PROVISION OF BORROWING FACILITIES. 445 



Governments and of the experience already gained in the provinces 

 referred to above. The report of the Committee was laid before 

 Parliament. It was now apparent that no real advance was possible 

 without legislation, the elaborate provisions of the Companies Act 

 being wholly unsuited to societies of the kind in question. Legislation 

 was therefore undertaken with the object, firstly, of taking such 

 societies out of the operation of the general law and substituting 

 provisions specially adapted to their constitution and objects, secondly, 

 of conferring upon them special privileges and facilities, so as to 

 encourage their formation and assist their operations, and, thirdly, 

 as a necessary corollary, of taking precautions against the improper 

 utilisation by speculators and capitalists of privileges not intended 

 for them. 



Legislation. A Co-operative Credit Societies Bill was accordingly 

 introduced in the Governor-General's Legislative Council in October 

 1903, and passed into law as Act 10 of 1904. In view of the wide 

 diversity of conditions in India, and the experimental nature of the 

 measure, simplicity and elaxticily were kept in view as cardinal points. 

 Broad principles were laid down, and certain precautions insisted on, 

 subject to which, and to rules to be made by local Governments, in 

 the same spirit, in accordance with local needs, the people were to be 

 left to work out their salvation on their own lines, the function of 

 Government being confined to sympathy, assistance and advice. The 

 object of the Act, as stated in its preamble, was " to encourage 

 thrift, self-help, and co-operation among agriculturists, artisans, 

 and persons of limited means. ' Local Governments were em- 

 powered to appoint provincial Registrars of Co-operative Credit 

 Societies, whose duty it would be to scrutinise applications for 

 registration under the Act. Subject to the provision that any 

 association of not less than 10 persons might be registered by the 

 special order of a local Government, the Act laid down that a society 

 should consist of persons residing in the same town or village or the 

 same group of villages, or, subject to the sanction of the Registrar, of 

 members of the same tribe, class or caste. Societies were classed as 

 " rufal " or " urban ", and it was laid down that four-fifths of the 

 members must be, in the first case, agriculturists, and in the second, 

 non-agriculturists. In the case of rural societies the liabHity of 

 members was to be unlimited, unless a departure from this rule were 

 specially sanctioned by the local Government ; in the case of urban 



