The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1912-12-17
Rural Credit
Systems

President Charles S. Barrett
Union City, Ga.

la IAAS CAllcu STATES, IN
this connection. constant reference Is
made to the German system. It Is.
wherefore, well for us to see what the /
German system Is.
In Germany. these cooperative in
stitutions which supply cheap money
u the farmers are ~variously known |
as p Banks and Raffeisen Loan
Banks-the last named being the bet
ter known. Originally they were not
in the proper sense Of the word
at all. It Is worth our while to look
back at their organization.
rather Ra1feisen, as he came to be
known. was born in 1918. and his
people him for a military ca
reer. Owing to defective eyesight. he
had to abandon that and became bur
g~oInaster In small and obscure viii
lagos in Western Germany. His dis
trict was almost exclusively q farm
ing one, n his people were being
eaten up by the Insurers. The dread
ful OF 1876. 1847 and 1S4S put
the burgomaster on his metal to see
what he could do for his people. lie
tried q cooperative bakery and made
II work. He tried cooperative cat
tie buying. and made that work. Both
OF these in Il small way. Then he
talked the usurers. He called his
people together and laid his plans be-
fore One can imagine the peo-
pie as he talked with them-dictating
to Heinrich that ne should put in five
dollars, and to Johann that he should
Put In seven dollars. and to Wilhelm
that he should put In ten dollars.
and their replies that they had no
money. and his informing them that
they could put it in a little bit at a
time. as low as one mark iabout
twenty cents) per week. Naturally In
his crowd there were would-be Dor
rowera tie Scraped together fifteen
hundred rdOllars and started his loan
company. There were two underly-
Ing principles-one vas the Cooper
alton Of the people, h other was
that loans should be made only for
productive purposes and for a suf1-
cjent length Of time to enable the cap
ital loaned. by use. to pay itself back.
The people were very poor n nat
urally the demand for money was
greater than h supply. This was
net by borrowing. The entire re-
sources OF every member OF the So
ciety being liable for every dollar OF
the Indebtedness This was cooper
alton with a vengeance. There was
a committee Of five appointed as man
ayers. and a committee of six ap-
pointed as supervisors, to overlook
h managers. Not a nickel was paid
to anybody who served except the
cashier, and he was not authorized
to lend a nickel-alI he could do was
to carry out the orders of the
ayers.
We will suppose that Wilhelm
wanted to buy a COW. as he a found
that he had q little patch of ground
which would enable him to keep an
other COW. and by having that COW
he could make enough cheese to pay
for the cost OF the COW in a certain
length OF time. He would lay his
case before the mage They
xunI,ta canadian ~ and - IT Caaynad
practical to them, they would loan
Wilhelm the money on a sufficiently
long time for the profits Of his add
tinnal cheese business to pay the loan,
The interest rates were cut to the
bone. The purpose OF these institu'
tons was not to make non but TIC
help the people. The little institl'
ton was successful in a mall way
and five years later a second one was
founded. a few years later yet a third
and still a few years later a fourth
1t took twenty years for the idea tt
get solid root, and then 1t grew INK
wild fire. Today there are thousand
OF these institutions in Germany. DO.
ing a business OF over five hundred
million dollars per year.
Father Raffeisen died at the age o:
seventy. the most lamented ma IL
Germany. His idea had done IT
work. and the usurers had been elm
mated. bettcF aNdA tldt, SA0 N0A
maj farmers. by h development o
their own resources. were able to &c
ali the money they needed for thei-
business at 4 per cent interest.
After they had been running To-
thirty years or more, the German
government decided that they shoult
become stock companies, but during
all these earlier years they wer'
nothing more thar partnerships. TIL
banks met the demand Of III govern
ment by the issuing OF shares to mem
bers Of the society In very small de
nominations-the shares running II
value from two to three dollars, an
any buyer Of q share being allowed t
pay for it in very insagntfican
amounts just a few cents weekly.
The country system. inaugurated b
Raff~isen, was copied In the towns b.
a man named Schulz eiltSch, and tn
tou1n haaha onoeafad &oe tha henAE