I. Introduction
According to one observer, the emergence and proliferation of peasant/farmer cooperatives in the generation before 1914 constituted then ‘the largest social movement in German history’.Footnote 1 Within little more than a generation, possibly half of German farmers had become members, in one form or another, of a cooperative organisation. Only Denmark possessed a network of rural cooperatives to rival that which existed in Germany, where, by the turn of the century, credit cooperatives were growing faster than any other branch of German finance, and where, by 1905, cooperatives were responsible for perhaps a quarter of the trade in fertilisers.Footnote 2 Despite this, the phenomenon of rural cooperatives in Imperial Germany remains relatively under-researched, both within the narrower field of agrarian history (Agrargeschichte) and, more conspicuously, in broader analyses of socio-economic and political developments in Imperial Germany. The very success of the German cooperatives generated a sizeable number of in-house organisational histories and detailed accounts of the careers of cooperative pioneers such as Raiffeisen. These enable us to trace the history of cooperatives as organisations, but tend to be less revealing about the place of cooperatives within village communities, the agrarian economy and rural society.Footnote 3 The reluctance amongst many historians of German society to acknowledge the significance of peasant cooperatives and other rural organisations as social movements can also be attributed in no small measure to the persistence of several long-established and inter-related arguments about German agriculture in the Kaiserreich. Although the last decade has witnessed a significant and welcome increase in the number of studies of peasant agriculture which cut across the grain of the more standard accounts of agrarian policy and politics, the latter still exert a strong hold on the way in which rural society in Imperial Germany is conceived.Footnote 4
While there is a brief acknowledgement of the importance of developments such as credit cooperatives, it remains secondary to the assertion that the most critical feature of Imperial German agriculture, or the feature of German agriculture most critical to an understanding of Germany's social and political history in this period and beyond, remained the strategic dominance of the Junker elite of east-Elbian Prussia. The political, socio-cultural and agrarian-political hegemony of the Junkers, it continues to be argued, was sustained at the cost of the true economic interests of the smaller peasant producers, identified routinely with animal husbandry, dairy farming, market-gardening and the production of commercial crops. Important recent syntheses now acknowledge, for example, that German agrarian politics in the generation before 1914 was more multi-dimensional than previous accounts suggested.Footnote 5 Nonetheless, Wehler, for example, remains overwhelmingly sceptical that larger peasant farms could become more profitable, that small and medium peasant farms could join together in viable cooperatives, or that east-Elbian monoculture could be replaced by a market-oriented diversification into high-value products for urban consumption. The barriers to such fundamental transformation of rural society were not only the constellation of power in the Kaiserreich, which enabled agrarians to ensure long-term state protection and subvention, but also the obstinacy (‘tiefgewurzelten Beharrungsvermögen’) and individualism (Besitzindividualismus) of peasant producers, which meant that they could not reconcile themselves to the cooperative use of tools and machinery or to collective selling and purchasing.Footnote 6 While Wehler would now concede that veterinary controls, which benefited primarily smaller peasant farmers, were an important adjunct to the policy of tariff protectionism, there remains an underlying assumption in much of the literature on Imperial Germany that high tariffs on imported grain militated against a more competitive agriculture which would have been sensitive to rapidly changing consumer needs.Footnote 7 This argument reaffirms the view of prominent historians of German agrarian politics, namely that tariffs completely stifled what little willingness there was for structural agrarian reforms. Even those provisions designed to assist the small farmer in the market-place, such as better agricultural credit facilities and cooperative ventures, benefited only the larger landowners and made no contribution to the modernisation of the primary sector, which continued to be bedevilled by high land prices, excessive production of ‘nineteenth-century’ staple foods, limited rationalisation, and an increasing insulation from the rigours of an open market.Footnote 8 According to Puhle, agriculture ‘did not choose to transform production techniques or farm structures gradually or to find a profitable estate size. It did not diversify or specialise in certain crops, nor did it lower production costs through mechanisation or the collective use of farm machinery. Instead, German agriculture relied on state intervention into the market. . . . The solution to the vital problems of German agriculture was permanently postponed.’Footnote 9 The emphasis such historians place on the demands from the agrarian lobbies, especially larger landowners, for ‘social protectionism’ or state-help (Staatshilfe) as the only route to securing the longer-term future of farming in a competitive market economy, is accompanied by a stress on the extent to which self-help among small farmers (Selbsthilfe), that is, a willingness on their part to orientate their production much more rapidly to the demands of the expanding urban market, was sacrificed to a growing and fatal dependence on the political subvention being attained by the agrarian lobbies. The popularly based agrarian conservatism of the Wilhelmine era, it is commonly asserted, set itself against the capitalisation of the land and more ‘rational’ (market-oriented) entrepreneurial principles. ‘Agrarism, in short, opposed attempts towards the mobilisation and modernisation of Germany's agricultural structure.’Footnote 10 The recourse to state subvention before innovation and rationalisation is seen more generally as a crucial factor explaining the longer-term vulnerability of small-scale producers to the blandishments of National Socialism.Footnote 11
This analytical linkage of tariff protectionism to state subvention, peasant traditionalism and the politics of the German Right, and ultimately to the exceptionality of modern German history, originally stated in classic form by GerschenkronFootnote 12, in turn almost requires its proponents to insist that German agriculture was unable or unwilling to modernise in the directions undertaken elsewhere. According to Gessner:
Germany's traditional agricultural structure, with its multiplicity of small and minute enterprises on the one hand, and the large agricultural latifundia on the other, underwent none (sic) of the changes seen in Holland and Denmark. . . . Moreover, the cooperative self-help efforts of the small and middle-sized agricultural producers did not extend to marketing their products. . . . Marketing cooperatives based on foreign models scarcely existed in Germany.Footnote 13
While such extreme (and erroneous) statements are rare, they are, I suggest, not untypical of a wider and continued failure to achieve a meaningful dialogue between historians of agriculture and some of the more influential historians of agrarian politics in particular and German society in general. They also signify a reluctance to abandon the presumption that the German landholding peasantry was essentially a structural anachronism in a developing capitalist society. Such a viewpoint takes little or no account of more general or comparative work on peasant or agrarian economies which stresses the productivity advantages enjoyed by smaller family farms as international price competition intensified from the 1870s onwards.Footnote 14
The following analysis of the development of credit, produce and purchasing cooperatives in Bavaria before the First World War is an attempt not just to fill a gap in our still limited knowledge of German cooperatives, but also to challenge some of the assumptions outlined above. Bavaria provides a good focus for such a study for three reasons. First, Bavaria was the German state where the peasant farm clearly constituted the dominant form of social and economic organisation in the countryside. In 1895 over sixty-five per cent of all farms in Bavaria were classified as peasant enterprises, here understood as all properties between two and one hundred hectares in size. Well over ninety per cent of the land used for agriculture was on farms within this category. Tenant farming was also much less widespread in Bavaria than in any other part of Germany. In 1907, two-thirds of all the farms in Bavaria were owned exclusively by the proprietor, compared to forty-three per cent in the entire Reich. The vast majority of holdings between five and one hundred hectares in size were run by farmers for whom their property represented their only, or principal, means of support. If we need to know more about how peasant farmers in Germany responded to the challenges of competition, Bavaria is as good a place as any to start.
