Eminently deserving of public interest and confidence, and, therefore, most naturally in the enjoyment of substantial prosperity is the People’s Finance & Thrift Company, of Santa Cruz, with headquarters at 3 Locust Street. It is incorporated under the laws of the state of California, and received its charter May 31, 1923. It offers a thoroughly commendable proposition usually netting high returns to farsighted business and professional men who will organize—with sufficient and proper aid,—a company locally owned, locally managed and locally controlled. It operates according to the Wimsett system and has a capital of fully fifty thousand dollars.
The story of the People’s Finance & Thrift Company recalls the most interesting incidents as to the origin of industrial banking in America and elsewhere. About seventy years ago there was inaugurated in some of the European countries a specialized phase of banking designed to meet the needs of the wage earners, salaried persons and others not having the usual banking and borrowing facilities. These institutions, variously called Industrial Banks, People’s Banks, Thrift Banks, and Workingmen’s Bureaus, have met with great success. In an article in the American Review of Reviews, for example, in the January, 1920, number, written by W. F. McCaleb, entitled, “People’s Banks: A new Era in American Economic History,” there are some interesting facts concerning these institutions. He says: “As a partial measure of their success, it is stated that in 1910 there were in Europe sixty-five thousand of these institutions, with an annual overturn of seven million dollars.”
It is an historical fact that America, the nation in which political liberty has reached the highest development, has failed to fully develop economic liberty in so far as financial facilities for the non-propertied classes are concerned. Until within recent years, the man without property, no matter how good his character, or how great his earning capacity, had no business credit; whatever credit was extended him was given as a personal favor. He could cast his ballot, but he could not borrow money without paying the unscrupulous money-lender a ruinous rate of interest; or by applying to a charitable agency at the sacrifice of self-respect.
Under our present banking regulations, the man without collateral cannot borrow from our commercial banks, and, without the aid of institutions such as ours, he has no recourse except to borrow at a ruinous interest rate. In spite of laws on our statute books, high rate money lenders thrive by reason of the sterner law of necessity. It is obvious to those who study the situation from a humanitarian standpoint that the only means of relief is to establish and operate a system under which the profits of the business will be reduced to the standard of commercial banking.
The People’s Finance & Thrift Company was organized in Santa Cruz for the purpose of meeting the demands of these people, and it will always be the Company’s endeavor, in addition to meeting their financial needs in loans, to mediate the spirit of thrift by teaching them to save as well as to borrow and repay. The self-respecting man with moderate regular income from salary or wages, who can borrow in his own name,—without appeal to she semi-charitable loan associations, and without becoming entangled in the clutches of a high-rate money lender, is a strong constructive force in any community.
Statistics show that approximately only six per cent of the population of the United States are served by commercial banks, while 18 percent would be possible patrons of the People’s Finance & Thrift Companies. The great mass of dependable wage earners and salaried people—those who have permanent employment—are the unlimited field of these companies in every community.
The easiest way to pay off a debt is by systematic weekly or monthly payments—which is also the surest way. This method keeps us in close touch with our borrowers.
The Peoples Finance & Thrift Companies make small loans, twenty-five to one hundred dollars, at reasonable rates, to those who are proven, by thorough investigation by the local credit association, to be of good character and industrious habits, and hence worthy of trust, and who can also secure two equally dependable endorsers on their notes. No property or other collateral is required as security. Loans are made in accordance with the borrowers’ income, and repaid on the easy installment plan, avoiding the danger of over-borrowing. Character is always a safe basis for loans. In the year 1922 more than one hundred million dollars was loaned on this plan in the United States to wage earners. Character, plus earning power, forms a proper basis of credit, and the system of the People’s Finance & Thrift Company proves a valuable community asset, a benefit to the merchant, and a benefit to the banks. The numerous institutions operating under the Wimsett System are meeting with uniform success in both large and small cities, and this is proven by the enthusiasm of the satisfied stockholders.
Under the Wimsett System, each company established in the various cities is a complete and self-governing unit, operating independently under the charter issued by the state in which it conducts its business. The preliminary survey, which constitutes the initial step in opening each of these institutions, is of supreme importance, and is paramount to securing their successful operation when once organized. This survey is credited, to a great extent, with the usual success of these institutions under the Wimsett System, as it is possible thereby to select the best and most reliable business and professional men in each community, as the organizers, officers, directors and advisory board, and by their selection the leading citizens are put on a preferred list as prospective shareholders.
The officers of the Peoples Finance & Thrift Company of Santa Cruz County are: president—Dr. M. J. Gates; vice-presidents—W. O. Kerrick and C. C. D. Dake; secretary and manager—Hugh J. Leonard. The directors are: Dr. M. J. Gates, W. O. Kerrick, C. C. Dake, Walter L. Paine, R. O. Lincoln, Harry E. Murry, Emmet C. Rittenhouse, Dr. A. N. Nittler, and M. J. Leonard. The Santa Cruz County National Bank and The Farmers & Merchants National Bank are the official depositories of the company.
Source: History of Monterey and Santa Cruz Counties, California : cradle of California’s history and romance : dating from the planting of the cross of Christendom upon the shores of Monterey Bay by Fr. Junipero Serra, and those intrepid adventurers who accompanied him, down to the present day. Chicago: S.J. Clarke Pub. Co., 1925.