the hands of working peasants, craftsmen and traders, the stock and the
tools without which their labour is vain. Credit for consumption is the
road to poverty; credit for production the road to well-being.

Just as with co-operation in labour and in purchase, so mutual help in
obtaining credit may doubtless be traced in primitive forms far back
into history. It was certainly more or less "in the air" in Germany and
France about 1848 and even earlier; but the beginning of systematic
organized credit co-operation may be definitely fixed in the year 1849,
when Raiffeisen began his _Darlehnscasse_, or loan bank, in Rhenish
Prussia. Curiously enough it had also a second and entirely independent
origin. For in the following year Schulze-Delitzsch, in a distant part
of the same kingdom, established his Credit Society based on an entirely
different system. As this second system spread much more rapidly than
the other and attained, as indeed it retains, much greater commercial
magnitude, it came to be regarded as the beginning of credit
co-operation, of which for a long time it was the only important form.
These two remain the two distinct types in every land. Thus Germany,
which has innumerable co-operative societies of every form and of great
importance, is in particular the mother of credit co-operation.

Raiffeisen loan banks.

In the famine years of 1846 and 1847 and for some years after, Friedrich
Wilhelm Raiffeisen was a burgomaster in the barren Westerwald. The
people were hopelessly ground down by debt to money-lenders for small
doles of capital, advanced to purchase stock, or meet times of special
difficulty. It occurred to Raiffeisen that by combining to borrow a
moderate sum of money on their joint responsibility, and afterwards to
lend it out among themselves in small sums at a slightly greater rate of
interest, the peasants might obtain relief from their burden of usury,
and at the same time get the capital necessary to make their labour
productive. Accordingly in 1849 at the little town of Flammersfeld, he
set up a "Loan Bank." Despite its success, it remained the only one of
its kind for five years, when Raiffeisen founded a second. There was no
third for eight years more: it was only in 1880 that they began really
to spread, but now they are found in many lands and are counted by
thousands.

Such a bank is essentially an association of neighbours. Besides
borrowing, it also receives savings deposits, w