427 



Miscellaneous. 



thus members are required to take one share for every £100 for which they are 

 assessed to property tax, and for every share they must undertake a guarantee of 

 £10. That is, they go bail for the liabilitites of the society to the extent of one-tenth 

 of their possessions. The credit accorded to each individual member is measured 

 by the amount of his guarantee. Thus a member holding fifty shares guarantees the 

 liabilities of the society to the extent of £500, but he will not be allowed credit for £500, 

 but only for about £375, without further security, and for advances beyond this sum 

 he must give a bill or personal sureties. Dr. Rabe, writing in 1901, observes that 

 during the twelve years these banks have been in existence none have failed, no losses 

 whatever have been recorded in connection with them, and they have rapidly gained 

 the confidence of the population. The value of each share is put at five shillings. 



Central Banks.— It will be understood that the first need of these societies, 

 whether Schulze-Delitzsch, Raiffeisen, or limited liability, was to borrow money on 

 the cheapest terms, and afterwards, as their reserves and deposits accumulated, to 

 arrange some means whereby any balance in the hands of one society could be used 

 to satisfy the wants of another. From a very early period, therefore, the need of a 

 central organisation began to be realised. Isolated from each other, and, in the case 

 of the Raiffeisen banks, necessarily confined to small areas, with correspondingly small 

 funds, they were hardly in a position to fulfil the expectations entertained of them, 

 and a consolidated body was felt to be a necessity. With this object provincial 

 central banks were formed by combinations of societies, and some of these were 

 afterwards affiliated to still larger institutions, such as the Central Bank of Neuwied. 

 It will be easily understood that the centralisation of co-operative banking was a 

 matter of some complexity, and that the measures taken by the various societies 

 were by no means uniform. A detailed description will be found in a series of reports 

 presented to the International Co-operative Congress at Budapesth, to which those 

 interested in the subject should refer. The following general summary indicates, 

 however, some of the main features :— 



The Central Bank op Neuwied.— In the case of the Raiffeisen societies, the 

 first central bank was formed at Neuwied, in Rhenish Prussia in 1872, by eleven 

 societies. In 1876 it was re-formed as a joint-stock company with a share capital of 

 £12,500, which was gradually raised until in 1900 it stood at £500,000, of which £415,000 

 had been paid up in cash by 3,754 affiliated societies. 



This organisation known as the li Landwirtschaftliche Centraldarlehenskasse 

 fur Deutschland," besides carrying on the business of a banker also buys agricultural 

 requisities and sells produce for the benefit of its societies. The funds required are 

 provided by (1) the share capital ; (2) the deposits received, or loans raised if possible 

 for long terms ; (3) the commissions charged and the margin of interest ; (4) proceeds 

 of the sale of goods ; and (5) bonds and debentures not made redeemable at will. 

 These funds are employed for advances in current account to the branch banks and 

 societies which are members, as working capital in the sale and purchase business, 

 and for discounting bills and advancing money on security. 



Business between the bank and its societies is conducted by branch banks, 

 but every shareholding society is directly represented at the general meeting, which 

 elects the board of directors. Each district in which there is a branch bank has its 

 own advisory board and local committee of management, as well as managing 

 directors of the branch banks. The latter are on the committee of management of 

 the central bank. 



The co-operative character of the central bank is maintained by restricting 

 the dividend to 4 per cent, on the paid-up capital, which goes only to the co-operative 

 societies which are members, the balance remaining being carried to reserve, 



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