RALEIGH, N.C.-Conditions in rural America had become fertile fields for the seeds of CUs by the turn of the 20th century.
The few banks that made agricultural loans did so at high rates of interest, forcing many farmers to loan sharks who were one crop failure away from seizing the farm. Seeking answers, in 1910 the Southern Commercial Congress was held in Nashville, Tenn., and its work led President William H. Taft to collect information on how agricultural credit was extended in Europe. The resulting lengthy report also noted that Massachusetts had recently passed a Credit Union Act and urged Taft to encourage other states to do the same.
On Dec. 7, 1912, Taft led a White House Governors' Conference at which legislation for forming rural credit societies was discussed, and the president formed a Committee to Investigate Rural Credit in Europe. One of the committee members was John Sprunt Hill of North Carolina, who studied rural credit societies in seven European countries, and particularly Germany's Raiffeissen societies.
Returning to North Carolina, Hill authored most of the McRae Credit Union Bill which was submitted to the state legislature in 1915, where it passed. The new State Credit Union Division was placed under the Department of Agriculture and included funds for someone to establish rural credit unions in the state.
Hill's first effort at organizing a credit union took place in rural Lowe's Grove, and on Jan. 20, 1916 that community's farmers formed the first credit union in the state. By 1934 the North Carolina CU League had been formed.
"The strength of a credit union is like that of a twisted rope, many times stronger than the small threads that compose it.
-John Sprunt Hill, 1915
