The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1914-06-03


and storing grain men had made nor
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 c]oncensus of German
opinion seems to have been that two
causes contributed to the failure; first,
state aid, which seldom really helps
a 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 Nieder Mabau.
In 1874 at a 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 1t 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 $1,000, 900. Such an
amount of money vas of course far in
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 it's debtors extensive credits. 1t
became known that credit could easily
be obtained at that village bank and
spectators far and neal f1ocked to it.
It 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 a large business in a hotel. There
seems to have been no n on the
board Of managers Of any particular
business Judgment On 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 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 1t 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 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 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 wen in Den.
mark, the country in all Europe most
completely organized for rural bust
ness. There a brilliant public mar
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-
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 unselfsh. He has been operating
for so long on the competitive basis
that it is difficult for him to acquire
a spirit of unselish loyalty to the
spirit of the organization to which he
belongs. If an opportunity presents it.
self under which he can net a profit
by abandoning the cooperative soci-
ETY. and dealing with a private dealer,
he embraces it at once, without realiz-
ing that in the end this will ruin his