34 BRITISH INDIA - CO-OPERATION AND ASSOCIATION 



members is almost invariably unlimited, it is evident that savings so spent or 

 invested contribute directly to strengthening the position of the societies. 



It is hardly possible to draw a distinction between share capital and 

 members' deposits since the members' shares are in effect compulsory 

 deposits. Both items together represented, in IQII-12, 25.2 per cent, of the 

 total working capital, and such a proportion seems satisfactory though the 

 Registrar for Bengal is of the opinion that members' deposits should be 

 the main source of supply. 



The reserve funds are in nearly every case invested in the ordinary 

 business of the society. The Registrar for Bombay thinks the practice open 

 to objection on the grounds that the chief benefit of a reserve fund is lost 

 if it is not really liquidable and available in time of emergency, and the so- 

 ciety which invests all its funds in the same way diminishes its own security. 

 He has recently issued a circular advising societies to invest their reserve 

 funds in some outside bank, and should the circular fail in its object, he 

 intends to apply for power to make such investment of reserve funds com- 

 pulsory. In the Central Provinces, reserve funds are already, in everj^ case, 

 lodged with the Central Banks. 



§ 3. The loans granted. 



In igii-i2, no new departure of any importance is to be noted in the 

 distribution of the loans made by Rural societies to their members. As in 

 previous years, loans were made chiefly for the repayment of old debt, 

 the purchase of cattle, and the payment of land revenue. The purposes for 

 which loans are required vary according to the peculiar needs of each 

 district, but loans for one or other of the purposes mentioned generally pre- 

 dominate. A very small proportion of the total loans is granted for " un- 

 productive " purposes. The small amount so lent is usually granted for 

 the celebration of marriage feasts, and, in connection with such expendi- 

 ture, an extract from the report of the Registrar for Bengal is significant. 

 The Registrar reports as follows : 



" That the village societies discourage unnecessary expenses for cere- 

 monial purposes is a proved fact. A member of a society is not encouraged 

 by his co-villagers to give extravagant feasts on the occasion of marriages. 

 Formerly he had to borrow money for ceremonial purposes in order to stand 

 well with his co- villagers. The latter now find they are also responsible 

 for his debts, and if he is unable to repay the loan they \\'ill have to make 

 good the loss. Instead of being encouraged to spend money he is restrain- 

 ed by the influence of village opinion to curtail his expenses according to 

 his means ". 



Loans for the payment of debt amount in some cases to 48 per cent, 

 of the total loans granted. Much of the money so lent is used to redeem 

 land from mortgage, and statistics are at present being compiled in 

 some Provinces as to the amount of land thus redeemed. The re- 



