i8o BIOLOGICAL PROBLEMS 



trader can, if he has a business started, obtain credit 

 on a security basis, because banks make a practice 

 of advancing money in that way. But the ordinary 

 bank does not generally understand the needs of the 

 agriculturist, and will not lend money on any security 

 the farmer has to offer. Nevertheless, the agricul- 

 turist needs the credit if he wants to enlarge his 

 operations or to undertake any new work. He even 

 needs it more than the ordinary trader, because, while 

 the trader can start his turnover at once, the agri- 

 culturist has to wait while his seeds grow and his 

 crops ripen until he can reap his harvest. And all 

 that time, apart from rent, he has to pay for labour, 

 for the feeding of his animals, and so on. This need 

 of the agriculturist is seized upon by money-lenders 

 in every country, and the necessity of the peasant or 

 small farmer is their opportunity. 



In Germany co-operative credit societies were started 

 on the so-called Raiffeisen system, from the name of 

 the man who suggested it. Essentially the system is 

 that a community of people who know one another 

 become jointly responsible for the repayment of loans 

 to any one of their number. The security is simply 

 the personal character of the borrower, his reputation 

 for honesty, industry, sobriety, and so on. Although 

 many people might hold up their hands in horror at 

 the suggestion that any such system could be success- 

 ful, it has worked exceedingly well, because no such 

 society would ever grant a loan to a man unless they 

 believed in him. An essential condition of such a 

 society is that there should be personal knowledge 

 of all its members, and therefore the unit must neces- 

 sarily De small. These societies increased enormously 

 in Germany from the middle of last century to the 

 end, and a few years ago there were over 4000 of 

 them, with a total loan account for the year of 



