408 



Agricultural Credit Societies. [sept., 



ductive purposes only, the borrowers being required to satisfy 

 the managing committee that the object tor which the loan 

 is required is one that affords a reasonable security for his 

 being able to repay the loan at the date fixed ; and (4) that 

 the operations of the society are confined to a small area in 

 order that the personal character and needs of applicants for 

 loans may be known to the members and committee. 



The collective liability of the members to the extent of 

 their whole means arose partly from the fact that it was the 

 only system on which such societies without means of their 

 own could raise money to lend to their members, and also 

 that at the time of their foundation it was the only system 

 recognised by the German law. In some parts of Germany, 

 however, the principle of unlimited liability has not been 

 received with favour, and the explanation is to be found 

 apparently in the distribution of the agricultural population. 

 In districts where small peasant proprietors predominate, 

 all of a similar station in life and not varying very greatly 

 in wealth, the Raiffeisen principles have made great headway, 

 but where farms of different sizes occur the various classes 

 are disinclined to share on equal terms the burden of unlimited 

 Hability, and some form of limited liability has been preferred. 

 It is possibly for this reason that co-operative credit banks 

 based on unlimited liability have up to the present made so 

 little progress in England, while in Ireland where there is a 

 greater preponderance of holders of the same class, they have 

 increased in numbers with considerable rapidity. It appears, 

 for instance, that in 1907 there were only 15 agricultural 

 credit societies in England and apparently none in Scotland, 

 whereas there were 246 societies in Ireland, which had loans out- 

 standing in that year to the amount of £50,164, and had a mem- 

 bership of 15,100. With an extension in the numbers of small 

 holdings in this country, the opportunities for the establish- 

 ment of credit banks are likely to become more numerous. 



The agricultural co-operative credit societies formed up 

 to the present are usually based on the principle of the un- 

 limited liability of the members for the debts of the society, 

 because this joint liability provides a security on which money 

 can be borrowed at normal rates of interest. A community 

 of small cultivators, who may wish to form a society of this 



