State Aid 



success, inspiring confidence among capitalists, 

 so that money may be borrowed on most favour- 

 able terms. Besides granting loans they receive 

 deposits, and the latter soon outstrip the former. 

 In Belgium at the beginning, they borrowed 

 their money from the Government Savings Bank, 

 but soon the process was reversed, and now the 

 well established ones lend the Bank their surplus. 



The general confidence in these Raffeisen banks 

 is not misplaced, for although they have no 

 capital and but little reserve yet there has never 

 (up to 1908) been a case in Belgium of failure, nor, 

 so far as can be ascertained, anywhere else. In 1907 

 there were 523 such banks in Belgium, with 

 25,000 members, lending about .£160,000 a year 

 and receiving about twice as much on deposit. 

 Each of them limits itself stridtly to a simple 

 village or community, and each member takes 

 care that no wastrel is admitted; because every one 

 would have to pay for his default. The Govern- 

 ment encourages them, and to cover preliminary 

 expenses buys books, etc., and makes a grant of 

 about £$ to each bank at its start. In 1907 these 

 523 banks granted 3,626 loans, of which more 

 than half were for less than ^10. 



We will take an instance to show how the money 

 is used. The village of Rillaer in Brabant has a 

 population of 2,500 souls and a credit bank. From 



161 M 



