Evening star., 1913-11-01
RURAL CREDITS,
WH.-The Schu!ze-De-
Iitzsch Banks.
By Frederic J. Haskin

While Schulze- -Delitzsch ban1,s found
ed by Herr Schulze in tbe tou,n 80
Deiltzsch, are regarded in Germany as
town" banks, as DISTINGUISHED fro
country banks. and while thev arc
mostly used by small traders and in
austrian workers. they yet form a link
III the ehaln OF Germany's credit system
"hlch mas served to put the small bor-
rover on a par with the large one with
respect to rates and standing. The
Schulze-Delitzsch Bank was started in
the same dfstressful year ls48 that set
RaiffeIsen to work laying the founda
ton for the application of his credit
ideas. In 1s49 Schulze organized =
friendly society for the relief Of sick
ness and also an association of shoe
makers for the purchase of raw mate
rIais. In 1850 he founded a loan So
ciety. with ten members, all of them
artisans. Two years later he remod-
eied 1t. making 1t self supporting in
stitutlon with capital and shares. He
saw that the lack of good credit was
at the root of the poor mans helpless
ness, and that this could be removed
by collective action of d number of
such men.
.,
town people and the other for country
people. Schulze and Raiffeisen did not
think very highly each of the others
ideas. Schulze blinked suspiciously
his ideas and Raiffeisen pitied Schulze
as a sort of Bourbon who never would
learn by experience. However, expert
ence proved that Schulze was right in
what he provided for the town bank
and Raiffeisen right in what he pro-
hu
The bank founded by Schulze is an as
Soctation to provide credit for its MEM
hers only. Il has two kinds of assets
the money paid in for shares and the
unlimited pool of the credit of all the
members. Each share is fixed as high
as possible-high enough to keep out the
undeSirables and to afford some ready
money for the banks operation, and yet
low enough not to prevent the entrance
of any frugal workingman. The buyer OF
and gets dividend on the part he has
paid for from the day he starts his pay
ments.
The profits Of the society are divided
into two parts, one part to the reserve
fund and the
Profits of Society other to the
Split Into Two Parts. = Ths a'saUoers. ,aw RS
auires that the reserve fund shall amount
to 20 per cent at least Of the share cap
ital. The Schulze-Delitzsch bank gets its
funds for lending to its members from
deposits and from rediscounts by outside
banks. Deposits are in large part the
savings Of the community, and non-mem-
bers may use the bank for purposes Of
depositing money. though not for borrow
ing. The bank pays 8 per cent and up
ward for money deposited with it, and
lends it again at per cent.
The banks protect themselves from sud-
den Withdrawals Of deposits in time of
financial stringencies by requiring notice
of intention to withdraw. ranging from
two weeks to twelve months, and pay an
ascending rate of interest, according to
the length of notice required. In ordinary
times, however. they waive the right Of
demanding notice.
Regular deposits differ from savings de-
posits in their size and the length Of time
they must be left in bank. They are for
larger amounts and are deposited for a
shorter period. Only the larger banks.