The Harrison times., 1914-05-30

The general concepsus Of German
causes contributed to the failure; first,
state aid, which seldom really helps
cooperative society, ruined these
projects by encouraging the construc-
tion Of warehouses which were either
not needed or which were bigger than
needed second, the members sought
to make money out of them instead of
using them simply to prevent waste
In shipping.
Bank at Nleder Mabau.
In 1874 at a German village of some
$40 inhabitants local tradesmen
formed loan and savings bank From
the very first they forgot that cooper
ative credit banks are primarily
formed to lend money only to those To-
cal members who will use 1t for 10.
cal purposes. They were too anxious
to get rich quick BY promise Of ex-
ceedingly high rates of interest they
attracted patrons from the most re-
mote points until there was on de.
posit in this little village cooperative
bank almost $1,OOO,OOO Such an
amount Of money was Of course far in
excess Of any needs which the men,
bers themselves might have as bor-
rowers. Consequently the bank be-
gan to do business with outsiders.
Funds were so plentiful and the de-
mands relatively so small that 1t grant
ed to It's debtors extensive credits. 1t
became known that credit could easily
be obtained at that village bank and
spectators far and near flocked to it.
1t risked its money In financial
schemes outside the limits Of the vii
lage.
The cashier, who had no particular
fitness for the position, also had charge
Of church funds and other public
funds. Besides this, he was conduct
ing a large business in a hotel. There
seems to have been no one on the
board Of managers OF any particular
business judgment or ability. Even
integrity was not present for the CASH
ier ended his year with forgery and
was sent to prison. II was not sur
prslng therefore, that in December,
1911, the Nieder Mabau Loans and
Savings bank was declared insolvent,
the natural results Of undue greed, Of
the spirit Of speculation, of incompe-
tence, and of dishonesty,
Cooperative Bank at Darmsted.
More recently the cooperative ag. !
rlcultural bank at Darmsted, formed |
In 1882, reached point where It was
unable to meet It's obligations. It's
situation was almost the same as
that Of the Nleder Mabau bank, al
though It operated upon much larger
scale In connection with this bank
there IVES also either gross incompe-
tency or dishonesty. In one case, for
example, over million dollars was
invested In mine that could not be |
worked, Other equally hazardous en-
terprlses were financed by this con-
cern contrary to all principles Of co.
operative credit and equally contrary
to all rules OF sound finance, Co
operative banks arc not foolproof,"
and Of course the cooperative bank
at Darmsted failed.
Cooperation may fail even In Den
mark, the country in all Europe most
completely organized for rural busl.
ness, There a brilliant public man
got in tho good graces Of those Inter
ested In cooperation and promoted
scheme for uniting many cooperative
societies In one big concern. Here
there was not 80 much incompetence
as dishonesty, and tho venture ended
In financial failure for the members
and In imprisonment for the dshon.
ost promoter,
cauees Of Falluroo In America.
Cooperative failures 80 far as Amer.
lea 10 concerned are traoeablo large
ly to those causes;
In the FIRST place II has always been
difficult for the American TO oompro-
hond tho fact that cooperative con-
Germs are not money making, dlyi'
dend declaring, profit producing con.
Germs. They do not seem TO realize
that the sole excuse for tho existence
OF tho cooperative organization as a
middleman Ia In order that middle
mans function may bo performed
without waste and without profit
In tho second place tho spirit OF
tho American farmer IL not sufficient
ly unaolAah, Ho has been operating
for no long on the competitive basis
that II Ia dflleult for him to acquire
n spirit Of uneelhsh loyalty 10 tho
spirit OF the organization TO which he
belongs. II an opportunity presents IL
self undor which ho can net profit
by abandoning tho cooperative soci'
ETY. and dealing with u private dealer,
ho embraces II at once, without foeliz'
Ing that IN the end this will ruin hls
cooperative concern and leave him
IN tho hands Of tho privately owned
doalor who has been for generations
working him for largo profits,
In tho third place, practically oil
thA Ameriean eoneoFna which have |