from emergencies such as sickness, operations, death and sudden unemployment. They help the small business man over temporary depressions and enable him to take advantage of gaining by cash buying. Rehabilitation loans have helped men returned from the war to reestablish themselves. There are loans for college tuitions in technical and normal schools and night courses in law, science, etc. Still others, in the form of second mortgages, aid members to purchase homes on which banks take a first mortgage. Frequently members are advised in the purchase of sound stocks, and are saved from "wild-cat" speculations. They use the credit union as a bank for the accumulation of investment funds with which to purchase additional stock in the market.

The officers of a credit union are authorized to invest surplus funds in good securities. Although the first principle is service, it is possible by good management, to pay dividends on paid up shares, but usually small dividends. Any member buying a block of shares on the installment plan is entitled to receive a dividend as soon as he has paid in an amount of money equal to the amount of one fully paid share. Shares are kept at a constant par value in order to create a surplus to serve as a source for credit when the union itself needs to borrow, and for emergency demands. Interest is paid upon deposits. A guaranty fund, not to be distributed except in case of liquidation, is established, composed of a percentage of the net earnings. This is used to offset bad loans.

his associates may have cash when they need it." Extent of Credit Union Development

A notable example of the growth of a credit union is found in the case of the New England Telephone and Telegraph Company in Boston. In 1918 fifteen of its employes organized with $3.75 capital. In 1925 the membership was 13,000 and the capital $1,125,000. In Massachusetts there are 50,000 members of credit unions. Only 16,000 of these are borrowers.

One of the earliest credit unions among postal employes was organized in Brockton, Mass., in January, 1923 with eight members and ten shares, partly paid up. The Director of Service Relations of the United States Post Office Department published bulletins in September, 1924, and April, 1925, showing the development of the credit union movement among postal employes. In that six months' period the number of unions increased from 21 to 36, bringing the membership up to a total of 5,087. This membership has a subscription of more than 92,000 shares, paid-up to the approximate amount of $160,000. In these 36 unions there are 2,385 borrowers charged with loans. to the amount of $286,000.

The following list of answers is extracted from replies made to a questionnaire circulated by the

Credit Union National Extension Bureau. It is illustrative of typical large and small unions and the comparative volume of business they transact.

Plan Bank

A credit union is supplemental to banks, being concerned with deposits too small for ordinary banks to handle profitably. It is capitalized by the members to whom loans are made. Their dividends are affected by the interest it pays. Under the Morris Plan, capitalization proceeds from individuals, mainly philanthropic, who receive a fair return for providing adequate credit resources for the general public. In this respect a credit union is more cooperative than a Morris Plan institution. Its administration expenses are nominal, and its headquarters' and general operating costs are considerably less. It does not serve the general public, but related groups: nor does it attract such business as is properly within the scope of the Morris Plan institution. "The real important point of difference between the two is that a credit union is a cooperative association in which the member works out his own salvation in a sort of banking institution made possible by his own savings, managed by his own. officers, dividing its profits with him and his fellow members and using the money in order that he and

Members Shares Deposits

Av. holdings per member $95.
Total loans, 12 months $1,175,180
Number of loans
Average size

% members borrowing

Rate of interest
Service or paper chge.

Dividends paid to
shareholders

Int. on deposits

8%-10.0%

none

7,2% past (5 yrs.) 7% past (2 yrs.)

5%

no deposits The large union reported 25% of net profits expended in overhead. It paid salaries of about $15,000 as against $747, paid by the small union.

To date most of the credit unions are urban, but the Credit Union National Extension Bureau states that it is stimulating development in rural districts in such states as have credit union laws. North Carolina development, under the direction of the State De

1 The Bridge, May, 1925. Official organ of the Credit Union Nat. Extention Bureau.

partment of Agriculture, is strictly rural.

There are no general statistics available. New York and Massachusetts figures for 1924 are as follows:

New York: 114 unions, 64,001 members, $8,500,000 shares, $664,704 deposits.

Massachusetts: 89 unions, 50,849 members, $7,750.

000 shares, $3,006,461 deposits. New York: 38,203 borrowers 550,007 resources.

loans; $10,

Massachusetts: 19,993 borrowers, $5,706,018 loans; $7,460,810 resources.

The Central Council of Russian Trade Unions has just issued a circular letter to all trade unions recommending certain changes in trade union policy.

The circular is the result of an energetic campaign conducted in recent months by the various trade union leaders for the revision of the main lines of local and central trade union organization in Russia. The underlying motive of the campaign is the fear that the lack of contact between the trade unions and the working classes may be yet further emphasized in the future. This lack of contact has been caused by certain very serious irregularities and defects in trade union organization.

The defects in question are of old standing. During the civil war and the period of unadulterated communism (1918-21), when the unions were State organizations, there could be no question of trade union activity properly so-called, and still less of any initiative on the part of the trade unions. Industry being nationalized, the private employer did not exist, and the State was the only employer and the sole court of appeal which could fix conditions of labor. Since, also, the trade unions were entrusted with the direction of nationalized industry, any infringement of State regulations was considered as a breach of trade union discipline. Moreover, since the labor agreement did not exist, the trade unions were unable to defend the interests of the workers, but had to confine themselves to organizing the proletariat in a single group which, under the direction of the Communist Party, was to exercise the dictatorship of the proletariat. With this end in view, it was made compulsory to belong to a trade union.

