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THE CREDIT UNION STORY Produced by the Marketing and Communications Department Jamaica CoCo----operativeoperative Credit Union League 2a Manhattan Road Kingston 5 December 2004 THE CREDIT UNION MOVEMENT … THEN & NOW Contents WHAT IS A CREDIT UNION ............................................................................................................................ 3 THE INDUSTRIAL REVELOTION AND CO-OPERATIVES ................................................................................... 3 THE STRUGGLE FOR SURVIVAL ..................................................................................................................... 4 A NEW ERA DAWNS ...................................................................................................................................... 5 ROBERT OWEN – THE FATHER OF CO-OPERATION................................................................................... 5 THE ROCHDALE SOCIETY OF EQUITABLE PIONEERS ................................................................................. 5 THE ROCHDALE PRINCIPLE OF CO-OPERATION ........................................................................................ 6 THE BIRTH OF FINANCIAL CO-OPERATIVES (CREDIT SOCITIES) IN EUROPE .................................................. 8 THE CREDIT UNION CONCEPT DEVELOPS ................................................................................................... 10 FREDERICK WILHELM RAIFFEISEN – THE FATHER OF THE CREDIT UNION MOVEMENT ......................... 10 THE CREDIT UNION CONCEPT SPREADS TO EUROPE .............................................................................. 10 CREDIT UNIONS COME TO NORTH AMERICA ............................................................................................. 11 ALPHONSE DESJARDINS – FOUNDER OF CAISSE POPULAIRES ............................................................ 11 EDARD FILENE – FATHER OF THE US CREDIT UNION MOVEMENT ..................................................... 12 CREDIT UNION MOVEMENT TAKES HOLD IN THE CARIBBEAN ................................................................... 14 THE CREDIT UNION MOVEMENT COMES TO JAMAICA .......................................................................... 15 THE LEGACY OF FATHER JOHN PETER SULLIVAN ................................................................................ 15 THE FIRST CREDIT UNION IS FORMED IN JAMAICA ............................................................................ 16 THE CREDIT UNION MOVEMENT VISITS PORT ROYAL ........................................................................ 16 THE MOVEMENT STRENGTHENS ........................................................................................................ 17 BUILDING CONTINUITY THROUGH YOUTH TRAINING ........................................................................ 17 REFERENCES ................................................................................................................................................ 18 WHAT IS A CREDIT UNION A credit union is a co-operative financial institution, which is owned and controlled by its members. Credit unions are not-for-profit, and exist to provide a safe, convenient place for members to save money and obtain loans and other financial services at competitive rates. Members of a credit union share a common bond, such as their occupation, where they live or attend church. THE INDUSTRIAL REVELOTION AND CO-OPERATIVES The modern co-operative movement has its genesis in Great Britain in 1844 when the economic landscape was changed as a consequence of the Industrial Revolution. Technical advances resulted in replacement of the traditionally agrarian economy with machinery. The social landscape was also altered as balance of political power shifted Spinning jenny used in textile industry from landowners to industrial capitalists and a new urban working class emerged. These changes had dire economic and political consequences, particularly for the poor. Workers in traditionally agricultural jobs suffered decreased wages as mechanization made production cheaper and more efficient. To compound the problem, wealthy industrialists, who had no interest in improving wages or working conditions had control of the political landscape. Prior to the industrial revolution workers supplemented their earnings by doing farming on common lands designated for this purpose. However, policymakers now denied them this opportunity along with the right to organise labour unions. Workers were also required to buy or credit goods at company stores, which often provided inferior products at inflated prices. THE STRUGGLE FOR SURVIVAL Between 1838 and 1848 workers struggled in vain to secure better working conditions and have labour and property laws reformed through the Chartists Movement which had its foundation in the "People's Charter" of 1838. The charter developed by William Lovett for the London Working Men’s Association was a public petition aimed at redressing omissions from the electoral Reform Act of 1832. It quickly became a rallying point for social and economic reform. Although thousands of people supported the Charter, Parliament turned down their proposals on three occasions eventually leading to their downfall. Later, efforts were also made to organize labour unions and exert influence by striking. While these unions eventually became powerful and recognized by law business owners used their power to side-line unionised workers. Karl Marx’s philosophy that the industrial system would be overthrown and wealth redistributed to the masses was also considered as a way out of the struggle for survival. However, this belief failed to garner much support in contrast to their counterparts in China and Russia. Karl Marx A NEW ERA DAWNS ROBERT OWEN – THE FATHER OF CO-OPERATION Robert Owen (1771-1858) known as the 'Father of Co-operation' and of British socialism was born in Newtown, Wales. Owen worked in London and Manchester and became the manager of the mills of the New Lanark Twist Company in 1800. He was extensively involved in work to limit child labour in factories and set up co-operative communities in the UK and America. In 1816 Owen Robert Owen Co -op outlined his plans for “ House found ed 1938 co-operative villages", where residents would live and work in harmony in a "new moral commonwealth." Despite many appeals to the Government, his requests for financial assistance were rejected. However, Owen established several "Owenite" co-operative communities based on the American model, including one at New Harmony, Indiana, in 1825. Unfortunately none of these communities was successful. Prior to setting up these villages he launched his magazine The Economist, in 1821 bearing the co-operative motto, "Each for All and All for One." He later attempted to fuse trade unionism with co-operative principles by organising the Grand National Consolidated Trades Union in 1830, however this collapsed Robert Owen a year later. Despite these obstacles Owen’s ideas bore fruit in the international co-operative movement, launched at Rochdale, England, in 1844. Owen died on November 17, 1858, in his hometown, Newtown. THE ROCHDALE SOCIETY OF EQUITABLE PIONEERS The idea of people working together and relying on each other to survive economically began to take shape leading to the formation of "friendly societies" or "co-operatives societies". Members would pool resources to garner enough capital to open their own mills, bakeries and stores. Goods were then sold at market prices and the surplus revenue redistributed to members. Many co-operatives experienced difficulties in establishing themselves and later collapsed; these include Sheerness Economical Society, Brighton Co-operative Benevolent Fund Association and London Co-operatives and Economical Society However, this changed in 1849, when twenty-nine (29) weavers pooled their resources and opened the first successful consumer co-operative, the Rochdale Society of Equitable Pioneers, on Toad Lane, Rochdale, England. These early pioneers sacrificed personal profits to pro vide goods and services to their customers. The original co -operative shop on Toad Lane, Rochdale THE ROCHDALE PRINCIPLE OF CO-OPERATION In bringing their social vision to life, the Rochdale pioneers developed specific guidelines for the operation of their co-operatives. These principles, which are outlined below, are now referred to as "The Rochdale Principles of Co-operation": 1. Voluntary and Open Membership Co-operatives are voluntary organizations, which are open to all persons without regard to their gender, social, racial, political, or religious orientation. 2. Democratic Member Control Each member of a co-operative has equal voting rights (one member, one vote) and actively participates in making decisions and establishing policies. Elected representatives should operate with integrity and are accountable to the members, which they serve. 3. Member Economic Participation Members contribute equitably to, and democratically control, the capital of their co-operative. • Co-operatives do not pursue speculative investments to secure profits at the expense of its members. • Net savings from the operations of a co- operative is distributed equitably among members. • Surplus may be used for the further development of the co- operative, provision of new services to members or distributed to members in proportion to their savings. 4. Autonomy and Independence Co-operatives are autonomous, self-help organizations, which

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