The history of the West Virginia Credit Union League closely parallels the history of the world-wide credit union movement. A need was identified that the common workers should have a fair and equitable place to save and to borrow. These humble beginnings gave way to urban as well as legal developments which have in turn led to the massive changes of the 1980’s and to the further challenges of the future. To better understand the history of the West Virginia Credit Union League it is important to grasp the unique past of financial cooperatives.
As the credit union idea took root in the northeast, the promise and hope of credit union legislation began surfacing in West Virginia. It was not, however, the first sign of a financial cooperative in the state. Efforts began in 1912 for state legislatures to pass measures allowing for the formation of Rural Credit Societies. President William Taft sent a letter to West Virginia Governor William Glasscock urging the passage of this legislation. The W.Va. State Grange became involved in this effort for financial cooperatives for rural families earning their living through agriculture.
In 1913, Congress passed legislation forming the American Commission. The Commission’s role was to study European methods of agriculture to help improve rural life. This included methods of production, distribution, and finance. Because of the American Commission, Governor Henry Hatfield appointed a committee to look at farm life in the state and make recommendations for improvements of rural life. The committee consisted of Chairman J.F. Marsh of Charleston, H.E. Williams of Charleston, J.B. Garvin from Huntington, and Wheeling’s E.W. Oglebay.
In its recommendations to the Governor, the committee found that better credit was needed for farmers. They found that although there were numerous banks in the state, farmers were having trouble securing credit. The report added that “farmers are favorite depositors but are often treated as undesirable borrowers, having to pay as much as 8% on money to improve their farms.” This committee felt that farmers should have facilities for easily securing fair loans for productive and constructive purposes. A measure was passed to allow for such facilities but it took another eleven years before it was introduced in the W.Va. State Legislature through the efforts of William Bryan Hawkins from Huntington.
Turning words into action
In September, 1923, Hawkins read an article in Colliers commending the efforts of credit unions. The article intrigued Hawkins and he wrote a letter to the Editor of Colliers requesting additional information on these institutions called credit unions. His request was forwarded to the Credit Union National Extension Bureau (CUNEB) who in turn contacted Hawkins and began working with him concerning credit union legislation in West Virginia.
Late in 1924, the correspondence between CUNEB and Hawkins paid dividends in the formation of the Credit Union Bureau of West Virginia. The bureau established headquarters at 701 Robson-Pritchard Building in Huntington. The officers of the W.Va. Bureau were: J.F. Bedell (Charleston), President; Charles S. Trump (Martinsburg), Vice President; Dr. Robert R. Roth (Thomas), Treasurer; and W.B. Hawkins (Huntington), Executive Secretary. Just prior to the formation of the Credit Union Bureau, Hawkins was elected to the state House of Delegates and there was little doubt as to what his first piece of legislation would deal with.
On January 27, 1925, House Bill 438 was introduced by Hawkins to “provide for the incorporation, establishment, and operation of loan and savings institutions known as credit unions.” In response to the measure, the March 22, 1925, issue of The Charleston Gazette featured an editorial entitled, “An Antidote for Usury.” The article states, “The credit union does not compete with the commercial bank and the building and loan association. It specializes in small savings and loans, a field not attractive to the other institutions, but which is a large field indeed. It is also the only known antidote for the ‘loan shark’ and his usury.”
With the help of Edwin Keatley, the Speaker of the House, House Bill 438 was passed overwhelmingly on April 20. In the state Senate, Senator William W. Cannon from Putnam County was working for the passage of Senate Bill 279, the counterpart of Hawkin’s bill. Cannon did such a fine job of presenting the measure in the Senate that the bill passed without a dissenting vote. Three days before the adjournment of the Legislature, the bill was sent to Governor Howard Gore for his signature. The measure became law in the summer of 1925 without ever receiving the Governor’s signature. Because so many bills were passed during that session of the Legislature, Gore only dealt with measures that he disapproved of.
With the passage of the state credit union law, three state chartered credit unions were formed ion the following months. In the Banking Department Report of June 30, 1926, credit union charters were presented to Charleston Postal Employees on November 11, 1925, to Huntington Postal Employees on November 27, 1925, and to the Wheeling Postal Employees on January 23, 1926. Although Charleston Postal was awarded the first charter, both the Huntington and Charleston Postal Employees Credit Unions were issued Certificates of Authority on November 6, 1925.
Charles Stratton, the Treasurer of the Charleston Postal Employees Credit Union, began a tireless crusade to organize credit unions throughout the state. The June, 1927, issue of The Bridge (the fore-runner of Credit Union Magazine) described Stratton as one of the most effective and tireless credit union organizers in the United States and credited him with the rapid development of credit unions in West Virginia. Stratton worked in Charleston, Huntington, Bluefield, Wheeling, and Parkersburg to organize the postal employees’ credit unions. In addition to these groups, in 1927, he was instrumental in the initial efforts of organizing the railroad employees of the Huntington C & O facility.
