Raiffeisen: Beginning and End

Cover picture left:

Friedrich Wilhelm Raiffeisen and his daughter Amalie, Andrzej Kolpanowicz, Krakow, oil on canvas. 50 x 60 cm, in private ownership

Cover picture right:

Left in civilian clothing, the last Federation Director of the Raiffeisen Organisation, Baron Magnus von Braun as German Agricultural Minister together with, amongst others, Major Pabst (third from the right) who ordered the murders of Rosa Luxemburg und Karl Liebknecht, both with other guests of honour from the League of Front Soldiers, Steel Helmet in Berlin in 1932.

© akg-images

Table of Contents

Preface

Part A: The Beginning

The world surrounding Raiffeisen

The political and societal developments in his era

Agriculture and rural society

The world of cooperatives before Raiffeisen

Raiffeisen's work

His life

His career in the cooperative movement

The principles of Raiffeisen's organisation

Raiffeisen's organisations

Raiffeisen's religious, political and societal dimensions

His religious beliefs

Resistance against Social Democracy

Close relationship to authority

Usury: Raiffeisen and reality

Raiffeisen's anti-Semitism

Raiffeisen's beginnings: a summary

Part B: The End

The Weimar Republic: rural society, agriculture, organisations

Agriculture and rural society

The agricultural organisations

The National Federation of German Agricultural Cooperatives

The Raiffeisen organisation

The General Federation

The collapse of the Raiffeisen Bank

The denial of reality

A rebel at the top

The unified organisation of agricultural cooperatives and the end of Raiffeisen

The Unified Federation

The end of Raiffeisen

The end of the cooperatives 1933/34

The aftermath 1943/49

Appendix I - Raiffeisen and the Jews

1. The Jewish question

2. Minutes of the Conference of Agricultural Cooperatives

3a) The Jews in Spain

3b) Valeriu Marcu: The expulsion of the Jews from Spain Amsterdam 1934

Appendix II - Glossary

Appendix III - Litarature

Preface

This work has been written to commemorate the occasion of Friedrich Wilhelm Raiffeisen's birth two hundred years ago. It also, to be more specific, provides an opportunity to counter the hagiography expected to surround this event which is unlikely to reflect the real Raiffeisen, his work, his aims and his legacy. I am quite sure that his antisemitism, his Christian fundamentalism and his paternalistic view of society are unlikely to be mentioned. After 1945, the agricultural cooperative movement suffered from these symptoms to hardly a greater extent than the rest of German society. This makes it even less understandable that the organisations which still bear his name, most prominently the German Raiffeisen Federation¹ and the German Friedrich Wilhelm Raiffeisen Society have still failed to this day to present a comprehensive and realistic Raiffeisen.

In order to avoid raising unreasonable expectations, I wish to point out that I will also not be presenting a complete portrayal of Raiffeisen. It is rather my intention to show the real Raiffeisen by confronting the popular tide of public opinion. I already made an attempt to do so in my critical appraisal of the real existing German cooperative movement which appeared in 2014 under the title Illusion and Reality. It was then that I encountered his antisemitism which I found astonishing because, with the exception of one short yet exculpatory reference (the only one as far as I know) it had never been previously revealed. While preparing for this work, I was particularly surprised by Raiffeisen's questionable originality, and by the development and demise of his organization. It is likely that my amazement concerning certain insights which I gained from the sources is reflected in some of my formulations.

On the subject of sources, Raiffeisen's documents and his organisation's archives were, as reported by Heinrich Richter and, later, also by Walter Koch, partially destroyed during the Second World War and some also remain undiscovered due to the chaotic situation which existed in the aftermath of the war. Raiffeisen's daughter, Amalie, destroyed the family's correspondence. I assume that I have looked through all of Raiffeisen's publications (with the exception of the 3rd edition of his book and possibly one or another special publication of his lectures). His periodical, the Agricultural Cooperative Gazette which was published from 1879 was a particularly rich source, yet it apparently has not been considered in publications dealing with Raiffeisen in the last few decades. It is here that his extended anti-Semitic deliberations can be found. Heinrich Richter's dissertation published in 1966, which is probably the most comprehensive scientific work about Raiffeisen, demonstrates that also those contributions to the periodical which were unattributed (not even bearing initials) were written by Raiffeisen himself.

I have attempted to mention, at least in passing, the historical issues which concerned Raiffeisen, and later, his organisation. These include short references to developments in agriculture and the characteristics of rural life. Furthermore, I have made use of the important contemporary portrayals of Raiffeisen himself (primarily the first source-based biographies) together with descriptions of the rural cooperative movement. Regarding the era of the Weimar Republic, I found the print sources of the Raiffeisen organisation (Federation periodical, business reports, special publications etc.) to be definitive.

I would like to mention Helmut Faust who, in three volumes (1958 – 1977), published the only extensive work on the history of cooperatives. It undoubtedly has its faults, primarily that Faust limits the history of cooperatives to the history of their federations and (its greatest flaw) to the history of the deeds of great men - or those who were thought to be great men. Faust's credo was men make history! Women did not really contribute to the history of cooperatives and, if at all, only as members of the supporting cast, such as the role played by Raiffeisen's daughter Amalie. Faust ignores economic relations and developments; he fails to provide figures. Above all, however, he draws a veil over the Nazi era (a period which is especially deserving of interest). In contrast, his commitment and his ability to take a stance are refreshing. I have drawn on him for numerous facts. Faust makes a sufficiently convincing case for the democratic character, or should we rather say, the democratic aspirations of cooperatives. This is exemplified in his attributing the great organizer of rural cooperatives, Wilhelm Haas, with having vigorously supported the democratic development of cooperatives – an approach which Raiffeisen completely failed to take.

