EUROPEAN AGRICULTURE 261 



province of Saxony there are 660 rural banks. These are small village 

 savings banks with an average membership of about 100 farmers. They 

 are the units of the farmers' cooperative organizations of the province. 

 At Halle there are three central cooperative organizations, with all of 

 which the local banks stand in relation and are members: (1) The Cen- 

 tral Cooperative Bank, which does nothing but a banking business and 

 whose members are cooperative associations instead of individuals. 

 (2) The Central Cooperative Association for the purchase and sale of 

 agricultural products. This, like the central bank, has for members 

 associations instead of persons and does a wholesale business in buying 

 and selling agricultural products. (3) The Union of Cooperative So- 

 cieties, which oversees the management of the local societies, audits 

 their books, furnishes uniform systems of bookkeeping and looks after 

 the organizing of new societies and does the propaganda work in pro- 

 moting agricultural cooperative work in the province. 



In order to become a member of the Central Bank at Halle the local 

 association or bank must take a share in it which is 300 marks. The 

 number of shares that the local bank or association hold is in propor- 

 tion to the amount of business it does. By virtue of holding shares 

 in the central association it is entitled to make loans from it. The 

 farmer goes to his local bank, of which he is a member and to whom he 

 is known, and makes his application for a loan. The bank in turn ap- 

 plies to the Central Association with which it has credit and secures 

 the money and it costs the farmer -J per cent, more interest than the 

 local society pays the Central in order to cover the local costs of the 

 society. The average interest rate charged by the Central Bank in 1909 

 was 3.92 per cent., in 1910 it was 4.34 per cent, and in 1911 was 4.39 

 per cent. The rate of interest paid for deposits is 3 to 3^ per cent.., 

 depending upon the current interest rate. 



Credit is the first requisite of successful cooperation. When a coun- 

 try has a well-established system of agricultural credits it is almost cer- 

 tain to be thoroughly organized on a cooperative basis in other lines. 

 This is the case in the province of Saxony, particularly in the purchase 

 of agricultural supplies, such as fertilizers, feeding stuffs, coal, seeds 

 and agricultural machinery. 



The local banks serve the farmers both as the societies through 

 which the purchases are made and furnish the credit for making the 

 purchases. In this way there is a saving in the cost of doing the busi- 

 ness and the bank knows how the money is spent. 



Moral Effect of Cooperation 

 The development of the cooperative credit systems among the farm- 

 ers of Europe has had an important influence on their social life. 

 Aside from the independence gained in their business affairs by being 