Second, this part of Germany offers an opportunity to observe varying patterns of peasant farming and how far different structures of landholding, inheritance, crop specialisms, credit mechanisms and proximity to expanding urban markets affected the pace and intensity of cooperative development. Circumstances on the larger and medium-sized holdings, with their greater reliance on grain production, which were more prevalent in the south-eastern provinces of Upper and Lower Bavaria and the Upper Palatinate, contrasted significantly with the conditions in Franconia. Here there was a preponderance of smaller farms and a greater tendency towards tenant farming, as well as localised concentrations of fruit, hop and vine growing. In addition, in the south-west of Bavaria, the higher rainfall and rich grass and meadowland of the Allgäu provided an ideal environment for some of the most intensive dairy agriculture and cooperative activity in western Europe.Footnote 15
Finally, Bavaria was a state where peasant political activism in the 1890s, in the shape of the Agrarian League (Bund der Landwirte), the Bavarian Peasant League (Bayerischer Bauernbund) and the Christian Peasant Associations (Christliche Bauernvereine), had a significant impact on the state's political development.Footnote 16 It is thus possible to explore the degree to which the emergence of vocal ‘populist’ peasant movements either militated against or encouraged structural agricultural reform and the development of a cooperative network.
II. Peasant Farms; Capital Shortages and Problems of Credit
By the later 1880s peasant farmers in Bavaria found their household incomes squeezed, on the one hand, by declining price levels, and, on the other, by rises in the levels of taxation, the cost of non-family labour and mortgage indebtedness. Certainly some amelioration could have been achieved by modest changes in farming practice requiring only minimal capital investment, but many of the improvements and innovations necessary to extricate the peasant producer from this dilemma required additional sources of credit. The changing world market in staple cereals and the greater competition of labour generated by industrialisation meant that the self-exploitation of peasant farmers would eventually shift the balance of advantage from larger to smaller farms, a process which in due course would be accentuated by a shift to livestock production or horticulture and by the introduction of technologies, such as electricity, which were less sensitive to scale.Footnote 17 But for that advantage to be realised a satisfactory supply of working capital and more effective provision of credit were indispensable. Contemporary surveys make it abundantly clear that it was precisely this capital which farmers in Bavaria lacked.Footnote 18 For many Bavarian farmers the clearest indicator of their predicament was the reduction in income occasioned by the decline in grain prices from the early 1880s. In the three decades up to 1880, Bavarian farmers had benefited from comparatively stable prices, particularly for wheat. Although there had been occasional and quite severe downturns in the decade after 1859, these paled in comparison to the sustained reduction in price levels after 1881. Apart from a brief recovery in 1890–1, prices for wheat and rye did not reach those that had generally prevailed in the 1870s until 1906. The price for barley, a crop widely grown in Bavaria, was rarely any higher than it had been in the 1860s. Similarly, the price of oats only increased substantially after 1907. Particularly noticeable is the very considerable fall in the prices for wheat, rye and barley between 1891 and 1894. Given the relatively large size of many peasant holdings, and the importance of grain to the peasant economy of southern Bavaria in particular, these developments were bound to have quite serious repercussions.Footnote 19
The fall in prices and farmers’ incomes contrasted significantly with an increase in financial outgoings. These stemmed firstly from comparatively high levels of taxation on rural producers.Footnote 20 In addition, many Bavarian peasants were still paying levies imposed on their predecessors during the peasant ‘emancipation’ (Bauernbefreiung), and some were even paying for obligations which had supposedly been abolished without compensation. In 1898 587,494 of the 839,380 farmers in Bavaria (excluding the Palatinate) were paying annuities which totalled over fourteen million Marks. A further six to seven million Marks per year were being raised from a range of minor village and church levies which had not been abolished in 1848; although the proceeds were relatively minor they all contributed to a situation in which rural inhabitants were paying an annual sum in excess of twenty million Marks in post-feudal obligations.Footnote 21 There was also a growing sense of grievance at the proportion of community funds which went on the provision of poor relief, particularly as the method by which it was raised was being rendered increasingly anachronistic by the rising volume of rural-urban migration. Although industrialisation proceeded somewhat more slowly in Bavaria than in north-western Germany, there is no doubt that the growth of Bavaria's cities also had a significant impact on the cost of non-family labour on peasant farms. Although small and medium-sized peasant holdings were pre-eminent in Bavaria, most enterprises of ten to twenty hectares and above relied on labour from non-family workers, much of it provided by resident servants and maids (Dienstboten or Gesinde), often the children either of other labourers or of peasants whose farms were not large enough to provide adequate employment for the entire family.Footnote 22 The wages of these agricultural workers had risen quite sharply in the late 1860s and early 1870s and were to do so again from the early 1890s onwards as the competition for labour intensified. The fear of losing workers either to urban employers or to rural construction projects forced many farmers to offer better living and working conditions for their employees. Wages and conditions in rural districts close to the larger cities rose substantially above those in more isolated districts with similar farm structures, while the rate of payment for casual and harvest workers could be substantially higher than the normal wage for day labour during the rest of the summer.Footnote 23
