IIEPOET EEGAEDIISG THE POSSIBILITY OF IXTHODUCING I.A>;D AND ACIRTCULTITEAL BiNKS INTO THE MADIIAS PRESIDENCY^ /^ VOLUME II, il A D II A S : PHI "i, D Bi THE SUPERINTENDENT, GOVERNMENT \EJi8tiraint is made according to the rules for administa-ative coercive process. The general board 19 the authority for ordering and conducting coercive process. "".ru. 11 The courts are bound to take into consideration the registered debt due to the bank when a property mortgaged to the bank forms an item in the schedule of a bankrupt's property, or is the It will be remembered that these Landsohaften have no capital in the ordinary a operations j^inior tne pnrposes mentioned in section 295 some disposable capital was found necessarv +>,;. I first provided by an advance of £30,000 by Frederick II at ihe commencement of the system aySDfr^ tbl nn '^''' *\ of one per cent, charged on the grant of a loan as commission for the very purpose of form^n^ a fu^d «nfl f °°«-«'?*l^ As the bank is administered very economically, and as there are no clivideudsfthe ownds are Aot . """Z™?,**- »nd it is believed that the original State grant has been repaid. ^°^ considerable, t Extracts will be given from the statutes governing several other of the Landsohaften to ri;»«l^„ ti, their administration, and any differences in method which may be of interest ^'""'^°"^"^" *° display the nature of The East Prussia Land bank was founded in 1788, for the benefit of ' Noble ' properties onlv J That is. althouyh all aiich dp.hentiiroQ a.ra 1.0 r, otto >,)/:. «..r..q.,«ii j ,_, , ^. , . "' «perati must wait t _ „_ v.— o .. iu. vju mc uiuBi- uanu ine Danls lias the nowor r,f »™ debenture at any time on notice. * " P°^^^ of repaying any Ab the debentures are excellent inreatmenti and are all isgued to bearer, a holder in wKni of i,;. «*1U Ut debenture in the market. ' °'^^^ '" ^'"'* "' ^^ money .implj- •object of coercive attachment or sale. The bank is entitled in cases where sach property is under its nianagement to be recouped as a first charge in the actual costs of such management and of any costs of restoration (to a good coniition), as also in any arrears of interest, and to claim such dues in priority to other creditors out of the sale price. Only after the bank has been satisfied (in such matters) shall the surplus income or sale price be divided.* .1, J 2. (Debtors in arrears must pay at the rate of 5 per cent, per annum on all advances made by the bank to debenture holders and others, on account of such arrears. If such advances are borrowed by the bank, the debtor is bound by the terms agreed upon with the bank's creditor. In case of these advances the bank a debtor must give and register security to the amount of 0-5 per cent of his original loan.) ^ 13. The holder of a debenture is entitled to punctual payment of interest, and of the principal when the debenture is publicly drawn for payment. ' 14. Debenture holders have, as their security for the payment of interest and principal and of ■any other claims under this statute — (a) the bank and all its funds, and, above aU, the whole mass of mortgage claims held by the bank ; (4) the general guarantee of(l) all the properties mortgagable to the ban (aUe bepfandbrief- ungsfahigen Landgiiter) by the law of 1808 whether mortgaged or not, within its area of operation ; (2) all other landed properties {e.ff., peasant (biiuerliche i-) section 23 (o) ) actually under mortgage to the bank ; (3) aU urban properties which by entry in the land register (Grundbueh) are subject to the general guarantee. 15. The registered mortgages held by the bank are exclusively assigned as security for the debentures, and can in no wise be made answerable for the dues payable to any other creditors of the bank. 16. AU. debentures have equal privileges. 17. Debentures against a specified property shall no longer be issued.J 18. The total amount lent upon a property shall never exceed two-thirds of its value as ap- praised and determined. 19. Should a mortgaged property be split np or be so badly managed as to deteriorate, or suffer loss of its stock, or the dilapidation of its buildings, or be cleared of its timber, or should the build- ings not be properly insured, the bank may either require the immediate repayment of a corresponding part of its loan, or may, on three months' notice, call in the whole loan and may, without preliminary proceedings, enforce its claims by attachment or sale. The bank may in case its security appears for any of the above reasons to be endangered, proceed without notice to attachment and management of the property. (Other paragraphs provide for calling in part or the whole of the loan in case the property is entered in an association, even foi^ land improvements, which is burdened with charges o* demands which may endanger recovery of the bank's claims ; also that the mortgagor shall inform the bank of •any sale of its stock to a tenant, and, if necessary, shall give security. In case of receiving no such notice the bank may proceed as in paragraph 1.) 20. The bank is entitled to inspect the registration books and land records relating to properties, within its area of operations and to take extracts therefrom gratit ; it is also entitled to demand simple or certified copies. 21. The mortgages must not be preceded in the registration books by any prior mortgage or •other obligation which would lessen the interest of the bank in the property or in its proceeds. The candidate for a loan must prove that prior mortgages have been redeemed, or must obtain the cession of such mortgages to the bank, or must arrange that the bank shall have priority over -all other registered entries, before debentures can be issued. § Persons and properties admissible to loans. ***■»» 23. Loans may be granted on the following properties : — {a) aU properties within the area of operation, including royal domains and forests, bearing an estimated value of at least £75. Properties defined in section 14 *. (2), (t>., peasant properties) must be possessed in full ownership without incidental servitudes {i.e., appa- rently, -without owing any feudal dues or duties to over-lords) ; (b) (certain urban properties -with buildings of the value of at least £750) ; (e) (certain other urban properties worth at least £75). All proprietors of the class mentioned in section 14 J. (2) (peasant), who obtain credit from the bank, are subject -without further or express declaration, to the conditions of the statute, and are charged with the guarantee mentioned in section 14. * It -Trill be remembered that the statutes of these banks absolutely forbid the bank to lend except on first Biorteages Henoo any sale, &o., of the property by any other creditors is subject to the bank's claim as first mortgagee. The Iresent section merely provides, therefore, for the recoupment to the bank of its incidental charges and advanoei not forming part of the principal debt. , , . . . • i ' * ■ . , , • t The acceptance of peasant, i.e., non-noble properties as mortgagable, is of comparatively recent mtroduotion. * This marks the great change in the land bank system. The bank was at first a mere intermediary between % creditor and a particular debtor ; the debentures -were issued against and actually specified particular properties and loans and the unpaid creditor had his claim against such property. Subsequently the bank became a genuine credit bank,' issuing debentures merely a,gainst the mass of its mortgages and other assets, and excluding any direct connec- tion between a debenture holder and a particular debtor. , . , • ,i § I.e., before the loan can be granted, since the issue of debentures and the grant of a loan are Bimultaneone or -so-related' acts ; the one ia impossible without the other. 8 The officials of the hank. 31. The business of the bank shall be carried out under the general supervision of a Eoyal Commissioner as president of the bank and according to the resolutions and under the control of the- general meeting as elected by the circle meetings, through— (1 ) the general board ; (2) the valuation committee ; (3) the full committee (Plenar-KoUegium) ; * (4) the audit committee. * * * * * 33. All officials of the bank are indirect public officials. They must take oath on apjiointment. * « % « *- 37. A commissioner or president appointed by His Majesty shall be placed at the head of the bank ; his special care shall be that the foundation principles of the system shall be strictly observed by all concerned, and that not the least infraction of duty towards the King and the constitution of the country shaU. be admitted. He is also entitled to preside, when he thinks necessary, at all the bank's meetings and committees without exception, and to expect and demand detailed reports. This right especially Tselongs to him with reference to the general meeting and the general board. He is also especially entitled, whenever he thinks necessary, to institute examinations of the cash and audit of the accounts, and he must particularly see that proper regulations are issued and obeyed by all the departments of the bank. 38. The departmental authorities of the bank are public departments ivith the rights mentioned in the general law, section 114 ff. Part II, Chapter X. All documents issued in their official capacity have the atahis of public documents. No suit lies (findet der Eechtsweg nicht statt) against resolutions issued in their official capacity, f 2'Iie Audit Coniwittee. 89. This committee consists of three members and as many deputies who shall be appointed for three years by the ordinary general meeting. 90. Its duty is the annual final revision of the whole of the bank's accounts, including the audit of the bank's work for the year which is to be made before the ordinary general meeting. The committee meets once a year, as soon as the settlement of accounts for the past business year has been completed by the office. The accounts must be plaeed in complete condition for audit with all vouchers and notes. I ***** 92. The committee submits the results of its revision to the president by whom it is transferred to the general board. Tlie enforcing of the lanlc's orders. 107. Every proprietor of an estate belonging to the credit association is bound to submit to all such orders of the several departments of the bank as relate to the due maintenance and execution of the provisions of this statute, especially as regards orders of the general board to undertake enquiry into estates which have deteriorated, and the rejn-esentation of circle deputies when they are prevented from making valuations of properties. This rule is applicable also to the occupants of mortgaged estates and to tenants of the same especially to lessees under the circumstances mentioned in sections 1 64 and 1 6,5 (relating to the leasing of eatates under attachment).- 108. The authorities of the bank are entitled to enforce obedience to their orders by fines which they may themselves impose and which they may collect by coercive process without the intervention of a Court, or by such other coercive means including the attachment of estates, as may seem good to them. All Courts are bound promptly and without objection to assist the bank in such cases. 109. Should these means not succeed in inducing the parties concerned to do their duty, the general board is entitled to demand repayment by them of their loans and for this purpose, should threats prove unavailing, to proceed in the last resort to the forcible sale of the mortgaged property. Such sale must be carried out by the Court having jurisdiction without previous enquiry. 110. Should the offender be dissatisfied with the action of the general board (sections 108 and 1 09) he can make a complaint to the general meeting the decision of which shall be final. On complaint being made execution of the penalty shall be postponed unless such penalty be a mere fine. * The Plenar-Kolleginm is similar in formation and duties to the ' select committee ' of the Pomeranian loa,nk. + Presumably this privilege extends merely to resolutions affecting the internal relation of the bank with its members and borrowers ; such resolutions could not affect third parties or the external relations of the bank. T}be Collection of ouistanding Interest* in fuU deS Jin Tt7 °\*^^ K^*' ^f%^ *T P*r 'i^' °* ^'^^^^^^t' ^ ^i«t °* ^^^^ars shall be drawn up m tnU detail and a notice sliaU be sent direct to tbe debtor that coercive process will issue. ^ 150. On the expiry of the time mentioned in the notice, the general board wiU proceed to coercion at first against the movable property of the debtor. "» u wui proceea to coercion the eSe'^^^*"'' *"'''°°* ''' '"""^ """'^^ *^^ objection that the creditor must first seek his remedy against worMif ^ ""'^ '"^*'^^' "* *^^ "^""^ °**^'' ^^***^ ^^^^ ^^ '°^^ *' ^""^ ''°* necessary (entbehrliche) for its or sTlfni/f^"^*^ *^® proceeds of the distrained properly not cover the arrears with the cost of distraint nLxTr^^i general board consider it advisable with reference to the amount of arrears or dthet estatT distraint proceedings may be taken for the attachment or sale of the 152. Should the board] decide to attach the estate it must, as a rule, appoint for that dutv the counciUorm whose circle the estate is situated; in exceptional circumstances another counciUor or a circle deputy may be appointed. One of the bank's legal advisers (syndic) or in his absence a judge (KonigHcher Richter) must always assist at such attachment. ■• ^ \ o i * * » # » 168. (3) The Courts are bound, on the request of the ''general board, to proceed to sell an estate without previous enquiry. STATUTE OF THE NEW WEST PRUSSIAN LANDSOHAFT.f 1. A credit institution entitled ' The New West Prussian Landschaft,' is hereby estabHshed for the proprietors of estates excluded from the ' West Prussian Landschaft Association ' in the districts CI Manenwerder and Danzig. It shaU be represented and managed by the general board of the West Prussian Landschaft with the proviso that such relationship may be dissolved. ' Loans. 2. The bank wiU grant mortgage loans to such of the above landholders as enter the association .Funds for such purpose will be found by the issue of debentures caUed 'New West Prussian Deben- tures ' ; these shall be made out to bearer and shall carry an annual interest of 4 or 4J per cent. 3. For entry to the association and for the receipt of loans only such estates f are admissible as— (a) do not belong to the West Prussian Landschaft Association ; {V) are held in fuU ownership ; (c) are worth, upon valuation by the bank, at least £226 ; (rf) and («) (relate to peculiarities of German land tenure). ***** 3. Loans may not exceed in amount half the estimated value of the property. ***** 8. A borrower must undertake the following obligations — {a) to pay, in two halt-yearly instalments, an annuity of 4| or b\ per cent, according as the debentures (representing the loan) were issued at 4 or 4^ per cent. ; (i) to pay towards a working capital (section 27) 1 per cent, on the loan amount at the issue of the debentures ; (f) to repay the loan principal, in whole or in part, upon six months' notice in the cases men- tioned in section 13 infra ; {d) in case of arrears to pay, as penal interest, 5 per cent, upon such arrears, for the quarter in which the payment fell due ; («) especially to submit to the conditions of this statute. * The corresponding articles of the Old West Prussian Landschaft are as follows : — 66. When the due date for the payment of interest is passed, the cashier must draw up a list of arrears and place it before the board. 67. Arrears of interest which only amount to £30 or less shall be collected by immediate distraint of the debtor-s movables. For such distraint the bank authorities may either use their own baUiS, or may request the Court having iurisdic- tion to make the distraint, and the Court is bound to comply With such request. 68. Arrears of interest of more than £30 mnst (miissen) be collected by attachment of the property. But the board may, in the case of small arrears {i.e., more than £30 but not very considerable), forego such attachment when they think proper. Section 81 provides that if, at the auction of a property for arrears, the bids offered are insuflScient, the bank with the consent of the general board and of the Royal Commissioner, may buy in the estate, but in such case, must re-sell it aa soon as possible and at longest within three years. •f- This is one of the New Landschaften (See Vol. I, pp. 56 — 58) and was founded in 1861 with the view of extend- ing a more general land credit than that granted by the Old Landschaften, the operations of which were, in general, confined to ' noble ' propeities. It is a mere annex of the Old West Prussian Landschaft ; such union however may be dissolved. f Grundstiloke = estates. It is peculiar to these German land banks that it is the Oharaoter and status of the estate that regulate ths capacity for lo&ns, Sec, nbt the status of the holder ; or rather, the holder of an estate derives his right to enter an association and obtain a loan, from the status, noble or peasant, of his estate. 3 10 12. The annuity shall be alloted as follows : — (a) 4 or, as the caae may be, 4J per cent, as interest upon the debentures ; i^ ^ i ■ am (b) i per cent, to the accamulation of the insurance and sinking fund respectively |eine« Sicherheits und resp. Amorti8ations-(TiIgung8-) FondsJ ; (c) i per cent, for the defrayal of the charges of administration.* # * # * * 14. The bank shall, upon the occurrence of arrears, issue its demand for such arrears and for the penal interest due thereon, and shall subsequently proceed against the movables ot the deDtor, or lo the attachment and sale of the land by the Courts having jurisdiction. . , xv ^ * The debtor cannot demand that the bank shall in the tirst place proceed against the estate, nor can he object to the simultaneous carrying out of the attachment and sale of the estate ; stiU less can ne " ^M thelYction of an estate the bank can, for the avoidance of any loss, itself buy it in without special authority from Government ; in each case, however, it must re-seU the estate withm three years. 15 The bank has the right of requiring the repayment of its loan at six months' notice— fa) when the mortgaged estate shall have so decreased in value that it is no longer worth i.226 , partial repayments may be demanded in the case of other diminutions m value ; (6) when the proprietor fails to make his bounden payments to the bank punctually ; this right ceases when the arrears and aU. costs are paid up ; i ,. j v.- (c) when the proprietor is unable to prove that he has regularly paid the public dues upon his estate ; i zo vi, i *• \ (d) when the estate comes under attachment or public sale— (bubhastation) j (e) when the proprietor manages his estate so badly that, on the examination of two commis- sioners, a serious deterioration of the estate and a danger to the bank s security are evident, and the proprietor fails to remedy the defects found according to the orders o± the direc- tors and within an appointed time ; . -u- -u -ij- (/) when the borrower fails according to the condition of section 11 to insure his buildings, stock and stores against fire ; „ i. . i i. a (g) when thw borrower does not meet his obligations in the matter of his loan contract as mentioned in section 8 ; i i . • • (A) when he refuses to undertake the office of bank commissioner upon due election or nomina- tion unle.-8 he has already served as such. 16. Properties under mortgage are subject to the inspection of the bank commissioners of the circle in so far as there may appear acts or omissions or other circumstances which may endanger the Beourity of the loans or of the interest thereon. » * # * * The Funds of the Bank and their Management. 27. Working Capital.— The working capital (Betriebsfonds) f shall be accumulated from the 1 per cent, deduction made from all loans at the time of issue as provided in section 8-J. This capital is the property of the bank, and shall furnish funds for unavoidable outlays (not otherwise provided for). The select committee is especially charged with the employment of this fund. 28. Insurance Fund. — The insurance (guarantee) fund (Sicherheitsfonds) is accumulated — (a) from 0-75 (drei viertel) per cent, which the boiTowers pay in excess of the interest due to the debenture holders, and 0-25 per cent, as costs of administration, for seven years from tlie grant of the loan; \ (b) from the penal interest on arrears ; (c) from the proceeds of expired (unclaimed) interest coupons; {d) from any extraordinary receipts ; («) from interest on the fund itself. 29. ThH insurance (guarantee) fund is formed to cover any losses of capital or interest which are not covered by the share of the proprietor of the estate in question (which has caused the loss) in the sinking fund (Tilgungsfonds). It is the own property of the association, and outgoing members are not entitled to any repay- ment of any portion thereof. 30. Sinking Fund. — The sinking funds (Tilgungsfonds) is accumulated from the proceeds of the annual ()■ 7 5 per cent, mentioned in section 28(a), which the borrowers pay to such fund after the expiry of seven years from the grant of the loan.fj together with the interest accruing on the fund. * It will be noticed that these banks are managed most economically, and therefore with the least possible cost to the borrower. An annual charge of 0'25 per cent, on the loan, and a lamp payment (8 ( b )) of 1 per cent, at the issue of the loan, suffices for i,he whole cost of administration, and for the accumulation of a small cash capital for immediate and current expenses. It is the absence of a share capital with dividends, and the adoption of the mutual principle, together with the enforced and but slightly paid for services of the various members, that bring about the result. ■)■ This is not a working capital in the sense of a capital by which the business of a bank is carried on or loans granted, but merely a fund from which tsash expenses, salaries, &o., are provided. J This point is not quite clear, for in sections 8 and 12 suj)ra the contribution to the insurance and subsequently to the sinking fund, is mentioned as 05 per cent, with 025 per cent, for the costs of management j total 0'75 per cent. § See Vol. I, pp 5K-58 (New Landschaften). It is usual or common for a bank to demand that 0'5 per cent, or other amount be paid to the guarantee fund for the first few years after a loan is granted ; after that period the con- tribution goes to the sinking fund, and amortizes the debt in a given period, nsuaUy about 50 years. But it is also necessary that the insurance fund or reserve shall first reach the amount of (say) 5 per cent, of the outstanding debenture debt. 11 This fund 18 the property of the owners of the mortgaged estates, and (so far as the contributions of such estates are concerned) is, dejure an appurtenance of the estates. * * * « • Management of the Bank. 40. (This section provides that the statute and working rules of the West Prussian Landschafi flhaJl serve for the new bank except in so far as the present statute alters them. 1. Appendix No. II to the statute provides rules for the issue of series No. II of debentures. Knle 1 IS similar to section 12 of the statute, but subsequent royal ordinances permit the issue of debentures at 3 and 3^ per cent. 2. The insurance (guarantee) fund is placed under the conditions of section 29 of the statute. It is composed from the following contributions : — (a) 0-5 per cent, annually, as mentioned in rule 1, until the fund reaches 5 per cent, of the debentures issued to the respective borrowers*; (6) half of such interest on debentures as has not been claimed within four years ; (c) penal interest on arrears ; (rf) all extraordinary receipts. 3. The 0-5 per cent, above mentioned as part of the annuity shall be credited to the sinking fund and ledgered against each borrower, as soon as it is no longer required for the insurance fund. • • # # « 5. The holder of debentures of series II has the right — (a) to the punctual payment of his interest ; (J) to the payment of his principal in cash when publicly drawn. Should the bank fail to satisfy his claims he is entitled to seek satisfaction by the ordinary legal methods against the bank — {a) first of all from the insurance (guarantee) fund ; (J) next from those mortgages against which the bank has issued debentures ; (c) subsidiarily from the sinking fund with reference to the debentures of series II issued against particular estates. So long as the insurance fuud shall not have reached the amount of 5 per cent, of the pending debentures, the debenture holder has further the right to seek satisfaction — {d) from the old insurance fund but without prejudice to the rights already acquired therein by holders of debentures of the first series. The valuation rules of this association are particularly minute, and too lengthy for translation here, while their chief interest would be the secondary one of showing the very moderate amount of loan obtainable per acre, and the extreme care with which the bank safeguards its loans, by demand- ing the most scrupulously minute enquiries ; the inability of such banks t> reach the small peasant is fully accounted for by the necessity — gained from experience — for such rules. STATUTE OF THE CENTRAL L\NDSCH.\PT (LAND BANE) FOE THE PRUSSIAN STATES.t 1. The undermentioned credit institutions (Landschaften) of Prussia (here foUow the names of nine Landschaften) establish, under the conditions of the present statute, an association for improving the credit granted to proprietors, especially by means of a mutual issue of central debentures, to be negotiated in the general market. Other Prussian Provincial Credit Institutions may be admitted to the association under the rules of the present statute and with the consent of the adherent institutions. 2. The association will take the name of the ' Central Landschaft (Land bank) for the Prussian States, and will be located in Berlin, with the rights of a corporate body.' 3. The business of the bank shall be manaajed by a central board which will represent the bank and wiU consist of one member from the highest administrative body of each of the adherent banks, who will be elected by such body as their representative. The central board will meet, whenever necessary, and at least once in a year ; it will frame its own business rules. 4. (The several provincial banks will arrange matters for the benefit of themselves and their clients, except in matters which concern the direct working of the central bank). The central board will regulate all details under a set of business regulations which will be framed in communication with the several boards of the affiliated banks. The managing bodies of the several affiliated banks are bound to respond to the demands of the central board. 5. The Minister for provincial affairs is bound, as royal commissioner, to supervise (control) the execution of the present statute. • The insurance fund is apparently not a general fnnd held in lump, but a fund containing as many divisions as there are loans ; each loan is separately ledgered and the contribution of 05 per cent, made by each borrower is then credited to him on his ledger page, together with his share of the other assets of the fund, and when the total of such credits reaches 5 per cent, of his debt, it is considered that he has sufficiently secured the bank against loss on hi» account, and the 0'5 per cent, is then diverted to its proper reservoir, viz., the sinking fund, by which his debt i> :{;radually amortized. t See p. 57 of Vol. I. The bank was established by the decree of 21st May 1873. 12 6 and 7. (Temporary arrangements for the commencement of work). 8. The central bank will issue 4 per cent, debentures to bearer, with the appellation of ' Lands-^ ohaft central debentures ' ; they shall not be repayable on demand by the holder (unkiindbar sind). These central debentures are intended to provide funds for the mortgage loans granted by the provincial land banks on the properties within their respective areas and limits of business. 9. Properties must be valued prior to the issue of debentures {i.e., before the grant of a loan thereon). Such valuations to be made upon the valuation principles of the respective banks and to be carried out by their officers. But it is permissible to grant loans without such valuation upon a consideration of the net income as fixed for the purposes of the land-tax, viz., within 50 times the amount of such tax as finally assessed, and after deduction of all taxes, cesses and charges ( Dienstbarkeit, servitudes, corvees, &c.) * 10. The proportion of the valuation amount which may be granted on loan shall f oUow entirely the rules of the respective banks. 1 1 . Changes in the valuation principles and loan limits of the several affiliated banks require the consent of the board of the central bank in so far as loans are to be made by the issue of central debentures. But in no case shall the loans exceed the proportion of two-thirds of the estimated value. 12. The borrower must execute a mortgage to the provincial bank for the security of its claims and for the execution of the obligations mentioned in section 16 infra: he must also fully submit to the provisions of this statute, and must effect the necessary registration in the land register. The issue of central debentures will f oUow, as a loan to the bank which has forwarded and assigned to the central bank, the documents necessary by the conditions of paragraph 1 . 13. For every loan granted and registered as per section 12' au equivalent amount of central debentures shall be issued. 14. The loan amount shall be issued through the provincial bank, either in cash or in central debentures at their face value, according as the centeal board shall decide. In the latter case the central board is authorized to buy in (from. the borrower) the debentures at a price previously agreed upon, or to sell the debentures itself on account of the borrower. The central board shall also determine when to issue the loan in cash at the face value of the debentures, should such debentures be quoted at a premium. In such cases the premixim shall be credited to the bank. 15. When the central debentures are below par the provincial bank authorities may, should they so decide and upon the request of the borrower, grant from their own funds the difference between the par and actual value of the debentures as an additional cash loan, bearing interest, &o., under the provisions of sections 16, 17, 28 and 29 infra. The same faculty is granted to the central board in regard to the grant of similar advances from the funds of the central bank. In such cases the provincial bank must execute a bond to the central bank for the repayment of such advances according to sections 16, 27, 28 and 29 infra. 16. The annuity for the repayment of the loan shall be settled according to the provisions of the present statute, and the constitution of the respective affiliated banks. In all cases at least 05 per cent, annually must be paid upon central debentures as sinking fund, or such higher rate as may be necessary according to the constitution of the respective provincial banks. The provincial banks are entitled in special eases to agree upon higher and extraordinary rates of amortization. In cases where cash supplements have been issued under section 15, the borrower must pay at least 0-5 per cent, in addition for the amortization of the special debt. (Higher rates may also be demanded for the same). 17. (Omitted : relates merely to advances upon pledge of valuable securities, and mortgages, &c.) 18. The debt-claims registered in favour of provincial banks under section 12 shall be exclusively assigned to the central bant for the security of holders of central debentiires, and other creditors shall in no way have any charge upon them. 19. Oefitral debentures shall be issued by consecutive numbers for sums of from £7-10-0 to £500 (in seven values), and the central board may sanction other values. They shall be signed for the central board by such member of the same as represents the bank on the request of which they were issued, and authenticated by the counsel (Syndic) of the central board. (Various other minor provisions are also entered for the due and formal issue of the debentures : they do not seem to need translation.) 20. (The debentures to be provided with interest coupons for 10 years, payable half-yearly, and with a voucher (talon) for the issue, to the person presenting such voucher, of a new set of coupons on the expiry of the first 10 years. If any objection is raised by a third party to such new issue the holder of the voucher must execute to tbe bank an indemnity bond.) 21. (Debentures may be issued with a true translation in foreign languages, the values being expressed in German as well as in foreign currency.) 22. The holder of a debenture wiH be entitled to demand — (1) the payment of the interest at due dates ; (2) the payment of his capital when the debenture is publicly announced for payment. » The references in thic section to the laws bearing on the subject of the land tas are : (1) Section 1 of the law of 6th March 1868 (General collection (Gesetz Sammlung), p. 206) ; (2) Law of 21st May 1861 (General collection 2531 • (3) Regulations of 12th December 1864 (General collection, 673 and 683) ; (4) Law of 8th February 1867 (Generai collection, 185). ^ 13 In case default stould be made he is entitled to proceed at law against tlie bank and to demand a judicial allotment of bis dues — (a) from the funds of the provincial bank on the request of which the debentures in question were issued and which has undertaken the specific obligation for them, in so far as such funds are not pledged for any older and well-founded claims of third parties ; or (J) from the actual mortgages wliich were the foundation of the loans on which the central debentures were issued ; or (c) from pro raid contributions made ad hoc from the proprietors of all estates on which central debentures have been issued ; the final security for the holders of central debentures is, as a general guarantee, the total assets of the sinking funds under accumulation by the central association for the various properties The holders of central debentures cannot demand (at pleasure) the repayment of their capital. 23. The payment of interest upon the coupons wiU take place on fixed dates, at the oflB.ce8 of the several affiliated banks and at such other places, whether at home or abroad, as may be settled by the central board. Interest (unclaimed) lapses to the bank at the end of four years from the 31st December of the year in which the said interest fell due. But the bank may pay the value of any coupons to such person as shall, before the expiry of the four years' limitation period, notify to the bank the loss of such coupons, and shaU prove his property therein by production of the debenture or by other satisfactory means ; such payment shall take place at the end of the four years if within such period the missing coupons are not forthcoming. 24. (Transfer, Sic, of debentures foUow the provisions of the general law relating to paper payable to bearer.) 25. (Deals with the issue of fresh debentures in place of spoilt ones.) 26. The amortization of debenture debts contracted according to the provisions of this statute, is effected at the bank through which the loan was issued and according to the statute governing such bank, regard being had to the rules in section 16, &c., supra. 27. Should the difference between the market and par value of central debentures issued for a loan, be made up by the bank by means of a cash supplement (section 16) for which the mortgaged property is charged (section 12), the whole sinking fund contributions payable by section 16 svpra for such property, shall be credited at interest to a special adjustment account, to be maintained by the respective banks, until such cash supplement with interest shaU have been fully paid up. 28. The sinking fund contributions payable by sections 16, 26 and 27 shall be used and applied according to the provisions of section 35 infra. As soon as at least 10 per cent, of the amount due upon the mortgaged estate shall have been accumulated to credit of the sinking fund, the borrower may demand that an equivalent amount of the debt shall be cancelled, provided that any cash supplement issued under section 15 shall have been repaid. 29. Every owner of a mortgaged estate is entitled to make, in accordance with the statutory rules of the bank which granted the loan, such extra payments as he pleases towards or in completion of the amortization of his loan. He is also entitled to settle his debt, so far as it is not covered by the sinking fund, by pay- ments in cash, or by the tender of central debentures at their face value with all unpaid interest coupons thereto belonging. 30. The share of a debtor in the sinking fund passes with the property of the estate under mortgage as an inalienable appurtenance thereto to any new owner. It can never be separated from the estate, or otherwise disposed of by the estate owner. Nor can such share be made liable for the claims of a third person, nor can it be made the subject of attachment on a decree of Court, or assigned to any third person. This section shall be read subject to the provisions of section 22,. paragraph 3. 31. A borrower who, by the rules of his provincial bank, is entitled to a proportionate cancehnent of so much of his debt as he has paid up, or to a new loan (for a similar amount), the priority of the balance of the original loan being, however, maintained, is similarly entitled in the matter of central bank loans. 32. Cancelment or other such arrangement in the matter of a loan, can only be effected on. the cancelment (Kassirung) of a corresponding value in central debentures. 83. The central board shall determine whether and under what circumstances debentures may be called in for cash payment. . . »,,£,,.'. j: nn^t. Such recall of debentures must be effected under the provisions of the State decree of 20th January 1870 and its appendix (General collection, page 70). 34 Debentures withdrawn from circulation shall be cancelled together with their interest coupons and voucher (Talon = voucher for the issue of fresh coupons) in the presence of a member of the central board, &c., and struck off the debenture register. 35. The funds of the central bank shall consist of the following : — (1) Any premium (Kursgewinn) and debentures issued (section 14) ; (2) Time-barred interest (section 23) ; , i • , . „„ (3) The value of any debentures, duly recalled for payment but unclaimed for 30 years, as per State decree of 20th January 1870 (G. 0. P., 70) ; , ^ ^^ ■ ^,. ^ , , , (4) Deposits, advances or loans made to the central bank by the affiliated banks or other- wise; (5) Any profits made by the bank. , , , ■,.. . i ^.v, ^ xi. The central board must, in the interests of the bank and of real credit, take every care that the bank funds and the sinking fund shaU be suitably utilized and invested at interest, either as provided 4 14 in section 15 (2) and 17 (5), or by purchase of central debentures or debentures of any affiliated bank, or m paper of or guaranteed by the State. 36. A half-yearly settlement of accounts as between the central bank and each of the affiliated banks shall be efiected by the central board. 37. A central commission to which the general meeting or the select committee, — if so empowered by the general meeting — , of each affiliated bank must elect a member, will accept such accounts (ertheilt die Decharge) after due audit and verification. The central board will issue a report on the above together with a clear extract from the accounts ^for incorporation) with the annual administration report of each affiliated bank. 38. The result of the settlement of accounts, together with an annual certified statement must be sent to the royal commissioner (in proof), that the total value of debentures in circulation does not exceed the total value of outstanding mortgages on which debentures have been issued under section 12. 39. All the provisions and dispositions of the several affiliated banks remain in full force as regards loans in central debentures and estates on the mortgage of which central debentures have issued, so far as they are compatible with the present statute. Any doubtful matters will be decided by the central board, proceedings in the Courts being excluded. 40. Similarly the affiliated banks shall be entitled to issue, without alteration, their own deben- tures according to their own statutes, and borrowers shall be at liberty to • choose whether debentures of the bank within the business limits of which their estates are situated, or whether central deben- tures, shall be issued for their loans. 41. (Relates to the issue of central bank debentures in place of provincial bank paper.) 42. Upon the complete amortization of a loan upon which central debentures have been issued, and of any supplement (section 15) paid to the borrower, the estate under mortgage shall be freed from all obligations towards the central bank. 43. Should the interest of real credit appear to require it, the business area of the central bank may, with the consent of the affihated banks, and, so far as may be necessary, that of the State, be extended to such degree as may seem needful. 44. Every affiliated bank may withdraw from the central association upon a resolution to that effect by the bodies entitled thereto by the constitution of the bank ; such withdrawal is, however, only permissible after the withdrawing bank has fulfilled all its engagements with the central bank, and has produced for cancelment aU the central debentures issued on its account. Every affiliated bank can, in preparation for such withdrawal, require that the issue of central debentures on account of proprietors within the business area of such affiliated bank shall cease. Similarly the several banks aiBliated to the central bank can require, by a unanimous vote, that the further issue of central debentures on behalf of a particular bank shall cease, proper regard being had to all well-founded rights based on previously issued debentureB. The central bank shall be dissolved should all the affiliated banks withdraw therefrom. 45. Alterations of the present statute, in so far as such can be efi'ected without injury to the rights of the holders of debentures already issued, require resolutions of the general meetings, or of the select committees of the several affiliated banks when so empowered by their general meetings ; they Also need royal confirmation. 46. (Relates to the newspapers in which the bank must publish its notifications.) LAW BiELATlNG TO SOCIETIES EOR THE GRANT OF LAND CREDIT (PRANCE), 28th FEBRUARY 1852.* Chapter I. — Land Credit Societies (Land Banks), f 1. Land banks, which are founded with the object of enabling proprietors who borrow on mortgage to repay the mortgage amount by means of long-term annuities, may be authorized by decree of the President of the republic after consultation with the Council of State. On such authorization they shall become possessed of the rights and be bound by the rules of the present law. X 2. The above authorization may be granted either to societies of borrowers or to societies of lenders. § * This is the law which governs the great French Land Bank called the ' Credit Foncier ' : See pp. 69-74 and Chapter IV of Part 1, Vol. I. It was largely based npon a stndy of the Prnssian Landsohaften and other German land banks. ■f The words nsed in the law are always ' Society ' or ' Society for land credit ' : in translation the word ' bank ' or ' land bank ' will be nsed for the sake of convenience. J This authorization inclndes an approval of the articles of a bank as shown by section 48 infra. § This is the prime distinction between the two great classes of credit banks or societies : in ordinary commerciaJ English they wonld be called co-operative and joint-stock banks respectively : a bank of the former class is a congeries of elected or selected members who imite their snbscriptions, credit, and sometimes their whole property to attract ontside capital which they lend solely amongst themselves ; the cost of credit and profits are rednced to a minimnm since it is throngh the grant of mutual credit that the profit of members is sought and not through the eamino' of dividends for the profit of investing at the cost of borrowing members j the interests of all members is identical viz oheap, safeguarded credit. ' '' A bank of the latter class is merely a mass of capital in small shares, transferable at pleasure to any holder who purchases them, and the primary object is the obtaining of large profits through a big business at such rates as are most profitable ; the interests of the shareholders and of the borrowers, who are not necessarily shareholders are in fact opposed, the shareholders requiring high dividends, the borrowers cheap credit. The Prussian Landsohaften ara Castrations of the former class, the Cridit Foncier of the lattet. 15 3. The operations of the banks shall be limited to the area fixed by the decree of authorization. 4. Land banks have the right of issuing debentures. 5. In order to assist the early operations of the banks, the State and departments (districtsV may invest ma certain quantity of such debentures. The budget shaU annuaUy settle the maximum to be invested by the Treasury m this manner ; such amount shall be divided amongst the banks as deter- mined by their respective decrees of authorization. The same decree shall determine what share shaU ■be received by each bank of the sum of £400,000 set apart for the establishment of land banks. • Chapter II.— Loans made by Land Banks. 6. Land banks may only lend on first mortgage (with a certain exception of no general import- ance). Loans by which all prior creditors are paid ofi both as to capital and interest are considered as first mortgages. In case of such loans the bank shall retain in its own hands so much as will effect the above payments. 7. No loan shall, in any case, exceed one-half of the value of a property; the articles of each bank shall determine the minimum loan to be granted. 8. (Eelates to the ' purge ' or postponement in favour of the bank of certain charges or claims This was made optional by the law of 10th June 1853.) If any claim is registered during the period allowed, the provisional loan deed will be held null and void. 9. [Contains precautions in case of certain claims under the French law (hypoth^ques l^gales).^ 10. Borrowers shall repay their debts by annuity, but shall always possess the right of repay- ment in advance either in full or in part. 11. The annuity shall of necessity comprise — (1) the interest agreed upon which shall not exceed 5 per cent. ; (2) the sum allotted as sinking fund ; (3) (a contribution towards) the cost of management together with such charges as are fixed by the articles of the bank. 12. In case of non-payment of the annuities the bank may, in addition to its rights as creditor under the general law, have recourse to the methods of recovery contained in Chapter IV infra. Chapter III. — Dbbenttjees issued bt Land Banks. 13. The ( land mortgage) debentures or bonds of land banks shall be to order (nominatives) or to bearer. Debentures to order are transferable by mere endorsement, without other guarantee than that provided by section 1693 of the Code Napoleon. * 14. The aggregate value, of the debentures issued shall not exceed that of the loans granted. (They must be countersigned by the governor of the bank; law of 6th July 1854) and shall be registered at a fixed rate of 10 centimes {Id.) each. 15. No debenture shall be issued of less value than £4. 16. The debentures shall bear interest. In the course of each year debentures shall be redeemed to the value of the sums paid in towards the sinking fund. 17. The holders of debentures can recover their principal and interest only by proceedings against the bank itself, f 18. No attachment is valid (il n' est admis aucune opposition) against the payment of either the capital or interest (of the debentures) save only in case of the loss of a debenture.J Chapter IV. — Privileges granted to Land Banks for the Sapett and Eecovebt of their Loans. A. 19. § For the postponement of known claims at law (hypotheques legales) a notice containing -an extract from the mortgage deed || executed in favour of the bank shall be served — * This is as follows : — " The vendor of a debt or other incorporeal right is held to guarantee that such right exists •t the time of transfer even though the contract provides no guarantee." t That is, they have no right of action against any of the mortgagors of the society even though the debentures are issued against and secured by such mortgages ; the society is the sole direct debtor of the debenture-holders. Nor can they proceed against other debtors of the bank by the means open to creditors of individuals under the general law, e.g., by attachment of dues owed to the bank by third parties i they can proceed only against the bank itself. J This provision, copied from the Prussian Landschaften, is intended to assist the debentures in finding a good market ; a security which a creditor or other claimant cannot touch, and the proceeds of which must necessarily reach the holder, is a desirable investment. Moreover the bank is saved from frequent legal attachments, notices, Ac. There is a similar provision in Trenoh law in the matter of public paper. The provision modifies the general law (section 1242 of the Civil Code). § Sections 19 to 25 are taken from the law of 10th June 1853, which cancelled those sections in the law of 1852. The ' purge ' was made optional by section 2 of the same law of 1853, and in any case, only extends to ' hypothfequeg legales,' i.e., the charges or claims created by the law, (a) in favour of a married woman over the goods of her husband; (6) in favour of minors and incapacitated persons, over the goods of their guardians ; (c) in favour of the State and other public bodies over the goods of their tax-collectors and cashiers. These charges are valid without registration, but husbands and guardians are bound to register such charges (section 2136, &o., of the Civil Code). But ■iseotion 24 of the present law provides against unknown, that is, unregistered charges. The ' purge ' of the present law merely operates to postpone the claims to that of the bank : it is not an absolute purge, such as that of the Jhansi Encumbered Estates Act. (See pp. 108-9 and 308 of Vol. I. There appears to be an error on page 308, since section 2136 of the Civil Code requires husbands and guardians to register charges at law.) II The bank and the mortgagor execute and register a provisional mortgage deed, and after the completion of the ' purge ' and any other conditions or formalities, the final deed if executed and registered. 16 (a ) upon the woman and her husband ; (b) upon the guardian or substituted guardian of the minor or incapable • (c) upon the minor freed (from wardship) and his trustee ; (d) upon all unregistered creditors possessed of a'claim at law. 20. (Particulars of the mortgage contract are to be entered in the notice.) It shall moreover contain a notice that if desired that such claim shall maintain its priority as against the bank, it must be registered within 15 days from the date of the notice, with an allowance for distance. • / 21 to 23. (Precautions to be taken in serving the notice where the woman is the wife of the person obtaining the loan, or when the borrower is the guardian of a minor, &c.) 24. For the postponement of unknown claims at law, an extract from the mortgage deed must be sent to the Government Pleader of the Court of the taluk (arrondissement) in which the borrower is domiciled, and of that in which the property is situated. The extract shall also be inserted, with a note that the above notices have been sent, in one of the newspapers appointed for publishing the judicial notices of the taluk in which the property is situated. Registration (of any unknown charges) must be made within 40 days of the above advertisement. 25. The postponement takes efEect in default of any such registration within the periods fixed by the above sections. Such postponement gives to a landbank priority over claims at law. But such postponement shall not benefit third parties, who remain subject to the formalitiea prescribed by sections 2193, 2194 and 2195 of the Code Napoleon.* B.— EIGHTS AND MODES OF EXECUTION BY A BANK AGAINST BOEBOWEES FEOM IT. 26. The Courts shall not grant any postponement of the payment of annuities.! 27. The payment of annuities shall not be stayed by any attachment, J (ne pent etre arret! par aucune opposition). 28. Annuities not paid at due date bear interest dejure. The bank may, moreover, proceed to the attachment and sale of the property mortgaged in the manner and under the conditions prescribed by the following sections. 29. Attachment. — When a debtor is in arrears a bank may, by means of an order § which shall, on itsreqilest, be made by the Court of first instance (having jiirisdiction), and within 15 days of service of such order, take possession of the mortgaged property at the risk and cost of the defaulter. 30. During such attachment the bank shall collect, notwithstanding any (other) attachment or distraiat, the whole of the proceeds or produce (of the property), and, by (special) privilege, shall apply the same to the clearance of all annuities and costs due up to date. This privilege takes rank immediately after those enjoyed on account of the expenses of main- taining the property, the wages of labour and of sowing the crops, and the rights of the Treasury for the collection of the taxes. || 31. In case of dispute regarding the balance sheet of an attachment, the matter shall be decided by the Court summarily.^ 32. Eviction and sale. — Whenever an annuity is in arrears, and whenever by reason of the dete- rioration of an estate or for any other cause mentioned in the articles, the repayment of the principal (of a loan) may be demanded, the sale of the immovable property (under mortgage) may be proceeded with. If objection is raised thereto, the matter shall be decided, as a summary suit, by the Court in the jurisdiction of which the property is situated. The judgment in such suit shall not be subject to appeal. » See pp. 108-9 and 308 of Vol. I. ■)■ Since the interest on debentures has to be paid by the bank to the very day, it is equally necessary that the bank shonld be paid by its debtors with similar pnnctnality. Hence not even the Courts can grant a debtor any privilege in the way of postponement of dues or payment of the annuities by instalments, &c. This provision modifies the general law (section 1244, Civil Code) by which the judges can grant moderate delays. J This is a large privilege, by which the bank obtains a certain precedence for its dues when once established by the contract deed. No creditor or claimant, not even a decree-holder, whether of the bank or of the borrower, can attach an annuity on its way to the bank. § The order is not a decree in a suit, bnt merely an order of an executive nature, which the debtor can object to not by appeal but by a suit brought against the bank for cancellation of the order. II The " privilege " is " a right of preference over other creditors, even mortgagees (hypotbecaires) , enjoyed by a " particular creditor in virtue of the nature of his claim. Privileged creditors take rank among themselves according to " the particular class of their claim." (Sections 2095, 2096 of the Civil Code.) These 'privileges' extend to both movables and immovables, but the privilege of the text is over movables only, since it is a right on the proceeds of the estate and not over the estate itself. The case, therefore, is one of those mentioned in section 2102 of the Civil Code which are as follows : — (1) The preferential right of the landlord for his rent, subject however to a prior right over the crops for the cost of sowing and reaping the crops, and over the implements for the cost of purchasing such imple- ments ; (2) the preferential right of a pawnee over the pledge held by him (it will be noted that the landlord's right precedes the pawnee's) ; (3) the preferential right on account of money expended in preserving the property ; (4) the preferential right for the price of goods bought but not paid for, if still in the possesBiou of the debtor. There are three subsequent classes of ' privilege ' under this section, but the privilege of the text takes rank next after (4) and before the next three. T The summary procedure of the French Civil Prooednre Code is really summary; see sections 404 to 413 of the Code: section 405 says "summary cases shall be) disposed of at first hearing without other formalities," the pTOoedture is brief and inexpensive. The procedure in the commercial Courts is of the summary nature. 17 33 In proceeding to the sale of an immovable, a land bank shall issue to the defaulter a daman,? notice (commandement) m the form prescribed by section 673 of the CivH Procedure Code t£ SZed. '"^ """ *^' *'^'' °* *^" registration area in which the proper^ is In default of payment within 15 days, three advertisements, with at least 10-day intervals shall mthin the SIX weeks foUowmg the above registrations, be made in certain newspapLs Tprovided ii section 42 of the Code of Commerce, and two notices shaU, at 15-day intervals, be affixef W S th^ court room (auditoire) of the court where the sale is to take place, (b) at the door of the office o^ the mayoralty mw^ch the property is situated, and (e) on the property when it is a building ihe farst affixture of the notice is communicated within eight days to the defaulter and in fl„^ SuHf s^e ^* -^^"" '* '^°"''^' ^^*^ ^ '^""'""^ *° *"^^ service of the nS of the con^ Fifteen days after the execution of these formalities, the auction sale may be proceeded with in the presenceof the defaulter or, after he has been duly notified, * before the court within whose furiV •diction the property or the larger part thereof is situated. ^ fv, ^1^^ r^f*."?*^' /* "^"if ^l *^^ ^^""^ J^*"""^ *^^ appearance of the first advertisement, order that the sale shall take place either before another court or at the office of a notary of the canton or taluk (arrondissement) m which the property is situated. This order is not open to appeal, nor can any objection be raised (to the proposal of the society) save within three days^te an aUowance for dis- tance after due notice given to the defaulter. ^ u^ 34. From the date of registration of the demand notice (section 33), the defaulter shaU not be able to alienate the mortgaged property to the prejudice of the bank, nor burden it with any real charges. 35. The demand notice, the copies of the newspaper containing the advertisements, the memo- randum attesting the affixture of the notices, the summons to take service of the list of conditions of sale, and to be present at such sale, shaU be annexed to the sale proceedings (proces-verbal). 36. Any objections or pleadings must be entered on the memorandum of conditions at least eight -days before that fixed for the sale. Such notice of objection must appoint a solicitor. The court shall take cognizance of any objection upon due exchange of notices between solic- itors.! It win decide the matter on a summary enquiry, but such enquiry shall not postpone the sale. 37. If, at the registration of the demand notice (section 33), there shall be in actual existence a prior attachment made on demand of another creditor, the land bank may, after simple notice to the solicitor of such creditor, and provided that the memorandum of sale conditions has not been already deposited (in court by the other creditor), proceed to sale in the manner provided by the preceding articles. If the inemorandum of the sale conditions has been abeady deposited prior to the registration by the bank of its demand notice (section 33), the bank shall not enjoy the privilege of being substituted for (of preceding) the attaching creditor. No postponement of the sale shall be allowed if the bank objects thereto. In case of any negligence on the part of the bank, the attaching creditor may resume his right of proceeding (to sale). 38. Within eight days of the sale the purchaser is bound to pay to the bank provisionally the amount of the annuity due.j After the period allowed for further bidding § has elapsed, the balance of the purchase money shall be paid over to the bank up to the full amount due to it, notwithstanding any attachments, objections or registered claims by creditors of the defaulter ; provided however that such creditors shall have the right to sue for recovery of any excess (en repetition) should the bank have been unduly paid to their prejudice. || 39. If the property has been sold by lots, or if there are several purchasers without joint interest, ■ each purchaser is only bound as regards the bank up to the amount of his bid. 40. The procedure for the ' surenchere ' shall be that prescribed by section 708 et seq. of the Civil Procedure Code. When the required sale has been before a notary, the surenchfere must be made at the court of ;the taluk at which the sale was decreed. 41. When a bidder has failed in his engagement so that a re-sale is necessary (lorsqu 'il y a lieu a la folle enchere), sections 33 to 37 of the present law shall be followed.^ * Any registered creditors other than the bank shonld also be notified ; otherwise their claims will remain as - encnmbrances ; if present or dnly notified their claims will determine as regards the property and will be valid only against the sale price. f This appears to the mea/ning of the phrase " ie tribnnal est saisi de la contestation par acte d'avoufi a avone. " j This is large privilege modifying the general French law, which provides numerous delays and precautions before a creditor can touch the proceeds of the court sale which he has brought about. In the ' Statement of objects and reasons 'of the present law the following is found : — "Ought the bank to be subjected to the incalculable delays entailed by the ordinary procedure before touching its money ? Such delays would be disastrous to a bank to which the power of punctually fulfilling its engagements is all important." § Surenchere : The procedure for the forced sale of landed property under the French Code of Civil Procedure (sections 673-748) is very curious and lengthy ; numerous precautions are taken to prevent any hurried sale to the prejudice of the owner or of other creditors. One of the provisions (section 708) provides that after the auction before the court has been duly and solemnly conducted " any person may, within eight days subsequent to the knocking down " of the property, make through the agency of a solicitor a higher bid (surenchere), provided that such bid shall exceed " the auction price by at least one-sixth." The bid shall be communicated to the court, may not be withdrawn, and shall be followed by a fresh ^.uotion with the further bid as the upset price ; should tjie further bidder fail to make :,good his bid, he is liable in his body for the difference. II Section 38 is now applicable to all sales of property under mortgage to the bank (section 7 of the law of 10th June 1853). IT It seems that the procedure in such cases by the general law (section 733 et seq., Civil Procedure Code) is speecder and less costly than a repetition of the procedure under sections 33 to 37 of the present law, and is usually ^followed by the bank. 5 18 42. All rights granted in the present chapter may be exercised against third persons in possession of the property after due service of the demand notice (section 33) on the defaulter. Proceedings begun against a defaulter are valid as continued against him until any third parties- to whom the defaulter may have alienated the property shall have given notice to the bank of such alienation. In such case proceedings shall continue against such third parties. OhAPTEE. Y. — Q-BNEEAl. 43. (Treats of the supervision of land banks.*) 44. Banks are forbidden to undertake any business other than that prescribed by the present law. 45. Banks may deposit their disposable funds in the Treasury on conditions to be laid down by Government. 46. The funds of incapacitated persons and of communes may be invested in land bank deben- tures. So also may be invested disposable funds belonging to public institutions, or institutions of public usefulness, in all cases in which such institutions are entitled to invest their funds in Govern- ment paper. 47. The registration of mortgages on behalf of land banks is exempt throughout the whole period of such loans, from the decennial renewal required by section 2154 of the Civil Code. 48. The articles of a bank to be approved under section 1 supra must particularly mention — (1) the mode of valuing properties ; (2) the nature of properties not admissible on mortgage, and the minimum loan which may be made on each class of (admissible) property ; (3) the maximum loan which may be granted to a single borrower ; (4) the tables for the calcidation of annuities ; (5) the method and conditions for payments in advance ; (6) the interval between the payments made by borrowers and the pajrment of interest by the bank ; (7) the mode of issuing, recalling and repaying debentures whether with or without premia (bonuses) and the method to be adopted for cancelling redeemed debentures ; (8) the building up of a guaranteed or reserve fund ; (9) the conditions which shall lead to dissolution, and the methods and conditions of liquidation ; (10) the security and other guarantees to be demanded from the managers and other> employes, as also the mode of their appointment. 49. (Relates to the framing of a set of rules for the supervision, &c., of the bank ; this was can- celled by the law of July 1854.) AETICLE8 OE THE ' OEEDIT FONCIEE OF FEANCE.' -f Chapter I. — Genbrai,. 1. The bank takes the name of the ' Credit Foncier de France.' * This section placed land banks under the supervision of the Home Minister and of the Ministers of Agricnltnre and Commerce and of Finance. Inspectors were also provided, under section 49, for carrying ont the details of such supervision. This was found cumbrous ; the ' Credit Tonoier ' had moreover assumed such proportions as to be almost a national institution and to require different treatment. Hence the law of 26th July 1854 which is substituted for sections 43 and 49 of the present law ; its chief sections are as follows : — 1. The management of the ' Credit Foncier of France ' is exercised by a governor. The governor appoints and dismisses the staff, presides over the council of administration and the general meeting, and countersigns the debentures : no resolution is valid if uot approved and signed by him. 2. Two sub-governors perform such duties as are delegated to them by the governor, and take his place in case of absence or sickness. 3. The governor and snb-govemors are appointed by the Emperor. 4. Before taking office the governor must show that he is possessed of 200 shares in the ' Credit Foncier ' and each sub-governor of 100. 5. The governor shall receive from the bank an annual salary of £1,600 : the two sub-governors (each) receive £800. 6. Three of the members of the council of administration (board of directors) shall be taken from among the .collectors-general of the finances. 7. (Abolishes certain restrictions as to the duration of annuities, that is, of loans.) 8. The bank is authorized, in addition to loans repayable by annuity, to grant short-term mortgage loans, repay- able in lump, from the capital arising from shares and profits. ■)• See Vol. I, pp. 69 to 74, and Chapter IV passim. The law translated above was passed on the 28th February 1852 ; by the 28th March of the same year a land bank (Credit Foncier de Paris) was founded and approved by the decree of that date ; this bank was to make long-term loans upon the issue of long-term debentures, and was granted a monopoly of operations wnder the special law for 25 years ; its articles were, under section 1 of the law, subject to the approval of Government. On the 18th November 1852 this land bank agreed with Government to extend its operations, and the decree of the 10th December 185iJ gave it the name of the ' Credit Foncier de France, ' extended its operations and monopoly under the Act to the whole of Jranoe, permitted a large increase of capital, and granted a subvention payable by instalments. Subsequently the bank was required or authorized — (1) bj'' the law of 28th May 1858 to grant loans for drainage (rural) in place of the State ; (2) by the decrees of 11th January 1860 and 17th January 1863 to grant loans (mortgages) in Algeria to land- holders, districts and communes, and associations ; (3) by a law of 26th May 1860 to discount the paper of the ' Sous-Comptoir des entrepreneurs ;' (4) by a law of 6th July 1860 to lend with or without mortgage to departments (districts), communes, and associations and to issue debentures against such loans, and by a law of 26th February 1862 this was extended to loans to hospitals and other public institutions (see infra). Only extracts will be given from these articles, which were authorized by Government in conformity with sec- tions i and 4S of the law. 19 Its objects are as follows : — _ (1) To make to the owners of inmiovable property mortgage loans either over a long term by annuities or oyer a short term by annuities or in lump ; (2) To issue and circulate land mortgage debentures (obligations foncieres or lettres de gage) to an amount not exceeding that of the sums due to the bank by its borrowers. _ It may, with the sanction of GoTernment, make use of nny other system with the object of facUi- tatmg loans on immo-vable property, of improving the soil, of developing agriculture, and of extinguishing the (existing) debt on immovable property (la dette fonoi^re).* The bank may treat with French or foreign assurance companies with the view of facilitating the liberation of borrowers (from debts to such companies). In BO case, whatever be the origin or nature of the funds available, shall the bank do any busi- ness, whether in the form of purchases or repurchases, advances or renewals on paper other than land mortgage or communal f debentures, or oq paper accepted by the bank of France as security for advances. The bank is prohibited from buying or making advances upon its own shares. 2. The bank may receive deposits at interest or without : the total of such deposits shall not exceed £4,000,000. Deposits shall be invested as follows : — (1) One-fourth at least in account current with the Treasury at such rate of interest as shall be fixed by the Finance Minister ; a larger proportion may be similarly invested with his consent. Securities to the above value may be deposited instead of cash, if accepted by the minister. (2) The balance in Government paper or Treasury bonds, or in advances for terms not exceeding 90 days on the security of debentures issued by the Credit Foncier or of securities as accepted by the Bank of France for advances, or, finally in biUs of at most 90 days, bearing at least two good signatures and made out to the order of the bank. Chapter II. — Capital and Shares. 4 to 17. (The capital is fixed at present at £6,820,000 in 341,000 shares of £20 each, but may be increased to £8,000,000, when one-fourth at least shall be invested in Government paper; the capital shall be maintained at a sum equal to at least one-twentieth of the total debenture issue. The special function of the capital is to secure the business engagements of the bank and especially its debenture issue : it is a guarantee fund rather than a working capital. Shares are to bearer or per- sonal, the latter being only transferable by a transfer in the bank's registers based upon a written document. The liability of shareholders is strictly limited to the amount of the shares held by them.) Chapter III. — Administration. 18 to 22. (Describe the powers and duties of the governor and sub-governors. The shares neces- eaxily held by them (200 and 100 respectively) are inalienable so long as they hold office, and are specially charged as security for their good conduct.) 23 to 35. [Deal with the council of administration (board of directors), which has from 20 to 23 members exclusive of the governor, sub-governors, and supervisors (censeui's) ; the ordinary mem- bers are appointed by the general meeting : three must be high finance officers (Trisoriers payeurs g6neraux des finances)]. 28. Every director must, within eight days of his appointment, deposit in the office of the bank 100 shares, which shall be inalienable so long as he holds office. 29. The duties of directors are gratuitous ; they are allowed sitting fees (jetons de presence), the amount of which shall be settled by the general meeting. ***** 36. Supernsors (censeurs, auditors). — The supervisors are three in number appointed by the general meeting : they hold office for three years, retire at the rate of one per annum, but are re-eli- gible. Articles 27, 28, and 29 apply to supervisors. 37 The duty of the supervisors is to watch over the strict execution of the articles. They attend, the meetings of the board of directors, assist with their opinion (but not with their vote). They suTJervise the preparation and issue of debentures, examine the balance sheet and annual accounts, and report on these matters to the general meeting when necessary. The books, accounts, and aU documents must always be presented for their examination when so required : they may at any time verify the cash balance and bill case; and they may, when aU three agree to that effect, require the convocation of an extraordinary general meetiag. 38 General Meetina. —(Re^Teaents the mass of shareholders, but consists only of the 200 largest holders Proxies can only be given to shareholders. Forty qualified members form a quorum if they hold one-tenth of the total share issue : failing such conditions, a second meeting shaU be caUed, which shall have full powers whatever the number of members present or of shares held. The other provi- sions are of an ordinary nature.) * See the preceding note foi- the development of the bank's operationa. + That is, debentures issued by the bank agfainst loans to oommnnes. 20 Chapter IV. — Loans. 51. Agreeably to article 1 the bank will grant mortgage loans of two classes, viz. :— ■ (1) Long-term loans repayable by annuities so calculated as to pay off the debt in a period of 10 years at the least and 75 years at most, whether in France or in Algeria. (2) Short-term loans, repayable in lump or by instalments. Loans may be made either in cash or in land mortgage debentures. 52. The bank wUl only lend to owners of immovable property on first mortgage, save only in •such cases as are contemplated by the law and these articles. (Eepeats the conditions of the law, section 6.) 53. When the bank deems it necessary to undertake the formalities of the ' purge, ' it shaU proceed in conformity with section 1 of the law of 10th June 1853. * 64. The bank shall not grant loans (1) on theatres; (2) on mines-and quarries ; (3) on undivided property,! unless the mortgage extends to the whole of such property and has the consent of all the ■co-sharers ; (4) on property in which possession and ownership (I'usufruit et la nue propriety) are not united, unless all those interested join in agreeing to the mortgage. 55. The bank will only accept mortgages on properties which jdeld a certain and durable income. J 56. The amount of a loan shall not exceed that of one-half of the value of the mortgaged property.§ It shall not exceed one-third of such value in the case of vineyards, || woods and other properties -of which the income depends upon plantations. Factory buildings shall only be estimated at their intrinsic value irrespective of their value as attached to the enterprise. 57. In no case shall the annuity to the payment of which the borrower binds himself exceed the "total income of the property mortgaged. ^ 58. The rate of interest. on loans shall be fixed by the board of directors, but shall not exceed by more than 0-60 per cent, the actual rate (prix de revient) payable by the bank on debentures in issue at the time the loan is granted. ** 59. The annuities shall be paid in cash, and shaU include (1) the interest, (2) the sinking fund contribution as determined by the rate of interest in combination with the duration of the loan, ff 60. Annuities are paid by half-yearly instalments at the dates fixed by the board of directors (now 30th April and 30th October). At the time of granting the loan the bank wiU retain such amount as will cover the interest, &c., -due up to the end of the first half-yearly period. 61. (Interest at 5 per cent, is payable on all arrears whether of annuities or costs of any sort.) 62. Moreover, default in the payment of a half year's dues renders the defaulter liable to a demand for the repayment of his whole debt in f uU one month after accrual of the arrear. 63. Borrowers are entitled to repay their debts in advance, whether in whole or in part. Repayments in advance may be made at the choice of the debtor, either in cash or in land mort- gage debentures of the series mentioned in the loan deed. When repaid in debentures, such deben- tures shaU be received at par, whatever may be their market value. A borrower repaying in advance must pay compensation (indemnity) to the bank, which shall not exceed 3 per cent, of the sum so repaid. Jf Sums repaid in cash in advance shall be expended in redeeming or purchasing land mortgage debentures, or in granting new loans. 64. A borrower is bound to notify to the bank, within one month, any alienation, whole or partial, which he may have made (of the property mortgaged). In default of such notification in due time, the bank may demand fuU repayment of his loan together with compensation as mentioned in section 63. 65. A borrower must also notify, within the period mentioned above, any deteriorations which the property may have suffered and aU natural events which might dimiuish its value, or disturb his possession or injuriously affect his rights of ownership. * See sections 19 to 25 of the law supra, and pp. 108-9 and a08 of Vol. I. + This indicates a graye Indian difficulty ; the French bank recognizes it, though a far less common or intricate -question in that ooimtry of surveyed, settled, and fairly well registered estates and claims. ' t This prevents the bank from undertaking the role of a land improvement bank : it will not lend on property which, after and by means of the expenditure of the loan, may become valuable, but is not so at the time the loan is sought. Such loans are given by a different class of banks and under special precautions. See infra ' Land Improve- ment bank," and Vol. I, pp. 70, 63-65. This section also explains the refusal, in section 54, to grant loans on theatres, mines and quarries. § That is, of the estimated value, and graat care is taken that such value shall be well within the market value. II This indicates the uncertain value of such properties in France, where the phylloxera, droughts, floods and hail frequently destroy properties or their crops to a frightful extent. ' ' T This is a noteworthy precaution adopted in security both of the bank and of the borrower. The bank will not allow reckless engagements to be entered into, it being obvious, that if a man's income or circumstances are such that he must borrow, that income cannot suffice to maintain him and also repay the loan, except where the loan is intended for a bov^fide and certain improvement. Tliis point is too often lost sight of by borrowers and by lenders— the latter often with intention — in this country. ** This condition marks the care with which the bank, in conformity with the law, seeks to make its loans as chean as possible. If the bank can borrow at 4 per cent., the interest payable to it by the borrower shall not exceed 4-60 • & it succeeds in placing its debentures at 3^ per cent., the charge to borrowers ipso facto falls to 4-10. The cost however must be the actual cost to the bank : its debentures may be issued at 3i per cent., but at a considerable discount ' there may be additional charges for lottery prizes, bonuses on repayment, &o. ; this must be taken into account calculating the actual rate paid by the bank. It The sinking fund contribution obviously differs according to the rate of interest even when the duration of loans IS the same, see Vol. I, pp. 108-110. tt The present rate of suoh compensation is 0-5 per cent, as per section 9 of the law of 6th July 1860 The com pensation is to indemnify the bank for any loss, delay, or cost incurred in the re'investment of the amount. or account in 21 In default of such notification, aijd in any case should the interests of the bank be compromised by such deterioration or events, the bank may in conformity with section 32 of the law of 28th February 1852 (see supra, p. 16) demand repayment of the loan. 66. The loan shall equally be liable to recall, with the compensation mentioned in section 63 supra, should the borrower conceal any suits upon claims at law (hypoth^ques ISgales), or for cancellation or rescission (of a contract affecting the property) which may form a charge upon the property mortgaged to the bank. 67. Property Kable to damage by fire must be insured at the cost of the borrower, unless the bank at the saiiie time holds in security of the debt not only the property in question, but also other property not liable to damage by fire and double the value of the debt. The loaa deed sliall contain a condition transferring (to the bank) in case of damage the amount insured. The policy must, be maintained throughout the whole duration of the loan. The bank may require that the policy shall be made out in its own name and that the premia shaU be paid by itself. In this case the amount of the annuity (payable by the borrower) shall be corre- spondingly increased. 68. In case of damage the amount assured shall be paid direct to the bank. During one year from the date of the damage, the debtor shall have the right of restoring the property to its original condition. During that period the bank will hold the amount of insurance as a security ; after the property has been restored to its original condition, it shall pay over the amount to the debtor after deducting any dues. If, at the end of a year, the debtor has not used his right of restoring the property, or, if, before that time, he has notified to the bank that he does not intend to restore it, the bank shall definitively credit itseK with the assurance amount, setting it off against the debt as a payment in advance. 69. Repayments in advance arising from such damage do not carry the compensation sanctioned in section 63. The bank may demand (the immediate) repayment of any balance due, should it deem that its interests are endangered by the damage. 70. In the v^uation of properties offered in mortgage, all documents, lease deeds and other sources of information tendered by the proprietor seeking the loan shall be considered. The bank may also cause a valuation to be made by experts. In all cases the valuation shall be made upon, a consideration both of the actual income and of the market value. 71. When the property is in order and the security sufficient, the board of directors wiU determine the amount of the loan to be made and wiU proceed to the execution of the conditional loan deed. 72. Aiter obtaining the supplementary statement of registered claims, including that of the bank, the formalities of the ' purge * ' will be carried out if necessary : after such formalities or at once, should the ' purge ' not be necessary, a deed shall declare the conditional deed to be cancelled or rendered absolute, according as registered claims burdening the property shall or shall not have been discovered. In the first case the document must contain a withdrawal of the registration m favour of the bank, and must be signed by the governor only. In the second case the document must be signed by both the governor and the borrower ; it shall recite the completion of aU formalities, the delivery of bonda (debentures) to the amount of the loan, and the date from which interest shall run. 73. All costs and disbursements necessitated by the request for a loan shall be at the expense of the candidate for the loan even where such a loan is not finally granted. Chapter V. — Land Mobtsaqe DEBENTUKBS.f 74. The land mortgage debentures issued by the bank shall be to order or to bearer (nominatives on au porteur). • i. j. i_ 75 Debentures to order are transferable either by mere endorsement without further guarantee than that provided by section 1693 of the Code Napoleon (see section 13 of the la.w supra), or in such, other way as may be determined by the board of directors. The bank is free from further responsibility when it has paid the person holding the debenture^ (tiers porteur) ; in no case is it responsible for the regularity of a transfer.^ Debentures to bearer are transferred by mere change of hands. 76 The amount derived from the issue of land mortgage or communal debentures shall not exceed that of the mortgage or communal loans granted by the bank.§ The amount derived from such issue shall Bending their regular employment (in loans), be mvested in the proportion to be decide 1 by the board in Government paper, in debentures of the Oity of Paris, of districts, and of communes, m shares of the Bank of France, in land mortgage and communal debentures, and m debentures of railway com- panies, the interest on which is guaranteed by the State. 77. No land mortgage debenture shall be issued below £4 in value. 78. Holders of debentures have no right of action for the recovery of their principal and interest save directly against the bank. * See Vol. I, pp. 108-109 and 308 ; also seotiong 19 to 25 of the law supra. . , . , + Bv section 5 of the law of 6th July 1860 relating to loans to oommnnea, debentures issued agamst loans to.- communes, &o., (ohligationa oommnnales) are placed under the rales of the Chapter V, and also enjoy all the rights and nrivileees of land mortgage debentures. .., ,. ,, j j- j. it j. t This provision fcf. section 79, last clause) relieves the bank from connection with the thousand disputes that, mav arise reaardin- the title to debentures and their interest; the bank is entitled to pay to the person holding or presenting the debenture or the interest coupon, and any claimant must sue such person and not the bank. ^1 Thf b is, the amount of the land mortgage debentures shall not exceed that of the land mortgage loans, and that of the communal debentures shall not exceed that of the oommanal loans: see section 6 of the law of 6th July I860 supra, relating to loans to communes ; the two classes of loans are quite distinct. 6 22 79. Debentures shall bear interest, the rate, date and mode of payment of -which shall be fixed "by the board of directors. No longer period than three months shall intervene between the payment of interest by the bank's borrowers and the payment of interest to the debenture-holders. In whatever form the debentures are issued (whether to order or to bearer), the payment of interest to the holder'is valid. 80. Debentures shaU be in the form of documents which shall be taken from a stub. They shall be signed by a director, stamped with the seal of the bank, and countersigned by the governor. 81. The board of directors may authorize the deposit of such debentures in the safe; a certificate in the name of the depositor shall be issued to be returned at withdrawal. The board shall determine the conditions, &c. 82. Debentures shall bear no fixed date for repayment of the capital.* The particular debentures to be repaid shall be determined by lot (tirage au sort). Every repayment shall include so many debentures as may be necessary to prevent those remain- ing in circulation from exceeding in value the amount outstanding on mortgage. 83. With the permission of Government debentures may be made repayable with prizes and bonuses.! . . The board of directors shall determine the rates and amount of such distribution. 84. The drawings are carried out by the board of directors in presence of the supervisors (censeurs). 85. Within eight days of each drawing the numbers drawn must be published by notice at the bank oflB:ce and by advertisement in two of the newspapers in which the banks notices customarily appear. 86. The debentures of which the numbers are drawn shall be repaid on the day mentioned in the published notices, from which date interest thereon ceases. 87. Debentures drawn by lot must, on repayment, be immediately marked with a cancelling etamp. They must be destroyed in presence of the governor, of a director, and of a supervisor, and a memorandum of the fact duly drawn up. Debentures, which return to the bank through payments in advance, must be marked with a special stamp, and cannot be re-issued without fresh countersignature by the governor. They take part Kke other debentures in the periodical drawings. Chapteb VI. — (Deals with the Annual Balance Sheet.) Chapteh VII. — Division of Profits. 89. 3.'he actual profits are distributed as follows : — (1) Five per cent, on the paid-up capital is allotted to the shareholders : (2) An amount not less than 6 per cent, and not exceeding 20 per cent, of the remainder is passed to the obligatory reserve ; other sums may also be allotted to optional reserves, J if so proposed by the board and approved by the general meeting. The remainder will be added to the dividend due to the shareholders. 90. Every dividend not claimed within five years from date of declaration accrues to the bank. Chapter VIII. — The Obligatory Reserve. § 91. The obligatory reserve is accumulated from the proceeds of the annual allotment from profits as per article 89 supra. When such reserve reaches the amount of one-half of the bank's own capital, such allotment may cease, but is renewed should the reserve be drawn upon. This reserve is intended to meet unexpected emergencies should the dividend of any year fall below the amount of 5 per cent., the deficit may be met from the reserve. The investment of the funds of the reserves, both obligatory and special, are determined by the board of directors. (The remaining chapters treat merely of changes in the articles, and of dissolution and liquidation, and do not call for translation.) * That ia, no specific date is marked on a debenture for the payment of that particular debenture. But they all bear a promise of repayment within a particular term, e.g., " Repayable at par as determined by lot (tirage an sort), at latest within 75 years from let January 1884.." + One great secret of the market value of these debentures lies in this article. The " tirage au sort " is not neoes- garily a lottery ; it is merely a, determining by lot (by withdrawing numbers at random from a wheel) the particular debentures to be repaid ; this is frequently resorted to in Kngland for the same purpose. But in Continental Europe it is usual to increase the popularity of these securities by adding the chance of prizes or bonuses. E.g., in the Credit Poncier, at each of the four or six drawings per annum for each issue or series of debentures (loans of 1853 1863 1879, &o.) many hundreds or thousands of debentures each of (say) £20 will be drawn by lot and repaid at par but' in addition, a certain number, e.g., the 50 or 100 first drawn, will obtain prizes varying in value from £4 000 to £50 each. This, though partaking of the spirit of gambling, since the prizes are in reality obtained from a share of the excess paid by the many over the true market value of a debenture at the nominal interest of the debentures is not a regular gambling lottery where a few gain everything to the total loss of the many ; every debenture-holder is eventually repaid at par and may gain a prize. The method of repaying with a universal bonus is wholly free from the real gambling spirit ; a debenture costs an original purchaser £20, and is repayable not at par but at (say) £25 ; e.g., the loan of 1853-54 is wholly repayable at this rate. Here every one obtains a bonus, and the only element of chance is in the accident of drawing whereby some holders obtain early repayment of their investment plus the bonus. Occasionally the prize and bonus system are combined. t E.g., reserves for eaualizing dividends, for the provision of prizes and bonuses, for reooupinc any differenca between the market and par value of debentures, &o. " § Obligatory by section 48 (8) of the law, q.v. 23 LAW OF 6th JULY 1860. (Authorizes the Credit Foncier of France to lend to districts, communes, and syndical associations.*) 1. The 'Cr6dit Foncier' is authorized to lend on the following conditions to districts, communes, -and syndical associations such sums as they may have been permitted f to borrow. 2. Loans may be granted with or without mortgage, J and repayable eithei over a long term by annuities or in a short period in lump or by instalments. 3. Loans are payable in cash only. 4. The commission payable to the bank towards costs of management shall not exceed 0-45 per cent, per annum.§ 5. The bank is authorized to issue debentures in representation and to the amount of its loans (to the above bodies), in conformity with the rules contained in Chapter V of the articles of the bank. These debentures shall enjoy all the rights and privileges attached to land mortgage debentures by the laws governing the Credit Foncier. 6. The sums due to the bank on account of loans to communes, districts and associations are specially and preferentially assigned for the payment of the debentures issued under the present law. The sums due to the bank on account of land mortgage loans remain assigned specially and preferentially for the payment of the debentures issued in representation of such loans. || 7 . The bank may, before granting any loans under the present law, issue temporary debentures for a sum not exceeding £200,000.^ * This is an important development of the CrSdit Foncier ; the demands of an advancing state of society with local Government require roads, schools, hospitals, sanitation, agricultural developments and many other classes of local improvement, and for these money is necessary, the burden of which should, by natural equity, be spread over many years and be borne by those who successively enjoy them ; it is impossible and inequitable to provide the capital for those improvements from revenue, and the result is a demand for long-term loans repayable by annuity. There are many reasons why the State cannot grant these loans to any great extent ; it is difficult for a great State to provide in its budget the large sums annually necessary j the delays in investigation of the projects and in the provision of funds are annoying j it depreciates State credit to owe immense debts ; and there would be a perpetual tendency on the part of local bodies to try and shift burdens, actual or prospective, from their own shoulders to those of the State. Hence the necessity for a great financial institution expressly organized to examine local demands for considerable loans and able to provide funds to any extent at a moment's notice. The ' Credit Foncier ' has been able to meet this demand to an immense amount : between 1860 and 1890 it had granted 16,577 communal loans for £78,720,000, and the outstanding loans in 1890 were valued at £46,540,000. The bodies to whom loans may be advanced are ' Departements, communes, et Associations syndicales.' An elaborate exposition of French administrative methods would be necessary exactly to explain these terms ; suffice it to say that the word ' Departement ' may be rendered ' District ' or ' District Board ' for Madras readers, though the Dfipartement of France is more closely connected with the general administration than the District Board with its mere local powers. The commune or village is a European unit which has no counterpart in Madras administration except the inchoate village union : the European village is a small municipality with property, budget and local powers quite unknown in this Presidency ; the possible development of the Madras village as an administrative unit is one of the most interest- ing of political and social studies and problems. The • Association Syndicale ' is another organization peculiar to Europe, and well worth detailed study as an example for this Presidency. It is found in Europe that many classes of agricultural and rural development cannot be carried out by individuals ; joint action is necessary, such action often extending over the area of several communes ; such are the provision of dykes and banks against encroachments by the sea and rivers, the regulation and improve- ment of canals both for navigation and irrigation, the draining of marshes, the afforestation of tracts of country, the development of waste and incultivable areas, &c. Hence laws have been passed for the encouragement and even the enforcement of such associations ; Government in Europe does not profess to carry out the irrigation and other works undertaken in this Presidency by the Eevenue, Public Works, and Forest Departments, nor is it content with merely suggesting such enterprises by joint action ; it frequently compels such improvements at the expense of the people themselves. For a brief notice of such forced or voluntary associations in Prussia, see Vol- 1, pp. 63 and 64, the laws being those of 1843, 1846, 1848, 1854 and 1879 ; see also ' fieport on the Land Tenures of Europe,' 1869, &c. In France the law for ' Associations Syndicales ' is that of 24th June 1865, amended by that of 22nd December 1888, but the associations were of earlier origin and were regulated by special decrees. The objects of these associations are recited nnder nine heads and are of the nature mentioned above ; the associations may be free or authorized ; the latter alone have certain privileges and are much the most important ; these authorized associations are either voluntary or formed upon the initiative (practically the orders) of the mayor, prefect (collector), x^,. + In most of the German Landsohaften the loans are issued in debentures, which the borrower cashes at the market rates. t See Vol. I, pages 195-196. This section is the result of the proposals to transmute these ancient and useful institutions into mere money-lending banks, a change of doubtful present utility. § Sack rules as are not of importance for the purposes of this report, are not translated. 56 (6) a note whether the privilege is in guarantee of HUs of exchange or of an account current, men the goods or produce may, by special arrangement, he moved to places other than the laruL to which they belong, express mention must he made of the fact. ***** 5. The maximum interest chargeable by each lending institution under section 15 of the law wiU be fixed annually or oftener by the Minister of Agriculture, Industry and Trade, in concert with the Finance Minister, and after taking the opinion of the several institutions Within sucJi limit tne institutions may fix their own rates, which must be notified to the Minister of the Agriculture, &c. Chapter II.— Mortgage Loans for Ageiculttjbal Improvements. 6. Mortgage loans granted under this law may be granted for the following in addition to the objects mentioned in section 18 of the law, viz. : — (1) the fencing of the farms ; (2) the digging and systematizing of drains; (3) the formation of new vineyards, olive-yards, mulberry and orange gardens ; (4) the introduction of high farming with the necessary implements ; (5) the amelioration of the soil ; (6) the embankment of slopes and plains ; (7) forest roads; (8) re-aflorestation ; (9) vats for retting fibre plants. 7. The mortgage deed must contain — (1) a statement of the improvements, &c., to which the loan amount is destined ; (2) a description of the farm offered in mortgage ; (3) the duration of the loan, the number, amount and date of each instalment in repayment ; (4) rules for the issue of the loan by instalments corresponding with the progress of the work ,- (5) the date of interest ; (6) the establishment, when such is the case, of the special privilege over the plw-Yalue resulting to the farm from the improvement effected by the loan, in accordance with section 22 of the law ; (7) a note of the order of the provincial (district) authority when the loan is one granted to an association and secured by the assignment of the common subscriptions, as per section 26 of the law ; (8) the declaration of prior creditors as per section 28 of the law ; (9) a statement of the domicile selected by the borrower for court purposes. Ohaptbr III. — Agricttlttjral Credit Operations and AGRicinLTUEAX Debentures. # * * » # 12. In order to obtain the power to grant agricultural credit under section 31 of the law, mutual associations of proprietors must forward to the Minister of Agriculture, &c. — ( 1 ) the memorandum of association of the society ; (2) the articles mentioning the duration of the society, a summary with valuation of the immov- able property contributed by each member, the conditions of association, the amount of the working or guarantee capital, as per section 31 of the law ; (3j a report on the above immovables made by two experts appointed for the purpose by the civil court on the motion of tho parties. The above prop«rties must be free from mortgages, or at least such portion of them as amounts to the required value of £120,000, and must be such as will yield a fixed income during the whole term of association. 13 to 19 contain rules regarding other societies. - 20. After the Minister of Agriculture as ascertained that the institution which requests permission to issue agricultural debentures, has fulfilled all legal requirements, he will obtain a royal decree authorizing such issue, the opinion of the Committee for Agricultural credit mentioned in the following section being first considered. 21. Upon the motion of the Minister of Agriculture a royal decree shall establish a consultative committee * charged with the duty of giving its vote on matters relating to agricultural credit. 22. The details relating to the issue and withdrawal of agricultural debentures are settled by a special set of rules. t 23. The Minister of Agriculture shall annually present to Parliament a report on the operations of agricultural credit. EULESt EELATING TO AGEICULTUEAL DEBENTUEE8, DATED 27th MAY 1888 AND IOh JANUAET 1892. Chapter I. — Issue of Debentures. [Agricultural debentures are of two classes: (1) those issued under chapter I, (2) those issued under chapter II of the law. They are to be of different colours, and their nature legibly printed. * See the decree, dated 5th September 1888, translated below. t See rules next following, dated 27th May 1888 and 10th January 1892. J The rules beings lengthy are abbreviated and many are omitted. 57 They are to be taken from a stub with, connterfoils and serially numbered and dated ; both stub and debentures are to be duly signed by officers of the issiiing institution : debentures under Chapter I shall have a face value of £4, and under Chapter II of £8. They maybe either to bearer, or personal (nominative) : the interest coupons may be to bearer in both cases, and shall be numbered to correspond with the debentures. In issuing debentures under Chapter I the following is the rule : the institution effects loans with the half of its capital paid up or specially assigned for the purpose, and at the same time creates an equal quantity of debentures which it retains in stock. As new loans are granted these debentures are successively issued to the amount of the loans and at the same time fresh debentures are created to a similar value and placed in stock."] Chapter II. — Transfbe, Exchange, and Issttb of Duplicates. * « jf « * Chapter III. — Withdrawal and Repayment. [The rules provide for a half-yearly public drawing by lot and for purchase in open market ; the amount withdrawn must equal the amount paid in during the half-year on account of the capital of loans. Prior to each drawing the bank must (rule 28) send to the Minister of Agriculture a statement showing (1) the value of loans and debentures outstanding; (2) their dates of issue and expiry ; (3) the amount paid in on account of the capital of the loans (Binking fund) ; (4) the value of debentures bought in by the bank during the half-year ; (5) the amount of any loans. The amount shown in (3) less (4) gives the value of the debentures to be withdrawn by lot. The drawings must be in presence of a Government agent with the usual precautions and formali- ties, as prescribed by the Minister of Agriculture. The debentures drawn must be presented with the unexpired interest coupons ; the value of any missing coupons will be deducted at payment, but the bank wiU then pay the value to any person who presents tiiem. AU debentures drawn by lot wiU be repaid in cash at par. The details of this and the preceding chapter are unnecessary for the present appendix, which is not intended as a manual.] Chapter IY. — Government Supervision.* 37. Institutions granting agricultural credit together with the issue of debentures are, so far as such business is concerned, placed under the supervision (vigilanza) of the Minister of Agriculture, Industry, and Trade, who exercises such supervision through delegates ; these have the right of inspect- ing aU the books and documents relating to such business. 38. Institutions authorised to issue agricultural debentures are bound immediately to communicate to the Minister aU resolutions of their directors on operations under Chapter II of the law. 39. At the end of every month each such institution must, according to section 35 of the law, send to the Minister a statement of the movement and financial position of the debentures ; this statement must be drawn up in the form prescribed by the Minister and must show for each series of debentures the number and value of debentures held permanently in the safe, the value of the loans actually ffranted during the month ; the number and value of debentures taken from the safe and issued m representation of such loans, the amount of debts repaid to the institution ; and the losses of the month. 40 The above institutions must also despatch to the Minister : (1) the annual balance sheet ; (2) a statement of the mortgages in arrears or in dispute ; a statement of the loans earrymg the privilege mentioned in Chapter I of the law not paid up at due date or in dispute. They must also furnish any other information called for. 41 The Minister is entitled to subject aU such institutions to periodical inspection by means of his delegates Such inspections shaU speciaUy ascertain (1) the actual existence of mortgages to the value of haH of the capital paid up or specially assigned as per section 30 of the la*, and the corre- sDondence of such loans with the amount of debentures held in the safe ; (2) the correctness of the tables and statements mentioned in rules 28, 39 and 40 swpra, in view to ascertam the equdibrium between the debentures and the loans granted, and the regularity of the bank's methods; (3) the fact of the canceUation of the withdrawn or paid off debentures. These inspections must take place at least quarterly. ni?PT?W ESTABLISHING UNDEE THE MINISTER OF AGEICULTURB, &o. (ITALY),; A CONSULTATIVE COMMITTEE FOR AGRICULTURAL CREDIT, 5th SEPTEMBER 1888. 1. A consultative committee for agricultural credit is established in the department of the Ministry of Agriculture. i 2 The duties of the committee are : — „.,.,,. ,• • u. i j-i v t, (1) to give an opinion upon the requests of mStitutions granting agricultural credit which propose to issue agricultural debentures ; • i* i j> n\ to studv any developments which mav be feasible m the organization of agricultural credit ; (3) to give an opinion on such other matters pertaining to that subject which may be laid before them by the Minister of AgriculfMre. » The natnre of this snpefviaion while defective in many respectB, seems unnecessarily exacting in others, as in "^^ T Th: diirrlwL's^/SrSe are valuable and are regularly pubUshed by the Minister of Agricnltnre. 15 58 3. The committee is composed of 12 members, appointed by royal decree and retaining oflSce for three years ; one-third resign each year with faculty of re-appointment. Resignation is determined by lot in the first three years. The Director-General of Agriculture, and the director of the section on Industry, Trade and Credit are ex-officio members. A Commissioner appointed by the Minister (of agriculture) for the supervision of credit institutions, shall bold the office of secretary to the committee, and shaU. have a voice in the committee but not a vote (con voto consultivo). The committee shall choose annually its chairman and vice-chairman. 4. The office of member is unpaid. Members who do not live in Rome shall receive their actual travelling expenses and a daily allowance (during meetings) of 15 lire (12' 6). &. The meetings of the committee shall be convoked by the Minister, who will indicate the subjects for discussion. 6. The minutes of the meetings shaU be published in the " Annali del credit© e della previdenza." LAW EELATING TO AGEICULTUEAL CEEDIT IN EOUMANIA (1881).* Chapter I. — Chabacter, Object and Duration of the Loan Offices. 1. In the chief town of each district shall be established an Agricultural Loan office ; each office shall be independent of the others, and have the status of a society. f Each office may estabUsh within its district central or communal agencies. 2. (Duration only 20 years, renewable with the permission of Government.) 3. These loan offices are to provide agriculturists and rural industries with the necessary capital. Chapter II. — Capital. 4. The capital of each office shall be from £6,000 to £12,000, as determined by Government according to the needs of each district. Such capital may be increased by resolution of the general meeting, confirmed by Government. 5. The capital shaU be divided into shares, which shaU. be personal, and can only be held by Eoumanian agriculturists or rural labourers (industriels agricoles). 6. Such shares form a charge upon the assets of the office, and are entitled to participate in the profits. 7. Until such shares are fully paid up, the capital of each office wiU be contributed free of interest by the State and by district funds, viz., two-thirds by the former, and one-third by the latter, on which proportionate dividends wiU be paid. These advances will be re-paid in due proportion as the shares are paid up. 8. An office shall be declared open and entitled to begin business as soon as its capital shall have been paid up, whether by the State, by the district, or by shareholders. 9. From the net profits shall be formed a reserve intended (1) to cover any losses of capital ; (2) to supplement the annual dividend till it shall reach a total of 5 per cent. 10. The reserve shall be formed from an annual retention of 10 per cent, of the net profits. 11. When the reserve shall have attained the amount of one-tenth of the capital, the retention mentioned in section 10 may cease, but shall be renewed should the reserve fund be impaired. Chapter III. — Organization and Administration of the Loan Office. 12. The administration is entrusted to a manager elected by the general meeting for five years, and re-eligible. He must deposit, as guarantee, shares of the society amounting to one-fortieth of the capital. 13. The manager shall be supervised by the commissioners, of whom two shall be elected by the general meeting, and one by Government : all for five years. 14. The manager and commissioners shall be salaried. 15. Until the society is fully constituted, the manager and two of the commissioners shall be appointed by the State, and the third commissioner by the district. 16] and 17. (Eelates to the general meeting : each share has a vote up to a maximum of five.) * Translated into French from Eoumanian by M. Louis Dnrand (Lyons), Secretary. General to the Fourth Con- gress ofthe ' Popular Banks of France,' 1892, to the report of which the above law forms an appendix. The law was not successful ; more than a dozen modiflcationa were made up to 1887, necessitating in 1891 a fresh bill which is translated below, and, eventually (1894), a new law, also translated. f The loan offices were to be joint stock sooietiee, yet guosi-public, working under the control of Govemment with certain large privileges ; the system was doomed to failure from the beginning, for while the State Idesired the benefit of the peasant, the offices sought the profit of their members ; hence antagonistic views and methods : in the words of the " statement of objects and reasons " to the new bill " the joint stock society is a trader which cares little for the needs of the people ; in season and out of season it demands the satisfaction of its claims without pity or con- sideration, while profiting by the privilege which enables it to obtain its dues by summary prooess." (See section 33 of the law j also see Vol. I, p. 132). 59 18. The Minister of Finance shall always be entitled to examine the afEairs and administration -of the society. 19. (Officers of the society who deal with its fnnds are to be regarded as public servants in so far as regards responsiblities and penalties.) 20. The shares shall be of £4. Chapteb IV. — BtrsiNEss \m> Pbivilbghs of thm Loan Offices. 21. Loan offices shall undertake only the following business, viz. : — (1) The discount and negotiation of the bills of agriculturists and rural labourers ; (2) The lending upon the pledge (see section 27) of agricultural produce and stock, or upon the produce and stock of industries dependent upon agriculture ; (3) The receipt of deposits or savings from agriculturists and rural labourers ; (4) The grant of loans to such persons on the deposit of Government paper, or of securities guaranteed by the State. 22. The offices shall not demand more than 7 per cent, per annum as interest except when th« rate of discount at the National bank exceeds that rate. 23. (Omitted.) 24. The offices shall not lend for terms beyond nine months.* 25. Loans shall be based upon bills to order signed by two solvent agriculturists or rural labourers who shall be jointly responsible. 26. Sums paid in on deposit or as savings shall bear interest, and when they preach the value of a share may be converted into a share. 27. In substitution for sections 1685 and 1686 of the Civil Code the delivery f of a pledge shall for the purposes of the loan offices, be considered as made when the agreement has been executed and from the date of its registration, in so far as regards standing trees, produce of the soil of all kinds, whether still attached to the soil or separated from it (i.e., crops whether standing or reaped), whether stored in the cellars, barns, and granaries, or lying in the open, whether standing in sheaves, heaps and stacks, and generally, as regards all bulky goods which are difficult to transport and warehouse. The delivery of a pledge shall be similarly regarded as though actually made in respect of the cattle and farm implements which cannot be removed from the farm without injury to its workiog. 28. The above privilege shall not be binding as against third parties until the date of actual registration in a special register J to be kept for the purpose in the village in which the goods ar» situated. 29. On the expiration of the loan, the property pledged may be sold (by the office) without resort to a court, and in conformity with the provisions of this law (i.e , in case of any arrears on such loan). 30. A. debtor who shall wilfully and in bad faith alienate, waste, remove, or allow the loss of any goods pledged under these provisions shall be punished for breach of trust. 