\g\2.] History of Scawby Credit Society. 831 



the bulk of the Society's transactions it borrows from 

 depositors at 3 per cent., and lends to members at 5 per cent., 

 it has a margin of profit on such transactions of £2 on 

 every £100 every year. During the first year there was 

 a loss, as the Society had to pay a registration fee of £1 

 (no fee is now charged for registration), but since then there 

 has been a profit every year, beginning with 105. in the 

 second year, and rising to £$ 6s. $d. in 1910. Under the 

 rules all profits must be carried to a Reserve Fund, which 

 has gradually mounted up year by year, until in 1910 it 

 was £64 16s. 5d., including a gift of £15 made to the Society 

 by the Chairman. The Reserve Fund is the property of the 

 Society, which pays no interest on it, so that any interest 

 received on this surplus is clear gain to the Society, and a 

 further means of adding to the Reserve Fund. This Fund 

 cannot, under the rules, be divided among the members, 

 nor can they derive any direct profit as sharers in the Society. 

 Its uses are to give confidence to depositors, who see that 

 the amount in reserve is readily available to meet their claims, 

 and to the members, who feel that any unforeseen loss, 

 such as the improbable failure of both borrower and sureties 

 to repay a loan, can be met from the reserve fund without 

 their having to contribute towards it. The interest on the 

 Reserve Fund also goes to swell the income of the Society, 

 and thus makes it possible to reduce the rate of interest 

 charged on loans, as was done by the Society three years ago. 



The financial position to which the Society has attained, 

 as disclosed by its balance-sheet at the end of 1910, is highly 

 satisfactory. It then possessed altogether ^255, of which 

 ^153 had been lent out to members, and the remainder, 

 which was in excess of the amount then wanted on loan by 

 members, was mainly deposited with the Central Co-operative 

 Agricultural Bank, Ltd., at 3 per cent, interest. Its liabilities 

 were only ,£186 principal, and £4 10s. 6d. interest, due to 

 depositors, and on this principal it paid only 3 per cent, 

 interest. So that, as already said, its surplus profits, or 

 reserve fund, amounted to nearly £6$. It has acquired such 

 good credit in the neighbourhood as to obtain on deposit all 

 the money its members require as loans, and its members can 

 borrow the capital they want for agricultural purposes at tbr 



