WORKING CREDIT FOR FAR^MERS. 247 



trading community, who are thus directly interested in the 

 integrity, prudence and success of each other. It rarely indeed, 

 if ever, happens that banks suffer loss by small cash accounts." 



The Scotch banks practising cash credit do not tie them- 

 selves down to fixed mechanical rules. They estimate the 

 credit (or repaying) value of their borrowers, and according 

 to their valuation of them they require few or more sureties, 

 one or two, or as many as ten. 



Scotch Cash credit has proved a magnificent success. 

 It has made banking common in its own country, raised 

 Scotch banks to their present high position, made them 

 considerably more liberal in their grantings of credit in small 

 sums than their sister institutions on this side of the Tweed, 

 and set a most valuable example to the entire world, by 

 making personal credit, which is now the driving wheel of 

 all business, available for business transactions. However, 

 it is not nearly popular enough for our purpose. We have 

 to dive very much lower than the overdraft for £500 or 

 £2,000, which Scotch Cash credit allows — very few under 

 £200 and none under £50 — and the method of overdrafts 

 does not, as already pointed out, in the great majority of 

 cases that we have to consider, constitute the most advis- 

 able form of credit. Also, we require some further security 

 for repayment. 



That security is the pledging of the employment of the 

 loan itself. In some instances, among the wealthier persons 

 to be catered for, who command a fairly steady flow of 

 business, overdrafts may be permissible. But as a common 

 rule the loan will have to be granted for some distinct 

 purpose commending itself to the lending institution as 

 promising a certain profit or economy, so as to repay itself 

 " with usury," out of its own employment. And to that 

 employment the borrower wants to be rigidly tied down. 



Now here it is that the liability commonly termed " un- 

 limited " comes in, not as a source of danger, but, on the 

 contrary, as an element of strength. It may readily be 

 admitted that in a good many co-operative banks — ^however, 

 only in Germany and Austria — unlimited liability is freely 

 imposed, where it is by no means necessary — for an entirely 



