RURAL CREDITS 765 



Raiffeisen established his banks on the fundamental principle of 

 unlimited joint and several liability of the members. Unlimited lia- 

 bility is still regarded in Germany as the system best adapted to rural 

 co-operative credit, while for other forms of rural co-operation limited 

 liability is being more generally adopted. 



In order to avoid any danger of capitalistic speculation, Raiffeisen 

 excluded shares altogether from his banks, but in 1876 he was obliged 

 to comply with the imperial law which compelled co-operative 

 societies to have foundation capital, and fixed the shares at a maxi- 

 mum value of 10 marks (about $2 .40). The Darmstadt federation, 

 on the other hand, recommended comparatively large shares, but not 

 to exceed 500 marks (about $120). In very few cases, however, does 

 the value of the share exceed 100 marks (about $24). 



In societies where the liability is unlimited a member cannot take 

 more than one share; in societies with limited liability, however, he 

 may take more. The value of the shares, and, in the latter case, also 

 their number, are fixed by the rules. The shares are repayable to 

 the members upon withdrawal from the society, and interest is paid 

 upon them at a rate which must not in any case exceed the interest 

 which borrowers pay upon loans from the society. 



The pure Raiffeisen system does not admit of entrance fees, 

 although the Darmstadt federation allows small fees which are carried 

 immediately to the reserve fund. Another fundamental principle of 

 the Raiffeisen system is that the area of operations is limited to a 

 commune or a parish. The organization of the rural banks being, 

 therefore, familiar and friendly, so to speak, their management is.very 

 simple. The administrative functions are divided between the com- 

 mittee of management, the council of supervision, and the general 

 meeting. The executive work is carried out by the treasurer, who is 

 often the only employee of the bank, and in any case is responsible 

 for the work of the other employees. 



The general meeting appoints the committee of management, the 

 council of supervision, and the treasurer. The conduct of the business 

 is intrusted to the committee of management, upon which often sit 

 the best educated persons of the district, such as the schoolmasters or 

 priests; for these, however, farmers are being more and more sub- 

 stituted. 



The committee of management usually give their services gratui- 

 tously. This, too, is one of the principles of-puTeT^aifteisenism, 

 which, however, permits in any case the remuneration of the treasurer 



