99 



members, and is entrusted with checking and supervising the 



Committee, overhauling all that it has done at least once a month. 

 And on both Committee and Council it is understood that the 

 richer members should be in a majority. 



Neither members of the Committee nor members of the Council 

 of Supervision are allowed to draw a farthing of remuneration, be 

 it in the shape of salary or of commission. Every chink and 

 crevice is deliberately closed against the intrusion of a spirit of 

 cupidity or greed, so as to make caution and security the 

 sole guiding principles of action. A salaried officer may not 

 feel so free to refuse an application for a loan, and may not be 

 able so easily to consider business purely on its merits. One 

 man only is paid — the cashier ; and he has no say whatever in 

 the employment and distribution of money, being merely an 

 executive agent. 



The simplicity of business ensures safety. The rules of Raiff- 

 eisen banks forbid most positively * banking' in the ordinary 

 sense of the term, or risk, or speculation of any kind. Their 

 business is simply to lend and to borrow. If a loan should go 

 wrong, under such circumstances, you know exactly what you can, 

 at the worst, be made liable for. That £l or £io absolutely limits 

 your loss. And joined to this simplicity of business is the sim- 

 plicity of business arrangements, bookkeeping, organization, and 

 so on. Everything is simple, everything is intelligible. 



As the rules were originally framed, no member was asked to 

 pay down anything on joining, either for shares or in entrance 

 fees. The German Government overruled this regulation and in- 

 sisted that there must be shares. The Raiffeisen association met 

 this dictation by making their shares as small as possible, gene- 

 rally lOs. or I2s., payable by instalments. 



No dividends or distribution of profits is allowed under any 

 circumstances. One of the essential features of the organization 

 is that individuals are to derive no benefit except the privilege of 

 borrowing, and every farthing which is left over out of transac- 

 tions is rigorously claimed for the reserve fund, which is an 

 entirely peculiar feature. It belongs wholly to the bank, and 

 must not be shared out on any pretence. It is really the backbone 

 of the whole system. Very small at first it grows very slowly, 

 only increasing little by little, but in the course of time it becomes 

 'an impregnable rock of financial solvency.' The first object is 

 to meet deficiencies or losses for which only with hardship indi- 

 vidual members could be made responsible. Its next is to supply 

 the place of borrowed capital, and so make borrowing cheaper to 

 members. Lastly should it outgrow the measure of such employ- 

 ment, it may, at the discretion of the society, be applied to some 

 public work of common utility benefiting the district. The rules 

 of the bank should clearly state, that, even if the association 



