road. The peasants, who were, until their liberation, entirely dependent economically upon their masters, now became independent, and were consequently compelled to seek their own salvation. After the abolition of serfdom, capitalism began to develop rapidly in Russia, and the capitalistic system set up before the producing peasant a whole series of most difficult economic problems. It became necessary to adapt production to the needs of the market, and the need of increasing the productivity of labor and land became fundamental in the rural economy of Russia. In order to achieve this, it was necessary to have loan and savings associations and credit societies. Moreover, it was essential for peasants to unite into cooperative groups for purposes of buying and selling.
It was, therefore, not merely an accident that the first Russian cooperative institution was a loan and savings association, which was formed in 1865, only four years after the abolition of serfdom. It came into being in an out-of-the-way, obscure corner of the government of Kostroma, and from there spread throughout the length and breadth of Russia. A short time after this, the first consumers' league was formed in Siberia.
Before long, Zemstvos began to be interested in the movement. Through their assistance many cooperative dairies, blacksmith shops, tar-works, and shoe-shops were organized during the period from 1866 to 1874. Cooperative credit institutions were developing at the same time. Between 1873 and 1877 about one hundred and fifty loan and savings associations were established annually. The Zemstvos alone established over eight hundred such associations between 1870 and 1877. In 1895 a new type of cooperative credit institution came into use. This was the credit society, in which there are no shares or stock, the capital being a loan from the State Bank, or from local Zemstvos. At the present time, loan and savings associations are most numerous in the western part of Russia, where the peasant population is more prosperous, while the credit societies are more common in the provinces of eastern Russia. On July 1, 1913 there were in Russia 12,225 loan and savings associations and credit societies with a membership of 7,649,192, and the total amount of loans 519,400,000 roubles. On January 1, 1916, the number of these organizations reached 15,450.
Although the first consumers' league was formed almost at the same time with the first loan and savings association, the development of this phase of Russia's cooperative movement proceeded much more slowly. Still, the average number of con-
