The Banking Principles of Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen

Abstract

The two men who created the cooperative movement in Germany, Hermann Schulze-Delitzsch (1808–1883), who worked in the towns, and Friedrich Wilhelm Raiffeisen (1818–1888) who worked in the rural areas, were directing their efforts to helping different groups in the population, but both were groups suffering from the economic and social developments in the first half of the last century. The two men never met, although there was some contact between them at times, mostly from Raiffeisen to Schulze-Delitzsch, and the cooperative banks which they founded differed in many details. Nevertheless, we can distinguish in both men three lines of development which are related to the establishment of the cooperatives and are virtually identical:

• 1. Neither Schulze-Delitzsch nor Raiffeisen, although they are regarded as the founders and creators of the modern cooperative movement, worked initially on the principles of self-help and equality which are the basis of the cooperative movement. It was only when it became apparent that the charitable organizations which they originally set up were lacking in stability that the true form of the cooperative was evolved.

• 2. Both men laid down clear and binding rules for the cooperatives they formed, especially their credit cooperatives, and devoted their lives to the observance of these rules. The principles are expounded at length in the books the founders wrote; these ran into many editions during their lives and after, and they have formed the major source of material for this article¹. The work of Raiffeisen and Schulze-Delitzsch was a major creative achievement and it laid the basis for the role the cooperative banks play today in the Federal Republic of Germany. Even the early credit cooperatives were run on pure banking principles and they were hardly affected by the secondary aims which the two men were pursuing in addition to their primary economic concerns.