THE RURAL PROBLEM 83 



co-operative bacon factories when, in 1887, the German 

 ports were closed against the pigs as a precaution against 

 swine fever. The capital for building was obtained from 

 ordinary banks on the joint guarantees of the farmers, who 

 were therefore called upon for no cash subscription. By the 

 rules of the society members are obliged to supply all their 

 pigs to the factory on pain of a fine for each pig they fail 

 to send. They subsequently receive a share of the profits 

 proportionate to the number of pigs sent. 



In England the procedure adopted has not been quite the 

 same, the distributive co-operative movement dealing rather 

 with societies than with individual farmers. Thus the 

 Eastern Counties Farmers' Co-operative Association, for 

 instance, last year supplied 1,294 pigs to industrial co- 

 operative societies and received £6,182 6s. 7d. in return. 



§ 5. Credit Banks. 



A credit bank is a co-operative society usually consisting 

 of persons in a small way of business which obtains advances 

 of capital on the joint security of its members and lends out 

 to them small sums of money from time to time for produc- 

 tive purposes. The question that arises in the formation 

 of such banks is whether the liability of members shall be 

 limited or unlimited, or limited by guarantee. In a small 

 area of, say, one parish it is best for the liability to be 

 unlimited, but the area can be further extended if it is 

 limited by guarantee, and in the case of a whole county 

 it must be limited. In this country credit banks are regis- 

 tered under the Friendly Societies Act of 1896 and the 

 special authority granted by the Treasury in accordance 

 with Section 8 (5) of the Act. A society registered under 

 that authority must have for its object the creation of funds 

 by monthly or other subscriptions, to be lent out to, or 

 invested for, the members of the society, or for their benefit, 

 and must have in its rules provisions that no part of its funds 

 shall be divided by way of profit, bonus, dividend, or other- 

 wise among its members, and that all money lent, to members 

 shall be applied to such purpose as the society or its com- 

 mittee of management may approve. A credit society 

 registered in this way cannot, however, engage in trading 



G 2 



