Cheyenne record., 1914-05-28

formed to lend money only to those 10
cal members who will use It for To-
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 100000. Such an
amount of money was Of course far In
excess of any needs which the mem
bers themselves might have az bor-
rowers. Consequently the bank be-
gan to do business with outsiders
Funds were 30 plentiful and the de-
mands relatively so small that 1t 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 1t.
1t 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. 1t 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 tncompe'
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. Its
situation was almost the same as
| that OF the Nieder Mabau bank. al
though 1t 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 a million dollars was
invested in mine that could not be
| worked. Other equally hazardous en-
terprises 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 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 a
scheme for uniting many cooperative
societies in one big concern. Here
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
hend 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 q
middleman is in order that 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 unselfsh. He has been operating
for so long on the competitive basis
that it is difficult for him to acquire
spirit of unselfish loyalty to the
spirit Of the organization to which he
belongs. II an opportunity presents it
self under which he can net a profit
by abandoning the cooperative soci
ETY. and dealing with 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
ital invested it has often occurred
that the interests of those who were
in control of the majority of the stock
| wera anita pOnfstic to the intercsts of