Schulze-Delitzsch, Hermann

Schulze-Delitzsch, Hermann, founder of the people's banks of Germany, was born on 29th August 1808, at Delitzsch, a small town of Prussian Saxony. He was educated to follow the law, at Leipzig and at Halle, and entered the public service of Prussia; but in 1841 he settled down in his native town as patrimonial judge (a kind of estate manager discharging also judicial and administrative functions), and thenceforward devoted his life to the better economic education of the small farmers and operatives amongst whom he lived. When the National Assembly was called together in Berlin in 1848 Schulze-Delitzsch, who represented his native town, was chosen chairman of a commission to inquire into the distress prevailing amongst the labouring and artisan classes; and two years later, for protesting that it was unjust to tax the people when their representatives were not allowed to deliberate together, he was tried on a charge of treason, but was acquitted. On his return to Delitzsch he started the first people's bank. In these institutions the subscribers, all contributors of small sums, received credit and dividends in proportion of their savings; the joint credit of the association was used for borrowing money; and the banks were managed by a board of the subscribers. By 1859 there were already more than two hundred of these banks in the central districts of Germany; and in that same year, at a congress which met at Halle, these were united under one organisation, with Schulze-Delitzsch as manager. The system was introduced with great success into Austria, Italy, Belgium, and Russia; and when its deviser and founder died, on 29th April 1883, at Potsdam, there were in Germany alone 3500 branches, having twelve million members, with a share capital of £10,000,000 and deposits to more than twice that sum. In 1861 he again took his seat in parliament, joining the Progressist party and labouring for constitutional reform. When Lassalle began to agitate for state loans to productive associations he found Schulze-Delitzsch, a firm believer in self-help, writing and speaking in opposition to him. 'He who preaches to the people self-help, self-responsibility, self-reliance as the condition of their economic independence and political freedom must in the first place practise these principles in his own life,' such was the social creed he lived by. And when the members of his party wished to make him a gift of £7000 in recognition of his disinterested labours in behalf of social reform, they could only prevail upon him to accept £1000 for himself; the rest he set aside for the payment of men who should promote the cause of social reform. An account of his system of people's banks is contained in Vorschuss- und Kredit-Vereine als Volksbanken (5th ed. 1876); besides this he wrote Die Entwickelung des Genossenschaftswesens (1870) and other books on co-operation. See Life by Bernstein (Berlin, 1879), and a paper by John Rae in Good Words (1885).