172 RURAL RECONSTRUCTION 



societies, has shown it to be in its power to render. For the RaifEeisen 

 Union has used the Government Bank as a central bank for a time — 

 till it discovered the " serpent in the grass." That serpent was the 

 Government institution's attempt to bring the co-operative banks 

 into subjection to itself, f etchers and carriers, rather than benefi- 

 ciaries. With so powerful a business bank at their back, co-opera- 

 tive banks need be in no fear of running short of money. 



Organically, union secures another extremely valuable benefit. 

 It admits of control being made very much more searching and 

 stringent. And control is the soul of this business. On the top of 

 what is being done in each individual bank, the " Union " controls 

 and inquires into the conduct of business, employing controllers with 

 much larger experience and wider technical knowledge than local 

 banks can command the services of. And its control becomes very 

 much more effective, because it is an advantage for the single bank 

 to be in the union, which gives it a certain cachet of quality, accepted 

 by the public and the money market. But, being in the union, it 

 will have to submit to union rules and judgments. 



In extreme cases it may be turned out of the union, and that will 

 spoil its position and its credit. The effect of such union control 

 has been that not only has business become much sounder and more 

 careful, but banks inside the union have become far more of equal 

 quality, which is a distinct advantage in the command of credit. 



I have known banks of the two descriptions here described, and 

 of others formed in more or less faithful imitation of them, intimately 

 for quite thirty years. I have w T atched their business and the 

 progress of their movements in detail, and pursued the expansion of 

 their system practically over all the world — always excepting our 

 own backward island ; for Ireland has adopted and benefited by 

 co-operative credit. A more useful institution, so I may say, more 

 productive in itself, and more fruitful in the subsequent creation of 

 secondary benefits, spreading co-operation out over further ground, 

 I do not know. If I am asked whether I give the preference to one 

 or other of the two systems reviewed, I must distinctly answer : No. 

 Either is the best in its own proper sphere. Sentimental considera- 

 tions make out the Raiffeisen system, to me at any rate, as the most 

 attractive. It stoops down so low ; it assists the very helpless ; it 

 moulds character ; it has worked veritable wonders in the reclama- 

 tion of bad characters and entire bad neighbourhoods ; it knits 

 people together and generates family feeling. And it enables men 

 with money to come to the assistance of their poorer neighbours 

 and help them on their legs in the very best way without demoralising 



