PROVISION OF BORROWING FACILITIES. 347 



same fifty subscribe, but in drawing for the pool previous winners are 

 excluded ; this continues for the whole fifty months till each subscriber 

 has received Rs. 50. This practice a necessary system where there 

 is no such thing as even a Savings Bank, and where deliberate hoard- 

 ing for many months or years is a most difficult operation gives men the 

 use in lump of a considerable capital, repayable by small and easy 

 instalments ; it is most useful for building houses, starting a shop, 

 buying a pair of cattle or piece of land, &c.; it is clearly the result of 

 the village self-contained system in a country devoid of banks and 

 communications, and where permanent emigration, even to other 

 districts or villages, was still of late perfectly unknown. It is said 

 that, whether from honesty or fear of the consequences, the system 

 is never abused by winners prematurely withdrawing from subscrip- 

 tion. It will be observed that there is nothing of a lottery in this 

 proceeding ; the element of chance appears only in the order in which 

 the subscribers obtain the pool ; every subscriber obtains it in turn, 

 it is not a gambling transaction in which one person obtains a given 

 sum by mere chance to the loss of others ; it is no more a gamble than 

 the drawings by which in England, as in Europe, it is decided what 

 particular debentures shall be paid off. 



A further development, however, is next found ; the subscribing 

 members, or more usually the promoters of the Fund, desire to obtain 

 definite and increased profits for themselves, drawn from the need of 

 the subscribers ; instead, therefore, of drawing for the pool, it is put 

 up to auction in lump or in lot ; the lowest bidder takes the amount, 

 that is, the one who bids the lowest sum below Rs. 50, say 40, obtains 

 only that sum, but gives a chit or promissory note for Rs. 50, the 

 difference, Rs. 1 0, is divided as profits among the other members. 

 This is similar to the Building Societies system, where loans are 

 knocked down at auction to the man who bids the highest interest, 

 or the largest premium ; in both cases it is apt to become an exploita- 

 tion of need or of recklessness, the man most in need of money has 

 to pay as high as possible for the accommodation. It has been 

 common in India, as elsewhere, to get up societies for the sole purpose 

 of providing the promoters with a living ; the so-called "directors" 

 get together the subscribers, and withhold Rs. 2 in every 50 rupees 

 as their own remuneration; these are not regular village or communal 

 institutions but outside speculations : in some cases, the borrowers 

 consequently defrauded the promoters by refusing payment, knowing- 



