422 PROVISION OF BORROWING FACILITIES. 





frequently one and the same person and consequently the two bodies 

 really become closely connected. The Central Bank fully understands 

 the value of the Union's inspection and in all its transactions trusts 

 implicitly to it. There are cases where the Central Bank is an 

 outside body, but there too the value of the Union's hall mark is 

 appreciated and the Central Bank lends almost entirely on the Union's 

 recommendation. The Union itself, however, has 110 financial 

 constitution, nor does it guarantee the financial transactions of any 

 society. 



The Sub-Committee are of opinion that the two questions 

 (a) Finance, (b) Control and Supervision, should be separately dealt 

 with. With regard to Control they are of opinion that if the 

 movement is to be made a success, the societies must co-operate with 

 each other for their mutual benefit in the same way as individuals 

 co-operate in societies. The object of such co-operation will be to take 

 common counsel, to discuss questions of common interest, to teach 

 co-operative principles, and so to maintain these principles pure in the 

 affiliated societies that the fact that societies belong to the federation 

 will affix to them a hall mark of sound co-operation. To accomplish 

 this end the societies must submit to an inspection of their accounts 

 and working by the representative body. 



The Sub-Committee are further of opinion that this body may 

 without objection be united with a Central Bank provided the share- 

 holders of this bank are the societies themselves, and they are 

 inclined to agree that this principle should be followed even where 

 a few individual shareholders are introduced into the Central Bank 

 with the object of securing better management. Where, however, 

 the Central Bank is a joint stock concern, the shareholders of which 

 are individuals and not societies, or in which the individual share- 

 holders predominate, there should be a Union of societies distinct 

 from the Central Bank. Several members of the Sub-Committee 

 expressed the opinion that the Union as such should have no 

 financial constitution and should not make itself responsible in 

 any way for the debts of affiliated societies ; but inasmuch as three 

 provinces Madras, Central Provinces, and Burma have organised 

 Unions which do not finance but yet guarantee, they consider that 

 it would be well to await the reports of these provinces on the 

 working of Unions of this kind during the next year before passing 

 any definite opinion on the subject. 



