PROVISION OF BORROWING FACILITIES. 397 



to obtain deposits not only from members, but from non-members of 

 every age and class. Savings boxes are distributed, savings stamps 

 and savings cards of various values are sold, and every suitable means 

 taken to collect the uninvested money of the community. As a 

 result of their success in this respect the savings of rural communities 

 are utilised for the purpose of further wealth production in the same 

 area. 



Local societies are able to grant loans to their members at from 

 4 to 5 per cent.; rates not exceeding 44 per cent, predominate except 

 in the eastern provinces of Prussia, where the population being 

 thinner, and less prosperous, deposits are less abundant, and higher 

 interest has to be paid on them, while the credit of the central banks 

 has to be more frequently invoked. The central banks lend money 

 to credit societies at rates which vary according to market conditions ; 

 but the normal rates of interest for advances within the ordinary 

 credit, as allotted periodically to each society range from 4J to 5 per 

 cent. A small commission of y 1 ^ or ^ per cent, is also usually 

 charged yearly or half-yearly on the amount of credit taken up. 

 The local societies generally levy a single commission of yg- to t 

 per cent, (most usually y 1 ^) on the majority of loans ; on advances 

 for property purchase or settlement with co-heirs a higher commission 

 is usual. The cheapness of the credit appears more striking when it 

 is recollected that ordinary commercial credit in Germany is dearer 

 than in England. 



Loans are secured for the most part on personal bonds backed by 

 sureties, but mortgage security is not uncommon in certain districts. 

 The committee usually asks the purpose of the loan, and usually enters 

 this in the minutes of the transaction. Many of the more developed 

 societies do not ask the question, being only concerned with the 

 standing of the borrower and of his sureties. Although rural socie- 

 ties are developing their loan business on current account, the 

 majority of loans are still granted for definite periods; at the end 

 of 1910 loans outstanding on current accounts granted by 82 per 

 cent, of all rural credit societies amounted in value to about 28 per 

 cent^of their total loans then outstanding. Current account loans 

 are especially prominent in the two provinces of Saxony and Pomera- 

 nia, where the majority of societies have adopted limited liability as well 

 in the societies with unlimited liability in Silesia and Brandenburg. 

 Care is exercised that loans on current account do not become, in fact, 



