A Starr-Bowkett Society was a co-operative, non-profit

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...

that provided interest-free loans to its members and operated on the principle of mutual

self-help Self-help or self-improvement is a self-guided improvement''APA Dictionary of Physicology'', 1st ed., Gary R. VandenBos, ed., Washington: American Psychological Association, 2007.—economically, intellectually, or emotionally—often with a subst ...

, as espoused in 1843 by Dr T. E. Bowkett.Darnell, Maxine. Attaining the Australian Dream: The Starr-Bowkett Way
/ref> Popular in

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

from the late 19th century until the early to mid 20th century, they no longer exist in any form.

Origins

Dr. Thomas Edward Bowkett was a London surgeon, and a vocal proponent of a number of progressive and unionist ideas. His scheme to provide "mechanics" with a means to become landholders, and thus have a greater influence on government, was first proposed during a series of lectures and articles in 1843. In 1862 Richard B. Starr made some changes to Dr. Bowkett's scheme, including a slightly increased subscription fee and shorter subscription time, among others. The changes made the scheme more palatable to potential subscribers and Starr promoted his now copyrighted system aggressively. The Starr changes also made running a Starr-Bowkett Society profitable for management.

Logistics of loans

A registered society is formed with a limited number of memberships available. New members are assigned a number and select the amount of loan they wish to apply for. Members then pay a monthly subscription for a set time period - e.g. 200 months. The amount paid each month is based on the amount of the proposed loan, generally 0.25% of the loan. Once the society has accumulated sufficient funds from subscriptions, ballot meetings are begun and held on a monthly basis. Loan recipients are chosen by a lottery. Once a member has received a loan, they pay it back, along with any amount still owing on their original subscription commitment. Once all members have had the opportunity to take out a loan, the society is closed and the original capital returned to its members.

History

There were concerns over the lottery system involved in the scheme, which was carried out in full view of all members and therefore open to physical abuse to change those who received the funds. That, and the actions of some unscrupulous society managers, led governments in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

to outlaw Starr-Bowkett societies there. However, they had spread to the Australian colonies, and became a popular option for a burgeoning

middle class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. Commo ...

to afford their own homes.Darnell, Maxine. The Alternative Building Society - Starr-Bowkett Societies: function, growth and operation. Presented at Asia Pacific Economic and Business History Conference, Sydney, 12–14 February 2007 Some societies transformed over the years into mainstream banks (e.g. Newcastle Permanent of

Newcastle, NSW Newcastle ( ; Awabakal: ) is a metropolitan area and the second most populated city in the state of New South Wales, Australia. It includes the Newcastle and Lake Macquarie local government areas, and is the hub of the Greater Newcastle area, w ...

, Australia),"History of Newcastle Permanent
/ref> and many were closed in the 1960s due to unscrupulous operators. The last known traditional Starr-Bowkett society, in

Newtown, NSW Newtown, a suburb of Sydney's inner west, is located approximately four kilometres south-west of the Sydney central business district, straddling the local government areas of the City of Sydney and Inner West Council in the state of New Sout ...

, Australia, sold its building in 2014 and moved operations to Strathfield. Its remaining schemes will continue to operate until the final loans are repaid. As of 1 July 2019, no new Starr-Bowkett Societies may be formed or registered. Existing societies may continue to operate, however, Starr-Bowkett Societies cannot admit any new members.

References

{{Reflist Mutual organizations