PROVISION OF BORROWING FACILITIES. 289 



of the loans granted ; the area of operation is indeterminate, and 

 ^he clientele all who will subscribe a share, subject however to the 

 decision of an entrance committee. Thrift is compulsory, the subs- 

 cription to a share being a condition of membership ; without thrift, 

 no credit. Funds are obtained chiefly by deposits attracted by the 

 principle of solidarity ; loans are granted chiefly on three months' 

 bills, SCHULZE-DELITZSCH believing that money withdrawable on short 

 notice could only be lent on similarly short terms. 



Beginning in 1850 with a single petty tentative society, established 

 solely by the unwearied efforts of SCHULZE-DELITZSCH, a man of very 

 moderate means and position, but of unbounded zeal, energy and 

 enthusiasm, this class is now numbered by thousands; these are 

 grouped in various unions, and these again are linked to a central 

 agency : each bank, however, is wholly autonomous and independent, 

 the unions having only advisory and inspecting powers. A congress 

 meets annually, and there is a periodical devoted solely to the interests 

 of the societies. Audit is provided within the societies by the usual 

 committee of supervision, but by the law of 1889, special external 

 audit is now compulsory, the unions of societies being generally 

 expected to supply such audit. 



These societies deal in the aggregate in millions sterling ; the 

 1,076 societies which sent in their accounts in 1892 to the Central 

 Union showed an own capital of 7,197,927 including a reserve of 

 1,473,702. deposits and borrowed funds of 21,951,159, and tran- 

 sactions in advances of 78,080,526 during 1891-92; they had 

 514,524 members, or 478 per society, of whom about three-tenths 

 were agricultural. Their defect is in the shortness of their loans ; 

 even for the current needs of agriculturists three months is insuffi- 

 cient; with however the necessary prolongations of one or two 

 further periods, current needs may be successfully supplied ; but for 

 all such purposes as the provision or replacement of stock, for 

 improvements, plantations, buildings and the like, they are obviously 

 unsuited. ^It is however, perfectly possible to adapt these banks to 

 all rural needs ; loans of longer term can safely be granted even 

 under the present system of deposits, and by adopting a system either 

 of long term deposits or of debentures or both, loans of any term may 

 'readily be granted. 



It is said that these banks frequently lose their mutual character, 

 and become mere general banks, seeking high profits. In order to 

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