730 



Agricultural Credit in Germany, [march, 



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. 



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 

 funds 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 

 ;£i5, 350,000, 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 outside the Union. These banks represented approxi- 

 mately 8,500 societies, but this number includes some societies 

 other than credit societies, which, taken by themselves, 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 comparatively 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 



