[Extracts from the Proceedings of the Governor General's Council, 

 dated the 23rd October, 1903.~\ 



CO-OPEEATIVE CREDIT SOCIETIES' BlLL. 



SIR D. IBBETSON said : 



One of the most difficult problems with which the small 

 agriculturist is everywhere confronted is, to obtain the money which 

 is necessary for his operations at a reasonable rate of interest. This is 

 a state of affairs by no means peculiar to India. The petty 

 agriculture of Europe is for the most part financed by borrowed 

 capital, and there too the money-lender takes advantage of the 

 exigencies of the cultivator to demand exorbitant terms. In 



o 



India, however, the problem is aggravated by the fact that 

 Indian rates of interest are to some extent survivals from times 

 when the security which the agriculturist had to offer was of 

 far smaller value than at present, and partly perhaps by the fact 

 that into most Indian contracts there enters an element of 

 oriental hyperbole, for which full allowance is made when the 

 settlement is by mutual consent, but which our Courts of Justice 

 are for the most part unable to recognise. 



Some fifty years ago, the establishment of agricultural banks 

 and of co-operative credit societies for small men was initiated 

 in Germany by SCHULZE DELITZSCH and RAIFFEISEN respectively. 

 The experiment passed through twenty years of struggle and 

 uncertainty ; but eventually it succeeded beyond all expectation, 

 the institutions of both classes now exceeding 5,000 in number ; 

 and the example thus set has been imitated, with more or less 

 modification, in many European countries where land is commonly 

 in the hands of men of small means. 



Madras J was the Indian province in which attention was 

 first turned to the subject. In that province an indigenous 

 institution called a Nidhi had sprung into existence at about the 

 same time as the movement to which I have just referred began. 

 These Nidhis are modelled very much upon the lines of English 

 buikling societies, and they find their clients among a more educated 

 and advanced class than that of the rural agriculturist, to whose 

 needs their constitution is not well adapted. But the fact that, 



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