130 APPENDIX 



small amounts, are added to the reserve fund. It is 

 customary to devote all the profits of the first year or 

 two to the reserve fund and afterwards 15 to 20 per 

 cent. The reserve fund can only be used to cover losses ; 

 and any shrinkage must be immediately replaced. 



Shares and reserve fund, together with unlimited 

 liability, where this occurs, constitute the secure basis on 

 which further supplies of capital are obtainable. These 

 are {a) deposits, {b) re-discounts by an outside bank. 



The amount of credit granted per member in 1905 

 was just over 5000 marks. This average has steadily 

 increased in the course of the previous ten years from 

 3000 marks in 1895. The figure, however, is liable to 

 mislead. It means that the credit transaction standing 

 to each member's account amounted to 5000 marks, 

 not that he actually took this sum out of the bank, 

 still less that the average loan was of this size. If a 

 loan of 1000 marks is renewed four times in the year, 

 it stands in the member's account as a credit of 

 4000 marks. If a current account with a credit of 

 20,000 marks is closed and reopened every six months 

 it stands as a credit of 40,000 marks. As a matter of 

 fact the actual loan in the form of a simple advance 

 averaged under 1000 marks (£50). 



RAIFFEISEN BANKS 



The Raiffeisen bank is the Schulze-Delitzsch bank 

 applied to the country, with the variations required 

 and justified by the difference of environment. 



The model rules of the Raiffeisen societies state that : 

 " the object of the society is to improve the situation 

 of its members both materially and morally, to take 

 the necessary steps for the same, to obtain through the 

 common guarantee the necessary capital for granting 

 loans to members for the development of their business 

 and their household, and to bring idle capital into 



