AGRICULTURAL CREDIT.—DAVIDSON. 473 
the principle of self-help productive as wellas provident. They 
are not mere savings banks instituted to encourage habits of 
thrift; they endeavour to supply credit to their members. This 
they do by one of two methods. They may issue shares of small 
amounts to form a capital of guarantee and then borrow on the 
security of this capital and lend out to their members. This first 
class is co-operative in character, but they often manage to com- 
bine co-operation with high dividends on shares, and the dividend 
earning instinct may influence their business to a greater extent 
than their co-operative principle. These are known as the 
Schulze Delitsch banks, after their founder, and are mainly 
industrial in character. They have not been found peculiarly 
well adapted to agriculture. The other type is peculiarly suited 
for the needs of small farmers and cultivators, and they do a 
very large and a very safe business. ‘They are entirely co-oper- 
ative in character, and are almost invariably managed by an 
unsalaried committee, and confine their operations to a very small 
area, such as the parish. They borrow the money they lend 
again to their members; but this money is not secured by any 
capital of guarantee. The members are jointly and severally 
liable to an unlimited extent for what they borrow to Jend again. 
To put the matter in another way, they borrow on a joint note, 
to which every member is a party, and the money so obtained 
is loaned out to individual members. This unlimited liability 
makes members very careful about the character of those admit- 
ted or retained, as a man is careful about the character of a man 
whose paper he endorses. The loans are made for specfic pur- 
poses to individuals known to the committee who are able to 
ascertain whether the loan is applied to the purpose for which it 
was borrowed. As there are no expenses of management worth 
mentioning, the bank is able to lend to its members at a very 
small advance on what it pays, and every member shares in the 
joint credit of all, and the system has been well characterized as 
the capitalization of character and honesty. The system is well 
developed and it has not resulted in loss, Not a penny has been 
lost to any one in all the forty-seven years’ experience of these 
Proc. & Trans. N. S. Inst. Sci., VOL. X. TRANS.—GG. 
