214 C M M U N I S M Germany, Scotland, and America have an educated people, and they are distinguished among other countries for pos sessing a peaceful, law-abiding, and order-loving population. So far from education being a danger to the institution of private property, nearly every one has been convinced by events that it is much more seriously threatened by ignor ance and the helpless desperation ignorance brings ; and the old order of society has recognized the necessity of protecting itself by the diffusion of education. Opposition L Organisation du Travail furnishes another example of U> banking, the mistake communists often make in thinking it is neces sary to turn the world upside down in order to bring about some desirable economic change. M. Louis Blanc is describ ing the organization necessary for the establishment of his " ateliers nationaux," which became so famous nine years later when the eloquent author of L Organisation du Travail was a member of the Government of 1848. He is speaking of the place occupied by the credit and banking system in the existing economical order of society. " Que doit etre le credit 1 Un moyen de fournir des instruments de travail au travailleur. Aujourd hui, nous 1 avons montre" ailleurs " (in an article in the JRevue de Progres called " Question des Banques ") " le cre"dib est tout autre chose. Les banques ne pretent qu au riche. Voulussent-elles preter au pauvre, elles ne le pourraient pas sans courir aux abimes. Les banques constitutees au point de vne individuel ne saurai- ent done jamais etre, quoi qu on fasse, qu un proce de admirablement imaging pour rendre les riches plus riches et les puissants plus puissants. Toujours le monopole sous les dehors de la liberte, ton jours la tyrannie sous les appar- ences du progres ! L Organisation proposed " (that of the national workshops) "couperait court h tant d iniquites, Cette portion de be ne fices, specialement et invariablement consacre e a 1 agrandissement de 1 atelier social par le recrute- ment des travailleurs, voil& le credit. Maintenant, qu avez vous besoin des banques? Supprimez-les " (pp. 97-8). This passage is a striking instance of the way in which communistic writers are inclined to treat social and economic problems. M. Louis Blanc observed that the banking system at the time in which he wrote was in some respects defective. From the nature of their business and the security they were obliged from motives of self-preserva tion to demand, the banks lent only to those who were able to give them that security, i.e., to the rich. Even this statement requires some modification unless in the expression " the rich " is included every struggling farmer or tradesman who is helped over a time of pecuniary diffi culty by the credit afforded to him by his banker. The fact remains, however, that the banks did not give credit to the labouring classes. Credit, urges M. Louis Blanc, which ought to be a means of furnishing the instruments of production to the labourer, is in reality no such thing. What is the remedy which he suggests for this deficiency in the credit system 1 ? An entire reorganization of the industrial world, in which every labourer will be supplied by the state with the tools and raw materials which his work requires. If this proposed reorganization were adopted theie would no longer be any scarcity of credit, and as for banks, he cries triumphantly, they would no longer be necessary, let them be put down. Credit It is not M. Louis Blanc only who observed that the banks in ordinary banking system cannot, from want of security, an y afford to make advances to the labouring classes. Herr Schulze-Delitzsch noted the same fact, but the remedy which he suggested, and which has been carried out with such great success in Germany, is very different from the heroic treatment recommended in the passage we have quoted from M. Blanc. The Schulze-Delitzsch credit banks which began to be established in Germany in the year 1851 are associations of artizans formed for the purpose of enabling the members to obtain by means of credit the capital necessary to production. These associations are entirely self-supporting ; they have supplanted nothing, they have up-rooted nothing. Their success, so far from weakening the ordinary banking system, has strengthened it by supplying one of its deficiencies. The individual workman cannot obtain an advance of capital upon credit because he cannot give adequate security that it will bo repaid. But the credit banks are associations of workmen who are jointly and severally responsible for the repayment of loans made to any one of their number. A member of one of these associations can through its means obtain a loan on favourable terms, because the principle of the unlimited liability of each of the members for the repayment of a loan made to any one of them affords the means of offering to the lender most ample and sufficient security. The fact that the principle of unlimited liability is strictly maintained is really the essential characteristic of the security which the association is able to give to those who advance capital to it. If this principle were relaxed it is more than doubtful whether the security offered by the association would be sufficiently good to ensure advances of capital being made to its members on remunerative terms. The unlimited liability of each for the debts of all necessi tates great caution before a new member can be elected into one of these associations. The circumstances and previous career of candidates for membership ore most carefully inquired into. They must give satisfactory evidence as to their previous character and industry, and they are required to give substantial proof that they are in a position to share the pecuniary responsibilities of the association by becoming shareholders in it. Care, however, is taken to elect no one who is not a bonafide workman. The capital required for making loans is partly obtained from the subscriptions of members, but the principal part of it is obtained in the open market, where the association, being able to offer good security, can obtain money on reasonable terms. The success of these associations has been most striking. In 1865 there were 961 credit banks in existence in Germany. Of these 498 sent in a report of their financial condition to the central bureau, and their accounts showed that they then possessed nearly 170,000 members, and that the money annually advanced was equal to 10,000,000 sterling. As ten years have passed since the time when these reports were sent in, and the prosperity of the associations has during the interval been uninterrupted, there is every reason to believe that the number of members and the amount of the loans would at the present time show a very considerable increase. The very remarkable success of the credit banks is an instance of what great things can be done by self-help and without initiating any attack on the existing order of economic life. It is one of the least pleasing aspects of communism that communists not only do not attempt themselves to bring about by similar means an amelioration in the economic condition of society, but they have often gone out of their way to pour contempt and ridicule on such reforms as that introduced by Herr Schulze-Delitzsch. The establishment of the credit banks was looked on with great disfavour by the German com munists. Their leader, Ferdinand Lassalle, published a book, said to be the most important of his economic writings, in which he bitterly attacked the credit banks and the co operative system generally (Herr Sckuhe-Delitzsch, J)er dkonomiscJie Julian, oder Kapital imd Arbeit, Berlin, 1864; Dem deutschen Arbeitsstande und den dcntschen Bourgeoisie gemdmef). Co-operation^ he saw, made no attack on the principles of private property and competition ; and it was these principles which he had set himself to destroy. The good achieved by an amelioration of the condition of the
people did not appear to him to outweigh the evils which