The Co-operative Credit Union League of Trinidad & Tobago

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History of the Credit Union Movement

The story of the Credit Union Movement has its beginning in the feudal but protean societies of late eighteenth and early nineteenth century Western Europe. There, as traditional agrarian economies gave way to the onrush of intense industrialization, many groups found themselves in a continuous struggle against loss of earnings brought about by the utilization of machinery instead of traditional artisan skills.

The Chartists, as members of this movement were called, were agitators who, between 1832 and 1854, attempted to articulate on behalf of the diverse groups of factory workers and craftsmen.

On the economic level, each of these groups was concerned about the profit-oriented and individualism of capitalism; the usurious business practices that these engendered and the low wages and long hours at the factories and work houses.

In attempting to unite weavers, craftsmen and the unemployed into a consciousness of their distinction and power as a labouring class, the Chartist movement developed as one, not of mere protest. Among these was a new type of co-operative institution, preaching the philosophy of self-help and independence and incorporating most of what the Chartist movement had stood for.

The first such organisation was officially born in Rochdale, Manchester, in 1844. Here, Robert Owen, an Englishman and a Chartist, inspired a few unemployed weavers of Rochdale to save some 28 pounds out of their few pennies to start the first consumer co-operative. This took the form of a store in which the members bought shares to raise capital and purchase goods to sell themselves at fair price.

Against this backdrop, the following rules were drafted by the Rochdale Society of Equitable Pioneers:

The co-operative concept quickly spread through Europe during the 1840s. In 1850, a German Civil Servant, Herman Schluze Delitzch, established the first Co-operative Credit Union Society, creating the prototype for what later came to be known as, "The People's Bank". In 1864, another German, Friedreich Wilhelm Raiffaisen, established the first Credit Union.

By the end of the nineteenth century, the practice of pooling personal savings cooperatively and disbursing loans to individuals at low interest rates had spread to the other continents. In Ireland, Horace Plunklet founded the Co-operative Bank as part of his "grand cooperative plan". In 1900, Alphonse Desjardins started the first Credit Union in Quebec, Canada, "La Caisse Populaire" and by 1909 the Movement began in the USA under Edward Filene.

Credit Unions in Trinidad and Tobago

Thomas Malcolm Milne, a devout member of the local Catholic Church laity, was responsible for introducing Credit Unions into (Trinidad and Tobago at around 1942.] A San Fernando solicitor and_ the then Commissioner of Inland Revenue, Milne's almost romantic attachment to the Credit Union began when he perused copies of the 'Readers Digest" and the "Catholic Digest" and came across articles on the progress of the co-operative movement in Antigonish, Canada. Milne, who was later to express the belief that the Credit Union Movement would lead to the economic emancipation of the people, must have immediately seen this as a solution to financial problems of the common man, and a protection against unscrupulous money lenders of the time.

He is reported to have had contact with Fr. Edward Sullivan, a Jesuit Priest, who was spreading the gospel of Credit Unions throughout the Caribbean. 'The next step was a "stimulating letter" from Sullivan. This "was followed hot foot by the gift of a sheaf of pamphlets and an armful of books from a Mrs. Neal Sullivan", one of Fr. Sullivan's relatives living in Boston, USA. Sullivan and Milne corresponded for over three years until Milne's visit to Jamaica. It was in this way that Sullivan's expertise and literature were shared with pioneers in Trinidad. Sullivan would then pay a short, informative and inspirational visit to Trinidad in August 1946. By that time, the Credit Unions had already been formed in Trinidad and Tobago.

Between 1942 and 1945, a period later referred to by Milne as "the gestation period", Credit Unions functioned largely as study groups and motivated individuals to save money in the hope that they would eventually be able to borrow. This alone bespeaks the then existing capacity of locals for thrift. By contributing 25cents per week, members were able to purchase shares, each valued at $5.00, to make themselves eligible for loans. However, to provide such loans would have been illegal. Fortunately, for Trinidad and Tobago, the local Administration of the time proved very sensitive to the representations made by the pioneers of the Movement to have laws enacted that would legalize the status of the Credit Unions and regularize their operations. On December 29th, two days before the close of 1945, legislation to this effect was enacted.

The Credit Union Society Ordinance, No. 48 of 1945, was passed on December 29th 1945. The Bill was sponsored by Sir Bede Clifford, Governor; Sir Errol Dos Santos, the Colonial Secretary, and Mr. Wilcox Wilson, Attorney General

The first Credit Union to be registered in Trinidad and Tobago was the Health Services Credit Union Society Limited whose membership came from the Colonial Hospital of Port of Spain

Once the routine had been established, the registration of Credit Unions came fast and furious. The Arima Credit Union Co┬Čoperative Society was registered on 6th August 1946 with over fifteen members and a share capital of $616.73. The St. Mary's District Credit Union applied for registration in July 1946 and got approval on 8th August 1946. By this time it had 186 members and $1,640.00 in share capital. Then came the Bonanza Employees Credit Union, made up of the members of staff of the Bonanza (D. Hope Ross & Sons Company Limited). Out of the 30 Credit Unions registered in 1946, one third had some basis in the Church.

The decade following the passing of the Act of 1945 was an intense period in the Movement. Following the passing of the Act, the number of the Credit Unions expanded rapidly. Some 90 new Credit Unions were registered between 1946 and 1950.

The first decade in the history of the local Credit Union Movement in the 1950s might very well be seen as something of its golden age. It was not merely that the Movement in Trinidad was growing at a phenomenal pace. Equally significant was the fact, although it emerged some four years after that in Jamaica and one year after that in Belize, the local Movement had outpaced those in other Caribbean Countries.