270 PROVISION OF BORROWING FACILITIES. 



confined and most consonant with the mutual confidence which is 

 to form their basis; we lay down that no profit is to be directly 

 divided among the members, since their object is not to make money 

 but to assist one another, and any surplus that may accrue 

 should either be carried to a reserve fund, or be applied to reducing 

 the rate of interest upon loans; and we forbid the society to 

 borrow money without sanction, for it would often be worth the 

 while of a money-lender to risk his money in order to get a success- 

 ful society into his power, and so to rid himself of a rival. We 

 prohibit pawn-broking, since the basis of the operations should be 

 personal and not material security; but we allow agricultural produce 

 to be received as security or in payment, and to be converted into 

 money at any time by the society, which will generally be in a posi- 

 tion to get a better price for it than an indebted cultivator could 

 obtain. 



In the case of urban societies we allow of limited liability and the 

 distribution of profits, subject to the creation of a sufficient reserve 

 fund, and we allow them to lend money to a rural society which is 

 situated in the same district, and with the circumstances of which they 

 have therefore the opportunity of being acquainted. 



Having thus provided for the constitution of our societies, and 

 regulated their operations, we proceed to confer upon them certain 

 privileges. We exempt the shares or other interests of members in 

 the capital of a society from attachment for their private debts, thus 

 encouraging thrift, and giving stability to the operations of the society ; 

 we relieve societies from the necessity for letters of administration 

 or a succession certificate ; we give them a lien upon certain forms of 

 property when created or acquired by means of a loan from them, 

 until the loan is repaid ; and we make an entry in the books of a society 

 pri-ma facie evidence in a suit to recover money due to it. We take 

 powers for the Governor-General in Council to exempt societies and 

 their operations from income-tax, stamp-duties, and registration-fees ; 

 and it is our intention to act upon those powers, at any if ite in the 

 first instance. 



Finally, we provide for compulsory inspection and audit by a 

 Government officer, in order to provide against mismanagement and 

 fraud, to give the members and the public confidence in the societies, ( , 

 and to justify the privileges which we confer upon them ; we make 

 Government advances recoverable as arrears of land-revenue; we 



