288 PROVISION OP BORROWING FACILITIES. 



cooperative unions alone that are suggested ; every class of institution 

 affording facile, cheap, and safe credit is to be encouraged. But it 

 is believed and urged that in the co-operative system lies the larger 

 hope for the development of rural society and industry. 



Classification of Credit. Credit is classified under three heads : 

 Real, Chattel and Personal, corresponding to the three divisions of 

 capital viz., land, goods and 'character.' The chief institutions for 

 these three classes are respectively: (!) the Land Banks of Germany 

 Austria and France, with the Building Societies of England and 

 America ; (2) the Monts de Piete of Europe ; and (3) the Popular 

 Banks and Credit Unions of Germany and Italy. In the West it is 

 generally found that banks are established for, and largely confine 

 themselves to, a single class of credit ; the Landschaften and ' Credit 

 Foncier ' deal solely in real credit ; the Mont de Piete is a mere 

 pawn-broking institution, the bill of sale or pledge without delivery 

 being almost unknown in Latin Europe, owing to the state of the 

 law; the Popular Bank or Union which is entirely co-operative, 

 deals chiefly in credit based on ( character/ i.e. on personal bonds with 

 personal sureties. The English Building Society, which is the original 

 of the Madras Nidhi, almost confines itself to real credit, while the 

 Madras institution deals or attempts to deal with every class. 

 * The following are the banks to be mentioned: (1) 



Land banks proper ; (2) special Land banks such as the Rent charge 

 'banks of Prussia and the Peasants' banks of Russia ; (3) Land 

 Improvement banks ; (4) Building Societies ; (5) Agricultural banks 

 (Societies du Credit agricole) ; (6) Monts de Piete ; (7) Positos 

 or Monte Frumentarii ; (8) Popular banks of various types ; (9) 

 Savings banks; and (10) Agricultural Association with Credit 

 annexes. 



Popular Banks. These are of three great classes, viz., those 

 following the system of SCHULZE-DELITZSCH, of LUZZATI and 

 R,AIFFEISEN. All are based on the grand common principle of 

 mutuality or co-operation ; they are not joint-stock banks, but co- 

 operative societies ; the units of association are men, not shares. 



Schulze-Delitzsch Societies. The first class are the well known 

 German f Vorschussvereine ;' these were principally started for the 

 artisan, small trading and professional classes, and their Clientele 

 is largely, though not solely, urban. The foundation principles are 

 those of solidarity or unlimited liability, thrift, and the productivity 