31. Loan offices shall enjoy in respect of debts due to them, a special privilege (prior claim) over the movables entered in sections 26 and 27 (i.e., over the deposits in the office, and over the farm stock, produce, &c., of the debtors). This privilege shall take rank immediately after the claims due for court fees, for funeral expenses, and for the custody of the goods in question. 32. Every act of borrowing from a Loan office will be considered as an ' act of commerce.' All parties to such borrowing shall be Uable to the jurisdiction of the Commercial Court, but Chapter III of the Code of Commerce shall not be appKcable to them. § * This period is mucli too short as a maximum, and the law does not provide for any prolongations. t This section and those following np to 31 inclusive provide for the pledge without actual delivery, of movables, &o., mortgaged for a loan, after the manner of Italian and Belgian special laws, translated immediately above, and of the English bill of sale. J The following rules appear in the Government set of rules framed under section 35 : — 71. The manager must send to the mayor of the commune (head of the village) in which the goods are situated, a request for registration, together with an extract from the loan deed showing the name and address of the debtor, the sum due, the number or quantity, description, &c., of the goods charged. 72. For carrying out the provisions of rule 70 (the same as section 28 of the law) the mayor of each commun* shall keep a special register, in the first column of which he will enter, word for word, the extracts sent to him by the Loan office. In the second column will be entered partial and complete discharges of the goods from the claims of the office. [This rule may be compared with the rules regulating communal societies for purchasing cattle in Canton Thurgau (Switzerland) : see Vol. I, pp. 161 and 162]. In this register all modifications of the original contract shall be entered by marginal note. After registration the mayor must send to the manager a certificate of the registration, showing its date, serial number, and page of the register. i.r,i.-i!Tj The registers must be signed, sealed and initialled (on each page) by the Chief Judge of the Commercial Court, or of the Civil Court where there is no Commercial Court. These registers shall be open to the inspection of the public, and certified extracts may be granted. 73. Mayors who do not carry out the provisions of the previous rules are responsible for all losses caused by such failure. If they make incorrect transcriptions in these registers they wiU be liable under the Penal Code. 74. The formalities recited in the foregoing rules are exempt from stamp duty, registration fees, Ac, in con- formity with section 34 of the law (i.e., for five years only). 75. The goods charged must be insured if there are in the neighbourhood any societies which undertake such insurances. A loan of this class can only be granted after a previous valuation of the goods, which shall be made by special valuers belonging to the office, assisted by the mayor of the commune. § Apparently this is similar to Chapter III of Book I of the Italian Code. 60 33. Execution upon the goods of a debtor shall be levied in cooformity with the law ol distraint or dues to the State.* 34. The business f of a Loan office (les operations des caisses) shaU be exempt from stamp duty for the first five years of its existence. 35. A public t set of business rules, sanctioned by royal decree, shall regulate the appUcation of this law. BILL FOE THE PEOVISION 0¥ AGEICULTUEAL CEEDIT (EOUMANIA).§ 1. An Agricultural bank shall be estabUshed at Bucharest, with a branch in the chief town of every district. 2. The bank shall comprise two divisions: the one for lending to agriculturists and rural labourers the capital necessary for agriculture and for the industries dependent on it ; the other for lending to agriculturists under the law of 1889 (i.e., to peasants who have bought State lands and require capital either for working the lands or for redeeming the perpetual rent-charges). Capital. 3. The foundation capital of the bank shaU, for the first division, be £800,000 entirely paid up by the State. (N.B.—Tlae capital was fixed at this sum because it represents the total loan issue under the former law.) 4. The capital for the second division shall be procured by opening a cash credit with a bank, preferably the National bank, which may rise to £120,000, and shall be repa,id by the State by an issue of stock. Should larger sums be required the bank may obtain an authorization from the legis- lature for an increase of the cash credit. 5. From the annual net profits, arrived at by deduction of all expenses, as shown in the balance sheet, 10 per cent, shall be set aside to form a reserve ; the remainder shaU be paid over to the treasury. 6. When the reserve attains the amount of one-fourth of the capital of £800,000, the share set aside for the reserve may be discontinued, but shall be renewed should the reserve be impaired. Organization and Management. 7. The agricultural bank shall be managed at its Central office by a director, with a sub-director, both appointed by the Minister of Finance under royal decree, and by a staff as indicated in the state- ment below (section 13). Branches will be managed by a manager and staff as mentioned below. * Probably this is not unlike the Italian Law for the distraint of goods for sums due to the State ; see translation of certain sections of that law in this appendix. « The following are the Government rules on this point : — 81. If the loan is not repaid at due date the manager of the Loan office shall forward to the Collector (Caissier- G^n^ral) of the district an extract from the loan contract together with a request for execution against the defaulter. The Collector is bound at once to enforce execution ander the formalities enjoined by the law for recovery of revenue until the arrears are paid over to the revenue officers (les agents du flso). Such payments shall at once be made over to the Loan office which shall give the necessary voucher. 82. (All steps are to be taken and objections disposed of in accordance with the revenue recovery law.) It will be noted that the above privilege is due to the gitasi-public nature of these so-called Joint Stock Societies. They were formed subject to Government rules, under Government supervision, and their management was under Government control ; hence the almost unique privilege of recovery of dues through Government revenue officers. t This provision is not clear, for the public rules issued by Government under the next section provide, in rule 84 that " the loans borrowed by the Loan offices (oontractes paries caisses) shall be exempt from stamp duty for five years. Possibly the words ' les operations des caisses ' refer only to borrowings by an office, and not to loans made by it. Rule 74 (9.'-) also provides certain exemptions, but no others are mentioned in the rules. It is, however, to be noted that in Italy the laws of 1874 on stamps and registration seem clearly to exempt all operations of a co-operative society from stamp duties and registration fees for the first five years of its existence. The heading to section 26 of the stamp law is as follows : — " Exemption of co-operative or mutual societies from every " stamp duty (' da ogni tassa di boUo ') for five years from its foundation, provided that its capital does not exceed "£1200." A similar note is made to section 148 of the law relating to registration fees (suUe taese di registro). These exemptions are expressly continued for co-operative societies in the amendment law of July 1887. Hence, it is probable that the Roumanian law grants a similar privilege. J This set of rules has the force of law and is issued in completion of the law by royal decree : it is not a set of rules issued by the bank. Rule 99 says : " The societies for agricultural credit (Loan offices) shall work in conformity with the law, and with the present set of rules which shall serve instead of articles. But a society may provide its own special set of articles as soon as it has repaid to the State and to the district the whole of the amount granted to it as foundation capital." The only rules needing translation are those printed as foot-notes to sections 27, 28 and 33. § As already stated, the law of 1881, in spite of its dozen amending Acts, was a failure ; the so-called Joint Stock Societies, intended a« Loan offices, were not satisfactorily formed, for the public did not take up their shares, while the action of the societies in following up their dues was considered as opposed to the interests of the peasants. Hence in 1891 (P) the Government proposed a new law of which the text is here given. The text of the previous law has been given rather as an object lesson in failure, than as an example for imitation. The provisions of that law are not very dissimilar from proposals made at various times for India, and the failure of the law, with its resulting cost to the State, carries a suggestive lesson for India. Moreover, the provisions of this attempt at giiasi-Sfcate credit are objectionable from other points of view, in that they aim merely 'at'eheap credit, and not at the reformation of habits and customs through the powers of association, of self and mutual help, of thrift and prudence, &c. The provisions of the bill appear equally unpromising of real success. The leading idea is a Central Government institution with a branch office in each district : the old gwaffi-pnblio Joint Stock Societies are abolish*!, and an attempt is to be made to substitute purely State banks. The attempt steems objectionable in almost every way. 61 8. (Persons who may not be appointed to the posts mentioned in section 7.) 9. All officers of the bank whose monthly pay amounts to £6 or more shall be appointed by royal 10. All officers of the bank or public servants, and are entitled to pension in common with other public servants, their pay being subject to the usual deduction, according to the law resardine pensions. o o 1 1 . The director is charged with, and is responsible for the management of all business. He is, moreover, the Inspector-General of all the branch offices, and for such purpose has the same rights as the State Inspectors of Finance. The sub-director works under the orders of the director, and acts for him in case of necessity. 1 2. The Minister of Finance may, by his inspectors and sub-inspectors, examine at any time th& business and management of the branches.* 13. (Statements of the staff and their pay.) A royal decree shall appoint 64 auditors for the whole territory, who shaU be distributed among the branches by the Minister of Finance.! 14. The directors of the branch offices shall deposit security of £200 in Government paner ("their pay fe to be £240.) i- i- ^ 15. Persons entrusted with the charge of the funds of the bank in any way are responsible as though entrusted with public funds. 16. (Omitted.) OpERATIONB AHD PErVILBGBS OF THB AgBIGULTUBAI, BaNK. 17. The agricultural bank shall only deal in the following business : — (1) in loans on pledge of cattle, produce and •gricultural stock, and of the produce an^ implements of industries dependent upon agriculture ; (2) in loans to peasants for the purchase of cattle, seed and agricultural implement*. These loans shall only be made upon the signature of the borrower and the security of two other solvent inhabitants of the village, and upon an agreement that the cattle, seed and implements shall be pledged { to the bank within 16 days (of purchase). Failure to make such pledge wUl render the borrower liable to the penalties for breach of trast, punishable under the Penal Code ; (3) in the receipt of deposits on account current and of sarings deposits from agriculturists and rural labourers ; § (4) in advances to such persons upon the deposit of public securities or paper guaranteed by the State ; (6) in such business as may be entrusted to it by the National bank, pending the establish- ment of district branches by the latter, as well as in such business as may be turned over to it by the insurance companies for the insurance, by borrowers from the bank, of agricultural and industrial implements, stock and produce. Bills in acknowledgment of a debt based upon pledge shall be negotiable and transfer- able by endorsement. (6) (in loans under the second division of the bank ; these are payable to the borrowers by instalments.) 18. The bank is prohibited from engaging in any other business than that recited in section 17,. and may hold no immovable property save such as is absolutely necessary for its business. 19. No advance to any single person shall, whether granted in one or more loans, exceed £40. |! 20. The bank shall not charge interest at more than 5 per cent, above the rate of discount current at the National bank, and in no case shall such interest exceed 10 per cent. T without the consent of the Minister of Finance. Debts not settled at due date shall pay at the rate of 2 per cent, per annum in addition to the contract rate. No other charge whether under the title of expenses of administration, commission, &c., shall b» made, save only such charges as may become due under the law of distraint. 21. The rate of interest may, with the consent of the Minister of Finance, be changed quarterly. 22. (Omitted.) 23. The bank may lend upon pledge only for terms of three, six, or nine months at the choice of" the borrower, except in the case of loans under section 17 (2) for the purchase of cattle, &c., which may be made for periods up to three years, and in the case of those under 17 (6) which may be repay- able by annuities. 24. Deposits by private persons shall bear interest as determined by the bank with the approval of the Minister of Finance ; in no case shaU such interest exceed the rate of discount at the National bank. 25. In substitution for the provisions of the Code of Commerce, loans under section 17 (2) are at due date demandable and leviable without notice, summons, or other judicial process whatsoever, but solely by ordinary distress as by the law for the recovery of revenue. • The Bill does not give power to inspect the bank itself : this is probably a clerical error, since no other form, of supervision is provided in the bill, so that the director would be wholly uncontrolled. + Since two auditors are allowed for each branch, there are apparently 32 districts in the kingdom of Boumania. J Cf. the practice in Thurgau, Switzerland, and under the Irish Loans Act of 1843 ; see p. 162 of Vol. I. § The bank excludes deposits from non-agricnlturists : the reason is not clear. II This sum was fixed upon because the experience of the societies under the law of 1881 showed that this was a very general maximum. IT The maximum under the Act of 1881 is 7 per cent. : apparently this was found too low. 16 62 26. The live stock, seed, and agricultural implements bougW with the sums advanced hy the hank under section 17 (2), may not be alienated or pledged to third parties, or seized in execution (i.e., for debts due to third parties) until after the complete payment of principal and interest to the bank. 27. (Similar to section 27" of the law of 1881, q.v.) When the goods pledged may have been transformed by an industrial process, the new product shall be considered as the security of the bank.* 28 to 33. (Similar to the corresponding sections of the law of 1881.) 34. Demands and bonds for loans obtained from the bank shall be exempt from stamp duty. All correspondence with and applications to Courts and processes issued at the request of the bank are exempt from stamp duty, but the bank must pay the special tax granted to baUiffs, and the cost of publications in the official gazette as required by the revenue recovery law. 35. All letters and packets of the bank, and all addressed to it by the authorities or by the National bank shall be free of postal charges. 36. The revenue collectors of the State shall serve as agents f of the bank for the purposes of valuation, verification and collection, and for the renewal and execution of contracts. They shall be granted such remuneration as shall be fixed by the Minister of Finance. 37. Collectors, mayors, and notaries shall be liable civiUy and criminally for any infraction of their duties. The bank shall enjoy a prior claim (privilege) over the property of these officers, which shall take rank immediately after that of the State. 38. (Omitted.) 39. The deeds of the bank shall be authenticated, upon demand of the parties, by the mayor of the village where the borrower resides. When such mayor | can neither read nor write the document will be authenticated at the request of the parties by the deputy -mayor, or by any literate village councUlor ; if all are illiterate, it shall be authenticated by the judge of the canton in which the borrower resides or in which the branch office is situated. The bank need not be represented before the authority which authenticates the deed, which may be verified by the authority in the sole presence of the borrower. Tbmporaey Provisions. 40. The Minister of Finance will repay (to share-holders) the value of the shares issued up to date, and will return to the districts (district councils or boards) the sums advanced by them, he wiU also put into liquidation the existing societies for agricultural credit. LAW OF 1st APEIL 1894 ESTABLISHIN& AN AGEIOULTUEAL BAi^K (EOUMANIA).§ 1. The present law authorizes the establishment of an agricultural bank for the purpose of assist- ing agriculturists with short term loans, to be granted with or without the pledge of produce, cattle, and agricultural stock. 2. The capital of the bank shall at first be £200,000 in 10,000 shares of £20 each. The capital may, with the sanction of Government, be increased by successive issues up to £800,000. 3. The constitution of the bank shall follow the rules laid down by Chapter I of Part VIII of the Code of Commerce with the exception of section 138 the bank being subject solely to the authorization of Government. || With this object the bank shall, after its establishment, enjoy in its relations with borrowers and others, the special regulations hereinafter laid down and which depart in its favour from the ordinary law. The duration of the bank shall be 20 years. 4. The head-quarters of the bank shall be at Bucharest. The bank shall establish, within one year from its foundation, a branch or agency in the chief town of every district. It may also elsewhere establish branches and agencies according to its needs. Until the establishment of such branches or a gencies, the bank is authorized to utilize the staff of the ' credito agricolo '^ for carrying out, under the bank's responsibility, its business in such places. Such delegation of duties shall not in any way engage the responsibility of the State. 5. A Government Commissioner shall supervise the operations of the bank, and, above all, the issue of the notes mentioned in section 6 (6). The salary of the Commissioner shall be fixed by Government in consultation with the authorities of the bank, and shall be paid by the latter. * E.g., where cotton, &o., pledged to the bank has been spun into thread or woven into cloth, the thread or cloth shall be considered as the pledge. f These and other privileges are granted, beoanee the bank is purely a State bank. j The mayor of the commune probably corresponds in status very nearly to the head of the village in Madras as shown by this proviso which contemplates his iUiteraoy. But he probably lacks the importance due to the hereditary position of the Madras village oiBcer. § From the Bulletin for April 1894 of the Italian Minister of Agriculture, Industry and Trade. This appears to be the form finally assumed by the bill immediately preceding : the changes are very considerable. The practical success and even the wisdom of the experiment seem whoUy doubtful. As the Bulletin was only received in September 1895, the present law is not mentioned in Vol. I. 11 Section 138 of the Code of Commerce lays down that no company may be formed without the authorization of the local Commercial Court ; see translation infra in the present appendix. ^ The meaning of this is not known, and it seems probable that the words " credito agricolo " are a mistake for " Revenue ofacers " : see section 36 of the bill. This is not the only place where the translation into Italian is doubtfnl. 63 «. The bank may engage only in the following operations : — (1) It may lend, by preference to agrioulturists, whether proprietors or tenants, upon mortgage * of agricultural produce, cattle, implements, or on pledge of receipt notes (warrants) for produce deposited in general warehouses,! on crops whether reaped or not from 1st June, on maize, whether stored or uncut from 1st September ; all such produce must be insured against hail or fire. The loans must in no case exceed half the value of the mortgaged produce, &c., or the period of nine months : (2) it may discount the bills of agriculturists of good reputation for solvency, provided that such bills shall not exceed 100 days in c-oMance. It may also discount and endorse the receipt notes (warrants) regularly issued by the managers of general warehouses against crops in deposit : (3) it may receive deposits from agriculturists whether in cash or in goods, and may open accounts current against such deposits. It may also open similar accounts current upon the mortgage (without delivery) of goods as per sub-section 1 sv^ra : (4) it may make or receive payments on account of its agricultural clients, and may, on their behalf, purchase or sell securities or agricultural produce ; (5) it may undertake, on behalf of agrioulturists, the various operations necessary on the deposit of produce in general warehouses ; (6) it may, in order to facilitate business between the agencies, branches and central office, issue notes J {iuoni di eassa) payable to order and at sight ; these notes shall be receivable in payments at Government offices up to an amount equal to half of the paid-up capital of the bank. No such note shall remain in circulation beyond thirty days from date of issue ; they shall be transferable by mere change of land ; (7) it may re-discount the contents of its biU case, whether its mortgage notes or agricultural bills, with the National or other bank within the limits of the credits granted by such institutions. Such re-discounts may not be effected beyond one and a haK times its capital. § (8) the bank is expressly prohibited from acquiring immovables, save those necessary for carrying on of its business, from acquiring and holding Government paper, land mortgage debentures, shares or any other class of public security. |l Exception to this rule shall only be made in favour of the reserve fund which may be invested in paper of the Roumanian Government. (9) the interest demanded by the bank upon its loans whether against mortgage in accordance with section 6 (6), or on the discount of agricultural bUls or pledge-notes in accordance with section 6 (2), shall not eiceed by more than 3 per cent. The rate of discount of the National bank. Such interest shall be fixed every month by the Board of Directors, and shall, at the same time, be published as hereinafter provided. 7. From the annual net profits shall, in the first place, be deducted, 10 per cent, for the formation of a reserve. The articles shall settle the mode of distributing the remainder. The above deduction shall cease when the reserve shall have reached the amount of 50 per cent, of the capital. 8. In addition to the publication of the annual balance sheet, the directors must publish monthly an abstract of the business done ; they must also send every month a detailed statement of all classes of business to the Minister of Finance through the Government Commissioner. 9. In modification of sections 1685 and 1688 of the Civil Code the pledge (of movables) will be considered as effected, as between the bank and the borrower, upon the mere ratification of the contract, and will take effect from the date of the document indicating the number, nature, quantity and location of the goods pledged ; it shaU not be needful to remove the goods given in pledge from the possession of the borrower or granter of the pledge. 1[ 10. Within five days from the date of the contract, the deed of pledge shall, on the request of the bank, be transcribed into a special register kept by the Court of the district in which the estate (immobile) is situated. In every commune a similar register shall be maintained, in which shall be entered a brief note of the pledges registered at the Court, for which purpose the Court shall send to the mayor of the commune an extract of every registration effected thereat. As regards third persons the rights of the bank shall not take effect until the date of such entry in the register of the commune. 11. The debtor who shall by his own acts, alienate, waste, remove, or allow to be destroyed the whole or part of the goods pledged, after the loan has been effected, shall be punished for breach of trust (abuso diflducia). The punishment shaU be three months' imprisonment at least and six months' * This is, contrary to the general law, a pledge without delivery, as under an English bill of sale ; see section 9 infra, and following sections. 4 These appear to be similar to dock warrants or certificates for goods held in bonded warehouses. The general law of pledge, requiring actual delivery of goods pledged, necessitates the provision of general warehouses or store- houses (as for silk, &c„ in Italy), where goods may be stored against advances reoeired. % These seem to be a sort of imitation of the notes of Scotch Banks, the work of which, in country places, was, in early days, when communications were less easy and secure, much facilitated by the issue and receipt of their notes in place of actual cash. § This is very vague : presumably it means that the total of the bills, &c., under re-disoonnt may not, at any given moment, exceed one and a half timfis the capital. II It is evident that the legislature had in view the example of the French Society called " he Cridit Agricole," which started with objects similar to those contemplated by the present law but which lamentably failed owing partly to its dabling in speculative investments in shares and securities. Such investments were, however, only the proximate cause of its failure as a society of agricultural credit. (See Vol. I., pp. 125, 126.) IT This is the " gage sans dessaisissemeni," the adoption of which, in Europe, has long beeu advocated as a neces- -sity for agricnltural credit : the ordinary civil law does not admit of pledge without delivery. The Italian and Belgian, laws were the first to adopt this innovation : cf. the English Bill of Sale. The contract takes effect from the date of the document, not from the date of registration : but see section 10„ j)ara. 2 for the effect of registration. 64 at most, and, in modification of section 60 of tlie Penal Code, the Court shall not admit extenuating- ■circumstances in regard to this special offence.* 12. Saving the preferential right (privilegio) of the landlord for the rent of the year in which the loan shall be effected and of that which foUows, beginning with the agricultural haK-year (23rd April to 26th October), and saving also all such other prior rights as contemplated by sections 172S and 1730 (2), (3), (4), (5), (7) and (8) of the Civil Code, the loans of the bank contracted in accordance with section 6 (1), of the present law are specially privileged, (have special preferential rights) over the goods pledged. The bank has the same preferential rights over sums owed to the debtor by Insurance Societies in case of damage to the goods pledged. The bank shall not lend against pledges to the proprietors and tenants of farms mortgaged to the rural land bank until the expiration of the period of such mortgages. 13. Every loan granted by the bank in conformity with section 6 (2) and following sub-sections, shall be considered a commercial transaction.! All parties to such transactions shall fall within the jurisdiction of the Commercial Courts, but Book HI of the Commercial Code shall not apply. J In its relations with other banking institutions the bank shall be wholly subject to all the provisions of the Code of Commerce. 14. Proceedings against debtors in the case of loans under section 6 (1) of the present law shall be carried out according to the rules next following : proceedings for the recovery of any other debts shall be made in conformity with the Code of Commerce. 15. If a debt§ shall not have been paid up on due date, the bank shall present an application to the President of the Court of the district in which is situated the property where the goods pledged are located. The President of the Court shall, within three days at latest, despatch a notice to the debtor that unless within eight days from receipt of the notice he settles his debt, the pledged goods will be sold. This notice shall be served on the debtor by the Court baUiff, and, in case of the debtor's absenc* or in case he refuses service, it shall be left at his house and in the communal office. When the debtor is a tenant, the notice shall in the same manner, be brought to the notice of his landlord; without such formality the proceedings shall not be binding against him (i.e., apparently against the landlord). , 16. If, on the expiry of the date entered in the notice, the debt is not settled, the Court shall make an order for the sale of the goods by the Court bailiff. The bailiff shall make an inventory of the pledged goods and shall draw up a memorandum of the proceedings with the aid of a communal councillor and two witnesses belonging to the commune. This memorandum shall be signed by the bailiff, by the persons who have assisted him and by the- person against whom the proceedings are made : should any of them refuse or be unable to sign, a note shall be made to that effect in the memorandum. 17. A copy of the inventory and of the memorandum shall be delivered to the person against whom the proceedings are made and a receipt for the same shall be taken from him : in case of hie- absence or refusal to receive the same, the copies shall be left at the communal office. A second copy shall be deposited in Court from the date of the memorandum no other proceedings or attachment shall have antagonistic effect against the goods in question, even though on account of other privileged dues owed to the bank.|l 18. The sale of the pledged goods shall take place at the end of 15 days from the date of the memorandum by order from the Court. The Court shall, before making such order, ascertain whether any other attachments or proceed- ings are in existence against the said goods. Where such proceedings exist and related to dues (crediti) privileged under section 12 of the present law, the Court will order the sale of the goods to such amount as will cover these dues also. 19. After the order has been drawn up a notice of the sale shall immediately be published throughout the taluk (circondario) where the auction is to take place, mentioning the place (date) and hour of sale, and the goods to be sold. 20. At the date fixed for the sale the Court bailiff shall repair to the place where the goods in- question are located, in company with a communal councillor and a police officer, or in default of such persons, with two witnesses, and shall proceed to the sale of the goods, lot by lot, until the realization of a sum sufficient to cover the dues. The remainder (if any) of the goods shall be delivered to the owner or to his representative, provided that no other attachment exists against goods : the owner or his representative shall give his receipt for such goods by entering his signature on the sale memo- randum. Should any of the goods to be sold be subject to an^ other attachment besides, that on which the Court has ordered their sale, the bailiff shaU invite the persons charged with such other attachment to be present at the auction ; any goods not sold shall be delivered to such persons who shall give receipt for the same. * This ia one of the provisions which indicates the difficulties of a central State-organized bank, and the doubts felt by the f ramera of the law as to its success without drastic legal provisions. The nature of the 'minimum punish- ment is noteworthy. t In continental Europe the word •commercial' has a rather technical meaning; all Acts of commerce are- governed by the Commercial rather than by the Civil Code, and are subject to the jurisdiction either of the regular Commercial Courts or of the Commercial side of the ordinary Civil Courts. See elsewhere in this Appendix. X The fioumanian Code is similar to that of Italy, in which Book III treats of the dissolution and liquidation of companies. § I.e., under 6 (1) ; See section 14. II The meaning is not quite clear ; apparently when the goods have once been thus attached no subsequent attach- ment is valid as against such prior attachment, but must take a lower rank. But section 12 expressly reserves the prior right of a landlord. Perhaps the landlord only has a prior right until the date of the memorandum of attach- ment ; in other words the bank's claim is preceded by the landlord's claim until actual attachment when the bank's-- <}laim takes precedence. This is contrary to the rights of a landlord under the Bills of Sale Act (England) by whiohi" 4he right of a landlord is saved even though the goods are actually under attachment. 65 or J^nnZfirrlZZ S' representatiye or the persons charged with any other attachment, refuse ^ClXcommuZTLY ^^l^A,&°°ff. ^^l said surplus goods shall be delivered to the mayor Tei^ nature TXLnfulv;,v''5 Vl^ ?°^'f ^^"'^ ^* '^ ""^^^' '^S^theT with a memorandum showing xneir nature and quantity, which shall also be entered in the sale memorandum. bidder.' '•^^^ ^'^^^ '^^^ ^« ^y Public auoion and the goods shaU be knocked down to the highest per cl\°of%tamo?ntS'' '" ''' ""'"' ""' '"^"^^ ^'"^ '^^P^^^*^'' "^*^ ^'^ ^^^« ^ ^^^ ^^^"^ *° 1° «al« tlf JwT.^^"^^ ^\*^ ^^^ ?? *^^ 'P°* *^* ^"*'*^°^ ^°*««' ^^^^'^ t^e^eo^ tlie amount obtained by the thi '«,^1 n^n ! r°T? .^^""^ ^ *^^ ^^^ ^''^ ^' *'°'*«' *^'i ^^« *1^« debtor an acknowledgment showing the sum coileeted. If there are no other attachments or executions on the property, any surplus receipt! shall be paid over to the owner in cash on the spot. f f j> j f i-™ 23. The debtor or his representatives shall sign the auction note reciting the conclusion of the anair and its results. Should the debtor refuse to be present at the sale or to accept a receipt and any burplus as men- tioned m section 22, the baibff in the presence of two witnesses taken from the bystanders shaU note such refusal at the end of the auction note, and shaU deposit the receipt in the communal office ; the surplus cash shall be remitted through the district treasury to the office for deposits to await any claim. The deposit receipt shaU be kept by the court which ordered the auction. i-v, ^ti ^^^^ *^® '^^^^ ^*« ordered the sale including therein any dues on any privileged claims otiier than those of the bank, as per section 12 and when the sum obtained by such sale shall not cover the whole of the dues for which the sale was ordered, the court shaU proceed to distribute such sum and shall determine the order of priority of the claims in the manner provided by section 26 infra. 25. The auction note shall be made out in triplicate, one copy of which shall be deposited in the communal records, the second in the court, and the third shall be sent by the President of the court to the bank together with the amount obtained by the sale towards the cancehnent of the debt. 26. Objections raised to proceedings taken against goods under the present law shall be made to the district court within eight days from the date of publication of the notice issued under section 19 sitpra. Objections by the debtor or pledgor shall not be admitted unless accompanied by a receipt intimating the deposit of the amount for which proceedings had been issued. In both cases the court shall treat the matter as urgent. Proceedings before the court under this section shall be exempt from stamp duties as regards the State.* The orders of the court shall be subject to appeal within 15 days from date of the order, on the ground that it has exceeded its powers, that it has no jurisdiction, or that it has acted illegally. 27. A public set of rules compiled by the Minister of Finance in concert with the Minister of Justice shall prescribe aU details necessary to execute the present law. 28. As soon as the law has been published Government shall open a public subscription for the capital of £200,000 mentioned in section 2. The bank shall not be established or commence business untU fuU subscription of 10,000 shares. 29. As soon as the subscription has closed, the Minister of Finance shall call together the share- holders with the object of establishing the bank and of fulfilling the requirements of the Oode of Commerce as per section 3 swpra. BILLS OF SALE ACT, ENGLAND 1878. | (41 & 42 Vict., Chap. 31.) An Act to consolidate and amend the Law for preventing frauds wpon creditors ly secret Bills of Sale of Personal Chattels. [22nd July 1878.] 1. Short title. — This Act may be cited for all. purposes as the Bills of Sale Act, 1878. * Verso lo stato ; tte meaning is not quite clear ; apparently it means that stamp dnties as on plaints are not leviable, but that other costs are. t See Vol. I, pp. 317-18. These Acts are here entered because of the similarity of some of the provisions to those of the special laws for agricultural credit in Italy and Belgium. Moreover the bill of sale is much used in small credit in Great Britain and Ireland ; in the latter island it is greatly used, and — it is said — abused, in the supply of credit, frequently usurious, to small farmers. These particular Acts do not however apply to Scotland and Ireland. The Act of 1878 seems to have been drawn chiefly in the interest of creditors ; to prevent fraud on the part of borrowers, and to enable lenders to ascertain the real nature of the security offered. That of 1882 protects debtors also, especially sections 4, 7, 8 sfaA 9. The bills of sale known as " conditional," vii., mortgages of movables granted to secure the payment of money, where the property remains in possession of the grantor of the bill (i.e., the borrower), are those of most interest for the purposes of this study ; " absolute" bills, that is, out and out sales, are of no present interest. A bill of sale is a doculnent by which the property in personal chattels is transferred without transfer of posses- sion ; usually the operation is intended to provide security for the repayment of money lent by the grantee of the bill of sale to the grantor ; should the grantor fail to meet his obUgatioms to the grantee, the latter nas the right of instant seizure of the chattels in question, as entered in the schedule to the bill of sale {see section 3 of the principal Act (1878), and section 7 of the Amendment Act, 1882, with the note thereon). But a bill of sale does not protect the goods against the right of a landlord to distrain them for his rent, or of the authorities for rates and taxes i these are prior or preferential rights (privileges) which cannot be defeated by contract claims. The definition of the expression " personal chattels " in section 4 is important. The works principally consulted are those of Messrs. D. B. Macalpin, T. W. Hayoraft and Herbert Eeed. 17 66 3. Application of Act. — This Act shall apply to every bill of eale executed on or after the first day of January one thousand eight hundred and seventy-nine (whether the same be absolute, or subject or not subject to any trust) whereby the holder or grantee has power, either with or without notice, and either immediately or at any future tiine, to seize or take possession of any personal chattels com- prised in or made subject to such bill of sale. 4. Interpretation of terms. — In this Act the following words and expressions shall have the meanings in this section assigned to them respectively, unless there be something in the subject or context repugnant to such construction ; (that is to say). The expression " biU of sale " shall include bills of sale, assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for pur- chase moneys of goods, and other assurances of personal chattels, and also powers of attorney, authorities, or licenses to take possession of personal chattels as security for any debt, and also any agreement, whether intended or not, to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon, shall be conferred, but shall not include the following documents; that is to say, assignments for the benefit of the creditors of the, person making or giving the same, marriage settlements, transfers or assignments of any ship or vessel or any share thereof, transfers of goods in the ordinary course of business of any trade or calling, bills of sale of goods in foreign parts, or at sea, bills of lading, India warrants, warehouse-keeper's certifi- cates, warrants or orders for the delivery of goods, or any other documents used in the ordinary course of business, as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of such docu- ment to transfer or receive goods thereby represented : The expression "personal chattels" shall mean goods, furniture, and other articles capable of complete transfer by delivery, and (when separately assigned or charged) fixtures and grow- ing crops, but shall not include chattel interests in real estate, nor fixtures (except trade machinery as hereinafter defined), when a9signed together with a freehold or leasehold interest in any land or building to which they are affixed, nor growing crops when assigned together with any interest in the land on which they grow, nor shares or interests in the stock, funds, or securities of any government, or in the capital or property of incorporated or joint stock companies, nor chooses in action, nor any stock or produce upon any farm or lands, which by virtue of any covenant or agreement, or of the custom of the country ought not to be removed from any farm where the same are at the time of making or giving of such bill of sale : Personal chattels shall be deemed to be in the " apparent possession " of the person making or giving a bill of sale, so long as they remain or are in or upon any house, mill, warehouse, building, works, yard, land, or other premises occupied by him, or are used and enjoyed by him in any place whatsoever, notwithstanding that formal possession thereof may have been taken by, or given, to any other person : " Prescribed " means prescribed by rules made under the provisions of this Act. 5. Application of Act to trade machinery. — From and after the commencement of this Act trade machinery shall, for the purposes of this Act, be deemed to be personal chattels, and any mode of dis- position of trade machinery by the owner thereof which would be a bill of sale as to any other personal chattels, shall be deemed to be a bill of sale within the meaning of this Act. For the purposes of this Act— "Trade machinery" means the machinery used in, or attached to, any factory or workshop- 1«^.— Exclusive of the fixed motive-powers, such as the water-wheels, and steam engines, and the steam boilers, donkey engines, and other fixed appurtenances of the said motive- powers ; and, 2nd. — Exclusive of the fixed power machinery, such as the shafts, wheels, drums, and their fixed appurtenances which transmit the action of the motive-powers to tbe other machinery, fixed and loose ; and, Zrd. — Exclusive of the pipes for steam, gas, and water in the factory or workshop. The machinery or effects excluded by this section from the definition of trade machin- ery shall not be deemed to be personal chattels within the meaning of this Act. "Factory or workshop " means any premises on which any manual labour is exercised by way of trade, or for purposes of gain, in or incidental to the following purposes or any of them ; that is to say, (a) In or incidental to the making any article or part of an article ; or (6) In or incidental to the altering, repairing, ornamenting, finishing, of any article • or (c) In or incidental to the adapting for sale any article. 6. Certain instruments giving powers of distress to be subject to this Act. — Every attornment instru- ment, or agreement, not being a mining lease, whereby a power of distress is given or agreed to be given, by any person to any other person by way of security for any present, future, or contingent debt or advance, and whereby any rent is reserved or made payable as a, mode of providing for the payment of interest on such debt or advance, or otherwise for the purpose of such security only shall be deemed to be a biU of sale, within the meaning of this Act, of any personal chattels which may be seized or taken under such power of distress. '^ Provided, that nothing in this section shall extend to any mortgage of any estate or interest in any land, tenement, or hereditament, which the mortgagee, being in possession, shall have demised to the mortgagor as his tenant at a fair and reasonable rent. 7. Fixtures or growing crops not to be deemed separately assigned when the land passes by the same instru ment. -No fixtures or growing crops shall be detmed, under this Act, to be separately assigned or charged by reason only that they are assigned by separate words, or that power is given to sever them 67 ^fwil^r^-"' ^^^''g *<^ J^''^^ tl'ey are affixed, or from the land on wliich they rtow. without otherwise taking possession of or dealing with such land or building, or land, if by the^amelnstru tIT^Z which such crops grovv, is also conveyed.or assigned to the same persons or person iJie same rule of construction shaU be applied to all deeds or instruments; includin/fixtures or gro^ng crops, executed before the commencement of this Act and then subsisting and in^f^ce in dl questions arising under any bankruptcy, Hquidation, assignment for the benefit of creditors, or exe- this Act ^'°'®'' ^""^ *'""^*' ^^"^ ^^^ *^^® P^*"® ''^ ^^ ^''^*"^' ''**«' *^^ commencement of 8. (Repealed by section 15 of the Act of 1882.) 9. Avoidance of oertaindiy>lwate bilk of sale.— Where a subsequent biU of sale is executed within or on tlie expiration of, seven days after the execution of a prior unregistered bill of sale, and com-' pnses au or any part of the personal chattels comprised in such prior biU of sale, then, if such suDsequent biU of sale is given as a security for the same debt as is secured by the prior biU of sale or tor any part of such debt, it shaU, to the extent to which it is a security for the same debt or part ttereot, and so far as respects the personal chattels or part thereof comprised in the prior biufbe absolutely void, unless it is proved to the satisfaction of the court having cognisance of the case that tbe subsequent bill of sale was bonS fide given for the purpose of correcting some material error in tHe prior bill ot sale, and not for the purpose of evading this Act. • .J^^i ,-^'"^f "f ''^ff^^ering bills of sale.— A bHl of sale shaU be attested and registered under this Act m tne following manner : — (1) The execution of every bill of sale shaU be attested by a Solicitor of the Supreme Court, and the attestation shall state that before the execution of the bill of sale the affect thereof has been explained to the grantor by the attesting Solicitor.* (2) Such bill, with every schedule or inventory thereto annexed or therein referred to, and also a true copy, of such bOl and of every such schedule or inventory, and of every attest- ation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale bemg made or given, and of its due execution and attestation, and a descrip- tion of the residence and occupation of the person making or giving the same (or in case the same is made or given by any person under or in the execution of any process, then a description of the residence and occupation of the person against whom such process issued), and of every attesting witness to such bill of sale, shall be presented to and the said copy and affidavit shall be filed with the registrar within seven clear days after the making or giving of such biU of sale, in like manner as a warrant of attorney in any personal action given by a trader is now by law required to be filed. (3) If the bill of sale is made or given subject to any defeasance or condition, or declaration of trust not contained in the body thereof, such defeasance, condition, or declaration shall be deemed to be part of the bill, and shall be written on the same paper or parchment therewith before the registration, and shall be truly set forth in the copy filed under this Act therewith, and as part thereof, otherwise the registration shall be void. In case two or more bills of sale are given, comprising in whole or in part any of the same -chattel, they shall have priority in the order of the date of their registration, respectively as regards «uoh chattels. A transfer or assignment of a registered biU of sale need not be registered. 11. Renewal of registration. — The registration of a bill of sale, whether executed before or after the commencement of this Act, must be renewed once at least every five years, and if a period of five years elapses from the registration or renewed registration of a biU of sale without a renewal or further renewal (as the case may be), the registration shall become void. The renewal of a registration shaU be effected by filing with the registrar an affidavit stating the date of the biU of sale and of the last registration thereof, and the names, residences, and occupations of the parties thereto as stated therein, and that the bill of sale is still a subsisting security. Every such affidavit may be in the form set forth in the Schedule (A) to this Act annexed. A renewal of registration shall not become necessary by reason only of a transfer or assignment of a biU of sale. 12. Form of register. — The registrar shaU keep a book (in this Act caUed " the register ") for the purposes of this Act, and shaU, upon the filiag of any biU of sale or copy under this Act, enter therein in the form set forth in the second Schedule (B) to this Act, annexed, or in any other prescribed form, the name, residence, and occupation of the person by whom the bill was made or given (or in case the same was made or given by any person under or in the execution of process, then the name, residence and occupation of the person against whom such process was issued, and also the name of the person or persons to whom or in whose favour the biU was given), and the other particulars shown in the said schedule or to be prescribed under this Act, and shall number aU such bills registered in each year consecutively, according to the respective dates of their registration. * Sub-section 1 has been repealed by section 10 of the Amendment Act (1882), but Mr. Herbert Beed, in his commentary, considers the repeal to be limited, by section 5 of the Amendment Act, to bills of sale under the same (Amendment) Act. This, however, includes all bills of sale given to secure the payment of money, that is, all such, as are of interest in this study. Such bills are to be attested as provided for in section 10 of the Amendment Act. It will be noticed that in sub-section 2 and the following sections, the immediate registration of bills of sale is compulsory. This is a much needed provision not found in the Indian Begisiration Act, by which the registration of such documents is optional [section 18 (d)]. Under the English Act registration is not " transcription," but " inscrip- tion," viz., the entry of a mere memorandum in a register, but the person making the registration must, with the bill of •ale, present also a copy thereof w;hich ia filed in the Eegistrar's office. The plan might be suitable for a good deal -of the registration effected in India, especially of the less important documents. 68 Upon the registration ol any affidavit of renewal the like entry shall be made, with the addition, of the date and number of the last previous entry relating to the same bUl, and the biU of sale or copy originally filed shall be thereupon marked with the number affixed to such affidavit of renewal. The registrar shall also keep an index of the names of the grantors of registered bills of sale with reference to entries in the register of the bills of sale given by each such grantor. Such index shall be arranged in divisions corresponding with the letters of the alphabet, so that all grantors whose surnames begin with the same letter (and no others) shall be comprised in one division, but the arrangement within each such division need not be strictly alphabetical. 13. The registrar. — The masters of the Supreme Court of Judicature attached to the Queen's Bench Division of the High Court of Justice, or such other officers as may for the time being be assigned for this purpose under the provisions of the Supreme Court of Judicature Acts, 1873 and 1875, shall be the registrar for the purposes of this Act, and any one of the said masters may per- form all or any of the duties of the registrar. 14. Heetification of register. — Any Judge of the High Court of Justice on being satisfied that the omission to register a bill of sale, or an affidavit of renewal thereof within the time prescribed by this Act, or the omission or mis-statement of the name, residence, or occupation of any person, was accidental or due to inadvertence, may in his discretion order such omission or mis-statement to be rectified by the insertion in the register of the true name, residence, or occupation, or by extending the time for such registration on such terms and conditions (if any) as to security, notice by advertise- ment or otherwise, or as to any other matter, as he thinks fit to direct. 15. Entry of satisfaction. — Subject to and in accordance with any rules to be made under, and for the purposes of this Act, the registrar may order a memorandum of satisfaction to be written upon . any registered copy of a bUl of sale, upon the prescribed evidence being given that the debt (if any) for which such bill of sale was made or given has been satisfied or discharged. 16. Copies may he taken, Sfc. — Any person shall be entitled to have an office copy or extract of any registered bill of sale, and affidavit of execution filed therewith, or copy thereof, and of any affidavit filed therewith, if any, or registered affidavit of renewal, upon paying for the same at the like rate as for office copies of judgments of the High Court of Justice, and any copy of a registered bill of sale, and affidavit purporting to be an office copy thereof, shall in aH courts and before all arbitrators or other persons, be admitted as primd facie evidence thereof, and of the fact and date of registration as shown thereon. 17. Affidavits. — Every affidavit required by, or for the purposes of this Act, may be sworn before a master of any division of the High Court of Justice, or before any Commissioner empowered to take affidavits in the Supreme Court of Judicature. Whoever wilfully makes or uses any false affidavit for the purposes of this Act shall be deemed guilty of wilful and corrupt perjury. 18. Fees.* — There shall be paid and received in common law stamps the following fees, viz. : — On filing a bill of sale . . . . . . . . . . . . . . . . . . 2«. On filing the affidavit of execution of a bill of sale . . . . . . . . . . 2*. On the affidavit used for the purpose of registering a bill of sale (to include the fee for filing) . . . . . . . . . . . . . . . . . . . . . . 6«. 19. Collection of fees under 38 and 39 Vict., c. 77, s. 26. — Section 26 of the Supreme Court of Judi- cature Act, 1875, and any enactments for the time being in force amending or substituted for that section, shall apply to fees under this Act, and an order under that section may, if need be, be made in relation to such fees accordingly. 20. (Eepealed by s. 15 of the|Act of 1882.) 21. Rules. — Rules for the purposes of this A ct maybe made and altered from time to time by the like persons and in the like manner in which rules and regulations may be made under and for the purposes of the Supreme Court of Judicature Acts, 1873 and 1875. 22. Tm* /or r«^««ira<«o».^When the time for registering a bill of sale expires on a Sunday, or other day on which the registrar's office is closed, the registration shall be valid if made on the next following day on which the office is open. 23. Repeal of Acts. — 24. Extent of Act. — This Act shall not extend to Scotland or to Ireland. BILLS OF SALE ACT (1878), AMENDMENT ACT, 1882. (45 & 46 Vict., Chap. 43.) An Act to amend the Bills of Sale Act, 1878. [18th August 1882.] 1. Short iiWe.— This Act may be cited for all purposes as the EiUaof Sale Act (187a)„ Amendment Act, 1882 ; and this Act and the BiUs of Sale Act, 1878, may be cited together as the Bills of Sale Acts, 1878 and 1882. * » * * » V — -— — ^ — ^ — ^— .^^^^.^^^^ * These fees are irrespective of the etamp duty on the hill of sale itself. This, on conditional bills, i.e., bills panted to secure the payment of money, is Is. 3d. on a bill of from £25 to £50, 2a. 6(J. on bills from £50 to £100, and so on np to £300. Transfers of bills are chargeable with a stamp duty of 6d. for every £100 or part of £100. The fee payable on the registration of bills of sale, which is compulsory, is 5s. for £100 or part thereof up to JE200, and £1 for bills above that sum. There are also heavy fees for filing other documents, affidavits, &o. These- are leviable as Supreme Court Fees {see section 19 of the present Act), by means of " Judicature stamps." 69 3. Comtruotion of Act. — The Bills of Sale Act) 1878, is hereinafter referred to as "the principal Act,"^ and this Act shall, so far as is consistent with the tenor thereof, be construed as one with the principal Act ; but unless the context otherwise requires, shall not apply to any bill of sale duly registered before the commencement of this Act, so long as the registration thereof is not avoided by non-renewal or otherwise. The expression "bill of sale," and other expressions in this Act, have the same meaning as in the principal Act, except as to bills of sale or other documents mentioned in section 4 of the principal Act, which may be given otherwise than by way of seoiirity for the payment of money, to which last- mentioned bills of sale and other documents this Act shall not apply. 4. Bill of sale ta- hcwe sehedule of property attaohed thereto. — Every bill of sale shall have annexed thereto or written thereon, a schedule containing an inventory of the personal chattels comprised in the bill of sale ; and such bill of sale, save as hereinafter mentioned, shall have efEect only in respect of the personal chattels specifically described in the said schedule ; and shall be void, except as against the grantor, in respect of any personal chattels not so specifically described.* 5. Bill of sale not to affeet after-acquired property. — Save as hereinafter mentioned, a bill of sale shall be void, except as against the grantor, in respect of any personal chattels specifically described in the schedule thereto of which the grantor was not the true owner at the time of the execution: of the biU of sale. 6. Exception as to certain things. — Nothing contained in the foregoing sections of this Act shall render a bill of sale void in respect of any of the following things ; (that is to say), (1) Any growing crops separately assigned or charged where such crops were actually growing at the time when the bill of sale was executed. (2) Any fixtures separately assigned or charged, and any plant, or trade machinery where such fixtures, plant, or trade machinery are used in, attached to, or brought upon amy Idnd^ farm, factory, workshop, shop, house, warehouse, or other place in substitution for any of the like fixtures, plant, or trade machinery specifically described in the schedule to such bill of sale. 7. Bill of sale loith power to seize except in certain events to he void. — Personal chattels assigned under a bill of sale shall not be liable to be seized or taken possession of by the grantee for any othef than the following causes : — t (1) If the grantor shall make defaiilt in payment of the sum or sums of money thereby secured at the time therein provided for payment, or in the performance of any covenant or agreement contained in the bill of sale and necessary for maintaining the security ; (2) If the grantor shall become a bankrupt, or suffer the said goods or any of them to be distrained for rent, rates, or taxes ; (3) If the grantor shall fraudulently either remove or suffer the said goods, or ally of them, to be removed from the premises ; (4) If the grantor shall not, without reasonable excuse upon demand in writing by the grantee, produce to him his last receipts for rent, rates, and taxes ; (5) If execution shall have been levied against the goods of the grantor under any judgment at law . Provided that the grantor may within five days from the seizure or taking possession of any •chattels on account of any of the above-mentioned causes, apply to the High Court, or to a Judge thereof in chambers, and such court or Jud^e, if satisfied that by payment of money or otherwise the said cause of seizure no longer exists, may restrain the grantee from removing or selling the said chattels, or may make such other order as may seem just. 8. Bill of sale to he void unless attested and registered. — Every bUl of sale shall be duly attested, and ^shall be registered under the principal Act witHn seven clear days after the execution thereof, or it it is executed in any place out of England then within seven clear days after the time at which it would ia the ordinary course of post arrive in England, if posted immediately after the execution thereof • and shall truly set forth the consideration for which it was given ; otherwise such bill of sale shall be void in respect of the personal chattels comprised therein. * This section is very important. The goods under mortgage must be specifically described in a schedule " with stich particularity as is usual in an ordinary business inventory of such chattels in such a place as they are," but it is not necessary to go " into minutise." Farm stock is somewhat variable, and probably, under the decisions, it is only necessary to mention the nature and number of the articles or animals. Presumably under section 5, the lender on the bill of sale would have no claim on after-acquired property, such. -as an increase, by reproduction, &o., of a given number of cows, sheep, &c., or on crops sown subsequently to the date + It will be remembered that under a bill of sale the grantee (lender) has the right of seizure of the scheduled property (section 3 of the Act of 1878). Section 7 of the Amendment Act limits the power of seizure to the occurrence of one or other of dve causes, with power of appeal by the grantor to the courts. The bill of sale, as such, with its inherent power of summary seizure, is not in toroe in India ; movables, crops, &c., are mortgaged without delivery of possession, but the mortgagee haa no power summarily and without court process, to enter and seize the goods on breach of covenant by the mortgagor. Perhaps, under the conditions of credit in India, it misht at first, be advisable to restrict the power of summary seizure by the mortgagee without court process; e.g., bv allowing the power only in the case of bills of sale granted to recognized or specially empowered credit associations and to confpanies, to individuals only in specified areas such as towns and for sums of Ks. 50 and upwards. The o-rantor may be required duly to maintain the security! e.g., the bill of sale may require him to insure the goods to prevent them from destruction or injury otherwise than by reasonable wear and tear, and to replace or rdpair damjjged stock &o.; failure to maintain the agreement will warrant seizure. So also, by sub-section (4), seizure is warranted if the grantee fails to produce his receipts for rent, rates and taxes, since the goods would be liable to .be distrained by the landlord or by the authorities on their respective rights of priority, if the grantee failed in hi» ipaymenta for rent, taxes, &o. isee note on section 9 infra). 18 70 9. Form of hill of sale. — A bill of sale made or given by way of security for the payment of money T)y the grantor thereof shall be voidiinless made in accordance with the form in the schedule to this Act annexed. * 10. Attestation.— The execution of every bill of sale by the grantor shall be attested by one or- more credible witness or witnesses, not being a party or parties thereto. So much of section 10 of the principal Act as requires that the execution of every biU of sale shall be attested by a Solicitor of the Supreme Court, and that the attestation shall state that before the execution of the biU of sale the- effect thereof has been explained to the grantor by the attesting witness, is hereby repealed, f 11. Local registration of contents of hills of sale. — Where the aflB.davit (which under section 10 of the principal Act is required to accompany a bill of sale when presented for registration) describes the residence of the person making or giving the same or of the person against whom the process is issued to be in some place outside the London bankruptcy district as defined by the Bankruptcy Act, 1869, or- where the bill of sale describes the chattels enumerated therein as being in some place outside the said London bankruptcy district, the registrar under the principal Act shall forthwith and within three clear days after registration in the principal registry, and in accordance with the prescribed directions, transmit an abstract in the prescribed form of the contents of such bill of sale to the county court registrar in whose district such place are situate, and if such places are in the districts of different registrars to each such registrar, page 56. Every abstract so transmitted shall be filed, kept, and indexed by the registrar of the county court in the prescribed manner, and any person may search, inspect, make extracts from, and obtain copies of the abstract so registered in the like manner and upon the like terms as to payment or other- wise as near as may be as in the case of bills of sale registered by the registrar under the principal Act. 12. Bill of sale under £30 to he void. — Every bill of sale made or given in consideration of any sum under thirty pounds shall be void. | 13. Chattels not to he removed or sold. — All personal chattels seized or of which possession is taken after the commencement of this Act, under or by virtue of any biU. of sale (whether registered before or after the commencement of this Act), shaU remain on the premises where they were so seized or so taken possession of, and shall not be removed or sold until after the expiration of five clear days from the day they were so seized or so taken possession of. § 14. Bill of sale riot to protect chattels against poor and parochial rates. — A biU of sale to which this Act appHes shall be no protection in respect of personal chattels included in such bill of sale which but for such bill of sale would have been liable to distress, under a warrant for the recovery of taxes and poor and other parochial rates. 15. Repeal of part of Bills of Sale Act, 1878. — The eighth and the twentieth sections of the prin- cipal Act, and also all other enactments contained in the principal Act, which are inconsistent with this- Act are repealed, but this repeal shall not affect the validity of anything done or suffered under the principal Act before the commencement of this Act. 16. Inspection of registered hills of sale. — So much of the sixteenth section of the principal Act, as enacts that any person shall be entitled at all reasonable times to search the register, and every registered bill of sale upon payment of one shilling for every copy of a bill of sale inspected is hereby repealed, and from and after the commencement of this Act, any person shaU be entitled at all reason- able times to search the register, on payment of a fee of one shilling, or such other fee as may be prescribed, and subject to such regulations as may be prescribed, and shall be entitled at all reason- able times to inspect, examine, and make extracts from any and every registered bill of sale without being required to ma,ke a written application, or to specify any particulars in reference thereto, upon payment of one shilling for each biU. of sale inspected, and such payment shall be made by a judi- cature stamp. Provided that the said extracts shall be limited to the dates of execution, registration renewal of registration, and satisfaction, to the names, addresses, and occupations of the 'parties, to the amount of the consideration, and to any further prescribed particulars. 17. Behentures to which Act not to apply .—Noihiug in this Act shaU apply to any debentures issued by any mortgage, loan, or other incorporated company, and secured upon the capital stock or goods chattels, and effects of such company. ' 18. Extent of Act. — This Act shall not extend to Scotland or Ireland. * The decisions show that only substantial conformity with the schedule form is necessary : it may be in any form provided that the legal consequences or effects will be neither greater nor less than if drawn in the exact statutory form : " nothing substantial must be subtracted from it, and nothing actually inconsistent must be added to it " Accordingly bills of sale are usually much fuller in form than that given in the schedule and contain in detaO the several covenants by which the grantor (borrower) is to be specifically bound. 'E.g., in a specimen extended form of a conditional bill of sale granted on account of money lent to the grantor, besides the general covenant for repavment there are special covenants (1) for insurance of the goods; (2) for due payment of rent, rates, and taxes on the premises oontainiug the goods ; (3) for the production on demand of the latest receipts for rent, rates and taxes and of the insurance policy and latest receipt ; (4) for the repayment with interest to the grantee of any sums paid by him oti account of (1) and (2) ; (5) for the non-removal of the goods without the grantee's consent (this does not bar temporarv removal for use in the ordinary course of business, as by driving a horse beyond the farm limits &c ) • (6) for the prevention of undue deterioration, &c., and for the replacement and repair of the goods and their maintenance in their present value ; (7) for allowing the grantee or his agents to enter and remove the goods in case of breach of covenant and to sell the same. ¥cu,« formality required by the principal Act. •' '^ '^'- "^ "^"^ t The reason for this limitation is not known ; Mr. Reed states that the limit originally proposed was £50 and that dB30 is the result of a compromise. In this Presidency it does not seem necessary to make a limit ' mnai; § Distrained property in England is generally left on the premises; «ee Vol. I, pp 315-16 and sfir-tini, Ri „f the Draft BiU in the same volume. ' ^^ °' ^^^ section 61 of 71 Form of Bir,L of Sale. This Indenture made the day of between J.. 5. of of the one part, and ^•■f{- oi of the other part, witnesseth that in consideration of the sum of ; .1 ^-T K ^--B.hy CD., the receipt of which the said A.£. hereby acknowledges {or whatever eke the mmderatton ma^ be], he the said ^.5. doth hereby assign unto CD., his executors, admin- istrators, and assigns, all and singular the several chattels and things speoificaUy described in the schedule hereto annexed by way of security for the payment of the sum of £ , and interest thereon at the rate ot per cent, per annum [or whatever eke may he the rate]. And the said A.B. doth further agree and declare that he will duly pay to the said CD. the principal sum aforesaid, together with the interest then due, by equal payments of £ on the day of [or whatever else may be the stipulated times or time of payment]. A.nd the said A.B. doth also agree with the said CD. that he will ihere insert terms as to instirance, payment of rent, or otherwise, which the parties may agree to for the maintenance or defeasance of the security]. Provided always, that the chattels hereby assigned shall not be liable to seizure or to be taTsen possession of by the said CD. for any cause other than those specified in section 7 of the Bills of Sale Act (1878), Amendment Act, 1882. In witness, &c. Signed and sealed by the said A.B. in the presence of me KF. [add witness' name, address, and description]. AGEICULTUEAL BANKS, MTSOEE.* Extract from the Dbwan's Dasaba Spbbch of 1894. Gektlbmbn, — Before concluding this address, I wish to make a few observations regarding the establishment of agricultural banks in this country, which on more than one previous occasion you pressed upon the attention of the Government. The subject has now received that careful study and investigation which its vital importance demands and I am able to place in your hands to-day the Kanaxese draft of a scheme whereunder banks for the special benefit of agriculturists can most readily be established in this coimtry. The details of the scheme are set forth in full in the draft before you, but I may in this place add a few remarks in explanation of its more salient features. On the one hand we have large accumulations of unused capital in the country as evidenced by the balances in the Presidency and other exchange banks, the refusal of the former to receive any private deposits except as current ones carrying no interest and the high premium which the Govern- ment of India 3J per cent, securities command. On the other hand, we have the agriculturist suffer- ing from inability to raise the funds required for his bond fide purposes except at ruinous rates of interest. In our own State the balance of the Government Savings Banks' deposits has risen from 4 lakhs in 1881 to 28 lakhs during the last year, though the rate of interest was recently reduced to 3f per cent., but the borrowing power of our raiyat is nevertheless as low as ever. The substantial agriculturist, especially the coffee planter and the grower of exportable produce, is able to obtain some credit from the foreign buyer on the security of his crops at 9 and 12 per cent, interest, but the ordinary raiyat is unable to get any credit except at usurious rates. How to bridge over the wide gulf that thus separates capital from want is one of the most important problems of the day in this country, and it is not without considerable diffidence that His Highness' Government approach its solution ; but we derive the hope of eventual success from what has already been accomplished in some European countries, where conditions very similar to ours have existed. These countries have tried various experiments for the re-organization of land credit by interposing an intermediate body, such as the Land Credit banks of the Continent, between the capitalist and the agricultural borrower. These experiments have been attended with varying degrees of success according to the degree of identification attained, of the interests of the intermediate body with those of the borrower, but the most successful system has been proved to be that in which the agriculturists, forming themselves into an association on strictly co-operative principles, substituted their own united credit for that of the intermediate body, thus securing for themselves the fullest return for their own credit as agriculturist* and doing away with the profits of the middlemen. The existing conditions among us offer no insuperable obstacle in the way of the establishment and successful working of similar associations in this country under the designation of agricultural banks. Indeed, speaking of our own Province, the tracts in which the Suttige and crop advance sys- tems exist, afford highly favourable conditions for their establishment. The essential principles imder- lying their constitution are — (i) Every bank to be an association of landholders, formed on strictly co-operative principles,, and enlisted on the basis of mutual confidence arising from the mutual information of each others character and resources. The object to be the common benefit of cheap credit and not the earning of divisable profits ; (ii) There should be no share capital, the funds required for the bank being obtained by means of loans raised or deposits received ; • These banks have not been mentioned in Vol. I, since that volume was mostly in type when the scheme waa first introdnoed at the end of 1894, while the standard rnles exemplifying [and modelling the system, were only issued after Vol. I had been completed and sent to Government. The omission is now remedied. It will be seen that the funds are entirely provided by Government, which also concedes certain privileges. It is believed that several banks are already (18f 6) at work under this scheme. , The text gives the speech of the Dewan (Sir Sheshadri Iyer, K.O.S.I.), introductory of the scheme (1894), a copjr of the revised model rules (1895), and two applications from inchoate banks with the Government orders thereon. 72 (iii) The members to contribute their liability only. They will be at full liberty to limit this liability by prescribing a maximum for each individual loan or for the sum total of all loans, or to resign at any time and thus escape from further liability ; (iv) The funds raised by the bank to be lent only to its members, at such moderate rates of interest as wiU leave the bank a small margin for the actual expenses of management and for the gradual formation of a reserve fund ; (v) The affairs of the bank to be managed by a body elected from among the members them- selves and giving their services gratuitously ; and (vi) No loan to be made except for an approved purpose, such as some agricultural operation which, with ordinary care, may be expected to yield enough to repay the loan and to leave some profit for the borrower. The subordinate principles and the details of the practical working, you wiU find fully described in the Kanarese draft before you (of which an English abstract is appended to this address). And it only remains for me to add that a bank thus constituted and doing business on such conditions must be solvent and will be able eventually to command ample credit in the open market ; but while such credit is in the process of growth — and its growth wUl take time — the Government wUl be prepared to help the bank with deposits of money at favourable rates of interest. The Government wiU in addition be able to grant exemption from stamp and other duties, to provide for the special registration of loans and tdeir ready recovery, for the custody of funds in public treasuries, for the periodical audit of accounts, &c., but the co-operative spirit to which the association is to owe its existence must emanate from the agricvilturists themselves. I have no doubt such a spirit is to be found in most parts of the Province, at least to the extent of enabling us to make a small beginning. Small beginnings and early struggles are the necessary conditions of vigorous Hfe, and I indulge in the hope that the scheme, carefully worked on a moderate scale and in places where the conditions are most favourable, will soon be the means of establishing a system of agricultural banks throughout the country. They will be a great education to the people in thrift and co-operation, and they wiU be the means of creating a wholesome public opinion against unproductive expenditure and extravagance of all kinds. Mtsokb, K. Sdeshabri Iter, 12th October 1894. Beican of Mysore. An Abstract op the Draft Scheme for the Establishment of Agbicultoral Banks in Mysore. I. Every bank to be an association of landholders formed on strictly co-operative principles, not for the purpose of earning any profit divisible among its members, but for the purpose of obtaining money by their own united credit and lending it among themselves according to the actual require- ments of each member to the extent the others have confidence in him. II. There is to be no share capital; there may be a small irrecoverable entrance fee for membership. III. The members to be elected with reference to their honesty, general character and habits. ly- The members to contribute their liability only. They may practically limit this liability by prescribing that not more than a fixed sum is to be lent to any one man or that not more than another fixed sum is to be lent out in aU. V. Every member to be at liberty to resign at any time and thus escape from all further liability. VI. The funds of the bank to be raised by receiving deposits from the members or others or by loans from others. VII. The security for repayment of the bank's loan to one of its members is the borrower's own character aud resources, and those of two sureties who should also be members. VIII. No loan to any one who is not a member is to be made on any account. • ^?: No loan to be made except for an approved purpose, which generaUy should be some opera- r'^'^.Z^r ^J^^ P • ' ''^ '■^P^y *^^ l"^"!- 1* ™*y i^i exceptional cases include an approved bond Jlde domestic requirement. It should include the redemption of land from an existing mortgage the liquidation of existing debts of any kind whatsoever, the purchase of agricultural stock, the extend sion of the holding, &c., always subject to the next condition regarding time for repayment. ?■■ ^\^°^''. ^^""l^ generaUy be for less than one year when for the ordinary annual require- ments of cultivation. It may be for longer periods, in which case the repayment should be bv equal annual instalments well withm the borrower's annual margin of profits. XI. Every borrower should be bound to spend what he borrows for the express purpose for which he borrows. Default in this to lead to the recaU of the loan by a three-months' notice. XII. Absolute punctuality of repayment to be strictly enforced. XIII. The members to give their services gratuitously. ^V' ^^^ ^r^^i ""^^^^^^y *^« >ank to be lent to its members at such moderate rates of interest tio'S a rls'eS: Cl " ""^" *" '^' "'''"^^ ^^^^"^^^ '' management and the gradulltrma «rr,nn^Thl^' IT^^ l^'^'t ^^ ^^""^f ^""^ ^^ °°'^°^°'' V^^o^^s of the members, but not to be divided among them. If the bank is wound up, the reserve to be used for some purpos^ of local utility ruraSs cottitSr "' ''' '^'^^ *° '^ ^^^ ^'^""^ ^ ^"^'^^ --• ^»>^ ^-^ to be ess;ntially 73 Xyil. The general meeting to be the absolute final authority in all matters. An Executiv* Committee of five or less to meet monthly or oftener and to grant loans, receive deposits, &e., and generally to conduct the business of the bank. A larger committee to supervise the operations and especially to watch that borrowers fulfil the objects for which they borrow. Proceedings oi? the Government of His Highness the Maharaja or Mysore (General), — DATED 30th November 1894. E.BAD — The following letter, No. 536, dated 22nd November 1894, from the Deputy Commissioner, Mysore District, to the Chief Secretary to the Dewan of Mysore : — I have the honour to state that some of the respectable raiyats of Palhalli, in the Seringapatam taluk, have resolved to form an agricultural bank, on the lines sketched by the Dewan, in his last Dasara speech. They m«t on the 18th instant at JPalhalli and unanimously resolved to institute the bank and adopted the rules and memorandum of association at the same meeting. The Proceedings embodying the same and signed by aU the members is submitted herewith. 2. There are now 16 members on the rolls, and the rules provide for leinding not more than Es. 1,000 to each member. The entrance fee has been fixed at a nominal amount, viz., 4 annas. The rates of interest fixed are Es. 7 per cent, per annum for loans not exceeding E,s. 100, and 6 per cent. for larger sums, to be recovered at the time of repayment. In other respects, the rules are the same as those contained in the Kanarese draft rules circulated with the Dasara address. The Amildar reports that the members are respectable and solvent, and that a sum of Rs. 16,000 may be lent to them without any risk. 3. I beg that the Proceedings may be forwarded to the Itegistrar of Joint Stock dotapanie* for registration, and that sanction may be accorded to the iUstitutiofi of the bank, and to the adtaUdihg t6 the bank by Government, from time to time, sums of money not exceeding in the aggregate Es. 16, GOO at any time. 4. I further request that the Government will be pleased to gfarit the concessions premised in thft address for the remission of stamp, registration, and other dues, and for periodical audit by Govern- ment servants. No. S9—D.H.0., dated bangalore, 29th Novemler 1894. Order thereon.— The memotandum of association and rules will be forwarded to the Eegistrar of Joint Stock Companies for Registration. 2. The Government are pleased to reduce the stamp duty and registration fees payable on docu- ments executed by, or in favour of, the bank as noted in the appettdix. 3. The Deputy Commissioner is authorised to plaice in the Seringfapatalm tsiluk treasury a Stim of Rs. 16,000 and to lend to the bank up t6 the said ainount moneys as required for lending to itd members. Interest must be recovered from tile bank haU-yearly up to 31st December arid 3atli June of each year at 4 per cent, per annum on the sums actually borrowed by the bank. 4. Th» Comptroller is requested to arrange for careful audit of the bank's accounts and prepara- tion of correct balance sheets every half year. 5. The Government are pleased to note the appreciation of the system of agricultural banks shown by the raiyats of Palhalli, and the readiness with which they have combined to start one in their village, and they hope that intelligent and respectable raiyats in other parts of the province will foUo'**- their example before long and avail themselves of the advantages of similar banks. T. Ananda Row, Chief Secretary. Appendix to Government Proceedings M. m-^B.H.O., dated 30th November 1894. Stamp duty under Act I of 1879. 1. Bill of exchange or promissory note payable otherwise than on demand (article 11, clause (b) of the General Stamp Act). (a) When not exceeding Rs. 100 1 anna. (J) When exceeding Es. 100 but not exceeding Es. 1,000 2 »"-°' 2. (a) Bond (article 14). (J) Indemnity bond (article 28). (o) Mortgage deed (article 14). . / ^. , „„ , ((/) Instrument imposing further charge on mortgaged property (article 30, clause (J)), («) Assignment of interest secured by bond or mortgage deed. When the amount does not exceed Es. 100 . . . . 2 Exceeding Es. 100 but not excesdingRs. 1,000 4 3 Memorandum of Association of a company with or without articles of association /article 43) ^ ^ rupees, 4. Articles of Association, article 8 (if separate) o rupees annas.- annaff. annas. annas. 0. Power- of -Attorney (article 50) . . . . • • • • • • • • • • ' ' f 6. Agreement (article 5, clause (c)) ■* annas. 7. Release (article 64) • • • ■ • 4 annas. Registration fees under Act III of 1877, Section 78. 1. When the value does not exceed Rs. 100 including schedules 8 annas. 2. Exceeding Es. 100 but not exceeding Es. 1,000 1 rupee.- 19 74 3. Search — Free or no fees. 4. Certified copies . . . . . . . . . . . . . . . . 1 anna for 100 words. 5. Attesting power-of-Attorney . . . . . , . . . . . . . . . . 4 annas. 6. For attendance of Eegistering Officers at private residences . . . . . . 2 rupees. 7. Issue of commission . . . . . . . . . . . . . . . . . . 2 rupees. 8. Mileage to Eegistration Officers or others per mile . . . . . . . . . . 2 annas. Mes under Act X of 1866. 1. Fees for registration of agricultural banking company whatever may be the number of members . . . . . . . . . . . . . . . . . . . . 1 rupee. 2. For registration of any increase in the number of members . . . . . . . . 1 rupee. 3. For registering any document, &c. . . . . . . . . . . . . . . 8 annas. 4. For making record of any fact . . . . . . . . . . . . . . . . 8 annas. Proceedings op thb Gov^bnmbnt of His Highness the Mahabaja or Mysobb (GhNBBAL), — DATED 21sT DECEMBER 1894. Ebad — The following letter No. 628, dated 8th Decembqp 1894, from the Deputy Commissioner, Mysore District, to the Chief Secretary to the Dewan of Mysore : — I have the honour to state that some of the respectable raiyats of KyatanhaHi, Seringapatam taluk, have resolved to form an agricultural bank on the same lines as laid .down for the bank at PalhaUi. They met on the 5th instant at KyatanhaUi and unanimously resolved to start the bank and adopted the rules and memorandum of association at the same meeting. The proceedings embodying the same and signed by all the members are submitted herewith. 2. There are now 19 members on the rolls and the rules provided are similar to those of the PalhaUi bank, excepting on the. following points : — Rule 9. — That interest should be recovered at the time of giving the loan. Rule VI. — That loans on promissory notes should not exceed Es. 500. Rule 22. — If any member repays the loan before the expiry of the fixed period, interest shall be refunded to such member for the remaining period at Es. 4 per cent. Rule 23. — A cash balance of Es. 500 shall be maintained in the bank, the excess being remitted to treasury. 3. I beg that the Proceedings may be forwarded to the Eegistrar of Joint Stock Companies for registration (the registration fees will be forwarded to the Registrar separately), and that the forma- tion of the bank may be sanctioned and permission granted to give the bank advances from the Serin- gapatam taluk treasury, not exceeding in the aggregate (Es. 19,000) nineteen-thousand for lending to its members. No. 10397-9— (?. 2425, dated Bangalore, 21st December 1894. Order thereon. — The memorandum of association and rules will be forwarded to the Eegistrar of Joint Stock Companies for registration. 2. The Deputy Commissioner is authorised to place in the Seringapatam taluk treasury a sum of Es. 19,000 and to lend to the bank up to the said amount moneys as required for lending to its members. Interest must be recovered from the bank half-yearly np to 31st December and 30th June oi each year at 4 per cent, per annum on the sums actually borrowed by the bank. L. Anantasami Eao, for Chief Secretary. MODEL MEMORANDUM AND AETICLES OF ASSOCIATION OF AN AGEICULTUEAL BANK.* MEMORANDUM AND ARTICLES OP ASSOCIATION OF AN UNLIMITED COMPANY HAVING NO SHARE CAPITAL. Memorandum of Association. The name of this Association is the Agricultural Bank. 2. The Eegistered office of the bank wiU be situate at of the , Taluk, in the District. 3. The bank is essentially rural in its constitution and is established for the relief of agricultural indebtedness within the limited area comprising the villages of in /■■■:;--:----i •• ^"^1^^' ^^ *^® '.".'.'. "District' 'by lending money to individual members of the bank at moderate rates of interest out of fuuds raised by means of the united credit of all the members. * No. 4453-62— PL 236, dated Bangalore, the 1st November 1895. Order.- Under the provisions of section 95 of the Mysore Companies Regulation No. Ill of 1895, the Govermnent of Mysore hereby prescribes the following addition to the forms in the Second Schedule of the aforesaid Regulation. C. Srinivasiensar, Revenue Secretary. 75 4. "We, the several persons -whose names and addresses are subscribed, are desirous of being" formed into an agricultural bank in pursuance of this Memorandum of Association : — Number. Signatnie of member. Address, giving father's name, residence and description of member. Witness to signature of member. Date. 1 Abticlbs of Association. 1. No person who does not hold arable land within the local hmits mentioned in paragraph 3 of the Memorandum of Association or who does not live within such limits shall be admitted as a member of the bank. 2. The bank shall consist of the members who have signed these articles, and of such other members as may hereafter be admitted in manner foRowing ; and the whole of the members for the time being shall together constitute the general assembly. Provided however that no person who, owing to minority or other cause, is sufiering from a legal disability, shall be admitted as a member except upon the written application of his duly appointed guardian or guardians. 3 Any person desirous of being admitted a member shall make a written application to the Board of Directors hereinafter mentioned, who shall place the same before the next meeting of the general assembly His admission will depend upon the unanimous consent of all the members present at such general meeting. Any member absent from such meeting shall be considered to have waived his right to vote against such admission. 4. An entrance fee of half a rupee shaU be paid by each of the members who have signed these articles as well as by each new member who may hereafter be admitted. Management. 6 The general assembly shall, subject to the provisions hereinafter mentioned, be the final authority on !u matters connected with the business of the bank. 'Ihe general assembly shaU appoint one of^e members as President and another Agent, and the President and the Agent thus appointed ShaU hold office nntil relieved therefrom by others appointed by the general assembly to succeed them tC Agent ShaU be the Chief Accountant of the bank and shaU be responsible for the proper and correct keeping of the bank's accounts. 6 The cash balance in hand, the registers, accounts, title-deeds, documents, ^d aU other property belon^ng to the bank shall be kept in the bank premises in the custody of the President and the Agent, who shall be responsible for their safety. 7 The registers and accounts to be kept in the bank in addition to those named below, which aie indispensable and aU the details in connection with the management of the bank, shaU be setUed by thf general assembly in a manner not inconsistent with these articles, and recorded m the Minute Book maintained in the bank : — 1. Eegister of members. ,, j. 2. Eegister of applications for loans, with the purpose thereot. 3. Cash book. 4. Ledger. 5. Minute book. 6. Half-yearly cash balance statement. General Meetings. 76 12. Any requisition made by the members as above shall express the object of the meeting- ■proposed to be called, and shall be left at the registered office of the bank. 13. Upon the receipt of such requisition, the directors shall forthwith proceed to convene an extra- ordinary general meeting. If they do not proceed to convene the same within twenty-one days from the date of the requisition, the requisitionists or any other three members may themselves convene an extraordinary general meeting. Proceedings at General Meetings. 14. Seven days' notice at the least, specifying the place, the day and the hour of meeting, and, in case of special business, the general nature of such business, shall be given to the members in manner hereinafter mentioned, or in such other manner, if any, as may be prescribed at a general meeting ; but the non-receipt of such notice by any member shall not invalidate the proceedings of any generals meeting. 15. All business shall be deemed special that is transacted at an extraordinary meeting and all that is transacted at an ordinary meeting, with the exception of the consideration of the accounts, balance sheets and the ordinary report of the directors. 16. No business shall be transacted at any meeting unless a quorum of members is present at the commencement of such business. Such quorum shall be ascertained as follows, that is to say, if the members of the bank at the time of the meeting do not exceed ten in number, the quorum shall be five ; if they exceed ten, there shall be added to the above quorum one for every five additional members, with this limitation that no quorum shall in any case exceed fifteen. 17. If, within one hour from the time appointed for the meeting, a quorum of members is not present, the meeting, if convened upon the requisition of members, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week at the same time and place ; and if at such adjourned meeting a quorum is not present, it shall be adjourned tine die. 18. The President shall preside as Chairman at every general meeting. 1 9. If, at any general meeting, the President is not present within 1 5 minutes after the time appointed for holding the same, the members shall choose some one of their number to be Chairman of such meeting. 30. The Chairman may, with the consent of the meeting, adjourn any meeting from tiiie to time and from place to place ; but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. Votes of Memhert. 21. Every member shall have one vote and no more; and the resolution of the meeting shall be determined by the majority of votes unless otherwise expressly provided. 22. If any member, owing to minority or other cause, is suffering from a legal disability, he may rote by his duly-appointed guardian or any one of such guardians if more than one. 23. No member shall be entitled to vote at any meeting if he is a defaulter at the Mme of such meeting. 24. Totes may be given either personally or by a proxy appointed in writing duly signed by the appointer. 25. No person shall be appointed a proxy who is not a member, and the instrument appointing him shall be deposited at the registered office of the bank not less than forty-eight hours before the time of holding the meeting at which he proposes to vote. 26. Any instrument appointing a proxy shall be in the following form : — Agricultural Bank. ■*■ p' being a member of the Agricultural bank, hereby appoint ■■••••■••: °*V as my proxy to vote for me and on my behalf at the general meeting of the Bank to be held on the day of and at any adjournment thereof (or at any meeting of the bank that may be held in the year.' .' .' .' ' ') Date Signature Witness Board of Directors. 27. In subordination to the general assembly, the affairs of the bank shall be manaeed bv a. Board of Dja-ectors eonsistmg of the President and the Agent and of not less than five and not mor^ than seven members chosen every half-year by the general assembly. 28. The President and the Age»t Shan have joint power to sign, and to transact business on behalf of and under the instructions of the Board of Directors. The Agent shaU prepare the bnlL.^ sheetofthebankforeyery half year ending 30th June and 31st De.ember, and lay it before the President on or before the 15th of July and 15th of January, respectively, following. 29. If the office of President_ or Agent becomes vacant, the remaining members of the Board of of Directors shaU forthwith appoint any member of the bank (whether on the Board or not^ asPrn visional President or Agent as the case may be, and convene a meeting of the general assemblv on the earhest date possible for appointing a permanent successor to the vacant office 77 30. A retiring director shall he re-eligible. 31. Subject to the masamum and minimum laid down in paragraph 27 above, the general assembly, may from time to time in general meeting, increase or reduce the number of members oonstituting the Board of Directors. 32. Any casual vacancy occurring among the members of the Board of Directors may be filled up by the remaining members of that Board ; but any person so chosen shall retain his ofl&ce so long only as the vacating director would have retained the same if no vacancy had occurred. 33. A general meeting may remove any director before the expiration of his period of office, and may appoint another person in his stead. The person so appointed shall hold office during such time only as the diTeotor in whose place he is appointed would have held the same if he h,ad not been removed. Proceedings of Birectors. 34. The directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit, and determine the quorum necessary for the transaction of business. Questions arising at any time shall, unless otherwise expressly provided for in these articles, be decided by a majority of votes. In case of an equality of votes, the President shall have a second or casting vote. A director may at any time summon a meeting of the Board of Directors. 35. The President shall be the Chairman of the meetings of the Board of Directors ; but if at any meeting the President is not present at the time appointed for holding the same, the directors present shall choose one of their number to be Chairman of such meeting. 36. The Board of Directors may delegate any of their powers to a committee consisting of the President, the Agent and such member or members of their body as they think fit. Such committee shall be called the Executive Committee, and shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Board of Directors. BanVs Fundi. 37. The bank shall have no share capital, but shall carry on its business with funds raised by means of loans, as well as from deposits received from the members themselves or from others. The -aggregate amount of such funds shall not for the present exceed Es The general assembly shall, however, be competent to resolve upon an increase of the fuiids of the Bank if such a course should at any time hereafter be found necessary owing to the expansion of business . 38. The rates of interest to be paid on loans and deposits shall, from time to time, be prescribed by the general assembly. 39. The liability of the members of the bank shall be equal as between themselves and joint and several as regards all others. 40. The cash balance in the haijds of the Board of Directors shall not ordinarily exceed Es. AE sums above this limit shall be lodged in a Government Treasury or deposited in a Government Savings Bank and be drawn upon from time to time as occasion may arise. Loant. 41. Loans will be granted only to the members of the bank and wiU be of the following classes : — Class I. On the seonrity of immovable property. Class II. On joint pro-notes. Class III. On joint instalment bonds. Class IV. On-inubaAala or hand loans 42. A loan of Class IV shall not exceed Es , , while a loan of any other class maybe granted to the extent ofEs Provided however that no member shall at any time be indebted to the bank in a larger sum than Es , including loans of all kinds granted both to himself and to other members on his security. 43. No person who is not a member of the bank, shall be accepted as security for any loan. 44. No loan shall b& made except for an approved purpose connected with some agricultural oper- ation which by its profits would enable the borrower to repay the loan, or for the redemption of land from an existing mortgage or for the hqnidation of debts of any kind whatsoever existing at the time of the formation of the bank or at the time of the admission of the borrower as a member of the bank. The agricultural operation referred to above shall include the extension or improvement of the borrower's holding, and the purchase of manure, seed, cattle and implements, and other similar purposes. 45. An application for a loan may be made to the Board of Directors, or, where there has been a delegation, to the Executive Committee, either verbally or in writing. The Board of Directors, or the Executive Committee, as the case may be, shall enquire into the object of the loan and into the suffi- ciency or otherwise of the security offered, and make a record of the result of such enquiry in the register of applications for loans. The applicant and his surety or sureties shall be bound to make true statements on matters thus enquired into. After making all such enquiry as may be necessary, the Board of Directors or the Executive Committee, as the case may be, shall either grant or refuse the loans applied for. Appeals from their refusal shall lie to the general assembly. If a clear majo- rity of not less than two-thirds of the total number of members of the bank other than the applicant and his proposed siirety or sureties, if any, should not be in favour of the grant, the refusal made a& ^above shall be affirmed. 20 78 46. A loan of Class I— on the security of immovable property— shall ordinarily be repayable in less than five years, and in special cases, in any period not exceeding ten years, by equal annual instalments well witliin the borrower's annual margin o£ profits. 47. Loans of Classes II and III— on joint pro-notes and joint instalment bonds— shall ordinarily be repaid in less than a year. They may however be allowed to be renewed from time to time on good cause shown. 48. Loans of Class IV— hand loans— shall not be granted for any period exceeding three months- Eenewals may be permitted. 49. No security in addition to the hypothecation of immovable property is ordinarily required in respect of loans belonging to Class I, though in special oases the additional security of one ot more members may. be required. Nor need any security be demanded for loans falling under Class IV. As regards loans coming under Classes II and III, there should be at least two sureties. 50. The highest rates of interest chargeable on the different kinds of loans are as follow :— Class I, 6 per cent, per annum if the loan does not exceed Es. 100, and 5^ per cent, when it exceeds Es. 100. Where the loan is repayable by annual instalments, interest is chargeable only on 80 much of the loan as is actually outstanding in the beginning of each year. Class II, 7 per cent, when the loan is Es. 100 and under, and 6 per cent, when it 6XC66d.S lis XOO Class III, 8 per cent, when the loan is Eb. 100 and under, and 7 per cent, when it exceeds- Es. 100. The interest is chargeable only on so much of the loan as is actually outstanding on the 1st of every month. Class IV, 1 pie per diem for every Es. 20. 51. The general assembly shall bo at liberty to fix from time to time the actual rates at which interest should be charged, such rates not exceeding the maxima above prescribed. 52. The general assembly shall likewise be competent to fix and prescribe from time to time, the time at which and the mode in which the interest chargeable on the several descriptions of loan made by the bank, shall be recovered. 53. When a loan is repaid or recalled before the time fixed for its repayment, a proportionate reduction or refund shaU be allowed of the interest payable or paid on account of such loan. 54. Absolute punctuality of repayment shall be enforced under pain of such fine as may bo imposed by the general or special direction of the general assembly for ordinary and excusable defaults, and of expulsion, as hereinafter provided, for persistent defaults. 55. No loan shaU be appropriated for any other purpose than that for which it is obtained. Its appropriation for any other than an approved purpose shall render it liable to be recalled by a notice not exceeding three weeks. Disposal of Profitt. 56. The interest due on loans and deposits, the charges of establishment and the cost of contin- gencies, shall be met from the interest levied on the different kinds of loans made by the bank and from the entrance fee levied from the members on admission, as also from the fines referred to in paragraph 54 above. The surplus shall form a reserve fund which shall not be divisible among the members, but shall, after meeting unforeseen losses, if any, go towards the reduction of the loans and deposits required for carrying on the business of the bank. 57. The members shall receive no remuneration for their services in connection with the bank. Removal, Besignation, Death, Sfc. 58. Any member persistently guilty of default or of violation of the rules, or of gross neglect of duty, shall render himself liable to removal from membership by. the votes of a majority of the general assembly. 59. Any member who may permanently leave the local limits referred to in paragraph 1 or who may cease to hold arable land therein, shall.cease to be a member of the bank from the date of such departure or cessation. 60. Any member shall be at hberty to sever his connection with the bank by tendering a -written resignation to the Board of Directors or the Executive Committee. 61. The death of any member shall result in the removal of his name from the EoU of Members, unless his legal heir or representative shall, in writing, consent to take his place with all his liabilities and obligations. Provided, however, that if such legal heir or representative is, owing to minority or other cause, ■uffering from a legal disability, he shall not be allowed to take the place of a deceased member except upon written application made by his duly appointed guardian or guardians. 62. The removal or resignation of a member under paragraphs 58, 59, 60 or 61, shall secure for him and his assets, or for his assets, as the case may be, freedom from all liability for loans and deposits obtained, or in respect of loans made, and acts done or omitted to be done, subsequent to the date of his removal or resignation, but shall in no way affect liabilities contracted by the bank previously thereto. Accounts. 63. The accounts of the bank shaU. be audited by a committee of three members, to be called the Audit Committee. 64. The first Audit Committee shall be nominated by the Board of Directors out of the body of members of the bank. 65. Subsequent Audit Committee shall be nominated by the general assembly. 79 <1,iHr^f^" J^^ Audit Committee shaU be supplied with a copy of the balance sheet, and it bhall be their .duty to examine the same with the accounts and vouchers relating thereto. +h..!.l" iT^^/i't^' Oommittee shall have a Ust delivered to them of all books kept by the bank, and they shaU at all reasonable times have access to the books and accounts of the bank ; and thev may Di^ectorr accounts, examine the President or Agent or any other member of the Board of 68. The Audit Committee shall make a report to the general assembly upon the balance sheet and accounts ; and m every such report they shall state whether, in their opinion, the balance sheet is atuU and fair b^ance sheet containing the particulars required, and properly drawn up, so as to exhibit a true and correct view of the state of the bank's afEairs, and in case they have called for explanations or information from the Board of Directors, whether such explanations or information have or has been given by the Board, and whether they or it have or has been satisfoctory ; and such meetin together with the report of the Board of Directors at the next ordinary general 69. The powers conferred, and the duties imposed upon the Audit Committee shall, as far as may be, be exercised and performed by such officer or officers as the Government may, from time to time, appoint tor the purpose of auditing the accounts of the bank or enquiring into its aflfairs Notiget, 70. A notice may be served by the bank upon any member, either personally, or by sending it through the post in a letter addressed to such member at his registered place of abode. 7l._ Any notice, if served by post, shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of the post; and, in proving such •ervice, it shall be sufficient to prove that the letter containing the notice was properly addressed and put into the Post Office. r r j Oeneral. . 72. No member shall so deal with his property as materially to diminish his resources and affect his solvency, on the strength of which he has been admitted to the benefits of this bank. 73. It shall be lawful for the Board of Directors or the Executive Committee as the case may be^ subject to the approval of the general assembly, to re-call by three week's notice any loan made to, or on the security of, any member who by his conduct or dealings has endangered the security of any loan granted by the bank or who has ceased to be a member of the bank under paragraphs 58, 59, or 60, or whose legal heir or representative after his death, does not take his place notwithstanding th» non-existence of any legal disability. Provided however that no loan shall be liable to be recalled by reason merely of such legal heir or representative not taking the place of the deceased member in consequence of his minority or other legal disability. 74. Any loan made to the bank by Government shall be deemed to be an advance made for agri- cultural objects to the members of the bank as holders of arable land, within the meaning of section 194 of the Mysore Land Revenue Code, and the same shall be recoverable from the members jointly and severally as an arrear of land revenue under the provisions of the Mysore Land Revenue Code or of any other law for the time being in force. 75. If, owing to resignations, deaths, removals or other causes, the total number of members of the bank should at any time faU below two-thirds of the number which constituted the bank on the date of its formation or on the date of the augmentation of its funds, or if according to a majority of votes at a general meeting there exists a disagreement among the members so serious as to render the further continuance of the bank undesirable, or if Government directs the recovery of loans made by it to the bank on the ground that the afEairs of the bank are in an unsatisfactory condition, all further transactions shall be stopped, and all outstanding loans of whatever description shall be recalled by a notice not exceeding three months, at the end of which period the bank shall be wound up under such arrangements, not inconsistent with law, as shall be decided upon at a general meeting to be convened for the purpose. The members shall however continue responsible for the due discharge of all existing debts and liabilities. 76. When the bank is wound up, all surplus remaining at its credit shall be used for such purpose of local general utility as shall be resolved upon by the majority of the members at a general meeting- •ubject to the approval of Government. Number. Signature of member. Address, giving father's name, residence and description of member. Witness to signature of member. Date. 80 No. 5038-47— Fl. 274, dated Basqalokb, 3nd Dhobmbbb 1895. Order. — One hundred copies of the Form of Memorandum and Articles of Association prescribed for use by agricultural banks in the Proceedings of Government No. 4453-62, dated 1st November 1895, will fct once be supplied to each Deputy Commissioner for distribution among the several taluks in his district. 2. The Superintendent of the Government Press should arrange to have a supply of 1,000 copies of the Porm in stock so as to enable him to meet future demands without delay. 3. The Deputy Commissioners are requested to give wide publicity to the scheme and to place promptly and free of cost at the disposal of applicants as many copies of the form as may reasonably he required by them. 4. All applications to Government for the grant of loans to agricultural banks should be made to the Deputy Commissioner, and should be accompanied by memoranda and articles of association in the form above referred to. The Deputy Commissioner should satisfy himself as to the solvency of the appUcants and the bond fides of their applications, and submit his recommendation to Government with the least practicable delay, with information regarding the applicants in the appended form and with an extract from the taluk map of the villages of the applicants. 5. UntU further orders. Government wiU be prepared to grant loans to agricultural banks within reasonable limits, at four per cent, per annum. 6. It is the wish of Government that as a rule, no loan of Class lY should, for the present, exceed Es. 50, while no loan of any of the other three classes should exceed Es. 1,000: nor should any member be at any time indebted to the bank in a larger sum than Es. 2,000 including loans of all descriptions, granted both to himself and to other members on his security. Any case requiring an exceptional treatm«nt in this respect should be specially reported for the orders of Government. C. Sbbenivasiengae, Revenue Seeretary. Proposed name of the Bank and the names of villages to be benefited by it. Names of members. Besidence of mem- bers. Arable land possessed. Probable value of land. If encum- bered, how and for how much. Bemarks. Eandayam land. Inam land. i 1 1 < 1 4i £ o >-> 81 CHAPTER [II.