The review. [volume] (High Point, N.C.) 1908-19??, 1914-05-28

4I1OA gOA@WhFCM0uSG6 WHICH were 01L06f
not neededor 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 alta German village Of some
$40 inhabitants local tradesmen
formed a loan and savings bank. From
the very first they forgot that cooper
alive credit banks are primarily
formed to lend money only to those To-
cal members who will use It for To-
cal purposes. They were too anxious
to get rich quick. BY a promise Of ex-
ceedingly high rates OF interest they.
attracted patrons from the most re-
mote points until there was on de-
post in this little village cooperative
bank almost 81, 0e0,0 200. 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 it grant
ed to its debtors extensive credits. It
became known that credit could easily
be obtained at that village bank and
spectators far and near focked to it.
It risked It's 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 large business in 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
Ter ended his year with forgery and
was sent to prison. It was not sur
prising. 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-
ricultural bank at Darmsted, formed
in 1882. reached a point where it was
unable to meet its obligations. It's
situation was almost the same as
that OF the Nieder Mabau bank, al
though it operated upon much larger
scale. In connection with this bank
there was also either gross incompe-
tency or dishonesty. In one case, for
example, over million dollars was
invested in a mine that could not be
worked. Other equally hazardous en-
terprfses were financed by this con.
Germ contrary to all principles OF CO.
operative credit and equally contrary
to all rules OF sound finance. "Co-
operative banks are 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 bust
ness. There brilliant public man
got in the good graces Of those inter-
ested In cooperation and promoted q
scheme for uniting many cooperative
6OSAOk1O0 IA OAO bA6 OOACO1A 44OA =
there was not SO much Incompetence
as dishonesty, and the venture ended
in financial failure for the members
and in imprisonment for the dishon-
est promoter.
Causes of Failures in America.
/ Cooperative failures so far as Amer
lea is concerned are traceable large
ly to these causes:
In the first place 1t has always been
difficult for the American to compre-
bend the fact that cooperative con-
Germs are not money making, divi-
dend declaring, profit producing con-
Germs. They do not seem to realize
that the sole excuse for the existence
OF the cooperative organization as a
middleman is in order that a middle
mans function may be performed
without waste and without profit.
In the second place the spirit Of
the American farmer is not sufficient
ly unselhsh. He has been operating
for so long on the competitive basis
that it is difficult for him to acquire
a spirit of unselfish loyalty to the
spirit of the organization to which he
belongs. If an opportunity presents it.
self under which he can net profit
by abandoning the cooperative soci-
ETY. and dealing with q private dealer,
he embraces it at once, without realiz-
Ing that In the end this will ruin his
cooperative concern and leave him
in the hands OF the privately owned
dealer who has been for generations
working him for large profits.
In the third place, practically all
the American concerns which have
failed have been organized on the joint
stock plan. With the voting power
distributed IN proportion to the cap
|eital invested 1t has often occurred
that the interests Of those who were
in control OF the majority OF the stock
were antagonistic to the interests OF
the smaller stockholders, who con-
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