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the rules promulgated by Government — will undoubtedly 

 invest money in the banks if they can be sure of getting the 

 principal back with 4 per cent, interest, with the further 

 chance of the interest being increased to 6 per cent. The 

 people in the rural tracts, who are solely guided by popular 

 report and tradition, will, there is little reason to doubt, 

 likewise commence to invest in these banks, and, if once their 

 natural timidity is overcome, and they are made to see that 

 the principal, at least, is quite safe, the investments are likely 

 to increase very rapidly. There are indications in the deve- 

 lopment of what are called ' funds ' or benefit societies, that 

 the people in many parts of the country are feeling the neces- 

 sity for the establishment of such associations. There are 

 123 such associations with a nominal capital of 2 "204 crores 

 of rupees and a paid up capital of 78*2 lakhs registered under 

 the Joint Stock Companies' Act in this presidency. Besides 

 these, there are large numbers of ' chit funds,' which are re- 

 gistered under the Registration Act without being registered 

 under the Joint Stock Companies' Act, and a great many 

 others which are not registered under either enactment. In 

 the Sub-Registrar's ofiice at Kasargdd, in the district of South 

 Canara, I found that the agreements of 16 such associations 

 were registered in a single year, viz., 1891, the total number 

 of members being 204. The arrangements made are gener- 

 ally of the following description. A number of persons, say 

 16, agree to contribute annually Rs. 100 each, on a fixed 

 date, and the sum collected in the first year, Rs. 1,600, is 

 made over to one of them, who is appointed manager of the 

 concern and is required to give security for the due account- 

 ing of the moneys received by him and for ensuring payment 

 of his contributions regularly during the remaining 15 years. 

 As regards the money collected in the second year, lots are 

 drawn as to which of the remaining 15 persons is to have it, 

 and the process is repeated every succeeding year till every 

 one of the members has obtained a full year's contribution. 

 The members who get the use of the money during the early 

 years of the period for which the agreement is to last are, 

 of course, the most lucky, and the man who gets it last gets 

 back barely the sum subscribed by him without any interest. 

 Nevertheless, these arrangements are extensively resorted to, 

 as it makes people subscribe from time to time small sums, 

 which, if retained by themselves, might be frittered away, in 

 the hope that they may receive a lump sum after an interval, 

 even though the interval should be one of 16 years. Another 

 method of nianaging this business is to put up the sum 

 collected annually to Dutch auction, and hand over to the 