— POPULAR BANKS. GERMAN LAW OF 1st MAY 1889 ON CO-OPERATIVE SOCIETIES. Chapter I. — Poemation of a Sooihtt. 1. Societies which do not limit the number of their members, and have as their object the encouragement of the economic interests of members by means of operations in common, especially— (a) loan and credit societies ; (i) societies dealing with raw materials ; (e) societies for the sale in common of agricultural and industrial produce ; (d) societies for the production and sale of goods for the common account ; {e) societies for the wholesale purchase for the common account of food stuffs and agrieultural requisites, and for their retail sale to members ; (/) societies for the acquisition of implements or machines for agricultural and industrial purposes, or for use in common ; ' (g) societies for the acquisition of houses ; obtain the rights of a ' Registered society ' under the conditions laid down by the law. 2. Societies may be instituted — (a) of such a kind that the members are individually responsible to the society for its engage- ments and directly to its creditors up to the total of their property (societies of unlimited liability) ; (i) *of such a Mad that the members, though responsible up to the total of their property, are not so responsible directly towards the creditors of the society, but are merely bound to pay to the society such additional sums as may be necessary to satisfy the creditors (societies of liability unlimited, but responsible for pro raid contributions) ; {e) of such a kind that the members are responsible for the engagements of the society only in a sum determined beforehand (Umited societies). ' 3. The designation of the society must set out the object of the enterprise, and indicate whether it is limited or unlimited according to the definition of section 2. The names of members or others must not appear f in the designation of the society. Such designation must clearly distinguish it from any other registered society already existing in the same neighbourhood or parish. 4. There must be at least seven members for the operation of a society, 5. The articles of association must be in writing. 6. The articles must contain — (a) the designation and address of the society ; (5) the object of the enterprise ; (c) the arrangements for the summoning of general meetings, for the confirmation of its resolutions, and for the presiding over such meetings ; (rf) I the arrangements for publishing the society's affairs and the official journals in which they are to be published. 7. The articles must further determine — (a) whether the responsibility of members is unlimited [section 2 (a) and (J)] or limited [(section 2 (c)] ; (S) § the maximum amount for which any member may take shares. The amount to be paid up must also be determined ; such amount must be at least one-tenth of the share value ; * Explanation is reqnired ; the first class of society is governed by the right (EinzelangrifE, saisie sur nn senl) peoognized by the law of 1868, by which any creditor of a society or liqnidator might select any member or members he chose from whom to recover the whole of his dnes, leaving such member to recover from the liquidating trustee. The present law has created a new class of unlimited society in which the right of EinzelangrifE is not recognized, but the creditor must apply to the liquidating trustee who may call upon every member to pay in such additional sums as will make up any deficit due by the society. The third class of society admits not only the ordinary form of society by which the responsibility of members is limited to the nominal value of their shares, but a form by which each member may be called on to pay such further sum — usually a multiple of the share value — as has been determined in advance by the articles of association. See sections 112 to 139 for further special provisions for each class of society. + It is thus seen that the societies are not partnerships, but are of the class called societes anonymes in the French law, and as the number of members and shares is, by the definition of section 1, unlimited, and will constantly be increasing or decreasing (section 63, &c.), they are also ' a capital variable.' J It is important to observe that the law requires the publication of every society's articles (section 12), its annual balance sheet, &o. (section 31), its dissolution or liquidation (section 80), the results of liquidation (section 88), &o. Publicity is, in every European country, the first requirement ; everything must be laid open to the public view. § Sub-section (6) is intended to favour the democratisation of the societies : the clause suggests the limitation of an individual's shares so as to prevent a preponderance of capitalists, and hence a divergence from the co-operative idea. But this sub-section is also the expression of the legislature on the debated share question. The Eaiffeisen societies rejected the idea of shares as leading to a desire for high dividends and as unnecessary : the law decides that shares are necessary. But they leave the societies to determine the value of the shares and the amount to be paid up. Hence a society may fix the value of its shares at 1- mark (shilling) and require only one-tenth to be paid up : this, it is believed, is actually done by some societies. Moreover, this one-tenth may be spread out over many instalments extending over several years. Hence the law can practically be evaded or reduced to an absurdity. Sub-section (d) ia most important : the reserve plays a very large part in these societies, especially in the KaifEeisen Unions. It is much neglected in the Hadras Nidhis ; see sections 20 and 156. II 21 82 (tf) the principles for the preparation and verification of the balance sheet ; (d) the formation of a reserve to cover any losses ; the mode of forming the reserve must be especially stated, and especially the proportion of the annual profits which is to be carried to the reserve, and the maximum amount of such reserve. 8. The articles should also contain provisions if it is intended to determine — (a) the limitation of the duration of the society to a fixed time ; (i) *the delimitation of the area from which members may be accepted ; (c) the business year ; (d) tthe majority which shall be required in a general meeting to decide certain matters ; («) ^ the extension of the operations of the society to persons who are not members. But societies which are established for credit purposes may not extend their operations, so far as the giving of such credit is concerned, to persons other than members. Societies for distribution [section 1 (e)] may not ordinarily sell goods except to persons recognized as members or to their representatives. 9. A. society must have a directorate and council of supervision, the members of both of which must be members of the society. If a society has registered societies as the whole or part of its members, § the individual members of such societies may become members of its directorate or council of supervision. 10. The 11 articles and the names of the directors must be copied out and entered on the register of societies by the court within whose jurisdiction the society is located. The register of societies is kept by the court, whose duty it is to maintain the register of commerce. 11. It is the directors who are bound to give notice of intended registration. To this notice must be added — (a) the articles, which must be in duplicate and signed by aU the existing members ; (i) a list of the members ; («) a copy of all papers relating to the appointment of the directors and of the council of super- vision. The directors must also enter their signatures before the court, or transmit their signatures in the prescribed form. One copy of the articles is attested by the court and returned with an appended certificate of registration. The other papers are retained by the court. 12. The articles as registered must be published in abstract by the court. The published notice must contain — (o) the date of the articles ; (S) the designation and address'of the society ; ((?) the object of the enterprise ; (i) ^ the forms in which the society's returns will be made and the names of the official jour- nals in which they will be published ; («) the duration of the society, if it is for a limited term ; (/) its regular business year when such does not correspond with the calendar year ; (y) the names and addresses of the directors. It must also be notified that the list of members may be examined by the public at any time that the court is open. If the articles provide a mode in which the directors shall publish their resolutions, and if they are authorized to sign for the society, such fact shall also be notified. 13. Until a society has been entered on the register, it does not possess the rights of a registered society. 14. Whenever a branch is established in any place, the court having jurisdiction in that place must be advised of the fact, with a view to registration of the branch. The notice must contain entries • Schnlze-Delitzsch Societies have no fixed area unless of the Province in which each is established. But Baiffeisen Societies are strictly limited to very small areas, usually a village. ■)■ Generally speaking, an ordinary majority suffices, but for particular purposes, e.g., an alteration of the objecti of the society, a special majority may be required, cf. section 16 infra. J This is very important. Credit societies must, so far as the grant of credit is concerned, lend only to members. This is intended to prevent co-operative loan societies from becoming mere joint stock banking concerns and to preserve the co-operative idea ; it is equally intended thereby to safeguard the societies, for it was found by experience that, owing to the greed for dividends and for that increase of directors' profits which was due to the grant of a commission on business done, risky outside business was undertaken, for which the directors had no sufficient expe- rience or qualification. The co-operative idea connotes membership, and no departure from it should be allowed. This -does not forbid borrowing from outside whetlier by loans or deposits : it is the lending of the society's money to outsiders that is forbidden. § This is to provide for the case of central societies or unions which accept as members, in whole or part, indivi- dual societies ; see section 52, &c., infra. For the duties, &c., of directors and councils, see Chapters III and IX of this law. II This section relates to the provisions of the Code of Commerce, by which aU business men (commeroants) or societies registered as commer9ants (see section 17 below) must be registered at a Commercial Court. An account of these provisions and^ of these courts would be too lengthy to find place here ; some of them and of the duties of tho courts and of commeroants will be found elsewhere. Suffice it to say that every European country looks after it» traders and their accounts, — and taxes them too, — in a fashion not dreamed of in England or India and that its Commercial Courts are excellent institutions, presided over by Honorary Judges, which hear most of the original commercial cases; they were unknown in England till lately, but a Commercial Court has, it is believed reoentlr been established in London. In this law the court takes the place held by the Registrar of Friendly, &o. societies in England. For a description of his powers see 'Friendly Societies' in Yol. I. Some such controlling or supervising authority is found absolutely necessary in the matter of co-operative societies and savings banks whether in England America or the Continent of Europe. ' As stated above, publicity is a principal European method of supervision over the work of societies. T It would seem better to give power to the court or some public officer to prescribe the forms : this is done by the Registrar of Friendly, &c., Societies in England. 83 ™ of ir«'r \" f ''^^"V^, and two certified copies of the articles must be appended, together with a Sty * ^''*°* members attested by the court haying jurisdiction at the address of the parent The court win return one copy with a certificate of registration, and must inform the court having jurisdiction at the address of the parent society, of this registration, with a view to its beinff entered on the register of societies. ^ 15 After the articles have been entered at the registering office, any person desiring to become a member must sign a declaration of uncondifeonal adhesion to the articles. If the candidate is admitted by the directors, the declaration must be sent to the court for entry on the Ust of members • tlus entry will at once be made. Upon such * entry by the court, the candidate attains the status of a member. The court must notify the fact of the entry to the member and to the directors. The original declaration is filed by the court. But if the court refuses to enter the candidate as member! the declaration is returned. 16. Every change in the articles, or extension of duration of a terminating society, must be settled only by a general meeting. If it be proposed to change the object of a society or to increase the individual value of the shares,! there must be a majority of three-fourths of the members present at I the meeting. The articles may impose even stricter conditions. For all other modifications of the articles a majority of three-fourths of the members present is required, unless the articles contain conditions to the contrary. Such resolutions must be notified (to the court) and registered, two copies, as provided in section 1 1, being sent. But the resolution need not be published, unless it has to do with the items mentioned in section 12 (A) and {c). The resolution is of no effect until duly registered. Chapter II. — Relation or the Society with its Members. 17. A registered society has, as such, certain rights and duties ; it can acquire estates and real rights over property : it can institute a suit and be sued before a court. Societies are considered as business entities (commer9ants) in the sense of the Code of Commerce, if the present law contains no condition to the contrary. 18. The legal relations of a society with its members are established by its articles. These articles must not contain any condition at variance with any stipulation of the present law unless •such variation is expressly permitted by the lav. 19. The profit or loss resulting from the transactions of any year may be divided amongst the members. For the first year this division must be in proportion to the sums paid up by each member on his shares ; for each subsequent year, in proportion to the amount paid up by the close of the preceding year, such amount being credited with any gains and debited with any loss. Profits will be simply carried to the credit of a member until his share is doubled. The articles may make other rules for the division of profit and loss in such wise as to determine in what proportion the profits are to be distributed to members before the shares have been fully paid up. When the share amounts have been reduced by losses, profits must not be divided till the share value has been again made up. 20. The articles may determine that, for a fixed period which may not exceed ten years (profits «hall not be divided § but shall be carried to the reserve. At the end of that time the decision may be renewed, for which purpose, a simple majority will suffice unless the articles contain any conditions to the contrary. • 21. (Omitted.) 22. The reduction of the share values || or of the instalments due thereon or the extension of the instalment dates are only allowable upon the conditions laid down for the division of capital in case of liquidation. * Here again publicity is the essence of the transaction. Just as a mortgage deed in Germany, though duly signed and attested, is of absolutely no effect until it is duly registered, so a candidate, though duly accepted, does not acquire the status of member till registered. The elaborate procedure laid down by this section seems unnecessary : it would probably suffice if the directorate send in a quarterly attested list. Nothing is stated as to the grounds upon which a court may refuse entry. •(■ It is frequently found advisable as a society grows older to continue the habit of thrift and to increase the working capital by increasing not the number which is unlimited (section 1), but the value of the shares, e.g., from £5 to £10. J It is noticeable that no provision is laid down as to the proportion of members to be present at a meeting to the total number of members, even when a radical change is to be made. Hence a packed meeting of a very few members might radically alter the objects, &o., of a society. A radical change in constitution ought to be safeguarded by requiring the agreement of a definite proportion of members, not of members present at a meeting. As regards the above two changes, the law absolutely requires a three-fourths majority ; in other cases a three- rfourths majority can be dispensed with by the articles. § The Raiffeisen Societies have only small shares and therefore only small dividends proper; the bulk of the profits go to a reserve. According to the present law, a society cannot enter in its articles a provision rejecting dividends absolutely, but only for ten years. But the ten-year period can be indefinitely renewed, and by cutting down the interest on loans or by expending profits on public objects, there need be no difficulty. Nevertheless the provision seems inadvisable ; why should not each society be left to decide for itself permanently by its articles, whether it will or will not adopt the dividend principle ? Moreover, what was intended to be a sop .-to the Raiffeisen ideas is really, as M. Duraud points out, a blow in the face, for it enables Raiffeisen Societies estab- lished on the non-dividend principle, to adopt the dividend system at the end of ten years by mere efflux of time and •without vote : in other words a society may change its whole principle of action without any resolution to that effect by its members ! And even if the matter be debated, the resolution may be carried by a simple majority, whereas a three-fourths majority is ordinarily required even for an ordinary modification of the articles of association. II By reduction of share values is to be understood the value of the individual share, e.g., from £10 to £5, not of the total share amount, for that is constantly increasing and decreasiug. The reduction of the value of individual shares is, pro tanto, equivalent to a division of the society's capital : hence the provision of the law : tee sections 8S =and 89 infra. 84 The share of a member, so long as he has not retired from the society, can neither be returned to him by the society nor accepted as security in its operations with him. A member cannot set off the value of his share in a settlement of accounts. 23. Members are responsible for the obligations of a society to the extent determined by the present law. Any one entering a society becomes responsible for obligations contracted before such entry. Any stipulation contrary to the above is void. Female members cannot avail themselves of any (special) legal privileges granted to them by the general law of the country, so far as regards obligations contracted by them in virtue of their membership. * Chapter III. — Administbatxon. 24. A society is represented, both judicially and otherwise by the directorate. The directorate should be composed of at least two members appointed bj' the general meeting ; the articles may fix a larger number of directors and other modes of appointment. The directors may be either paid or unpaid. Their appointment may be revoked at any moment without prejudice to any liabilities due by reason of existing arrangements. 25. The directors must signify their acceptance of office in the prescribed form. If no speciaL stipulation has been made in this respect, aU the members of the directorate should sign the decla- ration, and in any case not less than two should be appointed for the purpose. The signature must add the designation of the society to the signature of the signing directors. 26. A society is legally bound by the arrangements concluded in its name by the directorate. A certificate by the court (section 10) that the persons entered therein are entered as directors in the register of societies is sufficient proof of their status and powers as directors. 27. The directors are bound, as regards the society, by the restrictions entered in the articles, or in the resolutions of general meetings as regards their right to represent the society. As regards third parties such limitation of the directors' right to represent the society is of no legal effect, f especially in cases when the directors' powers extend only to certain operations or classes of operations, or for a given time or area, or when the approval of a general meeting is required or that of the council of supervision or of any other organ of the society. 28. Every change in the personnel of the directorate, any new election, or any total withdrawal of their powers, must at once be notified to the court for entry in the register of societies. New directors must at once give their signatures before the court, or send them on a properly certified form. A copy oi the documents relative to their appointment or to the withdrawal of their powers must be sent with the notification for being filed in the court. At every re-election registration shall be foEowed by publication. 29. Any modification in the directorate, or withdrawal of powers from a director, cannot be pleaded by a society as against a third party so long as such modification, &c., has not been duly registered and published, unless the society can prove that the party was aware of the modification, &c., at the time when the contract was arranged. After such registration and publication a third party will be bound to admit it as against himself, unless circumstances admit of his proving that, at the time of the operation, he neither knew nor could know of the modification, &c. 30. The directors must maintain a statement of members and keep it up to date. 31. The directors are bound to see that the society keeps the books J prescribed (by law). Six months after the expiry of each business year, the directors must publish the balance sheet, the list of members who have entered or withdrawn during the year, and the number of those on the list at the end of the year. These returns must be sent for entry on the register of societies. 32. The directors must conduct the affairs of the society in a thoroughly business-like fashion. Those who neglect their duties are responsible both individually and collectively to the society for any loss so caused. They are especially liable to repay any sums which they may have paid as profits out of capital contrary to the provisions of sections 19 and 22. But no proceedings shall lie after the lapse of five years. 33. Any stipulations regarding directors are equally applicable to their representatives. 34. The committee of supervision shall consist of three members unless the articles prescribe a greater number : they must be elected by the general meeting. The articles should fix the proportion of votes required for such elections. Members of the committee must have no interest (pecuniary) in the results of the society'^ operations. The appointment of any such member may be revoked by a general meeting even before the expiration of his term of duty. In such case the vote must be given by a majority of three-fourths of the members present at the meeting. * This last paragraph seems to mean that a female member who, as a female, might possibly, under the general law, evade payment ef a debt, cannot plead any snch law as against her obligations contracted with the society. t That is, a society has its remedy. against directors who exceed their powers, but is bound as regards contracts duly entered into in good faith with third parties, even though the directors have exceeded their powers in making snch contracts. J The Commercial Code of every European country requires that not only every society or firm, but every ' commerQant, ' i.e., business man, trader, shopkeeper, money-lender, &o., &o., of every description, who is liable under the law to take out a license (patente), i.e., every one who trades except perhaps costermongers, must keep certain prescribed accounts. The importance of the subject as regards money lending, especially under the regime of the private money-lender or usurer and his generally ignorant clientele, is so great that it is dealt with in full in the bodv:- of this report ; see Vol. I, pp. 322, 323. •'' This section (31) is very important : regular accounts and full publicity are prescribed. 86 3d. The members of the committee of supervision * must not, at the same time, be members of the directorate or permanent representatives of directors, nor be in charge of the society's operations as employes. For a certain period, to be determined beforehand, the committee may appoint any of its members to represent any directors under suspension during this period, and until he has been formally discharged from this duty, such member of committee may not exercise his functions as such member of committee. If directors retire, they cannot be elected to the committee of supervision until their retirement from the directorate has been duly notified. 36. The, committee of supervision must supervise the directorate in every branch of operations, a,nd for this purpose miist keep itself informed of the progress of business. It can, at any time, call for reports from the directors upon business matters, and can examine, either directly or by (ordinary) members appointed by it, the books and papers of the society, in order to verify the cash balance and the assets in bUls, bonds, goods, &c. It is bound to examine the annual statement, the balance sheets, and the proposals for the distribution of profit and loss, and to make a repoit on these points to the general meeting before the balance sheet is passed. It should call a general meeting whenever such may be advisable. The other duties of the committee are determined by the articles of each society. Members of committee cannot delegate their duties to other persons. 37. The committee represents the society in concluding contracts with the directorate, and brings against the directors any action (suit) determined upon by the general meeting. A director can obtain credit from a society only after due authorization by the committee of supervision, unless other stipulations have been made on this point, or unless such credit be absolutely forbidden. The same rule applies in the case of a director offered as surety for a loan. la case of proceedings against the committee of supervision, the society is represented by persons chosen at a general meeting and provided with powers of attorney ad hoe. 38. The committee is authorized in its judgment provisionally to suspend directors from their duties pending the decision of a general meeting to be at once convoked, and to take all measures necessary for the temporary conduct of their duties. 39. The members of the committee must conduct their duties in thorough business fashion : those who neglect them are responsible to the society, individually and collectively, for any damage so caused. They are especially bound to repay any capital wrongly disbursed as in section 32 {q.v.) when they have been cognizant of such disbursement though not actually concerned in it. A limitation of five years is prescribed for any proceedings under this section. 40. A society may also carry on (particular items of) business and be represented in such busiilegA by other persons if duly provided with' powers of attorney, ad hoc, or by its employes. In such case these persons exercise such powers as may be delegated to them, and in casd of doubt, such legal powers as are ordinarily required for the conduct of thfei particular class of business.f General powers of attorney for the conduct of its whole business are not admissible. 41. The rights granted to members of a society in regard to the business of the society,' especially with reference to the conduct of business, the examination of the balance sheet and the distribution of profit and loss are exercised by the general meeting, Each member of a society has one J vote. A member cannot vote on the subject of his exemption or discharge from a particular obligation. Nor can he do so in a matter affecting any legal question between himself and the society. Members cannot exercise their power of voting by proxy. This rule does not apply to entities incapable of personal voting, such as corporations, associations or other unions, or to females if the -articles forbid their actual participation in a general meeting. A proxy can only represent one member. 42. General meetings are convoked by the directors, unless other persons are similarly authorized by the articles or by the present Jaw. Such general meeting must be called whenever the interests of the society require it, as well as at such times as may be expressly laid down by the articles or by the present law. * The committee of supervision is a Eitfopean addition to the administration of societies and is most important. Its duties will be found in detail under the various classes of co-operative societies described in Vol. I, in the follovring sections of the law, and in the model articles. To some extent this committee is found in the audit committees — where they exist^^of the" MadrarNidEis; but in the' GFerman Law> audit' is separately and expressly provided for, this provision being the result of experience. The importance attached to this committee may be judged from the severe penalty entered in section 142 for the non-appointment of such a committee. _ " + This section provides for a society giving powers to particular individuals for the conduct of special work. But as the directors are the proper representatives of a society, the last clause, forbidding general powers of attorney, prevents a society from practically ousting its directors without dismissing them. J In these co-operative societies, the democratic principle of ' one man one vote ' is prescribed by law. This is intended to preserve the idea that the society is an aggregation of individuals not of capital, and' to prevent the accumulation of power in one or a few hands. At the same time the principle has the objection that the ignorant member of one share has jast as much power as the experienced direetor or business man. The refusal to admit proxies is delibei^ately entered so as to bring the members themselves to meetings, and get them to take a lively and personal, interestin the society and its conduct, and to prevent a few persons from carrying their personal views by means of lightly and- ignorantly given proxies. It is a very valuable co-operative principle, especially where societies are small, as in the Eaiffeisen Societies. In Italy it is generally provided by the articles of societies that members failing to attend a general meeting -without reasonable excuse are liable' to a. small fine. It will be observed that females are impliedly admissible as members of a society. Nor does the law forbid them. •to become office-holders or directors. II 22 86 43. A general meeting must be at once convoked when demanded by one-tenth of the members^ or by a smaller fraction if the articles so stipulate : the demand must be made in writing with a statement of the object and reasons of the demand. Members may require in a similar manner that the matters submitted to decision in a general meeting shall be published. If such demands are not complied with, the court (section 10) may authorize the members who have made the demand to call a general meeting or to publish the required matter. This authorization must be published together with the suminons for the meeting or with the publication of the matter. 44. A general meeting must be summoned in the mode prescribed by the articles with at least one week's notice. The summons must invariably state the object of the meeting. No subject can be voted upon at a meeting if it has not been announced in the mode' provided by the articles, or under section 43, at least three days before the meeting, save only matters relating to the chairmanship of the meeting and proposals to call an extraordinary general meeting. Such previous notification is not necessary either for the mere formidating of proposals to be laid before a meeting or for debates without actual voting. 45. The resolutions of a general meeting must be entered .in a minute book, and must be com-- municated to each member and to the State authorities.* 46. The general meeting must pass resolutions regarding the balance sheet, and fix the amount of profit or loss to be distributed among the members. The balance sheet and the statement of profit and loss must be placed at the disposal of members or otherwise brought to their notice, at least one week before the meeting, either in the society's ofiice or some other convenient place. Every member is entitled to demand, at his own cost, a copy of the balance sheet and of the (abstract) account of the year. 47. The general meeting must fix — (a) the total amount which the borrowings of the society and the deposits made with it by savings banks must not exceed ;t (&) the maximum amount to be granted to members by way of credit. 48. When the articles require payment of shares by instalment without settling the amount and date of them, the general meeting alone can decide these points. 49. A resolution of a general meeting may, by means of a plaint, be impeached as invalid by reason of its being contrary to law or to the articles. No plaint can be filed within one month of the date of the resolution. Not merely the directors, but any member present at the meeting, may thu« impeach a resolution, but only if he has declared his dissent from the resolution in the minutes of the meeting. Any member who was not present may also impeach a resolution, but only on the ground of irregularity in calling the general meeting or in notifying the subject of the resolution. The plaint must be filed against the society. This wiU be represented by the dij'ectorate, unles« this latter body is itself the plaintiff, and by the council of supervision. The court having jurisdiction over the district in which the society is located can alone receive such plaint. The hearing cannot take place till after the period mentioned in the preceding paragraph. The filing of the plaint and the date of hearing must at once be notified by the directorate in the •ustomary official journals. If the resolution is declared invalid by a judgment, such judgment is binding upon all memberi though not parties. J The judgment is to be transmitted by the directors to the court § (section 10) for entry on the register of societies. 50. Plaintiffs who file a suit maliciously and without due cause are responsible to the society for »ny damage caused by their action. Chapteb IV. — Examination and Audit. 5 1 . The organization of every society and its management in every branch must be submitted at least once in two years to the examination of a competent auditor not belonging to the society. 52. When societies belong to a union, the latter will, if it complies with the following conditions be granted the right of appointing the auditor. 53. The union must have, as a distinct object, the inspection of the societies which belong to it, »nd may also otherwise watch over those of their interests mentioned in section 1, especially the maintenance of mutual relations between the societies. || • The words ' State authorities ' is defined in section 171 infra, ■(• Under the word ' borrowing ' is inolnded deposits other than those of savings banks, for these form usually a large portion of the working capital derived ah eztra. The provision as to savings banks' deposits discloses a source whence many credit societies draw much of their- f unds : savings banks and popular banks mutually support each other. A savings bank, though not well adapted for ordinary credit banking business, can lend lump sums to societies which make credit their business. Every society iixes a maximum for its loans : not the total amount to be lent, for that cannot be foreseen but the total which may be advanced to individual members. This prevents influential individuals from obtaining an undno •hare of the funds. X This seems obvious, since the plaint is to be filed 'against the society,' which necessarily includes all members § The ' court ' is not necessarily the court which tries the case. By section 10, the court which keeps the registers of societies is the court which keeps the commercial register. This is usually, if not always, a court in a town, and the court which has cognizance of these plaints is the court which has general jurisdiction over the district And is probably, therefore, not the ordinary Town or Commercial Court. II Section 1 describes the economic objects to which co-operative societies devote themselves, e.g., credit produc- fion, distribution of raw and manufactured materials, the purchase of agricultural, &o., implements, the acquisition of Jioiises, &c- 87 likelv^to'h^^ ti^^f^ °* ^^^ ""fT T'- ^® ^''^^''^^ '"^ '^^ "*^''^^^' "^^^^ °i^8t «l^ow that the union is iocieties wh- ?^t -r^ °^*t^« ^^«i?.e88 of audit. The local area of the union, the number ^f Z\l^\Z r^ -""i" ''^''^'7 ^l members, must be mentioned, as also stipulatioAs regarS the selection and appointment of auditors, the nature and limits of their audit the formaS r^kf^ nf busmess, and powers and duties of the directorate and other organs of the union *°™"*^°'^' ^^"^^ °* .ever^^' fSerS?s?atr°'„tr'^*°'h ''.^''^f ^ ^he federal council when the union extends over several tederated btates; otherwise by the central authority of the State. Any modifications of thn Trecig reXn^ce.""^' '' communicated to the authoritie^ having Jurisdictio'n Ts" menSd i^ Z OnviLS-^ ?r.''*°'' of the union must every January, send the articles with a certified copy of the SrLT^ffp • grantingthe right of appointing an auditor, and a statement of the societies SZnf nffln ^°^' *« the courts Within the jurisdiction of which the several societies have their place of office, and also to the chief authorities who have jurisdiction over the place of office of the union. ^ 57. The general meeting of the union must be held solely within the limits of the union. Notioeof such meetings, with a copy of the programme, must be sent at least a week in advance to the chief authorities both of the district in which the union holds office and of that in which the meeting IS to be held. The latter authority has the right of sending a representative to the meeting. 58. The right of appointing auditors may be withdrawn from the union— (1) if it 18 guilty of acts contrary to the law by which the common weal is endangered, or if it foUows other objects than those mentioned in section 53 ; (2) if the union is unable to fulfil the duty of audit, such withdrawal is pronounced, after hearing the officers of the union, by the authority which granted the concession, which should at once inform the courts mentioned in section 56, of the withdraw al. 59. "When societies do not belong to a union, the auditor is appointed by the court (see note in ■ection 56) ; in such case the society may demand the nomination of the auditor. The appointment is made after the chief authority of the district has given his opinioQ regarding the person proposed ; if such authority concurs with the society, such person should be appointed. 60. (Contains rules regarding the fees payable by each society to the auditor.) 61. The directors must allow the auditor the inspection of aU the books and papers of th» society, its cash, its negotiable paper, and its goods in stock. The committee of supervision should be invited to assist in this audit. The directors must send, for entry on the register of societies, a certificate by the auditor that th» »udit has taken place, and must forward the report for discussion and resolution at the next general meeting, at which the committee of supervision must give any explanation on .the results found. The auditor appointed by a union must send to the directors of the union a copy of his report. 62. The Chancellor of the Empire is authorized to issue general orders for the drawing up of the audit reports. Ohapthb V. — Bhtibbicbnt of Mhmbbbs. 63. Every member is entitled by notice' of withdrawal to announce his retirement from a society. Such notice can only be given at the close of a business year, in writing, and at least three month s in »dvance. The articles may fix a period longer than three months, but not exceeding two years. Any agreement contrary to the above provisions is invalid. 64. When any creditor of a member shall, during six previous months, have failed in his efforts to execute process against the goods of such member, and shall have obtained the attachment and assignment to himself of such sum as would be due to such member upon the liquidation of th» society, he may, for the satisfaction of his claim, exercise, in place of such member, the right to cl aim the retirement of the member. To the withdrawal notice should be added a certified copy of the debt bond and of the documents relating to the unsuccessful attempt to execute the process. ■f 65. If, by the articles, the members of a society are bound to reside within the limits of a speci- fied area [section 8 (5)], any member ceasing to reside therein may, by a written notice at the end of the business year, announce his withdrawal from the society. Similarly, the society may notify ia writing to such member, that he must retire at the end of the year. The transfer of domicile should be certified by some official authority. 66. A member may be excluded from a society at the end of a business year upon loss of his civil rights, and also upon his taking part | as member in another society having a similar object in th» same locality. • The courts are those whicli keep the register of societies, and are the same as those which keep the commercial registers, i.e., usually the Commercial courts. These Commercial Courts and Commercial registers are peculiar to Continental Europe. The ' chief authorities ' mentioned in this section and in sections 57 and 59 are designated by tha Government : in this presidency it would probably be the Collector of the district. t This section specially relates to the EaifEeisen Societies, which very strictly limit their area of operations usually to a village, and require all their members to reside within those limits. The reasons are fully explained in- Tol. I, q.v. The oflScial authority attesting a transfer might in India be the village headman and kamam. t The provision is due to the fact that a member pledges his whole property for the engagements of the- society.. This pledge may amount to nothing if the member joins another society to which also his property is equally pledged, and which may liquidate at any moment. Moreover he may raise loans to the full value of his security in each society and thus possibly defraud one or the other. 88 The exclusion of a member from a credit and loan society may take place by reason of his joining' another similar society, even when that society does not carry on business in the same locality. The articles may also lay down other reasons for the exclusion of members. The resolution dismissing a member must at once be communicated to him by the directors by registered letter. Trom the moment this letter is despatched, the member cannot take part in a general meeting or be appointed a director or member of the committee of supervision. 67. The directors must notify a retirement to the court to be entered in the list of members, at least within six weeks before the end of the business year with a written certificate that the notice of with- drawal was given within due time. "Where the retirement is due to the action of a creditor (sectaon 64), the notification must be accompanied by the documents mentioned in section 64 (J) and a certified copy of the order of attachment and assignment. Similarly in the ease of retirement under section 65, the certificate to the court must be accompanied by the written notice of the member, or a copy of that issued by the society, and in case of expulsion, a copy of the resolution. These must be sent withm the time mentioned in the preceding paragraph. 68. It is necessary to enter at once on the jiiembers' roU the reason for the retirement of the member and the year. Following upon such entry the member quits the society at the end of the year mentioned, but if such entry is only made in a later year, then at the end of that year. 69. On the application of a member, or of a creditor under section 64, the court must at once enter on the list of members the reason for the retirement and the year from which it has effect. If the directorate accepts or is conclusively bound to accept the withdrawal, a note should be made of the fact in sending the notification to the court, in which case membership ceases from the day of the entry of such notification on the list. 70. The court must inform the directorate, the member, and, under section 64, the creditor, of the acceptance or rejection of the proposed retirement. AU documents sent to the court with reference to such retirement will be filed by the court. 71. The account of a retiring member with the society is settled according to the situation at the moment of retirement, the balance sheet being taken as the basis of settlement. The share value due to a retiring member must be paid over within six months, but he has no claim upon the reserve or other property of the society. Should the society's assets, reserve included, be insufficient to cover its debts, a retiring member will have to pay his quota of the deficit. 72. No demand can be made by a member for the repajrment to him of his share value after two years from the date of his retirement. 73. If the society is dissolved within six months from the date of a member's retirement, such retirement is considered as null and void.* 74. A member may, at any time by written agreement, transfer his share to another person and quit the society without settlement of accounts, provided that the transferee becomes a member in his place ; if he is already a member, his interest in the society must, with the new addition, not exceed the prescribed share maximum.! But the articles of a society may prescribe other conditions, or forbid any such transfers. The directors must communicate such transfers at once to the court (section 10), and, if the trans- feree is already a member, must also send a certificate that the transferee's pecuniary interest does not exceed the share maximum. The transfer should be effected in the list of members by the transferring member, from which date the transfer has effect. The conditions of sections 15, 69 and 70 are applicable. If the society fails within six months from the date of transfer, and the transferee is unable to malie good any supplementary payments, the transferring member will have to supply such deficit with regard to such supplementary payments as he would have been called upon, as member, to m^ke. 75. A deceased member is considered to have quitted the society at the close of the business year in which he died. Up to that time the heir of the deceased takes upon him the vacated member- ship. In the case of several heirs, the right of vote is exercised by a power of attorney. The directors must, without delay, send notice of the decease of a member to the court (section 10) for entry on the list of members. The conditions of sections 68, 69 and 73 are applicable. Chaptbr VI. — Dissolution and Liquidation. J 76. The society may be dissolved at any time by a resolution of the general meeting, such resolution being passed by a majority of three-fourths of those present. The articles of a society may fix further conditions in addition to that of the three-fourths majority. Such dissolution must at once be notified (to the court, section 10) for entry on the register of •ocieties. 77. In the case of a terminating society, its dissolution takes effect at the end of the term. Section 76, paragraph 2 applies in this case also. • This provision is evidently intended to prevent members from mining a society by withdrawal or from evadini; tbeirishare of responsibility for the condition of a society. f I.e., the maxixanm which may be held by any one member, tee sections 128 and 1S2. J For proceedings in case of bankrnptcy, aie Chapter VII. 89 ^8. In case the number of members falls below seven, the court (section 10) must, on the request of the society, or if such request be not made within six months, then by executive order after the directors have been heard, pronounce the dissolution of the society. The order must be at once communicated to the society. A regular suit to annul such order lies at once. The dissolution will have eflfect from the date of confirmation of the order. 79. When a society is guilty of illegal acts or omissions which endanger the common weal, ox when it follows objects other than those mentioned in section 1, it may be dissolved unless a formal demand for indemnity has been made. ( Prescribes the method and authorities for procuring disso- lution in such cases.) The authority pronouncing dissolution must report the same to the court (section 10). 80. The dissolution of the society must be entered without delay by the court on its register of societies. It must, moreover, be published by the directors in three separate issues of the journals in which the society publishes its notices. Such publication must also invite creditors to send in their claims. 81. Liquidation is effected by the directors if the articles or a special resolution of a general meeting do not entrust it to othfr persons. There must be at least two liquidators. If so requested either by the committee of supervision or by at least one-tenth of the members, the court (section 10) may nominate the liquidators. The court may also * suspend liquidators under the same conditions as those on which it appoints them. Liquidators not appointed by the court may be suspended by the general meeting before thft expiry of the period for which they have been appointed. 82. The appointment of liquidators must at once be notified for entry on the register of societies, and every change of liquidators as well as the expiry of any of their powers. Liquidators must, at the same time, give in or duly send in their signatures to the court. A copy of the papers relating to the appointment of liquidators must accompany the notification and be filed in the court. 83. The liquidators must signify their consent in due form, and will sign for the society. All liquidators should join in the above declaration and signature unless it is otherwise arranged, but at least two should be appointed for the purpose. The signatures must add the name of the society to indicate that from that date the society is in liquidation. 84. The provisions of section 29 are applicable to the case of liquidators as regards third parties. 85. Till the close of the liquidation, notwithstanding the dissolution of the society, the provisions of the Chapters II and III of the present law are applicable so far as concerns the legal relations of the society with its members, so long as no new legal situation shall arise from the provisions of the present chapter and from the nature of the liquidation. The legal position held by the society at the time of its dissolution subsists until the complet* partition of its assets. 86. The liquidators should close ctirrent operations, complete the engagements of the society, call in its debts, and turn all assets into cash. They will represent the society both at Jaw and in busi- ness. They may make fresh engagements for the purpose of winding up pending operations. 8". Liquidators have the rights and duties of directors as entered in sections 26, 27, 31 (1), 32, i'j to 45 and 46 (2), and as such are subject to the inspection of the committee of supervision. They must get out a balance sheet immediately after the commencement of liquidation and every year thereafter. The first balance sheet must be published and communicated for entry on the register of societies. , The sale of immovables can only be efi'ected by liquidators in public auction, unless the article* or a resolution of a general meeting decide otherwise. 88. The division ot the assets between the members cannot take place till the debts are paid off and quittance given, nor before the expiry of one year from the date when the notice to creditor* shall have been published for the third time in journals [section 80 (2)]. The amount of the uncollected debts, as u ell as that of debts postponed or in dispute, must be set aside (before the division ot the assets), as well as that of pending obligations. Liquidators acting contrary to the present provisions are responsible individually and collectively not only to the society, but to the creditors for any resulting damage. The same responsibility attaches to members of th» committee of supervision when such infractions have taken place with their knowledge and without objection from them. Nor is such responsibility towards creditors removed by the fact that the infrac- tion is the resid-t of the resolution of a general meeting. 89. (Prescribes the mode of dividing the assets among the members with liberty to enter other methods in the articles). 90. After the close of the liquidation the books and papers of the society are to be given in charg* for ten years to one of the long-standing members or to an outsider. Such person is appointed by the court (section 10), in case the articles or a resolution of the general meeting do not provide for this. The court may authorize members and their legal successors as well as the creditors of the cociety to examine their books and papers. * This is general : the court maj suspend (my liquidator upon referance by th« committee of snperTi^ion •r one-tenth of the members, II 23 90 ("hapteb VII.— Bankruptcy — Kbsponsibilitt of Members. 91. Bankruptcy is declared in case of suspension of payment as well as in case of an excess of liabilities (over assets). After a society is dissolved, it may be declared bankrupt so long as the division of assets has not taken place. 92. As soon as payment is suspended, the directors must propose * the opening of proceedings in bankruptcy. This must also take place when, after a society is dissolved, it is found by the balance sheet that the debts are in excess of the assets ' The directors are responsible to the society as laid down in section 32 for any payments made by them after such debt. But no demand can be made upon them after the lapse of five years. 93. Not only the creditors, but any one of the directors is authorized to propose the opening of proceedings in bankruptcy. If all the directors do not join in the proposal, such proposal cannot be accepted unless the facts necessary by section 91 are duly proved. The court should hear the other directors according to section 97 (2) and (3) of the Law of Bankruptcy. The proposal cannot be rejected on the ground that the assets do not suffice to pay the expenses of proceedings. 94. The society is ipso facto dissolved by the opening of proceedings. 95. The opening of proceedings must be at once entered on the register of societies, but this entry is not published. 96. On the opening of proceedings the court must nominate a committee of the creditors. A meeting of the creditors must then decide whether it shall accept the nominees or demand others. The provisions of section 79 of the Law of Bankruptcy are applicable. 97. A general meeting must be summoned (sections 42 and 44) at once, in order to decide whether the directors and members of the committee of supervision then in office are to be retained or others appointed. 98. If the scheduled creditors are not satisfied by the final division (section 149, Law of Bankruptcy) of the assets available at the opening of proceedings, the members mnst furnish supplementary payments to be credited to the funds in bankruptcy. Unless the articles fix another method for such payments, they must be paid in by contributions per capita. Such payments as cannot be collected from particular members are sub-divided among the rest. Any payments made in excess of the sums due as above must be returned after all creditors have been duly satisfied. Any member may put in a counter-claim against such supplementary payments, if he has a claim, as creditor in bankruptcy, upon such payments. 99. The trustee in bankruptcy must, as soon as the balance sheet has been deposited in court (Law of Bankruptcy, section 1 14), calculate the amount requisite as supplementary payments to cover the deficit. In the list drawn up for such payments, all members must be entered by name and the demand divided among them. The amount to be contributed must, however, be so calculated that, when allow- ance is made for the inability of some members to pay, the net proceeds shaU cover the demand. The account must be sent to the Bankruptcy Court with a request to declare it binding. If the register of societies is not kept by the Bankruptcy Couit, a certified copy of the articles and of the list of members must be added. 100. For its decision regarding the account, the court will fix a date not more than two weeks in advance. This date must be officially published, and a special summons must be sent to each member entered in the account. The account itself must be deposited in court at least three days before such date for the inspection of those concerned. This fact should be mentioned in the published notice and in the summons. 101. During this period the directors and the committee of supervision as well as the trustee in bankruptcy and the committee of creditors should be heard, as also any other persons interested if they have any objections to urge. The court will then give its decision, modify the account where necessary or order any moditi- . cation, and declare it binding. The decision must be published at once or within a week, and, with the account, must be deposited, for the inspection of those concerned, in the court. No appeal lies against this decision. 102. After the account has been confirmed, the trustee must at once collect the contributions from the members. The execution of the demand against a member is carried out according to the Law of Civil Procedure by service of a public copy of the decision with an extract from the account. 103. The collections must be deposited in such place as may be indicated by the committee of creditors (Law of Bankruptcy, section 120). 104. Every member is authorized to bring a suit against the account after its confirmation. The suit must be filed against the trustee in bankruptcy. It only lies if filed within one month from the date i)f publication of the decision, and if the plaintiff has declared his objection at the hearing (section 100), or if he has been prevented from so declaring it by no fault of his own. Judgment in such suit has the force of law, and afltects all members who are bound to make the above contributions. See sention 142 for the penalty for neglect to make this rroposal. 91 105. The suit must be filed only in the court which confirmed the account. The hearing cannot take place till after the above period of one month has elapsed. Several suits against the account may he heard and decided together. 106. Should the collections on the account prove insuificient by reason of the inability of any members to contribute their CLuota, or sbould the account require modification either by reason of a judgment or otherwise, the trustee must frame a revised account, for which the provisions of sections 99 to 1 05 are applicable. If necessary the account may be framed de novo. 107. As soon as the final distribution is begun (Law of Bankruptcy, section 149), the trustee must calculate how much, under section 98, members may have to pay as supplementary contributions in addition to or in modification of the entries in the account as compared with the actual contributions. Such account is subject to the provisions of sections 99 to 102, 104 and 106, but in such wise as not to include contributions from those whose inability to contribute has already been proved. 108. (Omitted.) 109. (Omitted.) 110. The directors are bound to assist the trustee in the duties imposed on him bv sections 99 (1). 102 (1), 106 and 107. ^ ^ 111. Such provisions of the present chapter as apply to directors apply also to liquidators. Chapter VIII. — Spbciai, Provisions. (A) FOR SOCIETIES OP UNLIMITED LIABILITY. 112. In societies of unlimited liability, a member can only hold one share.* 1 13. The agreement signed at entry by the member (section 15) must expressly state that the member is individually responsible in all his property for the engagements of the society, both towards the society and directly f towards its creditors so far as the law provides. 114. If the articles forbid the distribution of profits (section 20), sections 63 to 75 are to be read in Buoh wise that, as regards the retirement of a member, the "quarter" shall take the place of the " business year," that the notice of retirement must be given in at least six weeks before the end of the quarter, and that the transmission of papers to the court by the. directors (section 67) must take place at least three weeks before the end of the same quarter. In case of withdrawal a settlement must be made. The number of members withdrawing in a, quarter must be published. 115. Should it be found that the society's assets, including the reserve and the outstandings, do not cover the debts, the directors are bound to call a general meeting to consider whether the society sbould be dissolved. Should dissolution be decided upon, a decision on the point J mentioned in section 97 should at the same time be taken. 116. Should a society become bankrupt, not only is the society, but all the members are respons- ible individually and collectively in all their property, towards the creditors, for any deficiency found at the final distribution (Law of Bankruptcy, section 149) in regard to duly scheduled debts. After the expiry of the three months, dating from the confirmation of the account of supple- mentary payments, the creditors may, if their dues have not been satisfied, take steps against the members individually, nor can such members oppose the claim. Nor can debts duly scheduled, which have not been expressly objected to by the directors or liquidators during the period of examination of debts, be contested by the members against whom the creditors take steps as in paragraph 2.§ A regular judgment in a suit heard during the process of examination of debts, in the matter of a debt contested by the directors or liquidators, is binding on all the members. But a debt under objection is not binding upon members till it has been finally admitted on the schedule. 117. The right of action of creditors against individual members ceases at the expiry of two years from the period mentioned in section 116 (b), if no shorter period of limitation is prescribed by any law according to the nature of the debt. Such period of limitation in favour of the member is suspended during any legal proceedings taken by or against the society, but not by any legal proceedings taken by or against another member. * In these co-operative societies, the share is primarily a means (a) of compelling thrift, (6) of providing the gnarantee of the member which, in these unlimited societies, extends to the whole of his property and of thereby obtaining credit : it is not intended, except secondarily, as a means of furnishing funds directly, still less as an invest- ment by the members as is the case in an ordinary joint stock company ; hence the present limitation ; the holding of a single share renders the holder responsible in all his property, and the holding of other shares would therefore not increase the guarantee offered by him, while it might give him an undne preponderance in the society. The law has no retrospective effect (section 163) in this matter. + The word " directly " is important here, as it signifies that the creditors have the power of direct action against individual members (section 116), and not merely against the society ; see note on section 2 (v), and on section 121 below. t The retention or otherwise of the directors and members of the committee of supervision then in office. § Members are bound by the final list of admitted debts, and cannot contest such debts anew when the creditora proceed against them individually. 92 liiquidation applies also to minors, * or wards under guardianship, as also to persons who by law hav» the rights of minors, nor can they obtain a renewal of their expired claims. But they have, in such case, the right of action against their guardians. 118. If members who have been proceeded against under section 116 satisfy the dues of th« creditors, they become invested with the rights of such creditors against the society. 119. The provisions of sections 1 1 6 to 1 1 8 are applicable to such members as have quitted a society (under sections 68 and 74) during the two years immediately preceding the beginning of proceedings m bankruptcy, and who are not otherwise, under section 73, responsible for the society's engagements up to the moment of their withdrawal; but they are appHcable in such wise that the claims of creditors against them cannot be levied till the expiry of six months from the date at which the account of supplementary payments (section 107) shall have been confirmed. In the case of a deceased member whose retirement shall have been registered at the date fixed by section 75 (1), the claim extends to engagements contracted by the society up to the date of such registration unless the heir proves that, at the date of the engagement, the creditor was aware of tho death of the member. (B) SOCIETIES OF LIABILITY UNLIMITED AS REGARDS SUPPLEMBNTART PAYMEITTS. 120. The provisions of sections 112 and 115 apply to these societies. 121. The agreement signed by a member (section 15) must expressly state that the member i» individually responsible, in the whole of his property, towards the society, t for such supplementary payments as are legally due to satisfy the society's creditors. 122. If, when proceedings in bankruptcy have been opened, scheduled [98 (1)] creditors have not been satisfied within three months after the confirmation of the account of supplementary payments (107), such contributions as may be necessary must be levied as under section 98 from members who have retired during the eighteen months preceding the opening of proceedings in bankruptcy, and who have not yet been subjected, under the operations of section 73 or 74 (1) to supplementary contributions. 123. The trustee must at once frame an account showing the contributions due by retired' members. Such account must be entered up by name, and the contributions must be apportioned amongst them all, unless the inability of particular individuals is known. The provisions of sections 99 (3), 100 to 102, 104 to 106 and 108 are applicable. 124. The provisions of sections 1 22 and 123 do not affect the recovery of supplementary contributioni rom members remaining in the society. Should the contributions made by such members satisfy the scheduled [section 98 (1)] ereditors, the contributions levied from retired members must be returned to them. (C) LIMITED SOCIETIES. 12o. In limited J societies, the sum for which each member is responsible must not be less than his share value. The amount of the responsibility must be fixed by the articles at the institution of the society. The arrangement and any modification of it must be duly published (sections 12 and 16). 126. For any augmentation of the limitation value, a majority of three-fourths of the member* present at a general meeting is necessary. The articles may also establish other conditions. 127'. A reduction of the limitation value can only be efi:ected under the conditions applicrble to x division of the capital in case of a dissolution [sections 80 (2) and 88 (1) and (3)]. Notice of the resolution for reduction will not be made for entry on the register of societies before the end of the year mentioned in section 88 (1). With the notice must be sent the published copies of the resolution. At the same time the directors must submit a written certificate that the creditor* who have not consented to the reduction have been paid up or have obtained due security. 128. The articles may authorize the holding of more than one share by a member, and must fix the maximum number which may be so held. This condition or any modification of it must be duly published (sections 12 and 16). 129. The responsibility of a member holding more than one share increases in exact proportion to the shares he holds. • That is, where minora, Ice, are creditors, limitation eqnally applies to them, and they cannot gnbseqnentlT plead minority, &c.. in view to a renewal of their claim after the limitation period is orer. ■(• The difference between the societies A and B is that in the latter the creditor has no power of proceeding directly against a member as he has nnder section 116. A member is not responsible directly to the creditors as In the A societies (section 113), bnt only to the society, which is collectively responsible to the creditors, and these latter can only proceed against members through the trustee in bankruptcy who satisfies their dues by levying supplementary contributions. Hence, in section 121, the words "directly towards the creditors " find no place. It will bo seen that both societies are "unlimited" and that they differ not in the eitent of tho liability of members, but in the procedure to be taken against them. It is undoubtedly a relief to members that tliey shall not be liable to individual suit for the whole of a debt (leaving them to recover from the society afterwards), "but only t* vheir quota for each debt or mass of debts {see note on section 2 (r), {supra). J The word " limited " as used in Europe frequently means " limited to a particular sum or value," not neces- sarily that of the mere shares held by a member as is usually the practice in England and India. It is common for instance, for the members to be held responsible not only for the value of their shares, but for a limilar additional. value, or for a half extra, or two or threa times such value. 93 130. A. society must not permit a member to take a second * share till he has fully paid up his first share, and similarly for each successive share. 131. A member desirous of subscribing for a new share must give in a signed declaration. This must be sent by the directors to the court (section 10) for entry on the list of members as soon as the application for a new share has been accepted. The directors must, at the same time, certify that the member has fully paid up his previous shares. A member's property in a new share begins to have eSect after the entry is registered according to the preceding clauses. The conditions of section 5 are in other matters applicable. 132. A transfer of a member's share value to another is only valid if, at the time of transfer, the total share value held by the transferee, together with the amount transferred, does not exceed the maxi- mum permissible. The directors must therefore send to the court (section 10) the certificate required by section 74. In other matters the provisions of section 131 apply. 133. With the balance sheet of each business year shquld be published, besides the matters recited in section 31 with regard to the numberof members, a statement showing the total amount by which in that year the liabilities have increased or diminished, and the total amount for which the members are jointly responsible at the close of the year. 134. Proceedings in bankruptcy are called for not merely in case of inability to make payments, but in case the debts exceed the assets, etiould such excess pass one-fourth of the total amount for which the members are responsible. The directors are bound to propose proceedings in bankruptcy when such excess is discovered either by the annual balance sheet or by a balance sheet drawn up during the year. The provisions of section 92 (2) and (3) and section 93 are applicable. 135. Members cannot individually be followed for any sum in excess of that for which they are responsible, whether for any supplementary contributions or by the creditors of the bankrupt society. For other matters the provisions of sections 116 to 119 relative to claims by creditors are applicable. 136. Irrespective of the provisions of section 88, the creditors of a society, if their claims hare not been satisfied, may claim compensation from the directors, from the committee of supervision or from the liquidators, if profits or capital shall have been divided contrary to the provisions of sections 19 and 22. The same is permissible if, after the date on which it is obhgatory to propose the opening of proceedings in bankruptcy, money is paid out by way of repayment. The liability to compensation is not, as regards the creditors, removed by reason of the transaction having been based on a resolution of a general meeting. (D) TRANSFORMATION CF SOCIETJES. 137. A society of unlimited liability can transform itself into a society of liability unlimited as regards supplementary contributions, only by observing the conditions applicable to the partition of a society's ca;pital in a case of dissolution [sections 80 (2), 88 (1) to (3)]. The same procedure is necessary when societies of unlimited liability of either kind are transformed into limited societies. The provisions of section 127 (2) 'are applicable. 138. Por the transformation of a society of unlimited liability as regards supplementary contri- butions, into an ordinary unlimited society, or of a limited society into either class of unlimited society, a majority of three-fourths of the members present at a general meeting is necessary. The articles may also require further conditions. 139. The transformation under sections 137 and 138 is binding on members who have left the society before the registration of the decision in register of societies. In the case of the transformation of a society unlimited as regards supplementary contributions, the abovementioned members cannot be called upon for the debts of the society if their retirement took place eighteen months before registration of the transformation. la case of the transformation of a limited society, they can only be followed for the sum for which they were responsible when they retired. Chapter IX. — Penalties. 140. The directors, the members of the committee of supervision, and the liquidators, are punish- -able with imprisonment and with fine which may extend to 3,000 marks (fis. 1,500) if they wilfully act t against the interests of the society. They are, at the same time, liable to lose their civil rights. * It nmst be remembered that the shares in a co-operative society are not investments of capital by a mass of subscribers on whom alike general calls are oooasionally made, but are gradually developing shares in a partnership, and are intended to encourage thrift by steady, edntinuous saving, as well as to produce responsibility. A share is fixed, say, at Rs. 50, and a member — in the Schulze-Delitzsoh Societies for example — is obliged to pay this up by continuous, legular, and punctual periodical payments, e.g., 1 rupee per montfi till all is paid up. Hence, in order that a man may not; rashly undertake more than he can pay, or a burden of responsibility for which he is not fitted, he is compelled to show his thrift and prudence by completing each share before taking up another. It must not be forgotten that the shares are not a large proportion of the working capital. + This section is as draoonic as it is vague. No maximum term of imprisonment is stated while the phrase " act contrary to the interests of the society " is extraordinarily lax. Numerous acts may be contrary to the interest of a society, but are yet hardly criminal, except under this stringent provision. However, there is the law, and it suifi- ciently ^hows with what strictness the G-erman legislature intends to control by law the working of these societies, and to safeguard the interests of the poor and often ignorant people who form the members of these co-operative societies. In the- history of the M adras Nidhis there have been hundrfeds of oases which would readily fall raider this law, though, ithe parties would altogether escape under the Penal Code. II 24 94 141. The directors, members of the committee of supervision, and the liquidators are liable to* imprisonment for one year and to a fine which may extend to 3,000 marks, if they shall have know- ingly made false declarations in the notices, advices, and certificates sent to the court (section 10), or if they knowingly make incorrect allegations regarding the situation of the society either in their statements relative to the financial position of the society, to its members, or to the sums for which they are liable, or in their proposals made to the general meeting. They may, at the same time, be deprived of their civil rights. In case of extenuating circumstances, a sentence of fine only may be pronounced. 142. (o) Directors, members of the committee of supervision and liquidators, when the society hag been left more than three months without a committee of supervision, or if the committee of super- vision does not contain the number of members necessary for passing resolutions, (b) directors and liquidators who, contrary to sections 92, 111 and 134, neglect to propose the opening of proceedings in bankruptcy, are liable to a fine of 600 marks or to three months' imprisonment or to both. No one is liable to the above penalty if he can prove that the neglect was not due to him. 143. Directors are liable to a fine of 600 marks, if their operations are directed to objects other than those indicated in section 1, or if, in general meetings, they allow or do not prevent the discussion of propositions concerning public matters, the discussion of which falls within the law regarding the right of assembly and association.* The penalty is not leviable from any one who can prove that he is not guilty of such fault. 145. Any one who grants or makes any promise of special advantages to any person, if he will vote in a particular manner at a general meeting, is punishable with a fine which may extend to 3,000 marks or to imprisonment which may extend to one year. ChAPTBB X.^Mi8CBLLANB0US. 146. (Treats of the jurisdiction of courts.) 147. (Omitted.) 148. The notifications for entry on the register of societies must be made by all the directors or- all the liquidators personally, or on an authenticated form. Notices and documents sent according to sections 16, 28, 31 (2), 49 (4), 61 (2), 82 and 83 (2) must similarly be entered on the register of societies for each branch. The results contemplated in sections 13, 16 (4), 29, 84, and 139 come into force upon the entry in the register of societies at the principal place of office. 149. The registration of a new member, of a retirement, of the exclusion, or decrease of -a member, the entry of the acquirement of new shares in the list of members, must be communicated by the court (section 10) to the court having jurisdiction over the head-quarters of each branch for the due correction of the list there maintained. The registration of the dissolution of a society as well as the opening of proceedings in bank- ruptcy must, at the same time, be entered on the register of societies for each branch. 150. (Omitted.) , 151. (Omitted.) 152. The directors must be compelled by the court (section 10) to observe the provisions of sections 8 (2), 14, 16 (3), 28, 30, 59 (2), 61, 76 (2), 127 (2) and 137 (3) under summary penalties which may extend from 20 to 600 marks? In the same way the directors and liquidators must be compelled to obsOTve the provisions of sections 31 (2), 45, 46 (2), 49 (3) and (4), 82, 83 (2), 87 (1) and 148 (2). The procedure to be observed is that prescribed for the enforcement of notifications ordered by the Code of Commerce. 153. (Eepeals previous laws.) 154. Societies registered under the law of 4th July 1868 are placed under the present law. 155. A sofciety must, under penalties to be imposed by the court (sections 10 and 14), add the words " registered society of unlimited (limited) liability " to the designation of the society. 156. t So long as the provisions of section 7 (4), relative to the formation of a reserve, shall not have been entered in the articles of a society, such society must, from the beginning of the business j-ear immediately following the coming into force of this law, allot at least one-tenth of the annual profits to the formation of a reserve. Sections 157 to 170. (Are of temporary nature and relate to the effect on existing societies of the new law.) 171. The conditions necessary for the application of the provisions of the law relative to the- register of societies, and to the communications to be entered therein will be laid down by the Federal Council. "When the State is a confederation, the central authority of such confederation will notify for each confederated State what is the authority intended by the words " State authorities " in section 45 and ^' Chief Controlling authority " (sections 56, 57, 59 and 79 | ). 172. The present law comesinto force from 1st October 1889. * This section is obviously intended to iprevent the societies from becoming mere political clnbs. The two great difficulties in the way of these societies in Europe are said to be politics and high dividends. t A very, important section practically making a reserve compulsory by ordering a large annual allotment if the- articles do not prescribe an allotment. It -would be -well to make it a first charge on gross profits, and a minimum proportion shonld be prescribed by the articles. J See these sections -frhioh show that the Government itself keeps a watchful eye over these societies, in additioni to the close supervision to be exercised by the court (section 10). 95 MODEL ARTICLES OF THE SOHULZE-DELITZSOH CEEDIT SOCIETIES, 00-OPERATIVB AND UNLIMITED. [Revised aooording to the law of 1st May 1889.] Namb, Place of Business, and Objects or the Society. =■ho^/;>^^® Ta^K '^^ ^^ ""^^^ *^® Schulze-DelitzBch Credit Society unHmited and registered, and snail be located at — _ The object of tlie society is to provide its members with the funds necessary tor trade and agriculture by means of co-operative banking operations. WoRKiNQ Capital. 2. The working capital comprises— (1) The own capital of the society formed of the entrance fees, of the subscribed shares, and of such share of the annual profits as may be credited to capital and reserve. (2) Deposits and other extraneous funds. Organization and Management. 3. All members share in the work of the society through— (1) The board of directors (office-bearers). (2) The committee of supervision. (3) The general meeting. The DiKBOTORs (Officb-Beabhrs). 4. The directorate consists of — The managing director. The cashier. The book-keeper. These are elected by the general meeting on the nomination of the committee of supervision : th& election shall be determined by a majority of votes, which shall be in writing. The term of office shall not exceed three years, and arrangements shall be made to prevent the simultaneous retirement of •everal members together. If a candidate does not obtain a clear majority, the committee of supervision shall submit new proposals. Office-bearers are re-eligible upon expiry of their term of office. Every office-bearer must be a member. 5. Elections and re-elections of directors must be communicated to the Court* with a copy of the minutes relating to such elections ; the elected directors must also send a specimen of their signatures. 6. The directors represent the society both in Court and otherwise and have the powers granted by section 24 and following sections of the law. They sign for the society adding their signatures to th& name of the society. The signature of two directors is necessary, 7. The directors have fuU rights of management save as restricted by these articles or by any specific resolutions or by the necessity for tbe concurrence of the committee of supervision or of the- general meetiQg. 8. Directors are responsible personally and jointly if they exceed their rights as herein contained and for any loss caused to the society by any neglect of the duties demanded of good men of business : they are specially responsible if they have distributed profits or assets contrary to the provisions of the law. t 9. Directors must keep the affairs of the society in complete order. Especially must they look after the upkeep of the accounts and their abstracts, the compilation of the annual balance sheet, the maintenance of an exact list of members, the custody of the cash, funds, documents and books of the society. They must publish, within six months of the close of the business year, the number of members at the beginning of the year, the niunber admitted and withdrawn during the year, and the number belonging to the sosiety at the close of the year, and this list must be entered on the register of societies. * All declarations of membership signed by new members, and the notices and declara- tions required of withdrawing members, in conformity with the law, must be duly communicated to the Court for entry on the register of societies. The directors are also bound to see that the affairs of the society are submitted at least once in every two years to the auditors appointed by the audit autho- rities, { and that the auditor has full access to every document and acooimt and verifies the cash balance and the securities in hand, and certifies on the registers of societies that he has duly effected his audit. Should it happen that the assets are insufficient to meet the liabilities, the directors are bound to call a general meeting to decide whether the society should be wound up. 10. Every business matter must be decided by the directors assembled in actual meeting and by a majority of votes ; no director can take part in the discussion on any matter in which he is person^y interested, Every resolution is to be duly entered in a minute book and signed by each director. During the hours of business, two directors must always be present at the office, and no business is to be transacted • Bee section 10 of the law. + See sections 19 and 22 of the law. t S'ee sections 51 to 62 of the law. 96 «xc6pt at sucli hours. The directors must, at the close of office hours, verify the cash with the cash- book and see to the due securing of all books and papers. 1 1. Directors must assist the committee of supervision with their opinion when called for, and when in joint sitting (section 39) with the committee, they have the right of vote. In joint sittings the chairman of the committee of supervision or his representative presides. 12. At everj ordinary (weekly) sitting of the committee of supervision, the directors must present a statement showing receipts and disbursements of the past week, cash iu hand, debts past due and not paid upon, and loans made during the week. Directors must also transmit to the committee of supervision a similar list at the end of each month, and publish the same quarterly in a public journal, and at the end of each year must prepare the balance sheet, submit it to the committee of supervision and give account of their management to the general meeting. 13. Directors must take special care to see that all prescriptions of the law are obeyed and the necessary notices sent to the Court, &c. ; in case of neglect any fines wiU fall on them personally and not on the society. 14. The specific duties of directors are determined by the directors and the committee of super- vision jointly, with the subsequent approval of the general meeting. 15. The managing director supervises the cashier and book-keeper, verifies and safeguards the cash, the securities and the books of the society, conducts the correspondence, enters up the directors' resolutions, and must bring all irregularities or errors, &c., to the notice of the committee of supervision. 16. The cashier is directly responsible for all receipts, keeps the books, prepares all statements and works with the book-keeper in preparing the periodical returns. 17. (Duties of the book-keeper.) 18. The committee of supervision fills up temporarily any permanent vacancy in the directorate and notifies the same to the Court with a copy of the resolution. 19. (Eegarding temporary vacancies.) 20. The entire directorate or any member thereof may at any time be removed by a vote of the general meeting, and have no right of indemnification other than that which may have been agreed upon in their contract with the society. 21. The committee of supervision may suspend any or all of the directors temporarily, pending final decision of a general meeting which must be called as soon as possible. 22. Any such suspension or removal must be instantly notified to the Court, together with a copy of the resolution for entry in the register of societies. The directors continuing in office are responsible for such communication. 23. Directors shall receive a salary consisting of a fixed annual payment and of a percentage on profits. Such salary shall be proportionate to their several duties and settled by the general meeting. Directors must give security proportionate to their respective duties as determined by the general meeting. OOMMITTBB OF SUPERVISION. 24. The committee of supervision shall be elected by the general meeting bj- simple majority (detailed rules for election, with resort to the lot in case of difficulty). They must be members of the society. 25. One-third quit office each year, but are re-eUgible ; retiring members are determined by lot in the first two years, subsequently by seniority. 26. Vacancies before due date are filled at the next general meeting. 27. A minute relating to the first election of the committee must accompany the copy of the articles sent to the Court for entry in the register of societies. 28. The committee elects its chairman and secretary with deputies for ternporary vacancies. !Reso- lutions are passed by ordinary majority. In case of equal votes, the motion is considered as lost; but in such case when the matter is connected with an election, it is decided by lot. A majority of the members is necessary for a quorum. 29. The committee must hold its meetings everj' week in the society's office. Directors when present at such meetings can only vote on matters which, by the present articles, are subject to dis- posal by the directors and committee jointiy : in other cases they can merely give their opinion. 30. Extraordinary meetings are called by the chairman, who must notify the object of such meeting. He is hound to call such meeting forthwith when the directors or one-third of the committee demand such meeting, accompanying the demand by a written statement of the matter for discussion. 31. The minutes of a meeting must be signed by all members of the committee and of the direc- torate who may be present. 32. Members of committee may not take part in a meeting at which matters in which they are personally interested are discussed. 33. The general meeting may at any time remove all or any of the committee members from duty. For such resolution there must be a three-quarter majority of those present. The motion for euch removal shall ordinarily be made only by the directors and committee (jointly), but may also be made by private members, provided that it is made in writing with a statement of reasons and supported by one-tenth of the members. 34. The committee supervises the conduct of business by the directors in every branch, and is entitled for that purpose to inform itself at any time of the conduct of business. It may at any- 97 moment require from the directors a report as to the society's business ; it may examine and verify the books, securities, cash and valuables of the society. It may temporarily suspend any director pending decision of a general meeting to be summoned with all speed, and may make provision for temporarily carrying on business. The committee must assist at the regular audit, and at the next general meeting must submit its own report on the results. 35. The committee must examine the monthly and quarterly statements in such wise as to obtain cognizauce of the position of the society, the annual statement and balance sheet and the proposals for the division of profits, and must report thereon to the general meeting before the balance sheet is passed. It must also summon a general meeting when necessary. 36. The procedure to be observed by the committee is settled by the directors and committee jointly and approved by the general meeting. Members must act as good men of business, and those who neglect their duties will be held personally liable, especially in the matter of dividends which may have been issued contrary to law, unless they shall have protested against such issue. 37. The committee represents the society in contracts made with and in proceedings against the directors. 38. Directors must act with the committee in the following matters : — (1) In the grant or renewal of credit of every kind.* (2) In opening and closing business relations with any bank or financial institution in the matter of obtaining credit in such banks. (3) In the disposal of temporary surplus capital. (4) In the investment of the reserve. (5) In the acceptance of funds not expressly provided for in the law (deposits and savings). 39. The following matters must be decided by the directors and the committee in joint -f session : — (1) The appointment, dismissal and remuneration of employes, the nomination and regulation of agents, and the prosecution of employes and agents if necessary. (2) The concluding of leases and the sale of movables. (3) The drawing up of statements to be submitted to the general meeting. (4) Tlie fixing of the rates of interest and commission upon loans granted ; the rates to be published for the information of members. (5) The admission of new members and proposals for the expulsion of members to be decided by the general meeting. . ■, i_ i (6) The temporary suspension of employes appointed and dismissed by the general meeting. (7) The amount of loans to be contracted by the society, the rates of interest payable thereon, &c. ; also the interest to be allowed on accounts current. (8) All matters of general importance connected with savings deposits to be eventually submitted to the general meeting. (9) The extension or limitation of business in general or of certain classes (10) The representation of the society at the congresses and meetings of the general and- sub-uuions. (11) The hours of business. (12) The subscription for journals, &c. (13) The recovery of arrears from defaulters. The Gbnbbal Mbbting. 40 The rights of members to take part in the aflairs of the society are exercised in the general meeting. Each member has one vote, which cannot be passed on to a third party . (iV:^.— When corporations or other associations are members, they are represented by a single proxy.) * 41. The committee of supervision summons the general meeting or, in default, the directorate (usually by notice in a newspaper). 42. An abstract of the subjects for discussion must be published at least three days before tho meeting. 43. Ordinary meetings are held — , , , ,. . j- -j j .i. u (1) annuaUy for the disposal of the balance sheet, the declaration of a dividend, the acquit- tance to be given to directors, &c. ; . , . i • . j ^ (2) quarterly for a review of the society's business, for the receipt of complaints, and for the discussion of matters of interest ; elections to the directorate and committee of supervision take place in the last quarterly meeting of the year. The balance sheet with statement of profit and loss must be hung up in the office for perusal by members at least eight days before the annual meetingat which it is to be discussed ■and members must be notified that it is open to their inspection. Every member is entitled to a copy of the balance sheet upon demand and upon payment. * In societies where the directors are permitted to grant credit without the. consent of the committee of snper- vision, snch right should be limited by the preparation of a list (Italian " castelletto ") ^^^^^L f^wt^shonld be ^e Ranted to each individual. In that case 38 (1) should be expunged, and in- section 39, the following should be ^'^"^Thrpreparation of a list showing the maximum credit which may be granted to individnal members: this Ust " nmst be examined at least once in every month and revised according to circumstances. f See foot-note to section 38. 25 98 44. Special general meetings may be convoked at any time. The committee of supervision is bound to summon such meeting upon receipt of a demand in writing, with a statement of reasons, signed by the directorate or by one-tenth of the members. If neither the committee of supervision nor the directorate comply with such request, members may apply to the Court, which will authorize the calling of a meeting with the usual formallities. 45. The list of business is settled by the committee of supervision for ordinary meetings. Subjects proposed by one-tenth of the members shall be entered therein if forwarded in writing in sufficient time for due publication ; application may be made to the Court if the demand is not Attended to. 46. The chairman of the committee of supervision is the chairman of the general meeting; if it has been convoked by members, such members elect a chairman. But the general meeting by regular resolution shall always be at liberty to choose any member as chairman. The chairman appoints the secretary for the meeting. 47. Ordinary voting is by show of hands : in case of doubt the votes shall be counted by two tellers, and this procedure is compulsory should ten members demand it. It is only for elections and for the expulsion of a member that recourse shall be had to written votes. 48. The decisions of a duly constituted meeting bind the society. A three-quarter majority is required — (1) for any modification of or addition to the articles, (2) for changing the objects of business, (3) for increasing the share values, (4) for the re-election of members of the committee of supervision, (5) for the liquidation of the society. Moreover it is necessary for the validity of items (1), (2) and (5) that at least one-third of all members shall be present at the meeting. If such proportion is not present a second meeting is to be called after at least eight days and within four weeks ; the decisions of such meeting shall be valid without regard to the number of members present. 49. Minutes of every meeting are to be duly drawn up containing the points discussed, the resolu- tions thereon, and the result of votes : these are to be entered in a permanent register and signed on each occasion by the chairman, by every director and member of the committee of supervision present, by the secretary of the meeting, and by at least three other members. The committee of supervision is entrusted with the custody of the register and of the notices calling the meeting^s. 50. The following, in addition to other subjects elsewhere mentioned, must be submitted to the decision of a general meeting : — (1) Alteration of and addition to the articles; change of the objects of the society; dissolution and liquidation ; recoupment of the society's losses from the share values of members ; the acquisition, sale and charges of landed property ; the election and remuneration of directors and members of the committee of supervision, of the valuation committee (section 77) and of the special committee of audit (section 91) ; demands to sue or prosecute any members of the directorate or of the committee of supervision ; the dismissal from office of directors or committee members ; specific complaints against the conduct of business and against the decisions of directors and conunittee members ; the approval of the business regulations drawn up by the directors and committee ; the fixing of a maximum (a) for the aggregate of deposits, savings deposits or other loan funds to be received by the society, (i) for loans granted at one time to any individual member ; the opening of business in accounts current ; the division of profits at the end of the year, and the acquittance to be given to directors for their conduct of business ; the expulsion of members ; the joining or qtiitting the general union or a sub-union of societies. MbmBEES AST) THEIB POSITION. 51. Every one is admissible as member who is capable of free contract and who is not already a member of another similar society. Candidates are accepted by the directors and committee upon a written declaration of uncondi- tional adherence to the statutes of the society. Such declaration is forwarded by the directors to the Court for entry of the candidate's name on the Ust of members ; on such entry he becomes a member. The declaration must contain the express statement that the member is personally responsible for the engagements of the society both towards itself and towards its creditors in aU his property and in conformity with the law. It must be executed in duplicate, one copy being sent to the Court and the ■other retained by the society. A candidate rejected by the directors and committee may appeal to the general meeting. 52. Every member is entitled to withdraw on giving notice in writing, to take effect at the close of the business year ; it must be given in four months previously. 53. A member may be expelled— (1) if he loses his civil rights ; (2) if he faO.8 to fulfil his obligations in the matter of dues exceeding three months in arrears especially if two notices have been disregarded ; (3) if he becomes a member of another similar society; * (4) if it is found necessary to proceed against him in Court for a debt, or if he has occasioned loss to the society or to a surety ; (6) if he becomes bankrupt. • The reason for this is that the societies of this class are ' unlimited ' ; consequently, if a member of one sooietv joint anoiher also, the former society may lose, by the failure of the latter society the whole value of the member's seonrity. 99 Expulsion is by decree of the general meeting. An expelled member muBt be informed forthwitk _^7 *^e directors by registered letter, from the date of which he ceases to have the right to take part in -the society's operations. 54. The directors must forward to the Court the withdrawal notice of a member at least six weeks before the close of the year. lu the case of expulsion, a copy of the decision must similarly be sent to the Court. _ 55. The withdrawal or exclusion has effect on the erasure of Ms name from the list of members in register of the Court. 56. Death is considered as a withdrawal from the end of the business year in which death took place : up to that date the heirs of the deceased exercise his rights. 57. The directors must inform the Court of the death of a member as soon as they are notified of it. 58. The share value of a retiring or deceased member must be paid over within six months subsequently ; but he shall have no claim upon the reserve or any other asset of the society. If, upon the liquidation of the society, its assets, including reserve and aU debts due to it, are insufficient to cover its Uabilities, a retired member must pay his share of the deficit, * and withdrawal is null and void if the society liquidates within six months of withdrawal. 59. A member cannot withdraw by transfer of his membership. 60. Members are entitled — (1) to vote at general meetings and to move resolutions thereat (40 and 45) ; (2) to summon general meetings (44) ; (3) to avaU. themselves of all the arrangements made by the society to attain the object of its operations ; (4) to demand a share of the profits in conformity with article 89 and following articles. 6 1 . Per contra every member is obhged — (1) to subscribe to the society as per articles ; (2) to pay on admission the entrance fee (66) ; (3) not to act against the present articles or against the decisions and interest of the society; (4) to answer with all Ms property for the engagements of the society in conformity with the law for societies of unlimited liability, Shabb?. f 62. Each share is fixed at ... . marks (shillings) ; such share may be paid up in one sum -on entrance or by successive instalments of at least .... pfennigs (half farthings) per month. 63. AU profits due upon such share shall, till it is fully paid up, be credited to such share. 64. Each member will receive a pass-book in wMch, at the end of the year, will be entered by the directors all payments made by the member on his share, all profits accruing, and all deductions due thereon. The payments made by a memoer on Ms share, and the profits accruing thereon, form Ms share of the society's assets, but will not be paid over to him in whole or in part so long as he is a member, nor wiU it be accepted as a pledge. No member can be excused payment of any sum due upon Ms share. Bbsebve. 65. The reserve is formed to cover any losses wMch cannot be met out of the transactions of the year. It is formed from entrance fees and from a share of the net profits (article 94), and must accumu- late till it reaches at least 15 per cent, of the total assets of the society and must be kept constantly fuU. 66. The entrance fee may vary from time to time. 67. The widow or heir of a member will be relieved from the entrance fee should she or he seek and obtain admission as member witMn six months of the deceased member's death. * 68. The whole reserve must be retained intact untU dissolution of the society : no withdrawing member has any claim over it. Opbbatioks. 69. The society wiU borrow according to and on the security of debts due to it and against the deposit of savings banks' pass-books ; it wall enter into business relations with banks and, if necessary, open accounts with them. It will do business with other societies especially with the object of provid- ing a common fund. It will grant term loans to members, discount their bills and open ordinary accounts current or cash credits with them. It will transact business for its members on commission. The society cannot acquire immovable property except for its office or temporarily in guarantee for a doubtful debt. It will not buy pubhc stock or other securities except for the investment of its reserve or for the temporary utilization of surplus cash. All speculative purchase of paper is forbidden. * See section 72 of the law, whioli limits this responsibility to two years after withdrawal. 100 70. The development, limitatioii and conduct of businfiBS will be regnlated by tbe directors- and committee jointly. They will, when necessary, submit their business regulations for the con- firmation of the general meeting. They will fix, according to the money market and the needs of the society, the rate of interest upon deposits as well as the interest and commission payable upon loans granted. 71. Loans. — ^Demands for loans are examined by the directors and finally decided upon by the committee ; the reason for any decision need not be published. 72. Loans are only granted to members and only in proportion to their Bolvency or upon good collateral security. 73. Collateral security may be either — (1) one or more sureties ; (2) the deposit or assignment of mortgages ; (3) the deposit of good public securities quoted on the exchange. No loan will be made direct upon mortgage, but in case of a doubtful debt such security may b& accepted in default of any other security. For a cash credit a mortgage may be accepted as security. 74. (Omitted). 75. A loan may be granted up to 80 per cent, of the value of a mortgage pledged or assigned. Advances upon pubhc securities and other paper may be granted up to 80 per cent, of their market quotation. In case of any fall in the market during the pendency of the loan, the borrower must give additional security or make an additional in-payment. 76. Directors in ofiice cannot obtain any loan or use the funds of the society for their own advantage on pain of immediate loss of office. 77. Members of the committee of supervision cannot, while in office, obtain loans except upon good securities and for an amoxmt the maximum of which shall be fixed by a special committee of three members appointed each year by the general meeting. 78. Directors and committee members will not be accepted as sureties while in office. 79. A member may obtain at the same time several loans upon proper securities and within the limits of his solvency. 80. Deposits. — Deposits wiU not be accepted for less than . . . . marks at a time, and for less than three months certain. The rate of interest will be filled from time to time by the directors and committee according to the money market, the needs of , the society, and the term of the deposit. Repayment of depoists before the expiry of the term will be allowed only upon deduction of a commission to be fixed by the directorate and committee. 81. Savings deposits. — Savings deposits are accepted in the savings branch in sums of from one mark to .... marks, receipts being given by the directors in the pass-book of the depositor. The terms of such deposits, rate of interest and conditions of repayment will be fixed by the directors and committee, subject to confirmation by the general meeting. 82. Loans. — Loans of fixed term will be made to members ' against bills accepted by them for . . . . months at least and .... months at most. 83. The date of repayment may be postponed once or oftener : each renewal shall be for .... m^onths at most, and only on such conditions as shall prevent the loan from becoming a permanent investment of funds. When the collateral security is a surety, the renewal must have the consent of such fiurety. A renewal may be refused at any time without reason assigned, or it may [^be granted only upon payment of an instalment on account. If the money market is fluctuating, no renewal should be granted without payment of an instalment. Loans may be repaid at any moment in whole or in part. 84. Discounts. — The society will discount bills of exchange presented to it by a member if payable at a fixed date and not more than .... months echeance, and if bearing at least two good signa- tures. Interest shall be calculated by fortnightly periods, and no refund wiU. be made should the bill be met before due date. 85. Accounts current and cash credits. — The society will open accounts current with members bearing interest either ordinary or as cash credits. Accounts will be made up every six months. On the opening of an account, the society will reserve the right of closing it at any time. On the closing of an account, any sum at credit of the member must be withdrawn within fourteen days, after which no interest will be allowed and any amount at his debt must be repaid within four weeks. Cash credits must be duly secured by proper guarantees. ACCOXJWTS, PeOFITS and DrVIDBNDS. 86. The business year shall correspond with the calendar year. Immediately after its close ( 1 ) the committee shall proceed to examine the cash, documents and securities ; (2) the directors shall make up the books. 87. The directors must send the statement of accounts for the year to the committee by the end of March at latest : in case of default, the committee may get such statement prepared by other persons j»t the cost of the directors. 88. The statement must comprise — (1) an abstract of all the receipts and disbursements of the year under the several heads of account ; (2) a special statement of profit and loss ; (3) the balance sheet shoeing assets and liabilities at the close of the year. 101 89. In the balance sheet must be shown as liabilities the debts, the reserve, and the sums due to members ; amongst the assets -will be shown the value of all movable and immovable property less allowance for depredation and wear and tear, cash in hand, public securities at the minimum current value, the debts due to the society in its several branches ; doubtful assets must be shown only at their probable value, irrecoverable dues being altogether struck out. The balance sheet must also show the interest account drawn up as follows :- -AH interest due by the society accruing during; the year, though not payable till next year, together with any interest due to the society and received in advance during the year, shall be placed on one side : on the other aU interest due to the society accruing during the year though not payable till next year. The excess of the assets over liabilities obtained as above is the net profit for the year. 90. The audit of the accounts is undertaken by the committee, for which purpose it must use the books, documents, and inventory mentioned in article 86 supra. It may call in the aid of competent persons to be remunerated according to agreement. 91. The committee's audit report must be submitted to the next ordinary general meeting, which wUl decide whether to accept the report. In case of doubt as to the accuracy of the accounts or of the audit, the general meeting may appoint a special committee of three members to make a special audit : such committee shall have all the powers of the committee of supervision as contained in articles 34 and 35 supra. The meeting may proceed to such appointment, notwithstanding that no previous proposal to that effect may have appeared on the agenda for the meeting. 92. The disposal of the net profits is determined by the general meeting. Such profits, in so far as they are not necessarily credited to the reserve or otherwise necessarily employed, may be divided among the members in proportion to their shares in the society until such shares are fuUy paid up, or may be used to recoup any previous loss upon a debt due to the society. 93. In calculating dividends on shares, fractions of marks in the shares shall not be taken into consideration, and only such sums as had been paid up on the shares prior to the beginning of the year in which the profits accrued shall bear interest. 94. Until the reserve shall have attained the amount fixed in article 65 supra, at least 15 per cent, of the net profits shall be credited to such reserve before declaring any dividend to members. Should such reserve have been reduced below the normal by losses, a similar percentage shall be credited to it. Liquidation. 9.1. The society may be dissolved — (1) by decision of the general meeting as per article 38 ; (2) upon a declaration of its insolvency ; (3) by decree of Court when the number of members falls below seven ; (4) by order of the authorities mentioned in section 79 of the law (for alleged acts or omis- sions which are contrary to the general welfare, or for undertaking operations other than those permitted in the law of co-operative societies). 96. Insolvency will foUow suspension of payments, or in case of liquidation should liabilities exceed assets. Not only creditors but also directors may propose a motion of insolvency. 97. Members are jointly and individually responsible in the whole of their property to the credit- ors of the society for any losses sustained by such creditors and not satisfied by the distribution of the assets of the society. But the creditors of a society have no remedy against individual members tOl after three months from the date on which the society shall have proceeded to levy an additional pro raid assessment from the members, and even then only for claims already admitted but not satisfied. Members who may have withdrawn from the society within the two years preceding the com- mencement of proceedings are only liable to the creditors in bankruptcy for admitted liabilities contracted prior to the withdrawal of such members, and only after six months from the date on which the society shall have proceeded to levy any additional pro raid assessment from members. 