WORKING MEN'S BANKS.

Otago Witness, Issue 832, 8 November 1867, Page 17

WORKING MEN'S BANKS.

(From the Argus. )

It was wittily remarked by Jean Paul Riehter, that cLe English are masters of the sea, the French of the land, and the Germans of the vague regions of the infinite. But whatever may be the tendency of the German mind towards the speculative, the mystical, arid the abstract, it has shewn its capacity for the practical and the concrete by the compl«te success ■with which it has worked out one of the most beneficial movements of modern times, and has applied the principle of co-operation to the establishment and conduct of working men's banks. These institutions owe their origin to M. SrliuizeDelitzch, who in the Prussian Parliament distinguished himself as the consistent and earnest champion of democracy, and who is recognised as one of the most influential leaders of the party of progress in Germany. A devoted free-trader, and the implacable enemy of centralisation, the opinions he holds on Government are these : — That society should assure to each of its members the largest possible development of individual irecdoin, and that the functions of the state should be limited to those of un institution of police, calif d upon to guarantee security of person and property to every citizen. Thwarted in his endeavors to promote the political reforms by which he aimed at restricting the power of the Government and strengthening that of the peojrie, he has applied himself for many yeai-s past, to ameliorate the social condition of the masses by organising associations of crtdit, co-operative stores, co-operative ■workshops, and co-operative' societies, for the purchase of the raw material consumed in the latter. It is to the successful working of the first of these — the. popular banks — that we now propose to confine our attention.

In ldC3 no less than 662 of these institutions had been established in various' parts of Germany ; the eldest of them dating as far back as as 1849. The

returns from 400.. of j this-n uum^er .Staftd^, r jfchj^ _,th>y possessed v l;0p$00 shareholders ; had made advances "for periods averagiug three months to the extent of nearly L 4,000,000 sterling; during the currency of that year held half a million-sterling in the shape of working men's savings", and had incurred less than LIO,OOO losses by bad debts. The capital of these banks is derived from the following sources ;— The entrance fees and annual subscriptions of the shareholders, and loans contracted on the collective security of the latter. A president, cashier, controller, and nine assessors, are triennially elected by the share--holders, and entrusted with the management of their affairs. Each share is fixed at a maximum of forty thalers (Ls l6s 8d), which may be either paid up at once, or by a monthly contribntion^of not less than sixpence; -while an entrance fee of 2s lid is exacted, which i& also allowed to be paid by" instalments. Loans are granted for'tliree months in sums of not less than 8s Sid, and not exceeding L 145 ; the interest pharged being at the rate of 8 I per cent, per annum. The personal security of .^Jjb ' borrowing - shareholder is held to be sufficient in the case of small loans, but sureties are demanded where .the advance exceeds the value of a single share. Should the bank be compelled to fall back , upon the sureties for the recovery of the loan,- they are charged 5 per cent. only.

M, .Schulze-Delitzch attributes much of the success of these banks to the fact that they are independent alike of the state aid andTof charitable assistance. Benevolent individuals have offered them the use of capital without interest, but these offers,, have been uniformly declined. To liave accepted them would have weakened- that spirit of self-reliance, of self'rtspectyand of independence which is so necessary "to the strenuous maintenance of honest and hopeful • effort. When it was found necessary to borrow capital,_it was done in the open market, and at current rates ; but after having been established for a few years, most of the people's banks found themselves in a position to dispense with any extraneous assistance. The subscriptions and savings of the small shop-keeping classes and artisans sufficed to constitute a fund sufficiently large for each institution to transact its business with. Indeed, borrowers seemed to prefer obtaining loans from these VolkxbaiJxn to applying to the charitable loan societies which have been founded in some of the German cities. Thus, in Frankfort, while the operations of one of the latter, in the year 1859, did not exceed 61,660 florins, those of the people's bank at Eisleben, a town with only one-fifth of the population of Frankfort, reached more than 1,000,000 florins in the same

The small tradesman, the operative, and the husbandman, the men who, under ordinary circumstances and in European countries, are unable to open an account at a Bank and to obtain those monetary advantages which the middle and upper classes enjoy, are especially benefited by such institutions as the Volksbaiiken. As a general rule, the lower the grade of society to which a borrower belongs, the heavier the rate of interest he has to pay for a loan ; and this quite irrespective of his personal character and credit, indtistry, and ability, and of the reproductive uses to which he purposes to apply the money. So far from being an auxiliary to him in his occupation, borrowed c-ipital is usually a clog to his progress, if not a weight which drags him down to ruin. Tlie very men who are so instrumental in the creation of wealth, experience the greatest difficulty in, procuring the temporary use, upon just and equitable terms, of any portion of it in its mobilised form. Hence the utility of these popular institutions of credit, which protect the industrious working man against usury, which furnish depositors with a secure investment for their savings, and which direct into a thousand, minor channels the vivifying and fertilising stream of capital. The system upon which they are conducted appears to be as prudent and as safe as that which regulates the conduct of banking establishments •of a higher grade ;• and their solidity and solvency have stood the test of nearly twenty years' experience. ■ The authenticated balance-sheets published by 339 of the German Volicsbanken shew that in the year to which they refer (1863) only forty of the banks made any bad debts whatever, and that in only four instances did these exceed L 59. ,On the other hand, they had a paid-up capital equal to one-fourth of the entire capital of the joint-stock banks of all Germany.

The Canadian Primitive Methodist Conference has resolved that no parson shall hereafter -/become a member or candidate who uses tobacco. Two or -three of the present members are in the habit of using it, but'no more can come in.

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