1906.] Agricultural Credit in Germany. 



727 



higher than that required by the Raiffeisen associations, and 

 they are not so generally adapted to agricultural requirements 

 as the latter. It would be a mistake, however, to suppose that 

 they do nothing for agricultural credit, as, according to the 

 figures for 1902,* 28J per cent, of the members were peasants 

 and farmers, 24-J per cent, mechanics, and 10 per cent, merchants 

 and dealers. The number of societies belonging to the Schulze- 

 Delitzsch Union was 899 with 533,888 members. 



Raiffeisen Banks. — The loan and savings banks founded by 

 Raiffeisen may be said to have three main objects: (1) to en- 

 courage thrift among the agricultural population ; (2) to satisfy 

 the demand for loans on personal security ; and (3) to act as 

 bankers in the country districts. They rest to an even greater 

 extent than the Schulze-Delitzsch societies on the principle of 

 solidarity or unlimited liability, in that practically no share 

 capital is raised, the money for working the society being 

 obtained from entrance fees, subscriptions and deposits, and 

 borrowed from persons outside the society on the collective 

 security of the members. Loans are advanced only for repro- 

 ductive purposes, evidence being required of a reasonable pros- 

 pect of repayment at the date fixed, and they must be guaranteed 

 by another member of the society. The operations of these 

 societies are limited to small areas, usually a village or small 

 town, so that the personal character and circumstances of 

 applicants for loans may be known to the members and com- 

 mittee. The administration is honorary, no salaries being paid 

 (except a trifling sum to the secretary), and all profits realised 

 go to a reserve fund. 



Banks with Limited Liability. — The foregoing classes of asso- 

 ciations depend on the joint and several liability of the members 

 for any losses incurred by them, but since the passing of the Act 

 of 1889 the establishment of co-operative societies with limited 

 liability has become possible. The system has of late been 

 more largely adopted, and at the beginning of 1905 there were 

 1,623 credit societies with a membership of 356,000 on this 

 basis out of a total of 14,272 societies. Societies of this class 

 exist to a considerable extent in Pomerania and Prussian 

 Saxony, where the principle of unlimited liability has not been 



* /ahr-and Adressbach der Erwerbs-und Wirtschafts-genossemchaften, 1904. 



