The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1913-06-08

posts from mem bers or from anyone
in the vicinity. They pay a reason
able rate of interest on such deposits.
At 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 mem bers.
That is the entire plan in a nut
shell. A hundred farmers (the mem
bership of the German rural banks
averages a little less than a hundred)
club together because they know that
one hundred men can offer better Sc
curity and borrow on better terms and
at lower rates than one man. It is
not necessary for these hundred farm
ers to put up any money to start the
society. When Raiffeisen, the founder
of rural cooperative banks in Ger
many, esta blished his first bank the
peasant farmers of the community
where he lived were so poor that they
could not have afforded to put up
any money. They were literally owned
by the money lenders. Moreover most
of the payments in rural Germany at
that time were made in produce and
currency was very scarce. Raiffeisen
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 1t. But Raiffeisen
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 ssaw
that Raiffeisen had actually discovered
a means to create weaIth-to create
it from the thrift, the integrity and
toll of a community.
OF course had Raiffeisen's society |
had a cash capital to offer as secur- |
ity along with the pledge of collective |
liability of the members of the bank, |
it 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 Raiffeisen type, |
of which there are some 1000 today |
in Germany, still adhere to Raiffeisen's |
original plan of organization and OPP
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
icac Commission of course is only in
terested ia the question of esta blish-
ing such institutions in the United /
states and il is not likely that there /
- 10y farming communities in ]