316 PEG VISION OF BORROWING FACILITIES. 



cannot be successfully given to such folk by large institutions, and 

 credit, which is the result of philanthropic or State effort, is apt to 

 be either abused or abortive ; it is abused for it comes in the guise 

 of charity, and is received as a mere surplus of the wealth of others 

 which they can easily spare, with similar subsequ ent grants beside ; 

 it comes from a general and indeterminate fund, which is popularly 

 supposed to be inexhaustible. Similarly, when it is supplied by 

 government it is not only supposed by the borrower to be 

 from an inexhaustible source, so that no one will be harmed 

 if it is not repaid, but it is necessarily surrounded by the 

 lender with so many rules and formalities, that it cannot reach those 

 whom it would benefit. Above all, such credit does not educate ; 

 it does not teach the borrower that all capital comes from saving ; 

 yet without this lesson credit is dangerous ; credit is only safe when 

 it brings with it the lesson that there is no royal road to wealth ; 

 the mortgage of the unearned increment, the cheap loan from the 

 philanthropist, the Government takavi at charity rates, teach the 

 ryot nothing, while tending to beget carelessness and improvidence ; 

 it is the painfully saved surplus from laboriously won earnings that 

 is the true educator. " If he is to value a gift, he must be his own 

 benefactor j if he is to deal scrupulously with it he must be its 

 guardian" (WOLFF). " The only true secret of assisting the poor is 

 to make them agents in bettering their own condition " (Archbishop 

 SUMNEK). 



As a rule, too, these banks are local, and a marked feature if not 

 a principle, of their establishment is the limitation of their area of 

 operation. The Schulze Delitzsch banks do not indeed recognize 

 any limit, but in practice it seems that each bank operates in a small 

 area ; in the Kaiffeisen banks this is an absolute rule. Hence there 

 arises that local knowledge by the bank of its members, by the members 

 of the bank and of one another, which seem essential to success in 

 bringing credit to small agricultural folk. A further principle is* that of 

 association with unlimited liability a principle which gives the 

 maximum of credit possible in the absence of material pledge 

 compels the admission only of the more prudent and thrifty, binds 

 the members together in a spirit of fraternity, and at the same time 

 ensures that loans will only be advanced and spent for productive or 

 useful purposes. The result of this solidarity of members known 

 to be prima facie prudent and laborious, coupled with the material 



