A Chinese Mutual Savings Society

Abstract

M /[R. CHANG, who lived in Hopei Province in China, found himself in need of money to meet some special business expenses back in 1918. He might have gone to his relatives and asked them, as members of his family, to lend him the money. Or if there were not enough relatives to provide the sum needed, he might have persuaded one of his friends to introduce him to one of the well-to-do money lending families of the community, but that would have involved the payment of interest of two, two and a half or even three per cent a month. To save the heavy interest charge and to avoid putting too much burden on his relatives, Mr. Chang went to thirty of his friends and relatives, told them of his need for funds and invited them to join a mutual savings society. Such societies are very numerous in North China. They are popular because the members provide the capital sums that they use in turn and so avoid the expensive services of the money lender. The thirty members of Mr. Chang's society were asked to meet at his house on the 18th of the seventh month. As they were coming at his request and were going to help him with his need for funds, Mr. Chang provided a feast for his friends. A feast was served at all subsequent meetings of the society, but after the first meeting each member paid his share of the expense. The cost in 1927 was $3.20 per table for eight, or 40 cents per person. After the feast, the members discussed the organization of the society, the rules and regulations. First of all, it was decided that the society would meet every four months and that it would continue for ten years, the time necessary to have the number of meetings equal the number of members. As Mr. Chang needed 120,000 cash,1 it was decided that the society should be a 4,000 cash society and that each member should contribute 4,000 cash each time the society met. Mr. Chang, as the organizer of the society, was to receive the amount collected at the first meeting. The sums collected at subsequent meetings were to go to the other members of the society in turn.