The squeeze on working capital was compounded by the increasing levels of indebtedness on peasant holdings, much of it the result of the speculation in agricultural property which had accompanied the mid-century boom, when land had been purchased and re-sold for sums which rarely corresponded to the level of return which could have been realised from it.Footnote 24 On the larger peasant farms of south-eastern Bavaria, where a system of impartible inheritance was customary, indebtedness could become especially acute when a son inherited his family's holding. Apart from assuming responsibility for the mortgage debts on the farm itself, he often had to raise further cash sums for his siblings at the time of transmission. In Upper Bavaria the various liabilities of the inheritor were increasingly being converted into money payments. A combination of such developments and of inflated land prices on transmission led frequently to the accumulation of yet more debts on the family property. Three hundred and eighty of the 441 farms which went to compulsory auction in Upper Bavaria in 1880 had run into difficulties primarily because of unfavourable terms of transmission. Similar trends were also evident in Lower Bavaria and the Upper Palatinate, as well as in areas such as Upper Franconia, where the equal division of the legacy among the surviving eligible children was carried out so strictly that the one who eventually took over the running of the farm often came off worst. Heavy mortgage debts were contracted when buying back those parts of the inheritance which were essential for the efficient operation of the holding. In other regions where partible inheritance was the norm, increased indebtedness could also arise in those cases where the indivisibility of the dwelling inflated its price out of all proportion to its real value. It should be stressed, however, that indebtedness was generally a greater obstacle to profitable farming on the larger properties of south-eastern Bavaria than on the more fragmented holdings of Franconia.Footnote 25
The inflated price of land also presented problems for those farmers seeking to improve the efficiency of their farm by purchasing land for the purposes of consolidation. There had been little systematic land consolidation in much of Bavaria. Legislation in 1861 had proved largely ineffectual in encouraging consolidation (Flurbereinigung), and a further attempt was made in 1886 to stimulate such rationalisation by introducing a greater element of compulsion, but again to little effect. As long as legislative or communal action to regulate the Flur for the benefit of a village's inhabitants remained ineffective, the only way to bring about the necessary improvements was to purchase land, often without sufficient regard to its realistic value. Whenever farms were auctioned or broken up, dealers in land would be present, encouraging those farmers with adjoining property to buy some more strips, promising that the value of their farm would be enhanced by greater consolidation.Footnote 26 This was reinforced by the widely held sentiment that falling agricultural income could be mitigated by expanding the area of production.
It is also evident that, as the pressure on rural incomes intensified, many households were forced to take out small loans to tide them over the local and seasonal crises which remained a characteristic feature of Bavarian agriculture in this period. The most serious of these was the long and severe drought which hit much of southern Germany in the summer of 1893. At precisely the time when there was mounting rural anxiety about the fall in cereal prices, the drought created immediate problems for the peasants on smaller farms and those with more resources invested in animal rearing, as many parts of Bavaria began to suffer from an acute shortage of fodder. Lower and Central Franconia and the Palatinate were the regions hardest hit, but parts of Upper Franconia, the Upper Palatinate and Swabia were also quite badly affected. Farmers who possessed no accumulated stores of fodder and had no cash reserves to fall back on were forced to sell their animals at unprofitable prices. This led quickly to dramatic declines in the prices being obtained for animals at livestock markets. In the face of this rapidly worsening crisis, the government of Bavaria was propelled into further action; it offered palliative measures, including loans, on a scale rarely seen before. There was concern, however, that many peasants would find it difficult to repay the initial loan quickly, even when it was free of interest, thus aggravating the problems caused by long-term indebtedness. Farmers also faced the option of cutting their losses by reducing stock levels, thus obviating the need to incur further debts, or weathering the crisis by mortgaging a further part of the property. Both courses of action entailed risks, since those who cut their stock of animals would in due course have to raise more capital to replenish their stock.Footnote 27
A range of factors was therefore responsible for the accumulating levels of mortgage indebtedness which burdened many peasant properties, especially in southern Bavaria. While higher indebtedness could have arisen in part from greater demands for capital required by more intensive farming methods, there appear few grounds to dispute the view of the Bavarian government that these rising levels of indebtedness, particularly on the more well-endowed farms, had to be viewed as a ‘grave symptom of the general state of Bavarian agriculture’.Footnote 28 It is necessary to exercise due caution, given the propensity of peasant farmers to ‘complain without suffering’, but my analysis so far suggests that a variety of factors was inflating the costs of running a farm at precisely the time when peasants faced the price implications of the newly internationalised markets for food.
