1234 New Yokk State Agricultural Socieiy 



average credits are insignificant, Init in the aggregate it runs into 

 injportant sums. It seems to have worked very well with the 

 small present proprietors of Germany, l)iu I do not think it would 

 appeal to the farmers of America nor do 1 think the system would 

 serve our purposes. 



In Germany they also have the corporate system of cooperative 

 personal credits. This system is known as the Schulze-Uelitzsch 

 hanks. It is organized on cooperative lines; each memher must 

 hold diu' share of stock. The par value of shares run from $150 

 to $100. They accumulate a surplus, which can be used only 

 to make up losses. Through the membership they accumulate quite 

 a large basic capital, and they receive saving accounts and deposits 

 from members and non-members, and pay interest on them. The 

 rate of interest paid depends on the time the deposit is left with 

 the bank, but it is paid from the day it is deposited to the date 

 of withdrawal. In short they do a regular banking business, pay 

 their othcers and employees, and declare liberal dividends. They 

 may organize with limited or unlimited responsibility of members. 

 On the last reports about one-third of the members had limited 

 responsibility charters. They make short-term loans to members 

 usually requiring endorsements or collateral. They also loan on 

 current accoimt, the limit to such a borrowing member being fixed 

 by the members, interest being charged on the amount of credit 

 actually issued from time to time, or credited when the balance is 

 in his favor. In addition to these loans, they discount bills of 

 credit. 



AVe could follow the cooperative credit systems through the dif- 

 ferent countries of Europe, but we would find the same principles 

 underlying them all, with varying details to suit local conditions. 

 The banks are now regulated by definite and exacting laws and are 

 usually subject to close inspection and regulation. Tn France and 

 sonu' other countries these banks are federated under regional or 

 state baid<s. which are subsidized liv the ""overnment to rediscount 

 the bills of the local banks when need be. Government aid. how- 

 ever, has its di';i\vl)acks, and like the land banks tlic most success- 

 I'nl ]>('rsonal ci'edit hanks ai'c foniKJ in systems that dejx'nd entirely 

 on their own I'csourccs. and the ci-cdit of tlieir nuMubers. 



The principle of the Schulze banks seems to be well adapted to 



