Miscellaneous- 



428 



Each branch bank may give credit to a society up to 10 per cent, of the property 

 of its members, and. the main business of the central institution is to equalise the 

 supply and demand of money, which is done in this way : should a branch bank 

 require money it telegraphs to the central bank, which at once assigns to it funds 

 at its banking account with the Prussian Central State Bank. Excess cash held by 

 the branches is in the same way paid to the credit of the central bank. 



The magnitude of the operations of this institution may be gathered from the 

 fact that the turnover in 1903 amounted to £15,3f0,000, and the assets to £3,240,000. 

 The profits only amounted to £12,000, out of which a dividend of 3 per cent, was paid. 



Other Central Banks.— In addition to the twelve local central banks acting 

 as branches of the Central Bank of Neuwied, there are twenty-two provincial central 

 banks affiliated to the Union of German Agricultural Co-operative Societies, presided 

 over by Dr. Haas, of Darmstadt, and in addition some half-dozen central banks out- 

 side the Union. These banks represented approximately 8,500 societies, but this 

 number includes some societies other than credit societies, which, taken by them- 

 selves, probably number about 7,300. Each of the Central Banks, however, forms a 

 separate entity, the action of the Union being confined to audit and inspection. 



Briefly, these central banks have adopted the system of limited liability 

 referred to above, viz., that of issuing small shares carrying a comparative heavy 

 liability, and the credit allowed by them to their affiliated societies varies but bears 

 a relation to this liability, generally in excess. The working funds are derived from 

 the small share capital, from deposits, and from the Prussian Central State Bank, 

 which advances them money on the security of their members' liability to an amount 

 not exceeding ten times the paid-up share capital. According to figures quoted by 

 Herr Heuzeroth in an article prepared for the Sixth Congress of the International 

 Co-operative Alliance, the share capital of the twenty-two banks within the Union 

 amounted to £213,000, and the loan capital to £2,897,000, made up of drafts on the 

 State Bank, £654,000, and deposits from local societies about £2,000,000. 



It may be noted that during the past an amalgamation has taken place be- 

 tween the Darmstadt Union and the Raiffeisen organisation at Neuwied, by which 

 the supreme control of both organisations will be vested in a central committee. 

 The terms of the union have been so arranged as to secure the continued existence 

 within it of the special institutions of the Raiffeisen type. 



The German Co-operative Societies Bank.— It will be seen that the 

 central banks above described, both that at Neuwied and those affiliated to the 

 Darmstadt Union, obtain credit by pledging the combined liabilities of the societies 

 which they represent. In the case of the Raiffeisen banks, represented by the first- 

 named institution, the liability of all the members of all the societies to make good 

 the debts of the central body is unlimited ; in the case of the second class of central 

 banks the liability of the societies is limited to the amount of their guarantee. The 

 principle, however, never met with the approval of societies of the Sehulze-Delitzsch 

 type, which took the view that a central bank should be an independent institution 

 whose actions would not under any circumstances jeopardise the welfare of the 

 societies. With this object the German Co-operative Societies Bank was formed as a 

 joint-stock company in 1864, with a capital of £40,000, which was gradually increased 

 to £1,500,000. Its operations have not been confined to credit societies, though it 

 naturally made a special feature of co-operative banking, and its essential principle 

 has been that it dealt with the Sehulze-Delitzsch banks without favour on distinctly 

 business lines. As may be gathered from its increase of capital, it met with very 

 considerable success, but the extension of banking business in Germany made its 

 amalgamation with some more powerful institution desirable, and it has recently 

 been absorbed into the Dresdner Bank. 



