282 PROVISION OF BORROWING FACILITIES. 



belonging to them, but to see that the societies are conducted on right 

 lines and are not endangering the stability of the whole union. 

 Unions, such as I have described, are also essential to bring co- 

 operative societies into touch with the money market. In many 

 cases, the village societies attract loans locally. But more than this 

 is required ; and it is of great importance, for several reasons, that the 

 village societies should be in touch, through their unions, with a larger 

 money market, Among other reasons it is necessary to equalise the 

 demand and supply of loanable capital at different seasons. Probably 

 some may say, ' Why should not Government itself advance the 

 money ? The money is safe, and it can be lent at rates which 

 would make the transaction one from which Government would 

 actually profit.' I may at once say that personally I have no doubt 

 that Government could lend, and lend without loss, on a very large 

 scale. But leaving aside the fact that Government cannot take 

 out of the hands of private persons the financing of the agriculture 

 and petty trade of the country, were it to embark on such loans on a 

 large scale, the advances would necessarily be made on more or less 

 hard and fast rules. On the other hand, if societies are obliged like 

 any one else to borrow in the open market, their creditors will exercise 

 a very powerful, though frequently indirect, influence on the business 

 methods of the societies and on the objects to which loans are 

 devoted. 





