290 PROVISION OF BORROWING FACILITIES. 



develop thrift SCHULZE-DELITZSCH offered the attraction of profits as 

 large as could be made ; the societies have been very successful in 

 earning profits, and the investing members, as distinguished from the 

 borrowers, naturally look more to this function than to that of 

 supplying cheap and safe credit. Moreover the Directors have been 

 stimulated by substantial honoraria for their services, until this feature 

 of the banks has become unduly prominent. A co-operjtive bank 

 which looks chiefly to dividends and director's salaries is only co- 

 operative in name. A similar tendency is observable even in Madras, 

 whenever societies admit dividends and directors' salaries as promi- 

 nent attractions. 



It is believed that loans are chiefly granted for productive 

 purposes; that at least is a foundation principle, since SCHULZE- 

 DELITZSCH desired the material advancement of the people by the 

 development of thrift and productivity. 



Members can, of course, withdraw at will, with certain formali- 

 ties and notice, taking their share values, but not a share of the 

 reserve with them ; this is common to all co-operative societies. 



Self-help is the motto of these societies which have neither 

 received nor needed any help of any sort from Government, save only 

 that of a law which was based upon their own experience. 



Luzzatti Popular Banks. The second class of popular banks is 

 the Italian adaptation of the above. LTJZZATI, then a young Professor 

 of Political Economy and recently Minister of Finance, is the founder 

 of this system which has firmly established itself within 30 years, 

 the number of these banks being now (1894) about 900. In 1887 

 there were 641 banks, of which 541 reported their statistics, namely, 

 members 318,979, of whom about one-third were agricultural, own 

 capital and reserve 4,160,000, deposits, &c., 17/280,000, bills 

 discounted, loans, &c., 57,000,000. 



The Italian banks chiefly differ from their prototypes (1) in 

 rejecting the principle of unlimited liability, a share capital subscribed 

 by members only, and a heavy reserve, serving as a guarantee ; (2) 

 in keeping dividends and honoraria as low as possible ; LUZZATI in 

 fact, considers that the great danger to co-operative banks is not 

 that of failure, but of a success which leads members and directors 

 towards the race for high profits and snug incomes, and he is conse- 

 quently endeavouring, and with success, to obtain gratuitous or 