It should be stressed, however, that the initial response of the Bavarian government and its district officials to these developments was to assign the main responsibility for their predicament to the peasants themselves. A feature of the many surveys conducted into the state of Bavarian agriculture at the end of the nineteenth century was the extent to which peasant farmers were berated for their limited understanding of the tools and machines to which they had access, the manner in which they used their existing implements, and their reluctance to adopt new methods and implements. Unfavourable comparisons were drawn between Bavaria and other states in this respect. However, while there is little doubt that many working methods were a result of unfamiliarity with new techniques, and that peasants were often unduly sceptical in the face of continuing innovations, such factors should not be overplayed. Many peasants could often be more perceptive observers of their own needs than a well-educated local official. The comparatively wide distribution of threshing machines in Bavaria indicated that, where mechanisation could be achieved with a limited capital outlay and with a reasonable guarantee of genuine economies being realised, it was often adopted without undue delay. The importance of the cultivation of grain on the larger farms of southern Bavaria had led to a significant concentration of threshing machines, most of which belonged jointly to members of an organised loan scheme or of a users’ cooperative.Footnote 29
Officials also admonished the peasants’ misuse of both natural and artificial fertilisers. They argued that a more rational use of natural manure would produce substantial increases in arable yields, but that the appropriate care of animals was neglected on the assumption, reputedly widespread in Bavaria, that an animal was quite capable of cleaning itself. The continued concentration on the cultivation of grain, they argued, led to a relative shortage of land devoted to fodder crops, which meant that too little stock, and with it natural sources of fertiliser, was retained by peasant farmers. The subsequent reliance on artificial fertilisers thus became an unnecessary drain on the farmer's scarce cash resources. Again, however, it is worth stressing that such advice was sometimes easier to offer than to heed. In some parts of the state the buildings in which animals were kept were small and poorly ventilated. However, the costs involved in the construction of more suitable buildings were too high, and the benefits much less immediate than those apparently offered by expenditure in other directions, such as the increased use of artificial fertilisers, particularly when there were few prospects of sustained price stability.Footnote 30
Above all, Bavarian officialdom emphasised the degree to which a combination of falling world prices, particularly for the major bread-grains, and the rapidly expanding urban market for foodstuffs on the other, had highlighted the limited diversification of much peasant farming in Bavaria and the excessive reliance on the sale of grain. As long as the price of grain was determined by the costs of production, the outcome of local harvests and the scale of domestic demand, its predominant role in Bavarian agriculture did not constitute a serious weakness. However, once prices began to be determined largely by international factors, the need to diversify the structure of peasant farming became a matter of some urgency, made even more pressing by the growing demand for meat, vegetables and dairy produce in the cities. A marked shift in resources towards stock-rearing, together with the increased cultivation of suitable fodder crops, was viewed as essential if peasant prosperity was to be not only restored, but also permanently sustained.Footnote 31
This insistence by officials that peasant farmers should help themselves may help to explain why the Bavarian government was rather tardy in ensuring a suitable source of credit which would enable farmers to undertake this diversification and intensification. A significant defect in the protracted history of peasant defeudalisation in Germany had been the failure to introduce institutions capable of providing peasants with credit at reasonably low rates of interest. The situation was particularly acute in Bavaria. Although the paucity of suitable credit facilities for peasant proprietors had been identified as a major problem in the eighteenth century, little had been done to improve the credit market. Outside investment in the primary sector did not increase to any noticeable extent, while the informal and unofficial credit market on which many peasants had previously relied was now being squeezed by greater official regulation. According to Lee, instead of providing a foundation for a long-term improvement in the performance of the primary sector, ‘the attempts at reforming the banking and credit mechanism in Bavaria actually had an adverse impact on the primary sector, without offering even the prospect of an eventual effective supply of sufficient capital to meet the needs of peasant producers for constructive improvement and development.’Footnote 32
By the 1860s the pressure on credit had increased substantially as the inflation in property prices, a series of good harvests and developments in farming techniques all intensified the demand for capital at precisely the time when the banks were facing the mounting claims of an expanding industrial sector, as well as those of the state itself. The Bayerische Hypotheken- und Wechselbank, until 1869 the only banking institution providing basic credit on property, was unable to prevent many farmers being starved of loans. Some improvements were forthcoming. In 1864 the Hypotheken- und Wechselbank was permitted to distribute over fifty million Marks worth of mortgage bonds, but these were exhausted after just two years. By 1888 the nominal value of mortgage bonds in circulation was 466 million Marks, supplemented by loans of 277 million Marks from the Süddeutsche Bodenkreditbank, which was formed in 1871. Important steps were taken in the 1880s to reduce the prevailing levels of interest on mortgage loans to 3.5%, with the Bayerische Vereinsbank leading the way in 1881, and in 1884 the Royal Bank was given permission to distribute mortgage bonds at the lowest practicable rates of interest.Footnote 33
