CO-OPERATIVE CREDIT IN INDIA 33 



(c) Loans from Other Societies and from Non-members. 



Ini9ii-i2, Rural societies obtained more than half their working capital 

 from other societies, and the proportion drawn from this source is constantly- 

 increasing. 



In the same year they obtained just over 10 per cent, of their capital 

 in the form of deposits by non-members, and as a source of capital these 

 deposits are relatively decreasing. 



The increase in the first case and the decrease in the second are nor- 

 mal tendencies. The " other societies " from which the Rural societies 

 drew supplies of capital have been formed for the express purpose of furnish- 

 ing such capital and are designed to act as the intermediary institutions 

 between the local societies and the joint stock banks. On the other hand the 

 Rural societies, not being general banking institutions, naturally do not 

 prove very attractive to outside depositors. 



Other societies (Central Banks and Banking Unions) lend to Rural so- 

 cieties at about 9 per cent. The rate is in some cases considerably higher and 

 in other cases appreciably lower, as credit conditions vary greatly in different 

 districts, but 9 per cent, may be considered as the normal rate. 



The work of Central Banks and Unions in financing local societies will 

 be dealt with in a subsequent article. Here we shall proceed to examine 

 briefly the other items which make up the total working capital of the Rural 

 societies. 



(d) Share Capital, Deposits by Members and Reserve Fund. 



These three items together form that part of the working capital which 

 is contributed by the members themselves, and which in some of the Reports 

 is distinguished as " internal " capital. In 1909-10, they formed exactly 

 32 per cent, of the total capital ; in 1910-11, 30.6 per cent ; and in 1911-12, 

 the year under review, 28.8 per cent. Both share capital and deposits 

 by members show a relative decrease, while the reserve fund shows a much 

 smaller relative increase. 



The Registrars as a rule have no comment to make on the figures relat- 

 ing to share capital, but they occasionally show some uneasiness as to the 

 slow growth of members' deposits. The reason generally put forward is 

 that the members are overburdened with debt and cannot be expected to 

 make deposits. The Registrar for Bengal thinks it possible that the 

 pubHcity which is insisted upon, and which is one of the elements making 

 for success in co-operation, may have the effect of discouraging people 

 from placing their savings with the societies. 



In any case the capital owned by the members is not a true index of 

 the thrift of members, for, as is pointed out by the Registrar for the United 

 Provinces, much of their savings is devoted to the liquidation of old debt 

 or to the purchase of agricultural stock. And, since the responsibiHty of 



