Polk County news-gazette. (Benton, Tenn.) 190?-191?, 1914-05-28


lion Cf 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 Nieder Mabau.
In 1874 at a German village Of some
$50 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 win use it for To-
cal purposes. They we're too anxious
to get rich quick. BY promise OF ex-
ceedingIy 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 $1,000,000. Such an
amount of money was OF course far III
excess of any needs which the 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 its debtors extensive credits. 1t
became known that credit could easily
be obtained at that village bank ana
SPECTATORS far and near locked 70 u.
1t risked its money In hnahcldi
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 pubic
funds. Besides this, he was conduct
ing large business in hotel dIhere
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 insolYent,
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 point where 1t was
unable to meet its obligations. us
| 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 a million dollars was
invested in a 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
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 thoseSfnter
rested in cooperation ana promoted
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 it has always beer
difficult for the American to compre
bend the fact that cooperative con
Germs are not money making, diVl
dend declaring, profit producing con
Germs. They do not seem to realize
that the sole excuse for the existence
of the cooperative organization as {
middleman is in order that middle
mans function may be performed
without waste and without profit.
In the second place the spirit o
the American farmer is not sufficient
ly unselfish. He has been operating
for so long on the competitive basi
that it is difficult for him to acquire
a spirit of unselfish loyalty to thu
spirit of the organization to which n
belongs II en- opportunity presents II
self under which he can net prof
by abandoning the cooperative soci
} ETY. and dealing with private dealer
he embraces it at once, without realtz
ing that in the end this will ruin hi
cooperative concern and leave hin
in the hands of the privately ownet
dealer who has been for generation
working him for large profits.
} In the third place, practically al
the American concerns which hav
: failed have been organized on the join
stock plan. With the voting powe
: distributed in proportion to the car
ital invested it has often occurred
that the interests of those who wer'
in control of the majority of the stool
were antagonistic to the interests o
the smaller stockholders, who cor
tributed to the success by bringing
in a large part of the produce HANDLED
nv the concern. AS result the POI