The Pickens sentinel. (Pickens, S.C.) 1911-2016, 1914-06-11

in the United States, and by buying
and storing grain men had made enor-
nous fortunes. There was to be gold
for everyone who wanted it. A careful
study of the situation has revealed the
absurdity of the situation. Those who
controlled the warehouses could not
control to exceed one-twentieth Of the
supply Of grain grown in Germany
alone.
The general concensus Of German
opinion seems to have been that two
causes contributed to the failure; first,
state aid, which seldom really helps
cooperative society, ruined these
projects by encouraging the construc-
ton 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 it for To-
cal purposes. They were too anxious
to get rich quick. BY e promise Of e1-
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 s1,000.00O. Such an
amount of money was Of course far in
excess Of any needs which the mem
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 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.
1t risked its money in financial
schemes outside the limits of the vii
lage 1t loaned to spectators who
were dealers in vacant lots in other
cities which had only speculative
values. 1t went SO far as to make
loans upon second mortgages, and
even on third mortgages.
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
ier 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 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 it's obligations. Its
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 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 busi-
ness. There a 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 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 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 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 unselfish. He has been operating
for so long on the competitive basis
that it is difficult for him to acquire
spirit OF unselfsh loyalty to tbs
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 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 shird place, practically all
the American concerns which have
failed have been organized on the joint
stock plan. With the voting power
distributed ia proportion to the cap
ital invested it has often occurred