PROVISION OF BORROWING FACILITIES. 



council is appointed. For business purposes, the Union is divided 

 into sections or district unions, each with the duties of tho general 

 Union. 



Each local society pays annually 15 shillings as subscription for 

 expenses, including the price of a weekly newspaper (Co-operative 

 Societies Journal) intended to contain statistics and facts relevant to 

 the work of the societies. 



Central Banks. The want of a Central Bank for the use of societies 

 either in investing or borrowing was soon felt, for it was clear that 

 some societies will, at various periods, have too much and others too 

 little money, a Central bank would bring about an equilibrium. 

 Moreover, a well-established Central bank would be in a position to 

 borrow funds at cheap rates and thus provide for societies in need. 

 At first three Provincial banks were founded for their respective 

 groups, these again established a Central bank. This plan failed, 

 funds being limited to a credit of 7,500 obtained from a Provincial 

 Hulfskasse (Benefit fund), and the banks were finally closed as 

 contrary to the then law. The shares are personal, and cannot be 

 transferred without the bank's consent. No societies are admitted 

 as members except those which fulfil RAIFFETSEN'S six primary con- 

 ditions, viz. f (1) unlimited liability, (2) the intention of promoting 

 the moral and material welfare of members, (3) the narrowest 

 possible limitation of area, (4) absence of entrance fees, and smalluess 

 of shares, dividends on which must not exceed the interest paid by 

 borrowers, (5) gratuitousness of administration, (6) the accumulation 

 of an inalienable reserve. 



The Central bank, as far as possible, adheres to the same condi- 

 tions; it is, however, formed as an ordinary joint-stock bank limited 

 by shares, and its administration is partly paid; the bulk of 

 the responsible work is, however, undertaken by the committee of 

 supervision, which is wholly unpaid. The shareholders get dividends, 

 but not higher than the rate of interest paid to the bank about 4J 

 per cent. by its borrowing members ; it operates only with its own 

 members. 



In order to procure funds, the Articles provide (1) for the issue 



of debentures (Pfandbriefe) with the permission of Government as 



required by law, (2) for the receipt of deposits from members or the 



'public, (3) for receipt of commission, and of the difference between 



interest paid and received. 



