In the rural districts the co-operative banks admit to membership country-store merchants, blacksmiths, persons engaged in or connected with agricultural pursuits, school-teachers, priests, preachers, professors of agricultural colleges, agricultural government officials, agronomists and bankers along with the farm ers. Often members not farmers are elected on their boards and committees. The banks, however, devote their funds exclusively to agriculture, and they combine to help one an other. Differently from urban banks, their tendency is to become parts of a system having three degrees of organization. The first degree is a local rural co-operative bank or a group of associations centring around such bank. The second degree is the regional or provin cial unions, each with a central bank and central commercial and industrial associations. The third degree is the federation, with a bank and associations having a national scope. Usu ally the officers of the federation and its associa tions are elected by the unions, the officers of each union and its associations are elected by the adherents composing its various local groups, and the officers of the latter are elected by their individual members. The banks of the federation and of the unions of this system have shares, pay dividends and limit the liability. But in many instances the local banks impose unlimited liability, issue no shares and put all profits into the indivisible reserves.
These are called Raiffeisen societies in honor of Frederick William Henry Raiffeisen, whose ideas and work for the Prussian peasantry led to the formation of the first society of the kind in 1862 at Anhausen, and to the inauguration in 1869 at Heddesdorf of the rural co-operative credit movement which now embraces all Ger many. Besides the features already noted, a German Raiffeisen society confines its area to a rural section containing by preference not more than 2,000 inhabitants and so remains small. No entrance fees are charged. The members must profess some Christian faith and bind themselves to deposit all their savings with the society and use none but its facilities in their affairs. Directors, supervisors and officers, ex cept the secretary-treasurer, must serve gratui tously.
The powers of a Raiffeisen society comprise buying, selling and supplying various agricul tural needs, as well as receiving deposits and extending credit. Loans are subject to recall on four weeks' notice, and on this condition may be granted at long term for acquiring farms. The borrowed money must be used
only for a specific productive purpose. The society must join the federation and obligate itself to do no business with the outside world, except through the federation's banks and as sociations. The affiliated society buys their shares and bonds with its excess funds. Thus it serves as a basic unit and financial support of the system in return for advantages obtained therefrom. It attracts members by enabling them to economize their resources.
Laws Enacted.—Following Massachusetts in 1909, laws were enacted on credit unions in New York in 1913; on credit unions in North Carolina in 1915; on co-operative banks and on credit unions in Oregon in 1915; on agricultural credit co-operative associations in the Philippine Islands in 1915; on credit unions in Rhode Island in 1914; on co-operative unions in South Carolina in 1915; on rural credit unions in Texas in 1913; on co-operative banks for per sonal credit in Utah in 1915; and on co-opera tive credit associations in Wisconsin in 1913. With the exception of the co-operative banks in Oregon, the associations authorized by these laws do not possess ordinary banking powers. None can carry out the principles and practices of either Schulze-Delitzsch, Luzzatti or Raffei sen. They are all intended rather for encourag ing thrift and for granting loans on security other than real estate than for organizing credit or for supporting co-operative systems.
Bibliography.— Cahill, J. IL,