II Dec, 191 1 •] Agricultural Credit Banks. 801 



Raiffeisen and Schulze-Delitzsch were the men whose economic genius 

 gave rise to credit banking. The former started his first bank in 1849, 

 and Schulze-Delitzsch in the following year. In both cases the exorbitant 

 usury charged by the money-lenders caused these benefactors to take 

 action. Their methods varied, but the results achieved by each were 

 eminently satisfactory. To-day, the credit banks of Germany number 

 over 15,000. Those of the Schulze-Delitzsch type were intended more 

 for urban artisans and industrial workers. On the other hand, the 

 Raiffeisen bank is better adapted for dealing with agricultural credit. 



The outstanding features of the Raiffeisen system are as follow: — 



1. They are registered co-operative societies with unlimited liability. 



2. The society and its administration are entirely local and confined to a small 

 district, often even a single village. 



3. The management 's intrusted to an elected committee of four or five members. 

 A council of supervision of three controls the acts of the committee, seeing, for 

 instance, that the loans are granted regularly. 



4. The services of the members of both committee and council are gratuitous; 

 only the accountant or cashier is paid. 



5. Loans are granted only to members. 



6. The capital represented by the members' shares is small, the bulk consisting 

 of savings deposited with the society. In some districts, as mentioned later, central 

 banks have been established and these supply funds to the branch banks. Advances 

 of Government money are also made. 



7. Loans are only granted for some reproductive or economic purpose approved 

 of by the members. 



8. Every member of the society is equally with every other member jointly and 

 severally liable for all debts incuired by the society and for any loan which a 

 member may fail to pay. 



This last prov^ision is not necessary, and has not been adopted in the 

 Victorian institution mentioned. 



" Capitalization of honesty " has been the keynote which has brought 

 success to co-oix^rative ba: !.ing. By virtue of the circumscribed area in 

 which each society operates, the management is able to correctly gauge 

 the character of the applicant and the purpose for which the loan is to 

 be applied. The result has been that the los.ses have been practicall-y 

 nil. There is also a moral side to the question. In many districts where 

 the banks were opened the people were ignorant and unreliable, but the 

 establishment of the local bank in. which they were all interested has 

 raised them to a higher standard of life. They were put on their honour 

 and responded. Thrift has been encouraged with beneficent results. 

 A current saying is, " Whoever sets up Raiffeisen hanks pulls down work- 

 houses." Prompt payment of interest is insisted upon. When dealing 

 with this matter, H. W. Wolff, the leading authority on Agricultural 

 Banks, writes — 



The bank will forgive anything rather than impunctu.ility or remissness in this 

 respect. And the cfTect which such strictness has in training nen to business habits 

 is remarkable. Should the borrower fail to apply the monev as was stipulated, 

 without hesitation or mercy the loan is called in, within fo.ir weeks' time, thr 

 sureties being made responsible. 



rKNTRAI, B.ANKS. 



In .some countries, for iiistaiicf, in England, France, and Germany, 

 the necessary fluids rcf]uir(>(l by credit banks are supplied by Central 

 Banks. 



The Central Co-operative Agrirultural Bank Limited (England) was 

 founded in 1908 under the auspici-s of the Agricultural Organization 

 Stxiety, which is rendering such good sor\-icp to the co operative movement 

 in til.- Old ( oiiiitry. Tlie obj.-cts of the li.mk are (<> make advances at 