Certainly some farmers may have been too cautious to exploit the capital resources being released in this way by banks and credit institutes, due in part to a reluctance to reveal their private circumstances to a bank, an attitude partly exacerbated by the complex procedures that applicants for credit had to follow. However, the more critical point is that the trading conditions of most banks were geared principally to the needs of industrial and commercial customers and were not easily adapted to the needs of family farmers.Footnote 34 It is scarcely surprising, therefore, that the demand for personal credit often continued to be met by relatives and close acquaintances, or by moneylenders. Although private transactions between peasants, most of which were agreed on the basis of a hand-written note, began to decline in the 1880s, the practice continued to be quite widespread in many parts of Bavaria.Footnote 35 Even wealthier farmers might continue to rely on small private loans to overcome temporary problems or emergencies. Meanwhile commercial moneylenders capitalised on the desire of many peasants to keep their financial position as confidential as possible; they may also have taken advantage of farmers who were in the midst of difficulties, whether short or long-term. Many charged high rates of interest or stipulated that some proportion of a farm's future output be mortgaged as security. Those who combined usury with trading in agricultural goods also forced poor quality produce onto more gullible farmers.Footnote 36 Improvements came in the wake of the Imperial law on usury of 1880, and some of the sharper practices were eliminated. Nevertheless, local officials continued to report regularly of farmers, especially if they found it difficult to make ends meet, being deceived by unscrupulous money-lenders.Footnote 37
An analysis of the role of private moneylenders, or of the relationship between farmers on the one hand and dealers in land, livestock or goods on the other, cannot fail to ignore the fact that Jews composed a significant proportion of such traders. The stereotype of the ‘Jewish dealer’ was commonplace in rural society at this time, so much so that the terms ‘Jew’ and ‘usurer’ could be interchangeable. Certainly Jews were very active in cattle trading, particularly in the Franconian provinces. Indeed it was claimed that cattle markets were postponed in some parts of Franconia if they coincided with a Jewish holiday.Footnote 38 In many parts of Bavaria local middle-men arranged the transfer of livestock from the peasant to a large-scale dealer who then undertook the transporting of larger consignments of animals to the municipal abattoir. The dealer would charge a small commission to both parties. Intermediaries also regulated transactions between farmers at local markets, again for a percentage fee. Trading at such markets, which was often undertaken without adequate facilities, could lead to farmers being disadvantaged or even exploited, especially by dealers who wanted the farmer to purchase stock on credit.Footnote 39 Such practices were widespread in Franconia, where trading in livestock was intimately connected to the provision of personal credit. However, it is clear that the judgements of many contemporaries were coloured to a greater or lesser extent by antisemitic prejudice, which persuaded them to talk of Jewish domination of trading in both specialised commodities and more general agricultural produce. The Regierungspräsident of Swabia reported on how peasants in the district of Wertingen, in the absence of communal or cooperative organisations, led a precarious existence ‘in subordinate service to the dominant Jewish class’.Footnote 40 Prejudice against the Jews probably led to the extent of intermediate profiteering being over-dramatised and its disadvantageous impact on rural communities and farmers’ incomes being distorted. Peal probably overstates his case when arguing, on the basis of research into the province of Kurhessen, that cooperative organisations provided the institutional underpinnings of völkisch antisemitism; but he is clearly justified in questioning whether credit cooperatives gained a stronger initial foothold in areas, such as Hessen or Franconia, where a public identification of the Jewish ‘swindler’ with rural impoverishment can be clearly discerned.Footnote 41
III. Credit cooperatives
Given the circumstances that I have described it is little surprise that credit cooperatives made their initial headway in a province such as Lower Franconia. Within four years of the establishment of the first credit cooperative in November 1877 in Theilheim, thirty-eight of the forty-two such organisations in Bavaria were located in this province. A decade later they were still relatively limited in number and unevenly distributed, with a continued preponderance in Lower Franconia (165 of a total of 438), and Swabia (102) and only 102 in the four provinces of Upper Franconia, Upper Palatinate, Lower Bavaria and Upper Bavaria. There are few indications of these initiatives being directly fostered by the Bavarian government, although it is very likely that local officials actively promoted the cooperative idea in concert with local and district branches of the Bavarian Agricultural Association (Landwirtschaftlicher Verein), an organisation used by government to promote innovation in agriculture.
From the early 1890s onwards, however, there was an explosive growth which resulted in credit cooperatives being much more evenly spread throughout the state. The newly-established Bavarian federation of agricultural loan associations (Landesverband landwirtschaftlicher Darlehenskassenvereine), to which only 139 cooperatives were affiliated at the beginning of 1894, could boast an affiliation of 1,154 (with an individual membership of over 73,000) by the end of 1896. If one takes account of the additional 570 registered savings and credit associations which remained unaffiliated, making an overall total in 1896 of 1,724 credit cooperatives with 115,141 members, there was an almost fourfold increase in just five years. By 1903 the number had doubled again. Bavaria now had half as many credit associations (2,606) as the whole of Prussia. The decade thereafter saw a less dramatic but nonetheless significant consolidation of the network of cooperative credit. The number of associations in the Landesverband, to which about three-quarters of Bavarian organisations were affiliated, grew from 2,069 in 1903 to 2,799 in 1912.Footnote 42
If we take one province in particular we achieve further insights into the role played by credit cooperatives. In Upper Bavaria there were 374 such associations in 1908, of which 355, with a membership of over 28,000, belonged to the Landesverband. The number of associations in each district varied from just one in Tölz, where the farmers of the Alpine foreland were generally quite prosperous, to thirty-three in Landsberg, a district close to Swabia where cooperative ventures were proving particularly successful. As savings institutions the Raiffeisenvereine offered a useful means by which the scattered capital of peasants and some farm labourers could be deposited and put to profitable use. Interest rates were generally a little above those offered elsewhere, but the cooperatives did not usurp the place of the local savings banks (Sparkassen) in the province as a whole.Footnote 43 In 1908 over thirty-seven million Marks was lent, much of it at a rate some two per cent lower than that levied by the private banks, and thus a source of considerable saving for the cooperatives’ members. This was helped by the fact that accounting costs for each association averaged only 150 Marks per annum. We can thus see that, even in Upper Bavaria, a province where cooperative credit was established relatively late, the Raiffeisen organisations were making a significant contribution to relieving the credit difficulties of peasant farmers.
