INTRODUCTION 21 



and devoted himself solely to the amelioration of rural 

 credit. 



The principal aim of the Raiffeisen Banks is to grant easy 

 and cheap loans to furnish working capital to members of the 

 rural middle class, so as to offer them the same advantages 

 which large farmers obtain from ordinary banks, and to release 

 them from the necessity of borrowing from dealers and money- 

 lenders. The loans are granted on the personal security of the 

 members, and are used for buying seed corn, manure, feeding 

 stuffs, cattle, implements and machinery, etc., and to effect 

 improvements by draining, marling, building outhouses, and 

 so forth. In order to raise the capital Raiffeisen tried to offer 

 the creditors the best possible security, and this he sought to 

 accomplish by the following two arrangements ; — 



In the first place the Bank or Society has to be a local 

 institution within a definite small district, comprising one, or 

 at most two parishes. The members of the managing com- 

 mittee live at different places within the district in order that 

 they may have personal knowledge of the economical condition 

 and the character of the members and borrowers. Only 

 approved persons are admitted to membership or as borrowers. 

 At stated times the debtors' economical conditions are re- 

 examined, and according to the result of this examination the 

 condition of the loans may be altered. 



Secondly, the principle of joint Hability is strictly enforced. 

 All members of the Society are severally and jointly liable for 

 all obligations incurred by the Society. 



The Bank requires from the borrower security either by 

 mortgage, deposit of bonds, or — what is by far the most 

 frequent way — by surety. Generally the surety of one trust- 

 worthy man is considered sufficient. Loans are not granted on 

 bank bills. Ordinary bonds are issued on shorter terms of 

 one or two years or on longer terms up to ten years. Loans 

 on longer terms than one year are repaid by instalments, but 

 all loans can be called in if the committee shall find that they 

 are not used as intended. Loans vary from about £10 to £600. 



A Central Institution, the " Landwirtschaftliche Central- 

 kasse," ^ was founded in 1876 in Neuwied, which receives the 

 * Central Agricultural Bank. 



