PROVISION OF BORROWING FACILITIES. 



borrowing members. It must be remembered that RAIFFEISEN aimed 

 directly not at the mere material benefits of association, but at its 

 moral and educative results; thrift was to be promoted not so much to 

 make a man wealthy as to make him a better moral agent, a better 

 member of society : he regarded mutual help, the bond of Christian 

 charity, as the cardinal principle, and the necessary result of his 

 system ; SCHULZE DELITZSCH looked more to the material, RAIFFEISEN 

 to the moral and social, results ; the former used association to enable 

 the individual to struggle to the front, the latter used the co-opera- 

 tive principle not merely for the individual, but as a beneficent method 

 of increasing the common happiness and welfare. This difference is 

 important, since the desire for dividends leads to speculation for the 

 purpose of increasing profits, especially where directors are rewarded 

 by a percentage. In Madras the Co-operative Funds tend too much to 

 diverge from the co-operative idea of brotherly help, towards that of 

 profits upon investments or as a reward for management. The true co- 

 operative principle worked out in banks is, according to SIGNOR 

 LUZZATTI'S idea, "a bank with fixed dividends on its shares and deposits, 

 all surplus profits going to the reserve ; when the latter shall be equal 

 to twice the capital, the shares are repaid, and all subsequent profits 

 are expended in philanthropic or useful objects." (ROSTAND) The 

 external profit in this case is that derived by the borrowers from the 

 cheap and accessible capital which they borrow for productive or 

 useful purposes, the investors, at the same time, get a fixed dividend 

 of interest which is usually somewhat above that of State paper. 

 The corollary of these views is, in the Schulze Delitzsch societies, 

 comparatively large shares with considerable dividends and paid 

 administration ; in the Raiffeisen societies very minute shares and 

 then only in obedience to the law and no dividends but an inalien- 

 able reserve, and wholly gratuitous administration except as regards 

 the clerks. 



SCHULZE DELITZSCH, again, started his societies at any given centre 

 with a wholly indefinite area of operation, the larger the area, the 

 better the chance of paying business. RAIFFEISEN, on the contrary, 

 lays down as an absolute rule that the area of operation must 

 be small, never exceeding that of a village. The difference here 

 is radical ; in the former societies it is far less possible to know, 

 much less to influence, the members individually, to judge of their 

 character and status, to supervise the employment of the loan ; in the 