This rapid extension of credit cooperatives in Bavaria from the early 1890s resulted from the close interaction of various factors. The most critical were the longer-term problems being experienced by peasant farmers, aggravated by the severity of the seasonal crisis in 1893, and the extent to which farmers were disadvantaged by existing credit provision. What is important to note here is that the expansion of cooperation coincided with the significant political mobilisation of the peasantry, marked above all by vigorous challenges, particularly by the Bauernbund, to the Centre party's virtual monopoly of rural constituencies in Catholic Bavaria – which characterised the 1890s.Footnote 44 The platform of the more radical or populist Peasant League incorporated a strident claim that only a full-blown programme of Staatshilfe could rescue the peasantry from its current plight, and that reform initiatives such as cooperatives were mere palliatives. It is also clear that this stand generated some electoral support among those sections of the peasantry who, for one reason or another, doubted the willingness or ability of the Bavarian government, the Reich government, the Centre party, local officialdom or the Landwirtschaftlicher Verein to stand up for the peasantry. However, as we have seen, there is little evidence that a campaign of Staatshilfe statt Selbsthilfe (state-help, not self-help) prevented the adoption of self-help measures throughout the state. Indeed there are reasonable grounds for supposing that the more subtle stance of the Bavarian Centre party, combining an appeal for Staatshilfe and tariff protection and tactical opposition to the Junker-led Agrarian League with concrete organisational assistance for farmers through the expanding network of Bauernvereine, reaped electoral dividends, particularly over the longer term. Such an approach was synonymous with the activities of Georg Heim, who had already demonstrated his expertise by establishing and running a highly successful selling cooperative for the poorer peasants of the Fichtelgebirge (Upper Palatinate). Once the provincial sections of the Catholic Bauernvereine had formally united in 1898, Heim set up a Central Cooperative for sale and purchase. By 1903 the volume of the cooperative's trade had expanded almost tenfold.Footnote 45 In the short run, though, both the Bauernbund's demagogic appeal for a more direct representation of peasant interests, as well as the conspicuously greater leverage this challenge gave to Heim's agrarian wing within the Bavarian Centre party, reinforced the obvious discomfiture felt in government circles following the crisis of 1893 and the initial political breakthrough of the Peasant League.
There is a strong case for arguing that the government's transparent sense of unease was heightened by the fact that the deterioration in the rural economy and the rising tide of rural discontent were most conspicuous on the larger peasant holdings of Bavaria's southern provinces, which the authorities regarded as critical to the economic, social and political stability of the state. Its formation in November 1893 of the Landesverband, and its agreement to and support for the establishment of an associated central fund (Zentraldarlehenskasse), as permitted by the Reich law on cooperatives of 1889, are indicators of the type of initiative the government was now willing to undertake.Footnote 46 Another was the decision in 1895 to found an agricultural cooperative bank with the help of a grant and a cheap loan, each of one million Marks, from the state treasury. Bavaria was by this time the only major German state without some form of cooperative institute, under state control or supervision, capable of providing credit to farmers at minimal rates of interest. Pressure for such an institution had been evident for over a decade, but the decisive impetus came from peasant interests in the Bavarian parliament (Landtag) under the leadership of the Centre party delegate, Eugen Jäger, himself a prominent commentator on the prevailing condition of Bavarian agriculture. The government was also provoked into a hurried range of surveys into the state of agriculture and rural communities, the findings from which provided a basis for further intervention. In other words what we see in Bavaria, even in the volatile politics of the 1890s, is not a unitary peasant-agrarian demand for, or expectation of, Staatshilfe at the expense of cooperative ‘self-help’, but precisely that ‘mutually reinforcing interplay’ of politics and ideology, of new cooperative federations, agrarian mobilisation and state intervention, which Fairbairn has rightly identified as critical to the rapid adoption of cooperation by German peasants in the period from the mid 1880s to the early years of the twentieth century.Footnote 47
It should also be recognised that this expansion could not have taken place if there had been a persistent peasant resistance to such innovations. The attitude to cooperatives, especially in communities which enjoyed only limited access to the main lines of communication, was sometimes one of understandable scepticism.Footnote 48 Some early cooperative ventures inevitably foundered through inexperience or tactless management. More generally, a credit association presented a variety of challenges to customary practices, as well as to individual and collective sentiments. Every member of a Raiffeisen cooperative had to share in the unlimited liability for all the commitments and obligations of the association and its creditors. Although potentially risky, this type of liability proved extremely workable, especially if the activities of any one association were confined to a natural social unit such as a village or parish. The personal circumstances of a debtor could thus be assessed. Loans were only made to members of the cooperative, and normally for a relatively short period to encourage regular repayments and sensible deployment of the credit given. Security for a loan was guaranteed by another individual standing surety. The problems which usually accompanied transactions between individuals were eliminated by the mediating role of the cooperative. The submission of a balance sheet to every annual general meeting of the association helped to guarantee financial probity and prevented reckless speculation with the cooperative's assets. Given these provisions, considerable trust had to be vested in those responsible for the cooperative's day-to-day operations; this was usually a small executive committee, which met monthly to review all applications for loans and to revise or audit the accounts, and which was itself accountable to a board of directors. Much of the work of the board rested with the chairman who was ultimately responsible for ensuring that the books were in good order and for taking any necessary precautionary measures. It would scarcely have been surprising, then, if it took peasants some time to be convinced of the viability, effectiveness and reliability of a cooperative's operations. The Raiffeisenverein relied heavily on mutual trust, the delegation of responsibility to others and a willingness to have one's financial position subjected to the scrutiny of neighbours and friends. If there were some doubts at the outset, however, they seem to have evaporated once farmers appreciated the advantages of cooperative arrangements. Of particular note is the growing involvement of peasants themselves in tasks such as auditing and book-keeping. In the earlier years of the Raiffeisenvereine these duties had generally been undertaken by more highly educated men such as teachers or priests. By 1908, however, thirty-eight per cent of the loan associations in Upper Bavaria had farmers as auditors.Footnote 49
IV. The spirit of cooperation
The increasing success of the various credit organisations in responding to the short and longer-term credit needs of farmers also provided the springboard for the development of other collective ventures. Many loan associations themselves began to offer services, such as cooperative rental schemes for heavy and expensive machinery, in addition to the provision of cheaper credit. By 1890 there were 344 steam-threshing cooperatives in Bavaria with 5,636 members. Over the next twelve years their number grew to 683 (16,652 members), the majority of them in Central and Upper Franconia. Well-organised cooperatives often applied successfully for grants or cheap loans from the government to assist in the purchase or replacement of expensive machines. Other organisations to benefit from such support included cattle-breeding cooperatives, of which there were over three hundred by 1896, although again financial assistance was normally available only after the overall competence of the association had been adequately demonstrated. By 1898 Lower Bavaria, a province with fewer mixed farms, had 172 such cooperatives.Footnote 50 Organisations or arrangements for the collective purchase of seed, fertiliser, machinery and other farm requirements could place peasants in a much more advantageous position in the market. Many would have lacked either the expertise or the time to select the most suitable goods, but purchasing cooperatives could employ skilled buyers and exploit the potential for large discounts on bulk orders. Sensibly organised cooperative sales represented a way of maximising profit from a limited surplus of perhaps moderate quality. Cooperatives could secure for their participants cheaper freight costs and a more even quality. This enhanced the selling price and reduced unnecessary overheads.
