The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-08-25
RURAL BANKS IN
KAISER'S DOMAIN
General Economic Conditions
Make Necessary Great Strug-
gle Against More Favored
Competitors-Same Circurn-
stances Confront Small
Growers in South.
by W. j. LAUCK.

fertile lands In different parts of tho
world, European farmers have under
gone struggle to maintain them
selves against more favored competitors.
The general economic conditions under
which they had to produce and market
their crops have also been adverse
as consequence, they hnvc had to
practice economies unknown IN this
country and in order to refuge costs
TO their lowest level. have gSatually
developed system of cooperation IN
securing capital, in utilizing ogricul-
tural machinery and i'm marketing
their products. The agricultural credit
organizations or banks shorIG be OF
unusual interest 10 the farmer OF Vlr-
sin!a and tho South because tncy have
been developed from the same c.rcun-
stances which now confront the small
farmer in the Southern States-tho
lack of available capital which he can
obtain for the period of time ana the
security which he has to onrr. ono
OF the most valua BILE object icssuns
in this connection is furnished by whus
is known as the Raineisiu system OF
rural banks in Germany
The Itnlffciscu system.
The Raireiseu system Whlsh has
been named from its founder. Ftelerick
William Raiffelsou. bgrgom4st,r OF
Weyerbusch, stated In its aimplust
terms. consists in organizing all the
would-b borrowers in "a certain local
ity for the purpose of obtaini-ts credit
facilities which thay could not secure
individually. During the carly pare
OF the nineteenth century there was
urgent need for credit among TIE farm
ers OF Prussia. Capital could only bn
obtained from usurers at eNorbitAnt
rates Because OF these conditions.
Raiffeiseu conceived the plan o: bring
Ing the farmers together in "a certain
district and by means OF their collec-
tive guarantee and the pledge OF their
aggregate assets to secure the neces-
sary capital for carrying on their
! agricultural operations
The plan was successful from tile
beginning ~ the present tlne there
are more than fifteen thousand OF these
Raiffeiseu banks in Germany Tnoy
ORGANIZATIONS with head or central
bank in Berlin
Organization of Rural Banks
Tho fundamental princlNes upon
which tho rural hanks are ht7ed arc
as follows;
!. Unlimited liability q members.
\ small area Tor operation
3. Graiuitous manaEement
or the total number Of banks now
In operation in Germany aucut %
per cent are conducted upon tins pis.m
OF unlimited liabillty The cases
where there is a limited liability among
the members consists usually OF The
| large provincial bunks and the central
bank in Berlin The idea in coniutul
the business of the bank to smmn
area IS based upon the theory that
each member OF the bank can see how
wisely those who obtain credit are
Hsins it The minimum NUMBER OF
members required is seven and some
OF the banks have exactly this number.
Altogether there We're IN 1909. 1865
$50 members Of these rural banks In
Germany. OF an average Of - per bank
The average paid up capital per mem-
Der was slightly less than nvc dollars.
The condition as u sratuitous manage
ment is thus fixed because thu funds
contributed or obtained. must be used
in the most economical way
bank Is usually organized by J.
general meeting OF the members. who
elect committee 90 mana cement. a
council OF Supervision ana treasurer.
q pom the committee OF m4nagenleut.
which conducts the business ann gem
orally serves without pay. arc often
school teachers. ministers ana other
prominent citizens Tho tendcncs at
present however, is TO have actual
farmers. The treasurer looks after
the records and funds OF the bank and
is usually paid small salary But the
total expenses OF operation as already
stated are very small. On the average
IL is not more than Si35 Tor each bank
per annum. In proportion 20 the total
annual business done. the general ex-
pense Of operation is eonsideraols less
than one per cent
business zone.
The working capital Of the rural
banks consists on the amounts paid In