278 



THE AC4P.ICULTri!AL NEWS. 



August 20, 19U. 



AGRICULTURAL BANKS. 



CO-OPERATIVE CREDIT SOCIETIES IN 



INDIA FROM 1904 TO 1912. 



C'lvdit Ifgislation is of consiilfr;il)lf intt-ivst t<> tlii' 

 W'l .>t Indies in view of the St. Vincent (Ordinance 

 ,•111(1 the Contemplation of similar U'gislation in other 

 >-olonies. The following article, which is taken froni 

 the Monthly Bulletin of Economic avd Social Intel- 

 iifjevce for May 1914, provides a vahiahle insight int<.i 

 The pi'est'ut position of co-operative credit in India. It 

 niav lie remenihei-ed that in the Wrst IviJian Bulletin 

 (Vol. XIV, No. 1) under the title of 'The We.st Indies 

 .1)11 1 ( 'o-operative Credit' an account of the Indian 

 ( 'i'-iipciati\e Ci-edit Societies Act, I!I04, was given. 

 This Act lias now been repealed. As stated in the 

 t'ollouiiig summary, a new Act came int(j force in 

 .luh liM2, the ]iro visions of which are of a very com - 

 ;ireheiisi\'e nature and will be descnlied iu the next 

 i.ssue of the Agricultural Newfi. 



The ilevelopmeiit of co-operation in India may lie .said 

 'o hfgin with the pa.s.sing of the Co-opei-ative t'redit Societies 

 .\ct ill 1904, and the repeal of that Act, in June 1912, 

 :iiark.s the close of one period in t lie history of the movement. 



Progress must be pronounced to have l>een extraordi- 

 narily rajiid, even when allowance is made for the fact that 

 India has profited by the experience of other coiuitries. In 

 190o, when the .\et hatl been a year in operation, there 

 were forty-one co-ojierative societies in existence; in 1912 

 there were 8,177. In the former year the total working 

 lapital was only £3,608; in the latter year it was £2,2.38,000, 

 and there were more than 403,000 members in co-operative 

 i-redit societies. Even so, to quote the words of the official 

 report, 'the movement has touched only the fringe of the 

 va.«t population concerned.' 



The real progress of the movement cannot l>e represented 

 adei|uately by figures alone, since progress has to be estim-, 

 ated qualitatively as well as tpiantitatively, but there is 

 every reason to believe that it has been sound as well as 

 rapid. The i'rovincial Registrars appointed under the 1904 

 Alt were instructed to act cautiously and progress gradually. 

 They have concentrated their efforts on consolidating the 

 mo\ement and have consistently oppii.sed the tendency 

 towards undue expansion. The Act laid down broad, general 

 principles and left to the local Governments and the Eegis- 

 tiars the task of drawing up rules adapted to local conditions. 

 The Act itself was framed on lines already tried and proved 

 sound in h"uro|)eaii .systems of co-operative credit, and the 

 pfi-.sons responsible for guiding the movement in India have 

 welcomed criticism and been very willing to accept advice 

 from specially competent persons in other countries. 



The Kegistrars hold Annual Conferences to discu.ss 

 questions affecting the welfare of the societies, and the reso- 

 lutifins passed by the various Conferences have served to 

 a veiy appreciable extent to direct the whole movement on 

 sound lines. 



Whenever possilile the registrars seek the co-operation 

 ■ .f iion-otticial persons. Voluntary workers often po.ssess 

 a knowledge of local conditions which makes their advice 

 and a.ssistance of inestimable value, and their connexion with 

 the movement should .safeguard it against the danger of 

 becoming otiicializcd. The Registrars look to voluntary 

 helpers to acL'oni|)lisli much of the work of propaganda and 

 instruction, and what is still more im]iortaTit, to exercise 



a general supervision over tie traii.sactious of tlic local 

 societies. 



The Act of 1904 laid down that a .society should consist 

 I if jiersons residing in the same town or village, or the same 

 group of villages, or subject to the approval of the Registrar, 

 or members of the same tribe, class or caste. In 'liural" 

 societies it was required that four-fifths of the members should 

 be non-agriculturists, and in Urlian .societies that the same 

 proportion should be non-agriculturists. Except with the 

 consent of the Local Government, liability in the case of 

 Rural societies was to be unlimited; in Urban .societies, 

 lialiility might be limited or unlimited. Loans were to be 

 made to meiubers only, or, with the approval of the Registrar, 

 to Rural societies. 



.Societies of both kinds were required to provide for 

 building up a reserve fund. Limitations were placed on the 

 interest which might be held in a society by any member and 

 on the transfer of .shares, and provision was made frir com- 

 pulsory audit and inspection ly the Registrar. 



As was anticipated, the clevelopment of co-ojjerative 

 credit has proceeded on .somewhat different lines in different 

 ]iarts of India, but in general two main problems have present- 

 ed themselves, relating to the difficulty of securing funds, and 

 to the even greater difficulty of providing for the adequate 

 suijcrvisioii of all societies. It cannot be said yet that cither 

 problem has been solved, and it is for this reason that the 

 Registrars have followed a policj- of consolidation rather than 

 extension, but there is at least genei'al agreement as to the 

 lines upon which they nmst be sohed. Central societies have 

 been created in every Province for the purpose of lending to 

 other .societies, and have already proved their ability to attract 

 outside capital 



The question of finances is now largely one of regulating 

 the relations between local societies and central banking 

 institutions. The solution of the problem of supervision is 

 being .sought in the formation of societies into I'nions which 

 will assume much of the work of examination, audit and 

 inspection. Already in the I'nited Provinces and the Central 

 Provinces the Government staff is outnumbered by the .staff 

 of inspectors, auditors and clerks entertained by the .societies 

 themselves At the .same time there is no intention of relaxing 

 official supervision and control. Some of the Unions act also 

 as central banks; they serve, that is to say the double purpose 

 of .su])ervi,sing affiliated societies and financing them. 



The iriajority of the co-operative credit societies in India 

 are agricultural societies. In 1912, out of a total of 8,177 

 .societies, no less than 7,562 are cla.s.sed as Rural. A few 

 .societies have been formed among the members of a single 

 trade or profession. 



There is a general desire to associate the co-ojierative 

 movement with the technical and economic development of 

 agriculture, and this has led to the formation of a small 

 number of societies for co-operative purchase and sale. The 

 necessity of providing for the development of all forms of 

 co-operation led to the pa.ssing of a new Act which came into 

 force on .July 1, 1912. 



It is reported in I'/ie Board of I'rdde .Journal for 

 .Tune 2.1, 1914, that in New Zealand a comiiaiiy has been 

 formed with a capital of £30,000 to carry on dredging 

 operations for the recovery of Kauri gum which exists in large 

 quantities in many of the .swamps iu the northern peninsula. 

 A "old dredger has been purchased and will be adapted for 

 I'uni dredging. If the operations prove as successful as is 

 aiitii'ipated, the swamps after being dredged, will be drained, 

 ami should tlien make an excellent dairying country. 



