Sept. 1895.] AGRICULTURAL BANKS IN BAVARIA. 



127 



As regards the third point, it is a standing rule of the asso- 

 ciations only to lend out money when there is a certainty that a 

 part will be paid back yearly. However, respites are granted, 

 and the repayments made during the year may be in the 

 smallest sums. As those who go bail for their friends are 

 entirely responsible, it is their interest to be vigilant to 

 see that the loan obtained is used for the purpose given. 



It will be seen that the loans are lent upon personal security, 

 the repayment being guaranteed, first by the personal solvency of 

 the borrower, and secondly by that of his sureties. Loans are 

 sometimes made upon mortgage, and in such cases the associations 

 adopt the ordinary procedure followed by financial institutions. 

 Loans on behalf of the association are negotiated by the directors, 

 who act within the limits fixed by the general assembly of 

 members. The general assembly determines the amounts of 

 money to be borrowed and the rates of interest. According to 

 Mr. Yansittart, most of the existing Bavarian associations pay 

 3J per cent, interest on loans required by them and charge 4 per 

 cent, on loans made to their members. 



Attempts have been made on several occasions to unite groups 

 of the Raiflfeisen associations in the establishment of central 

 banks, so that associations having a surplus of capital might be 

 brought into relations with those having a deficit, to their 

 mutual benefit. The Bavarian Landesverband, which was formed 

 in 1893, is described in Mr. Vansittart's Report as a co-operation 

 of agricultural associations for advancing money, its principal 

 object being to promote agricultural co-operative societies and 

 the credit system. It is estimated that the total amount of 

 business transacted by the Landesverband in 1894 represented a 

 turnover of 396,071^., and that during the same year the accounts 

 of 143 local associations were revised. The Landesverband 

 receives an annual subsidy of 1,275^. from the Ministry of the 

 Interior. 



In addition to the Raiffeisen associations, there are in Bavaria 

 i\, number of credit banks working upon what is known as the 

 Schulze-Delitzsch system, but these are not so popular as the 

 former in the purely rural districts. The Schulze-Delitzsch 

 banks were designed by their founder, after whom they are 

 named, mainly for the benefit of mechanics and small tradesmen 

 in towns, and although one of the chief features of their business 

 is the provision of loans on favourable terms, they also perform 

 all the functions of a savings-bank and encourage their members, 

 as well as other persons, to open deposit accounts, bearing 

 interest. One reason why the Schulze-Delitzsch banks have not 

 gained much ground in the agricultural districts lies in the fact 

 that they grant loans only for a limited period, usually three 

 months, and, as has been frequently pointed out, this term is, as 

 a rule, too short to enable a farmer to derive any advantage 

 from the application of the loan. The Raifieisen associations, 

 on the other hand, make their loans for a term of years, and in 



