Nov. 1906.] 417 Miscellaneous. 



as the case may be, the accountant at the office of the Central Society writes up 

 his cash-book, and the ledger-accounts of the affiliated societies and of the 

 individual members of those societies. No accounts are kept at the offices of the 

 village societies. All that is required there is a list of the members and a list of 

 outstanding loans. The members of the affiliated societies have little difficulty in 

 getting these written up by some friendly literate resident of the village in those 

 cases where there is no literate member of the Society. There seems also to be no 

 difficulty in obtaining the necessary (help in the preparation of lists of loans 

 required and of payments for submission to the Central Society. In that Society, 

 however, it has been found necessary to employ paid labour for account -keeping. 

 The payment in the case of small societies takes the form of an annual gratuity, 

 but when the capital of any Central Society becomes large and the number of 

 affiliated societies numerous, a whole time accountant will of necessity be employed 

 upon a regular salary. 



The joint and several responsibility of the members of affiliated societies 

 in such a scheme is two-fold. Primarily it extends to the loans due by members 

 of their own affiliated Society. Secondly, it extends to the whole of the obligations 

 of the Central Society. This is, of course, a necessity, as the members of the 

 Central Society would naturally refuse to undertake the responsibility of the whole 

 of the liabilities of that society as a personal responsibility. They are empowered 

 by the by-laws to pledge the credit of the societies which they ex-officio represent. 

 As a matter of fact the secondary [responsibility of the members of affiliated 

 societies would only become a reality in the ease of failure of any society to carry 

 out its primary responsibility. This is a very remote contingency, and should it 

 arise, the reserve fund would, in any well-managed institution, suffice to meet the 

 loss incurred through the failure of an affiliated society to perform its obligations. 



The above system has been working in the case of one of the districts for 

 the past seven months, and seems to be proving a success. Its advantages are 

 many. In the first place, the difficulty of account-keeping in the villages is 

 successfully overcome by the simple method of removing accounts altogether from 

 the duties of the village punchayat. In the place of ten or fifteen small and 

 struggling societies, in each of which account-keeping has proved or would prove 

 a difficulty, there is one strong society, which is in a position to offer remuneration 

 to a competent accountant. This again results in the possibility of recruiting 

 cas e societies from the lower castes, among whom literate men are extremely 

 rar j. Again, it results in a number of petty reserve funds, no one of which is of 

 any real value as an asset of security, being replaced by one large reserve, against 

 wh Ich it will in a short time be possible to contract temporary loans where such 

 arc necessary. Further, owing to the increase in the amounts required, it is 

 po sible for such Central Societies to go to the joint stock banks with some 

 probability that loans will be granted. 



The central system is in fact only an attempt to induce among societies 

 co-operation of exactly the same nature as at present, in existing societies, obtains 

 among individuals. All the advantages which are so marked in the case of 

 individual combination for credit are still more marked in the case of a combination 

 of societies for the same purpose. 



This system is being adopted in the case of town banks which are being 

 started in Allahabad and in Gorakphur. Instead of dealing with individual 

 members, these banks are about to deal Avith groups of members, each of which 

 is a separate society, and inside which each of the members is jointly and severally 

 responsible with each of his fellow members for the loans granted by the town 

 bank. In this case, however, there is no secondary responsibility. The banks are 

 being started on share capital with limited liability. 



