PROVISION OF BORROWING FACILITIES. 291 



almost gratuitous administration. In this he is assisted partly by 

 the newness of the banks, partly by the Italian habit of gra- 

 tuitous public administration as seen in the matter of savings banks, 

 Monti and other benefit societies. Loans are also granted for longer 

 terms than in Germany, but the method is still by three months* 

 bills, periodically renewed, since this method gives the bank consider- 

 able control over the utilization of the loans and over the borrowers' 

 punctuality in repayment. 



The societies have, of course, a newspaper organ of their own. 



The popular banks, both of Germany and Italy, are able to reach 

 the small folk and grant quite small loans ; with the RAIFFEISEN 

 societies they form what will eventually be an almost complete 

 banking organization for the smaller folk of the countries through 



o o o 



which they are ramified. 



Raiffeisen Credit Unions and Wollemlorg Casse Rurali. The 

 Raiffeisen system, also adopted of late years into Italy, is entirely 

 rural and co-operative. It is again of German origin, of the humblest 

 beginning, and is due entirely to the philanthropic devotion and 

 energy of a simple burgomeister (village head), ' Father ' RAIFFEISEN. 

 These societies are based on the following principles, which are con- 

 sidered absolute : (1) limitation of area, usually to a single village, 

 so that the bank may know and be known of all ; (2) unlimited 

 liability ; (3) reduction of the share capital now compulsory by law : 

 to the lowest possible minimum ; this principle is expressly intended 

 to arrest any tendency to the seeking after dividends ; (4) absolute 

 gratuitousuess of administration, only the actual clerical work being 

 paid for, and that on a most economical scale ; (5) the utilization 

 of the loans only for productive purpose, the word ' productive ' being, 

 of course, interpreted widely, as, for instance, for the maintenance 

 of the farmer pending his crop, the paying off of usurious loans, and 

 the like ; (6) a considerable duration of loans, extending ordinarily 

 up to \0, and occasionally to 20 years ; (7) repayment by instal- 

 ments; (8) entire absence of increasing dividends, the shares, of an 

 almost nominal amount, bearing only a moderate interest fixed by 

 the articles, all other profits being credited to a reserve which is 

 not the property of members save in their corporate capacity ; hence 

 it can only be spent in works of public utility. 



These small and weak societies early found the advisability of 

 grouping themselves for mutual advice and moral support; there arc 



