Arizona republican., 1913-06-17

Dosits from mem bers or from anyone in the vicinity They pay a reason able rate of interest on such deposits. Al first the deposits may not be forth coming. The people will wait to see how successful the bank Is going to be. So for want of deposits the so- ciety seeks to borrow in the open mar ket. After having secured enough money to begin business. and at the start this Is the hardest part of the work, the bank offers to lend its funds to members.
 That Is the entire plan in a nut shell A hundred farmers (the mem bership of the German rural banks averages little less than a hundred) club together because they know that one hundred men can offer better se- curity and borrow on better terms and at lower rates than one man. It is not necessary for tn csc hundred farm CTS to put up any money to start the society. When Raiffeisen, the founder of rural cooperative banks in Ger many. tablished his first bank the peasant farmers of the community where he lived were so poor that they could not have afforded to put up
 
 by the money lenders Moreover most of the payments in rural Germany at that time were made in produce and currency was very scarce. Raifeisen saw that if he charged admission to his society he would exclude some of the most worthy men in the commun- ity and his chief aim was to help the very poor. So he said to them so long as you are honest and trust worthy you may join this society whether you can afford to put up any money or not. Of course all of them nearly had something to pledge for the debts of the society, an acre or two of land and a rude dwelling per haps. He made every man in the so- ciety pledge every cent he owned as security for the debts of the society and with this pledge Raiffeisen start ed out to borrow money. At first it was an uphill game. The security he offered was something new to the bankers and money lenders and they would not trust it. But Rainefsen succeeded in getting small loans for his society and these were in turn loaned out to the members. When the bankers saw that every cent of these loans was repaid their doubt of the plan began to weaken. They saw that Raiffeisen had actually discovered a means to create weaIth-to create 1t from the thrift. the integrity and toll of community.
 Of course had Raiffeisen's society had cash capital to offer as secur- ity along with the pledge of collective liability of the members of the bank, 1t would have been easier for him to borrow. Today all of the cooperative societies in Germany have some cash capital and in many organizations it is of sufficient amount to attract loans The banks of the pure Raineisen type of which there are some 4,00O today in Germany, still adhere to Raiffeisen's s original plan of organization and op- crate without any cash capital except a nominal one which is now reQuired by law. But there is no longer the need of starting the societies without capital that there was, for the use of currency in the rural districts has be- come common and the prosperity of the farmers has increased. The Amer ican Commission of course is only in- terested in the question of esta biish- ing such institutions in the United States and it Is not likely that there are many farming communities in