98. On the dissolution of a society, its liquidation is to be efi'ected, except in cases of bankruptcy, according to section 81 et seqq. of the law. Liquidation shall be carried out by the directors unless the general meeting appoints other liquidators. 99. Immediately after the commencement of liquidation and each subsequent year, a balance sheet must be prepared by the liquidators (with the precautions to be observed as in ordinary balance sheets). The first of such balance sheets must be published and sent to the registering office. 100. Should the assets not cover the liabilities, the reserve must be drawn upon ; if this is insufficient recourse must be had to the share capital of the members. Should the deposit not absorb the whole of such share capital, the required amount must be obtained by a pro raid levy upon the several shares. No member has any right to proceed against any other member merely by reason that the amount which the^ former has lost is greater than that lost by the latter, provided that the latter has paid his dues according to article 62. 101. If (in case of ordinary dissolution), after paying up all debts and the dues to members, there shall remain any surplus, it shall be distributed as foUows : (1) the dividends due for the last business year ; (2) a division per capita, provided that this latter shall not take place tiU one full year from the date on which notice to creditors shall have been published for the third time. 102. In the case of bankruptcy, should any surplus remain after creditors are satisfied, it shall be distributed as follows : (1) any assessment made upon the share capital of members shall he- replaced ; (2) the remainder may be granted as dividend. 26 102 103. If, after the exhaustioa of the reserve and of the share capital, the balance sheet shows a further deficit, the liquidators shall propose that all further payments be effected as proceedings in bankruptcy. 104—106 relate to the mode of issuing notices and other publications and to the selection of a newspaper in which they shall be published. MODEL AETICLES— RAIFFEISEN CEEDIT UNION.* Chapter I. — Constitution and Objects. 1 . The undersigned have formed a loan society under the name of Society, registered and unlimited, t Its place of business is and its area of operations is limited as follows : — 2. The primary object of the society is to supply its members with the capital necessary for the carrying on of their business or of their household by means of loans at interest. Such capital wiU be provided by means of the joint guarantee of the members. To assist in this object a savings bank will be attached to the oflB.ce. The society will also pursue the objects mentioned in items 2 to 6 of section 1 of the co-operative law of 1st May 1889. J Chapter II. — Members, their Rights ajtd Duties. 3. Members may be of either sex but must be residents of the area above-mentioned, not ■dependent upon others {e.g., minors, &c.), possessed of fidl civil rights, and not members § of any •other loan society. The admission of new members' must be consented to by the directors. Appeal against rejection Kes to the committee of supervision, the decision of which is final. The status of member foUows from entry on the register of societies. 4. Membership ceases — {a) by retirement, (J) by a removal of residence beyond the area of operation, (c) by expulsion, \d) by death. The notice of retirement must be given in writing to the directors at least three months before the close of the business year, and its receipt must be acknowledged ; at the expiry of such year the member ceases to be a member. Expulsion is permissible upon non-fulfilment of contract obligations, and may also follow when a member has, for more than six months, been in arrears with his subscriptions. It may also follow the. loss by a member of his civil rights or freedom of action, or when a member refuses to retire after joining another similar society ; or when a member ceases his subscriptions, or engages in acts con- trary to the principles of the society, or, finally, when, after repeated warnings, it has been necessary -to sue a member for arrears of his dues upon a loan. Expulsion is decreed by the directors and takes effect from the end of the business year. But an expeUed member ceases to have any rights whether as member of the directorate, of the committee of supervision, or of the general meeting, from the date of despatch by the directors of a registered letter notifying to him the fact of his expulsion. In case of decease the date of retirement is calculated according to section 75 of the law of 1st May 1889. The settlement of accounts between the society and a member who has withdrawn or been expelled is based upon the financial situation at the moment of his quitting the society, according to sections 7 1 and 72 of the law. 5. Members have the right — (a) to take part in and vote at general meetings ; this right is lost by members who voluntarily withdraw, from the date of their resignation. Each member has one vote. The right of voting is purely personal. A group of heirs vote by means of a proxy. Only a single member can be represented by each proxy. Female members may not take part in general meetings, but may be represented by proxies with the right of vote, (i) to apply for loans from the society in accordance with the rules contained in these articles, and up to the limit of the available funds ; also to make deposits therein at interest. * See Vol. I, pp. 144-154. ■(■ All Eaifieisen societies are ' unlimited ' and are generally restricted each in its area of operations to one village (commune, Gemeinde) ; Kaiffeisen recommended 2,000 as tlie maximum and 400 as the minimum population within saoh area. t See supra page 77. § This provision is necessary since each member pledges his whole property for the obligations of the society : hence, if he belonged to any other society such pledge might amount to nothing in case of liquidation. Moreover he might obtain loans from each society to the full value of his credit, and defraud one or the other by declining to repay- gach loans. 103 «. Members by their declarations upon admission, bind themselves— (a) to answer for the debts and engagements of the society ; to the society itself by equal con- tributions, but to third parties with all their property* The declaration of a member upon admission must contain an express entry to this effect ; (J) to subscribe for a share ; (c) to obey scrupulously the rules of the society and to further its interests under all circum- stances. Chapter III. — Admikistbation. ***** 7. The business of the society is conducted by — (a) the directors ; (J) the committee of supervision ; (c) the general meeting ; (d) the accountant. 8. Directors shall be . . . in number including the president of the society, and a vice-president. Directors hold office for four years : every tvro years . . . retire ; the first set are chosen by lot. 9. In case of the withdrawal or prolonged disability of a director, the committee of supervision shall appoint a substitute who shaU hold office till the next general meeting, at which the vacancy shall be filled by election. Directors thus elected shall hold office only for such period as it would have been held by the directors for whom they are substitutes. 10. The powers of directors are determined by the resolutions of a general meeting as entered upon the minutes. Directors shall notify their election to the court f by forwarding a copy of the resolution of the general meeting ; they must also enter a specimen of their signatures in the court, or send such specimen duly authenticated by a court or notary. Directors sign for the society, adding the name of the society to their own. Except as herein- after provided the signature is only valid if it is that of the president or vice-president or of at least two directors. For the repayment in whole or in part of loans, for loans of 75 marks or less, and for deposits in the savings bank attached to the society, the signature of the accountant and of two directors is sufficient. The society is represented by the directors both judiciaUy and extra-judicially according to the provisions of the law. In law suits and in meetings of unions of societies, any director may represent the society without any special authorization save that of the resolution relative to the matter in issue. The president or vice-president wiU ordinarily represent the society : in case of their inability, any director may be chosen. In the transaction of commercial or legal business before a notary or court, and especially in matters before the registrar of mortgages, the directors will determine their course of action and appoint two of their number to carry out their decision. Per contra, directors are bound by any restrictions contained in the present articles, and in any resolutions of the pjeneral meeting and of the committee of supervision. In borrowing on behalf of the society they are especially bound to keep within the limits fixed by the general meeting, and in the matter of all suits or contracts, save only suits against members of the society for the recovery of dues, they must previously obtain the assent of the committee of supervision. They are expressly forbidden to speculate on behalf of the society in any class of paper. ***** 12. No special notice is required for ordinary meetings of directors. For special meetings, as also for the general meetings, the notices, which must be accompanied by an agenda paper are issued by the managing director The notice for a general meeting must be published at least one week prior to the meeting date. All published notices must be signed by the managing director and printed in the . . . journal. 13. Directors must meet as often as may be necessary and not leas often than once a month regularly, to decide upon requests for loans. Decisions of the directors will be valid if they shall have been made in a regular meeting by the managing director and at least two other directors. 14. Directors are specially bound — («) to obey and carry out all the provisions of these articles and of the law and all valid resolu- tions and instructions of the general meeting and of the committee of supervision ; (b) to hand over aU. debt bonds for loans contracted on behalf of the society ; (e) to decide upon the admission or expulsion of members, upon receipts and expenditure, and upon the grant of loans, and to watch over the punctual repa3anent of loans ; (d!) to verify with the managing director the accounts and cash balances, and to invest as promptly and safely as possible, any surplus funds ; («) to examine before the 1st of April in each year the balance sheet and accounts of the preceding year. In disposing of appKcations for loans, the accountant may be called in and his opinion consulted. * That is, the society is entitled to collect from its members such contribntions as may be necessary to meet its liabilities, these contributions shall be collected from all members in equal parts. But third parties as creditors, are entitled to proceed not only against the society as a corporation, but against each member individually, and such individual member is liable in all his property for such claim; the right of the creditor then devolving upon him, so that he may recover from the society or from other individual members. See sections 2, 116-119 of the law, an4 the note thereon. + See sections 10 and 11 of the law. 104 15. The managing director carries out and supervises the work of the society, especially in the- matter — (a) of carrying on correspondence and preserving all papers ; (b) of keeping the prescribed list of members, of issuing all notices and advices required by law, and of publishing the balance sheet of each year within the first six months of the succeeding year ; (e) of carefully verifying the cash atid the accounts, of issuing pay orders, of preparing with the accountant the balance sheet, and of maintaining a proper audit. The directors may nominate another director for auditing the accounts, but such audit must nevertheless be supervised by the managing director ; (d) of issuing notices for the meetings of directors and for the general meeting ; («) of presiding at directors' meetings and of appointing a secretary ; (/) of preparing an annual report on behalf of the directors and of presenting it at the ordinary general meeting in spring. Committee of Supervision. 16. The committee of supervision consists of . . . members, distributed in such wise over the area of operations, that, together, they possess a complete knowledge of the circumstances of the various residents. The number may be increased by resolution of the general meeting, but must always be^ divisible by three. They elect annually a chairman and vice-chairman from among their number. Members are elected to ofiB^ce for three years : each year one-third retire, the retiring members^ being chosen by lot in the first two years. In case of the death or withdrawal of a committee member the committee will appoint a substitute until the election of a new member at the next general meeting. 17. The committee is bound to watch over the interests of the society in every matter, to take steps that the directors act in accordance with the articles and carry out aU resolutions whether of the committee or of the general meeting punctually ; it is at liberty at any moment to examine the accounts and securities of the society and to demand the production of cash in hand. If it is discovered that any director or the board of directors, or the accountant has disobeyed any stipulation of the law, of the articles, or of any resolution, or has in any way acted contrary to the interests of the society, it must take such steps as may be necessary to safeguard the society's interests. It may dismiss any director or the whole board, or the accountant, but in such case, as also in any case when it considers that the interests of the society are endangered, it must at once call a special general meeting and report the matter for orders: the chairman of the committee will assume the place of managing director for the purpose of reporting to the meeting. In suits by the society against the directors or in contracts made by the society with them, it is the committee which will take action through its chairman or vice-chairman and a senior member of the committee. 18. The committee is specially bound — {a) to issue instructions to the directors and accountant ; (J) to settle the accounts and balance sheet before the 1st May ; (ff) to decide what powers should be given to the directors in the matter of suits and in the cases referred to in section 11 of these articles, and to represent the society in suits against directors ; {d) to examine the securities accepted or tendered for loans, once in every three months at their regular meetings ; to decide whether loans should be called in ; and to make or institute a special audit of the business of the society once every year. Regular minutes must be drawn up of the proceedings in the ordinary meetings of the committee as well as of the proceedings in the special audit above mentioned. The chairman of the committee is responsible to the society for the due execution of the above -duties. If necessary he may obtain the expulsion of negligent members of committee and their- replacement by new ones. 19. The committee must meet for the transaction of business at least once in every three months at dates fixed by the general meeting, and whenever called upon by the chairman. At least half of the members of the committee must be present to form a quorum, the chairman or vice-chairman being of the number. The chairman has a casting vote. 20. The powers of the society are vested in the general meeting which consists of all mem- bers of the society and of those who are entitled to vote as per section 5 of these articles. The general meeting must maintain a general supervision over the business of the society, especially over the acts of the committee of supervision, and must take all steps necessary in the interests ' of the -society. It is the general meeting which passes the balance sheet, and settles the amount of profit and loss falling to the members. The chairman of the committee of supervision presides at the general meeting unless the latter elects its own chairman. The general meeting also decides upon the acceptance or rejection of the report relative to the accounts and business of the society. This resolution shaU ordinarily be made in the regular spring meeting. 21. The general meeting must assemble at least twice in each year, viz., in spring and autumn and as often as may be judged necessary by the directors, by the committee of supervision or by at least one-tenth of the members should such number address a written demand to that effect to the- 105 Tf lTZ°* ^^^ committee of supervision with a statement of the object and reasons of the demand If the chairman neglects to caU a general meeting upon such demand any member of the directorate fLTT^ IB. authorized to give effect to it, and if all of these neglect to comply with the demand coLt "" memhevs themselves may do so, after first obtaining an authorization f romThe nre v^K^^^W^^^ ".t**^'' provided for in sections 35 and 36 infra, the resolutions of a general meeting brjiTil If • ^r''°'\''' °^ T"^^"'' P''"'"^*' P'^ovidedthat the subjects for discussion havf oeen duly entered in the meeting notice. Subjects not duly notified beforehand in the meeting notice as provided in section 12 smra mav not be discussed, save only matters relating to the conduct of the meeting, and proposals to call an extraordinary general meeting. ^ ^ Except in the eases specified in sections 35 and 36 below, the resolutions of a general meeting are binding on aU the members of the society when they have been passed by more than half of the members present at the meeting. The chairman of the meeting has a casting vote T^ general meeting may, upon a regular motion to that effect, depose the managing director Irom olliee, and appoint another member in his place. The general meeting may, by specific resolution, fix the fine payable by such members as fail, mthout good excuse, to attend general meetings, and any such members shaU be bound to pay such 22. The general spring meeting elects by absolute * majority and by open vote, from among the (1) the managing director ; (2) his deputy ; (3) the accountant ; (4) the other directors ; (5) the members of the committee of supervision. l^ *^\™*J°"^y is Hot absolute at the first voting, the meeting shall proceed to election by baUot, in which the number of candidates shall be restricted to twice the number of vacancies. In ease of aa equal number of votes the matter will be decided by lot. Eetiring office-bearers are re-eligible ; supplementary elections may be held at extraordinary meetings. •' 23. Votes shall ordinarily be taken by show of hands unless the meeting decides in particular -cases to vote by secret ballot or by written votes. The chairman shall appoint two tellers to count the votes. The Aoeouritant and the Accounts. 24. The cash and books of the society are entrusted to an accountant appointed for four years, subject to three months' notice in case of resignation. It is the duty of the accountant — (a) to receive all monies and to make all disbursements according to the orders issued under section 18 (a) and by the managing director, to keep the books, the cash in hand, and the securities ; (b) at the end of each business year to settle and close the accounts and to submit in duplicate to the managing director before the 1st March, the balance sheet 9,nd accounts of the preceding year, together with all necessary documents in support thereof, and a detailed statement of the assets of the society. 25. The accountant may not be either a director or member of the committee of supervision. But lie may be called on for his opinion by the directors when loans are in question. He is responsible to the society for the custody of its funds and for the proper management thereof. He must provide a surety or good security in an amouilt fixed by the general meeting, which shall be answerable for aiy deficiency in the cash balances or for any loss due to the default of the accountant, as well as for the costs of ascertaining and recovering such deficiency or loss. 26. The balance sheet must be drawn up on due business principles and must show in abstract. (A) the total assets of the society iilcluding — ( 1 ) the balance in cash and Government paper at the end of the year ; (2) the debts due to the society in their several classes ; debts of doubtful value shall be entered at their minimum probable value, and those considered as irrecoverable shall be wholly excluded ; (3) the value of any moveables and immoveables possessed by the society as valued at the end of the year ; (4) interest due up to the end of the year. (B) the liabilities of the society, including — (1) every payment made to it in excess of the due amount ; (2) all business debts due by the society, whatever their due date of payment ; (3) the share amoimts due to members ; (4) interest owed up to the end of the year though not payable till next year. The difference between assets and liabilities shall form the profit or loss of year. The balance sheet and an abstract of the accounts tor the year showing profit and loss, shall be placed at the disposal of the' members in some place and manner convenient for their examination thereof at least eight days before the general meeting at which it is to be discussed. Any member is entitled on payment to a copy of the above. * I.e., a majority of more than half the members present. II 27 106 27. The directors and members of the committee of supervision are all honorary and serve gratuitously, and can claim only expenses out of pocket. The accountant will receive remuneration corresponding to his labour ; the amount shall be fixed by a specific resolution of the general meeting. Directors may give orders for the re-imbursement to members of their actual expenses. AU minutes of meetings, whether of the directors, committee of supervision or general meeting, shall be recorded in bound and paged volumes, in which all resolutions must be regularly entered. In the case of meetings of directors and of the committee of supervision, all present shall sign their names to the minutes after they have been read and approved : the resolutions of a general meeting shall be signed by the chairman, by two members present at the meeting, and by the secretary appointed by the meeting. Chaptbe IV. 28. The funds of the Society consist of the share subscriptions, borrowed funds, the deposits of the savings branch, commission fees, and surplus interest. These funds are employed in loans at interest to the members, in the expenses of the society, in the formation of a reserve, and in matters of the common welfare. 29. Every member of the society must subscribe for one share ; subscription may be made by instalments of at least per month, or by a single payment. Only one share may be subscribed for. These shares are the personal property of the respective members. Should the society be dissolved the members are considered as creditors, but only take the last rank. So long as a member continues in the society his share can neither be withdrawn, transferred, charged nor attached by a creditor. On the other hand, in case of liquidation of the society the shares will be used in the first place to satisfy the Habilities of the society should the other assets prove insufficient. Withdrawing members can claim the repayment of their subscriptions unless the ownership in such shares shall have been made over to the society, or unless they are required in case of liquidation. Repayment must be made within six months of the expiry of the business year, unless the retiring member is in debt to the society. The dividend payable upon the shares shall not exceed 4 per cent. The rate is fixed for each year by the committee of supervision after setting aside the amount payable to the reserve as required in section 34 infra. All dividends are credited to shares until such shares are fully paid up. 30. The general meeting shall fix by express resolution the amount which may be borrowed by the society including therein the deposits in the savings branch, as also the commissions and interest payable by members upon loans. 31. Loans may be made to members by the directors — (a) For short terms up to one year, renewable by the directors up to a total duration of two years at most ; (J) For long terms up to 10 years. If loans are required for terms longer than 1 years the matter must be placed for decision before the general meeting. The general meeting also fijies, by special order, the dates of the annual repayments. The society reserves to itself the right of caUing in any outstanding loans on four weeks' notice, but this power may not be used save where there is a general run upon the society by its creditors, or when the debtors of the society or their sureties are in such a position that the funds of the society are endangered. (tf) On cash credits. The general meeting can alone decide what shall be the maximum amoimt advanced to any one member upon cash credit by the directors. Credits above this amount may not be granted by directors without the assent of the committee of supervision. The due employment of the loans granted must, as far as possible, be supervised. Complaints against refusals to grant loans must be addressed to the committee of supervision, with a final appeal to the general meeting. 32. The security given for loans or cash credits must be absolutely good ; such security may be ■either personal sureties, mortgages, or the deposit of good pubHc jpaper such as is allowable for the investments of trust and charitable funds. If the security given is a surety or mortgage, care must be taken that the surety or the property mortgaged is worth at least double the sum borrowed . If it is public paper, then the current market price must exceed the loan by at least one-third. 33. (Eelates to a method of counteracting a mode of usury peculiar to Germany.) 34. A reserve shall be formed for the purpose of covering any losses. For this purpose at least 10 per cent, of the profits calculated as in section 26 mpra shall, for a period of 10 years, be annually «recLited to the reserve, and in addition so much of the profits as remains after paying in the above 10 per cent, and a dividend of 4 per cent, upon the shares. After the expiry of 10 years the general meeting may, by a simple majority, determine the mode of distr'buting the profits so as to complete the reserve fund. 107 Sections 88 and 89 of the law are applicable to the division of the reserve in case of dissolution. So long as the society is in existence no member has any individual claim over the reserve, nor can the members require its distribution.* Chapter V. 35. The present articles may be modified by a general meeting specially convoked for the purpose at which at least half of the members of the society are present. If such number is not present a second special general meeting may be convoked which may pass resolutions on the subject irrespective of the number of members present. But in the notice convoking the second meeting it must be expressly mentioned that resolutions will be passed irrespect- ive of the number present. To carry a resolution of the above nature there must be a three-fourths majority of those present. 36. The voluntary dissolution of a society cannot take place should more than two members object to such dissolution : if three members protest, the society cannot dissolve, but those who desire dissolution may retire from the society. Any proposal to dissolve a society must be addressed in writiag to each member at least four weeks before the general meeting which is to dispose of the motion. 37. Disputes regarding the contents of the articles, or between members regarding the opera, tions of the society, are to be disposed of by a general meeting with leave to appeal from such decision by a suit in court. 38. The first general meeting will choose by open voting — (as) the chairman of the meeting ; (i) the members of the committee of supervision, the directors, and the accountant; it shall not be necessary at such meeting that the rules regarding^the convocation of the meeting and the methods of voting shall be observed. AETICLES OF THE GENERAL UNION OF THE EUEAL CO-OPERATIVE SOCIETIES OF GERMANY AT NEUWIED (EAIFFEISEN).t Ohaptbe I. 1. (Title and foundation). 2. Object. — The union has as its objects — (1) the examination by its inspectors, as prescribed by law, of the (afiairs, methods and accounts of the) societies adhering to it ; (2) the representation and guardianship in every respect of the interests of such societies ; (3) and, especially, the duty of organizing means for the sale and purchase of agricultural products and necessaries. 3. Head-quarters and sphere of operations. — The union shall have its head-quarters at Neuwied and may operate throughout the empire. The minimiun number of its adherent societies shall be 20, and the maximxim, provisionally, 5,000. Chapter II. — Membership, &c. 4. Admission. — The union will admit — (1) rural credit unions (of the Raiffeisen type) : {a) which according to the co-operative law are constituted on 'the principle of unlimited liability or of unlimited supplementary payments (unbeschrankter Nachschusspflicht) ; f (5) which by suitable arrangements endeavour to better the condition of these members both morally and materially j {o) which only accept members, whatever their livelihood, from within a defined and very narrow area so that no member can belong to more than one society ; {d) which demand no entrance fee, and divide not more than 4 per cent, annually as dividend on the shares ; («) which fix their shares at a maximum of 15 marks (shillings) each and allow a member to hold only one share ; " {f) which grant no remuneration to any of their functionaries except the cashier, but only repay expenses out of pocket ; {g) which allot at least two-thirds of their annual gross profits to the accumulation of an endowment fund (Stiftungsfonds) for the advancement of the economic (or business) * In another set of model articles the following are the provisions relative to the reserve : — " After payment of the dues of the society and the dividend, the whole of the sttrplns shall go to a reserve intended to meet any losses sustained by the society. Should the own capital of the society attain such an amount that the society can work on its own funds, the interest on such capital and the profits of business may be employed on some local work of public utility. The charges on loans should, in such case, be lowered. "The reserve is the common property of the society : no member has any individual right over It, nor can he- demand its distribution. In case of the voluntary dissolution of the society the reserve shall be deposited in th© Imperial Bank, there to accumulate at interest until the formation of a new loan society which shall adopt the present (or similar) articles and be established in the same local area, in which case the fund in question shall at once b e handed over to the new society." See on the subject of the reserve, sections 7 (4), 20 and 156 of the co-operative law of 1889. t The work done bv this society was formerly done, or contemplated, to a greater or legs extent, by the central bank which consisted of two sections, one financial, the other supervisory. On the passing of the general co-operative law of May 1889, the supervisory section of the central bank was abolished and a separate society formed for the sole jnrpoBe of audit and supervision in conformity with Chapter IV of the law, q.v. % See the law of 1st May 1889 translated av/pra. 108 circumstances of its members ; or, if the' law permits, accumulate at compound interest from the sui-plus income, after allotting the dividend, an indivisible and common reserve fund ; (h) other registered co-operative societies, not being joint stock share societies, which seek to better the economic position of their members, such as vineyard, cherry, &c., associ- ations. ***** 6. (Kules for the mode of admission, withdrawal and expulsion of members (societies). 7. Duties. — Societies which belong to the general union are bound to the following duties : — (a) to observe the principles mentioned in section 4 (1) and to fulfil the conditions therein contained ; (i) to accept the rules prescribed by the union for business and account keeping ; {c) to submit to examination by (the inspectors of) the general union and especially to the audit prescribed by law ; (i) to take in the organ of the union, viz., the ' LandwirthsehaftHche Genossenschaftsblatt ' ; (e) by the first of May in each year to transmit the balance sheet of the preceding year to the chairman of the union, and an}' later information, and to mention any subjects which may seem of general interest ; {() to pay the annual contribution due as costs of audit ; {g) to send at least oue director to attend the ordinary meetings of the union, as also of the group (Dnterverband) meetings, and to carry out the resolutions of the same. 8. RigUs. — The adherent societies have the right — {a) to demand at least once in every two years an examination (of their affairs) by an inspector of the general union. (b) to be represented by their delegates at the meetings of the union or of the groups, and to submit thereat their proposals, provided that such have been sent by the 1st April at latest to the union chairman. (o) to share in aU the benefits offered by the general union, especially in those resulting from its organization for common purchases and sales. Ohaptee III. — Administration. 9. Organs, — The duties of the general union are carried out by its chairman (general Anwalt) and his deputy (articles 10 to 13), by the general council (14 and 15) and by the general meeting (16 to 22). 10. Chairman. — The chairman as director undertakes the carrying out of the work of the union; he is elected by the general council who can also nominate one or more deputies. 11. Duties of the Chairman — It is the duty of the chairman — [a) to work for the dissemination and encouragement of the Eural Co-operative System espe- cially as regards the Credit Unions of the Eaiffeisen system, strictly in the spirit of its founder, to watch over their interests in every respect, to assist them in every possible way (mit Eath und That) ; (h) to issue the necessary rules for the working of the societies and for their book-keeping ; (c) to arrange for suitable examination of the adherent societies according to law, and to appoint the necessary inspectors ; (^ and (e) (These require information regarding the societies, their business and the meetings of the union to be sent to the Government authorities) ; {f) to summon the meetings of the general union, to carry out the resolutions of the same and of the general council, to appoint the staff, to carry on the current business and to pre- sent the annual report at the general meeting. 12. The chairman is responsible for the ofBce arrangements of the union. 13. Rights of the Chairman- id) to propose to the general council the expulsion of adherent societies, to order extraordinary examinations of any society which he considers to be necessary in its own interests ; to attend in person or by representative and to speak at the meetings of the general union and of the groups, as also at the general meetings of the adherent societies. 14. The General Coimcil. — The general council consists of the members of the committee of supervision of the Agricultural Central bank and of the directors of the union ; it acts as a standing committee of the general meeting of the union. Its duties are — (a) to elect the chairman (general Anwalt) and his deputy, provided that the director of the Agricultural Central bank or his representative shall ordinarily be chosen as chairman ; (i) to examine the employment of the funds of the union, to settle the accounts of the year aad to lay them before the union ; {c) to watch over the interests of the union in every respect and in case of necessity to summon an extraordinary meeting to decree the expulsion of adherent societies on the motion of _ the chairman ; ****** (e) to fix suitable dates for the holding of meetings of the union. 15. (Eules for the meetings, &c., of the Council.) 16. General Meeting.— The general meeting of the union consists of the delegates of the adherent societies. Only directors of such societies may vote, but other members may take' part in the meetings without the right of vote. " 17. (Eules' for the place and time of meetings.) 18. Authority of the General Meeting. — It is reserved to the general meeting (a) to decide all matters of common interest; 109 {b) to appoint committeeB for the due management of aflFairs ; («) to receive the annual report from the chairman and as regards the accounts, to grant him quittance ; (d) to decide upon any changes in the articles ; («) to authorize the formation of sub-unions and groups and to permit their representation by- delegates : such unions and groups must, as far as possible, be conterminous with political divisions [e.g., districts and circles (taluk) ]. 19 to 2 1 . (Rules for the summoning for meetings. ) * » » * * Chapter IV. — Inspections. 23. Dviy of the Union. — The general union undertakes the duty of examining by its permanent inspectors at least once in two years, the societies adhering to it, and of inducing the removal of any defects which may be discovered thereby. 24. Method. — Examinations of societies shall be carried out according to the method prescribed by these articles. They shoidd not be restricted to a mere arithmetical audit of the books and balance sheets ; the inspector is specially charged to see that the administration is carried on in strict accord- ance with the spirit of the co-operative law, the articles, and the rules of the general union. The inspectors have the right (section 61 of the co-operative law) to examine all the books and documents of the society (under examination), to ascertain the agreement of the cash balance with the accounts, and the presence (in the safe) of all securities, paper and goods shown in the books. The committee of supervision of the society imder inspection must assist thereat. 25. Report of inspection. — A report in duplicate shall be drawn up of each such examination, and signed by the inspector, by the committee of supervision of the society examined, by its directors, and by the cashier. One copy is to be sent to the society examined to be placed before the next general meeting, the other to the chairman of the general union for examiuation and for such further steps as may be needed for the removal of defects. 26. Certificate by inspector. — The inspector must grant a certificate of any examination which has been held according to the rules, and this shall be forwarded by the directors to the proper Court.* 27. The inspector is entitled to be present at the general meeting of the society examined and to speak thereat. 28. In special cases, and particularly in case of grave breaches of duty by one or more of the administrative organs, so that the status of the society or the reputation of the union is endangered, the inspector has the right, without delay and in accordance with the articles, to convene an (extraordi- nary) general meeting and to obtain thereat new appointments (of directors, &c.) irrespective of the lawful claims of the society against the administrative agents. In such cases the inspector must at once report his action to the chairman of the general union. 29. Extraordinary examination*. — Upon the opinion of the union clinirman extraordinary examin- ations may be, and, upon the request of the director of the Agricultural Central bank, shall be insti- tuted, and the societies whose affairs are examined shall be bound to pay the costs. 30. The appointment of examiners rests with the union chairman. In such appointments it is essential — (a) that the candidates shall be of thoroughly good reputation in every respect (in jeder Bezie- hung durchaus unbescholten sind) ; (i) that they shall not be members of any of the societies to be examined ; (c) that they shall have thoroughly grasped the co-operative idea as displayed in the Eaiffeisen. system ; (d) that they shall be physically capable of enduring the fatigues of rural inspections. The final training of the candidates shall take place under the supervision of the union chairman and before being sent on independent inspections they should have made a series of such examinations under an experienced inspector until iljey have proved themselves thoroughly capable. Their final appointment shall be-'taade only after a practical and thorough examination by the union chairman. -r •31. The union chairman may appoint chief inspectors for supervising and controlling the inspectors. Chaptur V. 32. Complaints by adherent societies shall be disposed of by the general council of the union, and, in the second instance by the general meeting. ARTICLES OF THE AGRICULTUEAL CENTRAL CREDIT BANK, NEUWIED (RAIFrEISEN).t Chapteb I. — Foundation and Object. 1 . A joint stock society under the name of ' Agricultural central credit bank ' is hereby founded with the following articles. • See seotiona 10 and 61 of the co-operative law translated elsewhere. t This is intended as a central bank for the benefit of all societies which accept the EaifEeisen principles of co-operatiTe action. The members of this hank are societies, save only such individuals as are necessary for its dne working ; it is a joint stock association of societies fer their respective financial support and mutual assistance : see Tolnme I, pages 152, 153. II 28 no 2. Its object is banking and credit business with preferential consideration for agi-iculturists. 3. Its head-quarters shall be Neuwied. Chapteh II.— Capital, Shakes and Shareholdeks. 1. The capital of the bank shall be £25,000, divided into 500 shares, personal (auf den Namen lautend), and each of £50. 2. The capital may be increased by resolution of the general meeting. 3. The shares shall be made out in definite names and shall be signed by two members of the committee of supervision and by one of the directors. They shall be provided with interest coupons. Every claim on a dividend coupon is extinguished, when such dividend has not been drawn within fonr years from its due date. Any lapsed dividends shall be credited to the reserve. 4. The following alone will be admitted as shareholders, viz., persons who belong to the board of directors and committee of supervision, and co-operative credit unions — (a) which * are constituted under the form of unlimited liability ; (J) which by suitable arrangements endeavour to better the condition of their members both morally and materially ; (c) which only accept members, whatever their livelihood, from within a defined and very- narrow area, so that no member can belong to more than one society ; (rf) which demand no entrance fee, and, so far as the law permits, have no business shares, f or only admit one share for each member, and which grant on such share no higher dividend than the interest demanded from borrowers ; («) which grant no remuneration to any of these functionaries except the cashier, but only repay expenses out of pocket ; (/) which carry all net profits to an indivisible and joint reserve ; (g) which accept and attend to the instructions issued by the General Union | for management and book-keeping, submit to audit by the (inspectors of the) General Union, and permit the examinations instituted by the same. Shareholders must enter on the bank's share-register their names, addresses, and the number of shares which they take. Transfer of shares to persons and societies described above may be made by simple endorsement with the previous consent of the board of directors : such transfer is noted in the register. 5. Ten per cent, of the share amounts shall be paid down and the rest by instalments of at most 10 per cent. : provisional scrip to be issued till complete payment, but the holder has all the rights of a full shareholder : 6 per cent, interest is charged on arrears and a fine of 10 per cent, of the amount of such arrears. 6. (Rule relating to cancelment of shares.) Chaptee III. — Organization and Management. 1. The organs of administration are, the general meeting, the committee of supervision, and the board of directors. Their composition is as follows : — (a) The general meeting consists of the shareholders (Chapter II, 4) ; all shareholders are . entitled to take part therein, each having one vote. Societies taking part in the meeting exercise their right of vote by their lawful representatives. Every shareholder can be represented by another duly authorized shareholder ; such autho- rization must be in writing. No person other than a shareholder may be appointed as proxy. (i) The committee of supervision consists of nine members. The number may be increased by the general meeting, but so that the number may be divisible by three. It is appointed for three years : each j'ear one-third retire ; during the first two years the retiring members are chosen by lot. Should any member die or otherwise retire, the committee must make up the member until the next general meeting at which an election is held. The committee annually chooses one of its members as ijrresident and two others as deputies of the same. (o) The board of directors consists of a managing director and a cashier, together with a deputy of the first named, and two members. 2. The bank may establish branches and agencies. A resolution of the committee of supervision is necessary for this. (3, 4, 5 and 6 relate to the convocation of meetings, to elections, to persons entitled to sign for the bank, and to the keeping of minute books.) Chapter IV. — General Meeting. 1. Ordinary meetings are annual : extraordinary meetings are held when summoned by the directors, by the committee of supervision, or by at least one-tenth of the members. 2. The list of subjects is settled by the managing director and the president of the committee, the opinion of the latter prevailing in case of disagreement. * These conditions (a) to {g) must all be fulfilled by societies seeking admission as shareholders ; it is not meant chat a society which merely satisfies any one of the conditions is admissible. The conditions in question are the main principles of the Raiffeisen societies. t Under the new law of 1889 this condition requires modification : see the corresponding rales in the articles of the General Union. J See translation of the articles of the General Union (General-Anwaltschafts Verband) sv/pra. This originally formed a section of this bank, but was separated, and formed into a new society subsequent to the passing of the law of 1st May 1889 : see sections 51-62 on pages 295-96 of Vol. I, and the law itself translated cupm. Ill Every shareholder is entitled to propose a subject for discussion. (Only subjects proposed in due time and proposals for a subsequent meeting may be voted upon, though others may be discussed.) ***** 7. For the audit of the annual accounts settled by the committee of supervision with a view to acceptance (by the general meeting) and for the examination of the management, the general meeting must annually appoint for the following year an accounts committee of not less than three persons who will elect their chairman and apportion the work between them. On the report of the accounts committee and of the chairman of the committee of supervision, and after hearing the report of the directors, the general meeting will, if it sees no objection, accept the accounts. The members of the accounts committee have a claim to the refund of any expenses out of pocket. Chapter V. — Committee of Sttpekvision. 1. The committee of supervision watches over the conduct of business in all branches; it can acquaint itself with the progress of all transactions, may at any time inspect the books and documents, and examine the cash balance. It shoiild summon a general meeting whenever required by the interests of the bank. 2. The prior consent of the committee is required in the following matters : — (a) for the granting of cash credits ; (5) for investments, &c., in mortgages ; (c) for the fixing of the rates of interest and commission ; (d) for the settlement of the dividend and of the allotment to the reserve ; («) for the investment at interest of the reserve and of un-employed funds ; (and in various other duties such as the establishment of branches and agencies, the maoagement and sale of immovables, the budget, and the initiation of coercive process for collecting debts, &c. They also have the other duties of directors in an English company. They may form amongst them- selves committees either temporary or permanent for the better carrying out of their duties ; and for the general superintendence of affairs especially as regards investments, the opening of cash credits, &e., and for the preliminary settlement of the balance sheet and accounts of the year, there must be a standing committee of at least three persons. This committee must at least twice in the year make special (ansser-gewohnliche) examinations of the affairs and accounts, besides the regular monthly audit by one of their members or by some expert appointed by them ; a report of each such audit must be made to the committee of supervision. A meeting of the committee of supervision is only valid, if more than half the members are present : the suspension, &c., of directors, and decisions to establish branches and agencies require the votes of a majority of the whole committee.) * * « * * 9. The members of the committee of supervision serve gratuitously, but may claim the refund of any payments out of pocket. Chapter VI. — Directors and Staff. 1. The directors are charged with the management of the business. They represent the company judicially and extra-judicially in accordance with the code of commerce, the present articles, and the business rules. All speculation in movables or immovables is absolutely forbidden. (The duties of the board and of the managing director are laid down in detail, but do not need translation.) Chapter VII relates to the accounts which must be kept by double entry : full details are given for the preparation of a balance sheet which shall show the exact value of th« assets and liabilities, the assets being carefully rated at their actual value. Chapter VIII. — Operations. 1. The bank proposes as its primary object to satisfy, as far as possible, the needs of the agricultural population for credit, and to provide for their savings a secure place of investment. 'Hie imdertaking is for the common benefit, and not with the object of gain. All speculation, and particularly all business with which any probability of risk is connected, is expressly forbidden. 2. The funds of the central bank, outside of the own capital, shall be obtained — (a) by the issue of irredeemable * (unkundbar) debentures ; the committee of supervision is empowered to obtain, through the directors, the consent of Government,! as soon as the proper time shall have arrived ; (J) from deposits, especially those of long term ; (e) from commission, excess interest,]: and casual profits. .3. The funds of the bank shall be employed — (a) in loans to the registered co-operative societies which are shareholders of the bank ; (b) in bills of exchange and loans on pledge are the principles of the National bank ; (o) on mortgage business ; {d) on the management of immovables where required in the interests of the bank. Sums not applied to the above purposes shaU be employed ; * I.e., not redeemable at the pleasure of the holder of the debentures, but only within or after a fixed period, or at the pleasure of the bank within such period. + By German law, the express consent of Government is required before a bank can issue debentures, at all events of the land mortgage class. J I.e., general profits, Tiz., the difference between the interest received and the interest paid. 112 (#) in the purchase of bonds to bearer, issued by the Empire or by any of the German States, or any paper of corporations or communes issued under the authority of such state and of which the interest is guaranteed. Tlie funds derived from excess interest, commission, and casual profits shall be employed — (/) in meeting the expenses of administration ; (^) in paying a dividend to the shareholders. The committee of supervision shall, after deduct- ing the amount assigned to the reserve by the next paragraph (A), declare from the profits an annual dividend. This shall be calculated upon the amount actually paid in upon the shares, and shall never exceed the rate of interest paid by the shareholders for loans obtained by them ; (A) in accumulating a reserve. From the net profits * shall first of all be deducted a sum of 20 per cent, for the reserve. From the remainder shall be paid the dividend calculated as in paragraph (^) ; any surplus shall go to the reserve. The object of the reserve shall be the recoupment of losses of aU kinds. At the dissolution of the bank the reserve may be divided among the shareholders. Chapter IX. — Miscellaneotjs. 1 . Complaints by the shareholders are decided by the committee of supervision, and in the second resort by the general meeting. * * * # * 3. At least two-thirds of the shareholders must give their votes in the affirmative before the bank can be voluntarily dissolved. LAW FOE THE ESTABLISHMENT OF PUBLIC LOAN OFFICES; ALSAOE-LOERAINE (18th JUNE 1887).t 1. The Government is authorized, upon request of any commnnal council, to establish in the commune (Gemeinde) a public loan office. Upon a resolution of the communal council the chief tax-payers are bound to co-operate according to the terms of section 42 of the law of 18th July 1837 for the administration of communes. The business area of such loan office may be either a single commune, or the neighbouring tracts of one or more communes. 2. The loan offices may grant loans at interest to agriculturists and tradesmen (Gewerbetrei- bende) upon security. The borrower must always, and the surety must, as a rule, be a resident within the business area of an office. 3. The loans may extend to a sum of 1,000 marks (£50), and for a period of three years at most. But with the consent of the supervising authority (s. 19) loans may exceptionally be granted up to 2,000 marks, and for a period of five years. The rate of interest shall not exceed 5 per cent. The borrower is at liberty at any time to repay the borrowed amount in whole or in part, pro- Tided that each instalment shall not be less than five marks. 4. The first cost of the establishment of a loan office shall be provided from the funds entered for such purpose in the ' Landeshaushalt ' budget. J 5. Loan offices will, on their application, be provided with working funds by the Government treasury at an § interest not exceeding 4 per cent., and within a total sum fixed by the budget. The Government shall fix the maximum for grants to be made to single loan offices from the amount at their disposal, and will issue the necessary instructions for communications between the deposit office and the loan office. 6. The loan office may in their own j^names establish claims, enter into contracts (or inctir obliga- tions) and sue or be sued {i.e., they are corporate bodies). The provisions of the general German Code of Commerce regarding registration in the commercial register and its legal consequences, are not applicable to these offices. They shall enjoy the same privileges as the exchequer in the matter both of taxes and cesses, and of costs in proceedings before the courts. 7. The internal management and the business arrangements shall be regulated by articles drawn up by communal councillors appointed for the purpose, and confirmed by the Government. The articles must contain rules on the following points : — (1) the election of the directors (section 8), where the business area comprises more than one commune ; (2) the meetings of the directors, the periods for which the members shall exercise their func- tions, their resolutions, their methods of voting and of issuing orders, and the representa- tion of members in case of temporary or continuous absence ; (3) the powers and duties of the directors, of the chairman and of the cashier, and the measiu-es to be taken against negligent directors ; (4) the minimum amount to be granted on loan ; (5) the mode in which demands for loans are to be made ; * I.e., the excess interest, &o., less the expenses of administration. t See Vol. I, pages 156-57. According to Mr. Wolff these carefully thonght-ont and privileged institutions have been of little service or development (" the practical effect proved next to nil "), vfhile the private Eaiffeisen Credit Unions are rapidly developing. t The funds in question are public funds. § Landesdepositenverwaltung. This corresponds to the French ' caisse des dep6ta et oonsignationB,' or to the National Debt Commissioners of the English Treasury. 113 (6) tte circumstances under which such demands may be refused. The benefits of a loan office shall especially be refused in cases where any loss has been incurred by the office or by a surety on a previous loan to the candidate, or where he has obtained a former loan under false pretences ; (7) the general stipulations of loan contracts ; (8) the methods and forms of accounts, and the principles to be observed in preparing the balance sheet, especially in the matter of treating' doubtful claims ; (9) the security to be given by cashiers ; (10) the amount and investment of the reserve (section 16) ; (11) the period mentioned in the last part of section 16 and the proportion in which the divi- sion of any surplus shall be made for the benefit of the several communes within the business area ; (12) tbe circumstances under which the articles may be modified, under which single communes may withdraw from the union in cases where the business area comprises several com- munes, and under which the office may be closed. 8. The board of directors shall consist of a chairman and four members. The chairman shall be appointed by the supervising authority (section 19) : the members shall be •elected. If the business area comprises only one commune or parts of one commune, the communal council shall arrange for the election ; if of several communes, then the several councils or their deputies according to provisions expresslj' laid down in the articles of the office. The cbairman and members must be residents in the business-area, subjects of the German Empire, and in possession of their full civil rights. On the loss of such conditions they lose their position on the boated. The supervising authority will appoint one of the members as deputy chairman. 9. The office is represented judicially and extra- judicially by the board. Such representation extends also to such afiairs and court business as by law require a special authorization. In matters which the board have settled in the name of the office within the limits of their authority as laid down in the law and in the articles, the office is both bound and justified by such action. 10. The office of member of the board is honorary (Ehrenamt). The articles may, however, allow actual expenses out of pocket. The accounts and cash are looked after by a cashier appointed by the board and confirmed by the supervising authority. He may be granted a fixed stipend from the funds of the office, but payment biy a proportion of the profits (Gewahrung von Tantiemen) is not permissible. The cashier may not be a member, of the board. The tax collector and accountant (monigar and kumam) of the commune are bound to undertake the duty of cashier to the office if offered to them. • • • • • 12. The board is authorized in accordance with rules to be issued by Government — (1) to claim information and assistance from public officers and authorities, and especially to demand their co-operation in the receiving and giving opinion on applications for loans ; (^ to assign the care of local cash affairs to revenue officers. Officers entrusted with the cash affairs of the office are bound to foUow the business regulations of the directors. But the directors have no disciplinary authority over such officers. • • • • • 1 3. The board and all those who are occupied in the transactions of the office are bound to keep silence on all private matters which come to their knowledge in the exercise of their functions. 14. Any claim of the loan office shall, of right, be repayable in fuH — (1) if the debtor without the previous consent of the board of directors applies the loan amoimt to any other purpose than that specified in tiie agreement ; (2) if the debtor is in arrears for more than one month as regards any stipulated payment ; (3) if any coercive process is instituted against him or his surety : (4) if proceedings in bankruptcy are opened against him or a surety ; (6) if the debtor without permission of the board borrows money from any person who makes a trade of money lending. 15. The office can, without prejudice to its rights, proceed by way of judicial execution to the collection of its loans with interest and costs accoiding to the rules in force for the collection by coercive process of the public revenue. For the above purpose sections 708, 709, and 712 of the Civil Procedure Code shall be applicable. 16. To cover any losses a reserve fund, to the amount of at least 10 per cent, of the liabilities, shall be accumulated from the net profits. Should such reserve exceed the amount fixed by the articles, the communes within the business area of the office are entitled to any surplus disclosed at the end of the year,»for investment in any matters of public utility though not expressly laid down in the law. Where the excess has accrued by reason of a decrease in the liabilities of the office such assignment thereof should take place only on the expiry of a term of years to be fixed by the articles of the office. 17. If the means of an office do not suffice to cover its liabilities, the communes within the busi- ness area of the office must make up the deficiency shown by the balance sheet of the year by a pro latd contribution proportionate to the proceeds of their respective tax collections. Such contribution shall not exceed 5 per cent, of these collections, and shall be considered as an obligatory communal expendi- ture in the sense of section 30 of the law of 18th July 1837, regarding communal administration, and accounted for as extraordinary expenses. 18. An office which is permanently unable to meet its engagements can be dissolved by Govern- ment. In such dissolution the winding up of the business shall be carried out by the board of II 29 114 directors, or, in defaiilt, by the supervising authority. Por a period of four years from the expiry of the business year in which the supervising authority winds up affairs, the communes of the businesB area of the office shall be liable to make the contributions mentioned in section 17 mpra. 19. The supervision of the loan offices rests with the Tahsildar (Kreisdirektor) who watches over the carrying out of the regulations provided in the law and in the articles. His approbation is necessary to the resolutions of the board in regard to the salary to be given to the cashier and to the security to be taken from him. He verifies the cash balances and the annual accounts, and grants a certificate of correctness (Deoharge). Before the grant of this certificate the balance sheet is to be communicated to the councils of the respective communes. The confirmation of Govemiaent is necessary to the resolutions of the board in the matter of borrowing funds, whenever such borrowing is made otherwise than from the treasury. An office is bound at any time, upon demand by the Tahsildar or his deputies, to submit for their inspection the aflFairs, books and accounts of the office, and to permit the verification of its cash balances. At such verification the presence of the mayor of the commune in which the office is situated must be invited. The Tahsildar may require meetings of the directors to be convened, and in case such demand i» not complied with, he can himself convoke such meetings. In meetings convoked upon his motion, he or his deputy can take the chair. Should the board refuse to carry out its duties as required by the law or by the articles, its members wiU be deprived of their office. The Tahsildar must in that case either personally or by his representative take over the powers and duties of the board at the expense of the office, and arrange at once for the appointment of new directors. 20. For the official year 1887-88 the amount mentioned in section 5, paragraph 1, is fixed at £25,000. 21. The Government will issue regulations* for the carrying out of the law. LAW OF 28th JAJSTDARY 1894 EELATING TO THE PLEDGE OF CATTLE (CANTON THUEGAU, SWITZEELAND). t 1. The pledging of cattle (remaining) in the possession of a debtor is permitted in favour of Cattle Loan offices established by communes and approved by the authorities (Eegierungsrathe) ; *«* section 210 of the Federal law of contract, dated 14th June 1881. J ' 2. For the validity of such pledges of cattle an agreement drawn up in writing is necessary : the agreement must mention {a) the time and place of the agreement, (i) the amount advanced, (c) the terms of repayment, (<^ the exact description of each head of cattle according to species, colour and age. 3. The deed of agreement is to be handed in to the executive officer of the taluk (circle, Kreis) in which the pledgor resides. Such official shall forthwith enter it in the register kept by him for mort- gages of cattle, shall endorse upon it its register number and a certificate of its registration, and shall then haud it over to the pledgee. Every prior pledge (of the same cattle) shall be noted by the executive officer both in the register and on the document. § 4. A charge of one franc is payable (as registration fee) to the executive officer on each occasion when cattle are first pledged. 5. A pledge (mortgage claim, Pfandrecht) becomes valid (is acquired, erworben) upon the regis- tration of the document in the books of the executive officer, but without prejudice to the claims of any prior judgment-creditor so far as regards the cattle which, at the time of the execution of the document, are in the possession of the debtor. A valid claim is also acquired by the lending office when, at the time the claim originates, the office in good faith believes the pledgor to be the owner, even though in fact he is only the possessor, provided that the cattle are neither stolen nor lost property. 6. Should another head of cattle be lawfully pledged (to the Loan office) in substitution for the one originally pledged, an entry (to that effect) may, even without the consent of the creditor-office, be made in the document and in the registration books ; for such entry a fee of half a franc (60 Eappen) is payable. In other cases respecting the alienation of pledged cattle and the rights of third parties (pur- shasers), the provisions of section 96 of the Federal law of Debt and Bankruptcy (11th April 1889) and of section 57 of the Cantonal law of 3rd May 1891 are applicable. * These have unfortunately not been hitherto obtained. + This law repeals that of 1851 mentioned in Vol. I, pp. 161, 162. j The laty of mortgage in continental Europe invariably forbids the pledge of movables without actual delivery of the goods by the pledger. Of late years several countries have specially legalized pledge without delivery as in English bills of sale, in favour — usually— of banks or societies lending to agriculturists ; see swgra s. v. ' Belgian law regarding Agricultural credit, 1894,' and the Italian law of 23rd January 1887. The Federal law of Switzerland, section 210, is as follows : — " 210. The mortgage of movables or of paper payable to bearer takes place only by actual pledge (Faust pfand). Such pledge is effected by the delivery of the goods to the pledgee or to his representative. Such deliverv shall not be complete so long as the goods remain in the custody of the pledgor. " Nevertheless the State laws of the several cantons may permit the pledge of cattle by mere entry in the rublio registration books." i' ".- The law of Canton Thurgau is that given in the text and is a mere development of that of 1851 which permitted in favour of Cattle Loan offices, the pledge without delivery of cattle purchased by means of loans from enoh offices and only in security for such loans. It will be noticed that this exception to the general law is made only in favour of' approved communal Cattle Loan offices, and does not apply to any private creditors or to other Loan societies § Presumably this refers only to pledges still outstanding against the same cattle. 115 AETICLES OF A COMMUNAL LOAN SOCIETY FOEMED FOR THE PURCHASE OF CATTLE (CANTON THURGAU, SWITZERLAND).* 1. Object. — A cattle loan Booiety shall be formed in the commune (village) of with the object of facilitating the purchase of cattle by the inhabitants of the village, and of thus, on the one hand, assisting agriculture, and, on the other, presenting the injurious effects of usury as practised in cattle dealing. 2. Resources. — With this object the inhabitants of the commune will establish a fund either from their own resources t or by means of a loan contracted upon their responsibility, the maximum amount of which shall be fixed by the administrative committee. Any loan so contracted must bear the lowest possible rate of interest. 3. Administration. — The administration of the fund is entrusted to a committee appointed by ballot by the inhabitants of the commune. The committee will choose from among its members a manager who will have to give security in a sum to be settled by the commune. 4. The duties of the committee will consist (1) in the maintenance of a general supervision over the progress of the institution, (2) in the granting of loans, (3) in making to the commune aU. such reports and proposals as may seem desirable in the interests of the institution. 5. The manager shall have the immediate charge of the funds, shall settle the details of the loans, with the conditions of and security for the repayment thereof, and shall keep the books ; every year, at a date to be fixed by the commune, he shall give account of his management. 6. The annual accounts shall be examined and passed on the same principles as those laid down for the management of other communal resources. 7. The salary of the manager should he demand any, or should it appear right to pay him, shall be determined from time to time by the communal assembly, consideration being given to the amount of business : the salary shall, if possible, be paid from the resources of the institution itself.J 8. Employment of the funds. — Any inhabitant of the commune ,'may obtain a loan from the funds of the society for the purpose of buying cattle ; such loan may not exceed £12 per head of cattle. This maximum may be increased by a decision of the inhabitants upon the report and proposal of the administrative committee. 9. The borrower must furnish proper security for the amount lent ; such security may be personal or otherwise. In default of other security the repayment of the loan may be assured by taking a mortgage, according to the provisions of the law, § of the cattle bought with the loan. It shall be permissible to the administrative committee to send one of its members, or the borrower's surety, or some other trustworthy person, with the borrower to be present at the purchase of the cattle ; the expenses of such person shall be paid by the borrower. If the committee consider that the borrower is sufficiently experienced in the matter of cattle purchase, the amount (of the loan) may be handed over to him without further formalities. The committee must watch over the due maintenance of the securities furnished, and the borrower is bound at once to insure the cattle with the Cattle Insurance Society. 1 0. The interest on loans must be paid annually at Martinmas ; when repayments of the principal are made, interest to date must be simultaneously paid. Interest shall be 4J per cent, per annum, and shall be payable in fuU for the whole quarter in which the loan is made and for that in which it is- repaid. 1 1 . The repayment of the loan shall forthwith be claimable should the borrower sell the cattle mortgaged (to the society) as security, or he should he make purchases on credit. || Should the borrower desire to sell any of the cattle charged, he must notify his sureties and the manager of the society, failing which he wUl be legally liable. 12. The expenses of eifecting a loan, e.g., the costs of the sureties, of the security bond, of registra- tion, &c., shall be borne by the borrower. The manager, if he himself is not the cattle inspector, must give all necessary information to the head of the commune in order that all proper steps may be takeu, by the latter.^ 13. iJflsertie.— The net profits shall be credited to a reserve, which shall be employed to cover any losses which may occui'. Any losses caused by neghgent management shall be borne by the adminis- trative committee, who may in turn proceed against the member at fault. The inhabitants of a commune cannot be called upon to make any payments in place of the society until all the resources mentioned in this article shall have been exhausted. The inhabitants shall (in such case) contribute in equal shares to cover any deficit. * See Vol. I, pp. 161-2. , •. ■ ^i. , . + In Europe the commune is a corporate body with its own property, resonrces, and powers ; it is the lowest administrative unit in local government, and is managed, usually, by a conn oil which meets only occasionally (general meeting) and by a standing committee (board of directors). In Switzerland the ' communal assembly ' appears, as in these articles, to be a meeting of all the capable inhabitants of a, village, so that their decisions are absolutely popular decisions j throughout these articles the words used are ' the inhabitants of the commune." The re-habflitation of the commune, or village system, in this Presidency, seems a dpsirable step in administrative progre^^^^ _^^ ^^^ salary must be paid, if possible, from the profits of the loan society and not from communal funds ^''°^|''The cantonal law of Thurgau and the Federal law of Switzerland enact special privilleges for the encourage- ment of cattle-breeding ; the Federal law grants permission, contrary to the general law of pledge, to mortgage cattle without delivery ' by simple entry on the public registers :' the cantonal law restricts this privilege to cattle bought with the proceeds of a loan granted by the cattle society, and for the purpose of securing the repayment of such loan. II The society declines, for its own safety, to continue its dealings with a person who is elsewhere running into debt. The provision is stringent, and obviously based on experience ; on the matter of indebtedness and bankruptoies. in certain Swiss cantons, see Vol. I, pp. 4.3, 44. ,.,,,. ^ i i.- •f This clause relates to the provisions of the law regarding cattle and cattle breeding ; see translation eupra. 116 14. Duration. — The society shall subsist until the communal assembly decides to dissolve it. For such decision the consent of two-thirds of those viUagers present in an ordinary communal assembly shall be necessary. 15. The present articles may at any time be modified by the decision of two-thirds of those present at a regular (communal) assembly. EXTEACTS FEOM THE ITALIAN CODE OE COMMERCE (1882), RELATIVE TO CO-OPEEATIVE SOCIETIES.* » « # * « 219. " Co operative societies are subject to the provisions which regulate the class of society of "which they assume the character, as defined in ax'ticle 76, with due regard to the following special "provisions." {Note 1. — Article 76 divides commercial societies into three classes — (1) " Socipt^ in nome collettivo," i.e., based on unlimited liability ; (2) " Societi in aocomandita," in which the liability, of some members is unlimited, while that of others is limited to a fixed sum ; (3) " Sooieta anonime," in which the liability of each member is limited to the amount of capital subscribed by him.) 220. " Co-operative societies must be constituted by a public deed." {Note 2. — I.e., a notarial act.) " The deed of constitution, besides those particulars required, in compliance with articles 88 and " 89, according to the respective class of association to which the society belongs, must further state. (1) " The conditions of the admission of new members, and the manner in which and time when they are to contribute their subscriptions as members ; (2) "The conditions required for the withdrawal and the expulsion of members ; (3) " The formalities to be observed in summoning general meetings, and the public journals " appointed for the publication of the acts of the society." {Note 3. — Articles 88 and 89 contain those particulars as to the name, seat, object, organization, and administration of the associations mentioned in Note 1, which the code requires to be stated in their respective constitutions or acts of incorporation.) "J21. " Co-operative societies are invariably subject to the provisions affecting societies with limited " liability (' Society, Anonime '), so far as regards the publication of their constitutions and of any sub- " sequent amendments thereof, and also in respect to the duties and responsibility of their directors " (' Amministratori '). The publications in question are made without charge." {Note 4. — The regulations as to these publications are to be foimd in articles 91, 92, 94, 95 and 96 of the Code. Those as to the duties of directors are contained in articles 139 to 153.) " The directors must be elected from among the members, and may, by the Act of Constitution, be " exempted from the obligation of depositing caution-money. " Those provisions which relate to the general meetings, balance sheet, committees of control " ('sindaci '), and liquidation of joint-stock associations (' Societa per Azioni '), are equally applicable " to co-operative societies, so far as the following articles or the Act of Constitution do not provide " otherwise, " The quality of ' co-operative,' as well as the kind of society, must be expressly stated in all the •'' documents enumerated in article 104." {Note 5. — I.e., in every contract entered into by the society, and in every deed, letter, publication, or notice referring to it.) 222, " The provisions of the first part of article 131, and of the first paragraph of article 146, do " not apply to co-operative societies." {Note 6. — The portion of article 131, here referred to, makes the subscription of the entire capital and the payment by every mem.ber of three-tenths of the portion subscribed by him an indispensable preliminary condition to the constitution of any society, and forbids the issue of any new shares before the old ones are entirely paid up. The first paragraph of article 146 requires the directors of a society, whenever they discover the capit^l to have diminished by one-third, to summon the members and ascertain whether they intend to make up the capital to its former amount, limit it to the amount remaining, or dissolve the society.) "The Act of Constitntion of these societies may omit to comply with the provisions of article 144, " and with those of section No. 3 in article 165." {Note 7. — Article 144 precludes the directors of a society from nurohasing its shares on the society's account without the authorisation of the general assembly of the members, and unless such purchase is effected by means of suras taken from profits regularly ascertained, and the shares in question are entirely paid up. It also states that in no case can the directors make any advance of money upon the shares. Article 165, section No. 3, provides that the share certificates (" Ti^oli delle Azioni ") shall state the amount of the society's capital, and the number and total value of its shares.) • The sections here translated are merely those which relate solely t-j co-operative societies. But, as stated in section 219, these societies are also subject to tiie provisions which regulate the class of society of which they assume the character : these are numerous and will be found in full in the chapter on the " Law of societies in general" in this appendix. The translation is taken from Commercial No. 20 of 1886. 117 223. "The directors of co-operative societies must keep the register of members in accordance with " the provisions of article 140, and must further state therein : 1. " The date of the admission and that of the withdrawal or expulsion of every member. 2. " An account of the sums paid in and withdrawn by each meiaber. " They must present, at the end of every quarter, to the office of the tribunal of commerce, within " whose jurisdiction the seat of the society is established, a statement of the members whose liability is " unlimited, admitted into, withdrawn from, and remaining in the society in the course of the quarter, " giving their names, surnames and domiciles. "This statement must be signed by the directors and kept by the clerk of the court, open to the " free inspection of all comers." {Note 8. — Article 140 provides for the keeping of a register of members by the directors of all societies, in which shall be entered the payments made by them on account of the original capital subscribed by them, and of any subsequent increase of capital, as well as the declarations required by the law, in the event of the transfer of personal shares (" Azioni Nominative "), whether 'inter vivos ' or on the death of the owner.) 224. " No person may hold in a co-operative society a larger proportion of capital (' quota sociale ') " than 5,000 fr., or a number of shares exceeding that amount in nominal value. " The nominal value oi each share may not exceed the sum of 100 fr. " The shares are always personal (' nominative '), and may not be transferred until they are wholly " paid up, nor without the transfer being authorised by the assembly (of members), or by the Board of " Directors, according to the provisions of the constitution of the society." 225. " Members may not be represented by proxy at the general meetings, except in cases of lawful " impediment provided for in the act of incorporation or constitution of the society. " Each member has but a single vote whatever the number of shares held by him. " No proxy may represent at the same meeting more than one member besides his own interest, if " he be himself a member." 226. " The admission of new members is effected by their being entered in the register of members, " either personally or through a special representative. " Such entry must be authenticated by two members who are not directors. "If the constitution of the society authorises members to withdraw from it, the declaration of " withdrawal must be entered by the member withdrawing in the register of members, or notified to the "society in due form through a sheriii's officer (' per alto d' usciere '). It shall only take effect at the " end of the current year of the society, provided it be made before the beginning of the last quarter of " that year. If made later, the member remains bound for the succeeding year. " The expulsion of members can only take place for the reasons laid down by the law, or by the ' ' constitution of the society. It must be discussed either by a general meeting or by the Board of " Directors, according to the provisions of the said constitution." 227. "In regard to transactions concluded by the society previous to the day on which the " withdrawal or expulsion of a member takes effect, or the day on which the transfer of shares is entered " in the register, the departing member remains bound towards third parties for two years from the said " day, within the limits of his liability as laid down in the act of incorporation." 228. " The acts of incorporation of co-operative societies and the acts of withdrawal and admission " of their members are exempted from the usual registration and stamp dues." MODEL AETIOLES* OF A POPULAR CO-OPEEATPVE BANK (ITALY). Preliminary. The bank .... declares that it wiU be subject to the provisions of the Code of Commerce relating to co-operative associations with limited liability (" Society Co-operative Anonime "), and that it will comply therewith in accordance with the accompanying act of constitution. Title I. — Const iTUTioisr, Object, Duration and Seat oe the Association. 1. A Co-operative Credit Association with limited liability is hereby established at .... under the name of the People's Co-operative Bank of .... The name of People's Co-operative Banks and the qualification of limited (" Sooieta Anonima ") must be expressed in all contracts which it may enter into, as well aa in all letters, publications, or notices referring to it. (Commercial Code, article 104.) 2. Its object is to provide credit to its members by means of co-operation and saving. 3. It is established for a period of 99 years from the date of its constitution, with power to prolong its existence. 4. It has its domicile at .... in the place where its office is established. It may institute branch offices and agencies within the territory of the province, and the adjacent provinces, \>-y decision of the general assembly of members. The regiJations for the institution and management of the branches shaU. be framed with a view to jaciiitate their conversion into independent banks. Title II. — Capital or the Association. 5. The capital of the association shall consist of — (a) The. shares subscribed by the members, the value of each share being — lire ; * Extract from Commercial No. 42 of 1887. These are the articles of a popular bank of the system of gignor liuzzatti, and hare been translated for the above Foreign office report from Signer Levi's ' Manual for Popular Banks.' II 30 118 (J) The reserve fund ; (e) Such special funds as may be created for particular purposes. Although the Commercial Code fixes 100 lire as the maximnm limit of nominal value for the shares of co-operatiTe societies, the association of Italian People's Sanks considers that they ought not to exceed 50 lire. 6. The bank may, in order to extend its operations, contract loans and accept deposits of money, whether interest-bearing or without interest, on the security of its social capital. Title III. — Of Membebs. 7. Any person desiring to join the association must present a written application to the board of directors, stating his willingness to submit to the obligations resulting from the constitution, and from the bye-laws and decisions of the association. In eases of the transfer of shares from one person to another the application must be made by the heir 6r acquirer, even though he may be already a member. The application of any person not yet admitted to membership must be countersigned by two members, as witnesses to the character of the applicant. 8. Co-operative mutual benefit societies and corporate bodies may be enrolled in the association, with the same rights and obligations as any other member, but their delegates shall not be eligible to hold office in the association. If any banks should think proper to permit such representatives to hold ofSce, they ought not to be any personi «icept managers or dirtctors in the societies or corporate bodies in question. 9. Persons under legal or mental disability (" interdetti,, in^biUtate ") and bankrupts are expl]ided from the association ; nor can they own any shares upon transfer, unless in consequence pf an adjudi- 4;ation by a court of law. Such adjudication, however, shall not entitle them to any rights beyond participation in the profits. Any shares, which may come to the persons in question, either by inheritance or through decision of a court of law, must be disposed of in the manner laid down in article 15, paragraph 2. Although minors are equally disqualified from having direct transactions with the bank, yet as many of the bankg have already minors enrolled among their members, and as it may be at once an advantage and a compliment to the banks that the purchase of their shares should be deemed a safe investment for money belonging to minors, it has been thought best not to provide for their exclusion, but to leave the question for the banks to settle at their own discretion. 10. The decision as to the acceptance or rejection of the applications, whether of candidates for admission or of members wishing to acquire fresh shares, shall rest with the board of directors. An appeal shall be allowed from th^ir decisions to the committee of arbitrators. 11. If the application be granted, the new member, or the member acquiring fresh shares, must «nter his name in the register of members, in accordance with article 226 of the Code of Commerce. 12. The newi member iSj bound. — ,. , (1) To pa^ within three months, or by instalments of — lire, the entrance fee of — lire. (2) To acquire at least one share. (3) To hold himself answerable to the full amount of the shares subscribed by him for all obligations assumed ^y the association. The amount of the entrance fee should be proportionate to the value of the share, taking into account the amount of capital paid up, and of the reserve fund. For a share of 50 lire, for instance, it would be 3 lire. 13. A member acquiring not more than a single share may pay for it by successive monthly instalments of not less than — lire. The amount of each monthly instalment should be proportionate to the value of the shares, and to the particular •circumstances of the bank. Thus, in a large bank, or one established in a wealthy and populous centre, the instal- ments might be fixed at 2 lire ; in other cases at one lire. 14. Each member is entitled — (1) To obtain credit within the limits, and in the manner laid down by the constitution. ^ (2) To vote at the general meeting, provided he has paid his entrance fee and at least half of one share, and has been registered as a member of the association not less than three months. (3) To,, a part in the capital and profits of the association proportionate to the amount of his shares. 15. The board of directors may not assign more than . . sbares to any one member., In respect of any shares in excess of this number, which any member may have acquired by inheritance or through adjudication by a court of law, he shall only be entitled to his share of the profits of the associatioa, and must taJje measures to dispose of them within a term of two years. Should the membe]: fail to fulfil this obligation, the association may suspend the payment of dividends due to him on the shares, and also cause the shares to be sold in the manner laid down in article 30, holding the sum realised a,t t^ie owner's disposal. The number of shares which may be held by a single member is also proportionate to the value of the shares. The Code (article 224) fixes the maximum value of each share at 100 lire, and of the total amount which any on* member may hold at 5,000 lire ; if the shares are only of 50 lire a piece, the maximum to be allowed to a single member should be 2,500 lire, or. if the shares are inferior it should be reduced in proportion. 16. The board of directors may expel a member from the association — (1) For being in arrears with the payment of three instalments of the share subscribed by him without sufiicient excuse. ('2) If he shall have compelled the association to enter into judicial proceedings to force him to fulfil the obligation contracted by him with it. (3) If he shall have incurred a criminal sentence for any offence or a police court sentence on. account of an offence of bribery, forgery, theft or fraud. (4) If he shall have committed an act considered dishonourable by the board. An appeal shall be open from the board of directors to the committee of arbitration. 119 17. In the cases mentioned in paragraphs 2, 3, and 4 of the preceding article, the association is bound to refund to the member the value of his shares in accordance with the terms of article 24. 18. In the event of a member's death, the association may compel his heir to sell out, in the manner prescribed by article 15, the shares which he has inherited, unless he is already a member, or has applied to be entered as a member, and been accepted in accordance with the terms of article 10. 19. If a share be transmitted by inheritance to several persons, the association shaU not be bound to register or recognise the transfer until the designation and admission (as a member) of a single owner. Associations desirous of: allowing the withdrawal of members may here insert the following articles : — " Article .... Any member publicly declaring his intention of withdrawing from the association shall likewise cease to belong to it, upon complying with the provisions of the law, and if the directors consent thereto. " The member withdrawing shall be repaid the. principal of his shares, but not the amount assigned to the reserve f and. He may collect his profits, but must a part of the principal to meet the losses of the association : the profits and losses to be calculated according to the balance sheet for the year in which he withdraws. " The permission to members to withdraw from, the association with the amount of their shares is not free from -danger, and small banks, or those which for special reasons consider such a permission likely to injure the bank, or -endanger its existence, will not mention it in their constitations." (See articles 22g, 226, and 227 of the Code of Commerce.) 20. The shares are nominative and personal ; they may not be sold or pledged in any way without the consent of the board of directors. The board may grant advances upon the securHy of the shares, which are pledge4 in favour of the association for all HabiKties, of whatever kind, incurred by the member to the association. i But if the value of the shares owned by the member shall exceed the amount of the claims of the association against him, he may dispose of the surplus. 21. If a member fail to meet his obligations towards ^he association, the latter may oa,^^e his -shares to be sold in the manner provided in article 39, and may even issue a duplicate certificate whenever the original share certificate shall not have been deposited in its hands. 22. A member is entitled to. a share in the dividends, beginning from the quarter (reckoned accord- ing to the solar year) following tjhat in which he shall have completed the payment of his sliar^, But instabnents paid in under article 12 shall, as soon as they amount to one-fourth the value of a share, bear the highest rate of interest allowed by the bank on deposits placed in its care. Sucli interest shall be deducted from the balance still due by the member upon the price of his «haie. 23. Upon full payment of the amount pf hia share, as well as of the entrance fee and ajaj other expenses involved, the member shall receiye a certificate representing the share, which shall state the amount of his participation in the patrimony of the association. . The provisions affecting the form of the certificate are laid down in articles 165 and 222 of the Commercial Code. 24. At the beginning of each year the board of directors shall determine the value of new shares in accordance with the amount of the capital subscribed and reserve fund. Title IV. — Operations of the Association. 25. The association undertakes — (a) The granting of loans and the discounting of biUs of exchange, warrants, specifications of work undertaken, accounts (or bills for goods), orders of public departments, and treasury, provincial, and inunicipal bonds. (i) The granting of loans upon trust (" Pi;e8ti,ti suU' onore "). (c) Operations of credit in behalf of agriculture. (rf) The gijanting of pecuniary aid on the security of public stocks. (0) The opening of accounts current upon the guarantee of two or more persons in good standing. (/) The receipt of deposits in cash. , . (ff) " Servizio di Oassa," i.e., collections and payments, whether in behalf of members or of non- members. (A) The receipt of valuables (securities) for safe keeping, or for the collection of the interest thereon. (i) The m.^nagem^ent .without charge of the funds belonging to other co-operative or mutual benefit associations. , The operations mentioned under the headings, (a), (c), and («) can only be undertaken in behalf of members. The more important banks may also open for their members accounts current upon guarantee of public securities. This is a perfectly safe operation, but was omitted from the present constitution, because it usually assumes a certain imnortanoe, and must, in order to be of any use, extend beyond the Umits laid down for accounts current upon per- sonal guarantee, and can therefore only be undertaken by banks which have attained to a certain standing and possess ^'""^Again the oasis'of the f ands at the disposal of the bank being so abundant that the ordinary operations mentioned in article 25 cannot suffice for their employment has not been considered in the present Act. It is only when the funds of the bank and those entrusted to it, becopie so considerable that the investments can no longer keep pace with the deposits, that the bank can properly amend its constitution by inserting, at the end of Title IT, the followmg ^^ ^"Article .... The sums remaining in excess of the ordinary operations shall be employed in accordance with apeoia j®^^g^p^°°jj„ ^j^^ i,mg gf exchange of co-operative associations, credit institutions, persons or flru.B of estalj- lished solvency, even though they be not members, provided the documents in question bear at least two signatm-cs .and be issued for a term not exceeding six months. 2. In loans upon security of provincial, municipal, or industrial bonds. 3. In advances upon security of goods. 4. In loans upon mortgage. 120 5. In the pnrohase of provincial or oommtinal bonds, and of seoarities guaranteed by proriuoes, commuueSr aocietieg, and other corporate bodiea, as well aa of obligations issued by people's banks for the purpose of promoting- credit to agriculture. Article .... The amount of credit to be granted in the form of discount of bills of exchange shall neyer exceed, in the case of any person or firm, the amount previously determined by the committee of the " castelletto ' ' mentioned in article . . In the case of societies, the credit allowed shall not exceed one-fourth of the paid-up capital. But where real security is given, the amount of credit allowed may be increased by a sum equal to four-fifths of the value of the said security. Article .... The sum to be employed in loans on mortgage shall never exceed one-fourth of the social capital, and the lands mortgaged must be situated in the province in which the association has its seat, and also be free from other mortgages, and of a value at least double the amount to be advanced. Article .... The loans must not be for a period exceeding 10 years, and those shall hare preference which are intended to promote works of public utility, or the well-being of the working classes. Article . . . The general assembly of members shall determine upon security of what goods advances may be granted. 26. In the case of loans, discounts, operations of credit to ag^culture, and advances (on pledge), those for the smallest amounts shall have the preference and whenever the bank is unable to accede to all the applications made to it, the preference shall be given to the oldest members, and to such as are also members of other co-operative 'or mutual benefit societies, and are not in arraars. 27. The association binds itself not to undertake any transactions of a gambling nature, and not to- employ the sums entrusted to it as deposits in transactions extending over a long period, or in thfr purchase of real property, unless for the purpose of recovering a debt, or as a site for its offices. When there is a superabundance of funds the board of directors shall, after consulting the com- mittee of control, be authorised to employ, in the purchase of public securities issued or guaranteed by the State, or of debentures of land mortgage companies (" carteUe fondiarie "), a sum in no case exceeding one-half of the capital and reserve fund. The board of directors is empowered, in accordance with the requirements of the association, to dispose of or pledge the bills of exchange held by it, and to purchase treasury bonds, and keep funds- available in the hands of credit institutions and savings banks of approved solidity. The last paragraph may appear snperflaous, but it has been maintained for the sake of greater clearness, and for the protection of the directors, to whom the members must concede powers in proportion to the confidence felt in them. A. — Loans and Bisoov/nts. 28. In order to apply for a loan or discount a member must — (1) Have paid up at least one-half of the value of one share. (2) He must not have any debt due either to the association or to his own sureties on account of any previous loan or discount obtained from the association. (3) He must offer, according to circumstances, guarantees of moral and material for the exact fulfilment of the obligations which he assumes. 29. Loans may be granted to members, provided they do not exceed double the amount paid up by them on their shares. But these loans shall in no case exceed the sum of ... . lire over and above the amount paid up by the member, and shall not exceed one-third of the capital of the association. Since any single member may hold, according to the Code of Commerce, 5,000 lire, and even according to this constitution 2,500 lire, it is found necessary to fix a maximum for loans, independently of the number of shares which the member holds. 30. The amount of the loans, referred to in the preceding article, must be stated in form of a bill of exchange, and be granted for a term not exceeding six months. A prolongation for a term not exceeding four months may, however, be granted upon punctual, repayment of at least one-fourth of the original loan. It may seem unnecessarily severe only to grant one prolongation of four months, but considerable strictness is required in order to prevent the stagnation of the capital for too long a term. Such banks as may, from special circumstances, find greater indulgence necessary, had better keep the term of six months for the original loan and- grant two renewals, each for three months, provided at each renewal one-fourth of the original sum be refunded. 31. BiUs of exchange presented for discount must bear at least two signatures of persons well known and in good standing, and be drawn for a term not exceeding six months from the date of presentation. The signature of the member presenting the bill is included in counting the signatures. In the case of ' warrants ' the goods deposited may be accepted in place of a second signature. 32. Specifications of work undertaken and statements of account presented for discount must bear ■the endorsement of the person liable for payment, and his engagement not to pay except through the "bank. 33. No. member shall be allowed credit at any one time, whether in the form of loan or discount or of account current, for a sum exceeding that which the general meeting shall settle as a limit every year upon the proposal of the board of directors. The board of directors, acting with the controllers and the discount committee, shall decide the maximum of credit to which each member is entitled, within the limits above laid down, by means of -the system of the "castelletto," which must be kept with the greatest accuracy, and revised once in six months at least. In order to form a quorum of the commission of the "castelletto" there must be present at least one controller, together with half of the directors and of the discount committee. The president of the bank, or his substitute, takes the chair in the commission. If the votes are equally divided, that view which he adopts is carried. In banks where the duties of the discount committee are performed by the directors, the committee for drawine np the " castelletto " naturally consists of the controllers and directors, of whom three-quarters must be present to form A quorum. 121 _ The committee of the association of the Italian People's Banks, while aware that many persoi/fe of anthority and important institutions disapprove of the " oastelletto," nevertheless think it right to recommend its adoption as a measure of prudenoet r •»• - B, — Loam on Trust (' Prestiti suU' Onore '). 34. The assembly of members shall determine, each year, the amount to be employed in loans on trust, subject to the special regulations regarding them. C. — Operations of Credit to Agriculture. 35. The association may (1) advance money on the security of agricultural produce ; (2) discount to landowners the amount of their rents, entering into their rights under the lease in relation to their tenants ; (3) make advances to farmers upon the security of their stored produce and crops, whether standing or harvested, provided the landlord shall have waived his rights in favour of the association. 36. These transactions, as well as loans and discounts made to farmers under the ordinary rules, may be for longer periods than those allowed for other transactions. Every year the board of directors, in accord with the committee of control, shall determine the maximum term for transactions of credit to agriculture, and the maximum amount which may be employed in such transactions. In no case, however, shall the maximum term exceed one year, or ths maximum amount exceed the sum of half the capital and reserve fund, and one-third of the deposite for a fixed term. D. — Advance* upon Guarantee. ■37. The association may make advances upon the security of public stocks issued or guaranteed by the State, or of the debentures of land mortgage companies, for an amount not exceeding four- fifths of their value. 38. Such advances shall not be for a longer term than six months, but they may be renewed. 39. Should the stocks left as security fall in value to the extent of not less than 10 per cent., th« person to whom the advance has been made shall refund a portion of it, or furnish additional security. Should the sum advanced not be repaid when it falls due, or should the debtor, in case of depre- ciation of the security, decline to comply with the provisions of the preceding paragraph, the association may, without previous legal or judicial proceedings, sell the stocks, &c., received as security through a public broker or notary, up to the full amount of the debt, including principal, interest and expenses. These conditions must be previously accepted by the person applying for the advance, in ths certificate of debt, or even by a separate deed. Such certificate is not required in the case of liabilities guaranteed solely by the member's shares. E. — Aeeountt Current upon Guarantee. 40. The longest term for an account current is fixed at two years. The maximum amount of such credits opened must not exceed the . . . . th part of the sum of the bank's paid-up capital and reserve fund. The maximum amount which may be drawn in account current by any one member may not exceed the . . . th part of the whole amount of credit to which he may be entitled under the provision*, of paragraph 1 of article 33. Thegs proportions must Tary according to the circumstances of the banks themselyes. F. — Deposits of Cash. 41. Cash deposits may be made, subject to withdrawal by means of cheques, or savings pass- books, whether payable to order or to bearer, or through interest-bearing bonds issued for a fixed term. The interest accruing upon deposits, whether of savings or in account current, is added at the end of December in each year to the sum of the principal, The provisions relating to the various kinds of deposits shall be laid down in special regulation*. G. — Banking Facilities {' Servizio di Cassa '). 42. The association may undertake on behalf of its members the payment and collection of money, without charge, and it may also issue cheques on other places within the kingdom, and receive bills of exchange to cash them, either for members or non-members, upon payment of the expenses and the ordinary market commission. The general assembly of members may authorise the board of directors, after consultation with the control committee, to undertake the business of collection in those communes where the bank has its office or branches, and also the periodical payment of taxes in behalf of such members who, having a sufficient balance to their credit, shall expressly make application for the purpose. These transactions to be subject to special regulations, to be proposed by the directors and ratified by the general assembly. H. — Deposits for Safe-keeping and for Administration. 43. The association may receive in deposit for safe-keeping bonds, documents, or valuables, on payment of a commission to be fixed bj the board of directors. 44. The association is answerable for the safety of the articles deposited, except in cases of " fore* majeure "; but only for the value expressly assigned to them by the depositor. 45. The association may undertake the administration of securities payable within the kingdom, providing for the collection of the interest or dividends due thereon and for the repayment of the bonds^ drawn, placing the sums thus collected to the depositor's credit in account current. 31 122 TiTLH V. — Balance Shbet, Pkofits and theib Divibiok, ajtd Ebshevi Futo. 46. The balance sheet shall show the real capital of the association, the respective i^ounts of payments made on account of shares and of payments in arrear, and shall manifest plainly and truly the actual amount of profits realised and losses incurred. 47. The profits shall he distributed as foUows : — ( 1 ) 70 per cent, to the members of the association, in proportion to the number of shares owned by them. (2) 20 per cent, to the reserve fund. (3) 10 per cent, placed at the disposal of the board of directors, to be distributed among the officials of the bank, or to be devoted to the encouragement of education and provident charities. Any portion of the sum which the board do not apply to such purposes shall return to the reserve fund, even though that fund may have reached to the full amount provided by the constitution. 48. Out of the portion of profits assigned to the servants of the bank, a part may be retained in order to establish a provident fund, or a pension fund, subject to regulations to be approved by the directors. 49. The reserve fund shall consist of— (1) A sum annually taken from the business profits, as stated in article 47. (2) The entrance fees of members. (3) The difference between the nominal value of each share and the amount fixed each year (ia accordance with article 24) for the price of new shares. (4) Accidental profits. 50. Whenever the reserve fund shall equal half of the capital of the association, the share of the profits previously assigned to it shall be divided among the members. Signer Levi snggestB substitnting for this : — " The reserve fund shall no longer be increased by the share of the profits assigned to it, after it amounts to half the share capital "; and adding an article in the following terms : — "A portion of the sum of 10 per cent, of the profits, placed at the directors' disposal, shall be assigned, in accordance with the society's regulations, to increasing the interest npon small deposits of savings. " To this same purpose shall be devoted (by decision of the general meeting, upon proposal by the directorB) all or part of the sum of 20 per cent, assigned to the reserve fund, whenever that fund shall amount to half the share capital." Should the reserve fund again fall below half the capital, the portion of the profits above referred to shall again be assigned to it. TiTLB VI. — Obgajts of the Assooiatiok. 51. These are — (1) The general assembly of members. (2) The board of directors (" amministratori "). (3) The business manager, and the necessary clerks and employes. (4) The committee of control (" sindaci "). (5) The discount committee. (6) The committee of arbitration ("probiviri "). 1. Atsembhe*. 52. The general assemblies of the members are either ordinary or extraordinary. When lawfully constituted they represent all the members, and may decide all questions assigned to them by the constitution of the society. 53. The ordinary general meeting shall take place once a year, not later than the middle of March. At this meeting — (1) The report and balance sheet for the preceding year shall be presented for approval. (2) The officers of the association shall be elected for the current year. (3) Any other matters within the competency of the general assembly shall be discussed provided they are placed on the order of the day, either by decision of the board of directors, or at the request of the committee of control, or of at least .... members. Such request on the part of members must be made in writing to the board of directors not later -than the middle of January. The meeting of the general assembly is fixed for the first half of March, because the balance sheet must be in the bands of the committee of control at least one month before the meeting. Some banks hold two assemblies — one in December to elect officers, the other in February to examine the balance sheet. This frequent anmmoning of the assembly may cause inconvenience to the managers, and may further serve as an excuse f pr a scanty attendance of members. The number of members necessary to bring a question before the assembly must vary according to the importance of the bank, 54. Extraordinary meetings may be summoned at the discretion of the board of directors, or upon the request of the committee of control, or of . . . . members (or of one-tenth of the total number of members when there are not more than 500.) 55. The board of directors shall summon meetings of the assembly by a notice inserted in the judicial advertiser of the province, and by bills posted at least 15 days in advance, as well as in any other ways which the board may think fit. All other Acts of the association shall be published in the judicial advertiser. The notice shall mention what questions are placed on the order of the day, and shall further state the date of a possible adjournment. 66. One-fifth of the members form a quorum of the general assembly. Should this number fail ±0 appear, the meeting shall stand adjourned for a week ; the adjourned meeting shall be conBidered 123 lawfully constituted, whatever be the number of members present, and it shall be duly qualified to decide any of the questions on the order of the day of the original meeting. 57. The decisions shall be by an absolute majority. In the event of an even division the motion shall be considered lost. Secret ballotting shall be resorted to in personal questions, or upon the request of 20 members. Directors may not vote upon the discussion of the balance sheet, or in matters relating to their responsibility. 58. The chairman of the board of directors shall preside at the meetings, unless the assembly, by a special decision (which may be come to by open voting), shall appoint another member to preside. In dealing with the approval of the balance sheet, or with questions affecting the directors' responsi- bility, the assembly may appoint another member to preside. In the chairman's absence the deputy chairman shall preside, and if he also should be absent one of the directors chosen by the board shall preside. The President shall nopiinate the Secretary and the tellers from among the members. 