PROVISION OF BORROWING FACILITIES. 331 



As there are, however, shares, there are now dividends or rather 

 interest payable on them ; the rate is fixed annually by the committee 

 of supervision, but must not exceed the rate of interest paid by the 

 society on its borrowings ; the amount is credited to the shares until 

 they are fully paid up. The general meeting may determine that 

 there shall be no dividends. 



Shares cannot be transferred or pledged in any way while a 

 member continues in the society ; on quitting it he is entitled to his 

 share value. 



Reserve. This consists of the whole net profits after paying the 

 fixed interest on deposits, &c., and the cost of administration. 

 It belongs to the society in its corporate capacity alone, and no 

 individual has any claim to any portion of it. Should it attain 

 an amount larger than necessary, the general assembly can 

 devote the surplus to some object of public utility, such as 

 special beds in hospitals, the improvement of the village, 

 its water-supply, school, &c., or it can lower the rate of 

 interest and commission on its loans. Should the society be 

 voluntarily wound up, the reserve, less any due debts, must be paid 

 into the Imperial bank or placed in some recognized investment, 

 there to accumulate at compound interest, till a new society, under 

 similar rules, shall be established in the same village, when it is to be 

 er to them as a nucleus. 



cases the reserve is banked with the Central bank 

 and cannot be used in the ordinary business of the society. 

 The reserves appear to have been kept down by the low rate of 

 interest and commission demanded from borrowers, who pay 

 considerably less than the members of the Schulze Delitzsch 

 banks. 



In spite of the weakness of the reserves, the societies have found 

 no difficulty in borrowing, and all losses have hitherto been successfully 

 met from* the reserves. 



No entrance fees payable to the reserves are charged to members. 



Funds. -These consist of the shares, the reserve and the borrowed 

 capital. The first source, as already stated, is insignificant in amount, 

 the reserve cannot be used in ordinary business ; it is on their borrowed 

 capital that the societies work, thus fulfilling the chief function of 

 banks, viz., the collection of small capitals and their distribution for 

 productive use. 



