[Extracts from the Proceedings of the Fifth Conference of Registrars 

 of Co-operative Credit Societies, 1911J] 



FINANCE AND CONTROL OF CO-OPERATIVE CREDIT SOCIETIES. 



The Committee commenced with a consideration of the Neuweid 

 model of Union and Central Bank. The Central Bank in Neuweid 

 is a Joint Stock Company based on limited liability, which derives 

 its strength from the village societies, which are shareholders. It 

 operates only within the area of the Union which works along with 

 it and it is intended to serve as a common cash box equalising excess 

 and want : the dividend on capital is limited to 3J per cent., and all 

 surplus is carried to Reserve. It has the privilege of obtaining 

 advances from the Prussian State Bank. It lends direct to societies 

 at 3i per cent, and allows 3J per cent, on deposits. It has associated 

 with it 13 provincial branch banks. It deals only with societies 

 and only societies, can be shareholders. The Board of Directors is 

 appointed by the delegates representing each society holding shares. 

 Business is done mainly by means of cash credits with societies. 



The societies have formed themselves into Unions, the object of 

 which is to create by co-operation greater confidence. The Union is 

 confined to a Circle equal perhaps to an area of 4 or 5 districts in this 

 country. The object of the Union is to take common counsel, to 

 discuss questions of cemmon interest, to teach co-operative principles 

 and keep them pure, and to affix a hall mark on affiliated societies, 

 which adds much to the confidence felt by the public. Bad banks 

 are excluded and the general standard is raised. The Unions are 

 divided into sections (or sub-union sections) dealing with small areas, 

 each with its own committee and these sections inspect the societies 

 within them on behalf of the Union. Each section employs an 

 inspector and the area is not larger than such an inspector can 

 personally control. The section charges a fee for each inspection to 

 defray the expenses. The German Law, like the Indian, compels 

 societies to submit to inspection, but the law permits inspection by 

 officers appointed by recognised bodies of which the Union is oue. 



Where the societies have a Central Bank of their own, i.e., a 

 Central Bank in which they themselves hold all the shares, the 

 delegate to the Central Bank and the delegate to the Union are 



