Agricultural Finance & Co-operation. 236 



[September, 1910, 



eult to devise, since variations in quality 

 are difficult to assess otherwise than by- 

 sale in open market, while every attempt 

 to organise the retail distribution of 

 agricultural produce seems foredoomed 

 to failure. It is certain, however, that 

 farmers selling cattle and sheep might 

 easily, if they acted in combination, 

 secure better treatment than they have 

 sometimes received from the organised 

 traders who by their stock, and who, be- 

 cause they are organised, are able, in 

 matters of great importance, to dictate 

 terms to the uncombined farmers. 



On the other hand, there seems to be 

 no good reason why the sale of corn 

 should not be carried out co-operatively 

 with substantial advantages to the pro- 

 ducers. It must be recognised, however, 

 that this particular development of 

 organisation lies rather in the region of 

 experiment and conjecture than in that 

 of proved experience, such as attests the 

 success of the other forms of co-operatiun 

 which have been described. 



Co-operative Credit. 

 The greatest practical obstacle in the 

 way of agricultural organisation is 

 generally the difficulty of finance. A very 

 large number of those who might benefit 

 most by co-operation are prevented 

 from taking advantage of it because 

 they deal on long credit with the mer- 

 chants who supply them. It is this fact 

 which has chiefly led to the develop- 

 ment of credit as an essential adjunct 

 to co-operative purchase. The agricul- 

 tural credit banks, however, which play 

 so large a part especially in Germany 

 and Italy, originated in the earlier move- 

 ment pioneered by Schulze-Delitzsch 

 nearly seventy years ago for the promo- 

 tion of popular Savings and Credit 

 Banks. The later development of Raf- 

 f eisen banks adapted the organisation of 

 the co-operative banks to the special 

 needs of agriculture, 



The fundamental idea of the Raffeisen 

 banks, which are the general model for 

 the co-operative credit in agriculture, is 

 that the farmers in a small area should 

 combine to find credit for one another. 

 They provide loans for approved repro- 

 ductive purposes, and the banks rely for 

 their success on the knowledge which 

 their members and managers have of 

 local circumstances, and of the character 

 of the applicants, as well as on the fact 

 that each member, being implicated in 

 every transaction, has an interest in see- 

 ing that loans are only made for suitable 

 purposes and to reliable persons. It is 

 an interesting corroboration of the 

 soundness of this principle that these 

 banks do not in practice have any bad 



debts. Both in Germany and in Italy 

 the banks are closely associated with 

 purchasing societies, so that the bor- 

 rower has the advantage not only of 

 credit on reasonable terms, but also of 

 co-operative purchase, and of the ad- 

 vice and guidance of those by whom 

 the loan is sanctioned. 



It is not surprising that these banks 

 should have come into existence where- 

 ever agricultural organisation has had 

 time to mature its influence, or that 

 they should play a leading part, not 

 only in Germany and Italy, but also 

 in France, Denmark, Hungary, and 

 Finland. In Ireland they have come 

 to occupy in recent years a widening 

 field. In England, on the other hand, 

 they have so far made comparatively 

 little progress, while in Scotland they 

 are unknown. 



It is perhaps not easy to estimate how 

 far the complete absence so far, of co- 

 operative credit in Scotland is due to 

 the activity of the Joint Stock Banks. 

 There is probably no other country in 

 which reputable and useful institutions 

 of this kind are brought into such close 

 touch with the business of agriculture. 

 On the other hand, it can scarcely be 

 doubted that great unused openings 

 for well-secured credit exist especially 

 among the smaller holders, and that co- 

 operation might well procure for many 

 members of this class the use of money 

 which they could employ to great 

 advantage. How this state of matters 

 is to be remedied— whether by the for- 

 mation of co-operative credit asso- 

 ciations, or by loans from banks or other 

 sources to the co-operative purchase 

 societies, or by what other means — is an 

 urgent and important question for the 

 organisation movement in Scotland. The 

 question of a properly organised system 

 of well-secured credit is at the root of 

 the whole problem of organisation. We 

 find this illustrated everywhere in the 

 experience of other countries. 



Agricultural Organisation in 

 other Countries. 

 The chief example of a successfully 

 organised agriculture is that of Denmark, 

 and although the movement there is 

 not yet thirty years old, it has revolu- 

 tionised Danish farming, The dairies, 

 first instituted in 1882 in a simple form, 

 and developing with the growth of 

 experience and the invention of improved 

 machinery, now cover the whole country. 

 They number over 1,000, and the milk of 

 the great bulk of the cows in Denmark 

 is sent to them. Political and economic 

 circumstances led to the institution, five 

 years later, of the first co-oporative 



