Agricultural Finance & Go-operation. 438 



[May, 1912. 



limited by guarantee, as it is called) ; 

 but no society has yet been formed on 

 this basis, and all the existing societies 

 have adopted a rule to the following 

 effect :— 



" Every member of the Society shall 

 be equally with every other member, 

 jointly and severally liable for all debts 

 incurred by the Society, and for any 

 loan which a member or his sureties 

 may fail to pay." 



Thus in all existing societies the liabi- 

 lity of each and all of the members for 

 the debts due by the society is unlimited, 

 and the ultimate security offered by the 

 society for advances made to it is the 

 total property of all its members put 

 together. 



A society registered under the Friend- 

 ly Societies Act has to submit its rules 

 to the Chief Registrar, whose duty it is 

 to satisfy himself that they are not con- 

 trary to the Act. Most of these societies 

 have adopted the model rules recom- 

 mended by the Agricultural Organisa- 

 tion Society, to which all but two of 

 them are affiliated, and the others have 

 rules which are in all important respects 

 similar ; so that regarding all of them 

 it may be said that, besides the principle 

 of unlimited liability, they have the 

 following features in common. 



No one can be admitted as a member 

 unless he lives within a certain circum- 

 scribed area, such as a parish, or two or 

 more adjoining parishes, and so is per- 

 sonally known to most of his fellow- 

 members. He must also be approved by 

 the committee as a man of good charac- 

 ter, worthy of admission to the society. 

 All the members have an equal voice 

 in the election of the committee and the 

 management of the society. 



Loans are granted only on approved 

 security, and must be utilised only for 

 a specified purpose, which in the opinion 

 of the committee, is such that there is 

 a sufficient prospect of the loan repay- 

 ing itself by the production, business, 

 or economy which it will enable the bor- 

 rower to effect. No member can have 

 out on loan more than £50 altogether at 



any time, though he can, of course, 

 repay one loan and afterwards take out 

 another, not exceeding £50. 



The society may receive deposits, 

 either from members or non-members, 

 and may pay interest on them. 



No profit may be divided among the 

 members of the society. All profits 

 must be carried to a reserve fund, which 

 can only be drawn upon to meet excep- 

 tional losses by resolution of the general 

 meeting of the society. Even if the 

 society is dissolved, this reserve fund 

 cannot be divided among the members, 

 but must be spent on some useful pur- 

 pose in the parish. Thus the only pecun- 

 iary benefit a man may expect to gain 

 by becoming a member of such a society 

 is that of obtaining loans for profitable 

 purposes connected with agriculture at 

 a low rate of interest ; and if a man is 

 unlikely himself ever to require such a 

 loan, his motive for joining as member 

 can only be to help on a beneficial move- 

 ment, and to assist his neighbours, by 

 his guarantee and guidance, to get small 

 loans on advantageous terms. 



The accounts of the society, with the 

 exception of those relating to individual 

 loans and deposits, are open to the ins- 

 pection of all interested in the funds. 

 They must be audited annually and 

 submitted to the Chief Registrar, and a 

 copy of the annual balance-sheet must 

 be conspicuously displayed for the infor- 

 mation of all concerned. 



At the end of 1910 there were in 

 Englandjand Wales 40 registered socie- 

 ties of the above type, scattered over 

 twenty counties. Six of these were 

 registered in 1895 and 1896, seven were 

 registered in the three years 1904 to 1907, 

 and in the last three years the numbers 

 registered have been respectively seven, 

 ten, and ten, so that the movement has 

 recently shown signs of more rapid 

 development. 



Of these 40 societies, nine either sent 

 in no returns or reported that they had 

 as yet done no business. According to 

 the annual returns for the year 1910, sub- 

 mitted to the Chief Registrar by the 



