MYRON T. HERRICK'S CRITICISM 179 



increased from 201 to 505; depositors from 29 to 146; payments 

 on shares from $1,13225 to $4,327.53; deposits from $959.76 to 

 $3,763.40; cash in banks from $1,299.78 to $2,666.15; amount bor- 

 rowed from banks from $100.00 to $1,450.00; and total resources 

 from $2,264.89 to $11,448.31. This shows a growth in resources 

 of over 500 per cent in one year. The secret of the success of the 

 leading Credit Unions, says their Superintendent, is that they have 

 helped finance their members in the cooperative purchase of sup- 

 plies. Emphasis should also be laid on their encouragement 

 of thrift. 



The North Carolina Credit Union is a society with a dual 

 purpose, namely, to encourage savings and to utilize these savings 

 for productive agricultural purposes. Loans are made to members 

 only and for productive purposes only. Leadership in organizing 

 all the early credit unions in this State came, as the law provided, 

 from the Division of Markets and Rural Organization of the State 

 Agricultural Experiment Station and Extension Service. This 

 explains their growth in rural communities. The funds of the 

 union, as seen from the financial statement (Appendix) come 

 from share capital, deposits, and loans from banks. The par 

 value of a share is usually $10, but may be higher, up to $25. 

 Boys and girls are permitted to pay for shares on the installment 

 plan at 25 cents a month, and adults at $2.50 semi-annually. 

 Deposits may be received from members and non-members. 

 Four per cent interest is paid on deposits. The rate charged bor- 

 rowers is 6 per cent. At the same time the rate charged by supply 

 stores for book credit averages 38.4 per cent. Most of the loans 

 made by the North Carolina credit unions have been for fertilizer. 

 The Superintendent of Credit Unions in that State expects to see 

 two very important results follow from a general introduction of 

 credit unions: (1) Farmers should buy supplies in large quantities 

 at wholesale prices; (2) If the farmer can get credit on the same 

 terms as the middleman, he can afford to store his products and 

 hold them off the market till a favorable time arrives for disposing 

 of them. One apparent tendency is for the Credit Union to borrow 

 more and more from the banks, thus acting as a mere middleman 

 in buying and selling credit. 



Myron T. Herrick's Criticism. Very high hopes were enter- 

 tained by many thoughtful persons that at last the Credit Unions 

 had arrived to solve the problem of cooperative credit in American 

 agriculture. But our greatest critic in this field, Ex-ambassador 

 Myron T. Herrick, pronounced these various State laws, as soon 



