PROVIDING THE FUNDS 161 



shown that co-operative banks, properly conducted, are the safest 

 banks that there are. " It is inconceivable," so said to me Signor 

 Maggiorino Ferraris, at that time Italian Minister of Posts and 

 Telegraphs, " how a co-operative bank conducted according to rule 

 can come to grief." 



" Safety " is the foundation on which the co-operative system of 

 credit is reared up. Sir Robert Morier, in an interesting report 

 communicated to our first British Co-operative Congress on such 

 banks — which he could not help seeing at work during his term 

 of office as representative of our country in Germany — names as 

 the three main pillars of the system the three following points : 

 (1) maximum of responsibility ; (2) maximum of publicity ; and 

 (3) minimum of risk. 



All these three safeguards obviously are directly subservient to 

 the one great end of riskless safety. 



The co-operative bank interposes itself between the credit-seeking 

 member and the source from which all money dealt in must ulti- 

 mately come by pledging its collective liability for his loan, just as 

 in Scotch cash credit do the two or more, up to eleven, sureties. 

 Obviously that creates a security upon which people may well 

 deposit or lend the money which the single borrower wants — and 

 that not only by the collection of backing liability — for not only 

 does the bank, with the aid of the " publicity " already stipulated 

 for, and by which great store is rightly set, by means of the good 

 practice upon which its existence is dependent and which, as will 

 be seen, it studies with great care, establish a character which in 

 itself secures credit, but it makes on its own part ample provision 

 for keeping its debtor on the straight path. 



It is at this point that one feature distinguishing co-operative 

 from ordinary banks manifests itself with great force. The ordinary 

 banker lends, even if he does not formally take attachable security 

 to cover the risk, on the ground of his knowledge that the borrower 

 will be able to repay, being a substantial man. It does not matter 

 to him what use the borrower will make of his money. He may, 

 if he so chooses, spend it in the most improvident way, to his own 

 ruin. The co-operative bank will permit no improvident borrowing. 

 It advisedly limits credit in the very act of making it available 

 to those unendowed with " bankable " security. In a sense it turns 

 the very employment of the loan into security. Its standing rule 

 is that the borrower, in making his application for his loan, should 

 state the object for which he asks for the money for the bank's 

 approval. The bank will then judge, througlf its appointed officers, 



B.B. M 



