Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-11-04
RURAL CREDITS.
W.-The Banks of Italy.
By Frederic J. Haskin.

Borrowing a page from the book OF
German financial experience, Signor
Leone Wollemborg began, in 1850. to
preach the gospel Of rural credits to the
small farmers of Italy. After three years
of writing and lecturing he finally sue
ceeded in organizing a rural bank at
Loreggia, in the province of Padua, with
thirty members. The following year
bank was founded at Castelfiorentino, and
others came apace. with the result that
there are now some o.OOO such banks in
Italy. In 1892 the Catholic Church, see
ing the possibilities of self-help among
it's rural members. took up the work Of
directing the organization OF such banks.
with the result that today two out of
three rural banks are under church
supervision.
History was but repeating itself in the
organization of the rural credit system IN
Italy. The first bank was the answer OF
a practical philanthropist to the demands
of the misery about him. There was
slow, hard beginning: then welcoming
cess, and, then division. In Germany
Raiffeisen had had the same trouble a
third of century before, and had lived
through it all. But where DIR. Haas IN
Germany had found too much religion
in the Raiffeisen bank. here in Italy was
the Priest Don Gerutti finding too little
in the Wollemborg banks, and IT was this
that led to the organization of the first
church bank in 1892.
Italy seems to be the only country
where cooperative banking mas become a
sort of church institution. 1t Is true that
Rafffeisen always kept the moral idea IN
cooperative banking at the forefront. and
tried to utilize his system In developing
the higher traits of citizenship but there
was no direct connection between the
church and the banks. The idea of unit
ing the two interests has been found to
give the church a peculiar hold upon the
individuals who patrOnize the bank, and
the f act that the village priest enjoys
the confidence of everybody makes him
useful official in the bank. Furthermore,
as a man of education and training he
knows how to handle institutional funds.
And, still further. he has about the best
line that can be had upon the moral and
financial status of every resident OF the
community. as we'll as peculiar advantage
in knowing the needs of individuals and
the uses to which they are likely to put
the funds they seek. That the system of
uniting the banks with the church in the
Italian provinces has worked well from
the banking standpoint is indicated by the
statistics of these banks: that 1t has
worked well from the standpoint of the
church is evidenced by the gradual extern
sien of the number of banks and the testi-
mony of the church authorities. but that
it would work well elsewhere has not been
demonstrated.
non-sectarian insist upon honesty and
good character as a condition Of becom-
ing a member, but some sectarian banks
call for certain religious obseryances as
condition of membership.
The rural bank, of Italy follows the Ger
man idea in the requirement Of Cnlim-
tied liability
Rural Banks OF Italy Of all its
Follow German Ice. ;,s 49, o'
tons. and holds also TO the idea Of doing
business only il the immediate cornmu-
nity The seldom have any capital to
begin with, and pay from 3 to per cent
on deposits, using this money in their
business as far as it suffices to meet the
lending demands The bank gradually
creates a small capital out of nominal
charges for its services and membership
dues. Loans are usually of two kinds,
both upon the security of bills-the short
term loan, for period OF not more than
period not to exceed ten years. The
short-term loans are renewed every three
months. while the longterm loans are
paid by installments.
There is a national fedora ton of rural
banks in Italy. although they do not use
it as a financial organization; it bears
about the same relation to the Italian
rural banks that the American Bankers
Association bears to the national bank
ing system of the United States.
Italy also has a. system of town banks
modelled after the ideas of the German
town bank system. What SchuiZe of
Delitzsch was to Germany, Signor Luigi
Luzzatti has been to ITALY, in the hnanc-
ing of the small urban borrower. In
1885. with the munificent capital of sli0
Luzzatti started the Popular Bank of
Milan. with himself as It's biggest stock
holder. to the extent of $40.
His system differs from the German
town bank system in a number Of ways
In the first place, it Is more democratic
in It's plan OF organtzau ton. 1t has
rather large board Of directors whose