The Down East Formula

Like other New England states, Maine has seen many of its industries move off to the South, in search of cheaper labor and raw materials. But instead of crying to the Government for aid, Arthur F. Maxwell, president of the First National Bank of Biddeford, and some other Down East bankers and businessmen decided to solve the problem for themselves. They founded the Development Credit Corp. of Maine, the first and only banker-businessman "coop" in the U.S.

With Arthur Maxwell as president, D.C.C. got 60 industrial concerns and 30 banks to contribute to a cooperative credit pool of more than $500,000. By making loans to small businessmen who can't get a loan from a bank, D.C.C. hopes that it can slow down the exodus of industry from Maine, even persuade some outstate firms to come in. Not a penny of Government money has gone into D.C.C. Said Maxwell, who started in the banking business by "sweeping the floor" at the First National: "We're still rugged individualists here in Maine, and we think we can do this kind of job better than Uncle Sam."

Last week the D.C.C. made its first loans, to such firms as a wood-turning plant, a textile knitting mill and a small-boat building yard. It also approved three more applications, for a total of $97,000 in loans, out of the 311 received.

D.C.C. gives preference to enterprises which will put the maximum number of people to work. It relies on good Down East judgment to guard it against bad loans, but it also hopes to lend money on calculated risks. Said President Maxwell: "This country was made great by risk, not security."

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