WORKING CREDIT FOR FARMERS. 245 



agricultural banks in Ireland and in India, but also the 

 very large business done between German agricultural banks 

 and the great Dresdner Bank, conclusively show. But it 

 is a great mistake to go for advice as to the management 

 of agricultural banks to ordinary bankers, who know, 

 qua bankers, as little about it as does a fiddler about archi- 

 tecture or philosophy. The two different classes of institu- 

 tions were created for essentially different purposes ; they 

 have different sets of customers to deal with ; and different 

 kinds of security to operate with. The ordinary bank is 

 there to earn a profit for its shareholders out of deposited 

 money belonging to others. The co-operative bank must 

 of course keep on the right side in its reckoning, but it 

 distinctly must not make a profit, or as little of such as can 

 be, beyond what is necessary to enable it to accumulate 

 a sufficient reserve fund and provide for contingencies. It 

 is there to provide credit for its members at the lowest 

 possible cost of production. If it makes a profit, that shows 

 that it is overcharging ; and its first care must in that case 

 be to reduce its charges — except where a special effort is 

 deemed advisable as a means of rapidly building up a sub- 

 stantial reserve fund. The ordinary bank shapes its terms 

 of credit to suit itself. The co-operative credit society 

 has as much as possible to adapt its practice to its members' 

 requirements, that is, it has to give credit under circum- 

 stances and for periods that would not suit an ordinary bank. 

 The ordinary bank takes as security for a loan or an over- 

 draft some readily realisable effects, or else a lien upon 

 some saleable object, or else, once more, suretyship from 

 substantial backers. The co-operative bank, so far as it 

 is agricultural, has practically neither the first nor the 

 second of these convenient forms of security at its com- 

 mand, at any rate exclusively for its purpose. The two 

 institutions move on different planes, like two planets 

 revolving in distinct orbits, and for that reason have to 

 employ different methods and aim at different objects. 



The one common feature of the two classes of banks is 

 that they must have security of some sort — such as is 

 available — for the credit which they give. However, 



