COOPERATION IN GERMANY.

Otago Witness, Issue 3098, 30 July 1913, Page 81

COOPERATION IN GERMANY.

TO THE EDITOR. Sih, —In -the Otago "Witness of Juno 25 there’ is a note of what Mr M'Conneli, manager of the Ruakura Experimental Farm, said to the National Dairy Association about co-operation. He strongly urged the dairymen not only to co-operate in the manufacture and salc_ of their produce, but also in dealing with everything they bought and sold in Now Zealand. There was a prevailing opinion that cue Dominion was leading in the matter of co-operation; but it was far behind other countries in the light of what was being accomplished by co-operation all over the world. It was impossible to cast any doubts on the benefits of co-operation. Now, Germany has the most comprehenaixe co-operative system in the world, and 1, with your leave, will give your readers some particulars. The German agriculturists found, in a period of depression, dial there was more to he done than could be comprised in even the most elaborate scheme of technical education. Science could tell tile farmer what it would pay him best to produce, and ■how to secure big crops: but it left him to ins own resources in the way of raising money and of selling ids crops to the best advantage. It was in these circumstances that lie turned his attention to the possibilities of co-opera-tion, and soon the fact was recognised that agricultural co-operation was an indispensable sequel to agricultural instruction. Cooperation has, indeed, been by an authority on the subject as “the German farmers’ stronghold and bulwark, ’ and no one who is acquainted with the facts will fail to admit the aptness of the description. It was in the matter of finance that tl.o adoption of co-operative princip.es assumed one of the earliest and most practical of its varied forms in regard to Gorman agriculture. Falling prices and other adverse circumstances had so far decreased the available funds of the farmers that it was difficult enough for many of them to carry on their ordinary operations in the ordinary way. year by year, without embarking on wider undertakings or those more costly methods which agricultural science was opening to them. In these conditions it often became a matter of urgent importance to the fanner that he should raise a loan which would enable him to carry on until ho obtained a re turn from his crops. Such a loan might make ail the difference between comparative success and absolute failure. But, while the ordinary banks were quite ready to advance money to a land-owner who could give them a mortgage on his estates, they were reluctant to make advances to individual farmers on nothing but their personal security and their reluctance increased in exact proportion to the growing needs of those who wished to borrow. The wayout of the difficulty was found by a resort to the co-operative credit hank system, under which the credit of the whole of the members of an association is used for the purpose of borrowing money. The savings and credit banks of this typo founded by Schwlze Dolitzsch, at the end of the forties, aimed at promoting the interests of the labouring, artisan, and trading classes in general, rather than of the agricultural classes in particular, and (hey operated on a wide basis, without any restriction as to locality. The Raiffeisen banks, on ihe other hand, are essentially local in their charao ter, each dealing only with its individual members in the district in which it has been set up: so that any individual seeking to borrow money from the bank is likely to be known alike to the manager and to the majority of the other members. Then the direction of the R-.rffeiscn batiks is purely honorary, being controlled by a committee of the shareholders, who receive no remuneration, and loins to local residents are made only under clearly-defined limits; whereas the administrator# of the iSehwlz---Delitzseii batiks arc paid for their services, and the loans are practical’y unlimited, according to circumstances. '1 he banks formed on the Schwlze-De-litzsch principle have been takm great advantage of by the agricultural as well as by tiie industrial community of Germany; but it is the Raiffeisen system, with its more thoroughly co-operative basis, that has especially commended itself to the German farmers. Its fundamental principle, not simply of eo operation, but also of lire unlimited liability of the member.?, has bet n much criticised, and of late the tendency in Germany lias been to- modify this principle so far as to plw „ o-riain limit to the liability of individuals in the starting of new hanks. On the oilier hand, it is claimed on behalf of the Raiffeisen institutions of Germany that there is no instance on record of a member having suffered from the enforcement of the rule in question. It is argued that the existence of such a rule makes the members careful to advance money only to those whom they know to bo tiustworthy. and it is the very essence of a Raiffeisen bank that it should operate in some village or small town where everybody is Uptown to everybody else. ,\ brief expi ricm.-e convinced the pioneers of the Raiffeisen bank movement thuf, it was not, sufficient to put an easy credit within the reach of the small cultivator. It. was found that he needed guidance in the spending of the money as well. Hence the banks, in addition to receiving deposits and advancing loans, took up the business of ordinary purchasing societies—a procedure which excited a certain degree of hostility on the part of the purchasing societies, which, in their turn, started agricultural credit banks on their own account. Of Raiffeisen banks in Germany affiliated to the central inlitutiou at Neuwied there are now 4000. Of co-operative credit banks in general there are 4455 in Prussia and 3899 in other German States, u tola! of 8354. representing a membership of close on 1,500,000. Some States will have cooperative credit banks in 33 per cent, of their parishes, and 50 per cent, of the farmers in those parishes will he members. As for the good that has been done by such institutions. Mr F. T. Konig says, in a report on “Agriculture in Germany " ; "It has boon a puzzle to me why English farmers do not club together and form cooperation banks for the benefit of all concerned. Co-operation lias proved to be the key to success in Germany, and has saved many thou'ands of farmers from ruin.” But there are many other directions in which the combination principle lias been applied to agriculture in Germany, besides the .sotting up of credit banks. Of special agricultural societies for the purchase of artificial manures, feeding stuffs, machinery, tools, coals, etc. (in addition to what the banks may do in this direction), there arc--226 in, Prussia and 578 in other German States. Of production and selling societies .representing, among other branches,

