Miscellaneous. 



332 



[Oct. 1906. 



literate cultivator was appointed to keep the accounts, the result has usually been 

 confusion. With the best of good will, the accountant-agriculturist has not been 

 a success. 



In the rules, again, the village societies have found a stumbling-block. The 

 ordinary village member looks upon them in much the same light as the Penal Code, 

 and lives in constant dread of trouble in case of breach of their conditions. The 

 experience gained goes to show that rules should be reduced to the minimum 

 consistent with statutory requirements, and that much, which was originally 

 provided for by rule, should be left either to the by-laws or to the discretion of the 

 punchayat. This view has been accepted by the Government of India. 



Besides the difficulties mentioned in connection with the recruitment of 

 members, and the rules and forms of account, there has been in the raising of capital 

 a further serious impediment to the success of the banks. The working capital of 

 the societies was raised in three ways. Commonly it was collected by subscription at 

 rates of interest very much below the market rate, from interested landholders and 

 other native gentlemen. It was in certain instances advanced by Government, also 

 at low rates of interest. In some cases a portion was raised from deposits by the 

 members of the Society. In almost all cases the amount of capital supplied was 

 insufficient for the requirements of the members. It has also been inelastic. There 

 was no method in vogue whereby the capital of a village society could be readily 

 expanded or contracted in accordance with the fluctuating requirements of the 

 members. If more capital than that at present in the hands of a village society is 

 necessary, it can only be obtained at the same rate of interest as that paid on the 

 initial capital by the exercise of official pressure, express or implied, and this, as may 

 be readily understood, forms a serious obstacle to expansion. At the same time the 

 local societies, having enjoyed the advantage of the capital at a very low rate, are 

 not willing to pay the increased rate necessary to attract the money of the ordinary 

 investor. It would entail payment by the members of a higher rate of interest than 

 that which they now pay on loans from the Society, and they feel, unreasonably, no 

 doubt, but still naturally, that it is a breach of faith on the part of the punchayat to 

 charge them two pies in the rupee for accommodation which has hitherto been 

 provided at one pie and a half. 



It is, of course, highly desirable that, as far as possible, the village societies 

 should work on capital provided in the village from the members' hoards. That 

 this will in time be the main source of capital cannot be doubted. Experience 

 in certain districts leads to this inevitable conclusion. In most districts, however, 

 there is a distinct aversion to making deposits. The societies are looked upon as 

 a freak of Government, and are not generally regarded as in any sense permanent, 

 or as suitable places in which to deposit money. The investor of the towns has 

 not been attracted. It is not possible that under present conditions he should be. 

 The security of the village societies is not known to him ; of their very existence 

 he is probably in ignorance. It is, however, eminently necessary that the village 

 societies should be brought into touch with the world of finance, if they are to be 

 of general utility. Whatever scheme is adopted must contain, as essential features, 

 the existence of a headquarters organisation which is in a position to deal with 

 the large capitalists and the joint-stock banks upon a business-like method, in 

 which it is realized that elemosynary contributions at low rates of interest must, 

 in the nature of the case, be strictly limited in amount, and that practically un- 

 limited capital can be obtained if the business of the societies is sound and they 

 are willing to pay a fair rate of interest for the capital required. The existing 

 organisation societies do not meet the needs of the case. They consist of landlords 

 and others, who have subscribed certain amounts in order to finance the existing 

 societies. They look upon these subscriptions as of a semi-charitable nature, 



