Oct. 1906.] 



831 



Miscellaneous. 



duty of supervision by Supervisors (girdawars) and with powers strictly limited by 

 rule. The rules provided for the details of working and prescribed (inter alia) the 

 terms for and on which loans might be granted, the purposes for which they might 

 be taken, the rate of interest which they should carry, and the rate which the bank 

 should pay on the money borrowed by it. 



Of the banks then constituted, about one-third have survived as working 

 bodies, the remainder being either moribund or dead. It is the purpose of this 

 article to examine the causes which have led to the failure of so many of the institu- 

 tions, and to describe the steps which have been taken to avoid these causes in the 

 societies Avhich have been reconstituted, and in those new ones which have sprung 

 up during the course of the last twelve months. 



The majority of the societies had no chance of success from the outset, and 

 it is a testimony to the soundness of co-operative principles that so many successful 

 societies are now at work. The inception of the co-operative movement in these 

 provinces lay not with the people but with Government, and the formation of village 

 banks was a direct consequence of Government orders. Neither the officials nor the 

 landlords by whose action the banks were opened, nor the members of whom they 

 were composed, had any intimate knowledge or any practical experience of the 

 principles of co-operative effort. It is a first essential to the success of co-operation 

 that the members of a society should act voluntarily, and that each member should 

 have confidence in the rectitude and honesty of those with whom he associates and 

 for whose debts he takes upon himself the responsibility. At the outset of the 

 movement there was in most cases no question of voluntary membership. Cultivators 

 became members, not with any intention of contributing to a joint fund and enjoying 

 the benefits which such a fund would confer, —not with any idea of combination in 

 order to obtain credit at more favourable rates than are usually granted to the 

 individual cultivator, — but partly on account of pressure brought to bear by the 

 official or the landlord, and partly in the hope that, in virtue of the payment of a 

 four-anna entrance fee, each member would be entitled to unlimited credit at a 

 favourable rate of interest. The capital provided was not sufficient for the needs of 

 all the members, and the majority of the societies contained a number of high-caste 

 cultivators who obtained favourable consideration at the hands of the punchayat, 

 and being held more reliable than their low-caste fellow-members, were granted 

 loans out of proportion to their number. These loans there was every temptation 

 not to repay, as common justice demanded that on repayment the money should be 

 lent to some other member, who had not in the first instance received any benefit. 

 The punchayat, consisting of members of various castes, and the members themselves 

 in many cases recruited from almost every caste in the village to which the oper- 

 ations of the society extended, were unable to bring effective pressure to bear, loans 

 were not recovered, interest was allowed to run on, and finally the bank died a not 

 unnatural death. Such is the life history of many of the societies which were 

 founded in 1901. 



A further cause of failure has lain in the rules and accounts, which were 

 framed for the assistance and guidance of the banks. It has to be borne in mind 

 that in the majority of cases the banks were founded in villages were no professional 

 assistance in account-keeping could be obtained. The person, to whom this duty was 

 confided was as a rule the sub-agent of a zamiudar, or the clerk of a Court of Wards' 

 Estate. They did not understand the method laid down for account keeping, and in 

 many cases were most unwilling servants of the Society. Their labours were 

 gratuitous, and from the existence of the Society they personally could draw no profit. 

 It was consequently to their advantage that the Society should cease its operations. 

 Where semi-professional assistance of this description was not available, and a 



