132 APPENDIX 



reserve fund, because money thus placed can only be 

 withdrawn to cover losses: while if placed on the 

 foundation fund it can be used for positive improve- 

 ments, such as the extension of premises or the establish- 

 ment of a burial fund. In actual figures, the reserve 

 funds are not so strong as in the town bank, owing in 

 part to the lower loan charges. 



The loan capital, as in the town banks, is made up of 

 small savings and deposits. It is drawn, either from 

 within the area covered by the bank, in which case it 

 comes both from members and non-members, the former 

 being where possible rewarded at slightly higher rates 

 in order to encourage membership : or from without 

 the area, in which case it of necessity comes from non- 

 members. Savings are received in sums from one mark 

 upwards : the smaller amounts being collected by penny- 

 stamp books, similar to those used in the Post Office 

 Savings Banks of England. The willingness with which 

 the peasants bring their savings to the bank is a 

 triumphant proof of Raiffeisen's contention that the 

 small agriculturists, by a combination of unlimited 

 liability and close supervision, can become absolutely 

 credit -worthy. No savings since the foundation of the 

 first village bank have ever been lost through bank- 

 ruptcy. 



In addition the bank obtains credit from a central 

 bank, with which it has a current account. 



The funds thus raised are utihsed for three kinds 

 of credit : (i) Simple loans ; (2) current accounts ; 

 (3) property transfers (Zessionen). 



Current accounts are rare except in villages where 

 there is a little industry. With regard to the simple 

 loan, the security, as in town banks, is personal pledge, 

 land mortgage, or (very rarely) deposit of collateral. 

 The personal pledge, as with Schulze-Delitzsch, is the 

 most frequent. But Raiffeisen interpreted it more 

 strictl}^ than Schulze-Delitzsch. Not only must the 

 credit-seeker produce an outside testimony to his 



