AGRICULTURAL CREDIT 



One of the great difficulties of the Irish farmer has been the want of 

 capital. Capital is needed for two purposes in Ireland, — for the 

 purchase of the land which in ordinary circumstances and to a 

 limited extent would be accepted as sufficient security for the loan. 

 It is also needed for the working of the land and must as a rule be 

 got on personal security. There has been no difficulty about capital 

 for land purchase. The State has advanced it. The difficulty has 

 been, as it generally is, about capital for working the land. The 

 I.A.O.S., which has done so much for the Irish farmer, made in- 

 vestigations into the systems of Agricultural Credit in Continental 

 countries. Ultimately, they decided that the system most suitable 

 to Ireland was the Railfeisen system. 



Raiifeisen, the creator of the system, was born in the year 1818, 

 in Westphalia. He was a burgomaster and came into contact with 

 the poor peasant cultivators in the Rhine! and. He first started a 

 co-operative bakery, and the price of bread fell by 50 per cent. He 

 then started a co-operative cattle-buying society, and in the year 

 1849, recognising that the great difficulty in the way of the co- 

 operative movement was the want of capital, he started on a very 

 small scale his first bank. There are thousands of RaifEeisen banks 

 on the Continent now, and it is generally admitted that they are of 

 all banks the best adapted to the needs of the poor agriculturist. 



If we are to understand these banks we must understand the object 

 which the founder had in view. It was not merely the lending of 

 money to poor farmers. That of itself might be very far from a good 

 thing. One of the objections brought against the small holding 

 movement in Continental countries is, that much money has been 

 lent to the small-holders and that their debt is growing rather than 

 decreasing with the years. We are not anxious meantime to con- 

 trovert that statement. We are content to say that in so far as it 

 is true the development of character in general will remove the evil. 

 Now, one of the objects Raiffeisen had in view was the development 

 of character. Raiffeisen wanted so to advance money that it 

 would inspire in the borrower, courage, thrift, self-help, unselfishness, 

 while at the same time it inspired the outside public with such 

 confidence that capital would be freely attracted to the Societies. 

 The object Raiffeisen had in view has been attained to a wonderful 

 extent in the countries which have adopted his system of banking. 



Now, the first thing a bank wants is just what the members start 

 the bank to get, capital, and how do the Raiffeisen banks get 

 capital ? They refuse to take it as a gift or as charity. Raiffeisen 

 even deprecated State aid. His successors have not followed him 

 in this. In Ireland the Congested Districts Board in congested 

 districts, and later on, the Department of Agriculture in other dis- 



