350 PROVISION OF BORROWING FACILITIES. 



Doubtless many of these were the irregular and often fraudulent 

 Benefit and Insurance Societies described in the papers read in 

 Government Order No. 3368 Judicial of the 7th December 1885, 

 where one person is mentioned as "director" of six Funds, though he 

 had been "at least thrice punished for theft, misappropriation, &c." ; 

 another was a petition-writer, and so on ; these were started, received 

 subscriptions and disappeared, the "benefit" being only to the promoters. 



For the present study the winding up reports of 70 regular Loan 

 funds taken at random from the registrar's records have been 

 analysed ; 42 fell because of the failure of subscribers, especially 

 those who had borrowed, to pay their dues, probably owing to laxity 

 and mismanagement ; 9 fell because of the misconduct or 

 fraud of the secretary or other officers ; 9 simply decayed, 

 getting no business ; the rest from various causes ; natural 

 expiry being the reason in only 3 cases. Abuse of powers and 

 embezzlement by the secretary, absolute negligence by directors of 

 the rules of the society and of business methods, disregard by 

 directors of the share-holders, the falsification of accounts and records, 

 dishonest withholding of repayments by borrowers, and negligence 

 in subscription by non-borrowing members, are the chief features of 

 these reports. 



The notorious case of a certain "Bank" quite recently started 

 under most excellent auspices in Madras is well known ; the rules 

 provided especially for audit, and yet the funds disappeared almost, 

 from the beginning ; the resolutions of the general meetings and the 

 petitions put into Court and the proceedings in Court disclose 

 extraordinary laxity and negligence. 



The history is very instructive ; it shows that, in the infancy of 

 a movement, the energy, devotion, zeal and honour of the early 

 promoters may suffice to thoroughly establish a paying business on 

 just and honourable principles ; that success means ready imitation ; 

 that in the imitations and even in the originals there is no intrinsic 

 guarantee that the high principles of the original promoters will be 

 sustained ; that if the principle o$."laisserfaire" be allowed free 

 course amidst a needy population, much too ignorant of business 

 to be able to guard their own interests, that principle will be abused ; 

 that the mere fact of laws, even if suitable, being in existence, is 

 insufficient, unless there is a specific authority whose special duty it 

 is to work or supervise the working of those laws. 