societies for the sale of seed, fruit, vegetables, produce of all kinds; silo societies; the German spirit syndicate, and societies for the sale of cattle) there are 553 in Prussia and 116 in other German States—a total of 669. Of dairy produce societies there are 1261 in Prussia and 421 in other German States — a total of 1682. “As the co-operative system of dairying has increased in Germany,” says Mr Konig, “dairies have sprung up as fast as mushrooms. Then most of the factories established of late years in Germany, and especially in Saxony, for the production of sugar from beetroot have been sot up on the co-operative system, the farmers who grow and supply the beetroot either starting the factories themselves, or else holding shares in factories established by limited companies. The cultivation of sugar beet in Germany,” Mr Konig remarks, “ has made many a man’s farm pay, which previously was only kept afloat with difficulty; and when such a man. in addition to growing beetroot, has a share in the co-operative factory in which it is turned into sugar, he naturally gets a double advantage.” The total amount o' the purchases of agricultural necessaries effected by the German credit banks, or by the special associations for that purpose, during 1902, is stated by the annua! report of the German Confederated Co-operative -Societies for the year to have been £3,500.000. Co-operation, again, lias been extensively resorted to in Germany in the formation of societies for drainage and irrigation, and especially for the purpose of reclaiming bogs and moorlands. Theamount of land so reclaimed in Germany between 1878 and 1893 is estimated at over 700,000 acres and much of this land, on which nothing but heath hurl grown before, now _ ranks as among the most, productive soil_ in tne Empire. Still another resort to agricultural co-operation in Germany has been in regard to the use of machinery. Recent statistics show that steam thrashing machines are used there on no fewer than 35.000 farms of less than five acres, end). Without co-operation such a thing would lie altogeihor impossible. In some instances the farmers of a particular district will organise a society for the purchase of a. steam plough, hiring it out to their neighbours when they are not using it themselves. Then, in the wine district# of Wurtemberg, the smn’hu- m-owm-s

