aiffeisen banks boast that neither member nor creditor has ever lost a
penny by them, and while this is denied it seems at least near the
truth. Their credit is so good that they can obtain money at very low
rates, and as their expenses are trifling they can re-lend to their
members at rates but little higher. In Germany they usually lend at
about 5%. Only men of good character can obtain membership: thus,
besides spreading prosperity, they have everywhere been great promoters
of sobriety and good conduct. They were only intended to meet the needs
of the peasants, especially of the very poorest, and for this purpose
they have proved admirably suited.

Schulze-Delitzch banks.

Very different were the people among whom Schulze-Delitzsch established
his form of co-operative credit; and very different the organization he
adopted and the results which have flowed from it. In 1850 Franz Hermann
Schulze was a judge in his native town of Delitzsch, almost at the
middle point of the southern edge of Prussia, and established there his
first _Vorschussverein_, or Advance-Union. He had been in England and
knew something of our co-operative movement, but he scarcely seems to
have derived any part of his inspiration from it. The people he desired
to help were townsmen, especially the small craftsmen working on their
own account, the joiners, shoemakers and so forth; and his ideal was to
do this merely by stimulating their thrift.

In a Schulze-Delitzsch bank, a number of such men combine together to
raise a capital of guarantee: to do this every member takes up one share
and one only, which is of large value, say L30 or L50 or even much more,
but can be paid up by small instalments. Thus every member is committed
to a long course of saving. On the strength of this capital in course of
formation, and the unlimited liability of the members, the bank is able
to borrow, or to receive as savings and deposits from members and
others, a much larger capital. The funds so constituted it lends out at
the highest rates it can command, originally 12% or 14%, but now very
much less, and varying, of course, with the market. It lends to members
only, but to any amount, for any purpose and on any good and sufficient
security, whether acceptance, promissory note, overdraft, discount,
mortgage, pledge, surety or what not. The loans, however, are always for
a short period, usually three months, renewable for another three
months, and sometimes fu