PROVISION OP BORROWING FACILITIES. 391 



result farmers cannot obtain from banks, organised mainly to serve 

 industry and commerce, credit in suitable amount, at reasonable 

 interest, and on the security which they can usually provide. 



Yet, while commercial banks have become less satisfactory from 

 the standpoint of the farmer, his need for working capital has greatly 

 increased. More scientific and intensive farming, made necessary by 

 competition which has been facilitated by improved and cheapened 

 transport, refrigeratory processes, and other causes, requires more 

 capital expenditure on labour, fertilisers, feeding-stuffs, and 

 machinery ; payment in kind is being gradually entirely superseded 

 by payment in currency, while money wages are higher ; and other 

 expenditure, including cash payments to the State and other public 

 authorities, has increased. 



German farmers have advanced very far towards the solution of 

 the problem of obtaining adequate credit at moderate rates of 

 interest and on convenient terms of repayment by means of the 

 17,000 local co-operative banks established and conducted by them- 

 selves, such banks being further organised in central co-operative 

 banks. The membership of 14,993 local banks existing on January 1, 

 1910, totalled 1,447,766 persons, a figure which represented one- 

 sixth of the agriculturally occupied population of Germany in 1907 ; the 

 total turnover in 1910 of 14,729 societies amounted to 261,665,000, 

 and, at the end of that year, the loans outstanding for fixed 

 periods, together with overdrafts, to 93,034,000, while at the same 

 date the savings deposits totalled 92,429,000, and the deposits on 

 current account 10,865,000. At the end of 1911 there were 

 affiliated to 37 central banks (omitting the Prussian State Co- 

 operative Bank) 17,668 societies of all kinds, of which 14,508 were 

 credit societies ; and the total turnover of these central banks in that 

 year amounted to 410,391,000. 



Different German co-operators employed the same phrase in 

 giving to the writer the reason for the growth of rural credit 



O o o 



societies : "they are the children of necessity (die Kinder der Not)". 

 Individual small farmers must, in fact, rope themselves together 

 with j more or less stable bonds in order to be able to present to lenders 

 and depositors a security which the latter can accept as a guarantee 

 that their money will be repaid in the ordinary way and without the 

 exercise of legal pressure. And such local associations can lend 

 money to persons not providing "banking security", as they know 



