152 



Agricultural Credit in France. [June, 



of 1905 the advances by the State had increased to ^"644,000. 

 The growth of these banks during three years will be seen from 

 the following table :— 



District Affiliated Local Banks. Loans Granted. 



Year. Banks. No. Members. £ 



1901 ... ... 21 300 7,998 217,000 



1902 37 45 6 22,476 572,000 



1903 41 616 28,204 900,000 



There is considerable variation in the cons titution of these 

 local societies, very few restrictions being made by law on the 

 form a local society must take, but the system favoured by the 

 Department of Agriculture is based, not on the Raiffeisen prin- 

 ciple of unlimited liability, but on co-operation with limited 

 liability, the subscriptions of persons interested, together with 

 the assistance afforded by the State, enabling loans to be made 

 by the district bank either directly out of the capital or by 

 re-discounting bills through the Bank of France. The following 

 •is a summary of the scheme recommended by the Department. 



The members of a local co-operative bank must be drawn 

 from the members of an agricultural association, but the number 

 required for its foundation need not exceed seven. It is not, 

 indeed, desired that these local banks should embrace a large 

 number of members, as it is important that the character and 

 financial condition of each should be well known. They there- 

 fore usually confine their operations to one parish, but are 

 affiliated to a district bank, which may include the whole of a 

 department. Each of the members must subscribe for one share, 

 varying from 1 6s. to 32s., but only one-fourth need be paid up ; 

 this bears interest at a rate fixed annually. The liability of the 

 members is limited to the amount of their shares, and a reserve 

 fund is formed by devoting to that purpose three-fourths of the 

 annual profit. 



In making application for a loan a member must describe 

 the purpose to which it is to be applied, and state the security 

 offered ; if the committee grant the loan, the borrower signs 

 a bill which is forwarded for discounting to the district bank, 

 by whom the money is transmitted to the local bank. Loans 

 can thus be obtained in two or three days. Bills are made for 

 three or six months, renewable after payment of an instalment. 

 If the borrower is well known and of good standing, his sig- 



