PROVISION OF BORROWING FACILITIES. 



be made according to one of the bye-laws of societies. Now societies 

 dislike this bye-law, and they try to disregard it. But after a 

 year or so they commence to appreciate it ; and there are now grounds 

 for hope that the practice of burying metallic money in the ground 

 will gradually disappear. 



The idea of reserve funds is a novel one to the societies ; indeed it 



was novel enough to Central Banks, many of which were eager to 



distribute as much profits in the shape of dividends as quickly as they 



could. The larger the first dividend the better, they thought, was 



the quality of their business and the greater the proof of their success. 



The value of the reserve funds is now more generally appreciated 



simply because enlightenment has come with the co-operative 



movement. Another advance which is remarkable is the change in 



attitude displayed towards borrowing as such. At first Central 



Banks paid far more attention 1o the borrower's credit than to the 



necessity and nature of the purpose for which the loan was required. 



But Central Banks now understand, and so do societies, that 



borrowing except for productive purposes is not calculated to induce 



prosperity and to increase assets. A saner and better use of credit is 



being made. Education in co-operation has had this amongst other 



effects on popular character. In some districts, too, a marked 



decrease in litigation is being attributed by District Judges to the 



spread of the co-operative movement ; and I know that a healthy 



public opinion has appeared in villages in which it had either never 



existed or had been dead or asleep before co-operation commenced. 



It is not in financial statistics alone that the work which is being 



done is to be seen. Yet it cannot be too strongly insisted on that 



vitality depends on successful finance ; not, of course, on the earning 



of large dividends gained by the exploitation of the borrower to his 



detriment, but on the effectiveness of that disciplined organization 



which makes every man feel that he must do his full share of work and 



acquit himself honourably of his duty. Co-operators have asked for and 



have obtained public support. They are trustees for public money, and 



if any of that money is lost, confidence in the movement I will go fur- 



the and say confidence in the future of the country will be shattered. 



I have already referred to our Union of co-operative banki. The 

 objects of this Union are, as stated in its bye-laws : 



(i) to provide a regular and efficient system of supervision, 

 audit and control for all banks and societies enrolled in membership ; 



