PROVISION Of BORROWING FACILITIES. 341 



Unions or groups for mutual support, inspection and instruction, and 

 in order to equalise their funds and provide, if necessary, other funds, 

 a Central bank has been started for each Union which receives and 

 distributes the deposits of the societies which form its sole clientele 

 and body of shareholders. These Central banks have wisely provided 

 in their statutes for obtaining funds ab extra, chiefly by the issue of 

 debentures and receipt of deposits, but have not yet had occasion to 

 do so. It is strange if in this organism of village societies, autono- 

 mous and independent, yet, as members of one body, linked to, and 

 supported by, Central directorates and banks, there is not a seed which 

 may take root and grow in Indian soil, as it has done in Germany, 

 Austria and Italy. 



Differences between the Schulze Delitzsch and Raiffeisen Societies. 

 There has been almost, from the first, a regrettable controversy 

 between the two classes of societies, or between their 

 principal men, a controversy amounting almost to party strife, 

 and as unnecessary as bitter, seeing that both classes are indepen- 

 dently useful. It is advisable to mention the points at issue in 

 order to assist the future practice of this country. 



Both philanthropists started with the same idea, viz., that of 

 providing cheap capital for those, who were debarred from it by its 

 enormous cost, cheap credit for those, who were exploited by the usurer, 

 their object was to supplant the individual lender by the organized 

 bank. Both saw clearly that thrift is at the base of any possible 

 system ; only persons who showed themselves able to save were deemed 

 worthy of credit; saving, moreover, as the only basis of capital, 

 is a sine qua non. Here, however, the two systems diverged ; ScHULZl 

 DELITZSCH began to foster thrift by rewarding it with dividends and 

 and profits as high as possible, thus placing the interest of borrowers 

 in opposition to that of lenders ; KAIFFEISEN placed the interests of 

 the borrowers first and allowed no dividends. The difference is 

 considerable, the former tend to become joint-stock societies, in which 

 investments seek high dividends, some societies declaring dividends 

 to memjbers of 30 or even 56 per cent. (WOLFF), a result hardly 

 commensurate with anything but usury; the latter preserve intact 

 the co-operative idea of mutual help, and yet are eminently successful 

 both in attracting abundant deposits at market interest .and in help- 

 ing borrowers, the interest of all members is that of the borrowers, 

 actual or possible, and there is no antagonism between investing and 