59. When the business upon the order of the day is not finished in one sitting, the meeting may be adjourned to anytime within a week by a simple declaration on the part of the president, without requiring further publication. The adjourned meeting shall be legal, whatever the number of members present, provided only such questions are treated as have already been mentioned in the previous order of the day. In accordance with the provisions of article 225 of the Commercial Code, the absence of any express stipnlation as to representation of members by proxy excludes such representation. 2. Board of Direetori. 60. The board shall consist of a chairman, a deputy chairman, and . . . directors, elected for three years and re-eligible. One-third of the board shall be renewed each year. During the first And second years of the bank's existence, the retiring directors shfiU be designated by lot ; afterwards they shall retire according to the date of their election. In case of a vacancy occurring, the rest of the board, together with the committee of control, shall proceed to fill up the vacancy pending the next general assembly. Two-thirds of the whole body must 4ittend for this purpose, and the voting shall be by an absolute majority. One of the directors shall act as secretary, unless a secretary be appointed from outside the board. The number of directors should be an uneven one, and not less than five, without counting the chairman and deputy chairman. The original draft constitution proposed that the directors should not be re-eligible after two terms of office, but such a provision was deemed inconvenient, especially for small banks, with only a limited number of members fitted to undertake the office. 61. The duties of the directors are unpaid ; they are exempted from any payment of caution money, and by accepting office do not assume any responsibilities beyond those stated in the Commercial Oode. 62. The chairman (and the deputy chairman when acting in his stead) is precluded from contract- ing any personal liabilities towards the bank. Personal obligations are such as are guaranteed merely by the signature of the borrower and his sureties, as dis- tinguished from real obligations where the guarantee is some material object. Some of the banks exclude all the directors from obtaining credit ; others also, while excluding the chairman and deputy chairman absolutely, allow the other directors, as well as the controllers, to incur personal obligations, but require additional guarantees, not taking their own signature into account on their bills. 63. The board of directors shall meet ordinarily once a fortnight, one-half of the board to form a quorum. 64. The voting may be either open or by ballot. The latter mode must be used whenever -expressly demanded, even if only by a single director or member of the committee of control ; as also when personal matters, or questions in which some of the members of the board may be interested, directly or indirectly, are under discussion. Questions are decided by a simple majority. In open votes, whenever the division is even, the side on which the chairman votes shall carry the day. In ballots an equal division shall involve the loss of the motion. 65. The meetings of the board shall be presided over by the chairman, and if he be absent, or unable to preside, by the deputy chairman. In the absence of the latter, the chairman may appoint one of the members of the board to act as president. 66. The board of directors shall — (1) Fix the expenses of management. (2) Draw up the balance sheets and propose the manner of distributing the profits. (3) Settle and alter the rates of interest to be charged and allowed, as well as of the commissions to be charged. (4) Draw up aU regulations or bye-laws. (5) Perform aU acts connected with the administration which are not by this act expressly assigned to the general assembly, or to some other organ of the association. The board of directors may, for the transaction and settlement of special business, and for the per- formance of particular duties, delegate its powers to one or more of its own members, or to the offleiala -of the bank. 67. The Acts of the board shall be signed by the chairman or his substitute, and by the secretary. 68. The execution of the decisions of the board, whenever not delegated to one or more of the directors, shall be entrusted to the business manager. In accordance with the provisions of the regulations, the manager's action shall be supervised by •one of the directors appointed in turn to assist him in the various duties assigned to him. 124 3. Butinets Manager and Offieiah. 69. For the appointment or removal of the business manager at least thiee-quarters of the board of directors must be present, and the decision must be made by a majority of at least three-quarters of those present. 70. The manager, under the immediate supervision and dependence of the board of directors, and in accordance with special regulations, 'shall represent the association in dealing with third parties and before the courts of law ; he shall sign the correspondence, endorsements and other acts and documents affecting the association,* superintend the officials and the accounts, see to the publication of the monthly reports, possess a consultative vote at the meetings of the board of directors and of the commit- tees of discount and of the " castelletto," and perform all acts for which he has received the authorization of the board of directors. 71. The cashier shall keep, from day to day, and with perfect clearness, the books of receipts and expenditure, and shall give every aid to aU examinations by the dLrector on duty, by the committee of control, or by the manager, furnishing all information which they may apply for. 72. The manager and the cashier shall deposit, as caution money, such amounts as the board of directors may decide. 73. In case of the illness, absence, or removal of the manager or cashier, their duties shall be per- formed by one of the directors, unless the board of directors shall decide to entrust such duties to some other persons, defining, according to circumstances, their powers and responsibilities. 74. The officials shall be answerable to the board of directors, which shall appoint, suspend, or dismiss them according to the rules, and in the cases laid down in the regulations. 75. The officials must, upon their appointment, enrol themselves as members of the bank, and pay up the full amount of the shares subscribed by them. The officials may not incur any personal liabilities towards the association.! 4. Committee of Control {Sindaei). 76. The controllers shall be five in number — ^three effective and two substitutes. Their dutiei- are unpaid. 77. The controllers shall see to the strict observance of the constitution, regulations, and decisions of the association, and shall perform aU the duties assigned to them by article 184 of the Commercial Code. Article 184 of the Code of Commerce may be summed up as assigning to the " Sindaei" the duty of auditing and reporting on the annual balance sheet, and exercising a constant and efEective supervision over the finances and administration of the society. They may take weekly turns of duty, in accordance with the rules laid down in the regulations. The relations and connections of directors, to the fourth degree of consanguinity and affinity, are ineligible to the office of controller. 5. Committee of Biieount. 78. The committee of discount shall consist of the board of directors, and of ... . members elected by ballot in the general assembly ; they remain in office two years, are re-eligible, and have no claim to any remuneration. The general assembly may also delegate their election to a commission of . members elected by a simple majority. The number of the members of the discount committee and of those of the commission chosen for their selection must depend on the importance of the bank. Some banks have adopted other modes of selection, but the above is the one most generally adopted, and irhich in most instances, best fulfils the objects of the discount committee. In some cases, however, local or other circumstances may require a different course. The following may then be substituted : " The board of directors shall, every quarter, nominate four members to form the discount committee together with the bank chairman or bis substitute. " In some banks the duties of the discount committee are performed directly by the board of directors. 79. The members of the discount committee shall perform the duties of a discount commission two each week, jointly with two of the directors, according to a list drawn up by the bank chairman!^ One of the two directors shall preside. 80. Decisions shall be taken by a majority ; in case of an even division, the application shall be rejected. The members of the discount commission shall be precluded from presenting bUls of exchange for discount during the week when they are on duty, and must abstain from voting upon any questions in which they are interested directly or indirectly. 81. The voting may either be open or by ballot ; votes respecting transactions proposed by directors or members of the discount committee must always be taken by ballot, and such motion* shall not be considered carried unless supported by at least three votes. 82. No loan can be granted, nor any bill of exchange discounted, without the previous approval of the discount commission. The manager and other officials shall be bound to furnish to the commission all the information it may apply for. * The fear lest the duty of attending in turn at the bank should prove too burdensome in small institutions has caused the right of signing for the society to be given to the business manager by himself. Signer Levi deems such a course unsafe, and considers that the signature of one of the directors should be required in addition ; he would there fore substitute for the words " he shall sign the correspondence, Ac. . . .' " the phrase, " he shall, jointly with one of the directors, be empowered to sign for the association "; but in order to facilitate the performance of certain acts he- -would add at the end of article 70, " the board of directors may further authorize the separate signature of certaiir specified documents in behalf of the association by the director or other ofBcials." •)■ See Note on article 62. 125 83. The administration of the bank is not hound to explain its refusal of credit to the applicant, nor may any question be put in the general assembly as to the motives of such a refusal ; the member ■whose application for credit shall have been refused can only appeal to the committee of arbitrators, ■which shall settle the question after hearing the bank manager. 6. Committee of Arlitrators. 84. The committee of arbitrators shall consist of three members elected by the general assembly. They shall remain in office three years, be re-eligible, and have no claim to any remuneration. The arbitrators shall decide without appeal all questions arising under articles 10, 16, and 83 of the present articles, as ■well as such questions as may be submitted to them by special regulations fit decisions of the general assembly. They shall further settle any disputes arising between members of the bank and its administration ■when referred to them by common consent of both parties. 85. The committee shall select one of its members to preside, who shall summon it when required. The board of directors and bank manager shall be bound to fm'nish to the arbitrators- any inform- ation or explanation for which they may apply. 86. Except in the cases referred to in article 10, the arbitrators] shall act in the capacity of friendly mediators. Title VII. — Oonoeening the Oancellistg ar Secueiiies, &c. 87. In cases of loss, theft, or destruction of share certificates, policies of the deposit of securities, pass-books for accounts current or savings deposits made personal, orders to pay receipts or other valuable documents, duplicates may be issued in the manner and subject to the safe-gnards enume- rated below. 88. The person reportina; the loss of any security and applying for a duplicate must give a minute and precise description of the lost document. 89. The board of directors, upon receipt of such application, shall suspend, for a period to be determined in each case, the payment or restitution of the value represented by the lost document. 90. At the expiration of the period fixed, without any objections on the part of other persons, or when such objections have been either rejected or ■withdra-wn, the board shall declare the lost docu- ments to be cancelled, and shall issue a duplicate in their place. 91. The board may excuse the applicant from the formalities mentioned above, and issue the duplicate upon security, real or personal. Title VIII. — Of the Dissolution of the Association. 92. The association may be dissolved, even before the term fixed by this Act, upon the loss of not less than half of the capital paid up at the time of the previous yearly balance sheet, or by the vote of a majority of at least two-thirds in a meeting of the general assembly, convened for that express purpose, at which not less than one-third of the members must be present. In case of dissolution, the assembly shall determine the mode of liquidation and appoint liqui- dators. The distribution of the sum resulting from the liquidation shall be made in proportion to the members' shares in the patrimony of the association. Title IX. — Miscbllaneoits Pbovisions. 93. The assembly may make amendments or additions to this Act, provided these are approved' by the absolute number of members, and majority required in case of the dissolution of the association. Should one-third of the members not be present at the meeting, a second one shall be summoned at an interval of 15 days; the decisions of this meeting shall be valid, irrespective of the number of members present, provided they are carried by a majority of three-quarters of those present. 94. The association shall be considered to be constituted as soon as ... . shares have been subscribed, and .... lire paid up. 95. A copy of the general regulations approved by the board of directors must always be accessible to the members. MODEL BUSINESS EULES OF A 00-OPEEATIVE POPULAR BANK (ITALY) : SYSTEM OF SIGNOE LUZZATTL* Ohaptee I. — Membebs and Shakes. (Sections 1 to 19 deal -with the admission, and expulsion of members, their subscriptions for shares, and the transfer of such shares. Co-operative societies, which are associations of persons rather than Bank * Chiefly translated from the manual of Signor Levi, -with additions, &o., ft'om the rules of the Padna Popnlar k as contained in Signor Lnigi Kodino's ' Manual of Co-operative Society Precedents ' (Barbera Manual Series), 1893 These rules are supplementary to the articles, and deal in great detail with the methods to be adopted in order to carry out the articles. Signor Levi's manual is largely an expansion of and commentary on the articles and rules of business of popular banks. i ■ t j- Full translation is only given of such rules as seem suggestive for work in India. 32 126 of capital, demand great caution in the persons wliom they admit, both for the safety of their business, and in order to the stimulation of non-members towards the development of those qualities whiclL entitle a man to membership and to the benefits derivable therefrom. Hence .not only is the admission, of members but also the transfer of shares rigidly safe-guarded, for shares can only be held by members, so that to allow transfer is to admit a member : transfer can therefore only be effected in due form and with the prior consent of the directors. Every share is evidenced by a formal certificate taken from a numbered stub with counterfoil containing a description of the member and signed by the directors and the accountant : on withdrawal the withdrawing member must sign the stub in token of withdrawal. • Sections 20 to 21 deal with the issue of duplicate certificates and with the payment of dividends on shares.) Chapter II. — BtrsrNBSs of the Bank. SECTION I. (Rules 27 to 47 relate to the grant of ordinary loans and discounts. All ordinary loans of what- ever term are issued upon bills of three or six months given to the borrower ; interest is taken in advance on the discount of the bill (31) ; "a request for renewal must be presented at least four days prior to the date of repayment, and must be accompanied by repayment of one-fourth of the debt." ^33) The bank provides gratit printed forms of request for loans ; these are filed in a book which, is submitted to the discount committee with all necessary informatioA by the manager : on acceptance the borrower executes a bill for the sum granted. The remaining rules deal with office details.) SECTION H.—LOANS ON TRUST.* The bank grants loans upon trust to members of at least (two) years' standing in any one of the mutual benefit societies of the city, f provided (1) that they are not members of the bank ; (2) that they have a good reputation for honesty and industry; (3) that they are engaged in some business or industry ; (4) that they know how to read and write. Every year the general meeting, upon proposals made by the directors : — (1) decides the maximum amount which may be granted in loans upon trust ; (2) assigns from the profits of the bank a sum for the formation and increase of an insurance fund which, shall recoup the bank for any final loss on such loans. "| A candidate for one of such loans must make his request in writing on a printed form supplied by the bank, giving all details as to Ms status, residence, the purpose for which he requires the loan, &c. The demand must be furnished with a declaration by the president of the benefit society to whicli the candidate belongs (or by the patrons) showing (1) the status and position of the candidate; (2) the date of his entry into the benefit society ; (3) that he has been regular in his subscriptions thereto. Loans will be granted upon a bill signed by the candidate, and may not exceed £4 each. Eepayment must be made by (weekly) instalments of not less than one lira {lOd.) on loans not exceeding 30 lire, and not less than (two) lire on loans exceeding that sum. No second loan will be granted to a borrower who has not been punctual in his repa3Tnents. Except in special cases no loan will be granted till the expiry of at least (two) months from repay- ment of a prior loan: if the borrower has had (three) loans, at least (one) year must elapse before the grant of another. , Any borrower who fails to repay his dues in the prescribed manner will lose all future benefits, and the directors must acquaint the society to which he belongs (or the patrons) with the view of coming to some arrangement to obtain the eventual repayment of the balance due. A candidate obtaining a loan must pay interest in advance at the rate of (2) per cent, per annum.S For the management of this business and of the insurance fund a special administrative committee of (3) persons shall be annually elected by ballot from amongst a committee consisting of represen- tatives from the several benefit societies and from the directors of the bank. For the examination of individual loans there shall be a special loans committee consisting of (2) directors of the bank and (3) representatives of the benefit societies. Four members of the last- named committee njust meet every (15) days at the bank office with a director as chairman for the examination of requests for such loans. At the end of each year the special administrative committee shall report through the directors to the general meeting upon the management of this branch of business. * From the rules of the Padua bank as contained in Signer L. Rodino's ' Manual of Precedents.' t Some banks, e.g., Bologna, do not make this condition : they will admit any poor person to a loan on trust who satisfies the four conditions which follow in the rule, provided that they are recommended by two 'patrons' who must be well known men of good local standing, who are personally acquainted with the candidate, and will vouch for his character and the use he intends to make of the loan : these patrons have no material responsibility in case of failure of the borrower to pay, but are morally bound to assist the bank by stimulating and encouraging and looking after the borrower. Many of these patrons are, however, members, directors, Ac, of the local benefit societies. A patron whoso candidate has failed in his repayments, is usually refused subsequently as patron. X It is usual only to grant these loans when the bank has attained an established position, and can, without injury to the members, set aside a sum, usually from profits, for the purpose. § Some banks, e.g., Bologna, charge no interest or commission of any sort on these loans. In the Padua bank rules entered in Signer Levi's Manual (1886) the following are found : — The bank upon each loan credits itself with interest at 4 per cent, per annum, which is debited to the insurance fund (fondo di previdente benefloenza) which is a fund created by the bank from profits to recoup any losses. The borrower pays an actual interest of 2 per cent, per annum which is placed to his credit in a separate register : when such interest shall have accumulated up to the amount of a share in the bank, he shall bo credited with a share (and becomes an ordinary member of the bank). Occasionally the bank will issue a share of the value of £2, with all the rights and duties of ordinary member- ship. Persons who have thus obtained shares can only obtain subsequent loans according to the ordinary rules of the bank. 127 SECTION III.-AGEICULTORAL CREDIT* 49. (The value of the produce must be duly verified, and a promissory note executed bv +1ia ***** W1l/,?;^'^^T ''P''^*^^ mortgage of standing crops (^w^fee bills of sale) are made upon ordinary bJls under the general rules for loans, the condition of actual pledge being omitted. The borrower must prove that he is insured against the risks of fire and hail. K ea. ±ne Dorrower bj the bwrowe?^^ """^^ ^^ ^'*''*"^ ^^^''^ ^""^ valuation by experts, the cost of which must be borne banV«;p^?,!^fi°°'/'"^^^. this section must be kept entirely separate from other operations in the stetements expressly shown and reported on in the monthly returns and annual SECTION IV. (Eelates to loans upon pledge of moveables). SECTION V.-CASH CREDITS. 69. A member who desires to open a cash credit with the bank must present his apphcation stating the proposed amount of the credit and the security which he offers. No one who is unable "to read and write wiU be allowed to open a credit. 70. The application will be submitted to the discount committee which, after examination of the status and solvency of the candidate and of Ms sureties, will admit, modify, or reject his request. 71. Should the application be accepted, the candidate must present himself at the office with the persons tendered as sureties and deHver a biU of exchange f of an amount and term corresponding with those of the cash credit. The full amount without deduction of interest wUl then be placed at his disposal as a drawing account. 72. The holder of the credit will receive a pass-book and a cheque book ; the former will contain entries of the credit amount, and of all drawings and in-payments : the latter serves for drawings. 73. The holder of the credit may draw up to nine-tenths of his credit either in one or several instalments ; one-tenth is withheld by the bank as a guarantee for the interest and charges due on the advance. He is at liberty to pay in to the credit of his account any sums not exceeding his drawings : any excess will be transferred to ordinary deposit. 74. The directors may vary, according to circumstances and even before the expiry of the credit -term, the rates of interest payable by and to the credit-holder. Interest shall be calculated and paid up quarterly, and at the closure of the credit. Interest due by the credit-holder shall at each period be added to the amount at his debit : that due to him shall 1)6 placed to his credit. The credit-holder must give the bank an acquittance acknowledging the correctness of the account. 75. When the credit-holder shall not, during two successive quarters, have made any repayment on his account, the bank shall have the right to close the account, and may demand the immediate repayment of the whole amount drawn and of all charges, without waiting for the expiry of the term agreed upon. 76. AH charges, stamp duties, &c., must be paid by the credit-holder at the opening of the credit. The pass-book and all unused cheques must be returned at the closure of the credit to the bank, which wiU then return the bill of exchange cancelled. 77. All rules relating to ordinary deposits in the matter of the currency of interest, to notice of drawings, to the form of pass-book and cheques and the signatures therein, are applicable to cash credits. SECTION VI.— ORDINARY DEPOSITS IN ACCOUNT CURRENT. 88. A depositor may withdraw up to (£20) at sight, from (£20 to £40) at one day's notice (and so forth). 89. The bank reserves to itself the right to refuse deposits either in whole or in part ; also to pay on demand any sum however large. 90. No depositor can draw in a single day, nor will the bank pay more than (£20) at sight, even though the cheques presented may bear different dates : nor shall any depositor draw at sight during the interval between notice of intention to draw and actual drawing, nor on the day of such drawing. Notice of only one drawing may be given on a single day, and during the currency of such notice no further notice may be given. * These rules are taken from Signer Levi's mannal, and relate merely to special modes of granting loans to agricnlturists. In the Padna rules the following is fonnd : — Operations in agricultural credit shall be conducted by the bank in conformity with the laws of 23rd January 1887, No. 4276, series 3, with its attendant regulations of the 4th May 1889, No. 2389, series 3, and with any special mlas Trhich may be laid down by the bank. This law and regulations will be found elsewhere in this appendix a.v. "Agricultural credit." t Un vaglia oambiario ; presumably the engagement of the borrower takes this form in order to enable the bank to re-discount his bill. In India, as in Scotland, the form of engagement would be a bond with snreties, or a promissory iiiote in which principal and sureties jointly and severally engage themselves. 128 Savings Deposits. 94. The rate of interest on savings deposit shall be superior to that on ordinary deposits. 95. On the opening of an account the bank will provide the depositor with a pass-book, signed by- a director, by the manager and by the cashier, and containing the chief rules governing such deposits.^ Each pass-book bears a number corresponding to that given to the account in the bank's registers. The depositor must pay the value of the book and of the stamp duty thereon. 96. Pass-books may be to bearer* or personal (al portatore o nominativi). On the cover must be entered clearly the name and address of the depositor when the pass-book is personal : or else a note that it is ' to bearer.' 97. The owner of a personal pass-book must write his signature in the bank's register of signatures as required in the case of accounts current. 98. Pass-books to bearer change hands by simple transfer : personal pass-books only by special transfer which must be notified to the bank in one of the following ways : (here follow several rules). 99. Personal pass-books may be specially charged f (viucolati) ; in such cases the nature and conditions of the charge (or encumbrance) must be expressly entered in red ink on the cover, as also in the bank's register (ledger). 100. Every entry in the pass-book of in-payments or withdrawals must be in letters and figures and signed by the book-keeper and oashier.J No in-payment will be received or withdrawal allowed without the production of the pass-book. Withdrawals on personal pass-books can only be made by the owner or his duly accredited agent ; on pa^s-books to bearer they wiU be made to the person presenting the book, save in cases of patent irregularity or error. 101. Where a pass-book to bearer has been lost, stolen or destroyed, the holder should at once notify the bank which, should it see sufficient cause, wiU at once suspend all operations upon such account. But should such suspension not be confirmed within one week by receipt of a judicial order to the same effect, it wiU tben cease, and the bank wiU be at liberty to pay to the holder. Should a judicial order be received or proper security be given, the bank may issue a duplicate of the lost, &c., pass-book, bearing the same number as the original but expressly inscribed as a duplicate. 102. In-payments of less than (one) lira (10 d.) will not be received as deposits. 103. Only one pass-book can be granted to or operated on by a depositor. 104. Depositors can withdraw up to (£4) at sight, up to (£20) on (two) days' notice (and so forth). During the currency of the notice no sum can be withdrawn or further notice given by the depositor. Petty Savings. 105. The rate of interest on petty savings deposits shall be higher than that on ordinary saving deposits. Petty savings deposits shall be governed by the rules relating to ordinary savings except in so far as the following rules differ. 106. The pass-books of petty savings and ordinary savings deposits shall be separately numbered and have differently coloured covers. 107. Pass-books will be issued gratis by the bank. 108. In-payments of less than one penny (dieci centesimi) will not be received, nor will withdrawals of less than (one) lira be permitted. No in-payment of more than (£4) shall be received on one account in any one day, nor more than (£40) in any one year, nor more than (£80) in all including interest credited thereto. Should the account pass (£80) it shall be transmuted into an ordinary savings account. 109. A depositor may withdraw up to (£1) at sight, from (£1) to (£2) on two days' notice (and so forth). No withdrawal at sight can be claimed as of right within one week of a previous payment. Fixed-Term Deposits. (The rules, 111-118, do not require translation, but it may be noted that deposit receipts must be taken from a stub with counterfoil both of which must contain fuU details of the transaction. The directors may also discount deposit receipts if the holder wishes for re-payment before due date. ) SECTION VII.— OTHER BANKING BUSINESS. (Eules 119 — 142 do not need translation.) Chapter III.— Management op the Bank. (The only matters requiring notice are those relating to the work to be specially undertaken by individual directors and by the committee of supervision, to the castelletto (credit register), and to the arbitrators. ***** \ * See chapter on Savings banks in Vol- I and the law in the present appendix. f See chapter on Savings banks in Vol. I, page 205. These pass-books bear a special lien (vincolo) and can only be dealt with subject to that lien. J The rnles regarding the double check in English Trustee Savings banks are superior to these rules, fiee chapter- n Savings banks in Vol. I and the section in this appendix. 129 Bnles 156 to 160 proTide that liie directors shall irrespective of their collective work, each take periodical terms of office duty of (say) fifteen days each : during such period the director or directors on duty must examine and countersign all cash transactions whether of receipt or disbursement, mnst assist the chairman to examine req^nests for admission as members, must assist in examining the demands for loans, &c., and attend any meeting of the directors. This matter is of the highest import- ance, as it compels each director to be an active office bearer, fully acquainted with the affairs of the bank, while it prevents such affairs from falling into the hands of one or two persons as is so frequently the case in the Madras Nidhis. Similar rules will be found in the American Building Societies and in the English savings banks, where the ' double check,' viz., that of the actual directors or trustees and that of the office establishment, is insisted on. All directors should be compelled, by the articles or rules of a bank, to take active service in all the affairs of the bank {See article 6 in the " Specimen Articles for a Tillage Bank " in Vol. I). In the operations of very small banks, open perhaps only once in a week, the rules may not be of such importance, since the operations will be small and comparatively few, so that aU or most of the directors should have personal knowledge of all the business and of every transaction. But many Nidhis already have offices which are open throughout the whole of every day, and have considerable and numerous transactions ; for them the rules as to turns of duty are very necessary. ■»**«* 164. The duty of the committee of supervision (Sindaci)is to exercise supervision over the manage- ment of the bank in view to maintain the strict observance of the law and articles. For this purpose they must daily visit the bank, the daty of such inspections being delegated to each member of the committee by (fortnightly) txirns : any such member may, however, inspect the office at any time even out of his turn. This daily inspection niust be rigidly maintained, every care being taken to avoid its omission in coiisequence of absence, &c. 165. The member on duty must visit the office at various hours, examine the current business, and the books, especially the day-book. He must satisfy himself that all operations are duly registered, and that the day-book is balanced with the other books : at the close of his turn of duty he must draw up a certificate of their accuracy. 166. The member on duty' must, each month, compare and countersign for pubHoation theabstract of the financial situation. The annual balance sheet m^nst be examined by the whole committee, who will draw up their report for the general meeting. 167. A minute book will be kept in which the members will enter any remarks or Suggestions: this shall be kept in 'the custody of 'the chairman of the bank. Any notes relating to persons must be sent under seal. 168. No member on duty can obtain during such period any advance from the bank. (This i» also the case as regards directors on duty.) « * * • * The Credit Register [Castelletto). (Eules 179 to 186 relate to the preparation of this register ; in small banks all the directors join with the committee of supervision in preparing this register, which must be revised every six months. The register shows the maximum amount of credit which may be ;granted, outside of material jpledges or mortgages, to each member. The register must be kept secret, and every director, &c., is bound at once to :give information of any sudh changes in the circumstances of a member as require an alteration of the ^register. In larger banks there is a special committee. Eules 187 to 191 describe the procedure of the arbitrators, whose duties are mentioned in article 84 of the Model Articles for these banks. The present rules require that their enquiries shall be 'Com- plete and their examination of evidence not necessarily confined to members of the bank : all the arbitrators must be present and must sign the minute book, which should contain accurate and fuU notes of their enquiry. The result must be communicated to the directors and to the parties concerned. The rematining rules relate to the office establishment, &c.) MODEL ARTICLES FOE A CO-OPEEATIVE EIJRAL BANK (ITALY— SYSTEM WOLLEMBORG). (These article's are, practically, those of the German (Eaiffeisen) system on which they are modelled. It need only be mdted — (1) that all loans of whatever duration are granted only 'by successive renewals of three mouths each, a -pr-aCtice which enables the bank torefuse renewal should the borrower have broken the terms of his contract: it also serves to encourage borrowers to repay their Joan in whole or in part at each successive quarter ; (2) that arrangements are made to lend 'to tenants, in which case it is necessary for the bank to obtain from the landlord a statement that he consents to or irecognizes the loan, and that -he will -not-av-ail -himself -of the privilege -g-ranted by section 1958 of the Civil Code (sec- tion 1958 of the Civil Code relates to the right of ithe landlord to distrain for arrears of rent : his ' privil^e ' takes precedence of all other claims) ; (3) thsit an express declaration is made (article 30) that it is the duty of the bank to promote all institutions likely to better, whether morally or materially, the condition of the inhabit- ants of the village, and to fosterthe foundation of co-operative associations for production, sale, and consumption, by granting loans or opening cash credits to persons undertaking 33 130 sucli enterprises. (This recalls the words of M. de Laveleye that the popular banks of Italy "everywhere form centres of economic and moral progress," and of the priest who declared that the village bank had done more for morality {i.e., as regards industry, sobriety, &c.) than all his sermons ; (4) that there are no shares and no share capital. This was the original Baiffeisen principle, but the German law has now made shares and a share capital compulsory ; (ft) that, consequently, there is no dividend to be paid, and the whole of the profits are carried to a reserve which forms the joint capital of the bank ; this serves to cover any losses, and, after it increases to a sufficient sum, its annual proceeds may be used in any work of communal utility. No member has any individual right in the reserve, nor can it be divided by a vote of the general meeting ; in case of dissolution it must be deposited as a trust in some secure bank, and its annual proceeds paid over to some local charity ; the capital must remain intact until some new bank shall be formed similar to the one dissolved when it shall be handed over to the new bank. This article can only be modified in a general meeting at which every member is present, a two-thirds majority sufficing for the alteration of other articles (articles 31 to 33) ; (6) that the general assembly shall decide all disputes between members regarding the affairs of the bank and its rules, hnd, in default, three arbitrators, to be selected by the parties according to article 12 of the Code of Civil Procedure, shall finally decide the matter. The arbitrators may also act as conciliators.) MODEL AETICLES * FOE A GEOUP OP POPTJLAE BANKS (ITALY). 1. The co-operative popular banks of (such and such a district) have united in a group t for th« purpose — (a) of promoting within such area the diffusion of the several forms of popular credit and co-operation ; (I) of drawing such institutions together in intimate and cordial relations for the interchange of mutual good offices ; (c) of establishing, in the common interest, distinct modes of guarding against the abuse of credit ; (cZ) of co-operating with the associated banks so as to render their action more efficacious ; («) of coming to the aid of such banks whenever they are in difficulties and are willing to submit to an inspection of their affairs. 2. AU popular hanks and co-operative institutions within the above-mentioned district may becom« members of the group by a declaration of adhesion. 3. Every such associated institution may withdraw from the group on sending in on expresa declaration to that effect at least six months before the close of the business year. The associated institutions may expel any institution which fails to obey the rules of the group, and the decisions of the general meeting. 4. The group acts — {a) by the general meeting of the representatives of the associated institutions ; (J) by the president of the group. 5. Every associated institution, from time to time, elects, from amongst its directors or committee of supervision, a delegate to represent it at the general meeting of the group. This meeting is convoked by the president, who, at least fifteen days before the meeting, wiU issue invitations thereto containing a list of the subjects for discussion. For the preparation of such list the president shall previously address the several institutions to ascertain their wishes. Each institution must inform the president of the name of its delegate at least five days prior to the meeting. Such delegation is personal : no delegate can represent more than one institution. A quorum is constituted whatever the number of delegates present. The general meeting elects the president who may be re-elected year after year. The meeting shall determine the place which is to be considered as the central seat of the group. The president may assign his functions temporarily to another delegate in case of necessity. He appoints a secretary who draws up the minutes of the meeting. 6. All offices are purely honorary and gratuitous. Each institution, however, pays its delegate the expenses necessarily incurred by his attendance at the meeting. 7. For the general expenses of the group association, each associated institution shall pay a fixed subscription of . . lire if its paid-up capital exceeds . . . lire, and of . . . lire if it falls below that sum. These subscriptions shall be paid into the bank at the central seat of the group and wiU be held at the disposal of the president. 8. The meeting shall ordinarily be convoked once in every year, but special meetings may also be held whenever the president considers it necessary, or when at least three associated institutions demand it on good cause shown. The meeting may be held elsewhere than at the central seat of the group, provided that it be a place where there is an associated bank. * From Signer L. Rodino's ' Manual of Co-operative Society Precedents ' (BarMra Series of Mannals). t The co-operative banks and societies of Germany, Austria and Italy, invariably form themselves into ' Groups ' or ' Unions ' for the purposes mentioned in this section, and especially for the purpose of providing efficient audit and inspection. (See chapter on Popular Banks in Tol, 1, s.v., Germany and Italy : also the chapter on ' Law ' s.v. 'audit'; also the German Co-operative Law of 1889, in the present appendix, an d the articles of the ' Agrioaitnral Credit Central Bank ' of Neuwied, and of the ' General Union ' of the Eaiffeisen system. 131 The meeting appoints the inspectorB charged with the examination of the afFairs of a bank in di£5.cultieB, and will concert means for its relief. 9. No modification may be made in the present articles except at a meeting at which the delegates, of at least two-thirds of the associated institutions are present.* RULES FOR THE ISSUE OF AGRICULTURAL DEBENTURES BY THE POPULAR BANKS OF THE FIRST GROUP (TREVISO ITALY). It was early recognized that the popular banks on the Luzzatti system were helpful to agricul- turists, but, iti order to increase their usefulness to this class, the founder of the system desired to provide the banks with long-term capital instead of financing them with deposits withdrawable at call or short notice. Hence the origin of the "Buoni del tesoro deU' agricoltura a scadenza fijssa" (agricultural debentures of fixed term). As shown by their name these debentures are issued for the development of agriculture, especially for improvements ; an ^.griculturist who desires a loan for such improvements {e.g., the digging of a well) presents an application to his local bank with a statement of the nature of the intended improvement and the security offered; this is specially examined by the bank experts (probiviri dell' agricoltura) and, if approved, the loan is granted as soon as the bank has placed a corresponding debenture or set of debentures. Each debenture is guaranteed (1) by the security given by the borrower including his sureties ; (2) by the assets of the bank. They may be compared with the debentures issuable by English loan eocieties under the Act of 1840, but are more solidly based. A peculiarity is that they are issued under the authority and approval of the group, by the president of which they are countersigned : it does not appear that this countersignature gives them any additional material guarantee, but merely certifies that the debenture is regularly issued. These debentures are not to be confounded either with the "buoni fruttiferi a scadenza fissa," which are merely receipts for fixed-term deposits bearing interest, or with the agricultural debentures (cartelle agrarie) issuable by various banks under the law of 1887 (y.©.). The following are the rules issued by the Treviso group of popular banks : — 1. The co-operative popular banks of the province of Treviso, comprising the 'first Italian group,' will issue agricultural debentures of fixed term payable to bearer and bearing interest: the first series shaU. not exceed £20,000 in amount, and are subject to the following conditions. 2. Their purpose is to procure for the popular banks a special fund for the aid of agriculturists, by preference for such agricultural operations as demand a lengthy period (for the recovery of the eum spent) : e.g., for projects of irrigation and drainage, for the purchase and renewal of implements which will increase the value ^of labour, for the restoration of plantations, for the levelling and improvement of the soil, for the purchase and breeding of stock, for the postponement of the sale of produce and stock in expectation of a rise in' prices, and the Kke. 3. The banks (of the group) will, by way of experiment, issue loans upon bills, renewable every four months, for a period of one or more years, to agriculturists who are members of the banks, and who show that they intend to devote such loans to one of the purposes mentioned in rule 2. 4. The bank (granting such loan) will enquire every four months whether the borrower continues solvent and whether the loan has been properly utilized. Should the result of the enquiry be unsatis- factory, the bank will have the right of at once closing the loan and requiring its repayment in f uU. 5. The bank wUl invariably take the opinion of the discount committee and that of the agricul- tural experts (probiviri) before either granting or recalling a loan. 6. The three agricultural experts shall be annually elected by the directors from amongst persons ^ho are thoroughly acquainte i with the agriculture and rural economy of the area within which the bank operates ; they shall invariably give their opinion with reasons to the discount committee upon «very application for an agricultural loan. 7. The bank may, on the expiry of a loan, grant successive renewals provided that the conditions admit of it and the sureties agree thereto, and provided that the borrower makes a part payment at -each renewal. 8. The agricultural debentures shall be called "Buoni del tesoro dell' agricoltura a scadenza fissa presso le banche popolari," and shall issue on account of and under the responsibility of the issui g^^^ (debentures may be placed (on the market) either by the issuing bank, or by the president of the group if so requested. 9 The debentures shall be of uniform character for all the banks of the group, and shall be -signed by the president, manager, .and cashier of the issuing bank, and also by the president of the group as an attestation that they have been duly issued. 10 The president of the group in conjunction with his council and after taking the opinion of the directors of each bank, shall determine the amount of the debentures issuable by each bank, regard being had to the economic and financial position of each bank and to the local needs of agriculture in • The above articles provide indifferently for the duties of a group or nnion. The German law of 1889, irrespective ^f tl,n «.rtiolea of the unioBS under that law, is much more complete and deals expressly with the provision for examui- KsStors^ea translation of the law supra, page 82, and Vol. I, pages, 295, 296 ; also the translation of the articles o£ the 'General Union' of the EaifEeisen system. jv * i- j *v, 4. • i, ui -j ^ anioies ^^ ^^^ gj.^^g ^^^ precise security on which these debentures are based : that is probably provided for in the articles of the individual banks. The object of issuing these debentures through the groups president is not to rive them greater material security, but to guarantee that they are good investments sohdly founded on genuine transactions (mortgages, &o.) and are duly covered by assets. It does not appear that the several banks of the groups assume any joint responsibility for the debentures. 132 the aeighbourliood ; care rdust be taken that the aggregate shall not 'exceed that fixed for the total of the first series and that the market value of the debentures shall be maintained. The council of the group shall arrange for the maintenance of the necessary registers. 11. The council of the group * shall consist of the president of the groups and of two delegate's chosen by him every six months from two of the associated banks. 12. The interest on agricultural loans made with capital obtained by the issue of these debentures shall be uniform for all the banks. The group council, in consultation with the directors of the associated banks, shall fix such rate, which shall not exceed by more than 1^ per cent., that paid by the banks upon the debentures. The form of debentures shall be settled by the council 'of the gi^oup. 13. The council of the group shall draw up the business rules necessary for carrying out the pi'esertt rules. AfeTICLES OF THte CO-OPERATIVE CREDIT SCfCIETY OF POLIQNT.f Constitution, &o. 1. A co-operative society of production, consumption, and mtitual Credit, with variable capital, is hereby formed among the members of the Agricultural Association of Poligny, and is called ' the Co-operative Society of Mutual Credit of the Arrondiss^ment (taluk) of Poligtay.' Members of othe'r associations of the Jura which form part of the 'Union of Agricultural A'Sfeodiati oils of the Jura,' may belong to this society. Its objects are— (1) to buy and sell all classes of produce, goods, and cattle for members of the association, and for associates who pay an annual subscription ; X (2) to bring aid to honest and industrious agriculturists, by means of loans and discotints, ajad to provide means for savings. The society absolutely prohibits all speculative business, and aU loans or discounts to non-members. All deposits are classed as loans to the society and are placed in aCcount-current, a pass-book being given to the depositor. The duration of the society is 30 years, a,nd its head-quarters at Salins. Capital and Shakes. « « « « « '2. The own capital is fixed at £800, in 40 shares of £20 each, called founders' shares. § It may be raised to £8,000 by the i^sue of further shares of the same value, or of fractions (coupures) of shares, each of the value of £2, which may be subscribed for by ordinary members Bubsequently admitted. 3. The capital may be increased, or it may be reduced by the withdrawal either in whole or in part of the share contributions, but must never fall below £200. The general meeting which decides upon an increase of capital shall at the same time fix the conditions on which the new shares shall issue, and especially the amount to be paid by each new subscriber as a contribution to the reserve. Founders' shares wiU not be repaid by the society except in case of the death of the holder or of the liquidation of the society. 4. The shares or fractions of shares shall be solely personal, even when entirely paid up, according to the provisions of section 50 of the law of 1867. They can only be negotiated by transfer in the books of the society. Since the society is essentially an association of persons, the consent of the board of directors to any transfer of shares must be obtained ; the board may always refuse such transfer whatever may be the form such transfer assumes, or whatever its reason. 5. The heirs of a deceased shareholder are not recognized as members until one of them shall have been accepted by the board as representative of the deceased. If no such representative is elected the heirs shall be entitled to receive repayment of the share value, but only ih the mode and after the period fixed by article 10. The same rule holds good in the case of the representatives of shareholders incapable or absent in the legal sense of the words, and of undivided co-proprietors of one or more shares. • For the rules gliding the formation and working of a grbnp, see the Modfel -Articles immediately preceding these rules. f This society is the pioneer of the form of agricultural credit institution which, in a nascent stage, is special to "Pi«,iloe, and has 'apparently generated the new law of 1894, which follows subsequently. The Poligny 'Sooiety is an 'agricultural association' under 'the law of 1884 'which legalized such associations, and it'developed a credit annex to meet the needs of its members. Its success jiroduced a few similar sobieties, and the law of 1894 (see translation next following;, seeks to utilize the many hundreds of agricultural associations which have sprung up since 1884 as institutions for agricultural credit {see Vol. I, pp. 127, 179-81, 218-20). ' X It will be noted that there are two classes of adherents, viz., members ajid associates. The latter may share in ishe co-operative benefits derived from the purchase and sale of p^bdnce and goods, but cannot obtain ci edit which is oonfined to members. § These shares are intended merely to provide the first working capital. Such first capital may be attracted in various wdj^s, e.g., by making the society unlimited ' as in Germany, Whereby outside capital is readily attracted as deposits or as loans from savings^bariKs.iSJc., or by obtaining the guarantee of well-to-do persons, on which a bdnk 6r ■Others will adVBtifce funds, or, as in the prBserit case and as in the Bodenkredit Anstalt of Hungary (see Vol. I pp 77 ^8 and 95), by the aubsdription of founders' shares which, though phflanthropically subscribed, M'e entitled 'to '». moderate fixed interest. 133 6. Shareholders are of two classes — (1) those -who have relinquished the right of demanding loans from the society ; these are called founders (aotionnaires fondateurs ; patrons would he more appropriate, since they might happen to be members subsequently admitted) ; (2) those who have not relinquished the right of borrowing ; these are called ordinary members (aotionnaires societaires). This second class shall have the sole right of demanding loans. 7. Shareholders are only responsible for the amount of the shares for which they have subscribed. 8. Every ordinary member may give notice of withdrawal in the first six months of the business year to the president of the board of directors. 9. The board of directors will propose at the general meeting the expulsion of every member who nas not faithfully fulfilled his engagements with the society, or who has been convicted of an act which casts doubt on his solvency or morality. Since the credit society only admits members of the agricultural associations as its own members, any person who leaves such association ceases, ipso facto, to be a member of the credit society. The general meeting has the final voice in such matters. Should the capital have been reduced to the minimum of £200, any shareholder who is then excluded from the society must transfer his share or shares to a third person at the rate of the latest issue of shares. 10. The full share of a retired or expelled member will only be repaid to him after the approval by the general meeting of the annual accounts. But the board may at any time pay to such member one-half of the share value which appeared as due to him in the previous year's account. A retired or expelled member has no claim to a share of the reserve. The sums paid by a member upon his shares shall serve as guarantee, by way of pledge, for anything that he may come to owe the society, and shall not be repaid to him until after acquittance of aU. his dues to the society, but shall be placed to the credit of his account as a set-off against his debt. In no case shall the creditors of a member have any claim on the above sums until the society's dues have been satisfied. 11. Sums due to the society but in dispute shall be considered as past due in making up the accounts, and entered as suspense. Management.* 12. The society is managed by a board consisting of from six to twelve members chosen from among the founders. Their shares are inalienable, and shall be stamped (with the society's seal) and deposited in the safe. 13-16. (The appointment of directors by general meeting, the supply of vacancies, the limits of their responsibility, and rules for their meetings.) 17. The board disposes in the interests of the society of all matters not reserved by the law or articles to the general meeting ; it admits members and proposes their expulsion ; it fixes the maximum advance which may be granted to borrowers and the terms of repayment ; regulates the business of deposits and determines the interest payable to depositors : draws up or causes to be drawn up the several statements and accounts and supplies all information or documents required by the law, or to be sent to the commissioners (auditors) and the general meeting. It may contract loans, with or without mortgage, up to the amount of the shares^ subscribed by founders ; deposits and withdraws funds in public treasuries, transfers, or converts securities ; buys and sells takes on lease or lets immovables ; buys and sells movables ; collects all sums due to the society and grants receipts for them ; defends, carries through, compromises, arbitrates or obtains arbitrations (in contested matters) ; decides on the investment of surplus funds, &c. ^ * * * * 19. The members of the board receive no remuneration.f If the board appoints a manager he may be paid such amount as the board decides. Commissioners (Axtditoes oe Controllers). 20. The general meeting will appoint one or more commissioners, with or without salary, whose duty will be to report to the general meeting upon the position of the bank, on its balance sheet, and on the accounts presented by the directors ; they shall exercise all the powers with which by law they are invested.^ , , i , i .• In case of necessity they are expressly bound to summon a general meeting. Should the general meeting omit to appoint these officers, or should one or aU of them refuse to act or be prevented from acting, the president of the commercial court may make orders as to such appointments, upon the application of those interested, and after duly notifying the directors. General MEBTiNa. 21-28. (Provide for the summoning and the duties of the general meeting, but contain little of special interest. Only actual shareholders who have held a share for at least three months prior to * Many of the provisions nnder this head are of the ordinary description and are either omitted or merely * ^ +* This is one of the most marked features of true co-operative action whether in France, Germany, Italy, England, or America It is a point expressly insisted on by Eaiffeisen and Luzzatti, and in the pamphlet by M. Miloent exnlanatory of the model articles proposed for French societies which are almost, word for word, the same as the articles here translated, he enlarges on the necessity for gratuitousness of service, and for a maximum of (say) 3. per cent, as diridend upon founders' shares. + See sections 32-34 and 43 of the French law of societies. II 134 the meeting may vote ; eacli share entitles to one vote up to a maximum of five. At least one-fourth of the total subscribed capital must be represented at an ordinary general meeting ; failing such representation, a second meeting must be called after an interval of at least eight days, and after dua notification : such second meeting is valid whatever the amount of capital represented, in so far as the subjects dealt with are those notified for the first meeting. For special meetings, at which alone modifications of the articles and proposals for liquidating the society may be disposed of, half the capital must be represented, and, for dissolution, two-thirds of the votes present must concur.) Balajtce Sheet axd Peopits. 29. (Provides for an annual balance sheet.) 30. Each year the net profit, less the amount set apart for .the reserve, shall be divided among the shareholders in proportion to their share values. Founders' shares shall, however, receive not more than 3 per cent., and if the dividend divisible upon ordinary shares exceeds 5 per cent., the board of directors shall have power to form from the surplus an extraordinary reserve which shall be at its disposal in the interests of the members of the society.* V- * * * * Reserve. 32. From the net annual profits shall be annually deducted, prior to the declaration of a dividend, such sxmi as shall be fixed by the general meeting in order to the formation of a reserve. The amount annually set apart shall not fall below 5 per cent, of the net profits, but such appro- priation shall not be obligatory when the reserve shall have reached one-fourth of the nominal capital. The employment of the reserve fund is determined by the board of directors.! (The remaining provisions deal with liquidation and disputes and are not of interest, j) EXTRACTS FROM THE CODE OF COMMERCE OF BELGIUM. Oo-OPEEATIVS SOCIITIKS. ***** 85. A co-operative society is one which is composed of members of whom the number or share contributions are variable, and whose shares are non-transferable. 86. A society must consist of at least seven members. Members may bind themselves jointly or individually in an indefinite amount or up to a fixed sum. * ¥ * * * 90. Every co-operative society must keep a register containing on its first page the memorandum of association, and thereafter the following matters : — (1) The name, business, and address of each member; (2) The date of admission, retirement or expulsion of each member ; (3) An account of the sums deposited or withdrawn by each member. This register shall be paged, initialled (on each page), and signed either by one of the judges of the commercial court or by the burgomaster of the commune gratuitously. For the initials may be substituted the seal of the court or of the communal councU. 91. The admission of members is evidenced by the placing of their signatures, with date, over against their names in the register. * * * * * 93. Withdrawal is evidenced by a note of the fact entered on the member's pass-book, and on the register opposite to the name of the member. These notes must be signed and dated by the member and by the person who is managing and signing for the society. 94. If the managing member refuses to admit a resignation, the member may declare it before the local justice of the peace, whose clerk must prepare a minute of the fact and within 24 hours transmit such note by registered letter to the society. The minute shall be entered on plain paper and recorded gratis. 95. Expulsion is evidenced by a minute drawn up and signed by the managing director, reciting that the expulsion has taken place in conformity with the articles of the society. The minute shall be entered on the register of members, and a copy sent within 48 hours by registered letter to the expelled member. , 96. A retiring or expelled member cannot promote the dissolution of the society, but is entitled to his share, as calculated upon the last balance sheet. 97. In case of the decease, failure, insolvency, or suspension from civil rights, of a member his heirs, creditors or representatives may claim his share as mentioned in section 96. They cannot promote the dissolution of a society. * This limitation is -deliberately intended to prevent that scramble for high profits and dividends which is found fatal to true oo-operation, and highly detrimental both to borrowers and to the safety of operations. t This appears to be objectionable : the articles shonld rigidly lay down the limits or objects of such employment- it is on the fearly formation of a strong, safely invested, and inalienable reserve, that much of the success of a society depends. Government paper or paper guaranteed by Government is alone suitable for the investment of reserves. % It will be seen that the articles are very meagre and leave a great deal to the directors ; there are absolutely na risions as to loans. Vol. I, pp. 179-80 may be consulted. ^ provisions i 135 ,. , .f.f- Every retmng or expeUed member remains personaUy responsible to the original amount of his liability tor five years after withdrawal or expulsion for aU the engagements of the society contracted prior to that date, unless any shorter period shall have been prescribed by any other law. _ 99. The rights of every member are represented by a pass-book which must bear the name of the society, the name, status and address of the member, the date of his admission, and the signature of the member and of .the managing director. It shall mention, date by date, every deposit in and withdrawal of money from the society by the member ; such entries must be respectively signed by the managing director or by the member, and are valid as receipts. The pass-book must also contain the articles of the society. It is exempt from stamp duty. 100. The personal oreditors of a member can only attach the interest or dividends upon shares and the share itself only upon the dissolution of a society.* ' 101. Every year at a date to be fixed by the articles, the directors must prepare an inventory of assets and liabilities in the manner prescribed by section 62. A reserve fund shall be formed in the manner prescribed by the same article. f * * * *- .» 104. The balance sheet shall be transmitted, within 15 days after confirmation, to the registry of the local commercial court. 105. Every six months the directors must send to the same court a list showing alphabetically the names, business, and address of each member : the list shall be dated and certified by the directors who are responsible for any false entry. 106. Within eight days of appointment every manager shall deposit in the same registry an extract from the minute which recites their powers. Every such manager must give or transmit his authenticated signature to the registry. EXTEACTSJ FROM THE ARTICLES OE THE POPULAR BANK OF LI^GE. ***** 4. Capital. — The own capital is fixed at a minimum of £120, and consists — (1) of the entrance fees ; (2) of the compulsory subscriptions to shares which are each of £8 ; (,3) of the reserve and other joint funds. 5. The society also deals with extraneous capital, viz. : — (1) deposits of members and non-members ; (2) other funds obtained by borrowing or by re-discount of bills. 6. Rights and duiies of Members. — Members may take part in the general meeting, each member having but one vote. 7. Members are each obliged — (1) to pay an entrance fee; (2) to subscribe one share of £8 ; (3) to provide the costs of administration ; (4) to answer for aR liabilities of the society up to the amount of £40 each ; (5) to obey the present articles and all other resolutions passed in conformity with the articles by the general meeting or by the board of directors. ***** 11. A member disobeying the rules is liable to expulsion. This maybe decreed by the general meeting especially in the following cases : — (1) if a member is three months in arrears with his payments ; (2) if it has been necessary to recover any instalments of loans from him at law ; (3) if he has incurred any serious criminal penalty. ***** 20. Management. — The society is managed by a board consisting of 15 directors, and supervised by three commissioners. Both directors and commissioners must be members, and are appointed by a majority of votes at the general meeting which can, at any time, cancel such appointment. * * * * * 28. The commissioners have unlimited powers of supervision and of check over all the operations of the society, and may examine the accounts, correspondence, minute books and all documents belong- ing to the society. Every week a statement giving an abstract of the assets and liabilities of the society must be furnished, to them by the directors. They must submit to the general meeting a report on the results of their supervision, with any suggestions that may seem necessary ; they must also deseriba the method on which they have verified the assets. * Compare the law of the French ' Credit Fonoier,' and the laws relating to Building Societies in several States of the United States of America. + ViJt., at least 5 per cent, of the net profits, till the reserve is equal to one-tenth of the share capital. J It is unnecessary to give the full text of these articles, as the bank, though ' popular ' is not rural, aud most of the provisioDS are of the usual character. 136 30. Loans.— The amount which may be advanced to members depends upon the financial situation,, and is at the discretion of the directors. But no advance exceeding £200 may be made to any member. 31. Loans are made for three months at most, subject to renewal if the sureties do not object. 32. A loan may be refused — (a) for want of sufficient security ; i. j v • (i) if the member fell into arrears with any previous loan, or caused a call to be made on biB sureties ; (c) if the member has joined the society within one month. 33. If the loan does not exceed twice the amount of the member's subscriptions, the directors may grant a loan upon the personal character and status of the borrower if there is reasonable expect- ation of due recovery of the loan ; the directors will, in such case, chiefly consider the honesty, energy and capacity of the borrower. 36. Beserve. — The reserve is formed — (1) from the entrance fees ; (2)- from a share of the profits. Such reserve is the exclusive property of the society (as a corporate body). 37. The amount to be credited from profits to the reserve shall be fixed annually by the general meeting : such amount must be at least one-twentieth of the net profits. _ But such credit shall not be obligatory when the reserve amoimts to one-tenth of the capital of the society. BXTEACTS * FEOM PROPOSED MODEL AETICLE3 FOR POPULAR CO-OPEEATIVE AGRICULTURAL BANKS, BELGIUM. 1. Olject. — The society is a co-operative association with the object of procuring for its members, by their collective credit, the capital which they need for agricultural trade or household expenses, and is called ' The Popular Agricultural Bank of Co-operative.' Eor articles 4, 5, 6, 7, 11, 21, 29, 31, see 4, 5, 6, 7, 11, 20, 28, 30 in the articles of the Li6ge bank. *- X- * * * 32. Loans are made for six months at most, subject to renewal by the directors if the sureties raise no objection. Eor articles 33, 34, 37, 38, see articles 32, 33, 36, 37 in the articles of the Li6ge bank. RULES OF THE AGRICULTURAL BANK OF SEGOYIA (SPAIN).- 11. The loans which may be made are of three classes — (1) on mortgage of rural and urban properties; (2) on the security of crops and stock ; (3) on public securities. MOKTGAGES. « * * * * 14. Mortgages may be either repayable by annuity or in lump : the former is repayable by a fixed annuity including interest and sinking fund. 1.5. In either case the borrower may repay the loan in whole or in part at any time ; if only part paid, the annuity will be adjusted accordingly. But the borrower paying in advance must also pay a commission of 1 per cent, on the amount repaid, j 16. The bank will only lend on first mortgage^ it will however lend for paying ofi a prior loan if the bank thereby obtains position as first mortgagee. 17. Loans will only be granted up to 40 per cent, of the real value of a property. 18. (Mentions the documents, title-deeds, &c., to be produced by a candidate.) 19. (Provides for a valuation of the property and for the deposit of expenses.) * * * * * 22. Interest for such loans is fixed by the board of directors with reference to the security offered. 23. Failure to pay interest for two successive half-years will involve the calling in of the loan with all interest and costs. * The full text of these articles is to be found in a wferk entitled ' Le Credit Agricole,' by M. Leon D'Audrimont, the celebrated advocate, founder, and promoter of co-operative vfork in Belgium. t The nature of this society and of its articles and rules in general are Bufficiently indicated on page 183 of Tol. I. The rules relating to loans' are here abstracted. X This is to obviate the chance of any loss to the bank in finding a re-investment for the amount. 137 ?•*' ■^11*^® *^*^® tendered by a landholder is not complete, but is onlv Dosaeaaorv two o-nn.^ •ureties wJl be required in addition to the mortgage. ^ poBsesaory, two good ***** &HJh^Tltl^°Zi ^o'^'J. P'-^Perties must agree in their contracts to inform the directors within Xo?+>,? ^- ^«t«"«f^at'°'i °^ depreciation to the property, or of any judicial order which may a^eenSit.^ ''''"''' property; any failure in this respect will entail cancelment of the w,-11 fL,,t^! expenses involved in making the loan shaU be borne by the borrowers. But the bank ^ be Su^IcefsM^^ ^^^"^^ ""^ ^^"^ expenses equitable and moderate, and to avoid all that Agrioulturai, Loans. *_ ^Lx?*^.^^" T^^^se loans shall be for periods not exceeding one customary agricultural year, viz., from 24th August to the same date in the next year. J > ' On whatever date the loan be contracted, the period shaU be considered as one complete year. • * * * # SO. The board of directors will fix the rates of interest. 31. A land-owner requiring a loan of this character must produce his title-deeds and two good •ureties. A tenant must produce his lease-deed, his receipts for the payment of his rent for the past ten years, or in default a certificate from the landlord that he has punctually paid his rental ; also Mb receipts for the land-tax (or cess, contribution territqrial) ; also two good sureties. _ Every borrower constitutes himself by the contract a manager and bailee "for the property which IS the subject of the loan until the loan shall have been fully paid up. If he fails in any part of hi» contract, he will be liable to the penalties of section 2, heading 4, chapter 13 of the second book of th« Penal Code. The above condition will be expressly entered in the loan contract. 32. Payment of the amount lent shall be made in cash : but may be realized (repaid) also in gram at the request of the borrower. BUILDING SOCIETIES ACT. * [37 & 38 Vict., Ch. 42.] Arrangement of Clauses. Claasea. 1. Short title. 2. Commencement of Act. 3. Definition of registrar, 4. Definition of court. 5. Definition of terminating and permanent societies. 6. Application to Scotland. 7. Repeal of 6 & 7 WiU. lY., c. 32. 8. Societies under former Act to continue. 9. Incorporation of societies. 10. Enrolments to be sent to registrar. 1 1 . Where enrolled transcript of rules not transmitted. 12. Certificate of incorporation how to be granted. 13. Purpose for which societies may be established. 14. Limitation of liability of members. 16. Power to borrow money. 1 6. Matters to be set forth in the rules. 17. Eules to be made. Registration of rules. 18. Alteration of rules. 19. Rules may be made to provide forms of conveyance, &c. 20. Evidence of registration. 21. Rules to be binding on members and others. 22. Change of name. 23. Officers to give security. 24. Officers to account. 25. Investment of suiplus funds. 26. When trustees are absent, (fee, registrars may order stock to be transferred. 27. Property of the society vested without conveyance. 28. As to copyholds. 29. Pigrment of sums not exceeding £50 when members or depositors die intestate. Payment to persons appearing to be next of kin declared valid. 30. Provision for the case of a member dying intestate leaving an infant heir. 31. Punishment of fraud in withholding money, &c. 32. Proceedings necessary for the termination or dissolution of a society. 33. Societies may unite with others, or one society may transfer its engagements to another. * See Vol. I, pp. 189-91. It has been found impogsiUe, from want of time, to rewrite the eeotion on Building Socisties, as promised in the- footnote to page 189 of Vol. I. II 35 138 34. Determination of disputes by arbitration. Court may order compliance with the decision of arbitrators. Determination of disputes by registrar. 35. Determination of disputes by court. 36. Determination to be final. 37. Buildings for tbe purpose may be purchased or leased. 38. Minors may be elected members. 39. Shares may be held by two or more persons. 40. Societies shall make annual audits and statements of the funds to the members. 41. Exemption from stamp duties. 42. Receipt endorsed on mortgage to be sufficient discharge without re-conveyance. 43. Penalties. 44. Regulations. SOHEDtTLE. Chapter 42. An Act to eonsolidate and amend the Laws relating to Building Societies. [30th Jitlt 1874. J ***** 1. This Act may be cited as The Building Societies Act, 1874. ***** 3. The registrar in this Act means (except where otherwise expressed) the registrar for the time being of friendly societies in England, Scotland, or Ireland, as the case may be, who:^shall, for the purposes of this Act, be the registrar of building societies. 4. The court in this Act means, — In England, the county court of the district in which the chief office or place of meeting for the business of the society is situate ; In Scotland, the sheriff's court of the county jn which such office or place of meeting is situate; and In Ireland, the civil bill court within the jurisdiction of which such office or place of meeting is situate. 5. A terminating society in this Act means a society whi6h by its rules is to terminate at a fixed date, or when a result specified in its rules is attained ; a permanent society means a society which has not by its rules any such fixed date or specified result at which it shall terminate. * * * * * 13. Any number of persons may establish a society under this Act, either terminating or perma- nent, for the purpose of raising by the subscriptions of the members a stock or fund for making advances to members out of the funds of the society upon security of freehold, copyhold, or leasehold estate, by way of mortgage ; and any society under this Act shall, so far as is necessary for the said purpose, have power to hold land with the right of foreclosure, and may from time to time raise funds by the issue of shares of one or more denominations, either paid up in full or to be paid by periodical or other subscriptions, and with or without accumulating interest, and may repay such funds when no longer required for the purposes of the society : Provided always, that any land to which any such society may become absolutely entitled by foreclosure, or by surrender, or other extinguishment of the right of redemption, shall as soon afterwards as may be conveniently practicable be sold or converted into money. 14. The liability of any member of any society under this Act in respect of any share upon which no advance has been made shall be limited to the amount actually paid or in arrear on such share, and in respect of any share upon which an advance has been made shall be limited to the amount payable thereon under any mortgage or other security or under the rules of the society. 15. With respect to the borrowing of money by societies under this Act, the following provisions shall have effect : — (1) Any society under this Act may receive deposits or loans, at interest, within the limits in this section provided, from the members or other persons, or from corporate bodies, joint stock companies, or from any terminating building society, to be applied to the purposes of the society : (2) In a permanent society the total amount so received on deposit or loan and not repaid by the society shall not at any time exceed two-thirds of the amount for the time being secured to the society by mortgages from its members : (3) In a terminating society the total amount so received and not repaid may either be a sum not exceeding such two-thirds as aforesaid, or a sum not exceeding twelve months subscriptions on the shares for the time being in force : (4) Any deposits with or loans to a society under this Act, made before the commencement of this Act in accordance with its certified rules, are hereby declared to be valid and binding on the society, but no further deposits or loans shall be received by such society, except within the limits provided by this section : (5) Every deposit book or acknowledgment or security of any kind given for a deposit or loan by a society shall have printed or written therein or thereon the whole of the fourteenth and fifteenth sections of the present Act. 16. The rules of every society hereafter established under this Act shall set forth, — (1) The name of the society, and chief office or place of meeting for the business of the society • (2) {Repealed ly the Act o/ 1894, q.v.) 139 <3) The purposes to which the funds of the society are to be applied, and the manner in which they are to be invested : (4) (Repealed hy the Act of 1894, q.v.) (5) The manner of altering and rescinding the rules of the society, and of making additional rules : (6) The manner of appointing, remunerating, and removing the board of directors or committee of management, auditors, and other officers : (7) The manner of calling general and special meetings of the members : (8) Provision for an annual or more frequent audit of the accounts, and inspection by the auditors of the mortgages and other securities belonging to the society : (9) Whether disputes between the society and any of its members, or any person claiming by or through any member, or under the rules, shall be settled by reference to the court, or [to the registrar, or to arbitration : {10) Provision for the device, custody, and use of the seal of the society, which shaU in aU cases bear the registered name thereof : (11) Provision for the custody of the mortgage deeds and other securities belonging to the society : (12) The powers and duties of the board of directors or committee of management and other officers : (13) The fines and forfeitures to be imposed on members of the society : (14) The manner in which the society, whether terminating or permanent, shall be terminated or dissolved. 17. The persons intending to establish a society under this Act shall transmit to the registrar two copies of the rules agreed upon by them for the government of the society, signed by three of such persons and by the intended secretary or other officer ; and the registrar, if he find that the rules contain aU the provisions set forth in section sixteen of this Act, and that they are in conformity with this Act, shall return one copy of the rules to the secretary or other officer of the society, with a certificate of incorporation, and shall retain and register the other copy ; provided that no society shall be registered under this Act in a name identical with that in which a subsisting society is already registered, or so nearly resembling the same as to be calculated to deceive, unless such subsisting society is in course of being terminated or dissolved, and consents to such registration. The society shall supply to any person requiring the same a complete printed copy of the rules, with a copy of the certificate of incorporation appended thereto, and shall be entitled to charge for every such printed copy of rules a sum not exceeding one shilling. 18. Any society under this Act, certified previously to the passing of this Act, may alter or rescind any rule or make any additional rule by the vote of three-fourths of the members present at a special meeting called for the pxixpose, of which meeting notice, specifying the proposed alteration, rescission, or addition shall be given to the members in the manner provided by the rules of the society or in the absence of such rules, by letters sent through the post seven days previous to such meeting ; and any society hereafter established may alter or rescind any rule, or make an additional rule, in the manner its rules direct ; and every society under this Act altering or rescinding any rule, or making an additional rule, shall forward two copies of every resolution for rescission of a rule, and of every alteration of or addition to its rules, signed by three members and the secretary, and a statutory declaration of an officer of the society that the provisions of this section have been complied with, to the registrar, who, if he find that siich alteration, addition, or rescission is in conformity with this Act, shall return one of the copies to the secretary or other officer of the society with a certificate of registration, and retain and register the other copy. 19. Any society under this Act, in a schedule to its rules, may describe the forms of conveyance, mortgage, transfer, agreement, bond, security for deposit or loan, or other instrument necessary for carrying its purposes into execution. 20. Any certificate of incorporation or of registration, or other document relating to a society under this Act, purporting to be signed by the registrar, shall, in the .absence of any evidence to the contrary, be received by the court, and by all courts of law and equity and elsewhere, without proof of the signature ; and a printed copy of the rules of a society, certified by the secretary or other officer of the society to be a true copy of its registered rules, shall, in the absence of any evidence to the contrary, be received as evidence of the rules. 21. The rules of a society under this Act shall be binding on the several members and officers of the society, and on all persons claiming on account of a member, or under the rules, aU. of whom shall be deemed and taken to have fuU notice thereof. 22. A society under this Act may change its name by resolution of three-fourths of the members present at a meeting called for the purpose, provided that the new name is not identical with that of any society previously registered and stiU subsisting, or so nearly resembling the same as to be calculated to deceive, unless such subsisting society is in course of being terminated or dissolved, and consents to such registration. Notice of the change of name shall be sent to the registrar and registered by him and he shall give a certificate of registration. Such change of name shall not affect any right or obligation of the society, or of any member thereof, or other person concerned. 23. Every officer of a society under this Act having the receipt or charge of any money belonging to the society shall, before taking upon himself the execution of his office, become bound with one sufficient surety at the least, in a bond according to the form set forth in the schedule to this Act, or ffive the security of a guarantee society, or such other security as the society direct, in such sum as the society require, conditioned for rendering a just and true account of aU moneys received and paid by him on account of the society, and for payment of all sums of money due from him to the society, .at such times as its rules appoint, or as the society require him to do so. 24 Every such officer, his executors or administrators, shall, upon demand made, or notice in -writing given or left at his last or usual place of residence, give in his account as may be required by 140 the board of directors or committee oif management of the society, to be examined and allowed or disallowed by them, and shall, on the like demand or notice, pay over all the moneys remaining in his hands, and deliver all securities and effects, books, papers, and property of the society in his hands or custody, to such person as the society appoint ; and in case of any neglect or refusal to deliver such account, or to pay over such moneys, or to deliver such securities and effects, books, papers, and pro- perty, in manner aforesaid, the society may sue upon the bond, or may apply to the court, who may proceed thereupon in a summary way, and make such order thereon as to the court in its discretion BhaU. seem just, which order shall be final and conclusive. 25. Any society under this Act may from time to time, as the rules permit, invest any portion of the funds of the society, not immediately required |f or its purposes, upon real or leasehold securities, or in the public funds, or in or upon any parliamentary stock or securities, or in or upon any stock or securities payment of the interest on which is guaranteed by authority of Parliament, or in the case of terminating societies, with other societies under this Act ; and for the purpose of investments in the public funds or upon security of copyhold or customary estate, the society, or the board of directors or committee of management thereof, may from time to time appoint and remove trustees. 26. (Permits the registrar to transfer stock from absent, bankrupt, lunatic, &c., trustees to other trustees on appHcation by the society and on proper proof.) 29. If any member of or depositor with a society under this Act having in the funds thereof a sum of money not exceeding fifty pounds shall die intestate, then the amount due may be paid to the person who shall appear to the directors or committee of management of the society to be entitled under the Statute of Distributions to receive the same, without taking out letters of administration, upon the society receiving satisfactory evidence of death and a statutory declaration that the member or depositor died intestate, and that the person so claiming is entitled as aforesaid : Provided that when- ever the society after the decease of any member or depositor has paid any such sum of money to the person who at the time appeared to be entitled to the effects of the deceased under the belief that he had died intestate the payment shall be valid and effectual with respect to any demand from any other person as next of kin or as the lawful representative of such deceased member or depositor against the funds of the society, but nevertheless such next of kin or representative shall have his lawful remedy for the amount of such payment as aforesaid against the person who has received the same. 30. Whenever a member of a society under this Act, having executed a mortgage to the society, shall die intestate, leaving an infant heir or infant coheiress, it shall be lawful for the said society, after selling the premises so mortgaged to them, to pay to the administrator or administratrix of the deceased member any money, to the amount of one hundred and fifty pounds, which shall remain in the hands of the said society after paying the amount due to the society and the costs and expenses of the sale, without being required to pay the same into the Post OfB.ce Savings Bank, as provided by the Trustees Relief Act, and the Acts amending or extending the same. The said sum of one hundred and. fifty pounds to be considered as personal estate, and liable to duty accordingly. ***** 32. A society under this Act may terminate or be dissolved — (1) Upon the happening of any event declared by its rules to be the termination of the society. (2) By dissolution in manner prescribed by its rules. (3) By dissolution with the consent of three-fourths of the members, holding not less than two-thirds of the number of shares in the society, testified by their signatitres to the instrument of dissolution. The instrument of dissolution shall set forth — (a) the liabilities and assets of the sodety in detail ; (i) the number of members, and the amount standing to their credit in the books of the society ; (c) the claims of depositors and other creditors, and the provision to be made for their payment ; (d) the intended appropriation or division of the funds and property of the society ; («) the names of one or more persons to be appointed trustees for the special purpose, and their remimeration. Alterations in the instrument of dissolution may be made with the like consent, testified in the same manner. The instrument of dissolution and all alterations therein shall be registered in the manner provided for the registration of rules, and shall be binding upon all the members of the society. (4) By winding-up, either voluntarily under the supervision of the court or by the court, if the court shall so order, on the petition of any member authorised by three-fourths of the members present at a general meeting of the society specially called for the purpose to present the same on behalf of the society, or on the petition of any judgment creditor for not less than fifty pounds, but not otherwise. General orders for regulating the proceed- ings of the court under this section may be from time to time made by the authority for the time being empowered to make general orders for the court. Notice of the commencement and termination of every dissolution or winding-up shall be sent to the registrar, and registered by him. 33. Two or more societies under this Act may unite and become one society, with or without any dissolution or division of the funds of such societies or either of them, or a society under this Act may transfer its engagements to any other such society, upon such terms as shall be agreed upon by three- fourths of the members (holding not less than two-thirds of the whole number of shares) of each of such societies present at general meetings respectively convened for the purpose ; but no such transfer shall prejudice any right of any creditor of either society. Notice of every such union or transfer shall- 1)6 sent to the registrar, and registered by him. 141 34. Wtere <^e rules of a society under this Act direct disputes* to be referred to arbitration, arbitrators shall be named and elected in tbe manner such rules provide, or, if there be no such provision at the first general meeting of the sooietv, none of the said arbitrators being beueficiaUy interested, directly or indirectly, in its funds ; of whom a certain number, not less than three, shaU be chosen by ballot in each such case of dispute, the number of the said arbitrators and mode of ballot being determined by the rules of the society; the names of such arbitrators shall be duly entered in the minute book of the society, and, in case of the death or refusal or neglect of any of the said arbitrators to act, the society, at a general meeting, shaU name and elect an ari.itrator to act in the place of the arbitrator dying, or refusing or neglecting to act ; and whatever awar i shall be made by the arbitrators or the major part of them, according to the true purport and meaning of the rules of the society, shall determine the dispute ; and should either of the parties to the dispute refuse or neglect to comply with or conform to such award within a time to be limited therein, the court, upon good and sufhcient proof being adduced of such award having been made, and of the refusal of the party to comply therewith, shall enforce comphanoe with the same upon the petition of any person TOUoerned. Where the parties to any dispute urising in a society under this Act agree to refer the dispute to the registrar, or vrhere the rules of the society direct disputes to be referred to the registrar, the award of the registrar shall have the same effect as that of arbitrators. 35. The court may hear and determine a dispute in the following cases :— (1) If it shall appear to the court, upon the petition of any person concerned, that application has been made by either party to the dispute to the other party, for the purpose of having the dispute settled by arbitration under the rules of the society, and that such appli- cation has not within forty days been complied with, or that the arbitrators have refused or for a period of twenty-one days have neglected to make any award. (2) Where the rules of the society direct disputes to be referred to the court or to justices. S6. Every determination by arbitrators or by the court or by the registrar under this Act of a dispute shall be binding and conclusive on all parties, and shall be tinal to all intents and purposes, and shall not be subject to appeal, and shall not be removed or removable into any court of law, or restrained or restrainable by the injunction of any court of equity ; provided always, that the arbitra- tors, or the registrar, or the court, as the case may be, may, at the request of either party, state a case for the opinion of the Supreme Court of Judicature on any question of law, and shall have power to grant to either party to the dispute such discovery, as to documents and otherwise, as might now be gfranted by any court of law or equity, such discovery to be made on behalf of the society by such ofiB.cer of the society as the arbitrators, registrar, or court may determine. 37. A society under this Act may purchase, build, hire, or take upon lease any building for conducting its business, and may adapt and furnish the same, and may purchtse or hold upon lease any land for the purpose only of erecting thereon a build ng for conducting the business of the society, and may sell, exchange, or let such building, or any part thereof. SS. Any person under the age of twenty-one yeors may be admitted as a member of any society under this Act, the rules of which do not prohibit such admission, anrl may give all necessary acquit- tances ; but during his nonage he shall not be competent to vote or hold any office in the suciety. 39. Two or more persons may jointly hold a share or shares in any society under this Act ; and all shares held jointly by any two or more persons in any society subsisting at the time appointed for the commencement of this Act, the rules whereof shall not prohibit such joint holding, shall be deemed to be lawfully so held. 40. The secretary or other officer of every society under this Act shall, once in every year at least, prepare an account of all the receipts and expenditure of the society since the preceding statement, and a general statement of its funds and effects, liabilities and assets, showing the amounts due to the holders of the various classes of shares respecdvely, to depositors and creditors for loans, and also the balance due or outstanding on their mortgage securities (not including prospective interest), and the amount invested in the funds or other securities ; and every such account and statement shall be attested by the auditors, to whom the raortgajje deeds and o'her securities belonging to the society shall be produced, and such account and statement shall be countersigned by the secretary or other officer ; and every member, depositor, and creditor for loans shall be entitled to receive from the society a copy of such account and statement, and a copy thereof shall be sent to the registrar within fourteen days after the annual or other general meeting at which it is presented, and another copy thereof shall be suspended in a conspicuous place in every office of the society under this Act. 41. No rules of any society under this Act, nor any copy thereof, nor any power, warrant, or letter of attorney granted or to be granted by any person as trustee for the society for the transfer of any share in the jjublio funds standing in his name, nor any receipts given for any dividend in any public stock or fund, or interest of exchequer bills, nor any receipt, nor any entry in any book of receipt, for money deposi^ed in the funds of the society, nor for any money received by any member, his executors or administrators, assigns, or attorneys, from the funds of the society, nor any transfer of any share, nor any bond or other security to be given to or on account of the society, or by any officer thereof, nor any order on any olficer for payment of money to any member, nor any appointment of any agent, nor any certificate or other instrument for the revocation of any such appointment, nor any other instrument or document whatever required or authorised to be given, issued, signed, made, or produced in pur.suanoe of this Act, or of the rul^ of the society, shall be subject or liable to or charged with any stamp duty or duties whatsoever, provided that the exemption shall not extend to any mortgage. * " The Bailding Societies Act of 1884 was a short Act passed to define the meaning of the word ' dixpntes ' when •' appearing in the building societies' statutes or the rules of a society. It provides that it shall be deemeii to refer " only to dispatps between a society and a member, and shbll nof, in the absence of an express provision in the rules "of the society, apply tu any dispute between the sooief.y and a member as to the constrnction or effect of any " mortgage deed, or any contract contained in any document other than the rules of the society, and shall not prevent "the members of any society from obtaining in the ordinary course of law any rem.>dy in respect of any Buoh " mortgage or oontraot." (From 'The Building Societies Act, 1894,' by Bowen and VVailey.) II 36 142 42. When all moneys intended to be secured by any mortgage or further charge given to a. society under this Act in England or Ireland have been fully paid or discharged, the society may endorse upon or annex to such mortgage or further charge a re-conveyance of the mortgaged pro- perty to the then owner of the equity of redemption, or to such persons and to such uses as he may direct, or a receipt under the seal of the society, countersigned by the secretary or manager, in the form specified in the schedule to this Act, and such receipt shall vacate the mortgage or further charge or debt, and vest the estate of and in the property therein comprised in the person for the time being entitled to the equity of redemption, -without any re-conveyance or re-surrender whatever ; and if the said mortgage or further charge has been registered under any Act for the registration or record of deeds or titles, the registrar under such Act, or his deputy or assistant registrar, or the recording officer, as the case may be, or, in the case of copyholds or lands of customary tenure, if the mortgage or further charge has been entered on any court rolls, the steward of the manor or his deputy respectively, shall, on production of such receipt, verified by oath of any person, make an entry opposite the entry of the charge or mortgage, to the effect that such charge or mortgage is satisfied, and shall grant a certificate, either on the said mortgage or charge or separately, to the like effect, which certificate shall be received in evidence in all courts and proceedings without any further proof, and which entry shall have the effect of clearing the register or record of such mortgage ; and the registrar or recording officer shall be entitled to a fee of two shillings and six pence for making the said entry and granting the said certificate, and such fee shall in Ireland be paid by stamps, and applied as the other fees of the Registry of Deeds Office and Eecord of Title Office are now by law directed to be paid and applied. 43. If any society hereafter formed under this Act, or any person representing themselves to be a society under this Act, commence business without first obtaining a certificate of incorporation under this Act, or if any society under this Act makes default in forwarding to the registrar any returns or information by this Act required, or in inserting in any deposit book or acknowledgment •or security for loan the matters required by section fifteen of this Act to be inserted therein, or makes a return wilfully false in any respect, the person or persons by whom business shall have been so commenced, or by whom such default shall have been made, or who shall have made such wilfully false return, shall be liable for every day business is so carried on, or for every such default or false return, upon summary conviction before justices at the complaint of the registrar, to a penalty not exceeding five pounds. If any society under this Act receives loans or deposits in excess of the limits prescribed by this Act, the directors or committee of management of such society receiving such loans or deposits on its behalf shall be personally liable for the amount so received in excess. 44. One of Her Majesty's Principal Secretaries of State may from time to time make regulations respecting |^the fees, if any, to be paid for the transmission, registration, and inspection of documents underJthis'Act, and generally for carrying this Act into effect. The registrar shall give his certifi- cates in the forms contained in the schedule to this Act respectively. BUILDING SOCIETIES ACT, 1894.* [57 & 58 YicT., Cap. 47]. 1. (Prescribes certain matters to be set forth in the articles.) -2. (1) Every annual account and statement under section 40 of the Building Societies Act, 1874, shaU. be made up to the end of the official year of the society to which it relates, and shall be in such form and shall contain such particulars as the Chief Registrar of Friendly Societies may from time to time, with the approval of a Secretary of State, direct, either generally or with respect to any society or class of societies. Provided that every such account and statement shall set forth — («) With respect to mortgages to the society upon each of which the present debt does not exceed five thousand pounds (not being mortgages where the repayments are upwards of twelve months in arrear, or where the property has for upwards of twelve months been in possession of the society), the number of all such mortgages, and the aggregate amount owing thereon at the date of the account or statement, such information being given separately in respect of each of the four following classes : — (i) Where the debt does not exceed five hundred pounds ; (ii) Where the debt exceeds five hundred pounds and does not exceed one thousand pounds ; (iii) Where the debt exceeds one thousand ■ pounds and does not exceed three thousand pounds : (iv) Where the debt exceeds three thousand pounds and does not exceed five thousand pounds. (}) With respect to any other mortgage to the society, the particulars shown by the appro- priate tabular form in the Eirst Schedule to this Act. (2) Every auditor, in attesting any such annual account or statement, shall either certify that it is correct, duly vouched, and in accordance' with law, or specially report to the society in what respect he finds it incorrect, unvouched, or not in accordance with law, and shall also certify that he has at that audit actually inspected the mortgage deeds and other securities belonging to the society, and shall state the number of properties with respect to which deeds have been produced to and actually inspected by him. (H) A copy of every such annual account and statement shall be sent to the registrar within fourteen days after the annual or other general meeting at which it is presented, or within three after the expiration of the official year of the society, whichever period expires first. * This Act has been found necessary to amend certain detects and supply omissions in the principal Act of 1874. It will he observed that the amendments are all in the direction of more stringent supervision, whether by auditors or bj the registrar ; members are also given greater power of obtaining inspections. 143 3. Notwitlistanding anything in the rules of any society under the Building Societies Acts, one at least of the auditors of the society shall be a person who publicly carries on the business of an accountant. -1. (1) The registrar may, if he thinks fit, of the application of ten members of a society under the Building Societies Acts, each of whom has been a member of the society for not less than twelve months immediately preceding the date of the application, appoint an accountant or actuary to inspect the books of the society, and to report thereon. (2) Provided as follows :— (a) The applicants shall deposit with the registrar such sum as a security for the costs of the proposed inspection as the registrar may require ; and (}) All expenses of and incidental to any such inspection shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers, or former members or officers, of the society in such porportions as the registrar may direct. (3) A person appointed under this, section shall h&ve power to make copies of any books of the society and to take extracts therefrom at all reasonable hours, at the registered office of the society, or at any place where the books are kept. (4) The registrar shall communicate the results of any such inspection to the applicants and to the society. 5. (1) The registrar may, on the application of one-tenth of the whole number of members of a society under the Building Societies Acts, or of one hundred members in the case of a society consisting of more than one thousand members, and with the consent of the Secretary of State, either— (a) appoint an inspector to examine into and report on the afEairs of the society ; or (J) caU a special meeting of the eociety. (2) Provided as follows : — {a) The application under this section shall be supported by such evidence as the registrar may' direct for the purpose of showing that the applicants have good reason for requiring the inspection to be made or the meeting to be called, and that they are not actuated by malicious motives in their •application ; and (J) Such notice of the application shall be given to the society as the registrar may direct ; and (c) The registrar shall require the applicants to give security for the costs of the proposed inspection or meeting before the inspector is appointed or the meeting is called ; and (d) AH expenses of and incidental to the inspection or meeting shall be defrayed by the appli- cants, or out of the funds of the society, or by the members or officers, or former members or officers of the society, in such proportions as the registrar may direct. (3) An inspector appointed under this section may require the prodiiction of all or any of the books, accounts, securities, and documents of the society, and may examine on oath its officers, members, agents, and servants in relation to its business, and may administer an oath accordingly. (4) The registrar may direct at what time and place a special meeting under this section is to be held, and what matters are to be discussed and determined at the meeting, and the meeting shall have all the powers of a meeting called according to the rules of the society, and shall in aU cases have power to appoint its own chairman, any rule of the society to the contrary notwithstanding. (5) The registrar may, without any application by members, but with the consent of the Secretary of State given on each occasion, exercise the powers given by this section in the following (a) Where a society has, for two months after notice, failed to make any return required by the Building Societies Acts ; , ,^ ^- t -t a t- i- w (6) Where a society has, for two months after notice, failed to correct or complete any (o) 'where evidence is furnished by a statutory declaration of not less than three members of a society of facts which, in the opinion of the registrar, caU for investigation, or for recourse to the iudffment of a meeting of the members. Provided that the registrar shall forthwith, on receipt of such declaration, send a copy thereof to the society, and such society shall, within fourteen days from the sending of such copy, be entitled to give the registrar an explanatory statement m writing, -by way of reply thereto. 6 CThe registrar may, where a society has been registered by fraud or mistake, or where it exists for an' iUegal purpose, or where it wilfully, and after notice, violates the provisions of the Buildmg Societies Acts, cancel or suspend the registry of the society, after two months notice m wri ing, and shall advertise such cancelment or suspension : appeal hes by the society to the High Court. During suspension or on cancelment aU privileges are withdrawn from the society, but its Labilities contmue.) 7 rn On the application in writing of one-tenth of the whole number of members of any society under the Bunding Societies Acts, or of one hundred members m the case of a society of more than one aousand members, netting forth that the society is unable to meet the claims of its members and that it woX be for their benefit that it should be dissolved and requesting an investigation into the affairs oflhrsociety with a view to the dissolution thereof, the registrar may investigate the affairs of the sodety, but shaU before so doing give not less than two months' previous notice in writing to the societv'at its registered chief office or place of meeting. . . t, i • t-^. i, society at Its g .^^^^^-^^^^ ^^ ^^ rs that the society is unable to meet the claims of its members, and that it would be for their benefit that it shoud be dissolved, the registrar may, il he considera ^ expedienlso to do, award that the society be dissolved, and shall direct in what manner the affaira of ^rsocietv are to be wound up. Provided that the registrar may suspend his award for such period: Ts h^may deemLcesIary to enable the society to make such alterations of.its rules as will m hi^ Judgment P-^^ the ^cegty^^^^^ ^t^^Sy^oTe^d^yf after the making of any award for dissolutioi.: Tinder thi section, cause notice thereof to be advertised in the Gazette and m some newspaper circu- lating in the county in which the registered chief office or place of meeting of the society is situate. * * * . ^ . . - - » - 144 10. When a Society under the Building Societies Acts is being dissolved or wound up, a member ■to wliom an advance has been made under any mortgage or other security or under the rules of the society, shall not be liable to pay the amount payable under the mortgage or other security or rules, except at the time or times and subject to the tonditions therein expressed. Ihis section shall come into operation immediately after the passing of this Act. 11. If a society under the Building Societies Acts is dissolved in manner prescribed by its rules or in pursuance of the consent of three-fourths of the members, the liquidators, trustees, or other persons having the conduct of the dissolution shall, -within twenty- eight days from the termination of the dissolution, send to the registrar an account and balance sheet signed and certified by them as correct, and showing the assets and liabiHties of the society at the commencement of the dissolution and the mode in which those assets and liabilities have been appHed and discharged, and in default of so doing shall each be liable to a fine not exceeding five pounds for every day during which the default continues. 12. (1) A society under the'Building Societies Acts established after the passing of this Act shall not cause or permit the applicants for advances to ballot for precedence or in any way make the granting of an advance depend on any chance or lot. 13. (1) A society under the Building Societies Acts shall not advance money on the security of any freehold, copyhold, or leasehold estate which is subject to a prior mortgage, unless the prior mortgage is in favour of the society making the advance. 14. In calculating the amount for the time being secured to a society under the Building Societies Acts by mortgages from its members for the purpose of ascertaining the limits of its power to receive deposits or loans at interest, the amount secured on pioperties the payments in respect of which were upwards of twelve months in arrear at the date of the society's last preceding annual account and statement, and the amount secured on properties of which the society had been twelve months in possession at the date of such account and statement shall be disregarded. 15. (1) A society under the Building Societies Acts shall not use any name or title other than its registered name, and shall not accept any deposit except on the terms that not less than one month's notice may be required by the managers of the society before repayment or withdrawal. (2) If a society contravenes this section, the society, and also every director or member of the committee of management, who is a party to the contravention, shall be liable on summary conviction to a fine not exceeding ten pounds, and in the case of a continuing ofi'ence to an additional fine not exceeding ten pounds for every week during which the offence continues. 