July, 1009.] 



67 



Miscellaneous* 



character do not necessarily constitute 

 a sufficiently acceptable security for an 

 advance. It is such persons that a 

 Credit Bank is intended to benefit. 



A Credit Bank, however, is not a 

 philanthropic institution, but a society 

 based and conducted strictly upon 

 business principles. The distinctive 

 features of a Credit Bank are : — 



(i) It is co-operative — its key-note 



being "Self-help." 



(ii) It is local— its members living with- 



in a small area and being well 

 known to one another. 

 These two features will become clearer 

 when we proceed to consider its 



Constitution and Operations. 



The village or parish is the most con- 

 venient unit of area for a Credit Bank. 

 The intending members form themselves 

 into a society which adopts rules and is 

 duly registered by the Registrar of 

 Friendly Societies. 



Full information as to the proper 

 procedure can be obtained from the 

 Chief Registrar of Friendly Societies, 

 28, Abingdon Street, Westminster, S.W. 

 The Secretary of the Agricultural 

 Organisation Society, Dacre House, 

 Dacre Street, Westminster, S.W., will 

 also supply model rules on application, 

 and is willing to conduct the necessary 

 proceedings as to registration. 



The Credit Bank appoints its officers 

 and committee of management, and, as 

 soon as it is properly constituted and 

 registered, is in a position to borrow 

 money on the joint security of its 

 members. This money it lends out to 

 those of its members who are at the 

 moment in need of ready money. 



Credit Banks do not distribute divi- 

 dends, and, the expenses of management 

 being very small, money cau be lent at a 

 low rate of interest, and this is the maiu 

 object for which the Bank is formed. 



The wisdom of borrowing, it has beeu 

 stated, depends upon the purpose for 

 which the money is borrowed. The 

 Credit Bank will onlp lend money for 

 purposes of production or economy. 

 This, however, allows it a wide field of 

 action. To give but a few examples of 

 the useful objects for which money 

 might be advauced there may be 

 mentioned the purchase of imple- 

 ments, seeds, manure, poaltry> 

 or the erection of a fowl-house, green- 

 house, or pigstye. A member who 

 wishes to borrow mouey must state 

 the purpose for which he requires it, 

 and must undertake to apply it to that 

 particular purpose. It will then be 

 within the discretion of the Committee 



to decide whether the loan shall be 

 granted or not. 



A Credit Bank can only lend to its 

 own members, and its success will de- 

 pend upon its admitting as members 

 only those whose industry, honesty, and 

 integrity are beyond question. A man 

 who possesses these qualities should 

 have no difficulty in becoming a member 

 of a Credit Bank, or in obtaining from 

 it an advance of money for any useful 

 and productive purpose. The Bank will, 

 however, require him to furnish sureties 

 for its repayment. 



There can be no more thoroughly 

 democratic institution than a Credit 

 Bank. It elects its officers and commit- 

 tee to manage its affairs, but the action 

 of these officers will be subject to vigi- 

 lant checking, and it will be to the 

 interest of every member to see that 

 the character of the membership is strict- 

 ly maintained, and that the affairs of 

 the Bank are conducted in an efficient 

 and businesslike manner. 



The interest in good management will 

 be the more vital because a Credit Bank 

 of this type must necessarily be con- 

 ducted upon the priucipal of the 



Unlimited Liability 



of its members for the money raised 

 by the Society. 



Lest this should cause any misgiviugs 

 as to any risk incurred by the individual 

 members, it should be pointed out that 

 the risk may be most eff ectually guarded 

 against. The possibility of loss is in any 

 case very remote owing to the effectual 

 control which the members can exercise 

 over all transactions of the Bank, and 

 it is reduced to practically nothing by 

 adopting a rule limiting the amount of 

 mouey that can be lent either in all or 

 to any one member each year. Section 

 46 of the Friendly Societies' Act provides 

 that a Society shall not make any loan 

 to a member on personal security beyond 

 the amount fixed by the rules, or make 

 any loan which together with any 

 money owing by a member to a society 

 exceeds £50. 



On the other hand, it is just the secu- 

 rity of such unlimited liability which 

 enables the society to borrow money 

 without trouble on advantageous terms. 



How very remote the risk of loss really 

 is may be judged from the fact that in 

 Germany, where there are between 4,000 

 and 5,000 societies of the Riiffeiseti 

 Union proper, in addition to a much 

 larger number similarly organize 1, it is 

 said that no depositor or other creditor 

 has lost a farthing since the movement 

 was started in 1819. 



