Not to be confused with his
unimaginatively titled later work Credit Union: A Cooperative Banking Book (1931), Roy Bergengren's Cooperative Banking: A Credit Union
Book (1923) was his first full length publication. Having been hired
by Edward Filene a mere three years earlier to direct the project of
promoting credit union development first in Massachusetts and then
nation-wide, Cooperative Banking
is a fascinating reflection of both the state of the credit union
movement and Bergengren's thinking near the beginning of his long
career as a credit union champion.
The
most apparent difference between Cooperative Banking
and many of Bergengren's subsequent works is his focus on
international examples of credit unionism. In his later books, the
bulk of Bergengren's writing draws upon his experiences with an
enormous variety of domestic credit unions for evidence and emphasis.
However, the pool of domestic examples from which he could draw in
1923 was fairly small given the fact that only a handful of states
had passed credit union enabling legislation, and even the
Massachusetts movement (the strongest and most organized at the time)
boasted a total membership of less than fifty thousand. As such,
instead of leading with a description of the sparse credit union
development in America, Bergengren first introduces the readers of
Cooperative Banking to
the promise of the credit union idea by providing an overview of the
success of cooperative banking in Germany under the leadership of
Friedrich Raiffeisen and Hermann Schulze-Delitzsch. After outlining
the process by which the movements founded by these two men grew to
an enormous scale and helped to ameliorate many social problems,
Bergengren argues that the two models of credit union development
that had emerged over the previous decade and a half in America were
not unprecedented new socio-economic experiments. Rather, they
represented the spread of successful systems that had been subject to
continuous refinement for more than half a century before reaching
the United States.
With
the credit union's pedegree firmly established, Bergengren locates
examples of the urban (Shulze-Delitzsch) and rural (Raiffesen) models
of credit union development in Massachusetts and North Carolina,
respectively. Devoting a chapter to the experience of each state, he
both notes the issues that the different types of credit unions
solved for their potential members and gives numerous specific
examples from actual credit union practice. In the urban industrial
environment, he argues, credit unions help put loan sharks who prey
on financially naive workers out of business as well as encouraging
thrift through accepting and putting to work the small savings of
those with modest means. In the country, not only did credit unions
allow for farmers to get cheap credit, but he notes that many of the
organizations also became de facto purchasing co-operatives,
obtaining bulk items such as fertilizer for up to 30% less than the
members would have paid retail. Though still quite recent, Bergengren
argues that such examples demonstrate the enormous potential benefits
of continued credit union development in a wide variety of
environments.
In
addition to being a powerful example of early American credit union
movement propaganda, Cooperative Banking
also offers an interesting window into the nature of the relationship
between banks and credit unions in the movement's early years. By the
time of Bergengren's death in the 1950s, the for-profit banking
industry was beginning to view credit unions as potential
competitors. However, Cooperative Banking shows
that, in the 1920s, many bankers viewed credit unions in a positive
light since they usually deposited their surplus funds in banks and
served as a stepping stone by which people of modest means might
raise themselves economically to the point where they would utilize
bank services. Bergengren repeats at several points in the book that
credit unions were a supplement
to the banking system, and the the credit union law in the state of
Georgia was actually passed with the support of that state's banking
lobby.
Another
historically valuable element of Cooperative Banking can
be found in the book's final chapter, entitled "The Credit
Union--Democracy and Other Things." In it, Bergengren lays out
his perspective on the larger problems then facing America, such as
labor unrest and economic depression. Interestingly, he understands
those issues as ultimately deriving from the ascendancy of fractious
partisanship over the unified patriotism that the country had gotten
a taste of during the First World War. The solution that he argues
for is very reflective of the era's progressive values; namely, that
the "best and brightest" of the various elements of society
should come together and, putting the interests of the whole society
above partisan concerns, dispassionately and rationally help assemble
a social order that justly balances the interests of all. This
position is especially fascinating since, later in his career, he
became much more skeptical of the use of state power for promoting
even a positive agenda (for instance, he successfully opposed Federal
subsidies to the credit union movement in the New Deal, believing
that such support would destroy the credit union movement's
independence). As such, the chapter suggests that, in light of his
other work, Bergengren's intellectual starting point was fairly
conventional early 20th century progressivism, and that the origins
and nature of his deviations from that ideology over the course of
his later career might be a fascinating subject for further research.
In
sum, Cooperative Banking: A Credit Union Book
is a lucid and well written view into the realities of the credit
union movement, combining statistical data, anecdotes, and a sweeping
historical perspective. Written at the beginning of his decades-long
self-described "crusade" for economic democracy, the book
is a vital read for anyone who wishes to better understand either Roy
Bergengren's career as the leading voice of American credit unionism
or the early credit union movement in America.
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