative
banks, with their money spread out
among farmers and persons of small
means, rather than deposited in other
banks.
Describing the federal trade COM
missions function Mr.. Thompson said
"Its purpose is not to stop, hinder
or injure business, but to see to it
that it goes along in fair manner.
It's position is like that of the referee
of football game, to see that both
sides play the game fairly and abide
by the rules. In business this means
to follow the laws as made by con-
gress and as defined by the supreme
court. The competitive system is in
the fiber of the people of this coun-
try 1t has been upheld by the SUI
preme court Under the competitive
system the federal trade commission
says to a wholesaler, If you have a
function to serve. serve it.
He cited American laws as liberal
in their application and helpful to
cooperative groups.
81 believe the limitations on cor
poration," said Mr.. Thompson, should
be comparable to the opportunities
given it, just so as it develops prop
erly under the laws" He stated that
the commission can do nothing to
prescribe the powers of corporations,
however, until they are engaged in
interstate business. He decried what
he termed "a psychological feeling of
human beings" against the size of cor
porations, warning his auditors not to
condemn an industry merely because
of it's size. although admitting that
this size enabled it often to dominate
the price in an industry and that usu
ally this price is minimum under
which only strong concerns can oper
ate, and by which it can dominate the
field against competitors.
Other speakers included Leroy Pet
erson cashier of the Amalgamated
bank, organized by the clothing work
ers, who stated that there are now
nearly 35 labor banks, with assets Of
$75,000000. Mrs. Gertrude Matthews
Shelby, secretary of the leagues bank
ing committee, praised the banks for
making loans on personal surety and
character She cited the fact that all
banks earn an average of only 6 per
cent, but stated that the service of
many of them is not adapted to the
small borrower, which emphasized the
need for non-profit making co-opera-
tive banks, with small capital of $4,000
and $4,000 and with shares as low
as $40.