The Evolution of People's Banks (Volume 102, No. 1) (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1922. Excerpt: ... CHAPTER XV The Field For Cooperative Credit 1 The sphere within which the cooperative syndicate has had its greatest usefulness is fairly clearly marked. When there is enough banking business in sight to warrant the organization of a corporation with considerable capital and a full complement of officers, there is--as a purely commercial proposition at least--no field for the cooperative syndicate. The syndicate banks then would not compete with our national banks. But if the necessary amount of investment capital can not be found, or if a corporation organized with only such capital as can be locally subscribed would be too small to command the necessary degree of credit, or if the volume of business in sight were too small to make such investment profitable, then there is a real field for the credit syndicate. But even then the credit syndicate can not thrive by making small honor-loans to the propertyless any more than can a commercial bank. There is no magic in the cooperative form which causes its officers to be gifted with a special good-fortune in the making of unsafe loans. In those few cooperative banks where such "honor loans " are made, they are regarded by the syndicate in somewhat the same way that its charity account is regarded by a corporation. The cooperative syndicate is designed to serve the needs of business, not of charity. Charity may, however, be an incidental by-product. Furthermore, the syndicate, like the corporation, can succeed 253 253 only if it can find officers who are at least moderately competent. On the other side there is no field--as a purely commercial proposition at least--for the cooperative syndicate if a small partnership can secure the business, and can also command the capital and credit necessary for its perform...