Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1874-04-16
The Peoples Banks of Germany.

A WRITER in the Boston Journal de-
scribes the popular credit banks of Ger
many, of which at the last advices, there
were nearly a thousand in existence:
"In business city like ours, who can
look upon the Catholic churches now in
process of erection among US without
being struck by the financial skill they
imply? These immense and noble
structures, calculated to last for ages, are
built in reality by one of the least wealthy
classes Of our community-by servant
girls and labOrers-whe supply their reg
ular contributions, insignificant separate,
and not felt by their givers, but mighty in
the aggregate, as we shall see. Why can
not the laboring children of this genera
ton be equally wise in matters Of tenn
poral welfare-that is to say, why cannot
they use their enormous aggregate capital
for their own benefit, instead of being de-
pendent upon the crumbs doled out often
at exorbitant rates Ofinterest, by wealthy
capitalists, or going through the world
with the impression that their only CAPT
tai is their muscles, which may fail them
at any time and upon which they can
never realize? 1t was doubtless ponder
ing upon some such questions as these
that German named Schultze- Delitzsch
hit upon practical idea He saw that
the labOrer, like the tabled rods, was
financially weak as an individual, but
powerful enough for all purposes as the
member of a community. That ability
to labor, which is so poor security in
any one mans case, is, when a thousand
of such men are associated on a sound
basis, to use translation of the Germans
language, perfectly good negotiable
commodity
"Out of this reasoning came the peo-
pies banks of Germany. They are
formed by workingmen alone. Each
member subscribes for one share, which
is all he is entitled to hold. The price of
each share is about $3.50. 1t is paid on
entering, or in monthly installments after
entrance-these installments being as
small in some cases as 121a
cents. There is an entrance fee
the same way. The profits of the bank
are divided among the members in pro-
portion to the amount each has paid and,
until share is fully paid for, the amount
of the dividend upon it is credited in part
payment. Suitable regulations are made
for withdrawal. These contributions, of
course, do not supply all the capital re-
quired. The society is for the purpose OF
borrowing money, which is raised on the
joint credit of the members, in virtue of
the unlimited liability of all of them.
Each member is personally liable to the
full extent of his property. This is the
foundation stone of the system. The
profits of the members accrue from the
simple fact that the bank buys money at
wholesale and sells it at retail to its GUS
toners. The difference of price in Ger
many is generally about 4 per cent.
The workingman of Germany, therefore,
can hire money to a proper extent as
readily and cheaply as his employer,
while, as a member of one of these bank
ing institutions, he has a share of the
profits accruing from the total loans,
which, it will be seen, is practically re-
bate on the rates of interest he is himself
paying. In other words, these banks are
cooperative stores, dealing In money in
stead of groceries and other like commod-
tiles.
"1hey have now stood the ordeal Of
the trial, and must be pronounced mag
nificent success. Even the Franco-German
war added to their number and to their
popularity, for they held their own
owing to the prudent cOunsels of their
originator other banks were break
ing on every side. In 1859 they numbered
eighty; in 1869 there were 1856. During
this period their membership rose from
9,769 to 304, 772; and their borrowed cap
ital from $750,000 to $32, 100000. This
alone shows their credit and good stand
ing. They are all parts of one system,
each association forming part of pro-
vincial union and the unions being
leagued together. The report of each,
showing its exact financial position, is
sent to a central bureau and condensed in
an annual publication.
"These facts are sufficient to show the
principle Of the peoples banks of Ger
many. 1t will be seen that it consists not
only in consolidating and utilizing the
means of laborers, but in making them
ever in securing their share of the capital
of the country. 1t makes the wOrkingmen
as independent, according to their means
mot themselves individuality as any other
class of their countrymen. Why could
not the plan be adopted with equal or
even greater advantages IN the United
States? Different regulations would I'M
doubtedly be required, and extreme vigi-
lance in guarding against abuse, particu-
larly if the plan became popular; but the
principle itself seems Of universal appli-
cation, while the resources of capital
awaiting its command are larger here
than in any other country"