328 



PROVISION OP BORROWING FACILITIES. 



apply to him for loans ; on his report the directors consider the 

 application, the object for which the loan is demanded, and the 

 worth of the sureties and of the applicant. The president or his 

 representative, or failing them, a member of the directorate 

 specially elected by them, represents the society in its capacity of 

 member of the Central society. The president has other duties, 

 and is held specially accountable for the cash and the correctness 

 of the books and balance sheet, and for carrying out the decisions 

 of the directors. 



The council of supervision has a general control ; it is bound t 

 see that the directors observe the rules, and that all resolutions are 

 carried out ; it is required to make a quarterly examination of the 

 assets and debts of the society, when the position of each loan, its 

 then value, the use made of the loan, and the status and solvency of 

 the debtors and their sureties are examined afresh. Hence any 

 deterioration of an estate, any misapplication of a loan, any 

 degradation of a debtor or his surety, is at once known, and steps 

 can be taken to safe-guard the society, since the members of the 

 two councils reside in the villages which forms the sole locale of the 

 bank. It can, moreover, examine the books, cash and securities at 

 any time, suspend the directors or accountant, and call a general 

 meeting. 



The general assembly is the source of all power and is a petty 

 democracy. It decides the general rate of interest to b} demanded 

 from borrowers, and is likely to keep this as low as possible, since 

 all the membors are probable or possible borrowers, and since there 

 are no dividends to pay to investors. On the other hand, it requires 

 an influential directorate to guide the assembly, e.g., in so fixing 

 interest that profits may accumulate into a reserve as soon as possible, 

 and thus improve the material guarantee for the borrowed capital. 

 No difficulty is found in practice, as the original members, and 

 therefore the original directorate, are the most enlightened and 

 influential men in the village. Meetings must be held at least 

 twice a year, and as often otherwise as the committee or a tenth of 

 the members require. It is usual to require all members to attend on 

 pain of a fine in the absence of a valid excuse ; this is intended 

 to develop the personal interest of all members of every 

 degree in the working of their society, and is found very effective. 

 The general meeting in these and other co-operative societies 



