Seventy-Thikd Annual Report 1215 



European countries have been phenomenal. There has been 

 naturally a study of improved farming methods, a tendency of 

 each member of the society to get the best out of his farm, and 

 a sobriety of character and realization of responsibility which 

 did not exist under the old system of each one jogging along 

 for himself. 



I am not going to burden you with many ligures on this subject. 

 I believe that in Germany the mutual credit societies have some 

 one thousand six hundred million marks, or approximately 

 four hundred million dollars of assets on their books; that 

 is, they have that much money which has been de- 

 posited by their own members, or some of it borrowed, 

 as I will explain, from other banks and loaned to their members. 

 Xaturally it developed after a time that these societies did not 

 have in their own localities all the money they needed ; other 

 societies had more than they needed; and they began lending to 

 each other and borrowing from each other. Then they formed 

 central banks. By central I do not mean central for the whole 

 country, but district associations. Those district associations, 

 visually made up by the share capital of the local societies, attain 

 a degree of financial responsibility which puts them on a level 

 with other banking institutions; so that if one of these mutual 

 credit banks needs more money, it goes up to the central bank of 

 issue and borrows it. In other words, a district society of this 

 character can rediscount its paper at the Imperial Bank of Ger- 

 many, the great central bank of issue which controls the exchanges 

 with the world ; and in France at the Bank of France, or at some 

 of the great joint stock companies. Those great joint stock banks 

 in turn can discount their commercial paper almost without limit 

 in times of pressure. 



We cannot have, probably, a thorough and effective organization 

 of mutual credit upon a large scale until we have a better cur- 

 rency system. The Credit Foncier mortgage bank could s'o on 

 with very little reference to the state of the currency because it 

 has no ol)ligations, practically, to meet on demand ; but the mutual 

 credit societies, which loan for short terms, and which 

 need to furnish ready money to the farmers when they 

 want it, would cease to function or would be embar- 



