AGRICULTURAL CREDIT. DAVIDSON. 473 



the principle of self-help productive as well as provident. They 

 are not mere savings banks instituted to encourage habits of 

 thrift; they endeavour to supply credit to their members. This 

 they do by one of two methods. They may issue shares of small 

 amounts to form a capital of guarantee and then borrow on the 

 security of this capital and lend out to their members. This first 

 class is co-operative in character, but they often manage to com- 

 bine co-operation with high dividends on shares, and the dividend 

 earning instinct may influence their business to a greater extent 

 than their co-operative principle. These are known as the 

 Schulze Delitsch banks, after their founder, and are mainly 

 industrial in character. They have not been found peculiarly 

 well adapted to agriculture. The other type is peculiarly suited 

 for the needs of small farmers and cultivators, and the}' do a 

 very large and a very safe business. They are entirely co-oper- 

 ative in character, and are almost invariably managed by an 

 unsalaried committee, and confine their operations to a very small 

 area, such as the parish. They borrow the money they lend 

 again to their members; but this money is not secured by any 

 capital of guarantee. The members are jointly and severally 

 liable to an unlimited extent for what they borrow to lend again. 

 To put the matter in another way, they borrow on a joint note, 

 to which every member is a party, and the money so obtained 

 is loaned out to individual members. This unlimited liability 

 makes members very careful about the character of those admit- 

 ted or retained, as a man is careful about the character of a man 

 whose paper he endorses. The loans are made for specfic pur- 

 poses to individuals known to the committee who are able to 

 ascertain whether the loan is applied to the purpose for which it 

 was borrowed. As there are no expenses of management worth 

 mentioning, the bank is able to lend to its members at a very 

 small advance on what it pays, and every member shares in the 

 joint credit of all, and the system has been well characterized as 

 the capitalization of character and honesty. The system is well 

 developed and it has not resulted in loss. Not a penny has been 

 lost to any one in all the forty-seven years' experience of these 

 PROC. & TRANS. N. S. INST. Sci., VOL. X. TRANS.--GG. 



