The Waterbury Democrat., 1934-02-28

tained in an article by James E. Moran. member of the Wilby fac- ulty, in the March issue of the "Connecticut Teacher, monthly magazine of the state teachers as- sociation.
 Mir Moran's article is as follows:
 In December the Representative Assembly appointed a committee to investigate the subject of teach ers' credit unions. This action looks to the establishment of a form of cooperative banking among Con- necticut teachers that will enable them to solve their own short-teHm borrowing problems. Teachers credit unions are now being oper- ated with complete success in thirty-f1ve states.
 Credit unions will do two things for teachers: (a) they will encour- age systematic saving against emergency and retirement, and (b) Athey will protect teachers from loan sharks, In brief, they furnish a method whereby. with their own money, teachers can finance their own short-term borrowing at min- imum interest rates, instead of having to pay the brutal rates now being charged for such accommo- datiou.
 It is not true that teachers us- ually have bank credit available in time of credit necessity. The per- centage of those who do is estimat- ed to be between 2 and 15. Teach- CTS without such bank credit who need ready cash must, therefore, use any short-term borrowing facilities that are'available.
 The state of Connecticut is bon anza territory for the usurious money lender who is permitted un- der our laws to charge 36 percent on loans of $500 or less. These le- galized loan sharks, masquerading under a variety of highsounding names, calling themselves "bank- ing" and "financiaT' institutions, do a vast amount of business with school teachers. In fact, we are honored with 8 preferred position on the sucker list of the small loan company. We are deluged with in- vitations to hypothecate our sal- aries and pyramid our debts.
 Bitter necessity, however, all too frequently forces the teacher to ac- cept the invitation. Financial re- VGTSGS, 6dldIy Cuts ILLNESS, laHiiIy emergencies, drive the teacher into lenders. These gentlemen know that, as a class, teachers are proud and at the same time timid in money matters. Also the teacher has a relatively secure position, is honest. and will invariably repay loan. So, when the teacher in finan- cial diculty goes to the small loan company, he is as welcome as the flowers in May. And from then on, he pays and pays, at 36 percent!
 This is not over-statement in any sense. It is an appalling fact so common in occurrence as to make superfiuous any lengthy citation of the many instances of tragedy caused by teachers becoming in- volyed in debt to small loan com panies. The remedy for the situa- tion is the establishment of teach ers' credit unions.
 Per1nissiye Legislation Needed
 Credit unions are not widely un- defstood in Connecticut because this is not one of the thirty eight or more states which have credit union laws. The reason why we have no such law is simply that lack of effective support for such legislation has so far made 1t easy for the high rate money lenders to block the passage of the credit union bills that have been intro- duced.
 It is proposed, therefore, that the c. s. T. A. should endeavor to se- cure the passage of legislation per hitting the operation of credit unions in Connecticut. By so doing we are taking the initiative in a matter that is of vital public inter- est. For we are, of course, only one of the many groups of workers in Connecticut who are the victims of the present condition of legal ized usury. Here, as in other states, credit unions vii serve equally we'll the needs of a wide variety of as- sociatiens.
 PostofTice Credit Unions
 The Credit Union National Ex- tension Bureau has been cooper ating with the Director of Service Relations of the office of the Post master General to organize credit unions of postal employees. There are now over 300 credit unions in postoffices. Government approval, encouragement and supervision of postal credit unions is only 8 few years old but loans to postal em- ployes have already passed the $30, 100000 mark. Because post offices are federal controlled, Con- necticut postal employees are able to operate credit unions despite the lack of a Connecticut credit union law. One such credit union in comparatively small Connecticut postoffice last year loaned over $25,000 to it's members at an inter- est rate of percent-and 1t --re- turned to the members percent interest on their funds invested in ports never having had a bad debt.
 How the Credit Union Operates
 The plan of organization and method of operation of credit unions in thirty-eight states and the District of Columbia are uni form.
 A credit union is a cooperative society organized under state law within specific group of people (such as. for example, the teach CTS of Waterbury or Hartford).
 It should be noted CD that the credit union is a cooperative asso- ciation--tIlat is, each member has one vote in the management and only one vote; (2) it is organized under a state credit union law and each credit union makes annual re- ports to a state department by which 1t is annually examined; (3) it is organized to serve the mem : bers of a group, and is limited to the membeas of the group (the group may be small = there are less than 40 members in the credit union which serves employees of the Paducah, Ky, postofiice; it may be large--there are 16,000 employes fthe New England Telephone and Telegraph Company in the 3 credit unions of company employes): (G it is saving plan, q thrift agency first. To become a member one must first be q member of the group 1t serves and must agree to save at least one unit of $500 at the rate of twenty-five cents a pay e.S 44.& trs