Rensselaer Republican, Volume 13, Number 23, Rensselaer, Jasper County, 24 February 1881 — A Co-operative Credit System. [ARTICLE]

A Co-operative Credit System.

The German co-operative credit unions, of which Mr. Richard T. Ely gives an interesting account in the February are organizations which represent a development of the co-operative theory in a direction which has not been attempted, we believe, in this country. The unions borrow money for the enterprises of individual members,and pledge therefor the credit of all. The principle on which they are founded is that each and every member shall be fully liable for the debts of the association. The good name of the unions has so far grown that more money has often been offered them, at low rates of Interest—on an average about 4U per cent.—than they could use. Where they have been organized they have enabled all who were really worthy of credit to obtain it. ’Th'.' second principle involved in their organization, after that of .the full liability of each member for the debts of all, is that of saving and formation of capital by the members. No one can become a member .of the union and enjoy its advantages without being a shareholder; but the shares are sold on part payments, and there is therefore the strongest inducement for those who wish to join to save their earnings to that end, the money which is borrowed on the joint credit of the union being loaned for from 6 jo 10 per cent., according to circumstances. The profits of the business are paid back to the members as dividends. The first credit union was established by Dr. Schulze in the town of Deitzsch, in Saxony, in 1850. The dea spread rapidly, and 1878 the total number of unions reported was 1,841. Of these, the 940 which made a hill report to Dr. Schulze had 480,507 members, and had loaned during the year to the amount of 1,456,003,788 marks. The value of the mark is about twen-ty-four cents, so that this would represent a business of about $880,000,000. That the unions are well managed ap«pears from the small number of failures, and by such facte as that the eighty unions, which in 1859 lent over $4,000,000 lost only $470 of that amount. The reader who is curious in regard to co-operative schemes will find in Mr. Fly’s article many facte concerning the organization, the operations, and the legal status of the credit unions.