PROVISION OF BORROWING FACILITIES. 423 



The Sub-Committee are of opinion that Unions of the kind 

 recommended by them, should be confined to an area not greater than 

 a district and, where possible, to a local area less than a district. Such 

 Unions where not united with a Central Bank have no need for a 

 financial basis. The costs involved should be defrayed by a levy 

 pro rata on the affiliated societies. They should be managed by a 

 general meeting consisting of one or more delegates from each 

 affiliated society with an executive committee consisting of about five 

 members elected by the delegates. This committee should employ 

 and pay the staff necessary for inspecting the societies and for pro- 

 pagating the principles of co-operation. Ordinarily no society in the 

 local area should be registered by the Registrar unless such registra- 

 tion is recommended by the local Union and the Union should 

 form one of the main channels through which the Registrar 

 exercises his supervision and control of societies. Such Unions 

 should be encouraged to hold local conferences. The name 

 ' Union* should, as far as possible, be confined to such associa- 

 tions and where they are combined with a Central Bank the 

 association should be known as a Central Banking Union. 

 Adherence to these terms will prevent much confusion in 

 reports. 



With regard to Finance the Sub-Committee agree with the finding 

 of the third Conference that Central Banks registered under the Act 

 sliould be organised as Joint Stock Companies with limited liability. 

 The shareholders should be the societies alone and the Central Banks 

 should exist wholly for the benefit of their shareholders and should 

 make loans only to societies which are shareholders. Where however 

 it is impossible owing to the backwardness of the people to obtain 

 the necessary business management, there is no objection in the first 

 instance to admitting a small number of individual shareholders, but 

 loans should not be made to such individuals. At the same time 

 the Sub-Committee recognise- that there may be circumstances which 

 prevent the formation of such Central Banks and in these cases they 

 consider that there is no objection to a society dealing direct with a 

 joinfc stock company willing to finance it. The constitution of such 

 joint stock companies however (if formed for the purpose of 

 financing societies) should be carefully scrutinised by the Registrar 

 before registration to insure that the interests of the borrowing 

 societies are safe-guarded. The majority of the Sub-Committee are 



