PROVISION OF BORROWING FACILITIES. 263 



in towns and large villages. While, therefore, it is proposed to allow 

 urban societies to be promoted on a share basis with limited liability, 

 for rural societies it has been decided to insist upon the principle of 

 unlimited liability. The utilisation of combined credit for the benefit 

 of individual agriculturists is the kind of co-operation which it is 

 desired to encourage, and towards this end the measure is mainly 

 directed. It seems essential that the main qualifications for admission 

 to membership of a society, whether rural or urban, should be laid 

 down by legislation, and it is thought that the most prominent 

 qualification should be residence in the same neighbourhood, inasmuch 

 as it is an essential principle that the lenders should have that accurate 

 knowledge of the circumstances of the borrowers which can only thus 

 be obtained. It is also important that members should be eligible for 

 admission by election only so as to secure that mutual confidence upon 

 which successful co-operation must depend. 



Clause 8. As it is desired to foster thrift and mutual co-operation, 

 it is provided that loans shall be admissible to members only, save in 

 the case of urban societies, when it is proposed to allow, subject to the 

 sanction of the Registrar, advances to be made to rural societies in the 

 same district. The question whether pawn-broking should be 

 countenanced has been much discusssed, and the conclusion embodied 

 in clause 8 is that it should be prohibited except as regards advances 

 by rural societies on the deposit of agricultural produce. 



Clauses 9 and 10. These clauses aim at strictly limiting the 

 number and value of the shares held by a single individual, and 

 rendering shares untransferable until they have been in the possession 

 of the holder for a certain period. The object is to prevent the 

 acquisition of a predominant interest in a society by speculators whose 

 advantage it might be to wreck it, or to use the facilities furnished 

 by the measure to start banks for ends other than those which it is 

 desired to promote. 



Clcwse 11. It is here provided that the interests of individual 

 members in the funds of a society shall be exempt from liability to 

 attachment by civil process. To deposits it has been decided that this 

 exemption should not be extended. 



Clause 12. Facilities for the payment of what is due to a member 

 . on his death are here provided. 



Clauses 13 and 14. The proposal that a summary process for the 

 recovery of loans should be secured in favour of societies has been 



