11 JULY 1908, Page 15


[To THE EDITOR OF TRY "SPECTATOR.'] Si,—Will you allow me, as one who has devoted much time and thought for many years to the subject of "Small Loans for Poor People," so clearly and sympa- thetically dealt with in Mr. Herbert Batty's letter in last week's Spectator, and by your practical comments thereon, to express my personal opinion that the establishment of a national Moneylending Institution on sound lines would not only prove of great moral and economic benefit, but could also be made entirely self-supporting P As a matter of fact, in my recent book on "People's Co-operative Banks" (part of which is specifically devoted to "Moneylending amongst the Poor") I advocated the formation of such an Association with branch honorary committees throughout the country, and stated some of the reasons for its necessity. It will be unnecessary for me to repeat in this letter my previous portrayal of the legitimate needs of poor people for small loans, and of the frightful evils which result from existing methods of moneylending. The slightest knowledge of every- day conditions is sufficient to convince us of the former, and we are all agreed upon the latter. The only difference which can arise amongst students of social conditions is as to the

best remedy or remedies. As for the application of these, including the raising of the necessary preliminary capital for the establishment of a national Moneylending Institu- tion whose status would command the confidence of all sections of the community, if the mind and conscience of the nation could be properly aroused and enlightened as to the true facts of the situation it would be settled in a week. The ideal plan, to use your own words, is a Co-operative Bank or a Co-operative Loan Association. For several years past I have been actively engaged in advocating the claims of the Co-operative Banks movement, and promoting on its behalf the formation of Co-operative Credit Societies in town and country districts. The problem has been solved abroad by means of Co-operative credit, and I had fondly hoped that the same result would have been achieved by the same means in the British Isles. I still believe in Co-operative Credit Societies of the nature of those already established, especially for groups of small holders, and in certain small provincial towns and urban districts where "everybody is known to everybody." But, as indicated in my book, I have been com- pelled by the hard logic of facts to come to the conclusion that the provision of helpful credit to small people, and the scotching, if not complete extirpation, of usury, with its atten-

dant horrors, cannot solely be accomplished by these means. It would occupy too much space to state my reasons in. extenso in your columns, but put briefly my conclusion has been arrived at— (1) Because, despite many appeals, the philanthropic public will not subscribe sufficient funds for the necessary work of propaganda and supervision.

(2) Because Co-operative credit involves the education of poor people in the management of their own economic affairs, and this is a long, uphill, and expensive process.

(3) Because, unless Credit Societies are formed on an unlimited liability basis (which is impracticable in our big centres), their members are required to subscribe for permanent shares which, though transferable, are (under the Industrial and Provident Societies Act) unwithdrawable.

(4) Because local people of the right sort are averse from tissuming the responsibility of forming Co-operative Banks with- out the assurance that they will be backed by a strong national organisation to establish a uniform system of bookkeeping, exercise adequate supervision over their operations, and supple- ment local capital when required with advances at a low rate of interest.

For these and other reasons, therefore, I would hail with much satisfaction the supplementing, and possible assistance, of these societies by a central Moneylending Institution. My letter is, I fear, already so lengthy that I can only cursorily indicate what, in my opinion, should be the main features in the constitution and methods of such an Association, to guarantee its usefulness and permanent success. There should be nothing amateurish about its management, which should be characterised by earnest determination and con- centration. Its board of directors should consist of men of the highest probity and financial experience, and its manager should be intimately acquainted, not only with business pro- cedure, but also with the conditions of those to be benefited by its operations. Finally, its methods should be as mutual as is possible in a company not purely Co-operative. I welcome your concluding warning against the risk of such a scheme being "exploited by financial harpies, who are quite willing to cloak their predatory aspirations under the pretence that they are philanthropists." There are a good many of these gentry about just now, and the public will have a sad eye-opener one of these days when the deposits of thrifty persons attracted by their blatant advertisements have been found to have vanished. I have no doubt that some of them will have the assurance to write to your correspondence columns stating that they already provide that which you advocate. The

insertion of their hypocritical announcements in tile secular and religious Press is amounting to a scandal. In conclusion,

may I say that I would be only too glad to place at the service of any influential Conference, convened either now or in the early autumn, my experience and views on this im- portant subject, which affects the happiness of so many, at greater length than it is possible to do in a letter P—I am, Secretary of the Urban Co-operative Banks Association, 39 Victoria Street, Westminster, S.W.