PROVISION OF BORROWING FACILITIES. 309 



It is to these banks that attention is particularly directed, for it is 

 on them chiefly that the hope rests of popularizing an organized 

 system of credit. It is these banks which, as the Popular banks of 

 SCHULZE-DELITZSCH in Germany and Austria, and of Luzzatti in Italy, 

 are giving credit to the amount of at least 250,000,000 sterling to 

 small trades people, artisans and agriculturists; which, as the rural 

 loan societies of RAUTEISEN in Germany and WOLLEMBORG in Italy are 

 extending credit to, and greatly developing the character of , the purely 

 rural classes ; which in the form of the 2,300 so-called Building 

 Societies really Co-operative or mutual banks in England have about 

 600,000 members and supply immense credit on real security ; which 

 in America, in several thousand similar Co-operative banks, are said 

 to be a financial factor of increasing magnitude, likely soon to 

 overpass the Savings bankjs, and to form the chief means of granting 

 small loans on Real credit. It is these which supply not merely 

 credit but credit to the very smallest folk. They not merely supply 

 popular credit, but they have democratized credit ; their credit is not 

 merely not that dangerous form of easy credit which often ruins, but 

 is strongly educative. It not only does not demoralize or enslave, 

 but directly and indirectly stimulates thrift, foresight, order, business 

 methods, temperance and morality, industrial improvements, habits of 

 mutual association and self-help. 



These banks have not merely popularized but democratized credit, 

 which proceeds from the people to the people by the people. FiuaKy, 

 it is this form which has found a beginning in the hundred and odd 

 Mutual Funds (Nidhis) of the Madras presidency, a form of society, 

 which, originating probably in the indigenous Chit association, has 

 developed by the adoption of the English Building Society rules and 

 principles. 



It will be seen from the mere names of the above classes of 

 institutions, that one central idea is common to all, viz., that of 

 co-operation or association. That principle is, of course, at the base 

 of most modern banking societies. The Joint Stock bank is the 

 leading feature of recent banking enterprise, and is the latest 

 development from the rudimentary system of the private money-lender 

 working with his own funds, who subsequently developed into the 

 partnership banks which still share largely in this business, especially 

 ici country places. But there are two radically different forms of 

 association, the one is the association of lenders or capitalists- whether 