Another pioneer in the development of credit unions in the state was Theodora Fonteneau Rutherford of Institute. She was instrumental in the chartering of West Virginia Collegiate Credit Union which served the students and faculty at West Virginia Collegiate Institute (W. Va. State College). Mrs. Rutherford met with Roy Bergengren in 1927 and was featured in an article in The Bridge that June about the operations of the credit union of which she served as Treasurer. More than thirty years later Mrs. Rutherford served on the W.Va. Credit Union League Board of Directors.
A real argument for state leagues…
Credit union organization continued unabated until 1931 when even Bergengren learned a lesson in what can happen when dealing with state legislatures. Roy Bergengren describes what happened to the West Virginia Credit Union Law in the Crusade.
“Our West Virginia law had been enacted in 1924. There were some excellent credit unions in the state by 1931 but not many of them. We had no particular reason for being interesting in the 1931 session until, out of a clear sky, the C.&O. credit union, which was located in Huntington, was notified by the West Virginia Bank Commissioner to discontinue operations. It was somewhat mystified, as it had recently passed a good examination. The following interesting legislative procedures were then uncovered.
In 1929 the legislature had provided for the Recodification Commission. It was their job to go over all the existing laws and recodify them, offering the new code to the 1931 session. This had been done. The new code had been enacted after all the old laws had been repealed. It was discovered that the Committee had, somehow or other failed to include the credit union law in the recodification. Since our law was a long one, this was about as easy to understand as it would be to overlook the square grand piano when moving the household goods to a new location. We were left to conclude that some legislators friendly to high-rate loan companies had slipped over a fast one — in fact, a knockout.
The milk was spilled and we had no time to cry about it.
Fortunately, the legislature was still in session. I wired Charley Stratton. He was connected with a credit union at the Charleston Post Office and had been active in organization work. He contacted the State Banking Department and persuaded them to agree not to molest the credit unions, pending an effort to restore the law to the statute books. W. B. Hawkins was contacted. He was the father of the original West Virginia law and came promptly to the rescue. The West Virginia Association of Credit Unions organized over night with nineteen directors.
The newspapers, friendly to us in the campaign, rallied and raised a howl. House Bill 31 was promptly offered by Representative Starcher. Stratton moved over to the state capitol. Never was a campaign organized so quickly, so efficiently and so successfully. E. I. Ford, president of the new association, and all his associates worked ceaselessly. On March 9, Stratton wired that the new law had been enacted and signed. Never after that episode did we assume that there was no need for watching legislation in a state where our bill had already been enacted. We now had a real argument for the value of state leagues.”
As Bergengren stated, there was now a real argument for the state leagues. From 1931 until 1937, much happened that influenced the formation of the West Virginia Credit Union League. In 1934, the Federal Credit Union Act was passed and signed into law by President Franklin D. Roosevelt. The first West Virginia credit union to organize under the Federal statutes was KEMBA Charleston in 1935. In August, 1934, a historic meeting was held in Estes Park, Colorado, where the Credit Union National Association (CUNA) was founded. In 1935, CUNA Mutual Insurance Society was created to meet the movement’s insurance needs. CUNA Supply Cooperative was founded in 1936 and a centralized bonding service to insure employee performance was initiated in 1937.
An idea becomes a reality
There had been organizations of credit unions but a league had never been formed. Charles Stratton was quoted in 1927 saying that West Virginia was just about ready to form a league. His prediction was short by ten years. The organizational meeting was held in Huntington on April 5, 1937. Chairman for that session was H.M. Rhodes, the field representative for CUNA. Acting as Secretary was W.C. Vinton of the Emmons Hawkins Hardware Company Emp. FCU in Huntington.
Action taken at the meeting was to apply to CUNA for membership and the election for Board of Directors. The first Board of Directors of the West Virginia Credit Union League consisted of:
- T.J. O’Shea (President) — Huntington W.Va. Firemen’s FCU;
- Charles B. Maxwell (Vice-President) — Clarksburg W.Va. Gov. Emp. FCU;
- W.C. Vinton (Treasurer/Secretary) — Emmons Hawkins Hardware Company Emp. FCU (Huntington);
- F.M. Boon (Managing Director/National Director) — Huntington Postal CU;
- Mae Newman — Huntington Teachers FCU;
- Ray Williams — Bradshaw-Diehl EFCU;
- Hiram King — Viscose Emp. Nitro, W.Va. FCU;
- R.T. Hibner — Appalachian Electric Huntington EFCU; and,
- J.W. Bucklin — Anderson-Newcomb EFCU