846 



Credit Banks in France. 



[JAN. 



management, but in practice this liberty is much restricted 

 by the fact that in order to benefit in any way from the 

 State funds it must be affiliated to a district bank. This 

 means that its rules must be submitted to and approved by 

 the district bank, which, after affiliation, has very distinct 

 powers of control and supervision over its operations. 

 Subject to this, however, a local bank can be founded on the 

 principle of the unlimited liability of the members (with a 

 paid-up capital), or on the liability of the members to the 

 extent of two, three, or four times the shares they have taken 

 up, or on a liability limited simply to the shares taken by 

 each member. Legally, a bank can also be based on the 

 unlimited liability of the members, but without a paid-up 

 capital, in the same way as the Raffeisen Banks of Germany ; 

 such banks, however, not being in a position to contribute to 

 the resources of the district bank (owing to the absence of 

 capital) do not, generally speaking, participate in the benefits 

 afforded by the State loan. A considerable number of them 

 were formed prior to 1899, and continue to exist as organisa- 

 tions independent of the State with their own federations. 

 The model rules prepared by the Ministry of Agriculture 

 provide as a matter of preference for the liability of the 

 members being limited solely to the amount of the shares 

 subscribed, and the Ministry regards this system as best 

 suited for countries or regions where the co-operative spirit 

 is not much developed. 



The members of a local bank must also be members of an 

 agricultural association, but the number required for its 

 foundation need not exceed seven. Each of the members 

 must subscribe for not less than one share, varying from 

 16s. to 325., of which only one-fourth need be paid up. The 

 affairs of the bank are administered by a committee, and on 

 its formation the committee applies for affiliation to the district 

 bank, and then obtains from that institution full instructions 

 and advice as to the management of the business. Briefly, the 

 system is as follows : — 



The Bank is usually open once a week. The rate of interest 

 charged is about 4 per cent., or 1 per cent, above that charged 

 by the district bank, which in its turn is dependent on the 

 discount rate of the Bank of France ; this difference is intended 



