Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1914-06-03

excess OF any needs winch tne mem'
bers themselves might have as Dor.
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 focked to it.
It risked its money in financial
schemes outside the limits Of the vii
lage. It loaned to spectators who
were dealers IN vacant lots in other
cities which had only speculative
values. n It went SO far as to make
loans upon second mortgages, and
even on third mortgages. I. ) y E> 4.
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 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.
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 fnsolvent,
the natural results Of undue greed, of
the spirit OF speculation, Of incomps
tence, and OF dishonesty. 81 y
Cooperative Bank at Darmsted. n
More recently the cooperative ag-
ricultural bank at Darmsted, formed
in 1882, reached point where 1t was
unable to meet its obligations. It's
situation was almost the same as
that of the Nieder Mabau bank, al
though 1t operated upon a much larger
scale. In connection with this bank
there was also either gross incompe-
tency or dishonesty. In one case, for
example, over a million dollars was
invested in mine that could not be
worked. Other. equally hazardous en-
terprises were financed by this con-
Germ contrary to all principles Of CO.
operative credit and equally contrary
ito all rules Of sound finance. Coz
operative banks are not foolproof,"
and OF course the cooperative bank
at Darmsted failed. @s 4sssi.,
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 .
scheme for uniting many cooperative
societies in one big concern. Here
there was not 20 much Incompetence
az dishonesty, and the venture ended
in financial failure for the members
and in imprisonment for the dishon.
est promoter. 4 Isl z u. VI
Causes Of Failures In America. IN
Cooperative failures so far as Amer.
lea rs. concerned are traceable large
ly to these causes: N $
e In4the first place It has always been
difficult for the American to compre-
bend the fact that cooperative con-
Germs are not money making, divi.;
5dend 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 middle
mans function may be performed
without waste and without profit.
n In the second place the spirit OF
the American farmer is not sufficient
~ unselfsh. He has been operating
for SO long on the competitive basis
that it is difficult for him to acquire
"a spirit of unselfsh 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 private dealer,
he embraces it at once, without realiz-
ing that in the end thisrwill 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. 81 y5.T
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
ital invested it 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-
tributed to the success by bringing
in a large part Of the produce handled
by the concern. AS a result the pol
icy OF the cooperative concern has
often ignored the interests of the
producer II the concern was a market
ing one, or the interests Of the dis
tributee If the concern was distrib-
uting organization. ..S .s.
In the fourth place, the American
farmers have not yet had a sufficiently
far.seeing vision to realize that it often
pays to invest considerable salary
in q skilled manager. They hesitate
to pay salary which would demand
the attention of anyone who had sufn-
Gent experience and skill successfully
to manage the business. AS result,
cooperation has suffered from ignor-
ance and mismanagement.
ings" as sneak thief during the last
On vaore COWS tho R0atonS Ira nscriDt