RAIFFEISEN BANKS 121 



(i) That the society is absolutely local, the limits of 

 a commune (village) being strictly maintained as the 

 limits of membership and operation ; (2) that the ad- 

 ministration is equally local, members alone being 

 eligible for appointment, and is absolutely gratuitous ; 

 (3) that there is but small share capital, all funds being 

 borrowed on the guarantee of solidarity and eventually 

 of the reserve ; (4) that there are therefore no divi- 

 dends to pay, and all profits go to the reserve; (5) that 

 only members, who must be residents of the commune, 

 can get loans ; (6) that loans may be of long terms, 

 extending to ten or even twenty years ; (7) that, as far 

 as possible, all funds are the result of local thrift. A 

 Raiflfeisen bank is simply a village society of agri- 

 culturists, labourers and shopkeepers, united for 

 common interests. At first a few of the better class 

 unite ; these by example and precept draw in others. 

 The first steps are hard, but once fairly started there 

 is little difficulty, as the advantages are manifest to 

 all. It is considered that the village should not have 

 less than 400, nor more than 2,000 inhabitants ; several 

 small villages may unite if too small for a separate 

 society. This principle of restricted area is deemed 

 essential ; the bank is thus at the borrower's doors. 

 It can be administered gratuitously and by the most 

 trusted men of the community ; it has a perfect know- 

 ledge of the candidates, and can reject all unworthy 

 of the honour, who would be likely to discredit the 

 society ; it tends, therefore, directly by reason of the 

 advantages of membership, to encourage or to incite 

 men to industry, thrift and sobriety : as a priest of the 

 Rhenish provinces once said, " The bank has done 

 more for morality than all my sermons"; it has a 

 perfect cognizance of the status and solvency of would- 

 be borrowers, and it can and does examine the purpose 

 of every loan and enforce its due employment, for in 

 a village all is open to the eyes and ears of all ; it 

 establishes among the members the bonds of con- 



