Fulton County tribune. (Wauseon, Ohio) 1883-1925, 1914-06-05

heard that there were great corners
in the United States, and by buying
and storing grain men had made enor-
nous fortunes There was to be gold
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
calses 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 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 a 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 S1,000,000. Such an
amount of money was of course far in
excess of any needs which the men,
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
be obtained at that village bank and
spectators far and near fiocked 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. 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 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 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-
Germ contrary to all principles of CO
| operative credit and equally contrary
to all rules of sound finance. Go.
! 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 a 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 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 9
middleman is in order that middle
mans function may be performed
without waste and without profit.
In the second place the spirit oi
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 unselfish loyalty to the
spirit of the organization to which hs
belongs. If an opportunity presents 1t
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 hi:
cooperative concern and leave hin
in the hands of the privately owned
dealer who has been for generations
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 occurre,
that the interests of those who wer
in control of the majority of the stool
we're antagonistic to the interests o
the smaller stockholders. who COZ