TRANSACTIONS OF SECTION F. 685 



be got rid of and the principle of common service must be substituted. Sixty 

 years' experience in hundreds of co-operative banks abroad, however, shows that 

 this can be done with excellent effect. It has also shown that ordinary bankers, 

 having advisedly given up this particular province of business, have nothing to 

 apprehend from co-operative banks. The organisation of co-operative banks was 

 explained. It was shown that they do not stand in need of a large share capital, 

 but can very well attract the requisite funds by good business methods, so as to 

 be able to boast that they send no legitimate claimant empty away. As an instance, 

 the case of the Banque Populaire of Mentone was cited. Concluding remarks 

 reviewed the applicability of the system to the circumstances of this country. 



6. A Note on the Social Interest in Banking. By F. Lavington. 



In a modern industrial society dispensation from a central controlling authority 

 is obtained by the operation of the principles of specialisation and exchange, which 

 serve to reconcile, in part, the interests of the individual and the group by making 

 the earnings of the one dependent upon his service to the other. The reconciliation 

 is complete only where — 



(1) Competition operates freely. 



(2) In the adjustment of resources returns are maximised over a long period, 

 so that the good and evil in the methods employed do not fall outside the period 

 considered. 



(3) The organisation evolved does not contain defects which competition does 

 not tend to eradicate. 



It is maintained that the high social cost of the two banking services — the 

 transport of capital and the provision of currency — do not imply the existence 

 of monopoly power, and that the far-seeing policy of the banks involves no 

 social evils in its application. 



The type of organisation contains the defect of rigidity which tends against 

 the ideal distribution of capital, partially excluding certain classes from its use. 

 It is however well suited to provide a currency, and is adapted to undertake a 

 currency policy which would restrict fluctuations in general prices. 



The inquiry of supreme interest — that of measuring the divergence between 

 the directions of self-interest and social material welfare — goes to show that 

 there is in banking an exceptionally close parallelism between the two. 



MONDAY, SEPTEMBER 5. 

 The following Papers were read : — 



1. The Fundamental Implications of Conflicting Systems of Public Aid. 

 By Professor S. J. Chapman, M.A., MCom. 



Two systems are sometimes contrasted : (a) that of distribution of relief 

 according to desert and (6) that of distribution of relief according to economic 

 and social need. This contrast does not, however, lie at the root of the present 

 controversy. There are two schools of thinkers among those who accept the second 

 system, and the dividing line between these schools is determined by particular 

 beliefs or expectations with reference (1) to the nature and magnitude of the social 

 reactions which would follow the pursuit of different policies in the dispensation of 

 public aid and (2) to the desirability or otherwise of these reactions. It is the 

 existence of these divergent beliefs or expectations which has caused disagreement 

 to define itself in relation to what might be termed the three principles of (a) defer- 

 ment, (fi) less eligibility, and (7) the unity of the family. The policy recommended 

 by those who are most apprehensive about these reactions involves hardship to 

 gome persons who aTe reduced to distress, but this hardship they hope to minimise 

 1910, Y Y 