21. If any society under the Building Societies Acts neglects or refuses — (») to give any notice, sena any return or document, or do or allow to be done anything which the society is by those Acts required to give, send, do or allow to be done ; or, (J) to do any act or furnish any information required for the purposes of those Acts by the registrar or hj an inspector ; the society, and also every officer thereof bound by the rules thereof to fulhl the duty whereof a Ireach has been so committed, and if there is no such officer, then every member of the committee of management or board of directors of the society, unless it appears that he was ignorant of or attempted to prevent the breach, shall for each offence be liable, on suniniary conviction, to a fine not exceeding twenty pounds, and in the case of a continuing offence, to an additional fine not exceeding five pounds for every week during which the offence continues. 23. No director, secretary, surveyor, solicitor, or other officer of a society under the Building Societies Acts shall, in addition to the remuneration prescribed or authorised by the rules of the society, receive from any other person any gift, bonus, commission, or benefit, for or in connexion with any loan made by the society, and any person payii g or accepting any such gift, bonus, commis- sion, or benefit, shall be liable on sun-.mary conviction to a fine not exceeding fifty pounds, and, in default of payment, to be iinp'isoned with or witliout hard laliour for any time mt exceeding six months, and the person accepting any such gift, bonus, commission, or benefit, shall, as and when directed by the court by whom he is convicted, pay < ver to the society the amount or value of such gift, bonus, commission, or benefit, and in default of such payment shall be liable to be imprisoned •with or without hard labour for any time not exceeding six months. PIEST SCHEDULE. Pait I. Particulars to be set forth in the case of a mortgage where the repayments are net upwards of twelve months in arrears, and the property has rot been upwaids of twelve months in possession of the society, and where the present debt exceeds 5,000^. Date of advance. Whether sub- ject to any prior nni^rtgage or charge. If so, what amonnt. Whether freehold, copyhold, or leaseholil. Original valuation of property. Amount of advance. Present debt. Amount of payments ill advauce. Amount of payments in arrear. Observa- tions. 145 Past II. Particulars to be set forth in the case of property of which the society has been upwards of twelve months in possession : — 1 2 3 4 5 6 7 8 9 10 11 12 « 1 s 1 •s a Oats when possession was taken. Whether sabjeot to any prior mortgage or charge. If so, what amount. Whether freehold, copyhold, or leasehold. 13 ■9 •s Original valuation of property. Debt when possession was taken. Present amount included in assets. a to _ m CD So h ! Fast III. Partioulara to be set forth in the case of a mortgage where the repayments are upwards of twelve months in arrear and the property has not been upwards of twelve months in possession of the society : — 1 2 3 4 5 6 7 8 9 Date of advance. Whether sub- ject to any prior mortgage or charge. If so, what amount. Whether freehold, copyhold, or lease- hold. Number of months in arrear. Original valuation of property. Amount of advance. Present debt. Amount of payments in arrear. Observa- tions. INDUSTEIAL AND PEOVIDENT SOCIETIES ACT, 1893. [56 & 57 Vict., Oh. 39.] Aeeangbmbnt of Sections. Preliminary. Section. 1. Short title. 2. Extent of Act. 3. Existing societies. Registration of Societies. 4. Societies which may be registered. 5. Conditions of registration. 6. Acknowledgment of registry. 7. Appeals from refusal to register. 8. Effect of acknowledgment of registry. Cancelling and Suspension of Registry. 9. Cancelling and suspension of registry. Rules. 10. Eules and amendments. Duties of Registered Societies. 11. Eegistered office. 12. Publication of name. 13. Audit. 14. Annual returns. 16. Supply of copies of annual returns. 16. Copy of last balance sheet. Inspection of Booh. 1 7 Inspection of books by members. 18. Inspection of books by order of registrar. Banking hy Societies, 19. Conditions of banking by societies. II 37 Section. 20. Form and deposit of documents. 146 Eeturru and Boewments. Privileges of Societies. 21. Incorporation of society with limited liability. 22. Eides to bind members. 23. Eemedy for debts from members. 24. Exemption from income-tax. 25. Power of nomination for sums not exceeding one hundred pounds. 26. Proceedings on the death of a nominator. 27. Provisions for intestacy. 28. Probate duty to be paid where the whole estate exceeds one hundred pounds. 29. Power to deal with property of insane or lunatic member. 30. Pajroients to persons apparently entitled valid. 31. Transfer of stock standiig in name of trustee. 32. Membership of minors. 33. Promissory notes and bills of exchange. 34. Register of members or shares. 35. Contracts how made, varied, or discharged. Property and Funds of Registered Society. 36. Holding of land. 37. Provision as to copyholds. 38. Investments by societies. 39. Power to invest in savings banks. 40. Advances to members. 41. Societies may appoint any of their members as proxies to other corporate bodies. 42. Any body corporate may hold shares in a society. Discharge of Mortgages by Receipt endorsed. 43. Discharge of mortgages by receipt endorsed. 44. Discharge of mortgages in Scotland. 45. Receipt in case of society in liquidation. 46. Execution of deeds in Scotland. Ueers in receipt or charge of Money. 47. Security by oflBcers. 48. Accounts of officers. Disputes. 49. Decision of disputes. Inspection of Affairs. 50. Power to appoint inspectors. Change of Name : Amalgamation: Corwersion. 51. Meaning of special resolution. 52. Power to change name. 53. Amalgamation and transfer of engagements. 54. Conversion of society into company. 55. Conversion of company into society. 56. Registration of special resolution. 57. Saving for rights of creditors. Dissolution of Societies. 58. Provisions as to dissolution of societies. 59. Transfer of winding up from county court. 60. Liability of members on winding up. 61. Provisions as to instrument of dissolution. Offences, Penalties, and Legal Proceedings. 62. Offences by societies, 63. Offences by societies to be also offences by officers, &c. 64. Punishment of fraud or misappropriation. 65. Penalty for falsification. 66. Penalty for not using name of society. 67. Delivery of untrue rules. 147 . Section. 68. Penalties for ordinary offences. 69. Eecovery of penalties. 70. Appeals from summary decisions. Sujpplemental. 71. Remuneration of county court officers. 72. Public auditors. 73. Fees. 74. Regulations for carrjang out Act. 75. Evidence of documents. 76. Duties of registrars. 77. Application of Act to Oliannel Islands. 78. Payment to representatives of deceased members in Channel Islands. 79. Definitions. 80. Repeal. ScHEDTJIiES. Chapter 39. An Act to consolidate and amend the Laws relating to Industrial and Provident Societies. [12th September 1893.] Preltjninary . 1. This Act may be cited as the Industrial and Provident Societies Act, 1893.* 3. Every incorporated society now existing, which has been registered or certified under any Act relating to industrial and provident societies, shall be deemed to be a society registered under this Act, and its rules shall, so far as the same are not contrary to any express provision of this Act, continue in force until altered or rescinded. Registration of Societies. 4. A society which may be registered under this Act (herein called an industrial and provident . society) is a society for carrying on any industries, businesses, or trades specified in or authorised by its rules, whether wholesale or retail, and including dealings of any description -with land. Provided that — (a) no member other than a registered society shall have or claim any interest in the shares of the society exceeding two hundred pounds, and (J) in regard to the business of banking, the society shall be subject to the provisions herein- after contained. 5. With respect to the registry of new societies, the following provisions shall have effect : — (1) No society can be registered under this Act which does not consist of seven persons at least ; (2) For the purpose of registry an application to register the society, signed by seven members and the secretary, and two printed copies of the rules, shall be sent to the registrar ; (3) No society shall be registered under a name identical with that under which any other existing society is registered, or so nearly resembling such name as to be likely, or in any name likely, in the opinion of the registrar, to mislead the members or the public as to its identity, and no society shall change its name except in the manner hereinafter pro- vided; (4) A society registered under the Industrial and Provident Societies Act, 1852, and not registered under the Industrial and Provident Societies Acts, 1862, 1867, or 1876, may obtain from the registrar an acknowledgment of registry under this Act ; (6) The word "limited " shall be the last word in the name of every society registered under this Act ; (6) A society carrying or intending to carry on business in more than one part of the United Kingdom shall be registered in the part in which its registered office, as herein mentioned, is situate ; but copies of the rules of the society and of aU amendments of the same shall, when registered, be sent to the registrar of each of the other parts to be recorded by him, and until such rules are so recorded the society shall not be entitled to any of the privileges of this Act in the part in which such rules have not been recorded, and until such amendments are so recorded the same shall not take effect in such part. 6. The registrar, on being satisfied that a society has complied with the provisions as to registry in force under this Act, shall issue to such society an acknowledgment of registry. 7. (1) If the registrar refuses to register the society or any rules or amendments of rules, the society may appeal from such refusal as follows : — (fl) In England or Ireland to the High Court ; (h) In Scotland to either division of the Inner House of the Court of Session. (2) If the refusal of registry is overruled on appeal, an acknowledgment of registry shall there upon be g^ven to the society by the registrar. 8. The acknowledgment of registry shall be conclusive evidence that the society therein men- tioned is duly registered, unless it is proved that the registry of the society has been suspended or -cancelled. * This Act replaces that of 1876, and is that under which English co-operative societies, other than friendly and, building societies, are registered. See Vol. I, pp. 187-89. 148 Cancelling and Suspension of Regial/ry. 9. (1) The registrar may cancel the registry of a society by writing under Ms hand or seal : {a) If at any time it is proved to his satisfaction that the number of the members of the society has been reduced to less than seven, or that an acknowledgment of registry has been obtained by fraud or mistake, or that the society has ceased to exist ; (J) If he thinks fit, at the request of a society, to be evidenced in such manner as be shall from time to time direct ; (tf) With the approval of the Treasury, on proof to his satisfaction that the society exists for an illegal purpose, or has wilfully and after notice from a registrar violated any of the provisions of this Act. (2) The registrar, in any case in which he might, with the approval of the Treasury, cancel the registry of a society, may suspend the same, by writing under his hand or seal, for any term not exceeding three months, and may, with the approval of the Treasury, renew such suspension from time to time for the like period. (3) Not less than two months' previous notice in writing, specifying briefly the ground of any proposed cancelling or suspension of registry, shall be given by the registrar to a society before the registry of the same can be cancelled (except at its request) or suspended ; and notice of every cancel- ling or suspension shall be published in the Gazette, and in some local newspaper circulating in or about the locality in which the registered office of the society is situated, as soon as practicable after the same takes place. ' (4) A society may appeal from the cancelling of its registry, or from any suspension of the same which is renewed after three months, in manner herein provided for appeals from the registrar's refusal to register. . (5) A society whose registry has been suspended or cancelled shall, from the date of publication in the Gazette of notice of such suspension or cancelling (but, if suspended, only whilst such suspension lasts, and subject also to the right of appeal hereby given), absolutely cease to enjoy as such the pri- Tileges of a registered society, but without prejudice to any liability actually incurred by such society, which may be enforced against the same as if such suspension or cancelling had not taken place. Rules. 10. (1) The rules of a society registered under this Act shall contain provisions in respect of the •everal matters mentioned in the Second Schedule to this Act. (2) An amendment of a rule of a society registered under this Act shall not be valid until the same has been registered under this Act, for which purpose two copies of the same, signed by three members and the secretary, shall be sent to the registrar. (3) The registrar shall, on being satisfied that any amendment of a rule is not contrary to the provisions of this Act, issue to the society an acknowledgment of registry of tlie same, which, shall be conclusive evidence that the same is duly registered. (4) A copy of the rules of a registered society shall be delivered by the society to every person on demand, on payment of a sum not exceeding one shilling. (5) The rules of a registered society, or any schedule thereto, may set forth the form of any instrument necessary for carrying the purposes of the society into efEect. (6) The rules of every society registered under this Act shall provide for the profits being appro- priated to any purposes stated therein or determined in such manner as the rules direct. Duties of Registered Societies. 1 1 . Every registered society shall have a registered office to which all communications and notices shall be addressed, and shall send to the registrar notice of the situation of such office, and of every change therein. 12. Every registered society shall paint or affix, and keep painted or affixed, its registered name on the outside of every office or place in which the business of the seciety is carried on, in a conspicuous position, in letters easily legible, and have its registered name engraven in legible characters on its seal, and have its registered name mentioned in legible characters in all notices, advertisements, and other official publications of the society, and in all biUs of exchange, promissory notes, endorsements cheques, and orders for money or goods, purporting to be signed by or on behalf of such society, and in all bills of parcels, invoices, receipts, and letters of credit of the society. 13. (1) Every registered society shall once at least in every year submit its accounts for audit either to one of the public auditors appointed as in this Act mentioned, or to two or more persons appointed as the rules of the society provide. (2) The auditors shall have access to all the books, deeds, documents, and accounts of the society and shall examine the balance sheets showing the receipts and expenditure, funds and effects of the society, and verify the same with the books, deeds, documents, accounts and vouchers relating thereto, and shall either sign the same as found by them to be correct, duly vouched, and in accordance with law, or specially report to the society in what respects they find them incorrect, unvouched or not in accordance with law. 14. (1) Every registered society shall once in every year, not later than the thirty-first day of March, send to the registrar an annual return of the receipts and expenditure, funds and effects of the ;BOciety as audited. ' (2) The annual return — (a) shall be signed by the auditor or auditors ; and (b) shall show separately the expenditure in respect of the several objects of the society- and ' («) shall be made out from the date of its registration or last annual return to that of its last published balance sheet, provided that the last-named date is not more than one month- 149 before or after the Slat of December then last, or otherwise to the said day of December inclusive ; and {d) shall state whether the audit has been conducted by a public auditor appointed as by this Act is provided, and by whom, aud, if by any persons other than a public auditor, shall state the name, address, and calling or profession of every such person, and the manner in which, and the authority under which, he is appranted. The society shall, together with the annual return, send a copy of the report of the auditors, or, if more than one such report has been made during the period included in the return, a copy of each of such reports. 15. Ev6]*y registered society shall supply gratuitously to 'every member or person interested in the funds of the society, on his application, a copy of the last annual return of the society for the time being. 16. Every registered society shall keep a copy of the last balance sheet for the time being, together with the report of the auditors, always hung up in a conspicuous place at the registered ofBce of the society. Inspection of Booh. 17. (1) Save as provided by this Act, no member or person shall have any right to inspect the books of a registered society, notwithstanding anything in the existing rules relating to such inspection. (2) Any member or person having an interest in the funds of a registered society shall be allowed to inspect his own account and the books containing the names of the members at all reason- able hours at the registered office of the society, or at any place where the same are kept, subject to such regulations as to the time and manner of such inspection as may be made from time to time by the general meetings of the society. (3) A registered society may, by any rules registered after this Act is passed, authorise the inspection of any of its books therein mentioned, in addition to the said books containing the names of members, under such conditions as are thereby imposed, so that no person, unless he be an officer of the society, or be specially authorised by a resolution thereof, shall have the right to inspect the loan or deposit account of any other member without his written consent. 18. (1) The registrar may, if he thinks fit, on the application often members of a registered society, each of whom has been a member of the society for not less than twelve months immediately preceding the date of the application, appoint an accoun^tant or actuary to inspect the books of the society, and to report thereon. (2) Provided, as follows, — (a) the applicants shall deposit with the registrar such sum as a security for the costs of the proposed inspection as the registrar may require ; and (b) all expenses of and incidental to any such inspection shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers, or former members or officers, of the society in such proportions as the registrar may direct. (3) A person appointed under this section shall have power to make copies of any books of the society, and to take extracts therefrom, at all reasonable hours, at the registered office of the society or at any place where the books are kept. (4) The registrar shall communicate the results of any such inspection to the applicants and to the society. Banking ly Sooieties. 19. (1) No registered society which has any withdrawable share capital shall carry on the business of banking.* (2) Every registered society which carries on the business of banking shall on the first Mondays in February and August in each year make out and keep conspicuously hung up in its registered office, and every other office or place of business belonging to it where the business of banking is carried on, a statement in the form in the Third Schedule, or as near thereto as the circumstances admit. (3) The taking deposits of not more than ten shillings in auy one payment, nor more than twenty pounds for any one depositor, payable on not less than two clear days' notice, shall not be included in the business of banking within the meaning of this Act ; but no society which takes such deposits shall make any payment of withdrawable capital while any claim due on account of any such deposit is unsatisfied. Returns and DocumenU. 20. Every return and other document required for the purposes of this Act shaE. be made in such form and shall contain such particulars as the chief registrar prescribes, and shall be deposited and registered or recorded, with or without observations thereon, in such manner as the chief registrar directs. Privileges of Sooieties. 21. The registration of a society shall render it a body corporate by the name described in the acknowledgment of i-egisfery, by which it may sue and be sued, with perpetual succession and a common seal, and with limited liability ; and shall vest in the society all property for the time being vested in any person in trust for the society ; and all legal proceedings pending by or against the trustees of any such society may be prosecuted by or against the society in its registered name without abatement. * This provieion seems unneeessarily strihgent in the light of oontineintal European experience, where the co- operative credit societies do so immense on account of -banking, although they are aJl societies " ^ capital variable," since members to any number may withdraw at will, taking their capital with them. {See Vol. I passim, but especially the chapter on ' Popular banks,' pages 133-1 98.) It has, in fact, been asoe!rtailied that the four or five village banks recently (1895-96) started in England under the stimulus and information supplied by the ' Agricultural Banks AssooiSition,' have been registered under the Ffiendly Societies Act instead of under this Act. II 38 150 22. The rules of a registered society shall bind the society and all members thereof and aU persons claiming through ihem respectively to the same extent as if each member had subscribed his name and affixed his seal thereto, and there were contained in such rules a covenant on the part of such member, his heirs, executors, administrators, and assigns, to conform thereto, subject to the provisions of this Act : Provided that a society registered at the time when this Act comes into operation, or the members thereof, may respectively exercise any power given by this Act, and not made to depend on the provisions of its rules, notwithstanding any provision contained in any rxile thereof registered before this Act was passed. 23. (1) All moneys payable by a member to a registered society shall be a debt due from such member to the society, and shall be recoverable as such either in the county court of the district in which the registered office of the society is situate, or in that of the district in which such member resides, at the option of the society. (2) A registered society shall have a lien on the shares of any member for any debt due to it by hitn, and may set ofif any sum credited to the member thereon in or towards the payment of such debt. 24. A registered society shall not be chargeable under Schedules 0. and D. of the Income Tax Acts unless it sells to persons not members thereof, and the number of shares of the society is limited either by its rules or its practice. But no member of or person employed by the society shall be exempt from any assessment to the said duties to which he would be otherwise liable. 25. (1) A member of a registered society, not being under the age of sixteen years, may, by a writing- under his hand, delivered at or sent to the registered office of the society during the lifetime of such member, or made in any book kept thereat, nominate any person or persons other than an officer or servant of the society (unless such officer or servant is the husband, wife, father, mother, child, brother, sister, nephew, or niece of the nominator) to or among whom his property in the society, whether in shares, loans, or deposits, or so much thereof as is specified in such nomination, if the nomination does not comprise the whole, shall be transferred at his decease, provided the amount credited to him in the books 6f the society does not then exceed one hundred pounds sterling. (2) A nomination so made may be revoked or varied by any similar document under the hand of the nominator, delivered, sent, or made as aforesaid, but shall not be revocable or variable by the will of the nominator or any codicil thereto. (3) The society shall keep a book wherein the names of all persons so nominated and of all revocations or variations, if any, of such nominations shaU. be regularly entered. And the property comprised in any such nomination shall be payable or transferable to the nominees, although the rules of the society declare the shares to be generally not transferable. 26. (1) On receiving satisfactory proof of the death of a nominator, the committee of the society shall either transfer the property comprised in the nomination in manner directed by it, or pay to every person entitled thereunder the fuU value of the property given to him, unless the shares comprised therein, if transferred as directed by the nominator, would raise the share capital of any nominee to a sum exceeding two hundred pounds, in which case they shall pay him the value of such shares. (2) If the total property of the nominator in the society at his death exceeds eighty pounds, the committee shall, before making any payment, require production of a duly stamped receipt for the succession or legacy duty payable thereon, or a letter or certificate stating that no such duty is payable from the Commissioners of Inland Revenue, who shall give such receipt, letter, or certificate, on payment of the duty, or satisfactory proof of no duty being payable, as the case may be. 27. (1) If any member of a registered society entitled to property therein in respect of shares, loans, or deposits, not exceeding in the whole, at his death, one hundred pounds, dies intestate, without having made any nomination thereof then subsisting, the committee may, without letters of admin- istration, distribute the same among such persons as appear to them, on such evidence as they deem satisfactory, to be entitled by law to receive the same, subject, if such property exceeds eighty pounds, to the obtaining from the Commissioners of Inland Eevenue a receipt for the succession or legacy duty payable thereon, or a letter or certificate stating that no such duty is payable. (2) If any such member is illegitimate and leaves no widow, widower, or issue, the committee shall deal with his property in the society as the Treasury shall direct. 28. If elsewhere than in Scotland the whole personal estate, or in Scotland the whole movable estate, of any person entitled to make a nomination under this Act exceeds one hundred pounds sterling, any sum paid under this Act without probate or letters of administration shall, notwithstanding such nomination or payment, be liable to probate duty as part of the amoxmt on which such duty is charged, and the committee, before making any such payment, may require a statutory declaration by the claimant or one of the claimants that the total personal or movable estate of the deceased, including the sum in question, does not, after deductions of debts and funeral expenses, exceed the value of one hundred pounds. 29 Where a member or person claiming through a member of a society is insane, and no committee of his estate or trustee of his property has been duly appointed, the society may, when it is proved to the satisfaction of the committee that it is just and expedient so to do, pay the amount of the shares, loans, and deposits not exceeding one hundred pounds belonging to such member or person, to any person whom they shall judge proper to receive the same on his behalf, whose receipt shall be a good discharge to the society for any sum so paid. 30. AU payments or transfers made by the committee of a registered society, under the provisions of this Act with respect to payments or transfers to or on behalf of deceased or insane members, to any person who at the time appears to the committee to be entitled thereunder, shall be valid and effectual against any demand made upon the committee or society by any other person. 31. (1) When any person in whose name any stock belonging to a registered society transferable at the Bank of England or Bank of Ireland is standing, either jointly with another or others or solely as a trustee therefor, is absent from Great Britain or Ireland respectively, or becomes bankrupt or 151 files any petition or executes any deed for liq[uidation of his affairs by assignment or arrangement, or for composition with, his creditors, or becomes a lunatic, or is dead, or has been removed from his office of trustee, or if it be unknown whether such person is living or dead, the chief registrar, on application in writing from the secretary and three members of the society, and on proof satisfactory to him, may direct the transfer of the stock into the names of any other persons as trustees for the society. (2) The transfer shaU. be made by the surviving or continuing trustees, and if there be no such trustee, or if such trustees refuse or be unable to make such transfer, and the chief registrar so directs, then by the Accountant-General or Deputy or Assistant Accountant-General of the Bank of England or Bank of Ireland, as the case may be. (3) The Banks of England and Ireland are hereby indemnified for anything done by them or any of their officers in pursuance of this provision against any claim or demand of any person injuriously affected thereby. 32. A person under the age of twenty-one but above the age of sixteen may be a member of a registered society, unless provision be made in the rules thereof to the contrary, and may, subject to the rules of the society, enjoy aU the rights of a member (except as by this Act provided), and execute aU instruments and give all acquittances necessary to be executed or given under the rules, but shall not be a member of the committee, trustee, manager or treasurer of the society. 33. A promissory note or bill of exchange shall be deemed to have been made, accepted, or endorsed on behalf of any society if made, accepted, or endorsed in the name of the society, or by or on behalf or on account of the society, by any person acting under the authority of the society. 34. Iny register or list of members or shares kept by any society shall be primd faoie evidence of any of the following particulars entered therein : — (0) The names, addresses, and occupations of the members, the number of shares held by them respectively, the numbers of such shares, if they are distinguished by numbers, and the amount paid or agreed to be considered as paid on any such shares ; (i) The date at which the name of any person, company, or society was entered in such register or list as a member ; (e) The date at which any such person, company, or society ceased to be a member. * * * * # * Property and Funds of Registered Society. 36. A registered society may (if its rules do not direct otherwise) hold, purchase, or take on lease in its own name any land, and may sell, exchange, mortgage, lease, or build upon the same, or grant bonds and dispositions on security or other heritable securities over the same. * * ■x- ■» % 38. (1) A registered society may invest any part of its.capital in or upon any seciirity authorised -by its rules, and also, it the rules do not direct otherwise — {a) in or upon any security in which trustees are, for the time being, authorised by law to invest ; and (J) in or upon any mortgage, bond, debenture, debenture stock, corporation stock, annuity, rent charge, rent, or other security (not being securities payable to bearer) authorised by or under any Act of Parliament passed or to be passed of any local authority as defined by section thirty-four of the Local Loans Act, 1875 ; and (tf) in the shares or on the security of any other society registered or deemed to be registered under this Act, or under the Building Societies Acts, or of any company registered under the Companies Acts or incorporated by Act of Parliament or by charter, provided that no such investment be made in the shares of any society or company other than one with limited liability. (2) A society so investing shall be deemed to be a person within the meaning of the Companies Acts, and of the Building Societies Acts. (3) Any investments made before the passing of this Act, which would have been valid if this Act had then been in force, are hereby ratified and confirmed. 39. A society (not being one chargeable with income tax in pursuance of this Act) may invest its "Capital and funds, or any part thereof to any amount, in any savings bank certified under the Trustee Savings Banks Act, 1863, or in a post office savings bank. 40. The rules of a registered society may provide for advances of money to members on the security ^f real or personal property, or in the case of a society registered to carry on banking business in any manner customary in the conduct of such business. 41. A registered society which has invested any part of its capital in^the shares or on the security -of any other body corporate may appoint as proxy any one of its members although such member is not personally a shareholder of such other body corporate. The proxy shall, during the continuance of his appointment, be taken in virtue thereof as holding the number of shares held by the society by whom he is appointed for all purposes except the transfer of any such shares, or the giving receipts for any ■dividends thereon. 42. Any other body corporate may, if its regulations permit, hold shares by its corporate name in -a registered society. Discharge of Mortgages ly Receipt endorsed. 43. In England and Ireland — (1) A receipt in fuU, signed by two members of the committee, and countersigned by the secre- tary, of a registered society, for aU. moneys secured to the society on the security of any property to which such receipt relates, and being in the Form A. in the Third Schedule to this Act, or in any other form specified in the rules of the society or any schedule thereto, if endorsed on or annexed to any mortgage or assurance, shall vacate the same and vest the property therein comprised in the person entitled to the equity of redemption thei^eo£ without any formal re-conveyance or surrender. 152 (2) If such, mortgage or other assurance has been registered under any Act for the registralioQ or record of deeds or titles, or is of copyholds or lands of customary tenure, and is entered on any court rolls, the registrar under such Act, or recording officer, or steward of the manor, or keeper of the register, shall, on production of such receipt verified by oath or statutory declaration of any person, enter satisfaction on the register or on the court rolls respectitely of such mortgage or of the charge made by such assurance, and shall grant a certificate, either upon such mortgage or assurance, or separately to the like effect, which certificate shall be deceived in evidence in all courts and proceedings without further proOf ; and such registrar, recording officer, steward, or keeper of the register shall be entitled, for making the said entry and granting the said certificate, to a fee of two shillings and six pence, which in Ireland shall be paid by stamps alid aj)plied in accordance with the PubliiB Offices Fees Act, 1879. 45. Where a registered society is in liquidation, the signature to such a receipt as aforesaid of the liquidator or liqtiidators for the time beilig, described as such, shall have the same effect, and shall be entitled to the same exemption from stamp duty, as would under this Act attach to a similar receipt signed as aforesaid if the society were not in liquidation. 46. (1) Any deed or writ to which any registered society is a party shall be held to be duly executed on behalf of such society in Scotland if it is either executed in conformity with the present lAw thereof or is sealed with the common seal of the society, subscribed on its behalf by two members of the committee* and the secretary of the society, whether such subscription is attested by witnesses or not. \ (2) On payment of all moneys intended to be secured to a society by any of the aforesaid securities, the debtor or his successor or representatives shall be entitled to a receipt in the appropriate form provided by this Act. Officers in receyot of charge of Money. 47. Every officer of a registered society having receipt or charge of money, if the rxdes of the society require, shall, before taking upon himself the execution of his office, become bound, either with or without a surety as the committee may require, in a bond according to one of the forms set forth in the Third Schedule to this Act, or such other form as the committee of the society approve, or give the secTrrity of a guarantee society, in such sum as the committee directs, conditioned for his rendering a just and true account of all moneys received and paid by him on account of the society at such times as its rules appoint, or as the society or the committee thereof require him to do, and for the payment by him of all sums due from him to the society. 48. (1) Every officer of a registered society having receipt or charge of money, or his executors or administrators, shall, at such times as by the rules of the society he should render account, or upon demand made, or notice in writing given or left at his last or usual place of residence, give in his account as may be required by the society, or by the committee thereof, to be examined and" allowed or disallowed by them, and shall, on the like demand or notice, pay over all moneys and deliver all property for the time being in his hands or custody to such person as the society or the committee i appoint ; and in case of any neglect or refusal to deliver such account, or to pay over such moneys or to deliver stick property in manner aforesaid, the society may sue upon the bond or security before mentioned, or may apply to the county court (which may proceed in a summary way), or to a court of summary jurisdiction, and the order of either such court shall be final and conclusive. (2) This section shall apply to every servant of a registered society in receipt or charge of money in every case where he is not engaged under a special agreement to account. Disputes. 49. (1) Every dispute between a member of a registered society, or any person aggrieved who has for not more than six months ceased to be a member of a registered society, or any person claiming through such member or person aggrieved, or claiming under the rules of a registered society, and the society or an officer thereof, shall be decided in manner directed by the rules of the society, if they contain any such direction, and the decision so made shall be binding and conclusive on all parties without appeal, and shall not be removable' into any court of law or restrainable by injunction ; and application for the enforcement thereof may be made to the county court. (2) The parties to a dispute in a society may, by cotisent (unless the rules of such society expressly forbid it), refer such dispute to the chief registrar, or to the assistant registrar in Scotland or Ireland, who shall, with the consent of the Treastiry, either by himself or by any other registrar, hear and determine such dispute, and shall have power to order the expenses of determining the same to be paid either out of the funds of the society or by such parties to the dispute as he shall think fit, and such determination and order shall haVe the same effect and be enforceable in like manner as a decision made in the manner directed by the rules of the society. (3) The chief or other registrar to whom any dispute is referred may administer oaths, and may require the attendance of all parties concerned and of witnesses, and the production of all books and documents relating to the matter in question ; and any person refusing to attend, or to produce any documents, or to give evidence before such chief or other registrar, shall be guilty of an offence under this Act. (4) Where the rules of a society direct that disputes shall be referred to justices, the dispute shall be determined by a court of summary jurisdiction : Provided that iA eV6ry case of dispute cognisable Ubder the rules of a society by a court of sum- mary jurisdiotittil, it shall be lawful for the JpaWies thei'eto to enter into a con'sent referring such dispute to the County court, which may hear aad determine the matter in dispute. (5) Where the rules contain no direction as to disputes, or where no decision is made on a dispute withitt forty days afterapplieatioii to the society for a reference under its rules, the member or person aggrieved taay apply either to the county court, or to a court of sumtoary jurisdiction, which may hear and determine the matter in dispute. 153 (6) Notwithstanding anything contained in the Arbitration Act, 1889, or in any other Act, the court and the chief or other registrar shall not be compelled to state a special case on any question of law arising in the case, but the court or chief or other registrar, may, at the request of either party, state a case for the opinion in England or Ireland of the Supreme Court of Judicature, and in Scotland of either division of the Inner House of the Court of Session, on any question of law, and may also grant to either party such discovery as to documents and otherwise, or such inspection of documents, and in Scotland may grant such warrant for the recovery of documents and examination of havers, as might be granted by any court of law or equity ; such discovery to be made on behalf of the society by such officer of the same as such court or registrar may determine. Inspection of Affairs, 50. (1) Upon the application of one-tenth of the whole number of members of a registered society, or of one hundred members in the case of a society exceeding one thousand members, the chief regis- trar, or, in the case of societies registered and doing business exclusively in Scotland or Ireland, the assistant registrar for Scotland or Ireland respectively, but with the consent of the Treasury in every case, may — (a) appoint an inspector or inspectors to examine into and report on- the affairs of such society ; or {l) call a special meeting of the society. (2) The application under this section shall be supported by such evidence, for the purpose of showing that the applicants have good reason for requiring such inspection to be made or meeting to be called, and that they are not actuated by malicious motives in their application, and such notice thereof shall be given to the society, as the chief registrar shall direct. (3) The chief registrar or such assistant registrar may, if he think fit, require the applicants to give security for the costs of the proposed inspection or meeting before appointing any inspector or calling such meeting. (4) All expenses of and incidental to any such inspection or meeting shall be defrayed by the members applying for the same, or out of the funds of the society, or by the members or officers, or former members or officers, of the society in such proportions as the chief registrar or such assistant registrar shall direct. (5) An inspector appointed under this section may require the production of all or any of the books, accounts, securities, and documents of the society, and may examine on oath its officers, members, agents, and servants in relation to its business, and may administer an oath accordingly. (6) The chief registrar or such assistant registrar may,direct at what time and place a special meeting under this section is to be held, and what matters are to be; discussed and determined at the m.eeting, and the meeting shall have all the powers of a meeting called according to the rules of the society, and shall in all cases have power to appoint its own chairman, any rule of the society to ths contrary notwithstanding. Change of Name : Amalgamation : Conversion. 51. For the purposes of this Act a special resolution shall mean a resolution which is — (a) passed by a majority of not less than three-fourths of such members of a registered society for the time being entitled under the rules to vote as may have voted in person, or by prosy where the rules allow proxies, at any general meeting of which notice, specifying . the intention to propose the resolutions, has been duly given according to the rules ; and (5) confirmed by a majority of such members for the time being entitled under the rules to vote as may have voted in person, or by proxy where the rules allow proxies, at a subsequent general meeting of which notice has been duly given, held not less than fourteen days nor more than one month from the day of the meeting at which^ such resolution was first passed. At any meeting mentioned in this section a declaration by the chairman that the resolution has been carried shall be deemed conclusive evidence of the fact. 52. A registered society may, by special resolution, with the approval in writing of the chief registrar, or, in the case of societies registered and doing business exclusively in Scotland or Ireland, the assistant registrar for Scotland or Ireland respectively, change its name ; but no such change shall affect any right or obligation of the society, or of any member thereof, and any pending legal proceedings may be continued by or against the society notwithstanding its new name. 53. (1) Any two or more registered societies may, by special resolution of both or all such socie- ties, become amalgamated together as one society, with or without any dissolution or division of the funds of such societies or either of them, and the property of suqh societies shall become vested in the amalgamated society without the necessity of any form of conveyance other than that contained in the special resolution amalgamating the societies. (2) Any registered society may by special resolution transfer its engagements to any other registered society which may undertake to fulfil the engagements of such society. 54. (1) A registered society may by special resolution determine to convert itself into a company imder the Companies Acts, or to amalgamate with or transfer its engagements to any such company. (2) If a special resolution for converting a registered society into a company contains the particulars by the Companies Acts required to be contained in the memorandum of association of a company, and a copy thereof has been registered at the central office, a copy of such resolution under the seal or stamp of the central office shaU have the same effect as a memorandum of association duly signed and attested under the said Act. (3) If a registered society is registered as, or amalgamates with, or transfers all its engage- ments to, a company, the registry of such society under this Act shall thereupon become void, and the .same shall be cancelled by the chief registrar or by the assistant registrar ion Scotland or Ireland II 39 154 under hia direction ; but the registration of a society as a company shall not affect any right or claim for the time being subsisting against such society, or any penalty for the time being incurred by such society ; and, for the purpose of enforcing any such right, claim, or penalty, the society may be sued and proceeded against in the same manner as if it had not become registered as a company ; and ■ eTery such right or claim, or the liability to such penalty, shall have priority, as against the property of such company, over all other rights or claims against or liabilities of such company. 55. (1) A company registered under the Companies Acts may, by a special resolution, determine to convert itself into a registered society, and, for this purpose, in any case where the nominal value of its shares held by any member other than a registered society exceeds two hundred pounds, may, by such resolution, provide for the conversion of the excess of such share capital over two hundred pounds into a transferable loan stock bearing such rate of interest as may thereby be fixed, and repayable on such conditions only as are in such resolution determined. (2) A resolution for the conversion of a company into a registered society shall be accompanied by a copy of the rules of the society therein referred to, and shall appoint seven persons, members of the company, who, together with the secretary, shall sign the rules, and who may either be authorised to accept any alterations made by the registrar therein, without further consulting the company, or may be required to lay all such alterations before the company in general meeting for acceptance as the resolution may direct. (3) With the rules a copy of the special resolution for conversion of the company into a regis- tered society shall be sent to the registrar, who, upon the registration of the society, shall give to it, in addition to the acknowledgment of registry, a certificate similarly sealed or signed that the rules of the society referred to in fiie resolution have been registered, but in the registered name of the company as a society the word ' company ' shall not be used. (4) A copy of the resolution for the conversion of the company into a registered society under the seal of the company, together with the certificate so issued by the registrar, shall be sent for registration to the office of the Eegistrar of Joint Stock Companies, and, upon the registration of such resolution and certificate, the conversion shall take effect. (5) Upon the conversion of a company into a registered society the registry of the company under the Companies A.Qts shall become void, and shall be cancelled by the Eegistrar of Joint Stock Companies ; but the registration of a company as a registered society shall not affect any right or <;laim. for the time being subsisting against the company, or any penalty for the time being incurred by such company, and, for the purpose of enforcing any such right, claim, or penalty, the company may be sued and proceeded against in the same manner as if it had not become registered as a society. And every such right or claim, and the liability to such penalty, shall have priority as against the property of such society over all other rights or claims against or liabilities of the society. 56. A copy of every special resolution for any of the purposes mentioned in this Act, signed by the chairman of the meeting at which the resolution was confirmed, and countersigned by the secretary of the society, shall be sent to the central office and registered there, and imtil that copy is so regis- tered the special resolution shall not take effect. 57. An amalgamation or transfer of engagements in pursuance of this Act shall not prejudice any right of a creditor of any registered society party thereto. Biiiolution of Societiet. i8. A registered society may be dissolved — («) by an order to wind up the society, or a resolution for the winding up thereof, jnade as is directed in regard to companies by the Companies Acts, 1862 to 1890, the provisions whereof shall apply to any such order or resolution, except that the term ' registrar ' shall for the purpose of such winding up have the meaning given to it by this Act ; or (J) by the consent of three fourths of the members, testified by their signatures to an instru- ment of dissolution. 59. Any proceedings in the winding up of a registered society which at the passing of this Act are pending in any county court may, on application made by or on behalf of the registrar, with the consent of the Treasury, be transferred to the High Court, and thereupon the Companies (Winding- up) Act, 1890, shall, so far as applicable, apply thereto accordingly. 60. Where a registered society is wound up in pursuance of an order or resolution the liability of a present or past member of the society to contribute for payment of the debts and liabilities of the society, the expenses of winding up, and the adjustment of the rights of contributories amongst themselves, shall be qualified as follows : — {a) No individual, society, or company, who or which has ceased to be a member for one year or upwards prior to the commencement of the winding up, shall be liable to contribute ; (J) No individual, society, or company shall be liable to contribute in respect of any debt or liability contracted after he or it ceased to be a member ; [o) No individual, society, or company, not a member, shall be liable to contribute, unless it appears to the court that the contributions of the existing members are insufficient to satisfy the just demands on the society ; (i) No contribution shall be required from any individual, society, or company exceeding the amount, if any, unpaid on the shares in respect of which he or it is liable as a past or present member ; (e) An individual, society, or company shaU. betaken to have ceased to be a member, in respect of any withdrawable share withdrawn, from the date of the notice or application for withdrawal. 61. Where a society is terminated by an instrument of dissolution : — {a) The instrument of dissolution shall set forth the liabilities and assets of the society in detail the number of members and the nature of their interests in the society respectively, the claims of creditors (if any) and the provisions to be made for their payment, and. 155. the intended appropriation or division of the funds and property of the society, unless the same be stated in the instrument of dissolution to be left to the award of the chief registrar ; (i) Alterations in the instrument of dissolution may be made -«ith the like consents as herein- before provided, and testified in the same manner ; (e) A statutory declaration shall be made by three members and the secretary of the society that the provisions of this Act have been complied with, and shall be sent to the registrar with the instrument of dissolution ; and any person knowingly making a false or fraudu- lent declaration in the matter shaJl be guilty of a misdemeanor ; (rf) The instrument of dissolution and all alterations therein shall be registered in the manner herein provided for the registry of rules, and shall b(! binding upon aU the members of the society ; («) The registrar shall cause a notice of the dissolution to be advertised at the expense of the society in the Gazette and in some newspaper circulating in or about the locality in which the registered oflB.ce of the society is situated ; and unless, within three months from the date of the Gazette in which such advertisement appears, a member or other person inter- ested in or having any claim on the funds of the society commences proceedings to set aside the dissolution of the society in the county court of the district where the registered oflice of the society is situate, and such dissolution is set aside accordingly, the society shall be legally dissolved from the date of such advertisement, and the requisite consents to the instrument of dissolution shall be considered to have been duly obtained without proof of the signatures thereto. {/) Notice shall be sent to the central office of any proceeding to set aside the dissolution of a society, not less than seven days before it is commenced, by the person by whom it is taken, or of any order setting it aside, within seven days after it is made by the society. Ofieneet, Penalties, and Legal Proceedings. 62. It shall be an offence under this Act if any registered society — (1) fails to gfive any notice, send any return or document, or do or allow to be done any act or thing which the society is by this Act required to give, send, do, or allow to be done ; or (2) wilfully neglects or refuses to do any act or to furnish any information required for the purposes of this Act by tJie chief or any other registrar or other person authorised under this Act, or does any act or thing forbidden by this Act ; or (3) makes a return or wilfully furnishes information in any respect false or insufficient ; or (4) carries on the business of banking when it has any witfidrawable share capital, or in carry- ing on such business does not make out and keep conspicuously hung up such statement as is hereinbefore required, or makes any payment of withdrawable capital contrary to the provisions of this Act. 63. Every offence by a society under this Act shall be deemed to have been also committed by ■every officer of the same bound by the rules thereof ,to fulfil the duty whereof such offence is a breach, or, if there be no such officer, then by every member of the committee of the same, unless such Ba.eia[iber be proved to have been ignorant of or to have attempted to prevent the commission of such •flFence ; and every act or default under this Act constituting an offence, if continued, shall constitute a new offence in every week during which the same continues. ***** 65. If any person wUfuUy makes, orders, or allows to be made any entry or erasure in, or Omission from, any balance sheet of a registered society, or any contribution or collecting book, or any return or document required to be sent, produced, or delivered for the purposes of this Act^ -with intent to falsify the same, or to evade any of the provisions of this Act, he shall be Hable to a fine not exceeding fifty pounds. 66. If any officer of a registered society, or any person on its behalf, uses any seal purporting to be a seal of the society, whereon its name is not so engraved as aforesaid, or issues or authorises the issue of any notice, advertisement, or other official publication of the society, or signs or authorises to be signed on behalf of the society any bill of exchange, promissory note, endorsement, cheque, order for money or goods, or issues or authorises to be issued any bills of parcels, invoice, receipt, or letters of credit of the society, wherein its name is not mentioned in manner aforesaid, he shall be liable to a fine not exceeding fifty pounds, and shall further be personally liable to the holder of any such bill of exchange, promissory note, cheque, or order for money or goods for the amount thereof unless the game is duly paid by the society. 67. It shall be an offence under this Act if any person, with intent to mislead or defraud, gives to any other person a copy of any rules, other than the rules for the time being registered under this Act, on the pretence that the same are existing rules of a registered society, or that there are no other rules of such society, or gives to any person a copy of any rules on the pretence that such rules are the rules of a registered society when the society is not registered. 68. Every society, officer or member of a society, or other person, guilty of an offence under this Act, for which no penalty is expressly provided herein, shall be liable to a fine not exceeding five pounds. 69. (1) Every fine imposed or to be imposed by this Act, or by any regulations under this Act^ or by the rules of a registered society, shall be recoverable summarily. (2) Any such fine, if imposed by this Act or by any regulations thereunder, shall be recoverable at the suit of the chief registrar, or of any assistant registrar, or of any person aggrieved, and, if imposed by the rules of a registered society, shall be recoverable at the suit of the society. 70. (1) In England or Ireland any party may appeal to quarter sessions from any order or conviction made by a court of summary jurisdiction under this Act. (2) In Scotland any person may appeal from any order or conviction under this Act in. -accordance with the provisions of the Summary Jurisdiction (Scotland) Acts. 156 Supplemental. 71. The registrar and high bailiffs of the county courts shall be remunerated for the duties to be- ■perf ormed by them under this Act in such manner as the Treasury, with the consent of the Lord Chancellor, from time to time order and direct. 72. The Treasury may appoint public auditors for the purposes of this Act, and may determine the- rates of remuneration to be paid by ^registered societies for the services of such auditors, but the employment of such auditors shall not be compulsory. 73. (1) Thf' Treasury may determine a scale of fees to be paid for matters to be transacted or for the inspection of documents under this Act. (2) All fees received by any registrar under or by virtue of this Act shall be paid into the Exchequer. 74. (1) The Treasury may make regulations respecting registry and procedure under this Act, and the forms to be used for such registry, and the duties and functions of the registrar, and the inspection of documents kept by the registrar under this Act, and generally for carrying this Act into effect. (2) All such regulations shall be laid before both Houses of Parliament within ten days after the making thereof if Parliament is then sitting, or, if not then sitting, then within ten days from the then next assembling of Parliament. (3) Until otherwise provided by such regulations, the forms contained in the Fourth Schedule to this Act shall be used. 75. Every copy of rules or other instrument or document, copy or extract of an instrument or document, bearing the seal or stamp of the central office, shall be received in evidence without further proof ; and every document purporting to be signed by the chief or any assistant registrar, or any inspector or public auditor under this Act, shall, in the absence of any evidence to the contrary, be received in evidence without proof of the signature. 76. Sub-sections six, seven, eight, and nine of section ten of the Friendly Societies Act, 1875, relat- ing to the duties of the chief registrar and assistant registrars, shall, so far as the same are applicable to industrial and provident societies, be incorporated with this Act. * * « * * 79. In this Act, if not inconsistent with the context, the following terms shall have the meanings hereinafter respectively assigned to them : — "The registrar" shall mean, for England, the central office established by the Friendly Societies Act, 1875, and, for Scotland or Ireland, the assistant registrar of friendly societies for either country respectively; "the central office" shall mean the central office so established; and " chief registrar " and " assistant registrar " shall mean chief registrar and assistant registrar of friendly societies respectively ; "Land" shall include hereditaments and chattels real, and in Scotland heritable subjects, of whatever description ; " Property " shall include all real and personal estate (including books and papers) ; " Registered society" shall mean a society registered or deemed to be registered under thie Act ; " Amendment of rule " shall include a new rule, and a resolution rescinding a rule ; . " Eules " shall mean the registered rules for the time being, and shall include any registered amendment of rules ; "The committee" shall mean the committee of management or other directing body of a society ; "Persons claiming through a member " shall include the heirs, executors, or administrators, and assigns of a member, and also his nominees where nomination is allowed ; " Officer " shall extend to any treasurer, secretary, member of the committee, manager, or servant, other than a servant appointed by the committee, of a society ; "Meeting" shall include (where the rules of a society so allow) a meeting of delegates appointed by members ; " Office " shall mean the registered office for the time being of a society ; " County court" shall mean, for Scotland, the sheriff court of the county, and, for Scotland "probate or letters of administration" shall mean coniirmation in cases of testate suc- cession, and testament dative in cases of intestate succession ; " Gazette " shall mean the ' London Gazette ' for England, the ' Edinburgh Gazette ' for Scotland and the ' Dublin Gazette ' for Ireland. 80. The enactments specified in 'the First Schedule hereto are hereby repealed to the extent appearing in the third column of that schedule. SCHEDULE I. Enactments Repealed. Section 80. Session and Chapter. Short Title. Extent of Repeal. 39 & 40 Vict., c. 45 4.S Viot., L-. 14 ... 40 & 47 Vict., c. 47, The Industrial and Provident Societies Act, 1876. The Customs and Inland Revenue Act, 1880. The Provident Nominations and Small Intestacies Act, 1883. The whole Act. Section 8. So much as relates to in- dustrial and provident societies. 157 SCHEDULE II. Masters to be teovided tor by the Ruxes of Societies Eeqisterbd under this Act. Section IQ. 1. Object, name, and registered office of the society. 2. Terms of admission of the members, including any society or company investing funds in the society under th* provisions of this Act. 3. Mode of holding meetings, scale and right of voting, and of making, altering, or rescinding rules. 4. The appointment and removal of a committee of management, by whatever name, of managers or other officers, and their respective powers and remuneration. 5. Determination of the amount of interest, not exceeding two hundred pounds sterling, in the shares of th» •ooiety which any member other than a registered society may hold. 6. Determination whether the society may contract loans or receive money on deposit subject to the provisions of this Act from members or others ; and, if so, under what conditions, on what security, and to what limits of amount. 7. Determination whether the shares or any of them shall be transferable ; and provision for the form of transfer and registration of the shares, and for the consent of the committee thereto ; determination whether the shares or any of them shall be withdrawable, and provision for the mode of withdrawal and for payment of the balance due thereon on withdrawing from the society. 8. Provision for the audit of accounts and for the appointment of auditors or a public auditor. 9. Determination whether and how members may withdraw from the society, and provision for the claims of the representatives of deceased members, or the trustees of the property of bankrupt members, and for the payment of ■ominees. 10. Mode of application of profits. 11. Provisions for the custody and use of the seal of the society. 12. Determination whether, and by what authority, and in what manner, any part of the capital may ba invested. SCHEDULE III. FoBM OF Statement to be made out bt a Society cakeying on the business of Banking, Sections 19, 43, 44, 47. 1. Capital of the society — (a) Nominal amount of each share ; (b) Number of shares issued ; (c) Amount paid up on shares. 2. Liabilities of the society on the first day of January (or July) last previous — (a) On judgments ; (b) On specialty ; (c) On notes or bUls ; (d) On simple contract ; (e) On estimated liabilities. 3. Assets of the society on the same date — (a) Government or other securities (stating them) ; (b) BUls of exchange and promissory notes ; (c) Cash at the bankers ; (d) Other securities. FRIENDLY SOCIETIES.* [38 & 39 Vict., Oh. 60.] Aekangembnt of Sections. Section . 1. Short title of Act. 2. CommeBcoment of Act, 3. Extent of Act. 4. Definitions. 6. As to existing societies. 8. Classes of societies. 9. Limited application of Act. 10. The registry office. 11. Registry of societies. 12. CanceUing and suspension of registry. 13. Rules and amendments. 14. Duties and obligations of societies. ♦ See Vol. I, pp. 185-87. 40 158 15. Privilegee of societies. 16. Property and funds of societies. 17. Investments with National Debt Commissioners. 18. Loans to members. 19. Accumulating surplus of contributions for member's use. 20. Officers in receipt or charge of money. 21. Legal proceedings. 22. Disputes. 23. Special powers of registrars to be exercised on application from m.emberB. 24. Special resolutions and proceedings which may be taken thereon. 25. Dissolution of societies. 26. Militiamen and volunteers not to lose benefits. 27. Limitations of benefits. 28. Payments on death of children. 29. Societies with branches. 29a. Conversion of registered societies into branches. 29b. Registered societies may contribute to funds of other societies. 29c. Forms of acknowledgment of registry for branches. 30. Societies, &c., receiving contributions by collectors. 31. As to cattle insurance and certain other societies. 32. Penalties. 33. Summary procedure and appeals. 34. Regulation of proceedings in county courts. 35. Public auditors. 36. Pees. 36a. Amendment in fees payable on certificates of births or deaths. 37. Payment of salaries and expenses. 38. Regulations to be made for carrying out the Act. 39. Evidence of documents. 40. Application of Act to Isle of Man, 41. Application of Act to Channel Islands. Schedules. Appbwdix. Chapter 60. An Att to eomoUdate and amend the Law rilating to Friendly and other Societies.* [11th August 1875. ] ***** 1. This Act may be cited as The Friendly Societies Act, 1875. ***** 8. The following societies may be registered under this Act, viz. — (1) Societies (herein called friendly societies) established to provide by voluntary subscriptions of the members thereof, with or without the aid of donations — For the relief or maintenance of the members, their husbands, wives, children, fathers, mothers, brothers, or sisters, nephews or nieces, or wards being orphans, during sickness or other infirmity, whether bodily or mental, in old age (which shall mean any age after fifty) or in widowhood, or for the relief or maintenance of the orphan children of members during minority ; For insuring money to be paid on the birth of a member's child, or on the death of a member, or for the funeral expenses of the husband, wife, or child of a member, or of the widow of a deceased member, or, as respects persons of the Jewish persuasion, for the payment of a sum of money during the period of confined mourning ; For the relief or maintenance of the members when on travel in search of employment, or when in distressed circumstances, or in case of shipwreck, or loss or damage of or to boats or nets ; For the endowment of members or nominees of members at any age ; For the insurance against five to any amount not exceeding fifteen pounds of the tools or implements of the trade or calling of the members ; Provided that no society (except as aforesaid) which contracts with any person for the assur- ance of an annuity exceeding fifty pounds per annum, or of a gross sum exceeding two hundred pounds, shall be registered under this Act : ***** (2) Societies (herein called cattle insurance societies) for the insurance to any amount against loss l)y death of neat cattle, sheep, lamps, swine, and horses from disease or otherwise : (3) Societies for any benevolent or charitable purpose (herein called benevolent societies) : (4) Societies (herein called working men's clubs) for purposes of social intercourse, mutual helpfulness, mental and moral improvement, and rational recreation : (5) Societies for any purpose which the Treasury may authorise as a purpose to which the powers and facilities of this Act ought to be extended (herein called " specially authorised societies "). * The text of this Act is printed as modified according to the Amendment Act of 1887. Only such sections as are relevant to the present stndy are here printed. A new Act is shortly to be passed. 169 9. The Treasury may limit the application of this Act, as respects specially authorised societies^ to such of the provisions herein contained as may be specified in the authority for registering any such ■society. 10. With respect to the registry oihcp, the following provisions shall have effect: — (1) There shall be a chief registrar of frieijdly societies (herein termed "the chief registrar "), and one or more assistant registrars of friendly societies for England (herein termed ' ' assistant regis- trars for England "), and such chief registrar and assistant registrars for England shall constitute the central office after mentioned. There shall be an assistant registrar of friendly societies for Scotland (herein termed " assistant registrar for Scotland "), and an assistant registrar of friendly societies for Ireland Cherein termed "assistant registrar for Ireland "). (2) Every chief registrar and assistant registrar shall be appointed by and shall hold his office •during the pleasure of the Treasury. (3) Every chief registrar shall be a barrister of not less than twelve years standing, and one at least of the assistant registrars for England, and every assistant registrar for Ireland shall be a barrister oi solicitor of not less than seven years' standing, and every assistant registrar for Scotland an advocate, writer to the signet, or solicitor of not less than seven years' standing. The central office may also, with the approval of the Treasury, have attached to it such assistants skilled in the business of an actuary and an accountant as shall from time to time be required for discharging the duties imposed on the office by this Act. (4) The central office shall exercise all the functions and powers which are now by law vested in the registrar of friendly societies or the registrar of building societies for England, or as respects loan societies, building societies, and societies instituted for purposes of science, literature, or the fine *rts, in the barrister appointed to certify the rules of savings banks or friendly societies, and shall be entitled to receive all statutory fees payable to such registrar or barrister, and all enactments relating to such registrar or barrister, so far as respects such societies as aforesaid, shall be construed as apply- ing to the central office. (5) The central office shall, with the approval of the Treasury, from time to time — (a) prepare and cause to be circulated, for the use of societies, model forms of accounts, balance sheets, and valuations : (5) collect from the returns under this Act and from other sources, and publish and circu- late, either generally or in any particular district, or otherwise make known such inform- ation on the subject of the statistics of life and sickness, and the application thereof to the business of friendly societies, and from time to time publish generally or in particular districts such particulars of their returns and valuations, and such other information useful to the members of or to persons interested in friendly or other societies registered or whidh might be registered under this Act, as the chief registrar shall from time to time think fit : (e) cause to be constructed and published tables for the payment of sums of money on death, in sickness, or old age, or on any other contingency forming the subject of an assurance authorised under this Act which may appear to be calculable : Provided, nevertheless, that the adoption of such tables by any society shall be optional. (6) The chief registrar shall every year lay before Parliament a report of his proceedings and -ot those of the assistant registrars, and of the principal matters transacted by him and them and of the valuations returned to or caused to be made by the registrar during the year preceding. (7) The assistant registrars shall, except as after provided, be subordinate to the chief registrar. They shaU, within the countries for which they are respectively appointed, exercise all functions and powers by this Act given to the registrar, and may also, by the written authority of the chief registrar, exercise such of the functions and powers by this Act given to the chief registrar as he shall from time to time delegate to them, (8) Subject to any regulations to be made under this Act, the assistant registrars for Scotland t-and Ireland respectively shall — (a) exercise all the functions and powers now vested in the registrars of friendly or building societies for Scotland and Ireland respectively, or as respects building societies and societies instituted for purposes of science, literature, or the fine arts, vested in Scotland in the Lord Advocate or his depute appointed to certify the rules of friendly societies there, or in Ireland in the barrister appointed to certify the rules of friendly societies there, and shall be entitled to receive aU fees payable to such registrar. Lord Advocate or his depute, or barrister respectively, and so that all provisions in any Acts of Parlia- ment not hereby repealed relating to such registrar, Lord Advocate or his depute, or barrister respectively, shall be construed as applying to such assistant registrars respectively : (b) send to the central office copies of all such documents registered or recorded by them as the chief registrar shall from time to time direct : (c) record all such documents and matters as shall be sent to them for record from the central office, and such other documents and matters as herein provided : (d) circulate and publish, or transmit to or from societies registered within their respective countries, from or to the central office, such information and documents relating to th& purposes of this Act as the chief registrar, with the approval of the Treasury, shall from time to time direct : (e) report from time to time their proceedings to the chief registrar as he shaU direct. (9) No assistant registrar for Scotland or Ireland shall refuse to record any rules or amend- ments of rides which have been registered by the central office. 11. With respect to the registry of societies, the following provisions shall have effect : — (1) No society can be registered under this Act which does not consist of seven persons at least. (2) Eor the purpose of registry an application to register the society, signed by seven members. 160 and the secretary, and written or printed copies of the rules, together with a list of the names of the secretary and of every trustee or other ofaoer authorised to sue and be sued on behalf of the society, shall be sent to the registrar. (3) No society shall be registered under a name identical with that under which any other existing society is registered, or so nearly resembling such name as to be likely, or m any name likely, in the opinion of the registrar, to deceive the members or the public as to its nature or its identity, and no society shall change its name without the sanction of the chief or an assistant regis- trar as after provided. I J- i-ii ^ (4) A society (other than a benevolent society or working men's club) shall not, be disentitled to registry by reason of any rule for or practice of dividing any part of the funds thereof if the rules thereof contain distinct provision for meeting all claims upon the society existing at the time of division before any such division takes j)lace. (5) No society assuring to any member a certain annuity shaU be entitled to registry, unless the tables of contributions for such assurance, certified by the actuary to the Commissioners for the Reduction of the National Debt, or by some actuary approved by the Treasury, who has exercised the profession of actuary for at least five years, be sent to the registrar with the application for re^stry. (6) Societies carrying or intending to carry on business in more than one country shall be registered in the country in which their registered office, as herein mentioned, is situate ; but copies of the rules of such societies, and of all amendments of the same, shall, when registered, be sent to the registrar of each of the other countries, to be recorded by him ; and until such rules be so recorded the society shall not be entitled to any of the privileges of this Act in the country in which such rules have not been recorded, and until such amendments of rules be recorded the same shall not take effect in such country. (7) The registrar, on being satisfied that a society has complied with the .provisions as to registry in force under this Act, shall issue to such society an acknowledgment of registry, which shall specify the designation of the society, according to the classification herein set forth. (8) If any registrar refuse to register the society or any rules, the society may appeal from such refusal, as follows : — (a) If the assistant registrar for Ireland refuse to register, to the Court of Queen's Bench at Dublin : (b) If the assistant registrar for Scotland refuse to register, to the Court of Session : (c) If the central office or the chief registrar refuse to register, to the Court of Queen's Bench in England : (d) Either division of the Inner House of the Court of Session, the Court of Queen's Bench at DiibUn, and the Judges of the Court of Queen's Bench in England respectively, may make rules or orders as to the form of appeals and the trying thereof and otherwise relating thereto. (9) If the refusal of registry be overruled on appeal, an acknowledgment of registry shall thereupon be given to the society by the registrar. (10) The acknowledgment of registry shall be conclusive evidence that the society therein men- tioned is duly registered, unless it be proved that the registry of the society has been suspended or cancelled. 12. With respect to the cancelling or suspension of registry the following provisions shall have effect : — (1) The chief registrar, or in the case of societies registered and doing business in Ireland or Scotland exclusively, the assistant registrar for Ireland or Scotland respectively, may cancel the registry of a society by writing under his hand, — (a) If he thinks fit, at the request of a society, to be evidenced in such manner as he shall from time to time direct : (S) With the approval of the Treasury, on proof to his satisfaction that an acknowledgment of registry has been obtained by fraud or mistake, or that a society exists for an illegal purpose, or has wilfully and after notice from a registrar whom it may concern violated any of the provisions of this Act, or has ceased to exist. (2) The chief or assistant registrar, in any case in which he might, with the approval of the Treasury, cancel the registry of a society, may suspend the same, by vnriting under his hand, for any term not exceeding three months, and may, with the approval of the Treasury, renew such suspension from time to time for the like period. (3) Not less than two months previous notice in writing, specifying briefly the ground of any proposed cancelling or suspension of registry, shall be given by the chief or assistant registrar to a society before the registry of the same can be cancelled (except at its request) or suspended ; and notice of every cancelling or suspension shall be published in the Gazette, and in some newspaper circulating in the county in which the registered office of the society is situated, as soon as practi- cable after the same takes place. (4) A society may appeal from the cancelling of its registry, or from any suspension of the same which is renewed after six months, in manner herein provided for appeals from the chief regis- trar's or the registrar's refusal to register respectively. (5) A society whose registry has been suspended or cancelled shall from the time of such suspension or cancelling (but if suspended, only while such suspension lasts, and subject also to the right of appeal hereby given) absolutely cease to enjoy as such the privileges of a registered society, but without prejudice to any liability actually incurred by such society, which may be enforced against the same as if such suspension or cancelling had not taken place. 13. With respect to the rules of societies the following provisions shall have effect : — (1) The rules of every society sent for registry shall, according to the class in which the society is to be registered, contain provisions in respect of the several matters mentioned in the second schedule to this Act. 161 (2) No amendment of a rule made by a registered society shall be valid until the same has been registered under this Act, for which purpose copies of the same, signed by three members and the aecretary, shall be sent to the registrar. (3) The provision herein contained as to appeals from a refusal of registry shall apply to amendments of rules. (4) The registrar shall, on being satisfied that any amendment of a rule is not contrary to the provisions of this Act, issue to the society an acknowledgment of registry of the same, which shall be conclusive evidence that the same is duly registered. (5) A copy of the rules of a registered society shall be delivered by the society to every person on demand, on payment of a sum not exceeding one shilling. (6) If any person, with intent to mislead or defraud, gives to any other person a copy of any rules, laws, regulations, or other documents, other than the rules for the time being registered under this Act, on the pretence that the same or existing rules of a registered society, or that there are no other rules of such society, or gives to any person a copy of any rules on the pretence that such rules are the rules of a registered society when the society is not registered, the person so offending shall be deemed guilty of a misdemeanor. 14. "With respect to the duties and obligations of registered societies the following provisions •hall have effect : — (1) Every registered society shall — (») have a registered office to which all communications and notices may be addressed, and send to the registrar notice of the situation of such office, and of every change therein : (i) from time to time at some meeting of the society, and by a resolution of a majority of the members present and entitled to vote thereat, appoint one or more trustees of the society, and send to the registrar a copy of every resolution appointing a trustee, signed by the trustee so appointed, and by the secretary of the society : (#) once at least in every year submit its accounts for audit either to one of the public auditors appointed as herein mentioned, or to two or more persons appointed as the rules of the society provide, which auditors shall have access to aU the books and accounts of the society, and shall examine the general statement of the receipts and expenditure, funds and effects of the society, and verify the same with the accounts and vouchers relating thereto, and shall either sign the same as found by them to be correct^ duly vouched, and in accordance with law or specially report to the society in what respects they find it incorrect, unvouched, or not in accordance with law : (i) once in every year before the first day of June send to the registrar a general statement (to be called the annual return) of the receipts and expenditure, funds and eflects of the society as audited, which shall show separately the expenditure in respect of the several objects of the society, and shall be made out to the thirty-first December then last inclusively, and a copy of the auditor's rej)ort, if any, shall also be sent to the registrar with such general statement ; and such annual return shall state whether the audit has been conducted by a public auditor "appointed as in this Act provided, and by whom ; and, if by any person or persons other than a public auditor, shall state the name, address, and calling or profession of each of such persons, and the manner in which and the authority under which they were respectively appointed : « « « * « (/) once at least in every five years either cause its assets and liabilities to be valued by a valuer to be appointed by the society, and send to the registrar a report, signed by such valuer, and which shall also state his address and calling or profession, on the condition of the society, and an abstract to be made by him of the results of his valuation, together with a return containing such information with respect to the benefits assured and contributions receivable by the society, and of its funds and efiects, debts and credits, as the registrar may from time to time require, or send to the registrar a return of the benefits assured and contributions receivable from all the members of the society, and of all its funds and effects, debits and credits, accompanied by such evidence in support thereof as the chief registrar prescribes, in which case the registrar shall cause the assets and liabilities of the society to be valued and reported on by some actuary, and shall send to the society a copy of his report, and an abstract of the results of his valuation : (f) allow any member or person having an interest in the funds of the society to inspect t}ie books at all reasonable hours at the registered office of the society, or at any place where the same are kept, except that no such member or person, unless he be an officer of the society, or be specially authorised by a resolution of the society to do so, shall have the right to inspect the loan account of any other member without the written consent of such member : (A) supply gratuitously every member or person interested in the funds of the society, on his application, with a copy of the last annual return of the society for the time being : Provided that it shall be deemed a sufficient compliance with this requirement if the society supplies gratuitously every member or person interested with a balance sheet or other document, duly audited, containing the same partioiilars as to the receipts and expenditure, funds, and effects of the society as are contained in the annual return: (♦) keep a copy of the last annual balance sheet for the time being, and of the last quin- quennial valuation for the time being, together with the report of the auditors, if any, ^ways hung up in a conspicuous place at the registered office of the society. This subsection shall apply to a registered branch of a society as if it were a registered society, except that every notice, copy of a resolution, and annual return required by this subsection to be sent to the registrar, shall be sent through an officer appointed in that behalf by the society of which the braach forms part. II 41 162 (2) No society shall pay any sum of money upon the death of a member or other person whos9 death is or ought to be entered in any register of deaths, except upon the production of a certificate of such death, under the hand of the registrar of deaths, or other person having the care of the register of deaths in which such death is or ought to be entered. This subsection shall not apply to deaths at sea. (3) It shall be an offence under this Act if any registered society or any officer or member thereof — (a) fails to give any notice, send any return or document, or do or allow to be done any act or thing wWh the society, officer, or person is by this Act required to give, send, do, or aUow to be done : (b) wilfully neglects or refuses to do any act or to furnish any information required. for the purposes of this Act by the chief or any other registrar or other person authorised under this Act, or does any act or thing forbidden by this Act : (<;) makes a return or wilfully furnishes information in any respect false or insufficient. (4) Every offence by a society under this Act shall be deemed to have been also committed b^ every officer of the same bound by the rules thereof to fulfil any duty whereof such offence is a breach, or if there be no such officer, then by every member of the committee of management of the same, unless such member be proved to have been ignorant of or to have attempted to prevent the commission of such offence ; and every default under this Act constituting an offence, if continued, constitutes a new offence in every week during which the same continues. (5) Every annual or other return, abstract of valuation, sind other document required for the purposes of this Act shall be made in such form and shall contain such particulars as the chief registrar pirescribes. (6) AU documents by this section required to be sent to the registrar shall be deposited with the rules of the societies to which the same respectively relate, and shall be registered or recorded by the registrar, with Such observaitidns thereon, if any, as the chief registrar shall direct : Provided that the chief registrar, with the approval of the Treasury, may dispense with thevalua- tioin herein required in respect of societies to whose purposes or to the nature of whose operations he may deem the same ina,pplicable ; and the provisions herein contained in respect of the valuation shall not apply to benevolent societies, working mea's clubs, or cattle insurance societies, nor to specially authorised societies, unless it be so directed in the authority for registering the same. 15. Registered societies shall be entitled to the following privileges : — (1) No society or meeting of a society shall be affected by any of the provisions of the Acts of the thirty-ninth George the Third, chapter seventy-nine, or the fiity-seventh George the Third, chapter nineteen, if in such society or at such meeting no business is transacted other than that which directly and immediately relates to the objects of the society as declared in the registered rules thereof, but such society and all officers of the same shall, on request in writing by two justices of the peace, give full information to such justices of the nature, objects, proceedings, and practices of the society, in default whereof the provisions of the Acts in this section referred to shall, so far as applicable, be in force in respect of such society. (2) Stamp duty shall not be chargeable upon any of the following documents : — (a) Power, warrant, or letter of attorney, granted by any person as trustee for the transfer of any money of the society invested in his name in the public f urn is : (b) Order or receipt for money contributed to or received from the funds of the society by virtue of its rules or of this Act : (e) Bond given to or on account of the society, or by the treasurer or other officer thereof : (d) Draft or order, or form of policy, or nppointment or revocatian of appointment of agent, or other document required or authorised by this Act, or by the rules of the society. (3) A member of a society (other than a benevolent society or working men's club), not being under the age of sixteen years, may, by writing under his hand delivered at or sent to the registered office of the society, nominate any person, not being an officer or servant of the society, unless such officer or servant iS the husband, wife, father, mother, child, brother, sister, nephew, or niece of the nominator, to whom any moneys payable by the society on the death of such member, not exceeding fifti/ pounds,* shall be paid at his decease, and may from time to time revoke or vary such nomination by a writing under his hand similarly delivered or sent; and on receiving satisfactory proof of the death of a nominator, the society shall pay to the nominee the amount due to the deceased member, not exceeding the sum aforesaid. (4) If any member of a society, entitled from the funds thereof to a sum not exceeding fifti/ pounds, * dies intestate and without having made any nomination under this Act which remains unrevoked at his death, such sum shall be payable, without letttrs of administration, to the person who appears to a majority of the trustees, upon such evidence as they may deem satisfactory, to be entitled by law to receive the same. (5) Whenever the society, after the decease of any member, pays any sum of money to the person who at the time appears to the trustees to be entitled under this section, the payment is valid and effectual against any demand made upon the trustees or the society by any other person. (6) When any person, being or having been a trustee of a society, and whether appointed before or after the legal establishment thereof, in whose name any stock belonging to such society transferable at the Bank of England or Bank of Ireland is standing, either jointly with another or others, or solely, is absent from Great Britain or Ireland respectively, or becomes bankrupt or files any petition or executes any deed for liquidation of his affairs by assignment or arrangement, or for composition with his creditors, or becomes a lunatic, or is dead, or has been removed from his office of trustee, or if it be unknown whether such person i» living or dead, the chief registrar, on application in writing from the secretary and three members of the society, and on proof satisfactory to him, may direct the transfer of the stock into the names of any other persons as trustees for the society ; and such. • Onp hundred pounds substitnted for " fifty pounds," 46 & 47 Viot., c. 47, s. 3. 163 transfer shall be made by the surviving or continuing trustees, and if there be no such trustee^ or if such trustees refuse or be unable to make such transfer, and the chief registrar so direct, then by the Aceountant-General or Deputy or Assistant Accountant-General of the Bank of England or Bank of Ireland, as the case may be ; and the Governors and Companies of the Bank of England and Bank of Ireland respectively are hereby indemnified for anything done by them or any of their ofScers in pursuance of this provision against any claim or demand of any person injuriously affected thereby. (7) Upon the death, ^ or bankruptcy, or insolvency of any officer of a society having in his possession by virtue of his office any money or property belonging to the society, or if any execution, attachment, or other process be issued, or action or diligence raised against such officer or against his property, his heirs, executors, or administrators, or trustee in bankruptcy or insolvency, or the sheriff or other person executing such process, or the party using such action or diligence respectively shall, upon demand in writing of the trustees of the society, or any two of them, or any person authorised by the society, or by the committee of management of the same, to make such demand, pay such money and deliver over such property to the trustees of the society in preference to any other debts or claims against the estate of such officer. Bankruptcy or insolvency in the present section includes liquidation of a debtor's affairs b^ arrangement in England, cessio bonorum of a debtor in Scotland, and a petition for arrangement with creditors in Ireland ; and a trustee in bankruptcy or insolvency includes an assignee in Ireland and a jxidicial factor in Scotland. (8) A person under the age of twenty-one but above the age of sixteen may be a member of a society, unless provision be made in the rules thereof to the contrary, and may, subject to the rules of the society, enjoy all the rights of a member (except as herein provided), and execute all instruments and give sJl acquittances necessary to be executed or given under the rules, but shall not be a member of the committee of n^anagement, trustee, manager, or treasurer of the society. Provided as follows : — (a) Societies and branches, consisting wholly of members of any age under twenty-one years, but exceeding three years, may be allbwed to regjister linder this Act, subject to such - regulations as may be made in that behalf : (J) No rule or practice in force at the commencement of this Act for the admission of members under sixteen years of age shall be deemed contrary to any express provision of this Act as respects any society already registered. (9) For tlie purpose of this Act a certificate of the birth or death of any member of or person insured or to be insured with a registered friendly society shall be given under his hand by the registrw of births or deaths, or other person having the care of the register of births or deaths, in which, such birth or death is entered, for a sum not excee^ng one shilling, in place of ^U fees or payments in respect of the same, on application being made for the same in such form and under such regulations as shall be approved of by the registrar-general of births, deaths, and marriages for England, Scotland, and Ireland respectively. ^ .,,,,, (10) A society may subscribe ou<; of its funds to any hospital, infirmary, pharitable or provident institution, any annual or other sum which may be necessary to secure to members of the society and "ttieir families the benefits of such hospital, infirmary, or other institution, according to its rules. * m * * * , 18. With respect to loans to members of registered societies, the following provisions shall have effect :^ (1) Not more than one-half of the amount of an assurance on the life of a member of at least one f nil year's standing may be advanced to him, on the written security of himself and two satisfao- tpry suxeties for repayment ; and the amount advanced, with all interest thereon, may be deducted from the sum assured, without prejudice in the meantime to the operation of such security. (2) A society may, out of any separate loan fund to be formed by contributions or deposits of its members, make loans to its members on their personal security, with or without sureties, as may be provided by the rules, subject to the following restrictions : — (a) No loan can at any time be made out of moneys contributed for the other purposes of the society : (5) No member shall be capable of holding any interest in the loan fund exceeding two hundred pounds : _ . (0) No society shall make any loan to a member on personal security beyond the amount fixed by the rules, or shall make any loan which, together with any moneys for the time being ovring by a member to the society, shall exceed fifty pounds : (d) N6 Society shall hold at any one time on deposit from its members any moneys beyond the amount fixed by the rules, which shall not exceed two-thirds of the total sums for the time being owing to thte soci'ety Ijy the members who have borrowed from the loaii fund. 19. The rules of a society may provide for accumulating at interest, for the use of any member of the same, any surplus of his contributions to the funds of the society v^hich may remain after provid- ing for any assurance in respect of which the same are paid, and for the withdrawal of such accumu- lations from time to time. 20. With respect to officers of registered societies having receipt or charge of money, the following provisions shall have eflfect : — (1) Every officer, if the rules of the society require, shall, before taking upon himself the exe- cution of his office, become bound with one sufficient surety at the least in a bond according to one of the forms set forth in the third schedule to this Act, or give the security of a guarantee society, in such, sum as the society directs, conditioned for his rendering a just and true account of all moneys received and paid by him on account of the society at such times as its rules appoint, or as the society or the trustees or committee of management thereof require him to' do so, and for the payment by him of all sums due from him to the society. 164 (2) Every officer, his executors or administrators, shall, at such, times as by the rnles ot the society he should render account, or upon demand made, or notice in writing given or left at his last or usual place of residence, give in his account as may be required by the society, or by the trustees or committee of management of the society, to be examined and allowed or disallowed by them, and shall, on the like demand or notice, pay over all moneys and deliver all property for the time being in his hands or custody to such person as the society, or the committee of management, or the trustees appoint ; and in case of any neglect or refusal to deliver such account, or to pay over such moneys or to deliver such property in manner aforesaid, the trustees or authorised officers of the society may sue upon the bond or security before mentioned, or may apply to the county court (which may proceed in. a summary way), or to a court of summary jurisdiction, and the order of either such court shall bo final and conclusive. 22. Every dispute between a member or person claiming through a member or under the rules of a registered society, and the society or an officer thereof, or between any registered branch under the Friendly Societies Acts, or an officer thereof, of any registered society or registered branch and the registered society or branch of which the other party to the dispute is a registered branch, or an officer thereof, or between any two or more registered branches of any registered society or branch, or any officers thereof, respectively, shall be decided in manner directed by the rules of the society, and the decision so made shall be binding and conclusive on all parties without appeal, and shall not be removable into any court of law or restrainable by injunction ; and application for the enforcement thereof may be made to the county court. Provided as follows : — (a) The parties to a dispute in a society may, by consent (unless the rules of such society expressly forbid it), refer such dispute to the chief registrar, or to the assistant registrar in Ireland or Scotland, who shall, with the consent of the Treasury, either by himself or by any other registrar hear and determine such dispute, and shall have power to order the expenses of determining the same to be paid either out ol the funds of the society or by such parties to the dispute as he shall think fit and such determination and order shall have the same effect and be enforceable in like manner as a decision made in the manner directed by the rules of the society : (i) The chief or other registrar to whom any dispute is referred may administer oaths, and may require the attendance of all parties concerned, and of witnesses, and the production of all books and documents relating to the matter in question ; and any person refusing to attend, or to produce any documents, or to give evidence before such chief or other registrar, sh^ be guilty of an offence under this Act : (e) "Where the rules of a society direct that disputes shall be referred to justices, the dispute shall be determined by a court of summary jurisdiction : Provided that in every case of dispute co^isable under the rules of a society by a court of summary jurisdiction, it shall be lawful for the parties thereto to enter into a consent referring such dispute to the county court which may hear and determine the matter in dispute : (d) Where the rules contain no direction as to disputes, or where no decision is made on a, dispute within forty days after application to the society for a reference under its rules the member or person aggrieved may apply either to the county court, or to a court of summary jurisdiction which may hear and determine the matter in dispute : («) The court, chief or other registrar, may, at the request of either party, state a case for the opinion in England of the Supreme Court of Judicature, in Scotland of either division of the Inner House of the Court of Session, or in Ireland of one of the superior courts of common law at Dublin on any question of law, and may also grant to either party such discovery as to documents and otherwise or such inspection of documents, and in Scotland may grant warrant for the recovery of documents and examination of havers, as might be granted by any court of law or equity, such discovery to be made on behaH of the society by such officer of the same as such court or registrar may determine. 23. Upon the application of one-fifth of the whole number of members of a registered society or of one hundred members in the case of a society of one thousand members and not exceeding teti thousand, or of five hundred members in the case of a society of more than ten thousand members the chief registrar, or the assistant registrar for Scotland or Ireland, or in cases of societies registered and doing business exclusively in Ireland or in Scotland the assistant registrars for Ireland and Scotland respectively, but with the consent of the Treasury in every case, may (1) appoint one or more inspectors to examine into the affairs of such society, and to report thereon, who may require the production of aU or any of the books and documents of the society and may examine on oath its officers, members, agents, and servants in relation to its business and mav administer such oath accordingly : ' ^ (2) call a special meeting of the society in siich manner and at such time and place as the chief registrar or such assistant registrar may direct, and may direct what matters shall be discussed and determined on at such meeting, which shall have all the powers of a meeting called accordine to the rules of the society, and shall in all cases have power to appoint its own chairman any rule of the society to the contrary notwithstanding. Provided that — (a) the apphcation herein mentioned shall be supported by such evidence, for the purpose of showmg that the appHcants have good reason for requiring such inspection to be made or meeting to be called, and that they are not actuated by malicious motives in their application, and such notice thereof shall be given to the society, as the chief re«Btrn.r shall direct : ^ o^ai (b) the chief registrar or such assistant registrar may, if he think fit, require the appHcantR to give security for the costs of the proposed inspection or meeting, before appointing any inspector or caUmg such meeting : i-i-v/^iiioug 165 (#) all expenses of and incidental to any such inspection or meeting shall be defrayed by the members applying for the same, or out of the funds of the society, or by the members or officers, or former members or officers, of the society in such proportions as the chief or such assistant registrar shall direct : (d) this section shall apply to every society to which section thirty of this Act applies, other than an industrial assurance company, but save as aforesaid shall not apply to a society with branches, unless with the consent of the central body of such society. 26. With respect to the dissolutiou of registered societies, the following provisions shall have efEect : — (1) A society may terminate or be dissolved in any of the following ways : — (a) Upon the happening of any event declared by the rules to be the termination of the society : (6) As respects aU. societies other than friendly societies, by the consent of three-fourths of the members, testified by their signatures to the instrument of dissolution : (c) As respects friendly societies, by the consent of five-sixths in value of the members (including honorary members, if any), testified by their signatures to the instrument of dissolution, and also by the written consent of every person for the time being receiving or entitled to receive any relief, annuity, or other benefit from the funds of the society, unless the claim of such person be first duly satisfied, or adequate provision made for satisfying such claim, and in the case of a branch with the consent of the central body of the society, or in accordance with the general rules of the society. (rf) By the award of the chief registrar or assistant registrars in the cases herein specified. # * * * « (8) With respect to dissolutions and the distribution of funds upon the award of the chief registrar : (a) Upon the application of one-fifth of the whole number of members of any registered society, or of one hundred members in the case of a society of one thousand members and not exceeding ten thousand, or of five hundred members in the case of a society of more . than ten thousand members, made in writing under their hands, setting forth that the funds of the society are insufficient to meet the existing claims thereon, or that the rates of contribution fixed in the rules of such society are insufficient to cover the benefits assured, and the groujids upon which such insufficiency is alleged, and requesting an investigation into the affairs of such society with a view to the dissolution thereof, the chief registrar may by himself, or by any assistant registrar, or by any actuary or public auditor whom the chief registrax may appoint in writing under his hand, investigate the affairs of the society, giving nevertheless not less than two months previous notice in writing to the society whose affairs are to be investigated at the registered office of such society : (J) If upon such investigation it appears that the funds of the society p,re insufficient to meet the existing claims thereon, or that the rates of contribution fixed in the rules of the society are insufficient to cover the benefits assured to be given by the same, the chief registrar may, if he considers it expedient so to do, award that the society shall be dis- solved, and its affairs wound up, and shall direct in what manner the assets of the society shall be divided or appropriated : Provided always, that the chief registrar may suspend his award for such period as he may deem necessary to enable the society to make such alterations and adjustment of contributions and benefits as will in his judgment prevent the necessity of such award of dissolution being made : («) A registrar proceeding under this section has all the same powers and authorities, enforce- able by the same penalties, as in the case of a dispute referred to him under this Act : (rf)' Every award under this section, whether for dissolution or distribution of funds, is final and conclusive on the society in respect of which the same is made, and on all members of the same, and other persons having any claim on the funds of the society, without appeal, and shall be enforced in the same manner as a decision on a dispute under this Act ; and the expenses of every investigation and award, and of publishing every notice of disso- lution, shall be paid out of the funds of the society before any other appropriation thereof shall be made : (») Notice of every award for dissolution shall, within twenty-one days after the same shall have been made, be advertised by the central office in the Gazette, and in some newspaper circulating in the county in which the registered office of the society is situated, and unless, within three months from the date of the Gazette in which such advertisement appears, a member or other person interested in or having any claim on the funds of the society commences proceedings to set aside the dissolution of the society, consequent upon such award, and such dissolution is set aside accordingly, the society shall be legally dis- solved from the date of such advertisement, and the requisite consents to the application to the registrar shall be considered to have been duly obtained without proof of the signatures thereto. ***** 82. With respect to penalties under this Act, the following provisions shall have effect : — (1) If any person wUfuUy makes, orders, or allows to be made any entry, erasure in, or omission from any balance sheet of a registered society, or any contribution or collecting book, or any return or document required to be sent, produced, or delivered for the purposes of this Act, with intent to falsify the same, or to evade any of the provisions of this Act, he is liable to a penalty not exceeding fifty pounds, recoverable at the suit of the chief or any assistant registrar or of any person aggrieved. II 42 166 (2) Every Society, officer or member of a society, or other person giiilty of an offence under this Act for which no penalty is expressly provided herein is liable to a penalty of not less than one pound and not more than five pounds, recoverable at the suit of the chief or any assistant registrar or of any person aggprieved. (3) All penalties imposed by this Act, or to be imposed by any regulations under the same, or by the rules of a registered society, are recoverable in a court of summary jurisdiction. *^ « • * * 35. The Treasury may from time to time appoint public auditors and valuers for the purposes of this A ct, and may determine from time to time the rates of remuneration to be paid by societies for the services of such auditors and valuers ; but the employment of such auditors and valuers ii not compulsory on any society. 