ON AGRICULTURE TO IRELAND 121 



tricts, came forward and advanced money at 3 per cent for the start- 

 ing of the banks, and for carrying on their transactions. Sometimes 

 individuals have advanced the money as an ordinary business 

 transaction. But from whatever source the money is obtained, the 

 personal security of the members is always accepted as sufficient, 

 and that although the members are poor, because they are honest, 

 because each is liable for all, and because the loans are for productive 

 purposes. 



Honest Men 



Let us suppose that a bank is to be started. It must be in an 

 agricultural district for these banks, differing in many respects 

 from the Schulze-Delizcht Banks, differ in this, — that they are for 

 purely agricultural purposes. The membership is purposely 

 limited to a parish or district, which should not have less than 200 

 or more than 4000 inhabitants. One reason for the limitation is, 

 that the bank transactions may not be so extensive as to necessitate 

 a paid staff. These banks are not meant to create situations for 

 anybody or even to pay dividends to the shareholders. Here again 

 there is a difference between the Schulze-Delizcht banks and the 

 Raiffeisen banks. The former provided that the members must 

 take a share. The share was orignally £30, which was paid by 

 instalments. The founder did this with the view of teaching the 

 members to save money. He paid high dividends with the same 

 object in view, and the result was that the banks were not suitable 

 for the poorest classes because the possession of money was a sine 

 qua non and because the interest payable for money was high of 

 necessity because the dividends were high. The Raiffeisen banks, 

 on the other hand, made their shares merely nominal and they 

 purposely pay no dividend. Their object is not to make money out 

 of the bank transactions but to make it possible for the members 

 to get money easily with which to make more money. The income 

 of the bank, less expenses, is therefore not paid to members. It is 

 put to a reserve fund out of which more money may be borrowed in 

 future. There is another reason why the membership is limited. 

 It is necessary that the members should know each other intimately, 

 and unless the area over which the members are spread was limited 

 they would not know each other intimately. But why should they 

 know each other intimately ? One reason is that the bank is thus 

 able to secure as members only honest men. Without that, it could 

 not borrow money and therefore could not carry on its operations. 



Unlimited Liability 

 But there is another reason — a reason personal to the members 

 themselves, which makes it imperative that they should know each 

 other, and is a further security to the lender against the introduction 

 into the bank of any but honest men. The members are as a rule 

 jointly and severally liable for the debts of the bank. Every member 

 is liable for the whole obligations of all the members. Thus, when 

 these banks are started it is not usual to advertise for members as an 

 agricultural society might do. The bank must be select from the 