It would be gratifying if the Raiffeisen year 2018 were to result in the cobwebs being dusted off Wilhelm Haas's role in the history of cooperatives.

¹ The German original version of all the terms, proper nouns, book titles etc. which are printed in italics can be found in the glossary at the end of this book.

Part A: The Beginning

1. The world surrounding Raiffeisen

a) The political and societal developments in his era

²

To begin, the political and societal circumstances and developments in Raiffeisen's era need to be considered briefly. The Congress of Vienna ended its work (and its notorious celebrations) three years before Raiffeisen's birth. It was responsible for the reorganisation of Europe following the Revolutionary and Napoleonic wars. As a result, Raiffeisen's more immediate homeland now belonged to Prussia. The Congress led to a Germany consisting of three dozen individual sovereign states which together comprised a loose German Confederation. It lacked a political executive, had no financial autonomy and no military power. It was hamstrung due to the dualism of its two European superpowers – Austria and Prussia. Only few of these German states knew political freedom and, even then, it was severely restricted.

Within the growing bourgeoisie there was a longing for more opportunities for political participation and, above all, for a united Germany. However, all of the movements which repeatedly emerged - for example in the Hambach Festival in 1832 – were supressed by state police. This was the case up until the year of European revolution, 1848, when the bourgeois desire for political reform and German unity finally seemed to be on the winning side. The prince's thrones were shaking all over Europe. It was also the year of the political awakening of the lawyer Hermann Schulze in Delitzsch in Prussia. From then on he fought as a convinced democrat for universal suffrage and for the freedom of the press, he founded worker's associations, economic cooperatives and he took part in the founding of trade unions as well as the left-liberal German Progress Party and the German National Association.

Yet the revolution failed. The German Confederation carried on as before until, in 1861, the not quite young but new Prussian King Wilhelm I appointed Otto von Bismarck as Prime Minister. It was Bismarck's task to end a serious constitutional conflict within the liberal majority in the Prussian Parliament. The issue under contention was a reform of the army which was intended to remove the remaining militias which had arisen in the popular uprising against Napoleon in 1812 and which had become institutionalised as the Defence Militia. The Defence Militia was to make place for a royal army commanded exclusively by aristocrats. However, Bismarck did not resolve the conflict, instead he took the first available opportunity to divert attention by taking action abroad. This was provided by the war between the German Confederation commanded by Prussia and Austria against Denmark in 1864 in order to prevent the dukedoms of Schleswig and Holstein coming under the control of the Danish king. The war was a success. However, Bismarck used this opportunity to start another war, with Prussia and some closely allied German states on the one side and Austria on the other. Prussia was once more victorious and took the opportunity to annex several German states. Bismarck simultaneously exploited the situation to conclude peace with the majority of the liberals regarding the constitutional conflict (Schulze now belonged to the left-liberal minority which still remained in opposition to Bismarck). Prussia now founded its own federal state together with the north German states - the North German Confederation. Four years later, Bismarck sparked the third German Unification war, this time together with the south German states against France. Following victory against France, the German Reich was created. However, Austria was excluded.

Parallel to this political development, following after the Napoleonic era, the 19th century was marked by rapid and increasingly accelerating societal and economic developments. It was characterised by the continuous development of new technologies, methods and materials. Industrialisation took hold and forced an ever-increasing tempo - production increased, there was more and faster transport and the population grew. Life expectancy increased even though this was an extremely slow process. There were also advances in medicine. Since the 1830s, it was above all the railways that made rapid growth possible in mining, iron and steel production and machine building. The enormous demand for capital led to the development of an effective banking system. Towards the end of the century the use of electric power began to have an enormous influence on the future development of industry and society. When Raiffeisen died in 1888, there were already automobiles, electric lightbulbs and phonographs. Undersea cables made it possible to send telegrams from Europe to America. Raiffeisen's world, the world of agriculture, was also subject to continuous changes. One single example provides us with an insight into the pace of these changes - two years before Raiffeisen's death the first self-propelled combine harvester was put into service.

All of these technical innovations led to changes to society. The whole century was characterised fundamentally by a profound belief in progress. Rigid societal structures became more and more fluid. New social classes formed in step with industrial developments while others became less important. To paraphrase Golo Mann: a population of farmers transformed into a population of blue and white collar workers. Social differences, however, became more pronounced and the resulting conflicts increased. An example of this is the Weavers' Revolt of 1844. In the second half of the 19th century, workers created their own organizations even though the initial founders, such as Lassalle, were not workers themselves. But Bebel was. The growth of the Social Democratic Party under his leadership made the ruling classes nervous. Therefore, in 1878, Bismarck used two assassination attempts on the Kaiser (in which the social democrats were in no way involved) to sanction the party under state of emergency laws. The aim was to make the social democrats' work extremely difficult so that their influence on the workers would be drastically reduced.

A few years later, Bismarck added to this open conflict with his social legislation, i.e. the introduction of health insurance, old age pensions and invalidity benefits applying under the principle of stick and carrot. It was Bismarck's aim to lessen workers' backing for social democracy by lessening the vicissitudes of life through state support. He called this policy practical Christianity (Bismarck 1889: 156 and 164 et seq.).

b) Agriculture and