The rise and fall of the cooperative spirit: The evolution of organisational structures in American thrifts, 1831--1939

The American thrift industry began in the mid-nineteenth century as a way for people of modest financial means to purchase homes. Modelled after British building societies, thrifts relied on members adhering to the principle of mutual cooperation to achieve this goal. Over time five basic operating structures emerged to assist in this process. When the collapse of fraudulent competitors in the 1890s tarnished the industry's image, thrifts leaders promoted the core values of mutuality and the cooperative spirit, as opposed to the need for operational uniformity, to regain the public's trust in their businesses. As a result, thrifts continued to follow a wide variety of organisational structures and procedures well into the 1920s. This changed during the Great Depression when industry consolidation, federal regulations, and internal industry efforts combined to bring greater uniformity to thrift business practices. These conjoining actions resulted in one set of operating procedures becoming dominant -- the one that relied the least on mutual cooperation. By the end of the decade the process of repositioning the industry was well underway, and with it the spirit of cooperation that characterised thrifts for more than a century had become more an emotional attachment and less a pragmatic business choice.