Appendix.

The Civil Service Co-Operative Credit Bank.

A brief description of how this institution came to be established, and a practical instance of how it works, will give a very clear conception of its nature and objects, and of the important part it is likely to play in the co-operative movement.

When reasoning with a shareholder of the Civil Service Co-operative Society for not giving his custom to his own store, Mr. Burke discovered the cause to be the member's indebtedness to his local storekeeper to the extent of £9, which mortgaged his freedom beyond his ability to redeem himself. His income was but little over £100 per annum, more than £50 of which was annually spent with the local trader, and the prices which he had to pay were 15 per cent. in excess of those charged at the Civil Service stores for the same class of goods, or £7 10s. per annum, because of a £9 indebtedness on the storekeeper's books.

This would average 9d. on every 5s. worth of goods purchased, and probably may not have been too much of a premium for the storekeeper to charge to cover risks of loss to which a provision business run on credit is liable. The case in point was a rather hopeless one, and of pathetic interest. There was not much chance of recovery under the circumstances which held him in their relentless grip, and the storekeeper was as helpless in the matter, probably, as his customer. The trader must pay his way, and the system made it risky.

Mr. Burke was acquainted with the literature of People's Co-operative Credit Banks, and the idea forcibly struck him page 98 that a Civil Service Co-operative Credit Bank, in association with the Civil Service Store, would exactly meet this and all similar cases. The idea commended itself to his chairman, Captain Bartlett, and members of the board of directors, and was equally well received by the members of the Co-operative Union, and, as mentioned in the text, was made into a practical going concern, which has justified the expectations held of its usefulness. Of this the following instance will supply good evidence:—

This bank and the co-operative store act and react economically on each other. Were it not for the bank this borrower could not have paid off his indebtedness to the private trader and transfer his custom to the co-operative store, and without the savings effected by dealing for cash with the store, he could not hope to keep his repayment engagements with the bank.

At the rate of £50 of purchases per year, he would have to expend with the private trader, for the nine months the loan ran, £37 10s.—for goods which cost him at the co-operative store £31 17s. 6d., making a saving of £5 12s. 6d.; to this has to be added 6d. per £ returned on his purchases, j 15s. 10d., bringing the whole up to £6 8s. 4d., to which he page 99 had only to add of new money, £2 19s. 2d., to repay the bank the borrowed money, with interest—£9 7s. 6d, and continue to save at the same rate ever after.

This is said to be by no means a solitary instance of the good this bank has accomplished, in association with the store, to help members out of "very tight' places. Although the principle of people's banks is not new, this particular application of it in association with a co-operative retail store is the first of its kind, so far as? know, and seems entitled to special attention as a likely means, if adopted, to solve the credit difficulties which British co-operators find it hard to eliminate from their ranks, much to the detriment of their movement. There are always cases in which to refuse credit seems somewhat cruel, and yet to give way in one instance makes it difficult to keep loyal to the cash system By having a credit bank to apply to, a customer's temporary financial wants may be relieved, and the cash principle in trade preserved inviolate.

Many members of the Civil Service Co-operative Society, as Mr. Burke feelingly remarked to the writer, were kept more or less bound to the local traders, not because they were ever under the necessity of obtaining their supplies on credit, but because circumstances might any day place them in that position, and whilst private storekeepers were always ready to accommodate customers, of whose reputation they had probably many years' satisfactory experience, with whatever credit they might require, the rules of the Civil Service Store could not recognise the claim, however deserving and pressing. This loyalty to a cardinal principle in strict retail trade economics, was ready to place the store and its customers at any time at a disadvantage, against which customers made provision by keeping up their connection with the private storekeepers. The establishment of the Civil Service Credit Bank not only removes all liability to the occurrence of strained relations of this nature, but presents the remedy in a form which vastly increases the economy by which the accommodation can be received, and preserves the indepen- page 100 dence of members by patronising their own financial institution, instead of being under obligations to outsiders.

This, however, is not quite the same thing as the system of People's Credit Banks, designed to aid persons engaged in reproductive industries, by which, for instance, primary producers are helped to pay cash for fertilisers, seeds, stock, implements, &c., to be repaid out of the increased wealth which the investments produce. In strict economy, the true sphere of credit is to aid reproduction. It is quite another thing to use it in making loans in order to help persons out of financial difficulties, owing to having incurred expenses in excess of their incomes, and who have to submit themselves to the practice of more or less severe economies in order to repay the debt. To meet such cases, the Civil Service Cooperative Credit Bank is a most admirable and really beneficent institution, driving usury and distress from the door of many deserving families,

The bank is not only used for helping members out of difficulties such as anyone is liable to be placed in, however prudent, but also to economise expenditure. One small example will explain. A member, for instance, may find it very inconvenient to find the amount requisite to purchase a yearly or half-yearly railway travelling ticket. No more need be said. The Civil Service Co-operative Credit Bank is prepared to accommodate its members in this and other similar respects.

The office is at 114 Flinders-street, Melbourne, managed under the Presidency of W. M'Iver, A.I.A.V., and seven other directors, with J. Cummins, secretary—all members of the Co-operative Union. In writing for information, it is necessary to send a postage stamp for reply. See notices and advertisement in "The Federal Co-operative News."

J.R.