The Greeley tribune., 1912-08-08

Washington, Aug. 5.-The inves-
tsation of the German cooperative
credit systems which is being made
Dy Ambassador Leishman at Berlin
III connection with Pres dent Taft 8
EFFORT to Introduce cooperative cre-
at INTO this country for the benefit
OF the American farmer is divided
INTO three parts: an investigation
or the Ra!Ifeisen system of rural
banks, of the SchulZe-Delitzsch sys-
TEN or popular urban banks, and of
the Landschatten and Ritterschaf-
ten mortgage bond associations,
which are the medium of securing
the farmer the money necessary for
the permanent improvement of his
land.
Germany is the birthplace of CO.
operative credit. Necessity was the
mother of its invention. In the first
half of the last century the German
farmer found himself in the grasp
of the money lender. The great
transition in industrial conditions
which was then going on through
out the world made it essential that
the farmer be given some means of
securing cheaper and quicker credit
if he was to successfully meet COM
petition in the commercial world.
The excessive demands of usurers,
heavy burden always on the farm
err became increasingly hard for
him to bear, as the financial fabric
of the commercial world progressed
to its complex perfection and mod
ern finance furnished to other class
es an auxiliary machine, which
placed the farmer under great dis
advantage. Improved systems of
credit gave the merchants dollar
a multiplied strength. The farm
er's dollar remained a dead weight
worth a dollar and no more. He
possessed 1t and for what he needed
he spent part of 1t and kept the
balance idle, dead The merchants
dollar was being deposited and
withdrawn in dozen transactions
in as many hours, doing the work
of a dozen dollars.
AS David Lubin, American dele
gate to the institute of agriculture
at Rome. expressed it in lecture
before the southern commercial con-
gress. improved credit rendered the
merchants dollar dynamic. The
farmers dollar remained static.
The farmers dollar was electricity
unharnessed-poss the poten-
tial force, but not . harnessed so that
the owner could secure the benefit
of that force The merchants dol
lar was electricity applied in the
power house. The force which in
the farmers dollar was dormant
was awakened by hitching it to a
machine If the farmer was to be-
come the peer of the merchant in
the commercial world he must have
some such machine.
This problem became apparent to
Frederick William Raiffeisen, Bur-
gomaster of Weyerbusch in Ger
many. He set about planning ma
chine which would give the farmer
quicker and cheaper credit. AS the
basis for his plan he accepted the
principle that what the farmer was
denied as an individual he could Sc
cure by cooperation. The individual
farmer might be too small to COM
mand extended credit facilities at
good terms, but community OF
farmers combined would represent a
would be glad to deal. AS consti,
IOI ouCh SOORGAoliNV ooNA>S
he laid down three maXims.
First of all. the members of the
combine must hold themselves liable
to an unlimited extent for the trans
action of the society; second. the
society must operate only in limit,
ed field so that every member would
be a neighbor of every other mem,
ber. This reduced the chances OF
squandered loans; for, every mem
her being responsible for what ever!
other member borrowed from the
sociey and having eyes upon his eN
penditures, it was improbable tha'
Herr Fritz would in silence contem
plate any extravagant habits of hi:
neighbor Herr Heinrich. Lastl!
that the management of the so
ciety's business be done at a min
imum cost, most of the manager:
giving their service gratis. TINS
would. of course, reduce the cos'
to the farmers and bring then
cheaper credit.
Briefly stated, this is the simple
basis of the Raiffeisen system OF
rural credit, which has spread prac
tically to every country in Europe
and which has done more than al
else to release the european 1arHnel
from the grasp of the money lende1
and to enable him to make the doi
lar which he used to hoard in soci
an active help to him every hour o
the day.
Fearing speculative control of tn
banks. and desiring to extend th'
benefits Of his system to the poores
who might ask aid. Herr Raiffelsei
refused to allow the banks to be es
tablished with foundation capita
secured by selling shares of capita
stock. He argued that a rural bani
which offered as security the hold
ings Of every member Of it could d'
business without any foundatloi
capital. To secure working cap
ital for his banks he offered fou
sources of income: One, deposit
on current account; two, savings de
posits; three, loans from othe
banks or from private individuals
u ~