As was the case with credit cooperatives, collective buying and selling began to make substantial strides in Bavaria from the mid-1890s onwards. The earliest forms of organisation were agricultural Konsumvereine, of which there were fourteen in 1882, all in the Palatinate. By 1892 their number had grown to 106, with a membership of over 10,000 and with purchases approaching 11/2 million Marks a year. In the 1890s they were joined by several other organisations which were ready to encourage and institute schemes of cooperative sale and purchase for farmers wishing to counter the effects of the sharp fall in prices after 1891. Apart from the specialised cooperatives, credit unions, district committees of the Agricultural Association and a variety of non-affiliated local groups all began to offer facilities for collective trading. Their contribution was soon apparent; between 1896 and 1898 the value of collective purchases increased from 6.6 to more than 10 million Marks, while the value of agricultural produce sold cooperatively rose from 2.2 to 6.3 million Marks. The growing importance of cooperative sales of grain and procurement of fertilisers, feed and machinery is demonstrated by the overall figures for all Bavarian organisations in 1902, when such trade exceeded 42 million Marks, an increase of some 260% since 1898.Footnote 51
Striking as these advances were, it is readily apparent that this form of cooperation was rarely if ever so ubiquitous in Bavaria, and elsewhere in Germany, as the credit cooperative. Given the density and rapid spread of the latter, it makes little sense to explain the more patchy distribution of cooperative purchasing and selling in terms of peasant obstinacy or resistance to innovation. Indeed, it should be recognised that there were probably occasions when the more market-oriented a small farmer became, the more he might have to rely, for example, on an intermediate dealer. The advent of better rail communications certainly led to a decreased dependence on very local markets for the sale of surplus produce, and in more favourably situated areas the power of resident dealers to fix prices declined markedly towards the end of the century.Footnote 52 The reliance of some farmers on professional traders may well have increased with the demise of the local market. Those who wanted to bring comparatively small quantities to a non-local market had to pay relatively high transport costs, and were in no position to mix their produce with a view to enhancing its value. These problems were obviated by recourse to an intermediary. When compared to the disadvantages of selling locally, the drawbacks and expense incurred by reliance on middlemen were probably compensated for by the prospect of earning a better return in a wider market. Intermediate dealing was also unavoidable when animals were being sent out of the locality for slaughter. Some of the less scrupulous methods of trading were curtailed but a comprehensive system of cooperative trading in livestock would have required major and far-reaching initiatives, not just from farmers and their professional associations, but also from butchers, consumer organisations and municipal authorities. It was not until both the state government and urban lobbies became disconcerted by a significant increase in the price of meat, particularly after 1910, that the first discussions took place in Bavaria about the possibility of effecting the direct delivery of farm animals to the large municipal slaughter-houses.Footnote 53
The cooperative sale of grain also necessitated coordination and capital investment, this time in the shape of additional granaries and transit stores close to accessible railheads; these would allow many farmers to sell at realistic prices rather than having to offload produce too soon to intermediate dealers. Granaries could also improve the quality of the produce sold and perhaps have some influence on price levels in the national market. This was recognised by the Bavarian government, which helped to finance a major building programme at the turn of the century. Between 1897 and 1902 seventy-five new warehouses were built, and deliveries quadrupled in volume.Footnote 54 However, several of these installations foundered, either because of inadequate management or because they were located on unsuitable sites. Furthermore, although recognition of the value of using these depots was spreading quickly, there were recurrent complaints about the quality of the produce being delivered by farmers. Farmers were astute enough to sell their higher quality grain to dealers and use the granaries as dumping grounds for the inferior produce which they found difficult to sell in any other way.
Few peasant farmers in Bavaria, however, were as market oriented as those in the Allgäu, a part of Bavarian Swabia which formed the most intensive dairying region in Germany. One very distinctive feature had encouraged the development of dairy farming in this part of Germany, over and above considerations of soil, landscape and climate and good rail links to Munich, which were all, of course, extremely favourable to this branch of agriculture. Unlike much of the rest of the state the Allgäu was characterised by a high degree of land consolidation. According to Mayhew ‘the great prosperity brought by the growth of dairying in this region was made possible only by this early consolidation and resettlement, which created a suitable farm structure’.Footnote 55 By 1895 there were already 8,123 Bavarian farms engaged in milk cooperatives and other joint enterprises, the majority of them in Swabia and neighbouring Upper Bavaria. At this stage most of the arrangements remained relatively informal, as only twenty-six dairy cooperatives, including twenty-one in the Allgäu, were registered under the law on cooperatives. Their number grew rapidly to 476 (25,035 members) in 1909, of which 286 were in Swabia and 174 alone in the Allgäu. In addition there were many ‘free’ associations of milk producers. These were particularly widespread in the Allgäu where there were 602 such groups in 1909 with a combined membership of 11,162. Coordinating the activities of these various associations and registered cooperatives were organisations such as the Allgäu Dairy Association, which had its own monthly magazine and whose membership grew from 257 in 1887 to 5,576 in 1909. A similar body in Lower Bavaria, which was founded in 1898, had 2,366 members and its own specialised journal.Footnote 56 Such statistics suggest a high level of organisational integration and cooperative involvement of dairy farmers in and beyond the Allgäu. The resultant benefits were manifold. Cooperatives ensured the speedy implementation of improvements in technique and hygiene. Between 1898 and 1908 the number of centrifuges in Bavaria increased from 652 to 49,050, nearly all of which (97%) were used on peasant farms.Footnote 57 Cooperatives could construct their own dairies or more frequently buy out a private concern for their own use. Hygienic handling, as well as higher prices for the producers, were more easily achieved through communal and associational action. The cooperative advances made by the dairy farmers of the Allgäu contrasted sharply, for example, with the difficulties encountered by some vintners’ cooperatives in parts of Bavaria such as the Palatinate. These organisations were deficient not only in the level of personal expertise, but also in capital and reserve holdings and, just as critically, in the experience needed to manage the handling, storage and sale of wine. These problems were exacerbated by the impact on viticulture of sharp seasonal and climatic fluctuations, which themselves led to significant fluctuations in the demands being placed on the resources of a wine-growers’ cooperative. In the light of these experiences the Bavarian government became more reluctant to subvent the formation of further such associations.Footnote 58 By comparison, the commercial and technical progress attained in areas such as the Allgäu constituted one of the most formidable achievements of agricultural cooperation in pre-war Germany, but one that can only properly be comprehended in the light of the specific local advantages enjoyed by the peasant farmers of the area.
