hich often produce a
large part of, or even all, the capital it needs. Usually a few of the
members are comparatively well to do people, who join to help their
neighbours by increasing the society's credit. This Raiffeisen
considered essential. They have no actual privilege, but by common
consent they take a leading part. In the true Raiffeisen bank the
liability of each member is unlimited, but limited liability has been
introduced in some of its modifications. The Society confines its
operations strictly to a small area, say a parish, where everyone knows
everyone. Each borrower must specify the purpose for which he wants a
loan, say to buy a cow or drain a field, or pay off a money-lender, and
this is rigorously inquired into. Only members can borrow. Any member,
however poor, can borrow for a profitable approved purpose, and no one,
however rich, for any other. Practically all the members see that the
money is applied as agreed; and, while the loan is often made for a long
period, a year or two--even for ten or more--so as to repay itself out
of the profit, power is reserved to call it in at short notice if
misapplied. Loans are repayable by periodical instalments, but
repayments must be made with absolute punctuality. No bills, mortgages
or other securities are taken, except a note of hand either alone or
with one or two sureties. There are two committees, one to lend and do
the work of the society, and the other to supervise the first; and on
both of these it is understood that the richer members are to be in a
majority. No committeeman or officer receives any remuneration for his
services, except that the accountant gets a small salary. Originally
there were no shares, and when in 1889 the legislature ordained that
there must be shares, the Raiffeisen banks made theirs as small as
possible, generally ten or twelve shillings. Nothing is paid on the
shares as interest or dividend, all profit being voted once for all to
the ordinary reserve and the indivisible reserve, the latter the
backbone of the system. In every large district the Raiffeisen banks are
federated in a Union, and these Unions culminate in a General Agency. As
an intermediary among themselves, and between them and the money market,
the banks have also a central bank with a capital of L500,000, and with
ten provincial branches. A great deal of agricultural co-operation has
arisen from these banks as centres, and with the money they have
supplied.

R