Miscellaneous. 



252 



[April 1907. 



CO-OPERATIVE CREDIT AMONG INDIAN RYOTS. 

 Among other evidences of the enlightened .spirit which is now being 

 awakened in the development of India's greatest industry are the existence and 

 character of the Agricultural Journal of India, published from the Pusa Research 

 Institute, The second quarterly number is in every way an improvement on the 

 first, and there are several articles in it which will command the greatest interest 

 in every part of the country. It is not a little instructive to notice what a veiy 

 large number of writers on Indian agriculture have reached the general conclusion 

 that the greatest problem of agricultural improvement is the provision of capital 

 for the financing of the cultivators throughout the land. " The remedies," observes 

 Mr. Sly in a note at the end of the Journal, suggested for the existing want of 

 capital are many and varied. One suggests that Government should, as an experi- 

 ment, clear off all cultivators' debts in a selected tract ; another proposes bank- 

 ruptcy proceedings on the model of the ' conciliation ' methods of the Central 

 Provinces ; a third alternative is a joint-stock bank with a Government guarantee 

 and other privileges ; whilst the majority believes that salvation lies in Co-operative 

 credit." This being the opinion of the majority, the article on "Co-operative 

 Credit in the United Provinces," by Mr. J. Hope Simpson, which is published in 

 the same number of the Journal, will be read with exceptional interest. No one 

 knows the subject better than Mr. Simpson ; in no other province have experiments 

 in co-operative methods been so extensively carried out ; and in no other part of 

 India, therefore, have the results so great a value. The first conclusion set out 

 by Mr. Simpson is that village banks on the German or Raffeisen model, which were 

 very widely instituted in 1001, have been, speaking generally, a failure. Only 

 one-third of those established have survived as working bodies, the rest being 

 either dead or moribund. What it may be asked is the reason of this failure ? 

 Is the principle of co-operative banking discredited, or merely the methods by 

 which it was sought to institute it ? We are glad to see that Mr. Simpson, though 

 an official himself, is quite ready to acknowledge that one of the principal causes 

 of the failure has been the excessive official patronage extended to the experiment. 

 He writes : — "The inception of the co-operative movement in the Provinces lay 

 not with the people, but with the 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 of 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 1 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." But this has not been the only 

 cause of failure. The complexity of rules and accounts imposed upon the village 

 co-operators ruined a large number of otherwise promising societies, and the not 

 unnatural reluctance of capitalists to put their money into institutions with so 

 little appearance of soundness or permanence has prevented in a large measure 

 any effectual competition with the usurious bunia. None of the causes of failure, 

 however, has been more serious than the difficulty arising out of caste differences. 

 On this point Mr. Simpson remarks :— " Of the burdens and hardships entailed by 