36. The Treasury may determine a scale of fees to be paid for matters to be transacted or for the inspection of documents under this Act ; but no fee shall be payable on the registry of any friendly, benevolent, or cattle insurance society, or working men's club, or of any amendment of the rules of the same. All foes which may be received by any registrar under or by virtue of thii Act shall be paid into the receipt of Her Majesty's Exchequer. « « « • « 37. The Treasury shall, out of money to be provided by Parliament, pay to the chief and assistant registrars such •alaries or other remunerations respectively, and such sums of money for defraying the expenses of office rent, salaries of assistants, clerks, and servants, remuneration for actuaries, account- ants, and inspectors, computation of tables, publication of documents, difiusion of information, expenses of prosecutions, travelling expenses and other allowances of the chief oi any assistant registrar, and other expenses which may be incurred for carrying out the purposes of this Act, and may also pay to any public auditors or valuers to be appointed under this Act such remuEcration (if any) as tht Treasury shall from time to time allow. 38. The Treasury may from time to time make regulations respecting registry and procedure under this Act, and the seal and forms to be used for such registry, and the duties and functions of the registrar, and the inspection of documents kept by the registrar under this Act, and generally for carrying this Act into effect. All such regulations shall be laid before both Houses of Parliament within ten days after the approval thereof if Parliament is then sitting, or if not then sitting, then within ten days from the then next assembling of Parliament. Until otherwise provided, the forms contained in the fourth schedtde to this Act shall be used. 39. Every instrument or document, copy or extract of an instrument or document, bearing the seal or stamp of the central office, shall be received in evidence without further proof ; and every document purporting to be signed by the chief or any assistant registrar, or any inspector, or public auditor or valuer under this Act, shaU, in the absence of any evidence to the contrary, be received in evidence without proof of the signature. SCHEDULE n. Matters to be provided for by thb Rules of Socibtibs eegistbrbd under this Act. 1. The name and place of office of the society. 2. The whole of the objects for which the society is to be established, the pnrposes for which the funds thereof shall be applicable, the terms of admission of members, the conditions nnder which any member may become entitled to any benefit assured thereby, and the fines and forfeitures to be imposed on any member. 3. The mode of holding meetings and right of voting, and the manner of making, altering, or rescinding rules. 4. The appointment and removal of a committee of management (by whatever name), of a treasurer and other officers, and of trustees, and in the case of a society with branches, the composition and powers of the central body, and the conditions under which a branch may secede from the society. 5. The investment of the funds, the keeping of the accounts, and the audit of the same once a year at least. 6. Annual returns to the registrar of the receipts, funds, effects, and expenditure and numbers of members of the society. y. The inspection of the books of the society by every person having an interest in the funds of the society. 8. The manner in which disputes between the society and any of itsj members, or any person claiming through a, member or under the rules, shall be settled. 9. In case of dividing societies, a provision for meeting all claims upon the society existing at the time of division before any such division takes place. And also in the case of friendly and cattle insurance societies : — 1. The keeping separate accounts of all moneys received or paid on account of every particular fund or benefit assured for which a separate table of contributions payable shall have been adopted, and the keeping separate account of the expenses of management, and of all contributions on account thereof. * * * * * 3. (Except as to cattle insurance societies) a valuation once at least in every five years of the assets and liabilities of the'society, including the estimated risks and contributions. 4. The voluntary dissolution of the society by consent of not less than five-sixths in value of the members, and of every person for the time being entitled to any benefit from the funds of the society, unless his claim be first satisfied or adequately provided for. 167 5. The right of one-fifth of the total number of members, or of one hundred members in the case of a society of one ihouaand members and not exceeding ten thousand, or of fi.ve hundred members in the case of a society of more than ten thousand members, to apply to the chief registrar, or in case of societies registered and doing busiuegs exolasively in Ireland or Scotland to the assistant registrar for Ireland or Scotland, for an inyestigation of the afFalrs of the society, or for winding up the same II. ExTBAOTa FKOM 50 & 51 Vict., o. 66. 17. The Acts set forth in the Second Schedule to this Act are hereby repealed to the extent mentioned in th« third column of the said schedule, without prejudice to anything done thereunder. 18. (1) The principal Act shall, as from the passing of this Act, take effect subject to the additions, omissions, and substitutions required by this Act. (2) Any copy of the principal Act printed after the passing of this Act by any of the several printers to the Queen's Most Excellent Majesty duly authorised to print the Statutes of the United Kingdom may be printed with the additions, omissions, and substitutions required by this Act. SECOND SCHEDULE. Acts Ebpbaibd. Session and Chapter. Title. Extent of Bepeal. 38 * 39 Vict., u. 60 39 & 40 Vict., 0. 32 42Viot., c. 9 45 A 46 Vict., 0. 35 48 & 49 Vict., 0. 27 The Friendly Societies Act., 1875 . . , The Friendly Societies ^Amendment Act, 1876, An Act to declare the true meaning of section thirty of the Friendly Societies Act, 1875. The Friendly Societies (Quinquennial Ketums) Act, 1882. The Friendly Societies Amendment Act, 1885. So much of section fourteen and of Schedule XI as relates to sending to the registrar every five years a return, to be called a quinquennial return, of the sickness and mortality experienced by the society, or as relates to such return. The whole Act. The whole Act. The whole Act. The whole Act. AN ACT TO AMEND THE LAWS EBLATING TO LOAN SOCIETIES (ENGLAND), 1840. [3 & 4 VioT., Ch. no.]* ni. Be it enacted, that if any number of persons who have formed or shall form any society in England for establishing a fund for making loans to the industrious classes, and taking payment of the same by instalments, with interest thereon, shall be desirous of having the benefit of this Act such persons shall cause the rules framed or to be framed for the management of such society to be certified, deposited, and enrolled in manner hereinafter directed, and thereupon shall have the benefit of the provisions contained in this Act. IV to VI. (Three copies of the rules are to be sent to the barrister appointed to certify the rules of savings banks, who shall examine into their legali y, and suitability to the objects of the society, and shall give his advice thereon ; on approval he shall issue his certificate, and forward a copy of the certified rules to the court of Quarter Sessions which shall confirm and file them without costs or charge ; the rules shall then become binding. The barrister's fee shall not exceed one guinea, nor shall he demand any further fee within three years, even though consulted regarding the rules. +) ' IX. And be it enacted, that for every sum of money deposited or to be deposited with any loan society, otherwise than by way of gift, it shall be lawful for such society, if they shall think fit to issue a debenture, to be registered in the books of the loan society by whom such debenture shall be payable ; and no such debenture shall be liable to any stamp duty or parliamentary imposition whatever. J -^ X. And be it enacted, that no treasurer, trustee, or other officer of any loan society subscribing, i.e. signing debenture shall be individually responsible, in person or property, for the payment of the s'ame| or of any interest thereon ; but such debenture shall be a charge on the capital and property of * The Act is not very successful, and the Registrar of Friendly, Ac, Societies considers that it should be repealed since it grants several important fiscal privileges, while advantage is frequently taken of its very general wording (see: section III) by money-lenders who establish themselves as so-called ' societies." Under proper restriction some of its provisions are useful. Many sections are either omitted or merely abstracted. + The barrister here mentioned is the Registrar for Friendly, Ac, Societies who has very important duties to perform as a State commissioner : see Vol. I, pp. 185-86, Ac. t See section XXXV in the Irish Act (1843) next following. 168 •fche society alone, unless such treasurer, trustee, or other ofBcer shall, in the instrument or by writing at the foot or on the back thereof, declare his or their willingness to be so liable in person or property ; and such understanding shall only apply to the specific sums so guaranteed. XI. And be it enacted, that in case any debenture holder, depositor, or other claimant, entitled to receive any sum not exceeding fifty pounds out of the funds of any such loan society, shall die, it shall be lawful for the trustees or trustee thereof, from and after the expiration of three calendar months after the death of such debenture holder, depositor, or other claimant, if they shall be satisfied that no win was made and left by such deceased person, and that no letters of administration of the goods, chattels, rights, and credits of such deceased person have or wUl be taken out, to pay the same to any person who shall appear to the said trustees or trustee to be the person or one of the persons entitled under the statute of distribution to the effects of the deceased intestate, although no letters of adminis- tration shall have been taken out ; and the payment of any such sum of money shall be valid and effectual with respect to any demand of any other person as next of kin of such deceased intestate, or as the lawful representative of such person, against the funds of such society, or against the trustee, treasTirer, or officers thereof; but nevertheless such next of kin or representatives shall have remedy for such money so paid as aforesaid against the person who shall have received the same. XII. (Every treasurer or other person entrusted with money must give due security by means of a bond.) Xm. And be it enacted, that it shall not be lawful for any such society to lend to any person at the same time a greater sum than fifteen pounds, and that no second or other loan shall be made to the same person until the former loan shall have been repaid. XIY. And be it enacted, that no note which shall be signed for the repayment of any loan made under this Act, nor any receipt or entry in any book of receipt for money lent or paid, nor any draft or order, nor any appointment of any agent, nor any other instrument whatever required to be made in pursuance of this Act, or of the rules of the society, shall be chargeable with any stamp duty whatever. XV. And be it enacted, that no note of hand, bill, or other security for the payment of money taken by any such society shall be transferable by endorsement or otherwise to any person or party whomsoever, nor shall any such note, bill, or other security be sued upon by any person or party other than the society to whom the same shall have been made. XVI. (Provides that on any default of payment a notice in writing shall be served on the defaulter ; on further default any J. P. may take cognizance of a complaint made by the society, and, on due proof, shall order the payment of the arrears with moderate costs ; failing such payment the J. P. shall issue his warrant for the distress and sale of the goods of the defaulter. No such complaint shall be removable by writ, &c., into any other court ; the action of the society shall not, however, bar the rights of the landlord for his rent, so that the goods, though distrained, are still liable for the prefer- ential right of the landlord). XVII. (The society may also sue in the county or other court.) XX. (The society may demand an enquiry fee from a candidate for a loan ; such fee shall not exceed Is. 6d.) XXI. And be it enacted, that it .shaU, be lawful for the trustees or trustee of any society estab- lished under the provisions of this Act to demand and receive from every person to whom a loan shall be made, by way of discount, at the time of making the same, the full amount which shall be specified by the enrolled rules of the society, not exceeding in the whole the rate of twelve pounds by the hundred, for the full term of one year, and to receive the amount of the principal sum of instalments at such time or times, and in such proportion or proportions, as shall be specified by the enrolled rules, but so nevertheless that the first repayment shall not be paid sooner than the eleventh day after the day on which the loan shall have been actually granted and advanced, and that the time and manner of paying such instalments shaU be taken into account in the calculation of the interest to be paid, and to take a note of hand for the whole amount of the loan, by which the same or so much thereof as shall then remain unpaid shaU be recoverable immediately on failure of the payment of any instalment, without being liable on account thereof to any of the forfeitures or penalties imposed by any Act or Acts relating to usury. XXII. And be it declared and enacted, that the instalments to be paid, and the corresponding sum charged for interest, may be such as is expressed in any one of the schemes mentioned in the schedule (E) to this Act annexed, and that the scheme which is adopted by any society, and the actual number of shillings and pence taken by way of interest for every loan, shall be fuUy and clearly set forth in the enrolled rules of such society ; and that if such scheme shall in any respect differ from every one of the schemes set forth in the said schedule (E), it shall not be lawful for the said barrister to certify the rules of such society, until a certificate shall have been obtained under the hand of the actuary to the National Debt Office, to the effect that the rate of interest proposed to be taken including therein all charges whatsoever, except the aforesaid sum of one shilling and six pence or so much thereof as shall be charged for the form of application and expense of inquiry is not greater than is allowed by this Act ; for which certificate the said actuary shall be entitled to have a fee of one guinea, and no more. XXIII. (The above enquiry fee and interest shall comprise the whole charges of every description which may be made for the loan). ^ XXVn. And be it enacted, that the trustees of every society established under the provisions of this Act, or which may become entitled to the benefits thereof, shall cause an abstract of the accounts of such society for each year to be made out, and up to the thirty-first day of Beoemher, together with a statement of the funds and effects and of the debts or liabilities of such society, and an estimate of the clear net profit or loss up to that period, which abstract, statement, and estimate shall be in such iorms, and shall contain such particulars connected with the accounts and transactions of such society 169 as the barrister appointed to certify the rules of saving banks shall from time to time direct"; and a copy of such abstract, statement, and estimate, duly certified to be correct by the secreta ry, treasurer, and at least one trustee, shall, during the month of January in each year, be delivered or^sent^to the said barrister, and shall be laid by him before both Houses of Parliament ; and every society which shall refuse or neglect to' deliver such account as aforesaid shall be liable to a penalty o f fifty pounds, to be recovered, at the suit of the said barrister, against the trustees of the society, in any of Her Majesty's Superior Courts of Record : provided always, that the trustees shall not be liable, in their persons or goods, to the consequences of any judgment obtained against them in any such suit, but the same shall avail and be enforced only against the stock and goods of the society in th eir hands or -within their control. SCHEDULE B. Number of soheme. Amount of weekly instalment. Day on or after which th first instalment is payable, reckoning the day after the loan as the first. e Sum which may be taken by way of interest at the time of advancing the loan. 1 2 3 4 5 6 7 8 9 10 11 12 Two shilings per five pounds Six pence per pound Eight pence per pound Four shillings per five pounds Ten pence per pound One shilling per pound Two shillings per pound Two shillings and six pence per pound . Four shillings per pound Five shillings per pound ... Ten shillings per pound Twenty shillings per pound Eleventh Sixteenth Twenty-first Thirty -eighth Twenty-first Thirty-fifth Seventieth , Seventy-seventh ... Sixty-second Sixty- sixth Seventy-third Seventy-sixth Six shillings per five pounds. Twelve pence per pound. Ten pence per pound. Four shillings per five pounds. Eight pence per pound. Eight pence per pound. Eight pence per pound. Eight pence per pound. Six pence per pound. Six pence per pound. Six pence per pound. Six pence per pound. In these schemes all instalments after the first are to be paid weekly. Other schemes may be formed from these by advancing or postponing the day of payment of the first instalment, provided that the first payment is not made sooner than the eleventh day, and that not more than one penny per pound is added to the interest for every thirteen days of such postpone- ment, or that not less than one penny per pound is taken ofE the interest for every thirteen days of such advance. Thus : scheme 6 may be altered by making the first instalment payable on the twenty-second day after the loan, and taking seven pence per pound for interest, and so of the rest. AN ACT TO CONSOLIDATE AND AMEND THE LAWS FOE THE EEGULATION OF OHAEITABLE* LOAN SOCIETIES IN lEELAND, 1843. [6 & ,7 Vict., Ch. 91]. II. And be it enacted, that for the general control and superintendence of all charitable loan societies and charitable pawn or deposit oflELces established or to be established in Ireland under the authority of the said recited Acts or this Act there shall be a board in Dublin, to be denominated " The loan fund board," which board shall consist of such persons as at present constitute the loan fund board established xmder the authority of the said recited Act of the sixth and seventh years of his late Majesty King William the Fourth, and of such other person as shall, from time to time, be appointed a member of the said board by lie Lord Lieutenant of Ireland; and at any meeting of the said board, duly convened, three members shall be competent to do and execute aU acts which the said board are hereby enabled to do and execute. III. (The Lord Lieutenant may remove members and appoint and remove the secretary, inspectors and staff). IV. (The board shall" superintend aU loan, pawn, &c., societies established under the Act, especially with the view of ascertaining the legality and propriety of the rules, the due observance of the same and the due application of the funds, and may provide the necessary expenses for inspectors, clerks, &c., necessary for such superintendence, subject to a limit to be prescribed by the treasury). VI. (Funds to be deposited in the Bank of Ireland, and only to be withdrawn by drafts signed by at least three members of the board and countersigned by the secretary at the regular meetings of the board). VII. (The board must annually report to Parliament, with accounts showing its funds, the sources and modes of expenditure thereof, the balance, and the amount of loans outstanding). IX. And be it enacted, that it shall and maybe lawful to and for any number of persons in Ireland, subject to the restrictions and regulations herein-after provided, to form themselves into a society in * The word " Charitable" is somewhat misleading, as the loans, though at low interest', are on a business footing. Probably the word " Beneficial" would be more suitable, as they were intended to combat the money lender and to assist the poor to provide themselves with tools, seed, cattle, &c. One chief peculiarity of this Act is that it places all loan societies formed under the Act, under the general control and anperintendenoe of a board established for the purpose, the members of which are to be appointed by th& Xord Lieutenant. II 43 170 Ireland in auj' district or place in which it shall be proved to the satisfaction of the said loan fund hoard that such society is required, and such society shall and may raise from time to time by loans from the members of such society, or from other persons, at a rate of interest not exceeding fiv» pounds per centum per annum, or by donations, a stock or fund for the purpose oJE granting loans to the industrious classes resident therein, and receiving repajrment of the same by instalments, with interest as herein-after provided ; and it shall be in like manner lawful for any number of persons in Ireland, subject to the restrictions and regulations herein-after provided, to form themselves into a society for the purpose of establishing or maintaining a charitable pawn or deposit office or offices in Ireland, at which money may be lent to the industrious classes resident therein upon pledges or deposits, at such rate of interest, not exceeding the rate of interest which now is or may be hereafter legally chargeable by pawnbrokers in Ireland, as the said loan fund board may from time to time appoint ; and it shall and may be lawful for the members of every such society from time to time to make, subject to the restrictions hereinafter contained, rules for the better government and guidance of the same, and for defining the district, by townlands or otherwise, within which the operations of the society ought to be conducted, and for fixing the charges for application papers, instalments, cards and duplicates, and for the imposition of fines upon the several persons obtaining loans from the funds of any such society, and the officers and members thereof, offending against or violating such rules, and also from time to time to alter and amend such rules as occasion shall require, or to annul and repeal the same, and to make new rules in lieu thereof, so as such rules shall not be repugnant to the laws of this realm, nor to any of the express provisions or regulations of this Act. X. And be it enacted, that three transcripts, fairly written or printed on paper or parchment, of all rules, or of any alteration or amendment thereof, made in pursuance of this Act, signed by at least three members of such society, shall be transmitted to the said loan fund board for their consider- ation ; and in case the said board shall approve of any such rules, amendments, or alterations as shall be so transmitted to them as aforesaid, they shall cause the same to be submitted to such barrister as shall from time to time be appointed by the said board established under the authority of this Act (which barrister the said board is hereby authorized and required to appoint), for the purpose of ascertaining whether the said rules of such society, or such alterations or amendments thereof, as shall be so submitted to him, are in conformity to law and to the provisions of this Act. XI. And be it enacted, that in case the said loan fund board shall disapprove of any rule made by any loan society, and submitted to them as aforesaid, or of any alteration or amendment of any such rule, such rule, or amendment or alteration thereof, shall be null and void : provided always that in every such case it shall be lawful for such society, or for the persons desiring to form any such intended society, within one calendar month after notice shall be given to them of such decision of the said board as aforesaid, to appeal against such decision to the Lord Lieutenant of Ireland and Her Majesty's Privy Council there, who shall have power and authority on such appeal to approve or disapprove of such rule, or amendment or alteration thereof ; and if they shall disapprove thereof, then and in such case the same shall be null and void to all intents and purposes ; but if they shall approve thereof, then and in such case the said loan fund board shall submit the same to such barrister as aforesaid, lor the purpose aforesaid, in like manner as herein-before directed in the case of rules approved of by such loan fund board. XII to XIV. (The barrister is to advise upon the rules and to certify as to their conformity or otherwise with the law ; he is entitled to a fee of one guinea, but not oftener than once in three years on the same set of rules. Then so certified, and approved by the board, the rules shall be re-teans- mitted to the loan, &c., society with the countersignature of the secretary to the board, and with a eertifioate from the board to the effect that the rules are legal and have been approved by the board ; the rules shall take effect from the date of such certificate). XYIII. (All funds and property of any loan, &c., society must be vested in trustee or trustees). XX. And be it enacted, that it shall not be lawful for any person, being a trustee, treasurer, honorary secretary, director, member of the managing committee of any such society, or having any control in the direction or management thereof, to receive, directly or indirectly, any salary or other remuneration for attendance or any other services performed for such society ; and no salaried clerk or other paid officer or servant of such society shall be a member of its committee of management, or in anywise act or vote in the direction of its affairs. XXI. (Treasurers and any others entrusted with the money of any loan, &c., society, and other officers and servants when necessary, shall give security when required by the loan fund board : the bonds to be made out to the secretary of such board). XXrV. And be it enacted, that it shaU not be lawful to and for any such society to make any loan on personal security to any one individual at any one time exceeding in amount the sum of ten. pounds ; and that no second or other loan shall be made ,to the same individual, or to any person on his behalf or for his use, until the previous loan shall have been repaid. XXV. And be it enacted, that every note or security to be taken by any loan society established under the provisions of this Act for the repayment of any loan granted by any such society shall be in the form number 2, in schedule (A) hereunto annexed, or to the like effect, and blank forms for such note shall be supplied by the said loan fund board as herein-after provided ; and that no pro- ceedings shall be had or order made for the recovery of any loan fines or interest under this Act save and except where the note or security for such loan shall be in the form and on the paper supplied by the said board. ^ ^ ^ XXVI. And be it enacted, that no note or security for the repayment of any loan made by any society established or acting under the provisions of this Act, nor any receipt or entry in any book of receipt for money lent or paid, nor any debenture or transfer, or draft or order, nor any appointment of any agent, nor any bond nor security, nor other instrument or document whatever, required or authorized to be given, issued, made, or provided in pursuance of the rules of any such' society or of this Act shall be subject to or chargeable with any stamp duty whatsoever, 171 XXVII and XXVIII. (Eate of interest not to exceed 4J per cent. {4d. in tlie pound for 20 weeks), taken in advance ; the principal to be receivable by instalments. Part of tbo funds by special order of the loan fund board may be issued in small loans at 7J per cent. (1^;^. per pound per month).) XXX. (Similar to section XVI of the English Act of 1840 (see supra), but without the provision as t« the landlord's rights.) XXXII. (Distrained goods may be sold by the baUiffi free of auction duty). XXXV. And be it enacted, that it shall and may be lawful for every such society established or acting under this Act, which shall be desirous of raising funds for the purposes of such society or of increasing the funds of such society, to issue debentures in a form and on paper or parchment to be supplied by the said loan fund board, and the debentures issued under former Acts, or which may be issued under this Act, shall be transferable in the manner hereinafter mentioned, and not otherwise; (that is to say,) by endorsement upon the said debenture, to be executed by the person or persons entitled to the sum thereby secured, in the presence of two credible subscribing witnesses at the office of such loan society, and to be registered in the books of the loan society by whom such debenture shall be payable ; and after such endorsement shall have been so executed and registered as aforesaid, but not before, the person or persons to whom such transfer shall be made shall thereupon stand possessed of, and be entitled to, the amount of such debenture, and of all interest, benefit, claims, and demands whatsoever due or to grow due thereon as fully as ii he or they had been the party who had originally advanced the sum secured by the said debenture ; and every transfer of such debenture shall be in the form number 4, in schedule (A) to this act annexed, or to the like effect ; and after the thirty-first day of December after the passing of this Act, no debenture shall be issued for a less sum than twenty pounds, unless it be in Uen of one previously issued. XXXVI and XXXVIl are the same as sections X and XI in the EngUah Act of 1840. XXXVIII. (The business of a loan society not to be carried on at any hotel, tavern, &c.) XXXIX. (The books and accounts of all loan, &c., societies to be kept in such manner and form as shaU. be directed or approved by the loan fund board, and aU books, accounts, vouchers, documents, &c., are to be produced, for inspection and examination by the board's inspectors, whenever required ; a, penalty is prescribed for failure to produce.) XL. (Abstracts of the accounts, showing assets and liabilities, profit and loss, to be sent by each loan, &c., society annually to the loan fund board.) XLI. (A loan, &c., society intending to dissolve must give three months' notice of their intention to the loan fund board.) XLTI. It shall not be lawful for any treasurer, trustee, member of the managing committee, or other officer exercising control in the direction or management of the affairs of any loan society, unless upon the special leave of the said loan fund board, voluntarily to resign or withdraw from such office or trust, without having given at least three calendar months' notice in writing of his intention in that behalf to such loan society, and also to the said loan fund board ; and that a copy of such notice be posted in a conspicuous part of the office of such loan society. XLIV. And be it enacted, that it shall and may be lawful for every such loan society as afore- said, or for such person or persons as shall have been duly authorized in that behalf by the rules of such society, and they are hereby required, annually to reserve a sum, not less than one-tenth of their -clear net profits over and above all losses, to form a fund for the security of the debenture holders, and, subject thereto, it shall be lawful for them to appropriate from time to time such portion of the residue thereof as they shall think proper to the support of any dispensary, hospital, or infirmary in the district or county in which such society shall be established, or for such other charitable or useful local purpose as they, with the approbation of the said loan fund board, shall think fit ; and as well the said reserved fund, as the residue or the whole of such net profits if no part sbaU be so appropriated, shall be employed as part of the funds of such society, until such society, with the approbation of the said loan fund board, shall otherwise determine ; provided that no part of such net profits as aforesaid shall be appropriated in any way for the advantage or benefit of any member of the society, or of the persons managing or conducting the same,* or for any purpose whatsoever, except as herein-before provided ; and provided also, that in case any such society shall have been dissolved, or otherwise deprived of the benefit of this Act, the whole of the clear net profits not previously appropriated, after payment of all debts of or claims on such society, shall be appropriated to such dispensary, hospital, or infirmary, or to such other charitable or useful local purpose as the said loan fund board shall think proper. XLV. And be it enacted, that in case it shaU appear to the said loan fund board, after due investigation, that any such loan society as aforesaid has not adhered to its rules, or has applied any of its profits or funds, or done any matter or thing, contrary to the provisions of this Act, it 'shall be lawful for the said loan fund board to withdraw from such loan society the certificate f so issued to them as aforesaid, and to order and direct that such society shall discontinue its operations, and shall be dissolved. (The order is to be gazetted and to take effect six months later, when the whole assets of the society shall vest in the loan fund board which shall appoint a receiver for wind- ing up aflfairs. An appeal against the order lies to the Lord Lieutenant within one month from the date of the original order, of the board). XLVI. (Forms of debentures, &c., to be printed by the loan fund board for distribution to the several societies. XLVH to LII (Eefer to the " Irish Reproductive Loan Fund Institution" (established in. London) and the societies affilitated to it in Ireland : these were formed "for the purpose of making' * This provision is noticeable : eee section XX supra, and compare the similar provisions in the Trustee Savings Banks Act. t See sections XII and XIV gupra. 172 charitable * loans of money, or for providing, by way of loan, implements of labour, seeds, or raw materials for manufacture of goods to be used or 'employed in any trade." These are exempt from the control of the loan fund board, but are granted the privileges of the Act.) LIIl. (Societies not certified under this Act prohibited from using its provisions and privileges. ) LIII. (All " Monts de Pi6t6 or charitable, pawn or deposit offices at which money may be lent to the industrious poor upon pledge in Ireland, shall be deemed loan societies within the meaning of this Act " and shall be brought under its rules.) v LV to LVIII. (Provide for the recovery of any penalty by conviction at petty sessions, and through a warrant of distress to be issued by the Justices; " and no justice of the peace who shall be a trustee or other unpaid otJicer or member of any loan society shall be thereby precluded from adjudicating in the matter of any loan sued for, by or on behalf of, such society, or of any penalty or forfeiture incurred under this Act, or from acting as such justice of the peace in any other proceeding ■whatsoever under this Act.") Appendix No. 3. Form of delenture or ieeurity for the payment of the money lent to a loan society. This is to certify, that A.B., of , has this day deposited with CD., the treasurer of the loan society, the sum of £ to be repaid out of the funds of the said society to the said A.B., his executors, administrators, or assigns, at the expiration of calendar months after a demand thereof in writing shall have been made upon the treasurer of the said society, and to bear interest until repaid at the rate of per centum per annum, to be paid half-yearly [or otherwise, as agreed upon'] ; and it is hereby declared, that the said princi- pal sum and interest shall be a charge upon and payable out of the funds and property of the said society, and such funds and property only ; and that the treasurer and other officers and members of the said society, or any of them, shall not severally or collectively be responsible for the payment thereof from or oat of any other funds whatsoever. Dated this of 18 . (Signed) _ Trustee. Treasurer. Entered, Clerk. No. 4. Form of transfer of delenture to le endorsed thereon. I , the within-named depositor [or " the assignee of the within debenture "], do hereby transfer this debenture, with all interest due and to accrue due in respect thereof unto of Witness my hand, this day of 18 [Signature of person mahing the transfer.] Executed in the presence of of and of N.B. — The transfer is not valid unless it shall have been executed at the office, and registered in the books of the society by which the debenture was issued. THE BANKING LAWS OF THE STATE OF NEW YOEK. Article V.— Building and Mutual Loan Corporations. Bec. 170. Incorporation. 171. Powers. 172. Stock \oT minora. Sec. 173. Dividends and monthly payments. 174. Liability of stockholders and directors ; exemption. 175. Existing corporations. Sbc. 170. Incorporation. — Nine or more persons may become a corporation for the purpose of accu mulating a fund for the purchase of real property, the erection of buildings, or the making of other improvements on lands, or to pay off incumbrances thereon, or to aid its members in acquiring real property, making improvements thereon, and removing incumbrances therefrom, and for accumulating a fund to be returned to its members, who do not obtain such advances, when its funds shall amount- to a certain sum per share, to be specified in the certificate of incorporation, or for all or any of such purposes ; by making, acknowledging and filing a certificate of incorporation, setting forth (i) the name of the corporation ; (ii) the location of its principal business office ; (iii) when its regular meetings shall be held and how special meetings jnay be called • (iv) what shall be a quorum to transact business at its meetings ; (v) how members shall be. admitted and their quaUfioations ; (vi) what officers, directors or attorneys of the corporation there shall be and how and when chosen ; (vii) the duties of such officers, directors or attorneys and how removed or suspended from office • (viii) the names of the persons who shall be such oificers and directors for its first year, and until others are chosen or appointed in their places ; * See note to preamble to this Act. 173 (ix) the entrance fee of new members and new shares ; (x) the amount of each share ; (xi) the monthly or weekly dues per share ; (xii) the redemption fee on shares on which advances shall be made ; ixiii) the fees to be paid on the transfer of shares ; xiv) the penalties for non-payment of dues or fees, or other violation of the provisions of the certificate ; (xv) the manner of redemption of shares by advances made thereon ; (xvi) the mortgage security to be taken on such advances and how the same may be changed ; (xvii) the manner of the transfer or withdrawal of shares ; (xviii) the manner of investing funds not required for advances on shares ; (xix) the qualification of voters at its meetings and the mode of voting ; (xx) the ultimate amount to be paid to the owners of unredeemed shares ; (xxi) the manner of altering or amending the certificate of incorporation ; (xxii) such other provisions not inconsistent with law as shall be necessary for the convenient and effective transaction of its business ; Such certificate must be approved by the superintendent of banks and filed in [the office of the clerk of the county in which such corporation shall have its principal business office, and a certified copy thereof shall be filed in the office of the superintendent of banks. Thereupon the pers6ns who have subscribed such certificate and such other persons as shall become members of the corporation, and their successors shall be a corporation by the name specified in such certificate. Sec. 171. Powers. — The directors of every such corporation may call in and demand from the m.embers and stockholders thereof, all sums of money by them subscribed, at such times and in such payments or instalments as the certificate of incorporation shall prescribe, under the penalty of for- feiting the shares of stock subscribed for and all previous payments made thereon, if payment shall not be made by the member or stockholder within sixty days after a personal demand made or notice' requiring such payment shall have been published for six successive weeks in the newspaper nearest to the principal place of business of the corporation. Every such corporation shall have power to borrow money for temporary purposes not inconsistent with the objects of its organization, but no such loan shall have a longer duration than two years, nor shall its indebtedness for money so borrowed exceed at any one time one- fourth of the aggregate amount of its shares and parts of shares and the income thereof actually paid in and received. No loan made by any such corporation to any of its members or stockholders shall exceed in amount the par value of the capital stock for which such member or stockholder may have subscribed. Sec. 172. Stochjor minors. — Parents and guardians may take and hold shares in such corporation in behaU and for the use of their minor children or wards, if the cost of such shares be defrayed from the personal earnings of such minor '^^ children or wards, or by gifts from persons other than their parents. Sec. 173. Dividends and monthly payments. — Dividend sdeclared from the earnings of the corporation- shall be payable in such manner as may be provided in the certificate of incorporation. No holder of redeemed shares shall claim to be exempt from making the monthly or other stated payments provided in the certificate of incorporation on the ground that by reason of losses or other- wise, the corporation has continued longer than was originally anticipated, whereby the payments made on such shares may amount to more than the amount originally advanced, with legal interest thereon : nor shall the imposition of fines for non-payment of dues or fees or other violation of the certificate of incorporation, nor the making of any monthly payment required by the certificate of incorporation, or of any premiums for loans made to members be deemed a violation of the provisions of any statute against usury. Sec. \ 74. Liability of stoolholders and directors ; exemption.— A]! the shareholders of any such corpo- ration shall be individually liable to the creditors to an amount equal to the amount of stock held by them respectively for all debts contracted by it. The directors or other officers of every such corpora- tion shall be personally liable for any fraudulent use, disposition or investment of any moneys or property belonging to it, or for any loss which shall be incurred by any investment made by any such directors or officers, other than such as are mentioned in and authorized by this article ; but no director or other officer shall be so liable unless he authorized, sanctioned, approved of or made such fraudulent use, disposition or investment. The shares held by the members and stockholders of every such corporation shall be exempt from sale on execution for debt to an extent not exceeding six hundred dollars in such shares at their par value. Sbo. 175. Existing eor^»orahall determine, less any fines unpaid and a proportionate share of any unadjusted loss ; but not more than one-half of the receipts of the cor- poration, and when the corporation is indebted on matured shares, not more than one-third of such receipts, shall be applicable to the payment of withdrawing shareholders without the consent of the board of directors. When the demands of withdrawing shareholders exceed the moneys applicable to their payment, they shaU be paid in the order in which their notices of withdrawal were filed with the secretary. The board of directors may in their discretion, under rules made by them retire the unpledged shares of any series at any time after four years from the date of their issue by enforcins withdrawals of the same ; but the shareholders whose shares are to be retired shall be determined bv lot, and they shall be paid the full value of their shares, less all fines and proportionate part of anv unadjusted loss. 8bo. 185. Payment of matured shares. — When each unpledged share of a given series reaches the value of two hundred dollars, all payment of dues thereon shall cease, and the holder theiieof shall be paid out of the funds of the corporation, two hundred dollars therefor, with such rate of interest as shall be determined by the by-laws from the time the board of directors shall have declared such shares to be matured until paid ; but at no time shall more than one-third of the receipts of the corporation be applicable to the payment of matured shares without the consent of the board of directors The order of the payment of matured shares shall be determined by the board of directors. Sec. 186. Borrowing ly members —At each monthly stated meeting, immediately following the receipt of dues and interest, the board of directors shall offer to members of the corporation desiring to borrow aU accumulations applicable to that purpose, in sums of two hundred dollars, the value of a matured share, or a multiple thereof, or the fractional parts of one-fourth or one-half thereof. If more than one member desires to borrow, the right to the loan shaU be determined by an open bidding of a premium per share, and the member bidding the highest premium shall be entitled to the loan upon giving proper security ; and the amount of the premium paid shall be deducted from the sum loaned at the time of loaning, and the receipt thereof shall not be deemed a violation of the usury laws No 175 member can borrow a larger sum than shall be equal to the matured value of the shares held by him. A borroTfing member, for each share or fractional part thereof borrowed upon, shall, in addition to the dues on his shares, pay monthly interest on his loan at the rate of six per cent, per annum, or such lower rate as the by-laws shall name, until the shares borrowed upon reach the matured value of two hundred dollars each, or the loan is repaid ; and when such matured value is reached, the loan upon it shall be paid out of the share, and the proper surrender and acquittances be made. Seo. 187. Security ; rights of borrower. — Every loan made shall be secured by a bond and a first mortgage upon unincumbered real property, with a transfer and pledge to the corporation of the shares borrowed upon, and aU accumulations that have or shall accrue thereon ; but in lieu of the mortgage the borrower, or another, may transfer and pledge to the corporation for the payment of the loan, unpledged shares, the withdrawal value of which, under the by-laws, at the time of such borrowing, shall exceed the amount borrowed and interest thereon for six months. The right to the loan shall be forfeited if the borrower neglects to offer security satisfactory to the board of directors within the time provided by the by-laws, and he shall be charged with one month's interest and aU necessary expenses incurred, if any, under the by-laws, in reference to his proposed loan. All bonds and mortgages given to the corporation shall be deemed conditioned upon the performance of the provisions of this chapter relating to the repayment of loans and interest thereon, and the by-laws of the corporation, although not fully expressed therein. A borrower may repay the loan and all arrears of interest and fines thereon, or one share thereof, at any stated monthly meeting, or at any other time, but when not made at a stated meeting he shall pay interest up to the first monthly meetiag after such payn;ient. He may repay his loan in full and release the shares from liability upon the pledge thereof, or he may, by a proper notice and direction as to the application, have the withdrawal value of the shares borrowed upon applied in payment or part payment of his loan. Sbc. 188. Forfeiture fornon-payment of dues. — When any member shaU be six months in arrears in the payment of dues upon unpledged shares, the secretary shall give him notice thereof in writing, and a statement of his arrearages by mailing the same to him at the last post-office address given by him to the corporation, and if he shall not pay the same on or before the second stated monthly meeting thereafter, the board of directors may, at their discretion, declare his shares forfeited ; and at the time of such forfeiture, the withdrawal value thereof shall be determined and stated, and the defaulting member shall be entitled to withdraw the same without interest within one year, upon such notice as shall be required of a withdrawing shareholder. If a borrowing member shall be six months in arrears in the payment of his due's and interest, or either, the whole loan shall become due at the option of the board of directors, and they may proceed to enforce the collection upon the securities held by the corporation. The withdrawal value at the time of the commencement of the action of aU. shares pledged as collateral security for the loan shaU be applied upon the loan and arrearages of interest and fines thereon, and the shares deemed surrendered to the corporation. Sec. 189. Purchase of real property ; loam. — Any such corporation may purchase at any sale, pubUe or private, any real property upon which it may have a mortgage, judgment, lien or any other incum- brance, or in which it may have any interest, and may sell, convey, lease or mortgage the same at pleasure to any person or persons. It may also borrow money, but not for a longer period than one year, for the purpose of making loans or paying withdrawals, not exceeding two thousand dollars, when its accumulated capital is less than ten thousand dollars ; and not exceeding six thousand dollars when its accumulated capital shall be ten, thousand dollars and over, and not more than sixty thousand dollars ; and if its accumulated capital exceeds sixty thousand dollars, it may borrow money for such purposes not exceeding ten per cent, of its accumulated capital. If any such corporation has a surplus in its treasury for which there is no demand for loans, withdrawing shareholders or matured stock, it may loan the same to any other corporation organized under the provisions of this article, subject to the provisions of this section on the part of the borrowing corporation. No corporation shall borrow or make loans authorized by this section except by a two- thirds vote of its board of directors, which shall be recorded by ayes and nays in its regular minutes. Sec. 190. Profits and losses. — Profits and losses shall be distributed at least annually and always before issuing a new series of stock to all shares in all series outstanding at the time of such distri- bution, in proportion to their holding value as distinguished from their withdrawing value, except that, in addition thereto, a distribution of not exceeding the amount of the entrance fee, in the dis- cretion of the board of dareotors, may be made to each share outstanding in the last series issued prior to the distribution. At each periodical distribution of profits, the board of directors may reserve and carry as undistributed profits, in the nature of a guaranty fund, any sum from the net profits that in their discretion seems wise, to be applied upon any future losses that may occur from any cause whatever. Seo. 191. Qualification of memhers ; transfer and exemption of shares. — Any person of full age and sound mind may become a member of the corporation by taking one or more shares therein and subscribing the by-laws, and annexing to his signature his post-office address ; and when he desires his post-office address changed, he shall give written notice thereof to the secretary of the corporation ; and for the purpose of giving any member notice by maU, the last post-office address given by him shall be deemed the proper one. A minor may hold shares in the name of a parent, guardian or next friend as trustee f of him. No transfer of shares shall be binding upon the corporation until the same has been made upon its books ; and the transferee thereof shall take the same charged with all the liabilities and conditions attaching thereto in the hands of the person transferring the same ; and the corporation may require a transfer fee not exceeding twenty-five cents per share. All accumulations upon shares held by any person shall be exempt from execution and pro- ceedings supplementary thereto to the amount of six hundred dollars ; and the corporation shall be deemed an institution for savings and not taxable under any corporation tax law, which shall exempt savings banks or institutions for savings from taxation ; and no such corporation shall be liable to pay any tax upon its organization or as a condition thereof. 176 BANKING LAWS OF MASSACHUSETTS. The following is the law of this State, as reported by the OommiBsioners of Savings Banks December 31, 1887 :— Sec. 1. Twenty-five or more persons who associate themselves together by an agreement in writing, with the intention of forming a curporation for the purpose of accumulating the savings of its members paid into such corporation in fixed periodical instalments, and lending to its members the funds so accumulated, shall be and remain a corporation upon complying with the provisions of the three following sections. Sec. 2. The agreement shall set forth the fact that the subscribers thereto associated themselves with the intention of forming a corporation ; the name by which the corporation shall be known ; the purpose for which it is formed; the town or city, which shall be. within this Commonwealth, in which it is located ; and the limit of the capital to be accumulated. Sec. 3. The name shjill be one not previously in use by any existing corporation established under the laws of this Commonwealth, and shall be changed only by Act of the General Court. The words " co-operative savings fund and loan association " shall form a part of the name. Section three of chapter one hundred and seventeen of the Public Statutes, relative to the name of co-operative savings fund and loan associations, is hereby amended by striking out the words " co-operative savings fund and loan associations, " in the fourth line, and inserting in place thereof the words "co-operative bank." The title of said chapter one hundred and seventeen of the Public Statutes is hereby amended by striking out the words " savings-fund and loan associations," and inserting in place thereof the word ' banks.' The names of aU co-operative savings-fund and loan associations heretofore organized are hereby changed by striking out in each the words " savings-fund and loan association," and inserting in place thereof the word ' bank ' ; and they shall hereafter be known as ' co-operative banks.' The first and second sections of this Act shall take effect upon its passage, and the third section, upon the first day of July, in the year eighteen hundred and eighty-three. Sec. 4. The provisions of sections eighteen, twenty, and twenty-one of chapter one hundred and six shall apply to such corporations, except that, in the certificate signed by the Secretary of the Common health, the limit of capital to be accumulated, as fixed in the agreement of association, shall be inserted, instead of the amount of the capital, that the certificate required by said section twenty- one to be filed and recorded may be signed and sworn to by the presiding and financial officers, and a majority at least of the officers possessing the powers of directi;rs by whatever name they may be called, and that the fees to be paid for filing and recording the certificates required by said section twenly-one, including the issuing of the eertiticate of organization, shall be five dollars. Sec. 5. The capital to be accumulated shall not exceed one million dollars, and shall be divided into shares of the ultimate value of two hundred dollars each. The limitation of capital to be accumu- lated in any co-operative bank now organized or hereafter formed under the provisions of chapter one hundred and seventeen of the PubKc Statutes shall be held to apply to capital actually paid in, and no such bank shall be restrained from issuing shares so long as the capital actually paid in on shares is not in excess of one million dollars. The shares may be issued in quarterlj', half-j'earty, or yearly series. La such amounts and at such times as the members may determine. No person shall hold more than twenty-five shares in the capital of anyone such corporation. No shares of a. prior series shall be issued after the issue of a new series. Sec. 6. The number, title, duties, and compensation of the officers of the corporation, their terms of office, the time of their election, as well as the qualifications of electors and the time of each periodical meeting of the officers and members, shall be determined by the by-laws ; but no member shall be entitled to more than one vote at any election. AU officers shall continue in office until their successors are duly elected, and no corporation shall expire from neglect on its part to elect officers at the time prescribed by the by-laws. In any co-operative bank now or hereafter formed under the provisions of chapter one hundred and seventeen of the Public Statutes, the offices of secretary and treasurer may be held by one and the same person. Sec. 7. The officers shall hold stated monthly meetings. At or before each of these meetings every member shall pay to the corporation, as a contribution to its capital, one dollar as dues upon each share held by him until the share reaches the ultimate value of two hundred dollars or is withdrawn cancelled or forfeited. Payment of dues on each series shall commence froiE its issue. Sec. 8. A member may withdraw his unpledged shares at any time by giving thirty days' notice of his intention so to do, written in a book held and provided by the corporation for that purpose. Upon such withdrawal the shareholder's account shall be settled as follows : — from the amount then standing to the credit of the shares to be withdrawn there shall be deducted all fines, a proportionate part of any unadjusted loss, together with such proportion of the profits previously credited to the shares as the by-laws may provide, and such shareholders shall be paid the balance : Provided that at no time shall more than one-half of the funds in the treasury be applicable to the demands of with- drawing members without the consent of the directors. The directors may at their discretion under rules made by tbem, retire the unpledged shares of any series at any time after four years from the date of their issue by enforcing the withdrawal of the same; but whenever there shall remain in any series, at the expiration of five years after the date of its issue, an excess above one hundred unpledged shares, then it shall be the duty of the directors to retire annually twenty-five per centum of such excess existing at said expiration of five years after the date of its issue, so that not more than one hundred unpledged shares shall remain in such series at the expiration of nine years from the date of its issue and thereafter the directors may in their discretion retire such other unpledged shares as they consider the best interests of the bank to require : Provided, that whenever under the provisions of this section the withdrawal of shares is to be enforced the shares to be retired shall be determined by lot and the 177 holders thereof shall be paid the f uU value of their shares, less all fines and a proportionate part of any imadjusted loss : Provided, also, that share pledged for share loans shall be treated as unpledged shares. Shares may be issued in the name of a minor, and if so issued may, at the discretion of the directors, be withdrawn, in manner as provided in section two of this Act, by such minor, the parent at guardian of such minor, and in either case the payments made on such withdrawals of shares shall be valid. When a share or shares are held by any one in trust for another, the name and residence of the person for whom such share or shares are held shall be disclosed, and the account shall be kept in the name of such holder as trustee for such person ; and, if no other notice of the existence and terms of such trust has been given in writing to the corporation, in the event of the death of the trustee, such share* may be withdrawn by the person for whom such deposit was made or by his legal representatives. Sec. 9. Wh.en each unpledged share of a given series reaches the value of two hundred dollars, all payments of dues thereon shall cease, and the holder thereof shall be paid out of the funds of the corporation two hundred dollars thereof with interest at the rate of six per cent, a year from the time of such maturity to the time of such payment : Provided, that at no time shall more than one- half of the funds m the treasiiry be applicable to the payment of such matured shares without the consent of the directors : Provided, further, that when any series of shares, either pledged or unpledged, reaches maturity between the dates of adjustment of profits or whenever shares are retired between such dates, the holders of such shares shall, in addition to the value thereof, be entitled to interest at the rate of six per cent, per annum for all full months from the date of the preceding adjustment. Chapter one hundred and seventeen of the Public Statutes is amended as follows by adding to section nine the following words : — " And that before paying matured shares all arrears and fines shall be deducted." Sec. 10. The moneys accumulated, after due allowance made for aU necessary and proper expenses and for the withdrawal of shares, shall at each stated monthly meeting be offered to the members according to the premiiims bid by them for priority of right to a loan. Every member wbose bid is accepted shall be entitled, upon giving proper security, to receive a loan of two hundred dollafs for each share held by him or such, fractional part of two hundred dollars as the by-laws may allow. If a balance of money remains unsold after a monthly sale, the directors may invest the same in any of the securities named in the second clause of section twenty of chapter one hundred and sixteen. Sec. 1 1 . Premiums for loan shall consist of a percentage charged on the amount lent in addition to interest, and shall be deemed to be a consideration paid by the borrower for the present use and pos- session of the future or ultimate value of his shares, and shall, together with interest and fines, be received by the corporation as a profit on the capital invested in the loan, and shall he distributed to the various shares and series of said capital as hereinafter provided. Sec. 12. a borrowing member, for each share borrowed upon, shall, in addition to his dues and monthly premium, pay monthly interest on his loan at the rate of six per cent, per annum imtil his shares reach the ultimate value of two hundred dollars each, or the loan has been repaid ; and when said ultimate value is reached, said shares and loan shall be declared cancelled and satisfied, and the balance, if any, due upon the shares shall be paid to the member. Any corporation organized under said chapter one hundred and seventeen may provide in its by-laws that the bid for loans at its stated monthly meeting shall, instead of a premium, be a rate of annual interest upon the sum desired, payable in monthly instalments. Such bids shaU. include the whole interest to be paid, and may be at any rate not less than five per centum per annum. Sec. 13. For every loan made, a note secured by first mortgage of real estate shall be given, accompanied by a transfer and pledge of the shares of the borrower. The shares so pledged shall be held by the corporation as collateral security for the performance of the conditions of said note and mortgage. Said note and mortgage shaU. recite the number of shares pledged and the amount of money advanced thereon, and shall be conditioned for the payment, at the stated meetings of the cor- poration, of the monthly dues on said shares, and the interest and premium on the loan, together with all fines on payments in arrears until said shares reach the ultimate value of two hundred dollars each, or said loan is otherwise cancelled and discharged : Provided, that the shares, without other security, may, in the discretion of the directors, be pledged as security for loans, to an amount not exceeding, their value as adjusted at the last adjustment and valuation of shares before the time of the loan. If the borrower neglects to offer security satisfactory to the directors within the time prescribed by the by-laws, his right to the loan shall be forfeited, and he shall be charged with one month's interest and one month's premium at the rate bid by him, together with all expenses, if any, incurred ; and the money appropriated for such loan may be reloaned at the next or any subsequent meeting. Sec. 14. A borrower may repay a loan at any time, upon application to the corporation, where- upon, on settlement of his account, he shall be charged with the fuU amount of the original loan, together with all monthly instalments of interest, premium and fines in arrears, and shall be given credit for the withdrawing value of his shares pledged and transferred as security ; and the balance shall be received by the corporation in full satisfaction and discharge of said loan : Provided, that all settlements made at periods intervening between stated meetings of the directors shall be made as of the date of the stated meeting next succeeding such settlement ; and. Provided, that a borrower desiring to retain his shares and membership may at his option repay his loan without claiming credit for said shares, whereupon said shares shall be retransferred to him, and shall be free from any claim by reason of said cancelled loan. Partial payment of loans on real estate made by any co-operative bank may be received in sums of fifty doUars or any multiple thereof ; and for each two huncfred dollars so repaid one share of stock shall be released from pledge. Sec. 15. Members who make default in the payment of their monthly dues, interest, and pre- miums shall be charged a fine not exceeding 2 per cent, a month on each dollar in arrears. No fines shall be charged after the expiration of six months from the first lapse in any such payment, nor upon a fine in arrears. The shares of a member who continues in arrears more than six months shall, at the option of the directors, if the member fails to pay the arrears within thirty days after notice, be declared forfeited, and the withdrawing value of the shares at the time of the first default shall be- 45 178 ascertained, and, after deducting all fines and otter legal charges, the balance remaining shall be transferred to an account to be designated the ' Forfeited Share Account,' to the credit of the default- ing member. Said member, if not a borrower, shall be entitled, upon thirty days' notice, to receive the balance so transferred without interest from the time of the transfer, in the order of his turn, out of the funds appropriated to the payment of withdrawals. All shares bo JEorfeited or transferred shaU. cease to partiiipate in any profits of the corporation accruing after the last adjustment and valuation ■of said shares before said first default. Sec. 16. If a borrowing member is in arrears for dues, interest, premium or fines, for more than six months, the directors may, at their discretion, declare the shares forfeited, after one month's notice, if the arrears continue unpaid. The account of such borrowing member shall then be debited with the arrears of interest ' premium,' and fines of date of forfeiture, and the shares shall be credited upon the loan at their withdrawing value. The balance of the account ma}', and after six months shall, be enforced against the security, and be recovered as secured debts are recovered at law. Sec. 17. The general accounts of every such corporation shall be kept by double entry. All moneys received by the corporation from each member shall be receipted for by persons designated by the directors, in a pass-book provided for by the corporation for the use of, and to be held by, the member ; and said pass-book shall be plainly marked with the name and residence of the holder thereof, the number of shares held by him, and the number or designation of the series or issue to which said shares respectively belong, and the date of the issue of such series. AU moneys so received shall be originally entered by the proper ofiicer in a book to be called the ' cash-book,' to be provided by the corporation for the purpose, and the entries therein shall be so made as to show the name of the payer, the number of shares, the number or designation of the series or issue of the particular share or shares so entered, together with the amount of dues, interest, premiums, and fitnes paid thereon, as the case may be. Each payment shaU be classified and entered into a column devoted to its kind. Said cash-book shall be closed after the termination of each stated meeting, and shall be an exhibit of the receipts of all moneys paid at said meeting. All payments made by the corporation for any purpose whatsoever shall be by order, check, or draft upon the treasurer, signed by the president and secretary, and endorsed by the persons in whose favour the same are drawn. The name of the payee, the amount (laid, and the purpose, object, or thing for which the payment is made, together with its date, shaU be entered on the margin of said order, check, or draft. The treasurer shall dis- pose of and secure the safe keeping of all moneys, securities, and property of the corporation, in the manner designated by the by-laws, and the treasurer and secretary shall give such security for the faithful performance of their respective duties as the by-laws may direct. Sec. 18. The profits and losses may be distributed annually, semi-annuaUj', or quarterly, to the shares then existing, but shall be distributed at least once in each year, and whenever a new series of shares is to be issued. Profits and losses shall be distributed to the various shares existing at the time of such distribution, in proportion to their value at that time, and shall be computed upon the basis of a single share fully paid to the date of distribution. Losses shall be apportioned immediately after their occurrence. At each periodical distribution of profits the directors shall reserve as a guarantee fund a sum not less than one nor more than five per cent, of the net profits accruing since the next preceding adjust- ment, until such fund amounts to five per cent, of the dues capital, which fund shall thereafter be maintained and held ; and said fund shall be at all times available to meet losses in the business of the corporation from depreciation of its securities or otherwise. Sec. 19. Any such corporation may purchase at any sale, public or private, any real estate upon which it may have a mortgage, judgment, lien, or other incumbrance, or in which it may have an interest ; and may sell, lease, convey, or mortgage, at pleasure, the real estate so purchased to any person or persons whatsoever. All real estate so acquired shall be sold within five years from the acquisition of'the title thereto. Sec. 20. The commissioners of savings banks shall perform in reference to every such corporation, the same duties, and shall have the same powers, as are required of or given to them in reference to savings banks, and shall annually make a report to the General Court of such facts and statements respecting such associations, and in such forms they deem that the public interest requires. Every oificer of such corporation shall answer truly all inquiries made, and shall make all returns required by the commissioners. An Act relating to Co-opbeativb Banks, 1889. Every co-operative bank shall annually, within twenty days after the last business day of October, make a return to the commissioners of savings banks in such form as may be prescribed by them, showing accurately the condition thereof at close of business on said day, which return shall be signed and sworn to by the secretary and treasurer of such corporation. The president and five or more of the directors shall certify and make oath that the report is correct according to their best knowledge and belief. LABOUE LAWS OF THE STATE OF NEW JERSEY. Co-OPEEATION. An Act to provide for the formation and regulation of Co-operative Societies of working-men. 1. That it shall be lawful for any number of persons, not less than seven, residents in this State to assoojate themselves into a society for the purpose of carrying on any lawful mechanical, mining, manufacturing or trading business, or for the purpose of trading and dealing in goods, wares and. 179 merchandise or chattels, or for the purpose of buying, selling, settling, owning, leasing and improving* real estate and erecting buildings thereon, within this State, upon making and filing a certificate of association, in writing, in manner hereinafter mentioned, and as such shall be deemed to be a cor- poration, and to possess all powers incident thereto. 2. That such certificate of association shall set forth — (i) the name assumed to designate such society and to be used in its business and dealings, which name shall have the word ' co-operative ' as a distinguishing part thereof, but shall in no respect be similar to that of any other society organized under this Act ; (ii) the place or places in this State where the business of such society is to be conducted, and the location of the principal office of the same ; (iii) the objects for which the society shall be formed ; (iv) the total amount of capital stock of such society, the number of shares into which the same is divided, the par value of each share, the manner in which the instalments on the shares shall be paid, the number of shares subscribed, and the amount actually paid in cash on account of the same ; (v) the terms of the admission of members ; (vi) mode of application of profits ; (vii) the mode of altering or amending the certificate of association and the by-laws of the I society. 3. That the said certificate of association shall be signed by the persons originally associating themselves together, and shall be proved or acknowledged by at least seven of them before an officer qualified to make acknowledgments of deeds of real estate, and after being approved by the chief of the bureau of statistics of labour and industries, shall be recorded in the office of the clerk of the ■county where the principal office or place of business of such society shall be established, and a copy of such certificate shall be filed in the office of the chief of the biixeau of statistics of labour and industries. 4. That the business of every such society shall be managed and conducted by a board of not less than five directors, who shaU respectively be members of said society and shall be annually elected at such time and place as shall be provided in the by-laws of the society, and one of such directors shall be chosen president and one of them shall be chosen treasurer, and such directors and officers shall hold their respective offices until their ]. successors are duly qualified; and that such society shall also have a secretary and such other officers, agents and factors as may be necessary to carry on its business, and shall choose them in the manner prescribed by the by-laws thereof. 5. That the first meeting of such society shall be called by a notice signed by a majority of the persons named in the certificate of association, and designating the time, place and purpose of the meeting, and shall be personally served on all the persons signing said certificate, or by advertisement in a newspaper published in the county where such society shall have been incorporated, if such personal service cannot be made ; and at such meeting so called, or at any adjourned meeting thereof, a majority of the persons so signing shall constitute a quorum for the transaction of business, and- shall have power to elect the directors and other officers provided for in section fourth (4) of this Act, who shall serve until their successors duly qualify, and to adopt by-laws, rules and regulations for the igovernment of such socipty. 6. That the by-laws of such society shall provide; — (i) for an annual meeting of the members thereof, and such other regular and special meetings as may be deemed desirable, the number of members necessary to constitute a quorum for the transaction of business, and the right of voting at the same ; (ii) for the election of directors and other officers, agents and factors, and their respective powers and duties ; (iii) for the limitation of the amount of such real and personal estate as the purposes of th« society shall require ; (iv) whether the shares, or any number of them, shall be transferable, and in case it be deter- mined that the same shall be transferable, provisions for their transfer and registration, and the consent of the board of directors to the same ; and in case it shall be determined that the shares shaU not be transferable, provision for paying to members the balance due to them on withdrawal, or of paying nominees in oases hereinafter mentioned ; (v) how members may withdraw from the society ; (vi) whether and by what authority any part of the capital may be invested in or on security of another society through which its products are disposed of or its supplies secured ; (vii) whether and to what extent credit in its business transactions may be given or taken ; (viii) in what sum and with what sureties the treasurer and other fiduciary officers or agents shall give bonds for the faithful performance of their respective duties ; (ix) for the audit of accounts ; (x) for the distribution of the net profits ; (xi) for the custody, use and device of the seal, which shall bear the incorporated name of the society. 7. That every society incorporated under this Act shall paint or affix, and shall keep painted or affixed, its name on the outside of every office or place in which the business of the association is carried on, in a conspicuous position in letters easily legible. 8. That every society incorporated under this Act shall have a registered office to which aU com- munications and notices may be addressed, and notices in writing of the location of such office, and of any change therein, shall be filed with the chief of the bureau of statistics of labour and industries, and in the office of the clerk of the county where the office of such society is located. 9. That the capital stock of such society shall be divided into shares, the par value of which shall not be more than fifty (SO) dollars, and no share shall be issued for less than its par value ; and that no certificate of shares shall be issued to any member until the shares are fully paid up. 180 10. That no member of such society shall be entitled to more than one vote upon any subject, "which must be cast in person ; and that the board of directors shall have power, unless otherwise- 3)rovided in the bye-laws of the society, to fix and regulate the number of shares to be held by any one member. 1 1 . That any society incorporated under this Act may hold in its corporate name any amount of ifiterest in any other society through which its products are disposed of or its supplies secured ; Provided, that such interest so held shall not exceed one-third in value of the paid-up capital of the society holding said interest. 12. That the board of directors of every society incorporated under this Act shall annually make a statement in writing of the condition of such society, setting forth the amount of capital stock, the number of shares issued and the par value thereof, the number of stockholders and number of shares held by each, the amount and character of the property of the society and of its debts and liabilities ; and said statement shall be signed and sworn to by a majority of directors, including the treasurer, and filed in the ofiLce of the clerk of the county where the principal office of such society is located, and that immediately thereafter a copy of such statement shall be forwarded to the chief of the bureau of statistics of labour and industries who, if he shall have reason to doubt the correctness of such state- uent or upon the written request of five members of such society, shall cause an examination of the books and affairs of such society to be made and render a correct statement to the members thereof ; and every member or creditor thereof shall be entitled to receive from the secretary a copy of such annual statement ; and every director or other officer refusing to comply with the requirements of this section, or making and signing a false annual statement of the condition of the society, shall forfeit for each offence the sum of one hundred dollars, to be recovered in an action of debt in any court of competent jurisdiction in this State by any member 6r creditor of the society who shall sue for the same. 13. That any member or other person having an interest in the fund of any such society may inspect the books thereof, at all reasonable hours, at the office thereof. 14. That there shall be such distribution of the profits of Such society, among the workmen, purchasers and members, as shall be prescribed in the certificate of association, at such times as therein prescribed, as often at least as once in twelve months ; Provided, that no such distribution shall be made until a sum equal to five per centum of the net profits shall have been appropriated for a contingent or sinking fund, and that such appropriation shall continue to be made until there shall be accumulated a sum equal to thirty per centum of the capital stock of such society. 15. That any member of such society, by writing under his hand, delivered at the office of the society, may nominate any person, being the husband, wife, father, mother, child, brother, sister, nephew or niece, or other relative of such member, to whom his or her share of the capital stock of the society shall be transferred at his or her decease, and from time to time may revoke or vary such nomination, by a writing similarly delivered ; and such society shall keep a book, wherein the names of aU persons so nominated and the number of shares to be transferred shall be recorded ; Provided, nevertheless, that in lieu of making such transfer, the society may provide for payment to all such nominees of the full value of shares intended to be transferred ; Provided, also, that if by the bye-laws of the society the shares are transferable, this section shall not be construed to forbid the transfer of such shares by sale or wUl, or otherwise, subject to the consent of the board of directors. 16. That any such society may be dissolved in the manner in which any other corporation may be dissolve^, under existing laws. 17. That where the whole capital of such society shall not have been paid in, and the assets of such society shall be insufficient for the payment of its debts, liabilities and obligations, each stock- holder shall be bound to pay, on each share held by him, the sum necessary to complete the amount of such share, as fixed in the certificate of association, or such proportion as shaU be required to satisfy such debts, liabilities and obligations ; Provided, Jiowever, that no such contribution shall be required from any person after the expiration of one year from the time he has ceased to be a member or for any debt, liability or obligation contracted after he has ceased to be a member of such society. Approved March 19th 1894. LAW EELATING TO MONTI FEUMENTAEII * (ITALY). Law of 17th July 1890 (opeee pie). ***** 3. In every commune is established a charity committee with the powers granted by the present law. 4. Institutions of public beneficence are under the management of the charity committee or of such bodies, councils, boards, or other governing agencies as are specially charged therewith bv their deeds or statutes of foundation. •' 5. The committee shall consist of a president with four members where the village has less than 5,000 inhabitants, with eight members when the population is from 5,000 to 50,000, and with twelve in other cases. * See Vol. I, pp. 195-96. These institutions are ancient charitable institntions and are still classed as ' oDere pie.' Bnt these operations, thongh charitable, are on a business footing, and may thus be compared in character wit>, those of the Irish Loan Societies under the Act of 1843. Their present object is the supply of grain for seed and maintenance during the oultiTation season, and cash for the purchase of cattle and implements Theyare regulated by the law relating to'operepie' (17th July 1890), of which, however, only such Beotions will be extracted as will display the general management and supervision of the various 'opere pie' in Italy Tho special law, however, does not contain the whole law on. the subject, for the communal and provincial laws iBoiii™ the local authorities to watch the management of such institntions. i^omura 181 6. The president and members are elected by the communal council * in the autumn session : not more than half of the members must belong at the same time to the communal council. The president remains in oflBce for four years ; one-fourth of the members retire each'year. * * * # » 18. The managing bodies of public charitable institutions shall maintain an exact inventory of all movables and immovables, rights, dues, charges and obligations with their respective documents. 19. A statement taken from the above with all subsequent additions and alterations shall be sent to the mayor of the commune, and to the Provincial (District) Administrative committee.^ 20. The managing bodies must annually draw up a budget, a statement of expenditure and a repor on the work done. 21. When the treasurer (of a society) has not presented his account within one month (from due date) the district administrative committee shall proceed to draw it up at his expense. The managing bodies must proceed to consider the account within two months of its receipt : in case of failure the district administrative committee shall examine it, and must, in that case, dispose of the matter within three months. 22. (Each charity committee may have its special collector or collectors or it may use the village tas. collector.) 23. (Any surplus funds are to be deposited in the Postal Savings bank or other approved bank. The rules of the Postal Savings banks as regards the amount of deposits either annual or aggregate, do not apply.) 24. The income of ipublio charitable institutions shall be collected according to the rules for the collection of communal dues. » # * * * 29. When by the non-observance of the methods prescribed by the law, by the statutes, or by the rules for the preservation of the funds of an institution, the managers have negligently and culpably, even though not criminally, caused loss to the institution, the district committee may of its own motion or on demand by the prefect, proceed administratively to ascertain the loss, and the persons responsible. Such enquiry shall not prejudice the cause of the parties, but shall serve as a basis for action before the judicial authorities. QXTARDIANSHIP. 35. Public charitable institutions are placed under the guardianship (tutela) of the district administrative committees. { 36. The following matters must be submitted for the approvaljof the district committee : — (a) the budget ; (b) the statement of expenditure by the directors and the accounts of the treasurers and collectors ; (c and d) (certain contracts and leases of property) ; (e) resolutions which effect any transformation or diminution of the funds ; (f, g and h) various matters relating to staff, their pay and pension, resolutions regarding the collection of dues, and appearances in court.) * * '.' * * 39. The district committee must, when leviewing the budget, take care that the expenses of managing public charitable institutions are reduced to what is actually necessary. When, with such view, a modifica tion of the articles is necessary, the committee should suggest such modification. 40. Before disposing of the matters submitted for its approval, the district committee may order, at the expense of the charitable institution, such verifications or examinations as they may think necessary. 41. An abstract of the resolutions of the district committee in their capacity as guardians must be published in the Prefect's gazette. 42. [Provides appeals to the Oorte di conti and to the King.] * The oommanal oonncil ia a body elected by the residents of a commune for the disposal of communal business : it meets, however, only twice a year and is similar in powers to the general meeting of a company, subject, of course, to the check and control of superior authorities. But the general work of the council is done by a standing com- mittee (giunta) similar to the board of directors in a company. The mayor is a Government officer, and is the head of the communal administration. . . , ^. s ;, . .x. t^ c ^ /r^ ^^ . s ^ ■ + This is a committee (giunta provinciale ammmistratiTa) composed of the i'retect (GoUeotor) and six members who dispose of non-judicial (administrative) applications and appeals. There is one such committee for every- province (district) of which there are 69 in Italy. > + Both the Prefect (Collector) and the communal council are speoially empowered and required by law to keep watch over the management of these institutions. Section 106 of the communal law requires not only general watch- fulness, buti gives the communal council power ' to examine their management and inspect their accounts.' But they cannot' of themselves interfere in the management and should communicate their proposals to the Home The distinction betweeen the 'tutela' of the district committee, and the ' vigilanza ' of Government (aee next heading) is that the committee watches over the institution in the interests of the welfare of the institution itself, while the Government supervision regards matters from a public and general point of view, e.g., the commititee vfatches over the management of a Monte Frumentario to see that its operations are safe, prudent and economical : the Government supervises its effect on the public, notes whether it is carrying out the object of its foundation, and considers whether such object is desirable and its methods beneficial. 46 182 StfPBBTISION AND OoNTBOL OF THE StATB. ***** 44. The supreme supervision of public charity rests with the Home Minister. He watches over the regular management of institutions, examines their position both in the matter of their adminis- tration and in reference to their objects, and takes care that they obey the law, the statutes of their foundation, and their articles and rules.* In each district one of the members of the Prefect's (Collector' s) council, appointed thereto by the prefect, is specially charged with the duty of watching over the observance of the laws in the matter of public charity. 45. When the district committee or the managing body of an institution does not obey the pro- visions of section 39, the prefect may make to the Home Minister such proposals as may seem needful. * * * » * 50. When the managing body of an institution, notwithstanding authoritative warnings, does not hasten to fulfil a duty required by the law or by rule, the political authority (Government repre- sentative) may order such fulfilment by means of a special delegate. * * * * * 52. The G-overnment authority shall cancel the resolutions andordersof the charity committee and other charitable institutions when they contain violations of the laws, or of the general regulations, or of any special statutes having the force of law. (Various rules for carrying out the above provisions are also g^ven.) 53. The prefect may, of his own motion, or on the request of the communal authorities, order at any time an examination of the offices and administrative acts of the charity committee and of the other charitable institutions and may verify the treasurer's cash balance. The Government authority of the taluk (circondario) may, under the same conditions, order a verification of the treasurer's cash balance. LAW GOVERNING THE POSITOS (GRAIN BANKS) OF SPAIN (26rH JUNE 1877).t 1. A standing committee shall be appointed in each province (district) called the permanent com- mittee of positos. It shall consist of the Governor (Gobernador Civil, Collector) J of the province as president, of the provincial agricultural officer, of two of the councillors (of the provincial counoU), of two members of the provincial committee of agriculture, industry and trade, and of two residents of the province elected from among the 50 persons paying the highest revenue as land-holders or cattle-breeders. Members shall be nominated by the Home Minister. The [Secretary shall be the person who is Secretary to the Provincial AgTicultural Committee, but shall have no vote. 2. The commitee shaU, as soon as it has been constituted, proceed to ascertain whether aU the institutions under its supervision are in possession of the funds belonging to them. The Home Minister ahall fix a date for the completion of such investigation. * The following are some of the rules contained in the Kegolamento attached to the law : — 80. " All the above-mentioned institutions are placed under the supervision of the Home Minister. Such supervision includes the right of requiring copies of every resolution of the managing body, of arranging for the cauoelment of such resolutions, of ordering visits, examinations and enquiries into their management with refer- ence to their moral, educative and economic results, of obtaining the removal of the managing body and of prosecuting when necessary, the members of such body or the staff, and of advising the managing body of such reforms as seem essential to the better accomplishment of the objects of the institution and for the public good. 81. The supervision which the communal councils are called on to exercise over these institutions by section 106 of the law relating to communes, does not confer upon them or upon their individual members any right of giving orders in or making arrangements for their business, or of intervening in the meetings of the managing body. The mayor or a deputy chosen from the communal council has the right of examining at the ofB.06 (of the insti- tution) all the documents, contracts, and registers of the managing body, reporting thereon at the next subsequent meeting of the council. 82. For the carrying out of the provisions of rule 80, the member of the prefect's counoU charged with the duty of supervision under section 44 of the law, shall immediately report to the prefect every irregularity, abuse infraction omission or violation of the laws or articles, and, in general, every impropriety discovered by his examination of the management, or is otherwise brought to notice by the authorities (e.g., communal council), by pubUo report by the press, or by private persons ; he will also cause seasonable examinations to be made, and will' report to the prefect his suggestions in any mattter. At the end of each half-year he shall make a special report to the prefect (a) on the working of the institutions of the district ; (6) on the progress of any private suit against any institution (this alludes to the right of any private citizen to bring a suit in court in the interests of the institutionlor of the public : see sections 82 and 83 of the law) • (e) on the reforms approved of or under discussion; '' (d) on the state of the capital of the institutions ; (e) on any resolutions cancelled for irregularity ; (f) the number of institutions unprovided with articles, rules, or treasurer ; (g) on the number of managing bodies dismissed ; (h) on the number of institutions under the several charity committees grouped or transformed • (») on the number and result of ordinary and extraordinary examinations of the cash balances together with in the latter case, the reasons for the same ; > 6 "> (0 on the arrangements which, in his opinion, may be necessary for the proper conduct of each institution A copy of this report shall be sent to the Home Minister. 85. (Provides for audit by the Government finance inspectors.) t Various clauses of only local interest and meaning have been omitted in the translation t The word 'Collector' will be used in the translation of this law and its rules, since the word 'Governor' managing committee of the posito, of whom the mayor and secretary shall be members, and the other for the expenses of administration. Chaptbb II. 9. (Mentions various duties of the Provincial standing committee, including that of examining the accounts, &c., of the positos as per section 11 of the law.) * # « * * 1 1 . The committee shall meet for business in the Governor's (Collector's) office at least once a week. Every member must assist ; if unable he must send an excuse in writing. 12. Any member absent without good excuse from three successive meetings, or faihng to carry out a duty imposed on him, will be considered to have vacated his post. * Only Buoh rtJes as are of general interest have been translated. The words ' Governor ' and ' Province ' are generally translated "by the words ' Oolleotor ' and ' Distriot ' as being the nearest corresponding terms. 184 Chaptee III. AcCOtTNTS. ***** 15 to 24 provide for the keeping of proper accounts, showing each loan and repayment whether in money or g^ain and for the preparation of an annual balance sheet and report : these latter are sent through the standing committee to the Collector. 25. The committee shall, on the 1st September, send to the Home Minister through the Collector^ a general statement showing, in alphabetical order, the situation of the positos and the business done by each during the year. The form of this statement shall be prescribed by the Home Minister, who shall draw up a general statement for the whole country. Chaptbb IY. — Bbpaymbnts to thb Positos, and thb Sate of Intbbbst. 26. The communes are bound to collect the sums due to the positos : they wUl, when necessary,, use the coercive powers granted by the orders of 3rd December 1869. 27. Loans in grain shall be repaid with an increase of 4^ per cent.* Interest and principal must be collected at the first harvest at whatever period the loan may have been made. 28. Payment of such loans must be made within three days after it falls due. The precise amount shall be signified to the debtor, and should it not be paid it shall accumulate at compound interest till next harvest. The whole amount of interest must be paid even though the debtor shaJT have settled his account before due date. 29. Grain debts may be paid in cash or in grain at the pleasure of the borrower, grain being commuted at the average market price of the village and its neighbourhood on the day preceding payment. 30. Cash loans shall bear interest at 6 per cent, per annum, or at 0'50 per cent, per month when the loan is repaid in less than a year, the months of payment and repayment being considered as entire months. The rules relating to grain loans shall be applicable to cash loans (e.g., rule 29). Chapter V. ***** 32. Declarations that a debt is irrecoverable shall be made after due proceedings taken by the commune against any debtor in arrears. 33. In such proceedings it must be proved beyond doubt that every administrative method for collection has been exhausted without success. Thereupon the communal council shall propose to close proceedings against the defaulter on the ground that the debt is irrecoverable either from the defaulter, or from his surety, if any, or from the communal councillors if they have granted the loan without security or have neglected to proceed to recover the dues at the proper season. 34. On the above decision being passed the communal council shall transmit the papers to the Collector who, in consultation with the standing committee, shall give his decision. 35. The Collector of the district may declare the debt irrecoverable, adding, however the addi- tional clause contained in section 6 of the law (viz., that the failure is to be considered temporary and without prejudice should the defaulter recover his position) so that the debt to the positos may retaia its preferential rank. ***** 38. Any delay granted for the recovery of a debt must only be allowed on the application of the- debtor and upon a regularly drawn up proceedings in which the debtor and his Bureties are bound on giving good security, for the whole capital and interest due. ' Chapter VII. — Inspection op the Posito. * * * * 4- 47. (Appointment of inspecting delegates and their visits of inspection.) 48. The inspectors must ascertain whether the minute books and accounts are clear and precise - they will correct any irregularities and take all necessary steps to prevent their recurrence They shall report to the standing committee all that they have observed, noted, and done. They shall when necessary, verify the accounts in view to ascertain the actual quantity of grain, money and other valuables which form the funds of the posito. They shall make an exact inventory of the loan& panted and the interest thereon, with the names of the debtors and their sureties. They shall also arrange with the communal councils for any improvements which they may consider desirable * * * * ^ Chapter Till. 50 and 51. (Regulates the staff, clerical and account, to be employed under the standing committee "the scale being very moderate and economical.) ^ ' All these posts shall be filled by ex-employes of the civil administration. 52. Every posito in a district must pay (annually) one penny for every fanega (li bushelO of grain in their granary and 0;25 per cent, on their cash fund, to the standing committee in order to meet the exnenses mentioned in rule 51. ° ' "^"■t'i w meet the expenses mentioned in rule 51. » One-half ceiemm per f anega ; 12 oelemiuB or gallons go to the fanega which is eanal tn IP-P „.ii n. tushels. The grain interest is a fixed proportion whether the loan be for onl month or twelve ■ na,mllv fu '^ ""^ -A ie for six months or less. " """^""^y tne loan wiU 185 MISSION BANKS. These are stiU in conception, except for one or two Provident Societies as at Nazareth in Tinnevelly district. It is, however, understo id from several missionaries, that small banks for the relief of Christian people belonging to their spheres of work are likely soon to be started. This is as it should be ; no part of the population is more depply oppressed by usury than the almost invariably poor people who form the bulk of Christian congregations, while in the persons of their missionaries aild other pastors, they have precisely the leaders who can place and instruct them in the way of thrift, prudence, and co-operation ; in fact, the very position of these congregations, excerpted from and, to a great extent, isolated amongst the rest of the population, should tend to bind them naturally in co-oporative union. Moreover, the missionaries, instructed as they are in the necessity for and methods of thrift, prudence, self and mutual help, will be able very specially to stimulate and lead early efforts, though it is hoped that guidance -will not mean governance beyond what is necessary. Bellary, which has already distinguished itself beyond all other mofussil towns in the largei niunber of its Nidhis — showing, inter alia, how ready the population is for such institutions, how promptly a good example is copied, and how easy it is to found and to work such institutions if but a few good men are available — is likely to have soon its co-operative Christian bank through the efforts of the Eeverend B. Lucas of that town, while Cuddapah is not likely to be behindhand. The articles of the proposed banks are not, however, yet available. The Salvation Army scheme is, similarly, in conception ; its praiseworthy hopes and efforts to raise, economically and socially, large masses of the poor, include a scheme for village banks or brotherhoods ; the scheme, as set forth in its tentative articles, includes a complex organization beginning— according to Salvation Army principles of organization — with the General and extending to the villages ; indeed, one of its weak points appears to be that it reverses Luzzatti's maxim, derived from practical experience, that popular credit for the small folk must proceed from without inward ; that is, village banks must first grow one by one, here and there in an area till there are enough to found a group in that area, and the several groups shall then form a further union with centralized powers of advice, audit, and assistance. The Salvation Army scheme, however, largely depends, even for its initiative and finance, upon the energy and capacity of the General, and this power is to be passed on by International, National, and District committees to the village brotherhoods, which are thus seen to be institutions of but slight local effort. The scheme, however, is only tentative, so much so that the publication of the articles is not yet permissible ; it is, however, greatly to be hoped that this powerful organization wUl very shortly see its way to practical experiment. Mention is specially made here of the efforts or intentions of missionaries and mission agents, since one of the lessons taught by European experience is that when the foundation principles have been settled by practical experiment as in the Eaiffeisen and Italian Banks, no one is a more valuable propagator or founder of such banks than the village clergyman, coupled with whom are generally found the village apothecary and the schoolmaster, with a proportion of lawyers and other philan- thropic business men. In other words, the stimulus and the initiative must almost necessarily proceed from outside the classes to be benefited ; it is the philanthropic men who know that must first take action. Hence it is very fitting in India that men, possessed of independent powers, true philanthropy, and economic knowledge, should experiment practically in the direction of organizing credit ; the missionaries are in this position, and would probably be able to secure, whether from Government * or from other, sources, the email starting and working funds necessary, and could thus work out the form of village or class bank which might be useful to their numerous adherents and persons with whom they are in touch. Nevertheless it is on the energy, wisdom, and help of the numerous body of Government officials — retired or in their private capacity — of the still more numerous lawyers + and schoolmasters, and of associations elsewhere proposed — after the methods of France and Ireland — that India must mainly depend, at least at the start, for independent, self-helping, co-operative village banks, and it is but a poor national outlook if, with the knowledge even now available, both of needs and methods, for the organization of small credit for the masses of poor yet solvent and industrious ryots, the classes above named are disinclined to venture upon the experiment. Apart from philanthropy and duty with their own reward, there is the reward of an undying name and gratitude such as attaches to many names in Europe ; it is not upon the Government but upon themselves that leaders of economic and social reform should call. • See Vol. I, pp. 26-28, 348, 3W-78 and 392. f The most strenuoas promoter in France of village banlis on the Raiffeiaen principle is that philanthropic lawyer M. Lonis Durand of Lyons, and there are Tery tnany others in France as in other countries. • II 4T 186 CHAPTER IV.— AGRICULTUKAL ASSOCIATIONS.* INTEODUOTION. One of the most noticeable features of industry and capital is the tendency towards association, whether it be in the form of the ancient guilds and corporations, or of the joint stock enterprises and trades' unions of the nineteenth century. Agricultural association, however, for reasons which need not here be mentioned, has till of late years been entirely wanting : association, that is, of the farmers and cultivators in groups for the furtherance of their immediate interests, as distinguished from the Agricultural Societies and Chambers of Agriculture for the promotion of scientific agriculture. The ^Farmers' Alliances' of the United States, the ' Syndicats Agricoles ' and ' Bauernvereine ' of France and Germany, and the ' Agricultural Labourers' Union ' of England are but modem and partial efiorts towards the former class of agricultural association. In India such association is entirely wanting, and yet it is in India that it is most needed. The ignorance of the peasant, his hitherto isolation from the outside world, his consequent inability to hear of and his unreadiness to believe in other methods than his own ancestral modes whether of cultivation, business, or finance, and his exploitation by trader, broter, and usurer alike, require that he should be stimulated, strengthened, and educated in methods and business practices calculated both to lessen his expenses, to increase and improve his produce, and to give him a larger share of the same. That is the immediate work of Agricultural association, while, as shownpassim in Vol. I, there flow from association, as it develops, incalculable other benefits, not merely economic such as credit, but moral and mental, as in the development of self and mutual help, of thriJEt and providence, of fore- sight and calculated effort, of self-reliance and independence coupled with friendly union and mutual intercourse. But the great difficulty in these associations is not merely in starting them, but in sustaining their early life till, being based on proved usefulness, they form part of the customary organization of the village. An Agricultural association, if it is to be more than a mere debating society, or than an artificial product with but a simulated and temporary life, must have certain defined and practical aims ; it must yield tangible benefits, or the ryot will have none of it. The mistake hitherto has been that a petty society, imposed probably on a few farmers by external enthusiasm or influence, has not justified its novel and unsought existence to its members by giving them some visible good result : it has too often been a mere machine for spasmodic talk, or it has attempted crude experiments with unproved implements through unsuitable agents ; the results are failure, the collapse of the society, and more deeply-rooted scepticism, just as the failure of the many Nidhis, fraudulently or foolishly started and managed, has been a serious blow to the organization of credit. The follow- ing remarks attempt to show that associations may at once be made so useful that they will have a life of their own, and may stand from the beginning. The objects of associations are noted generally in section 107 of the Draft Bill in Yol. I, to which may be added ' ' the promotion of rural industries, and the development of the various classes of Co-operative society." Credit by associated effort has been dealt with fuUy in Vol. I, whether credit be sole object of the association, or the work of an annex. Many of the other objects, notably 1, 2, 5, 6, 7, 10, II and 12 maybe at once pursued with tangible and profitable results. Item ( 1 ) is the purchase of all stock and other requisites for agriculture including, of course, clothes and food. Those who have studied the methods of supply know at what heavy rates credit is granted in these items, and even where cash is paid, as for clothes, salt, &c., the necessity for small individual purchases means dear and bad goods. To discuss this further would be to discuss co-operative distribution ; it need only be said that experience proves a gain of from 10 to 50 per cent, in the quality and price of goods obtained wholesale by a large buyer such as an association, the custom of which is valuable to any vendor. For instance, in the very first year of five of the Irish Societies promoted by the Irish Agricultural organization society in 1894, artificial manures to the amount of 2,055 tons were bought at rates varying according to the manure from £3-9-0 to £6-0-0, while the prices previously paid by the individual farmers ranged from £5-0-0 to £10-10-0, credit being given for the same time in both cases. The consolidated orders of members (see translation of the articles of French Agricultural associations) would be placed with tradesmen, or the association would purchase the goods in advance and sell by retail to the members. ^ Item (2) is perhaps more important, viz., the collection of produce from members and its sale to purchasers. Many valuable products such as cotton, sugar and jaggery, indigo, turmeric, tanning bark, &c., are sold by producers at much less than the market rates, because they are sold in small quantities to petty middlemen, who are frequently three or four times removed from the real purchaser • e.g., cotton is bought by the large shippers not from the ryots but from brokers, who employ agents and * This chapter is to be read as an addendum to Vol. I. In translating for Vol. II the articles of various Frenck Agricultural associations, and on perusal of later information snot as that regarding the ' Agricultural Banks Associb- tion ' in London and the ' Irish Agricultural Organization Society ' in Dublin, both formed only in 1894 it hat become clear to the writer that a brief chapter on Agricultural association and organization is a necessity 'as it is believed, the text of the chapter will show. Moreover it is believed that the suggestion for an organisation sooietr i.e., n. society formed for the sole purpose of encouraging, promoting, organizing and supervising village societies will soItc the difficult problem as to the formation of Village banks and societies. The suggestion is borrowed from tke Irish Society above mentioned— a society which has already met with great success through the energy and zeal of its founders and members, and is apparently turning Irish peasant farmers rapidly towards co-operation : tee text infrm It is by some such society that the corresponding zeal and devotion of earnest men in this Presidency may be ntilieed i» overcoming the timidity, ignorance and vis inertiw of the Indian ryot, and the necessity for Government interference minimiied. The Mahajana Sabha or the aborted Agricultural association formed in Madras at a public meeting ia 1808 mif ht, with the assistance perhaps, of the Director of Agriculture, undertake this all-importwit rSle 187 -sub-agents to collect in small quantities from the villages ; hence — and by reason of the system of advances, often on usurious terms — the ryot gets a price far below the real value of his cotton ; he pays the -wages and profits of several middlemen, while his necessities or ignorance or both, entail hard bar- gains. If an association should gather in the cotton from its members, and tender, say, 1,000 pothis direct to the press owner, it would obtain the best current price, avoid the costs of the middlemen, by itself acting as such, and pay over the whole of such price to its members, less any advances with interest which it might have made to them ; such advances, moreover, would be at equitable rates. Hence a large immediate saving and an equally large gain to the ryot members. Item (5) is the establishment of Benefit funds : these may take various forms, and attention is drawn to the articles of a French vine-dreasers' association for assisting sick members by contributing gratuitous labour during part of such period. Items (6) and (7) relate to the provision of stud cattle and the employment of veterinary experts. Now that the method of dedicating bulls seems to be on the wane, it is imperative that a substitute be foimd; the purchase and use in common of good stud buUs and rams would be an immediate and obvious benefit. And while a single association might not be able to employ a veterinarian, a group could do so, especially -with Government aid, in which case a veterinary station and stud depot might be formed at many a centre. Item (10) is the study and representation of matters affecting the agricultural industry. It is certain that where single voices, each untutored and incapable of properly stating a case, might not command attention, even though numerous, the temperate, well-stated case of an association representing such individuals, would, at all times, be of value. It is not merely that the association would represent a number of persons, but that the contents of the memorial would most probably have been duly sifted, extravagances or absurdities rejected, and only such matters put forward as might represent a grievance which would be real or which would genuinely seem real to the memorialists. The reasons for proposed changes in the kistbandi, in the rules relating to well irrigation, in the methods of collection when irrigation sources have short supplies, in forest rules, and so forth, might all be represented by such associations with advantage to the ryots and to the administration. So again such associations would serve as distributors of information, as instruments of enquiry ^ as sources of information, and as agents for the conduct of experiments. Item (11) is arbitration between agriculturists; this is partly pro-vided for by the vOlage pan- chayat system, but associations would, even if not providing arbitration, be influential in directing their members towards arbitration by the panchayat instead of allowing them to ruin themselves and to promote feuds and factions by unnecessary and vexatious litigation. Item (12) is the joint carrying out of projects of irrigation, drainage, plantation, &o. There appear to be many opportunities wasted of taking over small irrigation works or of creating new ones, wHcb are now neglected for want of joint action, while such associations could, by arrangement with Government, take over the duties of kudi-maramat, or by village arrangement, could carry out quasi- communal duties, such, as the repairs to korambus for Cauvery channels in Ooimbatore. In this way much useless Government interference could be obviated. In matters of drainage, again it would be possible, for instance, to arrange for the planting of large blocks of sugarcane, a frequent impossibility at present, because of the rights of neighbouring ryots to surface water so that a ryot is obKged to grow paddy when he would prefer sugarcane. Village plantations, moreover, might be taken up for the supply of fuel and grazing without the intervention of the Forest department. In France and Germany the 'Associations Syndicales' * may be formed compulsorily, the objects of such associations being, generally, those of item (12) ; voluntary associations are preferable, if formed, and, in Italy and elsewhere, such associations are assisted with funds, &c., by the Agri- cultural department. There are other immediate advantages such as those mentioned in section 114 of the Draft Bill. The question, however, arises whether such associations can be started and maintained in coun- tries where they are altogether novel and unsanctioned by, if not opposed to, custom. Probably the answer would, prior to 1884, have been in the negative in France and, prior to 1894, in Ireland, seeing how few Agricultural associations, even for the jm«s«- manufacturing industry of butter-making, existed in those countries. But the answer of the French peasantry is found in the 1,200 Agricultural asso- ciations -with, perhaps, half a million members, formed in the eleven years since 1884 ; in Ireland the question is being answered affirmatively even among a peasantry where the rent and other questions are such delicate problems. The following paragraph is taken from th« Spectator of 11th January 1896, quoting the ' Times ' •of the 6th idem : — " Perhaps, however, the most interesting of all the new and healthier signs are those connected ' ' with the spread of the co-operative movement, especially in connection with agriculture. The farmers, " even of quite remote districts in the south and west, have, in many cases, literally flung themselves into ^' the co-operative movement. A couple of years ago Ireland was the despair of the co-operators, "now it is their boast. Not only has the movement connected -with the creameries been spreading, "but Co-operative societies for enabling members to purchase jointly their seeds, manures, feeding " stuffs, and other agricultural requisites, have been started. How considerable must be the efi'eet of ^' this movement may be judged from the following facts. A saving of at least £6,000 has been effected "in the purchase of artificial manures alone, f and even those who are not members have derived " advantage from the effect of the competition upon local dealers." " Members," adds the -writer in the ' Times,' " had an additional gain in the guarantee of good quality which analysts secured to the smallest purchaser." The following facts as to the Co-operatiT« societies are also well worth notice: — "It is estimated that the sales of the Co-operative dairy "societies, as the creameries are called, will amount to £20,000 this year. The purchasers of the " Agricultural Co-operative societies in non-dairying districts, £5,000 ; and the turn-over of the Irish • See else-srhere in this volume, translation of part of the law relating to the French " Assooiationa STndicslM.'