l/ 



INTRODUCTION 19 



who were to pay a monthly contribution of one penny each, 

 which amounts were credited to the members individually. 

 In 1852 the rules were amended to the effect that any member 

 could pay in as much as he liked, but none less than twopence 

 per month, and the surplus was divided in proportion to the 

 amount held by each. 



These Schulze-Delitzsch Credit Banks soon became an 

 important factor in the economical organisations of the middle 

 classes in the towns in Germany. They are based on the 

 principle of mutual self- aid and joint hability, and their chief 

 object is to secure to members the necessary working capital. 

 Schulze has, in his book, " Vorschuss- und Creditvereine als 

 Volksbanken," ^ formulated the rules of these societies as 

 follows : (1) the members or the borrowers manage the society 

 and share the risk and the surplus ; (2) the j&nancial matters 

 are managed on business principles as distinctly from philan- 

 thropy and benevolence ; (3) a member's stake in the society, 

 in proportion to which he shares in the surplus, is formed either 

 by small periodical contributions or by payment of a lump 

 sum once for all ; (4) new members pay an entrance fee which 

 is added to the reserve fund, for covering heavy losses ; (5) 

 any additional capital which may be necessarj^ for the business 

 is borrowed on the joint hability of members ; (6) the number 

 of members is unlimited, every one who fulfils the conditions 

 laid down in the rules has a right to become a member, and 

 members can resign by giving the prescribed notice. 



Schulze-Delitzsch worked indefatigably for the formation 

 of many other societies for mutual aid, for sickness and burial 

 clubs, for building societies, co-op. stores, etc., and these many 

 societies were greatly assisted by the Central Bureau which 

 was founded in 1864 through his instrumentality, and by the 

 Co-operative Bank {" Deutsche Genossenschaftsbank ") founded 

 in the following year which served as a connecting link between 

 the various societies and between these and the ordinary 

 money market. A year before the death of Schulze there were 

 about 3500 mutual aid societies with more than a milhon 

 members, a capital of £10,000,000, and an annual turnover of 

 £100,000,000. He worked for these societies until his death, 



' " Loan and Credit Unions as People's Banks." 



