1905.] Agricultural Credit in Hungary. 



213 



count by those banks. Such bonds are negotiable instruments 

 and find a ready market. To secure these bonds the law requires 

 that the bank should raise a special guarantee fund of ,£125,000 

 to be added to by the addition each year of 10 per cent, of the 

 accrued profits. In no case is the guarantee fund to fall short 

 of 10 per cent, of bonds in circulation. Not to embarrass the bank 

 at starting, the State itself provided the first funds of the 

 guarantee fund, laying down £"125,000 in Government bonds. 



The number of societies which up to the end of 1903 had 

 taken advantage of the law and affiliated themselves to the 

 Central Association was considerable, as will be seen from 

 the following figures taken from the Annnaire Statistique 

 Hongrois, 1903. 



No. of societies ... ... ... ... ... ^653 



No. ofmembers ... ... ... ... ... 366,721 



No. of shares ... ... ... ... ... ... 700,273 



Share capital ,£1,418,000 



ditto (paid up) ,£714,000 



Savings deposits .. ... ... ... ... £"883,000 



Reserve fund ... ... ... ... ... ... £95»ooo 



It appears from this that the local societies average about 

 222 members who hold nearly two shares each, the average value 

 of the shares being £2. The interest charged on loans by the 

 local societies is generally 7 to 8 per cent. — a rate which is not 

 considered high in Hungary — and it is stated as an evidence of 

 their satisfactory condition that they are becoming more and 

 more capable of providing for their needs out of their own 

 resources, and, accordingly, come to the Central Bank for 

 fewer loans. 



The Central Bank itself not only provides money, but also 

 cts as organiser and controller of the local societies, and 

 advises the Government on co-operative matters. 



The local societies shown in the Table above do not by 

 any means represent the whole of the credit associations in 

 the kingdom of Hungary, as the total number in 1903 was 

 2,830. 



