he most favorable
possible terms. Their development was also due to the hard economic
conditions of the period immediately succeeding the revolution in
1848.

They differ from the Schulze-Delitzsch societies chiefly in the
following particulars: They charge no initiation fees and do not rely
to the same extent on the proceeds of the sale of shares, the amount
of which they place at a very low figure, often the lowest permitted
by law; they make long-period as well as short-period loans, indeed
the former chiefly; they do not pay dividends on their share capital,
but instead put all profits into reserve funds or prevent their
accumulation by keeping the loan rates low; they exercise more care
than do the Schulze-Delitzsch associations to keep their societies
small, laying great emphasis upon the importance of personal
acquaintance between members and thus upon mutual watchfulness; and,
in their origin, they were peasant organizations pure and simple, and
hence more strictly land banks.

Their founder, F. W. Raiffeisen, Burgomeister of a small village in
Westphalia, Prussia, wanted to rescue the poor peasants of his and
other districts from the clutches of the usurers, into whose hands
they had fallen and by whom they were being exploited in a most
shameful manner. Since it was loans that these people needed and
since their cash resources were always very low and in many cases nil,
he felt that to require, as a condition of membership, entrance fees
and the purchase of one or more shares of stock, however small, would
be fatal to the success of his plans. He also firmly believed that in
the integrity, industry, frugality, and agricultural skill of these
people was the basis for sound credit and that cooperation was a means
by which these elements of sound credit could be made available and
attractive on the money market. At the beginning, therefore, no
entrance fees or share subscriptions were required. Later Prussian law
made share subscriptions compulsory and they were, of course,
introduced, but they were made so low, and the acquisition of the
money for their purchase so easy, that they have not been a serious
obstacle.

From the beginning Raiffeisen invited to membership in his societies
the well-to-do and substantial people as well as peasants. Of course
these people did not require the society for the satisfaction of their
own credit needs, but Raiffeisen saw that they would greatly
strengthen the credit of th