f the
recent rapid industrial and commercial development of Germany, which
dates back only to the establishment of the Empire in 1870. Most of
them began operations in the decade 1862-1872, but the most rapid
growth in the magnitude and scope of their business operations has
come in recent years.

In 1899 there were forty institutions of this kind in operation in the
German Empire. The number at the present time is probably considerably
greater, since for obvious reasons combinations among them are not
promoted by the same kind of economic pressure that in recent years
has operated so efficiently in Germany in the field of commercial
banking.

Two other groups of German institutions merit attention in this
connection, namely, the so-called Schulze-Delitzsch and the Raiffeisen
Credit Associations.

The Schulze-Delitzsch societies were the direct outcome of the period
of dearth and famine through which Germany passed in the years
immediately preceding the revolution of 1848. The first one was not a
credit association, but a cooperative buying society, organized by a
local judge named Schulze for the aid of his needy neighbors of the
small trading class in the town of Delitzsch. In 1850 a credit
association on the same plan was organized. Others followed, in rapid
succession in and after the seventies, until at the present time they
are numbered by the thousands and their members by millions, and they
are scattered throughout the entire empire.

The principle of their organization is the association of a
comparatively small group of neighbors, or of people who know one
another well, or who may easily come to know one another well, by each
making a contribution to a common fund to be loaned out to individuals
on personal security chiefly, and which, together with the credit of
the entire group, may be made the basis of security for larger funds
to be borrowed on the open market. They are carefully organized on the
cooperative principle, each member having an equal voice in a general
assembly which chooses a board of directors and a small administrative
board, to which is intrusted the actual management and administration
of the affairs of the society.

Loans are made to members only, usually for short periods of time, on
the personal security of the borrower and of others who are willing to
vouch for him, and on the unusually favorable terms which the credit
of the entire organization and very low costs of administra