340 PROVISION OF BORROWING FACILITIES, 



It appears that the bank is provided with sufficient funds from 

 the deposits of the local societies ; these have always found more 

 money than they could dispose of, and this surplus can be deposited 

 with the Central bank at 4 per cent. ; the bank lends these deposits 

 to societies requiring funds at about 4J per cent, with a small 

 commission. 



The bank is authorized to invest its funds (1) in accounts-current 

 with its members (societies), (2) in discounting bills and in loans on 

 pledge, (3) in mortgages or purchase of rent certificates, (4) in 

 immoveable property, (5) in paper issued or guaranteed by the State 

 or a commune. 



The Central bank is doing a useful and increasing business ; aud 

 appears to be solidly based. 



Other Unions have followed the Neuweid example in starting 

 Central banks, e.g., Westphalia and Hesse Darmstadt (Offenbach) ; 

 the Articles, conditions and operations of these are similar to those 

 of Neuweid, but the Offenbach bank is somewhat more liberal in 

 admitting as members societies which do not adhere absolutely to 

 the strict Raiffeisen principles. 



In other Unions, the local societies utilize ordinary banks for the 

 deposit of their surplus funds and for obtaining credit. 



In Hanover a Co-operative Banking Corporation (Limited) has 

 been formed under the law of 1889. 



It has been objected that these banks being specialized for agricul- 

 tural loans, operations would fail, since they would have to receive 

 and disburse money at given periods, e.g., after harvest and before 

 cultivation, and would not be able to maintain an even current 

 of business. The result, however, proves that these special banks can 

 maintain their position, and though no great profit is made, this is 

 not their object ; they were formed as a channel of communication 

 so as to maintain an equal financial level in the various local societies ; 

 this object has been successfully achieved. 



Resume, There are then in full operation a vast number of very 

 small, autonomous, village loan societiess, of unlimited liability and 

 wholly rural, if not agricultural, drawing funds largely from the 

 savings of their members, cheaply, almost gratuitously administered, 

 aiming at the moral as well as the material development of their 

 associates, teaching them the use of credit and guarding them against 

 its abuse. These societies, originally isolated, are now linked in 



