In France the Credit Agricole Mutuel rep resents a development of the Raiffeisen idea. Small local societies had been doing business with moderate success, but the movement was given recognition and encouragement in 1897, when, upon a renewal of the charter of the Bank of France, a gratuitous loan of 40,000,000 francs, and also a certain share in the annual earnings of that institution, was exacted from it and diverted to the use of the agricultural banks. The law provided for the organization of district banks, which lend the available funds to the local societies, the distribution be ing made by a committee of public men, in cluding the governor of the Bank of France. The peculiarity of the system seems to be that it depends chiefly upon the funds received from the Bank of France, which it is allowed to use gratuitously. These funds are loaned below the ordinary market rate, but as they are limited in amount the growth of the system is restricted. It lends only to provide temporary credit to farmers.
There are mutual credit associations in Russia, of limited liability, whose capital is created by the payment on the part of each member of a sum equal to one-tenth of the credit granted them. Associations of this kind may be established by the Zemstvos. In 1907, the sum total of these loans and discounts was approximately 245,000,000 rubles. A project is pending for the establishment of a central bank for these associations. See CO-OPERATIVE BANK ING; FEDERAL FARM LOAN ACT; LAND CREDIT.
Savings Banks, Municipal, Postal, Private.
—A system of municipal savings banks has its most important development in Germany and Russia. In both countries the banks are public institutions, supported by the credit of the municipalities and conducted under their super vision. The profits go to the surplus fund of the banks, or may be in part expended for pub lic purposes, such as the support of hospitals, parks, etc. In Russia the municipal banks do
a general banking business and also lend money on real estate security, but in Germany the in vestments are confined to trustee securities, as fixed by law, and to the purchase of a limited amount of commercial bills.
The municipal savings bank is to be found in other countries of Europe, and there are also stock company savings banks, but they are without special features. Mutual societies sup to a great extent, the facilities for saving. savings banks have been established in many countries, Germany being an exception, due to its high development of the municipal savings banks.
Public Loan In France, in 1830 and in 1848, in Prussia in 1848, 1866 and in 1870, and in the German empire in 1914, the governments resorted to the establishment of public loan banks or more properly, loan offices, as a means of facilitating in an emergency the flotation of public loans. The function of these banks was to serve in a subsidiary capacity to the central banks, by making loans upon col lateral security. In Germany, in 1914, one of these banks was established in every city where there was a branch of the Reichsbank. They were authorized to make loans upon collateral or goods, and, in doing so, to issue notes to the maximum aggregate of 3,000,000,000 marks. These notes were not legal tender but were ac ceptable at the Reichsbank and made good as basis for note-issues by the latter. It was an emergency measure, designed to aid in mobiliz ing the financial resources of the nation. These banks are known as Charles A., ern Banks of Issue> (New York 1915) ; Dun bar, Charles P., 'The Theory and History of Banking> (New York 1909); Publications of National Monetary Commission (Washington 1910).