American Jewry is setting up for devastated Jewish communities in Eastern Europe a banking system which resembles in many respects the United States Federal Reserve, according to David M. Bressler, one of the national chairmen of the Allied Jewish Campaign, and who is also a member of the Joint Distribution Executive. It supports a network of financial institutions functioning in ten countries under the direction of the American Reconstruction Foundation, which was established in Europe in conjunction with the Jewish Colonization Association.
One and one-half million Jews in Eastern Europe are dependent for their livelihoods upon occupations established with the aid of outstanding loans of credit cooperatives in the Foundation system, Mr. Bressler said in describing the scope of the philanthropically supported banking business. The outstanding loans at present amount to $13,400,000, he said, and in the course of a year the credit-cooperatives have a turnover of more than $60,000,000. The present number of borrowers is 308,748, and the average size of a loan, $60.
ALLIED CAMPAIGN TO AID
One of the purposes of the present $6,000,000 campaign from which $3,500,000 is destined for the continuation of Joint Distribution Committee work in Eastern Europe and $2,500,000 for the Jewish Agency for Palestine, will be the extension of the existing banking system, Mr. Bressler said.
The credit machinery, he explained, has at the apex the Council of the American Reconstruction Foundation, composed of twelve delegates from the Joint Distribution Committee and the Jewish Colonization Association, the two organizations which created the Foundation in 1924, and eight representative leaders of Eastern European Jewry. Lieut. Gov. Herbert H. Lehman of New York State, as chairman of the Reconstruction Committee of the Joint Distribution Committee until the Foundation was organized, directed the revival of the Jewish credit cooperative movement in Europe.
COUNCIL RULES ENTIRE SYSTEM
Like the Federal Reserve Board, the Council lays down general rules governing the entire system, decides for what uses funds may be loaned and regulates interest rates. It receives and votes on recommendations of the Foundation managers, Dr. Bernhard Kahn and Louis Oungre. Foundation funds are advanced at low rates of interest to central banks and federations of cooperative credit societies. The central institutions in turn transmit this credit to their member-cooperatives, who possess share capital in the central banks and thus stand in the same relationship to them as member banks stand to the district banks in the Federal Reserve System, Mr. Bressler explained.
CREDIT COOPERATIVES SMALLEST UNITS
The credit cooperatives are the smallest units in the system and are owned by the individuals who borrow from them or hold deposit accounts with them. They exist today to the number of 712 in Poland, Lithuania, Latvia, Roumania, Czechoslovakia, Bulgaria, Esthonia, and Turkey. While the present investments of the Foundation amount to $2,992,583.35 the local populations have now invested in share capital, and deposits, over $11,000,000.
Mr. Bressler said that the most completely organized network exists in Poland where the Foundation investments are the largest, amounting to $1,204,222.73. Here 444 credit cooperatives with a total membership of 177,932, have a total share capital and reserves of $1,000,000. The cooperatives have 165,929 loans outstanding. Fifty-four merchant banks in the system serve the upper classes of Jewish merchants and manufacturers, and consumers’ and producers’ cooperatives help the working classes.
HAS CENTRAL BANK
The Bank dla Spoldzielni is the central bank and is owned by the federation of cooperatives. Besides being the clearing house and the central financial institution for the cooperatives, the bank does a commercial business with private firms and individuals. Another central bank in Poland is the Central Jewish Volksbank in Vilna. Cooperatives in Galicia have already subscribed a large part of the share capital necessary for the establishment of a separate central bank in their district. The Foundation’s second largest investment is in Roumania, Mr. Bressler said, and amounts to $534,959.81.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