V. Conclusion: cooperation and change
The degree of cooperation evident in the Allgäu certainly remained exceptional in Bavaria before 1914, but it was nonetheless typical of a much wider trend. From the 1880s onwards many peasants joined an increasingly dense network of non-political, cooperative and technical organisations. Between 1887 and 1893 alone the number of specialist agricultural associations rose from 1,953 to 3,134, with their total membership increasing from 153,431 to 232,844. By 1907 there were some 7,083 specialised bodies in rural Bavaria (with a combined membership of 320,080) concerned with a broad range of agricultural interests, ranging from machine cooperatives and insurance associations to organisations promoting market-gardening, fruit cultivation and improved animal husbandry.Footnote 59 It would certainly be going too far if I were unequivocally to endorse the opinion of the Bavarian government that, in 1900, ‘the whole of agriculture is dominated by the cooperative idea’.Footnote 60 It also makes little sense to argue that cooperative action and the proliferation of organisations promoting greater agricultural efficiency eliminated the structural problems of Bavarian farming. The Regierungspräsident of the Upper Palatinate was clearly shaken by what he saw on a visit in 1905 to a community in Parsberg, some twenty kilometres to the west of Regensburg. His diary records how many of the fields in the area were unweeded and insufficiently fertilised, much of the machinery ‘antediluvian’. Animals were badly housed in cramped conditions and there was an inadequate supply of fodder crops. Numerous tracts of land which could have been put to good use remained uncultivated.Footnote 61 On the other hand many local officials also commented favourably on the way in which farmers were adapting to technological change, the loss of rural labour and the challenge of new markets.Footnote 62 Such changes would have been virtually impossible without cooperation, although it remains extremely difficult to quantify how much of the adaptation shown by peasant farming before 1914 is attributable directly to the cooperative organisation of credit, production, purchase and distribution. Even the one recent micro-analysis of a number of credit cooperatives in western Germany concludes that their overall effects remain hard to discern, and their impact on the German economy still to be calculated.Footnote 63 But solid, if admittedly fragmentary, evidence does exist, for example, in a major survey of agrarian conditions in southern Bavaria carried out by students of Lujo Brentano, one of the staunchest opponents of tariff protection and of its supposedly retrograde repercussions on German agriculture, whose critique of Imperial German agrarian policy still helps to mould historical interpretation of the period. One of his investigators found that the formation of a selling cooperative, which had encouraged better cultivation of grain, had yielded an increase in income of ten per cent. Another calculated that, between 1900 and 1910, farmers in some northern districts of Upper Bavaria enjoyed a growth in income of thirty-five per cent, half of which was the product of the technical changes they had made.Footnote 64
Such evidence hardly supports the negative assessments of German agriculture and producer initiatives implicit in the recurrent emphasis on intensive Danish farming as the paradigm of progressive economic (and perhaps, by implication, political) attitudes. We have to acknowledge that German farmers, large and small, must have adapted their production to rapidly changing market conditions during the later nineteenth and early twentieth centuries. Between 1850 and 1913 the volume of beef supplied by German farms tripled, while that of pork increased no less than eightfold. As Perkins has emphasised, the outstanding characteristic of Imperial German agricultural development, when viewed from the perspective of the forces and relations of agricultural production, was the intensification of production, involving increasing inputs of entrepreneurial skill to a more or less fixed area of agricultural land.Footnote 65 Other calculations suggest that the rate of productivity growth in German agriculture in the years 1830 to 1910 exceeded that of any other European country, with the most dramatic increase occurring between 1890 and 1910. By 1910 only Denmark could claim a higher index of productivity than Germany.Footnote 66
Clearly much more research is needed if we are to establish more exactly the contribution made by cooperatives and other agricultural organisations to this phenomenon. But these new agents of ‘rural sociability’Footnote 67 showed that many peasant farmers were willing to engage in various forms of local and supra-local activity which would enhance their financial security, technical efficiency and longer-term viability as commodity producers within a capitalist market economy. The early proponents of credit cooperatives, not just in Germany, undoubtedly conceived of these organisations as a form of defence against the depredations of the market,Footnote 68 but these organisations were at their most successful when they were used by peasant farmers to adapt, diversify and shape their own part in the competitive system. The political mobilisation of the peasant interest did not inhibit self-help measures, but went hand in hand with cooperative initiatives by political parties, government and, above all, farmers themselves. Some of the more demagogic agrarians of the time may have asserted that Staatshilfe and Selbsthilfe were incompatible, but our findings suggests otherwise. ‘State help’ and ‘self-help’ were not exclusive of each other; they were interdependent.