9B 



application for admission of any but an openly disreputable 

 neighbour. But make people understand that, in electing the new 

 member, they practically make themselves liable for any default 

 which he may make, and all considerations of etiquette and mere 

 neighbourly courtesy are sure to vanish. This strictness in 

 election is one of the causes which makes these banks such won- 

 derful moral reformers. When a man knows that before he can 

 be admitted to share in the advantages of a cheap lending insti- 

 tution, his character will be submitted to the searchlight of his 

 neighbours' knowledge, the idle will become industrious, and the 

 reckless careful. 



Next, unlimited liability secures good administration. It en- 

 sures that the most competent men shall be elected as officers, and 

 the unlimited liability which the officers share with the other 

 members leads them to be extremely critical in their disposal of 

 bank moneys, and very strict in their demand of prompt repay- 

 ment, which is one of the essential conditions of success, economic 

 and educational. 



Without unlimited liability, furthermore, there could not pos- 

 sibly be all that watchfulness and control which keeps everything 

 safe. The borrowers must remain honest, thrifty, careful and 

 deserving of credit, The employment of the loan is watched and 

 its application to its proper purpose — failing which it is called in 

 unmercifully — otherwise there can be no success. Prompt pay- 

 ments are insisted upon. The whole fabric is built up upon a sys- 

 tem of mutual checking, the borrowers being checked by the com- 

 mittee, the committee by the council, the council by the mass of 

 members — all without offensiveness, all in the interest and for the 

 protection of the very people checked. All that zealous, lively, 

 warm, and loving interest in their local association, which is such 

 a feature among members of Raiffeisen banks, is plainly trace- 

 able to the principle of unlimited liability, which makes everyone 

 feel that he and his fellows have become ' members one of 

 another.' Under this system an association becomes what every 

 genuine co-operative association should be- — an honest and indus- 

 trious family, with a community of aims, of interests, and of 

 sympathies. 



Another very important element of success is the smallness of 

 the district assigned to every bank. In any but a small district 

 there cannot possibly be that knowledge and vigilance and 

 checking of one another which constitutes a sine qua nojt of success. 



The organization of the association is entirely on democratic 

 lines. No diiference of any sort is recognised between poor and 

 rich, except that the rich, bearing the brunt of the liability, are 

 by accepted understanding allowed also to take the leading part 

 in the administration. The Committee consists of five, and is 

 charged with all the executive work. The Council of Supervision 

 consists, according to the size of the district, of from six to nine 