of Wurtemberg. the smaller growers—mostly peasants will have co-operative societies for establishing cellars where the wine-juice can be kept until it ferments,” hotter prices being lints obtained when it soh-I. I lio Ickwil agricultural unions, gu.at and small, have been a material factor in improving tiie general position, in the report already referred to, the British Consul at Stuttgart says reaped - mg those unions; —They are devoted to tin- col.eel ion, utilisation, and propagation of the agriculture in its commercial and economical aspects. . . . The great sucwhich 1.-a.s hitherto crowned the efforts of _ ihe agricultural unions is principally owing to tiie method of organisation, which seels to unite fill the different branches into large and powerful corporations, with welldefined and similar objects. Beginning with the small local unions, there follow, branch, district, and comity unions—all these being united together in the central and nrovincial agricultural of smaller States ami provinces. These are amiin united into the highest agricultural corporations of flic larger -Stales, which often po-’sess a semi-official character. For instance. in I’lii-sm the Band Economy Gounctl, in Havana the Agricultural Council, in Saxony the Band Cultivation Council, and so forth. The apex of the whole organisation and- the highest condensed expression of German agricultural wishes are emhodnd.in the Imperial German Agricultural Counci!. In addition to the semiofficial n-pre dilative a.gr:< ultnral bodies, there exist other special associations which have been formed for tin- purpose of furthering the inti n.sis of special brandies of agriculture or agricultural industries. ( bie of lie' l-odiea in question, the German Agricultural Association, has a membership of 13,000, ami the 23/ associations in 80-vana have a total luelubei-shm of 50,000. Organisations su.-h as these ought, therefore, to exerci-.-e a considerable influence, not alone <m the economic but nl-o ou the political position ot agriculture m Germany, and such has undoubtedly been the ease there in regard to recent legislation. I‘ roni some notes corifribnt!d to the Journal of the Department of Agriculture and Technical Instruction for Ireland for December. 1903, on “ Agricultural 'Cooperation in Germany,” by Mr 11. <b> K. Montgomery. 1 learn that tin- total number of registered agricultural co-operative -oen-tks In the German Empire on .July ]. 10J3, Wiia 17.162. These figures included 678 new savings and en dit banks formed during the previous 12 months (569 with unlimited and IC9 with limit! d liability), and 151 miscellaneous societies, among which w- re tin- fo’lowing :—.'■foeh tics for liepurchase of steam thrashers. 35: societiis for the sa'e of cattle, 22: soeieiiis for the sale of corn, 4: wine-growers’ societies, 18; cattle-breeding societies. 10; horse-breeding societies, 7; egg and poultry soe-iei hs, 13; distillery societies, 3; irrigation soch ties. 2: electricity socie-t a s. 2: jam factory societies, 2: steam plough societies, 1: fruit i-oci<tifs, 1, Quoting from a report drawn up by Dr Hass, chairman of the Cnion of .Agricultural Co-operative Societies in Rhenish, Prussia, .Mr Montgomery a!-o mentions a parish of 160'J inhabhaut.s in Hanover which can lioast of flea flourishing aark-ul:vtra! co-operative -. «.oei.it:o::s a savings and credit bank, an agricultural supply society, a dairy society, an egg society, a milling society, and a. society for the sal<* of cattle. What, therefore, with her very practical ami comprehensive system of agricultural education. her elaborate- development of an e-a-y and most effective agricultural credit, and, finally, her great variety of agricultural co-operative associations, Germany may well e-laiin to hi ve- reorganised the position of the cultivators of her soil in a way that has brought to them a measure of success, and to herself a. degree- of economic advantage, that would have been impossible if. when they were threatened with agricultural depression, they had clung tenaciously to old ideas a.ml antiquated methods. Now. just a note from the Journal of ihe Board of Agriculture of July. 1912. on Cermany's co-operative credit societies. Reports were received from 12.614 credit societies belonging to unions affiliated to tiie Imperial Union, with a membership of 1,165.185. showing assets amounting to £97.127.000 and liabilities amounting to £86.776.000. T he total loans to members in 1909 wore £14,379.000 for fixed periods, and £30.522.000 on current account. The reserve funds of all the credit societies together equalled £2.549,000. The cost of administration in 1909 was £387,884 —i.e., at the rate of £3l per annum per society.

Some ide-a of the large amount of work done by these societies may be gathered from 1890 to 1912 in Germany of co-opera-(receipte and expenditure) in 1909 amounted to £222,808,000. In the Journal of the Board of Agriculture for April, 1915, there is a table showing the progress made from 1890 to 1912 in Germany of cooperative societies: Date, 1890. Number of credit societies, 1729, number of trading societies, 537; number of dairy societies, 539; other societies, 101; —total, 3005. In 1912 tlie number of credit societies was 16,744, the number of trading societies 2417, the number of dairy societies 3475, and the number of other societies 3360; the total number in 1912 of ail the societies being 26,026. Local Credit Societies. —The importance to which agricultural co-operative credit has attained in Germany is shown by the record of the local credit societies. In 1910 the total number of such societies in existence was 16.735. with a working capita! of £135,000,000, of which £120.000,000 was members’ deposits. At the end of the year the loans on current account were £23.000.000 and for fixed periods £60,000.000; the total amount in Joans granted in 1910 was £34.000,000 on current account and £15,000,000 for fixed periods. Many of these local credit societies undertake the purchase of farm requisites for their members. Ihe purchases in 1910 amounting to £4.500,000. Mr J. R. Cahill, in a report to the Board of Agriculture, states in a prefatory note that in no modern State dors organised effort for safeguarding and promoting the economic interests of agriculture appear to have

been so persistent and so suoce-vfu! as in Germany —more especially in the direction of providing the farmer with facilities for obtaining credit, for acquiring the insi turnouts of production, and for disposing of Ida produce on the most favourable terms. In the present report an endeavour has been made to set out in considerable detail the principles and practice, together with the results of the working, of the throe groups of organisations rluit owe their existence to lids organ iced effort in German agriculture. The report is based essentially upon knowledge obtained by personal inquiry and upon the, study of original documents. A general report on agricultural credit (30 pages) is followed by detail reports on the came subjects of 502 pages in length, while in a valuable appendix to the report a.re given translations of laws and documents, maps, and a very complete bibliography. It is stated by Mr Cahill that the great system of German rural co-operative credit, as we now see it, bus not been created in a day, and it is hardly to he expected that the work of establishing a similar system would 1 progress more rapidly in England. On the other hand, there seems to bo no reason why it should progrtvs more slowiy in this country than in Germany, especially if a similar intensive and penetrating propaganda could bo set in operation. Only through such local organisations would it seem possible to establish the c’ose contact that must exist between lender and borrower, if small farmers are to be in a position to obtain credit on suitable terms. I have given a good deal of thought to co-operation, and this long letter is the result.-■ Wo iuis, Cave, S.G. D.M.