After the introduction, in 1921, of the "New Economic Policy," which to some extent re-established the capitalist system in the form of State capitalism the status of the trade unions was completely modified. Membership of a trade union was declared in principle to be voluntary, and the trade unions lost the right of participating in the administration of industry, and were re-organized as as

sociations of wage-earners for the defense of their interests against the now renascent private capitalist and against State capitalism.

None the less, the Communist regime made a profound impression on the whole trade union movement, and traces of it lingered in the more or less official appointment of Works Councils and other trade union organizations, in the bureaucratic, formalist spirit of the leaders and in the strict dependence of the trade unions on the State. The result was that the interests of the workers were lost sight of to an alarming extent, and this, in certain districts, led to keen discontent among them and almost to a rupture between them and the unions.

In addition must be mentioned the grave defects in trade union organization which sprang up, due to a large extent to the irresponsibility of trade union officials. In a recent speech summarizing the campaign which led up to the issue of the circular referred to above, MR. ANDREIEV, Chairman of the Railwaymen's Union and Secretary of the Central Trade Union Council, set out clearly and courageously the chief defects from which Russian trade unionism is at present suffering. We publish below a brief summary of the situation as given in the speech in question and in the Central Trade Union Council's circular, concluding with a summary of the chief measures recommended by the Central Council to cope with the situation.

"Bureaucratic Spirit

"Mr. Andreiev states that trade union officials have lost all contact with the working masses and have ceased to feel any responsibility towards them. They have confined themselves to carrying out the orders of the higher trade union or Communist organizations, and acknowledge no responsibility except to such organizations.

"In support of this statement, MR. ANDREIEV quotes the serious labor disputes, followed by strikes, which took place in certain large-scale State textile and metal under

takings in the spring of 1925. In MR. ANDREIEV'S view, as also in the view of the Central Trade Union Council, the main reason for this state of affairs is the bureaucratic spirit, the inertia and the irresponsibility of the trade union officials, and their lack of comprehension of the workers.

"Corruption of Trade Union Officials "Another question which has become increasingly serious in recent months is the question of trade union finance. At all recent meetings of trade unions in Russia, it has been stated that embezzlement, malversation, illegal advances, etc., have been alarmingly frequent. "The embezzlement of trade union funds' (says the Central Council in its circular) has increased considerably and is still increasing.'

"A situation favorable to embezzlement is created by the absence of any serious control, which allows officials freely to dispose of trade union funds. Further, it is clear (says the circular) that the too benevolent attitude of Works Councils, Central Trade Union Committees, and even workers, towards the guilty parties cannot but encourage thefts and embezzlements.

"This benevolent attitude is in some instances nearly allied to complicity, and the central organizations either do not hear, or hear too late, of cases of malversation. The fact is that here too, as in all other spheres of trade union life, administrative relations between the central organizations and the union are confined to formalities.

"Apathy of the Workers

"The lack of understanding displayed by the trade unions with regard to the wishes and requirements of the workers, the authoritarian and uncompromising attitude of the trade union leaders, together with the arbitrary manner in which the trade unions are conducted, has led to the result that the workers have entirely lost interest in their occupational organization. In this connection it is symptomatic that not more than 50 percent. of members pay their contributions. General meetings are as a rule very poorly attended. It is extremely rare to find more than 15 percent. of the total number of members attending them.

"To the reasons given above may also be added the fact that the agenda is generally overloaded with questions of secondary importance, or with questions which have no connection with the immediate requirements of the worker, such as discussions on problems of world politics, on chemical warfare, etc.

"Right of Free Criticism Curtailed "This situation (continues MR. ANDREIEV) has been aggravated by the fact that, in the great majority of cases, the elections to trade union organizations (and especially to Works Councils) are confined to the mere formality of

accepting the official list, and there is no opportunity for the general meeting to discuss candidatures. The list is passed en bloc without any individual presentation of candidates. The outgoing committee does not always submit a report on its administration to the general meeting, and when a report is submitted it passes over in silence anything that might be awkward for itself. Trade unionists who endeavor to exercise their right of criticism are met with reprisals, which sometimes go so far as to exclude them from the union, and this generally means that they lose their employment. In these circumstances, the general meetings of workers are flat and uninteresting. Proceedings are confined to the mere reading of the report and to the adoption without opposition of all motions submitted.

"Works Councils Criticized

"A yet more serious feature of the situation is that in certain State undertakings the Works Councils appear to forget that they are trade union organizations, created for the defense of members, and connive at all the acts of the management, even if such acts are against the interests of the workers. This is particularly noticeable in wage questions, as also in the case of the dismissal of workers who are 'undesirable' from the point of view of the management.

"There have been cases in which Works Councils have, in agreement with the management, threatened workers on strike with a lock-out. Again, Works Councils indiscriminately approve of piece-rates proposed by the management. This often leads to a fall in wages.

"The Central Trade Union Council states that these facts have shown that the organizations the duty of which is to defend the interests of the workers are not competent to carry out their work. The tendency of Works Councils to become organs of the management is, in the opinion of the Central Council, likely to lead to a dangerous relaxation of the bonds between them and the workers. The workers come to consider the Works Council as a creature of the management.

"The Evil of 'Voluntary Contributions' "One great evil, which has had no small effect in alienating the workers from the Unions, is the abuse of the so-called 'voluntary contribution.' By means of resolutions passed by trade union committees, by Works Councils or even by plenary meetings of trade unions, the workers are compelled to become members of a number of public organizations, such as the Association for the Promotion of an Aerial Fleet, the Association for the Development of Chemical Warfare, the Association for the International Support of Revolutionary Parties, etc. These associations sometimes absorb between 10 and 12 percent. of the wages of the workers."