No. 4.] RURAL CREDIT, ETC., IN EUROPE. 99 



ing all loans to members. The interest on loans ranges from 

 •ii/i to 5 per cent. Satisfactorily indorsed notes or collaterals 

 are accepted as security. All othccrs and trustees are chosen 

 by the members and serve for four years. The " account- 

 ant," or cashier, receives about V\ o of 1 per cent on all trans- 

 actions. The societies reserve the right of recalling loans 

 upon one to three months' notice, but this is very seldom done. 



These Raiffeisen banks have succeeded in reducing the 

 rates of interest for farmers from 6, 7 and 8 per cent down to 

 4 and 5 per cent. Again, funds are always available, while 

 previous to the organization of these banks there was often 

 great difficulty in securing loans under any conditions what- 

 soever. These societies are not permitted to speculate in 

 any way. They are built upon a foundation of Christianity 

 and loyalty, but at their meetings discussions of both denomi- 

 national or political subjects are forbidden. 



The founder of these local Raiffeisen societies, realizing 

 from the beginning the need of combination in order to pro- 

 vide centers for equalization of funds by a non-profit seeking 

 organization, finally solved this problem by the establishment 

 of central banks in each province. The local banks adjust 

 the finances of their members, and the central banks adjust 

 the finances of the local societies in the same manner. The 

 German Agricultural Central Loan Bank in turn balances 

 the supply and demand among the provincial central banks, 

 obtains credit and makes necessary investments for them. 



This central bank has twelve branches in different parts 

 of the country. While the local societies are in no way 

 under government supervision, the central bank is subject 

 to inspection by a representative of the government, as the 

 State has made an appropriation in its aid upon which 3 

 per cent interest is paid to the State. ISTeither the inspector 

 nor the government can close the bank, but in case of mis- 

 management the appropriation can be withdrawn. The 

 original intention was to have other co-operative undertak- 

 ings carried on by the local Raiffeisen societies, but experi- 

 ence has proved that this is impracticable, and has shown 

 the advisability of independent organizations for these opera- 

 tions. These we will consider later. 