*- Mention of the Tolnntary and oompnlaory associations for drainage and other agricultural improTemeate id m«d« •«. pp. 63 and 64 of Yol. I. , . . .rr . • t This TTM ill one year and \sj only flre societies, the artificial manure being 2,055 toni in quantity. 188 " Co-operative agency society, £80,000. The quality of tlie butter is attested not only by tbe prices " obtained, but by the number of prizes won at Islington, Chester, and several other places. The number "of societies has increased from sixty-seven on March 31st last (1895) to eighty-seven at the present "date." "Ve;ry interesting, too, is the prospect offered by the establishment of what are virtually "land* banks. Pour credit societies, we are told, have been established at Doneraile, County Cork, "Johnstown, and Urlingford, County Kilkenny, and Kyle, County Tipperary. Their object is to " get rid of the extortion of the ' gombeen' man, and make advances on moderate terms. Clearly " co-operation has a very great future in Ireland." Even this does not fully express the change, since, prior to the 31st March 1 894 there were only 33 co-operative creameries or dairies, no co-operative supply associations, and no co-operative credit societies or Village banks. The increase in dairies, the initiation of societies and Village banks, dates from the inauguration, on the 18th April 1894, of the Irish Agricultural organization society, the special work of which is the promotion of the co-operative movement in agriculture, especially as regards agricultural associations for supply, production — especially of butter — and credit. When so great a change as is mentioned by the ' Spectator ' is synchronous with the inauguration and efforts of a special society framed ai hoc, it may reasonably be concluded that the change is largely due to such society. This in fact is the case. The further question, then, is how are village associations to be started and maintained. In France, as shown in Vol. I, a number of energetic men took up the idea, preached it through the country, established small societies, and then formed Central societies for the assistance of the new associations. In Ireland the energetic and patriotic men corresponding to those of France, began in the more business- like way of forming, in 1894 an " Agricultural organization society," which is intended to last, as such, for only five years, within which time it expects to have formed a large number of associations, and to have placed co-operative or joint effort on a solid foundation. When this is done it is intended to form a "Central Farmers' Association" by delegates and representatives from each society; this central' association formed out of the societies themselves, wiU then replace the original creative society which will have lost its raison d^etre. The initiatory success of the society has been mentioned above ; societies are being successfully formed, worked, audited and supervised, and it is anticipated that even the short term of five years will hardly be netded for the replacement of the original society. It appears that, about 1889, the idea of co-operative production was adopted by certain reformers who pushed the idea with some success in the establishment of about 33 co-operative dairies in the south of Ireland. Progress, however, was slow, and the suggestion of systematizing effort by the establishment of an ■ Organization Society,' the sole object of which should be the stimulation, estab- lishment, and maintenance of Co-operative Agricultural Association, was hit upon. Accordingly an inaugural meeting was held on the 18th April 1894, attended by men of all shades of political and religious opinion. The Chairman (Honourable Horace Plunkett, M.P.) presided, and described the work of the intended society, and the necessity for its formation. The society was accordingly formed under very simple rules ; it is a limited society, registered under the ' Industrial and Provident Societies' Act {see chief sections of the Act in this volume) ; its members may be persons, societies or co-operative bodies ; its shares are of £ 1 value and transferable with the consent of the committee, but bear no dividend or interest ; donations and subscriptions may be received from non-members. The object of the society is "to improve the condition of the agricultural population of Ireland, by teaching the principles and methods of co-operation as applicable to farming and the allied industries, to promote industrial organization for any purposes which may appear beneficial, and, generally, to counsel and advise those engaged in agricultural pursuits." (article 2). As shown above, it has translated the object mentioned in the above article by stimulating fostering and organizing a large number of local associations in its very fijst year, and with constantly increasing success ; in its first year 315 meetings of farmers were held, each of which was attended free of all charge either by the Secretary of the Organization Society, by his Assistant, or by a local ' organizer ' of whom five had been appointed ; as a result of these meetings thirty-four societies in addition to the 33 established between 1889 and 1894, were organized and registered in 1894-95 and fifteen more were in an earlier stage. In addition to these meetings, the society started a weekly paper 'The Irish Homestead,' price 1;?. containing a large amount of suggestive information, a record of work, &c. : a large number of useful leaflets were also printed and circulated. The following quotations or abstracts from the speech of the Chairman at the inaugural meeting of the society, and of other speeches, at the first anniversary meeting, are instructive. The speaker, at the inaugural meeting, pointed out that the scheme dealt solely with the rural population dependent on the great agricultural industry. The industry was certainly capable of vast improvement, viz., in the practice of the Act, in the relations and connection between producer and consumer, in the supply to the farmer of his requisites and in agricultural fijiance. Unless harmonious and equitable relations could be established between these interests, agricultural develot) ment was hardly possible. Such relations might, however, be developed by what was strangely lackins- in the farmer, viz., combination or association. ^ "While every other trade and industry has accepted the great essential of modern commercial life, namely, the necessity for combination, the Irish farmer, and for that niatter the Encrlish farmer as well, continues to conduct his business on the old individualistic and exclusive lines which the progress of the world has swept away from every other avocation. This is not the case all over the world. If time permitted, I could show you how this principle is being accepted in other countries. I thmk it is not too much to say that, wherever the condition of the p«)p]e in rural communities has, of late, been materially improved, it has been done by a combination of the Beowle themselves for their own improvement. We often look with envy at the amount of monev other countries spend upon agricultural interests ; but you will find in all cases, that a pretty strong oreani zation precedes Government assistance. When I come to deal with the plan of work which our association might adopt, I shall show you that our programme will consist mainly in inducins the Irish farmer to do for himself what has been successfully achieved by the farmers of other countries This is an error for AKrionltural or Village banks : they are not land banks in the true sense of the worfl ,;, ortoras-e! banks. "uiu, tiz.,. land mortgage banks. 189 The key-note of our proposals is tlie proposition that the Irish farmers must work out their own salvation, and_ further, that this can only be done by combination among themselves. I am quite aware of the difficulty which at once suggests itself. It will be pointed out, that effective combination for productive or commercial purposes is not to be accomplished simply by a recognition of the fact that it is necessary to combine. An association which is not to be a mere debating society, but which is to be capable of joint action, must be organiised on certain well-known, but rather com- plicated, lines in order to bo permanent. The farmers, from the nature of their occupation, are incapable of evolving for themselves the principles which must be observed in framing such rules as will do justice between man and man, and harmonize the interests of all concerned. Even when a farmer grasps the idea that he ought to combine with his neighbours, he cannot put before them an intelligible and workable scheme. Now, here is the point at which, without any interference with his business, without weakening his spirit of independence, without any departure from the principles of political economy, we can do the Irish farmer a great service. To bring to the help of those whose life is passed in the quiet of the field, the experience which belongs to wider opportunities of observa- tion, and a larger acquaintance with commercial and industrial afiairs — that, gentlemen, is the object and aim of this society. Patriotism and- philanthrophy alone will not avail, or the work would have been done long ago. I admit that this is no easy task. "We have got to turn the current of national thought on these subjects into new channels. It will take the best men in Ireland to fulfil such a mission, but the best men in Ireland are with us, and the task wiU be performed." The speaker then proceeded to discuss the several branches of co-operative work, viz., co-operative dairying already began on a small scale, co-operative sale distribution, co-operative supply of rural requisites, the dissemination of knowledge, the protection of common interest, arbitration, &c., and finally, co-operative agricultural finance, already found so successful on the European continent. Not only, however, is association materially beneficial, but educationally in a wide sense of the word. " I wish to caU your attention to another and very important aspect of local organization. "While people differ as to the possible increased production which would result from improved husbandry, it is generally admitted that the soil of Ireland does not produce anything like what it ought to produce. An opinion prevails that the desired reform in our agricultural methods would follow upon the establislunent of an Agricultural department, of which I shall speak presently. Now I have a strong belief, based upon a considerable amount of observation, that no means of improving the methods of farmers will be of any great utility so long as a central body tries to work upon unorganized individual farmers. House-to-house work with this object is slow, laborious, and utterly ineffectual. Habit exercises a predominant influence, which no amount of mission work can over- come. "When, on the other hand, the individuals are organized into societies, then the latter form an easy channel for the dissemination of information, and a lever for the enforcement of better methods. And, in addition to this fact, you wiU find that in such an association the advanced thinkers come to the front, and that the others follow them — the whole process resulting in the triumph of intelligence and progressiveness over habit. The reason I lay stress upon these rather abstruse speculations, is that I consider one of the greatest achievements of our society will be the forging of a golden link between central, beneficial and philanthropic agencies, whether they be Governmental departments, or such splendid institutions as the Eoyal Dublin Society and the farming community whose condition it is sought to improve.* * The writer would here refer to his own suggestions on the absolute necessity for Agricultural association in this. Presidency, as contained in a letter read in Board's Proceedings, No. 307, dated 30th August 1987 (Revenue Settlement and Agriculture) in a note prepared for the Agricultural Committee of 1889, and in "Vol. I of this report, pp. 218, 366, The following is a quotation from the above-mentioned Board's Proceedings : — " I consider that both for this and for agricultural experiment and progress generally, local associations are absolutely necessary. It is impossible to conduct experiments either by officials or by isolated ryots ; the former are too busy and too inexperienced ; the latter are too shy and conservative, too half-hearted and sceptical, too careless of the result of supposed official fads. We ignore, at present, the large amount of experienced indigenous agricultural talent ; we fail to utilize a vast and trained force lying to hand, because we have failed to organize it into a phalanx, and to combine scattered units into one organized whole, and to bring them into rank with our own forces. If com- petition ia the nineenthcentnry watch word, association is doubtless advancing claims for the twentieth century ; this bond alone can unite the disjecta, memira of the agricultural body politic. I consider, therefore, that we should organize in every district agricultural associations ; not isolated societies, dependent upon, perhaps, temporary local knowledge or interest and enthusiasm, but, while possessing local life and organization, dependent for permanent life and inspira- tion upon a central organization with head-quarters at the presidency town. The central organization would consist of all the best talent and knowledge available in the whole Presidency, worked officially in the Agricultural department, hut corresponding, and having frequent conferences, with its m embers in the districts. These members would, of course, be principal members of the district associations, which in turn would have members in every chief town and village in a district. The result would be not only that the central association would be supplied with the oorrectest and best in- formation on all agricultural and rural topics, but would supply information in turn even to the remotest villages, and all this at the least possible expense. Not only $o, but real experiments would at last be possible and popular ; at present a ryot, if induced by a Tahsildar to take up an experiioent, is not only sceptical and careless, but rather ashamed of departing from ancestral methods ; the result is, of course, failure. But if experiments, wisely chosen by an agri- cultural bureau composed as above, were entrusted to local associations and by them, to selected members, these latter would not only have the whole intelligence, skill, and resources of the association at their back, but would be rather proud of being selected as delegates, while the experiments, as the suggestions of men of local status, would com- mand greater interest and faith than officially-ordered trials. Moreover, many suggestions are now obliged to be put aside, because, the Agricultural department cannot find time or space to work at them ; the associations would supply a thousand hands and a thousand acres if need be. The results of experiments, moreover, would be rapidly spread over a district, instead of being confined to the pages of the District Gazette. Finally the associations would pro- vide the talent necessary for stimulating and judging competition in prize farms, exhibitions, school farms and the- etoeteras'of agricultural progress. These and many other results will follow skilfully formed associations." The above was written when the French Agricultural associations under the law of 1884 were only beginning, and in ignorance of the facta of and of the possibilities open to agricultural association in the way of providing credit whether in the form of Eaiffeisen banks or as annexes to agricultural associations proper ; the Irish Co-operative societies also- were not then in existence. Hence the recommendation of 1887 made no distinct mention of objects which, though then called " th-e etceteras of agricultural progress," would now be named ' essentials.' Moreover, too much promin- ence is, perhaps, given to the functions of the Agricultural department in connection with the central organization! cociety. II 48 19'.= * * 8. (Treasurers and other officers entrusted with the receipt or custody of money to give security.) * * * « ■::■ * Only a few sections or parts of sections hare been eitractsd and prinUd. II 51 202 U. No trustee or manager of any savings bank (subject to tlie provision hereinafter contained in respect to savings banks in Ireland) shall be personally liable, except — (1) For monies actually received by him on account of or for the use of such savings bank, and not paid over and disposed of in the manner directed by the rules of the savings bank : (2) For neglect or omission in complying with the rules and regulations required by this Act to be adopted as hereinbefore is provided in the maintenance of checks, the audit and examination of accounts, the holding of meetings and keeping minutes of proceediogs thereat : ^3) And also for neglect or omission in taking security from officers as is hereinbefore provided. 12. (Trustees or managers in Ireland may, by declaration in writing deposited with the national debt commissioners, limit their responsibiUty to a particular amount not bems less than £100. But such limitation shall not extend to sums actually received by him on account of the bank, tor aU ol which a trustee is personally liable.) 13. (Treasurer, trustees, &c., and their heirs or executors, &c., to account for and deliver up aU effects of the bank in their custody whenever required by the other trustees.) 14. If any person already appointed or who may hereafter be appointed to any office in a savings bank, and being intrusted with the keeping of the accounts, or having in his hands or possession by virtue of his said office or employment any monies or effects belonging to such savings bank, or any deeds or securities relating to the same, shall die, or become a bankrupt or insolvent, or have any execution or attachment or other process issued against his lands, gools, chattels, or effects, or make any assignment thereof for the benefit of his creditors, his executors, administrators, or assignees, or other persons having legal right, or the sheriflE or other officer executing such process, shall, within forty days after demand made hy two of the trustees of the said savings bank as aforesaid, deliver and pay over all monies and other things belonging to such savings bank to such person as the said trustees shall appoint, and shall pay out of the estates, assets, or eflfects of such person all sums of money remaining due, which such person received by virtue of his said office or employment, before any other of his debts are paid or satisfied, or before the money directed to be levied by such process as aforesaid is paid over to the party issuing such process, and all such assets, lands, goods, chattels, estates, and effects shall be bound to the payment and discharge thereof accordingly. ***** 16. (Trustees may receive money from depositors to be applied or invested otherwise than as mere deposits in the savings bank. This should be provided for in the articles of the bank.*) ***** 19. The said commissioners shall cause all the monies paid into the banks of England and Ireland respectively, and placed to their account in pursuance of the provisions of this Act, to be invested from time to time in their names, and to be carried to the account hereinbefore provided, under such regulations as the said commissioners shall direct, in the purchase of bank annuities or exchequer bills or Parliamentary securities of whatsoever kind created or issued, or which may hereafter be created or issued, under the authority of any Act or Acts of Parliament for the interest on which provision is made by Parliament, or any stock or debenture or other securities expressly guaranteed by authority of Parliament, and the interest which shall from time to time arise and become due thereon shall in like manner be invested in the purchase of such Government annuities or exchequer bills or securities aforesaid, f * * * * * 33. It shall be lawful for the trustees or treasurers of any friendly society legally enrolled or certified in the manner required by the Acts in force relating to friendly societies to invest any sum of money the property of such society, vrithout restriction as to amount, into the funds of any savings bank established under the provisions of the said hereby repealed Acts or of this Act, and which shall be willing to receive the same, under such terms and conditions as shall be specially provided for that purpose by the rules, orders, and regulations of such savings bank. 34. The receipt of the treasurer, trustee, or other officer for the time being of any such charitable or provident institution or society, penny savings bank, or friendly society, for any money paid accord- ing to the requisition of such treasurer, trustee, or other officer apparently authorised to require such * This power has now been limited by aection 10 of the Act of 1891, which is aa follows : — 10. (Enacts the following restrictions to section 16 of the principal Act), viz. — (a) (an investor mast have deposits of £50 in the bank) ; (6) (the total amount to be invested for any one depositor shall not exceed £500) ; (c) (the money received for investment shall not be invested in any manner not for the time being authorized by law in the case of investment by trustees, and shall not be invested on mortgage of land or any interest in land ; (d) (the accounts of the bank shall be kept so as to distinguish between the receipts and expenditure on account of special investments, and the receipts and expenditure on account of the general business of the bank ; (e) (the assets of the bank in respect of ordinary deposits shall not be chargeable with any part of the expen- diture on account of special investments, and shall not be liable for a,ny loss or deficiency in respect of special invest- ments : (/) (the security required by section 8 of the Trustee SaviDgs Banks Act, 1863, as amended bv this Act, shall comprise separate security in respect of the amount received on account of special investments ; (5) (the annual statement required by section 55 of the Trustee Savings Bank Act, 1863, shall contain, or be accompanied by, such particulars with respect to the special investments of the bank as the national debt commis- sioners direct : Qi) (the rules of the bank shall provide to the satisfaction of the inspection committee for the audit, examin- ation, and publication of the investment accounts for the safe custody of the securities held by the bank on account of special investments, and the security to be given by officers of the bank in respect of the amount received on such account ; (i) (the povt-ar to make special investments shall not be exercised by any bank unless the bank has exercised the power before the first day of June one thousand eight-hundred and ninety-one. (In other words the power of making iuch investments is forbidden to anynewbanke.) t This section limits the investment by trustees of savings deposits ; only Government securities are allowable, the French law is similar, and these two countries and their dependencies stand practically alone in this limitation. 203 payment, shall be a sufficient discharge for the same, and the savings bank paying such money and the trustees, managers, and officers thereof, shall not be responsible for any misappHcation or for want ot any authority of the person or persons requiring or receiving payment of such money. * * * * # • J— j" ^/ ^?*y ^ispii^^e shall arise between the trustees and managers of any savings bank and any individual depositor therein, or any executor, administrator, next-of-kin, or creditor or assignee ot any depositor who may become bankrupt or insolvent, or any person claiming to be such executor administrator, next-of-kin, cred-tor, or assignee, or to be entitled to any money deposited in such savings bank, then and in every such case the matter in dispute shall be referred in writing to the barrister-at-law * appointed under the said hereby repealed Acts or this Act, who shaH have power to proceed ex parte on notice in writing to the said ^trustees or managers left or sent through the post- office by the said barrister to the office of the said savings bank, and whatever award, order or v*il"'?™**^°^ ®^^^^ ^® ^^^^ ^y *^® ®^^*^ barrister shall be binding and conclusive on all parties, and shall be final to all intents and purposes, without any appeal. 49. On any such reference it shall be lawful for the said barrister and he is hereby authorised to inspect any book or books belonging to the said savings bank relating to the matter in dispute, and to administer an oath to any witness appearing before him, or to take the affirmation in cases where affirmation is allowed by law instead of oath ; and if upon such oath or affirmation any person making the same shall wilfully and corruptly give any false evidence, every person so offending shall be deemed -and taken to be guilty of perjury, and shall be prosecuted and punished accordingly. 50. (All powers of attorney and receipts relating to deposits, and aU instruments or documents whatever made or issued in pursuance of the Act, are exempt from stamp duty.) THE SAVINGS BANKS AMENDMENT ACT. 54 & 55 Vict., Cap. 21 (1891 ).t 2. (1) There shall be established an inspection committee of trustee savings banks. (2) A paid officer of a trustee savings bank shall not be eligible to be a member of the committee. (3) The committee may, with the approval of the national debt commissioners, modify a scheme framed under this section. (4j The committee may, with the approval of the Treasury, appoint such officers as may appear to be required for the execution of the duties of the committee under this Act. •J5) The members of the committee shall be entitled to such remuneration by way of fees or otherwise as may be approved by the Treasury. (6) Every scheme made in pursuance of this section and every modification thereof shall be laid before both Houses of Parliament. 3. (1) The inspection committee may appoint persons to inspect the books and accounts of trustee savings banks, and to examine and ascertain and report to the committee from time to time with respect to each bank, whether the bank has complied with the requirements of the Acts and rules relating to the bank as to the security to be taken from officers, the accounts of the bank and the conduct of its business, and whether any portion of the expenditure is excessive or unnecessary ; and every trustee savings bank shall give all due facilities for enabling any such inspection or examina- tion to be made. (2) If on the report of any such person it appears to the committee that any trustee savings bank has made default in giving such facilities or comjilying with any of the requirements aforesaid, or that any portion of the expenditure of the bank is excessive or unnecessary, the committee shall call upon the bank to remedy the default, or, as the case may be, to reduce the expenditure, within a specified time, and if the default is not remedied or the expenditure is not reduced within that time, the committee shall report the matter to the national debt commissioners. (3) Thereupon the national debt commissioners may in their discretion either close the account of the trustees of the bank, in which case the provisions of section 55 of the Trustee Savings Banks Act, 1863, shall apply as in the case of neglect or refusal to obey any orders or directions given by the commissioners, or report the matter to the Treasury with a view of action being taken under section 2 of the Trustee Savings Banks Act, 1887, or adopt both of these courses. (4) The trustees of every trustee savings bank shall, on the requisition of the committee supply the committee with a copy of the pass-book in use in the bank, of the annual general statement of the accounts of the bank, and of the rules of the bank, and of any amendments thereof. (5) If in the opinion of the committee the rules of any such bank are insufficient for the pur- pose of maintaining an efficient audit, the bank shall with all convenient speed make such additional rules as may, in the opinion of the committee, be required for the purpose. (6) If the bank do not, within a time specified by the committee from the date of being required to make any such rules, comply with the requirement, the committee may make such rules, and shall submit the rules so made to the Eeaistrar of Friendly societies, to be certified by him ; and, when so certified, they shall be binding on the trustees. (7) The committee shall annually report their proceedings under this Act to the national debt commissioners, and this report shall be laid before Parliament. (8) The committee may, with the approval of the national debt commissioners, make rules for regulating the duties of persons appointed by the committee under this section. * The barrister-at-Iaw is now the Chief Begistrar of Friendly, &c., Societies. t Only partially printed. 204 4 (The expenses of the committee are to be paid up to a certain amount from the suiylus in the^ handsome national debt commissioners, and any further amount by contribufaone from the several savings banks.) , ^ * * * 7. (The office of trustee ipso facto to become vacant if the trustee is continuously absent from duty for 12 ^°^*^^^ statement required by section 55 of the Trustee Savings Banks Act 1863 to be made by the trustees and managers of every trustee savings bank shall be m such formand contain orTe accompanied \,y such particulars as the national debt commissioners direct. A similar state- ment shall be sent to the inspection committee each year at the same time. 4.' ^ ^ 13 Nothing in section 40 of the Bankruptcy Act, 1883, shallafEect the priority given by section 14 of the Trustee Savings Banks Act, 1863, to the debts mentioned m that section. THE BANKING LAW OF THE STATE OF NEW YOEK.* Aktiolb III, Savings Banks. Section. 100. Incorporation. 101. Notice of intention to organize. 102. Filing of certificate by superintendent. 103. Examination by superintendent. 104. Certificate of authorization. 105. When persons named in certificate become a corporation. 106. Must begin business -within one year. 107. Trustees and their powers. 108. By-laws. 109. Meeting of trustees ; quorum. 110. Yacancies. 111. Security may be required and salaries fixed. 112. Dividends, compensation and loans to trustees prohibited. 113. Eepayment of deposits ; regiilations ; limitation. 114 Deposits of minors, and trust deposits. 115. Wife witness against husband ; claimants may be interpleaded 116. In what securities deposits may be invested. 117. Limitation as to real property. 118. Available fund for current expenses ; how loaned. 119. Temporary deposits. 120. Personal security prohibited ; loans on bond and mortgage. 121. Mortgaged property to be insured. 122. Eestrictions on methods of doing business. 123. Eate of interest ; extra dividends. 124. Per cent, of surplus, how determined. 125. Compensation of officers. 126. No other report or inspection required. 127. Proceedings against delinquent corporations. 128. Examination of vouchers and assets by trustees. 129. Expenses to be paid. 130. Debts due savings banks from insolvent banks preferred. 131. Advertisements of unauthorized savings banks prohibited. 132. OhaTters to be conformed to this chapter. 133. Savings bank voluntarily closed. 134. When dissolution effected. 135. Deposit of unclaimed moneys. 100. Incorporation.-— {Thiiteen residents in a county may form themselves into a savings bank by a certificate (memorandum) of association as trustees ; copies to be deposited with the authorities including the superintendent of banks.) f 101. Mtice of intention to organize. — (Notice must be duly published in the newspapers, and expressly sent to any other savings bank in the country.) 102. Filing of oertifioate ly superintendent. — (Superintendent may refuse to file the memorandum if" not in proper form or not duly notified :. otherwise he shall " file it for examination.") * This law forms Article III of Chapter XXXVII of the General Laws of the State of Tfew York. This chapter known as ' the Banking law ' of the State, was entirely revised and consolidated in 1892, and represents, therefore, a very modern conception of banking law in a great industrial and commercial State. The chapter contains eight aiticles, viz., general provisions, banks (ordinary), savings banks, trust companies, building and mutual loan corporations (companies), co-operative loan assooiations, mortgage, loan, and investment corporations, and safe deposit companies. All classes of banking, &o., association mentioned in Articles 2 to 8 are subject to the provisions of Article 1 : hence savings and all other banking institutions are under the supervision of the ' Superintendent of banks.' Article 1 will be found below in Chapter ¥11. The savings banks law of New York must be read with that article. The New York savings banks under this law are those known as ' Trustee savings banks ', and they have, within certain limits laid down in the law, the right of free disposal of their funds. The aeotione are not always excerpted in full ; some are merely abstracted, others omitted. + See foot-note to the heading of this law and Article I printed in Chapter VII. Miscellaneous. 205 105 Ayavimaiwn by svpennt'endent.—'IU superintendent sliaU thereupon ascertain from the best sources of information at his command: ^ lo^axi^ui irom ine oest (1) Whether greater convenience of access to a savings bank will be afforded to any consi- cortmcate™ '"^ aepositors by opeLing a savings bank in the place designated in the (2) Whether the densitj of the population in the neighbourhood designated for such aaring* thTeiter'irise '"''™''"'^'"^ country, affords a reasonable proiuise of adequate support to (3) Whether the responsibility, character and general fitness for the discharge of the dutie. appertaining to such a trust of the persons named in the certificate, are such as to command tJie contidence ot the community in which such savings bank is proposed to be located. • ^^J- (^'''Jf''<'*f'>f!'^i^orimtion.--(The superintendent wiU, if satisfied on the matters mentioned in section 103, authorize the starting of the bank, and will send a copy of his authorization to the county clerk : it he refuses authorization, he wiU similarly give notice to the county clerk.) 105 mm trustees become a corporation.— {On receipt of the superintendent's authorization the proposed trustees shaU be 'deemed a corporation and may transact the business of ajsavines baak • the name and address of each of the officers of such bank must first be sent to the superintendent ) 106. (Omitted.) 107. TrMs!;««*.— (There must be at least thirteen trustees, all resident* of the State.) 108 and 109. (Omitted.) 110. Vacancies among truiteei.—{K trustee ceases, ip*o facto, to be such, if he becomes trustee oflicer, or employ^ of any other savings bank, or if he borrows, directly or indirectly any of the funds of his savings bank, or if he becomes surety for any loan from such bank, or if he neglects without permission, the duties of trustee for six successive months.) ' 111. (Omitted.) 112. Dividends, eompemation and loant to trustees prohibited.— 'No trustee of any such corporation shall have any interest, direct or indirect, in the gains or profits thereof, nor as such, directly or indirectly, receive any pay or emolument for his services, except as hereinafter provided ; * and no trustee or officer of any such corporation . shall directly or indirectly, for himself or as an agent or partner of others, borrow any of its funds or deposits, or in any manner use the same except to make such current and necessary pa>ments as are authorized by the board of trustees ; nor shall any trustee or officer of any such corporation become an indorser or surety, or become iii any manner an obligor, for moneys loaned by or borrowed of such corporation. 113 to 115. (Omitted.) 116. t -/« «'^< securities deposits may he i«t»wi«(i.— (Deposits may be invested in stock or other interest bearing paper of the United States of America, in paper of the New York State, in paper of any other State of the United States of America which for t& years has not made default in pay- ment of principal or interest of its debts, in certain municipal and local board stock, in bonds and mortgages on unincumbered real property situated in this State, worth at least twice the amount loaned thereon. Not more than sixty-five per cent, of the whole amount of deposits shall be so loaned or invested. If the loan is on unimproved and unproductive real property, the amount loaned thereon shall not be aore than forty per cent, of its actual value. No investment in any bond and mortgage shall be maecure such debts: but all such real estate shall be sold by it within five years after the title thereof is vested in the corporation. 21. No president, treasurer, member of a committee or board of investment, or oflScer, of such corporation charged with the duty of investing its funds, shall borrow or nse any portion thereof, be surety for loans to others, or in any manner, directly or indirectly, be an obligor for mohey., borrowed of the corporation ; and if such member or officer becomes the owner of real estate upon which mort- gage is held by the corporation, his office shall become vacant at the expiration of sixty days there- after, unless he has ceased to be the owner thereof, or has caused said mortgage to be discharged. Only one of the persons holding the offices of president, clerk, and treasurer shall, at the same time, be a member of the investing committee. ****** 24. Every such corporation shall, at the time of making each semi-annual dividend, reserve as a guarantee fund, from the net profits which have accumulated during the six months then next preceding, not less than one-eighth nor more than one-fourth of one per cent, of the whole amount of deposit.*, until such fund amounts to five per cent, of the whole amount of deposits, which fund shall be, thereafter, maintained and held to meet losses in its business from depreciation of its securities or otherwise. SI;* * * * * * Books ksd Eetctens. 39. The commissioners may prescribe the manner and form of keeping and auditing the books and accounts of any such corporation. 40. The treasurer of every such corporation shall annually within twenty days after the last busi. ness day of October make a report to the commissioners showing accurately the condition thereof at the close of business on said day. The report shall be in such form as the commissioners shall pre- scribe and shall specify the following particulars, namely, name of corporation and number of corpo- rators ; place where located ; amount of deposits ; amount of each item of other liabilities ; public funds, including all United States, State, county, city and town bonds, stating each particular kind the par value, estimated market value and amount invested in each ; loans on public funds, stating amount on each; bank stock, stating par value, estimated market value and amount invested in each ■ loans on bank stock, stating amount on each ; railroad bonds, stating par value, estimated market value and amount invested in each; loans on railroad bonds, stating amount on each; estimated value of real estate, and amount invested therein ; loans on mortgage of real estate ; loans to coun- ties, cities or towns ; loans on personal security ; cash on deposit in banks, with the names of such banks and the amount rieposited in each ; cash on hand; the whole amount of interest or profits received or earned, and the rate and amount of each semi-annual and extra dividend for the previous year; the times for the dividends fixed by the by-laws; the rates of interest received on loans • the total amount of loans bearing each specified rate of interest ; the number of outstanding loans which, are of an amount not exceeding three thousand dollars each, and the aggregate amount of the sa-me • the number of open accounts ; also the number and amount of deposits received • the number and amount of withdrawals ; the number of accounts opened, and the number of accounts closed feve- rally, for the previous year ; and the annual expenses of the corporation ; all of which shall be certified and sworn to by the treasurer. The president and five or more of the trustees shall certify and make oath, that the report is correct according to their best knowledge and belief. 41. Beginning with the year ending with the last business day of October eighteen hundred end eighty-nine and every fifth year thereafter such reports shall also state the number and amount" of deposits of fifty dollars and less, of those exceeding fifty dollars and not more than one hundred dollars of those exceeding one hundred dollars and not more than two hundred dollars, of those exceeding two hundred dollars and not more than five hundred dollars, of those exceeding five hundred dollai^ and less than one thousand dollars, of those of one thousand dollars or more ; and of those to the credit of women, both adult and minor, guardians, religious and charitable associations and in trust respectively, received during the year. ' ' 209 42. The commissioners shall furnish blank fonns of reports to every such corporation, and shall prepare annuaUy from such reports, and communicate to the General Court on or before the first Wednesday in January, a statement uf the condition of each corporation from which a report has been received for the preceding year, and shall include therein a statement of the affairs of such corporations in the hands of receivers, und shall make such suggestions as they may deem expedient relative to the general conduct and condition of each of the corporations visited by them * ITALIAN LAW OF THE 15th JULY 1888. f 1. (All savings banks other than Government banks must come under the present law.) 2. Savings banks formed by groups of persons must be constituted by a formal deed of association^ The deed of association for savings banks started by corporate bodies J or with their aid, shall settle (1) the share to be taken by such body in the appointment of directors (for the savings bank), and m the inspection of the accounts ; (2) the business rules of the bank. The deed of association of savings banks formed by groups of individuals shall settle (1) the number, the mode of admission, the replacement, and the rights of members and of their meetings i (2) the mode of election and the number of the directors; (3) the duties of the directors. The articles shall be attached to the deed of the association. These must contain the rules for deposits a,nd repayments, for the forms and nature of the pass-books, for the modes of investing the deposits and other capital and for the disposal of the annual profits, together with rules for the alteration of the articles. 3. The original endowment fund of a savings bank, however provided, must consist of actual cash, and must not be less than £120 which may be repaid in whole or in part according to the terms of the deed of association, when the reserve shall have reached the position mentioned in section 17. The persons or bodies mentioned above shall in no case, save that mentioned in section 17, derive any benefit from (or on any pecuniary interest in) the above fund, or from any subsequent additions to •uch capital, or from any profits derived by the bank. 4. Savings banks founded by benevolent institutions or by other corporate bodies or with their assistance must be provided with a capital and administration distinct from those of the founding body. In no case may the administration of a savings bank be undertaken by a communal committee (giunta comunale), or by a district council, or by the members of the eame.§ Savings banks may have the management || of other institutions of an economic character in so far as is admitted by the laws or by any special regulations, or by their respective articles. 5. In savings banks founded by associations, membership ^ is personal and non-transferable. Members of such savings banks preserve their status even after their contribution (to the endow- ■lent fund) shaU have been repaid to them. 6. The directors of savings banks are prohibited from sharing in the profits and from receiving ■alaries or gratuities, except as regards those who occupy the position of manager. The directors and managers are also forbidden to have pecuniary trantactions with the savings banks which they direct or manage. Savings banks of considerable importance may, ho\i ever, as an exceptional case, allow sitting fees to directors.** 7. The pass-books of depositors may be personal (nominative), to bearer (al portatore), or per- lonal but payable to bearer. Those payable to bearer may bear a name.tt 8. Savings banks may also provide in their articles for the issue of a special category of pass- books to particular benevolent institutions or to particular classes of persons ; these shall be charac- terized (1) by a lower minimum for in-payments, (2) by a limitation of the amount which shall bear interest, (3) by a higher rate of interest. This class of pass-book {i.e., of deposits) shall not exceed a fixed proportion of the aggregate of deposits. 9 to 11. (Omitted.) * In 1888 and 1889 it waa found necessary to enact as follows : — During the year eighteen hundred and eighty-nine and every third year thereafter savings banks and institutions for sayings shall call in the books of deposit of their depositors for verification in such manner aa their respective boardi of trustees may elect. Every savings bank and institution for savings shall, as often aa once in each of its fiscal years, make an accurate trial balance of its depositors' ledgers. + The Italian savings banks are admirable institutions. Exclusive of the Government Post Ofiice banks there are numerous banks formed and worked either by a group of trustees or by public or quasi-public bodies (corpi morali) or societies, such as friendly and benefit societies and Monti di Pieta : conversely, the savings banks frequently support such societies as off-shoots from themselves. They are served almost or quite gratuitously, the trustees iiocepting much labour and responsibility wibhout recompense. They have the right of investing their fuilds in variouB claaaes of security. The Milan Savings Bank is, perhaps, the finest institution in the world in its principles, methods, magnitude and results. (See the chapter in Vol. I.) A specimen of the articles of such banks will be found in this chapter. X Corpi morali, i.e., legal persons whether corporations or corporate bodies, or bodies having a legal entity. ^ That is, the body or committee which actually administers the general work of a commune, shall not be the body or committee, as such, which shall handle the deposits of the villagers or be made officially acquainted, as savings banks' directors, with the accumulations of individuals. 11 " Avere la gestione " ■ the wording ia insufficient j the savings banks have the right of founding as well as of working other institutions. f This refers to the members who unite to found the bank ; these correspond to the ' truateea ' of the British Trustee Savings Banks. ** The great Milan Savings Bank, which deals with millions sterling annually in deposits, loans and iuvestments,. ia managed absolutely gratuitously by its directors. ft The pass-booka most in favour in Italy are those ' to bearer.' II 53 210 12. No objection to the repayment of deposits on pass-books to bearer sball be admitted, except in the ease of the loss, destruction or theft of a book, or when there exists a dispute as to the bearer's right to succeed (as heir) or where there is a court injunction. When pass-books are personal objection may also be admitted in case of bankruptcy (of the depositor), or on the demand of the husband or of the legal representative of a minor. Objections must, in order to evalid, be made in writing to the directors. So long as the objection holds good no payment shall be made without the consent of the objector and {qumre ' or ') without the order of a competent court. « 13. The amount at credit in a personal pass-book may, when the pass-book is issued, be sub- jected, by request of the depositor, to a special assignment (or lien, vincola) ; in every case, a deposit may, by consent of the owner or by order of a competent court, be assigned, transferred, subjected to a lien or attachment, or to seizure in pursuance of an execution, whether as regards the interest or the principal. 14. Savings banks may receive deposits in account current or otherwise as well as savings deposits. But such deposits must be kept in separate accounts. 15. Savings banks, except when specially authorized by royal decree upon the motion of the Minister of Agriculture, Industry and Trade, may not acquire any immovable property other than that necessary in whole or in part for their accommodation or for the carrying out of their business or for such other operations as are contemplated in section 4, or such as it may be necessary to acquire for safe-guarding their claims in the case of expropriations. They must sell within ten years such immovable property as thej may acquire either voluntarily, or in consequence of expropriations in the course of their claims, or by succession or donation. 16. Savings banks must invest their capital in the manner specified in their articles. The articles must determine the maximum proportion of the total assets to be borne (a) by loans or cash credits secured by mortgages, (h) by investments with or loans to corporate bodies. 17. Savings banks must always devote nine-tenths of their net annual profits to the formation and increase of the reserve. The other tenth, and even a larger proportion when the reserve shall have attained the amount of at least one-tenth of the total deposits of all classes, may be devoted to works of benevolence and public utility, or to the development of the founding institution. 18. Any reform or modification of the articles shall involve the least possible departure from the intentions of the original founders. 19. (After the provisions of sections 2 and 3 have been complied with, a royal decree issued on the motion of the Minister for Agriculture shall establish the savings bank and approve its articles after due consideration. Modifications of the articles require similar approval and orders.) 20. In addition to any exemptions from stamp and registration duty allowed by the existing stamp laws to savings banks, such banks shall also be exempt from stamp and registration duty on their deeds of association, on any modifications of the same, and on any powers of attorney which may be used in the withdrawal of deposits.* 21. Savings banks shall pay the income tax f due by holders of deposits, and shall be entitled to recover the same from them. Savings banks shall also pay the said tax upon their net annual profits. 22. The business in deposits other than savings deposits, as mentioned in section 14, shall be regu- lated by the Code of Commerce and by the special laws relating to credit institutions, and they shall be subject to the ordinary taxes : so also the deeds relating to all investments of capital by savings banks. 23. Savings banks shall be subject to the supervision (vigilanza) of the Minister of Agriculture, Industry, and Trade. 24. The said minister shall have the power of making both periodical and extraordinary inspec- tions of savings banks. The result of such inspections shall invariably be communicated to the directors. 25. When such inspections shall disclose misfeasance in the management of a savings bank and breaches of rule or other gross irregularities, the minister may, by a royal decree and with the con- sent of the Council of State, remove the directors from office. The order removing the directors shall appoint a royal commissioner who, within three months, shall nominate a new board of directors accord- ing to the articles of the bank in question. 26. When inspection shall have disclosed a loss of at least one-haU of the own capital (patrimonio i.e., the endowment fund and reserves), the minister may, after taking the opinion of the Council of State, obtain a royal decree for the dissolution and liquidation of the bank, unless the founders or founding body shall, within one month from the date of ascertaining the loss, replace so much of the capital as shall enable the bank efiioiently to resume and continue its business. The liquidators shall be appointed by the minister, and the liquidation shaU proceed under the rules laid down in the Code of Commerce for the liquidation of joint stock societies. 27. Savings banks must transmit to the minister their annual balance sheets duly approved (bv a general meeting), withm one month after approval ; they must also despatch to Mm, at the close of each half year, a statement of their financial situation, made out in the form prescribed in the dovernment rules (section 32). 28. No institution which doe. not conform to the conditions of this law, may assume the title of ' savings bank, even though it carries on operations of the same nature as a savings bank (Directors contravening this article are personally liable to a fine amounting to £120 ) • Compare the exemptions in the English law. t This is not an exact translation of " la tassa di richezza mobile," which considerably differs in incidence weio-hr ^orXto trprtislt'^f tTeW.''^^ '""""^ *^^- " '^ ^' ^'^^«"* ^^"^ "^ °-* - -* profitsTc'eSe'i 211 29. (Directors and others responsible may be fined up to £120, irrespective of the penalties pro- vided by the Penal Code, if they begin business without receipt of proper authority (autorizzazione sovrana) if they contravene the law as to the investment of deposits and the provisions of sections 6 and 17, if they delay the preparation of the balance sheet and half-yearly statements for more than two months, and if, in any document or report laid before a general meeting before the directors or before Government, there shall be any wilful misrepresentation or concealment of material facts relating to the position of the bank.) 30. The minister shall, on proof of such misdemeanours, lay a complaint before the proper court for the infliction of the penalty. 31. (Omitted.) 32. A royal decree shall, after taking the opinion of the consultative committee established for considering matters of providence and labour, and of the OouuolL of State, approve of the rules issued for the execution of the present law.* GOVEENMENT EULES FOR THE GUIDANCE OF SAVINGS BANKS, ITALY. 1 . Persons or bodies intending to establish savings banks under the special law must present a proper application with the documents hereinunder mentioned to the Minister of Agriculture, Industry, and Trade through the prefect, t 2 and 3. (Savings banks founded by associations of persons must present with the application (a) the deed of association and the articles (see section 2 of the law), (J) a certificate from the treasury that the requisite endowment fund has been deposited therein. •• "When the savings bank is founded by or by aid of a corporate body, a copy of the resolution deciding to found such bank must also accompany the application.) 4. The deed of association shall, in addition to the items mentioned in section 2 of the law, deter- mine (1) the amount of the endowment fund, not being less than £120, and the mode of providing it ; (2) the time, modes and proportion in which such fund is to be repaid after the formation of a reserve, should such repayment be contemplated ; (3) the establishment of an endowment fund and administra- tion separate firom those of the founding body, when such body is a corporate body ; (4) the nature of the institutions of which the bank shall have the management (section 4 of the law), with precise details as to the methods, objects and means for establishing the same. 5. The articles of a savings bank must settle the following matters : — (1) Deposits. — (a) The minimum in-payment, and — should it be considered necessary — the maximum amount which shall bear interest ; (i) (similar matters for the special class of deposits men- tioned in section 8 of the law) ; (e) the provisions distinguishing savings deposits from deposits on account current ; (d) the rules for fixing interest, ordinary or extraordinary. (2) Pass-boolcs. — {a) The form of the pass-books, whether to bearer, &c. ; (8) special rules under section 1 of the law (issue of duplicates) ; {o) the benevolent institutions and classes of persons to whom special pass-books are to be issued under section 8, and the maximum proportion which such deposits shall bear to the total deposits. (3) Repayments. — {a) The maximum repayable at sight; (i) the conditions for the repayment of larger sums. (4) Administration. — Whether the office of manager when fiUed by a director shall be salaried ; if so the amount of such salary ; (i) the rate of sitting fees if such shall be allowed under section 12 of the law. ... 1 . , J. 1 (5) Investments. — (a) A precise statement of the nature of the securities in which funds may be invested ; (i) the maximum proportion which may be invested in loans or cash credits secured by mort- gages ; (c) the maximum proportion which may be lent to or invested with corporate bodies. 6. Distribution of net profits. — (a) The use to be made of the one-tenth which is not compulsorily made over to the reserve; (i) the share of the profits (to be used otherwise than in increasing the reserve) and the way in which such share is to be used after the reserve shaU. have reached the amoimt fixed by section 1 7 of the law. 7 Modification of the articles.— {The cases in which modification may be demanded by a minority of the members, the proportion of such minority, and the rules for the exercise of the right). (6) The prefect shall, within eight days from the receipt of the application (rule 1), transmit it and its enclosures to the minister, with his observations and opinion. (7) (The minister may demand further information and propose any modifications in the articles or deed of association). 8 The royal decree, the deed of association, and the articles must be published in the official JBulletin of institutions for 'thrift and providence \ within one month from the date of the decree. After such pubHcation the minister shall release the sum placed in the treasury as per rule 2 (J). § 9. (Alterations in the articles require similar formaUties as in sections 6 to 8.) 10 (Any person becoming a directer of a savings bank must settle within six months any claims wHch the bank may have upon him, or his office will become vacant.) J The*wora^^''Preteor°ir^^^^^ be read in this Presidency as corresponding to "CoUector" and -'Distr^t " respeotivrfy^ publication containing a mass of statistics, information, sets of articles, laws, &c., relating to . ..f i.- * +^!St *P whether in Italy or f oreisn conntries. Such a bulletin is necessary for India also. "' 1 S isNtTwi^Teplt^^^^^^^ ^-^^ ^"^P^^P^^ investment according to the law and the artiolea of the bank. 212 11. No one may become a director who is the syndic or other member of the conneil of the town' or province in which the bank is situated. 12. Sitting fees, permissible in exceptional cases by section 8 of the law, may only be allowed in the case of banks having a capital in deposits and otherwise of at least £200,000, and must be limited to the days on which directors are actually on duty according to their turns of office, and to meetings of the board. 13. Benevolent institutions admissible to special deposit conditions as per section 8 of the law, shall include friendly societies of working men. In the classes of persons similarly privileged shall be included all those who depend upon manual and daily labour, and elementary school teachers. The proportion which such special deposits shall bear to total deposits shall not exceed one-tenth, 14. (Accounts current to be distinct in every way from savings deposits.) 15. (Omitted.) 16. The nature of permissible investments shall be precisely specified in the articles, and no invest- ment of any other kind shall be made by the directors. In selecting investments, care must be taken that they possess the requisites of security and of easy realization and collection. 17. The supervision to be exercised by the minister shall be elfected by the examination of the balance sheets and half-yearly statements, and by means of inspections carried out by the prefects, by the royal commissioners connected with banks Of issue, and by other officers. 18. When the prefect has reason to believe that a savings bank is violating its articles, or is contravfening the law or the present rules, or that it will be unable to fulfil its engagements, he shall at once inform the minister who may require him to make such inspections or examinations as may be necessary. In any case of such gravity or urgency that there is no time for reference to the minister and for receipt of his orders, the prefect may, of his own motion, undertake the nf cessary inspections, inform- ing the minister of the same forthwith. When at the prefect's head-quarters there is a comniiseioDer charged with supervising banks of issue, it shall be his duty to perform such inspections, but it shall rest with the prefect to stimulate the action of the commissioner when such action shall not be suffi- ciently vigorous. The commissioner shall not, of his own motion, undertake iuspections in such cases without having previously consulted with the prefect and with his consent. 19. The regular inspections shaU. be annual, but extraordinary inspections shall take place when- «Ter the minister considers them necessary- Eegular and extraordinary inspections shaU. be carried out by suitable examinations of the accounts,^ biU-book, and cash of the bank. They should t specially aim at ascertaining (1) whether the books and accounts correspond with the half-yearly statements and with the annual balance sheets ; (2) whether the securities and cash as entered in the accounts are actually in hand ; (3) whether the provisions of the law, of these rules, and of the articles with regard to deposits, investments, and the reserve,- «,re duly observed. The inspections shall also ascertain whether the business and accoxmt keeping of the bank are well conducted. 20. Every inspection is to be carried through on the day it is begun or on consecutive days without interval, in order to obtain trustworthy results. The directors and manager must give all required assistance, and the head of each branch must be present when his branch is examined, 21. The results of any inspection must be duly recorded in a note. Any contention, that may arise between the Government officers and those of the bank, must be specially mentioned therein. Should any irregularities be discovered such as are entered in section 29 of the law, a separate memorandum must be drawn up to be sent to the court by the minister. The report must be sent to the minister with a note by the inspector on the general working of the institution, on the causes of any irregularities and difficulties, and on the method for removing the same. 22 and 23. (In case of loss of half the own capital (section 26 of the law), the minister shall at once call a meeting of the members or founders and enquire whether they wiU replace the lost capital; the reconstituted capital must never be less than the original endowment fund.) 24 and 25 (When a board of directors has been removed (section 25 of the law), the commissioner shall assume charge of the bank, reporting monthly to the minister, and taking his orders on all matters other than those of ordinary management; as soon as a new board has been appointed, he must hand over charge, a memorandum in triplicate being drawn up.) 26 to 35. (Befer to liquidation.) 36 The honoraria or other dues payable to the commissioner or to the liquidators, shall be settled by the minister for each case, and shall be paid by the bank. 37. The annual balance sheet to be sent to the minister must clearly and correctly display the workmg of the bank ; it must show the movement of the deposits classified according to their several categories, the profits which have accrued, the losses sustained with the causes thereof, the expenses of every sort, and the distribution of profits. It must be accompanied by a report from the directors explanatory oi the statements in the balance sheet, and discussing the progress of the bank and the working of any other institutions dependent on it. An abstract of the various balance sheets shaU be published in the buUetin for savings banks. 38. The half-yearly statements shaU be sent in to the minister in the first fortnight of the next ^"'inditure '^r'' ^^^""^^^ '"^ ^^""^ ^^^^ °* account, vi^., own capital, deposits, investments,. 213 A royal decree shaU, on tto motion of the minister, prescribe a form for these R+nfo^o^+o ™i.- i. shall be attested by (yarious officers) of the bank in token of correctness statements, which An abstract of the several statements shall be published in the bulletin inspe'LrpTepare'ttr ''^"* '"' ^'^''"^"^^ ^" "°* ^^^* ^ P^^^*-"^' *^« ---ter may send an M^^ ^ f^^-""^ ^^"®? n^^*^ ^®**^^ t^« contribution to be paid by savings banks for the rnrf nf publishing their several documents (deed of constitution, &c.) and statemente '°'* ""^ 41 to 48. (Are of a temporary nature.) AETICLES OF THE CORTONA (ITALY) SAVINGS BANK8.* Scope. nf tT^V^f??" ^^''\^ ^''■^°i*-'^ ^""^ maintained for the benefit of the poorer classes and for the promotion tLw ^r""^ i! r'^""^ ""^T^ \ *^' ^"'^^'^y established in 1865 as a branch of the sTSs bank of Florence, but subsequently made an independent organization f "^-iviiigs 2. (Mentions the laws governing the bank; see translation of the principal law svpra.) Number, admission and duties of Members. 3 The society + consists of not more than 97 members, corresponding to the number of founda tion shares: the status of member cannot be transferred, or transmitted by succession, and is lost whenever a member loses his civil and political rights. 4 to 9. (Members must, with certain exceptions, be residents of Cortona ; vacancies are filled bv elec tion only; all appomtments are made by the assembled members who may themselves be appointed - members are bound frequently to visit the bank, and communicate, if necessary, the result of thei^ inspections to the manager ; they can never under any circumstances claim any share whether in the accumulated capital of the bank or in its annual profits.) Representation and duties of the Socitty. 10. The society is represented and the bank managed by a board consisting of a chairman and nine directors. 11. A manager, secretary, and three auditors (supervisors, sindaci) complete the administration. 12. The society in general meeting appoints from among the members the chairman, directors and auditors. All these offices are honorary (gratuitous). § 13. (The board appoints the manager who may be paid : also the secretary, who must be a member, and may also be paid.) 14 to 20. (Deal with the election, &c., of office bearers.) The Board of Direetors. 21 to 28. (Deal with the duties of directors which are of the usual nature.) ITie Chairman. 29 to 32. (Deal with the duties and powers of the chairman.) The Manager. 33 to 48. (The manager superintends all office work, represents the directorate in court and with the public, is responsible for all funds and securities, looks after the books and correspondence and drafts the annual report, &c. He has certain powers in granting short delays in cases of dues to the bank, holds one of the three keys of the safe, and is otherwise a responsible officer from whom security is required.) * See Vol. I, pp. 203-208. ■j- This method is common in Italy both amongst savings and popular banks, and is distinctly favoured by the promoters of thrift and popular credit. A small branch or even agency is established by an existing bank, and this in turn, develops into an independent unit with, subsequently, its own branches or agencies. The Cortona bank is an offshoot of a larger bank ; others are differently formed ; see Vol. I, pp. 205, 206, e.g.- the Verona Savings bank is the descendant of one founded in 1825 by the local Monte di Piettl (pawnbroking establish- ment) which, as in Europe generally, is a public office ; the Verona Municipality (comnne) is the ' corporate founder of the savings bank,' which is supervised by a committee appointed by the municipal council. That of Badia Polesine was founded in 1878 by the ' Working-men's Society ' of that place, which is a Friendly Society (Societa Operaia di matuo soccorso), and which granted an endowment fund of £400 to the savings bank at its foundation : this fund bears no interest and is not repayable till the reserve of the bank shall have reached one-tenth of the deposits. That of Ferrara was formed in 1838 by a society of private persons who subscribed a fund of £425 in 100 shares, bearing no interest, but gradually repayable, in part, should oiroumstanoes permit ; the object was to encourage thrift amono- the poorer classes by providing a secure place of deposit. That of Cingoli was founded in 1845. by the " voluntary association of 90 respectable persons, with the object of promoting thrift among the poorer classes by collecting their savings and investing them to advantage, the whole without any profit to the founders "; each share was about £,2. That of Calabria Citra was founded in 1861 by the District Board (Amministrazione provinciale), and is managed by a directorate composed principally of members of the Board. That of "Keggio d' Emilia was founded in 1852 by the Monte di Pieta of that place, and though it forms a separate entity it is administered by the local com- mittee which manages the Monte and affiliated benevolent societies. In all cases the duties performed by the administrators are gratuitous. J That is, the society which founded and maintains the bank, and consists of a certain numb 3r of 'membsrs* - who correspond to the ' trustees ' of the English Trustee Savings banks. § See section 6 of the law. II 54 214 The Auditors.'^' 49. It is tie duty of the auditors (sindaci) to follow continuously the proceedings of the directo- Tate, to assure themselves of the continuous and scrupulous observance of the articles and rules, to verify the movement and state of the cash and of the securities in hand, to report to the directors any matter of importance which their inspections may disclose, and to suggest such iniprovements as they may consider useful whether in the management or in the system of accounts. Finally, they must review the annual balance sheet and tate steps to present it to the society together with a written report mentioning such matters as may be important. 50 to 57. (Their reports should be in writing ; they are entitled to pass written opinions on the modes of investing the funds ; they can require from the directors or manager any explanations or state- ments that they may need together With all the books, &c., that they may desire to see ; they must make unexpected examinations of the cash. They may carry out their duties either collectively or by turns, but any communications to the board or to the society must be joint and not individual. One of the three keys of the safe must be held by them. No controller can hold any other office in the society.) The Secretary. 58 to 63. (Omitted, being unimportant.) Meetings of the Society and of the Board. 64 to 74. (Omitted ; of no special importance.) Investment of the funds. 75. The funds of the bank (Cassa) shall be invested as follows : — (a) In mortgage loans to persons of known respectability and solvency, to be returned within five years if repayable in one sum, or within 50 years if repayable by instalments ; These loans shall be secured by the mortgage of immovables, the transfer value of which shall exceed the sum advanced, with any extras, by one-half if the property be buildings, and by one-third if it be rural property (land or a farm). Whatever be the date or mode agreed upon for the repayment of such loans, the bank shall, in case of necessity, always have the right to demand from the borrower, at four months' notice, the repayment of one-tenth of the balance still due by him, and, at one year's notice, of the total.f {!)) in the purchase of paper issued or guaranteed by the State, or of debentures issued by insti- tutions legally entitled to grant real credit {oredito fondiario, credit forwier) ; {c) in the acquisition, by the substitution (of the bank as creditor) of mortgages secured as in (a) ; t (i) in advances on the pledge of Government (public) paper ; such advances shall not exceed six months in term, or foux-fifths of the market value of the paper, provided, moreover, that no advance shall exceed the face value of the paper ; (e) in discounting bills (for work done) due for public works to contractors by corporate bodies, provided that such are sufficiently guaranteed ; § * The dntiea of the gindaoi (controllera, supervisors or auditors) are laid down in the Code of Commerce, which provides compulsorily for the appointment, &o., of these officers in every society or company. The provisions are as follows : — 183. Three or five controllera, with two deputies, shall be appointed for the supervision of the affairs of the society, and for the audit of the balance sheet. They may be members of the society or not and are re-eligible. Parents of directors and other relatives to the fourth degree of relationship, are not eligible as controllers. 184. The duties of controllers are as follows : — (1) to settle, in concert with the directors, the form of the balance-sheet, and the (financial) position of the shares ; (2) to examine the books at least once in three months, so as to ascertain the current business and determine the suitability of the account system ; (3) to make frequent and unexpected examinations of the cash in hand at intervals not more than three months apart ; (4) to verify with the books at least once in every month, the existence of the various documents and securities of every sort held in pledge, as security, or under custody ; (5) to ascertain the due execution of the rules of the society; (6) to examine the balance sheet and to report thereon ; (7) to supervise the work of liquidation ; (8) to convene extraordinary general meetings, as also ordinary ones when the directors omit to do so • (9) to be present at all general meetings ; ' (10) in general, to see that the provisions of the law, and of the memorandum and articles of association are observed by the directors. The controllers of companies which do not fall under section 177 (companies for the grant of credit which must send their returns to the Commercial Court) are entitled to obtain monthly from the directors a, statement of business done. Controllers are entitled to be present at the meetings of directors and to enter on the agenda list of such meetino-s and of general meetings any proposals which they may deem necessary. " t This mode of investing funds is unknown to English and French Savings banks, but is general in Germanv Austria, Italy, and the Umted States, and is very successful, lucrative and secure (see Vol 1 sv ' Savings banks 'V The term and conditions of such loans differ in various banks, since the law leaves them free to settli for them selves the articles governing their investments ; but the differences are only in details. The last clause is intended to safeguard the bank in case of a sudden and general demand for the return of deposits. t This enables sayings banks to relieve embarrassed yet solvent persons by buying up debts of a u™rin„,i character and substituting more equitable contracts. § Corporate bodies such as district boards, communes, friendly and benevolent societies, Ac There is in India also, frequently much delay m paying contractors for pnbKc work done, and as contracts for such work 'are often executed with money borrowed athigh interest contractors suffer loss unless the contract rates are undulv high. By discounting with a bank their invoices or bills for work done-secured by an acceptance endorsed uron them by the debtor-contractors can touch their money as soon as it is due and thus do work on cheaper terms 215 (/) iu lending upon or discounting bills of exchange of not more than six months' term, issued Dy corporate bodies ; (g) in discounting bills of exchange having three approved signatures ; (h) in deposits on account current with well established banks ; (i) in cash credits secured by mortgages of the character mentioned in paragraph (a) ; (/) in accounts current against the deposit oE securities or cash ; (m) in_ advances on the pawn of valuables, whether gold, silver, precious stones, goods, or domestic furniture, up to not more than two-thirds of the actual value of such property. 76. The rules to be followed in each class of investment shall be entered in special business regulations (supplementary to these articles). 77. The bank may also, should it deem fit, carry on the work of agricultural credit (credito agrario) as provided for by the law of 23rd January 1887, or such othdr work as may, by any special laws, come within the scope of savings banks.* 78. The bank may not invest in all more than six-tenths of its assets, as disclosed by its latest balance sheet, in loans and cash credits on mortgage to private persons and in loans to corporate bodies. Frqfiis.]- 79. The profits of the bank shall not be divisible amongst the members (of the founding society) : they shall be reserved to meet any liabilities, first, as regards savings deposits, secondly, as regards ordinary deposits. Each year the accruing profits shall be added to such reserve. 80. The society may, from time to time, determine that a portion of the profits not greater than one-tenth of each year's profits, shall be devoted to works of beneficence or to the development of providence. i 81. When the reserve shall have so accumulated from the profits as to amount to and be main- tained at one-tenth of the deposits of every kind, the net annual profits may be distributed as follows : — Two-tenths to the reserve ; three-tenths to a fund for equalizing the value of securities held by the bank • five-tenths to the fund for the execution of works of beneficence or for the development of providence. Pass-Boohs and Deposit Reeeipts.^ 82. The bank will receive savings and deposits at the hours and on the days mentioned in the rules of business. 83. This business will be carried out through — {a) pass-books for ordinary savings deposits ; (J) pass-books for special savings deposits ; {c) pass-books (personal only) for petty savings deposits by the working classes ; § (d) deposit receipt notes. 84. Pass-books of all kinds and receipt notes are supplied gratuitously. They must be counter- signed by the chairman, manager, and two directors, and sealed. 85. All in-payments, notices of withdrawal, and repayments must be entered in the pass-books or receipt notes. Only one pass-book or receipt note may be issued to or presented by the same person. 86. Only heads of benevolent institutions, workshops, and factories may be supplied with several pass-books, and may use the same, provided that they declare in writing that such pass-books belong to as many different persons comprised in the number of their dependents. 87. (Interest to run from the tenth day after each in-payment.) 88. The account of profits shall be made up to the 31st December of each year, and, as regards pass-books, the amount shall be entered therein as though a deposit, and shall bear interest ; profits on deposit receipt notes shall not bear interest and shall be payable to the receipt owner. 89. From January every depositor shall be entitled to inspect a statement showing the settlement of his account. 90. (Omitted.) 91. The pass-book or receipt note must be presented at every in-payment or withdrawal of funds. 92. In case of withdrawals, whether in whole or in part, whether at sight or on notice, and whether on pass-books or receipt notes, interest shall be calculated up to 21 days before the date of withdrawal.il 93. If money be not withdrawn at the expiry of a notice given by a depositor, the amount shall continue to bear no interest, and shall be retained at his disposal. 94. (Omitted.) * The Verona savings bank provides as follows : — • " (i) In the creation of banks for agrioultnral credit, and in taking part in such banks or inland banks ; " (m) in loans to working-men for the purchase of tools and implements." t See section 17 of the law, which requires that nine-tenths of the annual profits shall primarily be devoted tO' building up a reserve : the remainder must be used in works of charity or public utility or in the development of tha founding institution, if any. See also articles 125 and 125 infra for the disposal of the reserve in case the society comes under liquidation. t See sections 7 to 14 of the law of 15th July 1888. § Classes (6) and (c) are entered with reference to section 8 of the \sM, q.v. II The effect of articles 87 and 92 read together is that the bank gains one month's interest, which is probably taken as a commission for the trouble and cost of the operations. 216 95. Ordinary savings deposits. — Ordinary deposits shall be reeeirable in sums of from one penny (10 centesLmi) to £80 (2,000 lire). Each suoh deposit ceases to bear interest when it reaches the na.aximum of £280, interest and principal both included. 96. These deposits are withdrawable upon demand to the amount of 8*. 4d. (10 lire), or upon 21 days' notice for larger sums. 97. Except in cases expressly arranged to the contrary, the person presenting a pass-book shall be considered as its lawful owner, or as the representative of such owner.* 98. ^ Special pass-hooJcs. — Deposits on special pass-boois constitute a debt by the bank personal to the individual in whose name they are issued. They are transferable or changeable in the modes provided by the ] aw. The bank will recognize as lawful holders of the same only those named therein, ^ their repre- sentatives, or legal claimants. 99. Special pass-books are issued on account of minors, friendly societies, benevolent institutions, corporate bodies, and privileged persons. § They may also be issued to other classes of persons upon a written request. 100. No in-payment on a special deposit shall be less than 10 lire (8«. id.). 101. The maximum sum received on a special deposit shaU not exceed £280 except by special order of the board which may, in such case, prescribe special conditions as regards the deposit and as regards repayment. 102. When a special deposit has reached £400, principal and interest included, subsequent interest shall not be credited to the deposit, but shall be paid over to the deposit owner. 103. For the repayment of special deposits three weeks' notice is required for sums (from £4) up to £120, four weeks up to £200, and six weeks for larger sums. Sums not exceeding £4 are payable at sight. 104. Deposit receipts. — On deposit receipts money is received from single depositors in one or more instalments, each instalment not being less than £4, up to an aggregate not exceeding £800. 105. Sums due on such deposit receipts are repayable up to £200 on one mouth's notice; for larger sums two months' notice is necessary. 106. Eepayments may be made either of the whole or of part of the sums deposited : such repay- ments will be made only to [the persons named in the receipts, or to their proxies, or to their legal assignees. 107. With the above view it is necessary that the receipt holder shall, on his first in-payment, sign the receipt and the corresponding counterfoil in the stub.|| 108. Petty savings. — Pass-books for petty savings deposited by the working classes may be issued to day-labourers, tenant farmers (coloni), primary school teachers, and domestic servants.^ Deposit* under this head shall not exceed one-twentieth of the total deposits of all classes. 109. The amount which may be individually deposited under this head shall not exceed £20 per depositor. When the deposit shall have reached that sum, it «hall be thenceforth treated as an ordinary deposit. 110. With the view of encouraging thrift among the labouring classes, the bank will grant on such deposits a rate of interest higher than that granted on other classes of deposits, and will also establish a fund from which, at the end of each business year, bonuses shall be allotted to those depositors who, during the year, shall have made at least 40 in-payments and no withdrawal.** 111. In-payments must not be below one penny (10 centesimi) nor exceedlB*. 8d. (20 lire), ff- Repayments may be made at sight up to 20 lire ; larger sums require fifteen days' notice. * The pass-book payable to bearer is the most common and approred form used in Italy ; it i«, in thie way a readily negotiable security. ' t See section 8 of the law. X This includes transferees by enddreement : see section 1.3 of the law. § In the Verona Savings bank the corresponding rule is as follows : — " 73. (Special pass-books) shall be issued only in favour of friendly societies of »rtisans and sgricnlturistB, those excepted which contemplate dividends as an object j of protective socieries founded with the view of encouraging thrift and providence among the poorer classes ; and of those who can prove that they belong to one of the following classes, viz. : (a) agriculturists who themselves labour on the soil ; (b) working-men and artisans ; (c) domestie servants ; (d) members of the lower ranks of fiscal and excise servants (peons, &c.) ; (e) the several classes of police ; (/) waiters in coffee-houses, ale-houses and inns, drivers of public and private vehicles, clerks, shop attendants' postal and telegraph servants, porters and servants in public offices, railway workmen and porters, rural police and primary school teachers. ' " 76. The interest on special deposits shall be one-half per cent, higher than that on ordinary deposits. " In the Verona bank, however, the " special deposits " include both the two classes (b) and (c) mentioned in article 83 supra. These Cortona articles contemplate larger deposits under (b), and the smaller ones under (c). II It will be noticed that in Italy these deposit receipt notes are transferable. These deposit receipts are not for a fixed term (see 105) ; some banks (e.3., Foligno) provide for suoh deposits the receipts for which are by law'transferable. ' t This is a rather narrow category which might with advantage be extended. The bank of Poligno grants these deposits m favour of " workmg-men, agriculturists, persons in service, and persons on daily wages " • this however does not include primary school teachers ; it also allows snch deposits up to one-tenth of the aggregate deposit under &IX i163iUb« •* The last three words are very restrictive : in a small or village bank the wording might be " and no withdrawal save for a productive purpose, including therein the payment of rent " : large banks, however, cannot watch over each depositor as a small bank can. ci/u. tt This provides a 'Penny bank ' for the poorer classes. The bank of Arezzo requires "weekly" fsettimanali> in payments of not loss than one penny, so as to induce and regularize the saving habit ; it also permits denosita till the principal reaches £40, and allows interest thereon to accumulate to a much higher sum 217 112. No holder of a pasa-book under this class may own more than one such deposit at a time. When such deposit shall be closed, even by transfer to ordinary deposits after reaching the sum of £20, a fresh deposit of this class may be begun, and so on. 113. General. — Every pass-book or receipt note shall contain the principal rule relating to deposits of the class to which it belongs. Loss, theft, or destruction of pass-houhs, and ohjections to repayment. 114 to 121. (These articles are based on the Italian law on the subject and translation seems unnecessary. Articles 120 and 121 are as follows.) 120. The bank will suspend payment on pass-books issued to bearer in the following cases : {a) when it has received notice in due form of the loss, theft, or destruction of such book ; (J) when an objector has presented legal proof that a suit regarding the right of succession is pending ; (tf) when suspension of payment is required by the judicial authorities. 121. In the case of personal pass-books (libretti nominativi), the bank will suspend payment in the following cases besides those mentioned in article 120, viz. : (a) when the deposit has been attached or mortgaged, or is in any way the subject of a suit ; (5) when the owner has become bankrupt, has forfeited his civil rights, or has become incapacitated ; (tf) when the husband of the holder, or the lawful representative of a minor or other incapable, objects to such payment to the wife, minor, or incapable, respectively. Other operations. 122. The bank will be solicitous to develop its relations with similar institutions in view to harmonious and vigorous action in the field of thrift and providence. 123. It may, either individually or in conjunction with other bodies, undertake or take part in the management of other institutions of an economic character. 124. The bank may establish branches and agencies within such limits as may be useful for the development of thrift and providence.* Own capital of the bank, Sfc. 125. The own capital of the bank shall be inalienable and shall constitute the reserve prescribed by law which shall be annually augmented as determined by the present articles.f 126. Should the liquidation of the society be found necessary, any of the own capital in hand shall be expended in works of public benevolence at the pleasure of the members. MODEL AETICLES FOR AUSTRIAN SAVINGS BANKS. | Objects. 1. The object of the savings bank of .... is to assist in the promotion of industry and thrift in general, but especially among the less prosperous classes, to invest savings readily and speedily with security and profit, and to permit tJieir withdrawal at need. Mode of establishment. 2. Village (oom'n'unal) savings banks. — The bank shall be established by the village of ... . and under its general guarantee. The bank is not a village institution, but is an independent foundation and organization, under State inspection. 3. The village, in virtue of the resolution of the village council, dated .... which has been approved by the district authorities, wiU furnish the necessary special guarantee for the deposits and for the lawful interest thereon until released from such guarantee under the provisions of article 7 and, moreover, binds itself to defray the costs of its first establishment and working from the funds of the village, such advance to be in due time repaid from the profits of the bank.§ * Other banks deal much more fully with this point : e.g., Foligno has ten articles on the subject of which the following form part : — " 36. The general meeting may decide to establish agencies, the principal object of which shall be the collection of deposits on behalf "of the parent bank. " 37. The board of directors (of the parent bank) shall appoint for each agency a committee of supervision. " 38. The work of the members of such committee shall be gratuitous. " 39. One member shall act as cashier. " 40. The committee shall be held responsible towards the bank for sums temporarily held by it." The remaining rules relate to the regulations to be imposed on such agencies. t See articles 79 to 81 sivpra. X These articles are published, apparently, by authority, for the guidance of ordinary non-postar savings banks. They are intended, by modifications entered in the full text, to serve for savings banks whether established by com- munes (Gemeinde) or districts (Bezirk). It will be remembered that these are corporate. bodies with property, rates and taxes, and duties of their own. It has not been thought necessary to translate the articles in full ; many are abstracted and some omitted. See page 203 of Vol. I. . . , . . ■ , § The provisions for district banks are, tmhtaiis mutandis, similar, but add to article 3 that the district (authori- ties or council) will make gratuitous provision for the housing and management of the bank until the bank itself can bear the cost thereof out of its own profits. The special guarantee mentioned in this article is different from the general guarantee of article 2 ; see article 7, paragraph 3. II 55 218 The funds of the bank. 4. The funds of the bank shall consist («) of the deposits, (J) of the profits of management. 5. The custody and accounts of the funds shall be kept separate from those of the village [or district). 6. The profits of management shall consist of the amount which remains after deducting the interest due to the depositors and the costs of the lawful business of the bank. The profits shall form the reserve fund of the bank. (Fifty per cent, of the profits shall be employed in granting higher interest to such deposits as do not exceed 500 florins (rupees) and are of one full year's standing ; such interest to be placed to the depositor's credit and added to Ms deposit. The remaining 50 per cent, shall go to the reserve).* 7. The reserve, which is to be managed and accounted for separately from the deposits, shall be used to cover any losses. This fund shall not be touched for any other purposes until it has reached the amount of 5 per cent, of the total deposits. So soon as this proportion shall have been reached, a portion of the annual profits not exceeding one-half may, by resolution of the board of directors approved by the public (politisohen) authorities of the Province, be utUized for such local objects (of the vUlage or district, respectively) of public utility and .benevolence as shall serve the interests of the poor members (depositors) of the bank. When the reserve shall have reached an amount equal to at least 10 per cent, of the total deposits, 90 per cent, of the profits of any given year may, with the consent of the public authorities and so long as the above proportion subsists, be utilized as above. When the reserve shall have reached the amount of 5 per cent, of the total deposits, the public authorities may consent to the release of the special guarantee mentioned in article 3. The general guarantee referred to in article 2 will, however, always remain in force. The bank is entitled to form,' in addition to the abovementioned reserve, a special reserve intended to meet any market depreciation of its securities. This special reserve must be separately shown' in the balance sheet, and must not be taken into account in calculating the proportion of the general reserve to the deposits. 8. The amount expended by the village (or district) out of its own funds at the establishment of the bank shall be made good from the reserve, but repayment cannot be claimed until such reserve has reached the proportion of 2 per cent, of the total deposits. 9. In case of the dissolution of the bank the reserve, or, as the cas9 may be, such amount as remains after the full repayment of the deposits and after the liquidation of all claims, shall be handed over to the village (or district) for employment in local objects of general utility and benevolence {tee article 49). Amoimt of the deposits. 10. Every deposit shall be received provided that it does not fall below one florin (rupee).t The total amount receivable from a single depositor by means of gradual in-payments, shall be determined by the board of directors. The bank shall return deposits which exceed this maximum. Interest on deposits. 11. (Eate to be fixed according to the price of money and amount of deposit, the rate decreasing as the amount increases. A month's notice to be given before reducing interest. The rates are to be entered on the first page of every pass-book.) 12. Interest is limited as follows : — It is only calculated from the first day of the month succeeding that in which it is deposited, and up to the last day of the month preceding withdrawal. (Or, as an alternative method, interest may be calculated by the half month, which then takes the place of the month in the preceding paragraph.) 13. (Omitted.) 14. (Eules governing the withdrawal of deposits.) 15. (Omitted.) Pass-books. 16. (Every pass-book is to bear a consecutive number, the name of the depositor, the details of deposits, interest, and withdrawals, and the number of the corresponding page in the bank's ledger It shall also contain a copy of the articles and a printed table showing the interest and compound interest due on deposits from the smallest receivable deposit up to 100 florins, annually for twenty years to come.) 17. Eor each deposit account a separate page shall be allotted in the deposit ledger, which shall show every deposit made by the particular depositor with the interest due thereon, and also all withdrawals. 18 to 23. (These articles relate to the transfer, alienation, charging, or loss of pass-books, and need not be translated.) 24. (Eelates to the period of limitation for claims upon deposits not withdrawn. Deposits which thus become the property of the bank are passed into the reserve.) » This paragraph within brackets is evidently intended to be optional, and is probably only for nse when t-he reserve has already attained a strong position. It is a general Bnropean (continental) rule to favour small denosita lieIong:ing to the poorer classes. yu»ii-» t This is a high minimum : as shown in Vol. I, page 203, the savings banks appear to serve not merelv nnorf nlV but those somewhat well-to-do. ^ ^^ "* '^""^» 219 Investment of the funds. * ^wif'-K^'^f i5^* °* i^^ deposits and own capital as wiU be required for probable needs, must always be held m cash Such part as is not so required shall be so invested at iaterost that the engagements of the bank may be completely carried out. The investments may be as follows : — f i-k ^^ '^ interest-bearing mortgage loans within the Province (and in other Hngdoms and provinces of theEmpire under certain conditions), but always repayable by fixed instalments and under the foUowing conditions VIZ. -.{a) that buildings under mortgage shaU be insured against fire; (b) that if the interest on the loans is not paid within, at latest, six weeks from due date, the whole principal with the interest due and any insurance premia that may have been paid by the bank shaU be at once recoverable without notice ; {o) that the debtor pays all costs and accepts the jurisdiction of the Court within which the bank is located ; x- j ■ ^^^ in interest-bearing loans against the pledge {a) of paper issued by the State : (h) of deben- tures issued by provinces, districts or communes with the necessary legal sanction ; (c) of other paper the interest and principal of which are guaranteed by the State ; [d) of debentures issued by irrigation societies under the law of 30th June 1884 for the improvement of agriculture by means of irrigation • W of dobenturesissued under proper authority against mortgages, and quoted on the Austrian Stock Jixchanges ;(/) of shares of the Austro-Hungarian bank and certain other fuUy paid-up shares if pa,ranteed by the State ; {g) of certain railway preference shares ; (A) of securities which by law may be declared suitable for the investment of trust and savings bank funds, even though not enumerated Loans on such securities must not exceed the term of six months nor three-fourths of the market value at the time of the loan, or three-fourths of the face value of paper not quoted on the exchange, or three-fourths of the minimum value of paper redeemed by periodical drawings, all taxes deducted ; (3) in paper of the classes mentioned in paragraph 2 ; (4) in loans of not more than six months upon current coin to not more than four-fifths of its nominal value ; (5) in discounting its own pass-books, and the interest coupons and securities drawn (by lot) for paynaent of such classes as are mentioned in paragraph 2 ; also in discounting and re-discounting biUs bearing three good and well-known signatures. None of the above securities must be of longer term than six months ; (6) in loans at interest (a) to the State, (i) to provinces, districts, villages, and irrigation societies on mortgage of their own taxes or subscriptions when authorized to borrow on puoh security, (c) to public institutions, funds, and corporations, when the same are founded for purposes of general utility. In cases (J) and {c) interest must be paid to the bank half-yearly in advance ; (7) in loans at interest to any credit society attached to the bank or in any way established by it in accordance with these articles which are subject to the approval of the Government ; (8) in deposits with the larger Austrian savings banks ; (9) with the permission of the public authorities, in loans at interest to industrial and trading companies of limited or unlimited liability established under the law of 9th April 1873, especially to credit and loan societies to which the law of 1st June 1889 — , relating to certain privileges in the matter of taxation — is applicable ; such loans shall not exceed the aggregate amount paid up on the shares of the societies ; (10) in real estate should the purchase thereof be necessary for the security of the bank, as when estates indebted to the bank are brought to sale in execution (of a decree, &c., or by the bank), and it is feared that the price fetched will be so low, in comparison with the estimated value, that the claims of the bank wiU not be satisfied. For every such purchase the previous consent of the public authori- ties must be obtained ; when this is impossible by reason of urgency, such consent must be subse- quently obtained. Property thus obtained must be sold as soon as it can be done without disadvan- tage to the bank. With the previous consent of the public authorities real property may be bought by the bank for carrying on its business (for an office, &c.), but only out of its reserve funds ; (11) in endowing a loan office for the grant of personal credit to solvent and deserving peasant proprietors (Klein-Gfxundbesitzer), and tradesmen) Gewerbetreibende) ; such endowment shall not exceed 5 per cent, of the assets exclusive of the reserve. The establishment of such a loan office and the conditions of loans to the same, shall be subject to the approval of ■ Government ; (3 2) in taking part in the cheque and clearing business of the imperial post office savings banks ; (13) should the above investments not exhaust the funds in hand, in deposits with reputable banks and credit societies which have been indicated by the provincial public authorities ; such deposits may be on account current or on deposit receipts, provided that they are merely temporary and not permanent. Investments under headings 9 and 13 shall not in the aggregate exceed the then existing amount of the reserve. Privileges. 26. (These are very slight being confined to the power of seUing securities held in pledge, when dues have not been paid on the loans or when the pawnor becomes bankrupt ; this privilege is governed by certain laws, and does not appear to be singular to savings banks. The banks are also entitled to sell such securities if they fall in market value to nine-tenths of the market value at the time of the loan, unless the pawnor within twenty-four hours provides further cover.) * This ia a chief point in which the practice of foreign saviugB banks is of interest in a study of popular credit j tee Vol. I, pp. 198 to 218. 220 27 to 29. (These Bections merely relate to the safe custody of cash and securities, to the times at. "which money ■will be received and issued, and to the preparation and publication of the balance-sheet.) Decision of disputes. 30. Complaints by individual depositors (against the bank) for irregular management (or acts contrary to the articles) shall be brought before the public authorities of subordinate powers (erster Instanz), who shaU decide the case and take the necessary action. Appeals from their decisions lie to the Provincial authorities, and finally to the Home-Minister. In all other cases, whether the bank be plaintiff or defendant, recourse must be had to the regular courts. The officers of the hank. 31 to 47. (These articles relate to the authorities of the bank, and do not seem to need translation. The committee of management shall be elected from among the village or district councillors, and thosa directly concerned in the administration of the bank must take every interest therein, and must never be in the position of debtors to it : the mayor of the village or head of the district is, ex-officio, a member of the board. The committee shaU elect from its midst a body of directors, one of ■whom should, if possible, be a lawyer : these appoint from among themselves a manager, and if the officer is not a la^wyer, a special counsel must be designated : the directors manage all the affairs of the bank with any paid staff that may be necessary. Article 47 provides that " the duties of conmiittee members and of directors shall be gratuitous.") State supervision. 48. A special royal commissioner shaU be appointed for the bank, who will be in^vited to every meeting of the committee and of the directors. He must keep himself continuously acquainted with the progress of business, with the condition of the bank, and with aU its affairs, must ■watch over the exact observance of its articles, must veto any resolutions of the committee or directors which are con- trary to the law, to the regulations or to the articles, must cause the necessary precautions to be taken in the proper way for the amendment of the rules and for the security of the bank when defects and irregularities are perceived, must himself take immediate action ■when there is danger in delay, and must report to the public authorities of the province regarding any instructions issued to him upon the position of the bank and upon his official duties. Dissolution of the hank. 49. The resolution to close the bank, the mode of carrying out the same, and especially the dis- posal of any surplus assets (article 9), shaU be subject to the approval of the public authorities of the Province. THE PRUSSIAN LAW OP SAVINGS BANKS.* ***** 19. As regards the supervision of the State, it shall be, in general matters, the same as that pre- scribed by law for thesupervision of the State over other communal institutions. Provincial Presidents (Indic6 'Collectors') and authorities shall, ho^wever, be bound to devote special and continuous attention to these institutions, to satisfy themselves that they are suited to their ■work and that their business is, in order, to make and to arrange for extraordinary inspections of the banks, and, ■when disorders and abuses are noticed, stringently to compel removaFof the same. 20. Provincial Presidents must also require the banks to send in annual reports regarding the business done and the results of the bank's working, in a general form to be prescribed by the Minister of the Home and Police departments, so that a single comprehensive return for the -whole Province (district) may be prepared and sent in to the said minister. Every savings bankis, moreover, bound to publish in the local newspaper, or, failing such newspaper, in the official gazette, the statement sent to the president. 21. In the case of savings banks established for larger | areas, such as taluks (Kreis; and \inions, their articles must be sent for royal approval. % * See ■Vol. I, pp. 199 to 203. The contents of the regulation of 1838 are so fully stated there that detailed translation in this volume seems needless ; see, especially, paragraphs 4 and 5 on page 201 . Hence sections 19 to 21 — regarding general State supervision — at the end of the regulation are alone translated. There are numerous circulars and 'orders ■which constitute a manual for Prussian Savings banks, but are too lengthy for translation in a "work on oredifinstitutions and on savings banks in their capacity of credit institutions. ■f That is, larger than villages, which is the usual area contemplated by this regulation. J In the case of village savings banks the articles must be approved of by the provincial presidents. 221 CHAPTER VI.— MADRAS NIDHIS. MEMOEANDUM OF ASSOCIATION OF THE MYLAPOEE HINDU PEEMANENT FUND (LIMITED). 1. The name of the association is the Mylapore Hindu Permanent Fund (Limited). 2. The registered office of the association will be situate in Mylapore, Madras. 3. The objects for which the association is established are — (a) to enable persons to save money ; (J) to invest their savings in landed property and Government promissory notes ; (c) to secure loans at a favourable interest on the security of immovable property situate within the original civil jurisdiction of the High Court of Judicature at Madras, of jewels and of Government promissory notes ; and (d) to do aU such other things as are incidental or conducive to the attainment of the above subjects. 4. The liability of the members is limited. 6. The nominal capital of the association isEs. 2,99,964 divided into 3,571 shares of Es. 84 each to be paid in monthly instalments of one rupee. jy.B.— Raised to Rb. 9,99,936 divided into 11,904 shares in May 1885. Raised to Rs. 19,99,956 divided into 23,809 shares in April 1889. Raised to Rs. 24,99,924 divided into 29,761 shares in October 1895. We the several persons, whose names and addresses are subscribed, are desirous of being formed into an association in pursuance of this memorandum of association, and we respectively agree to take the number of shares in the capital of the association set opposite our respective names : — No. of shares Nnmber. Names, addresses and description of subscribers. taken by each subscriber. 1 C. V. lyasawmy Moodelliar, Dnbash, Messrs. Arbuthnot & Co., residing at Madras ... 15 2 P. Tasndeva MoodeUiar, Dabash, Messrs. Arbuthnot &Co., residing at Madras 15 3 R. Balajee Row, Vakil, High Coart, Mylapore ... 10 4 M. Singaravelu Moodelliar, Head Clerk, Collector's Office, Saidapet, residing at Mylapore 15 5 M. Srisivasacharln, Government Pensioner, Mylapore 15 6 M. Subbraya Moodelliar, Translator, High Oonrt, A.S., residing at Mylapore 12 5 T. R. Ramanadhan, Principal of Govindu Naidn's school, Madras, residing at Mylapore ... ... ... ... 15 8 0. Ramasawmy Iyengar, Landed Projirietor, residing at Mylapore 15 9 C. Seshiah, Clerk, Presidency College, residing at Mylapore 10 10 P. DnrmaUnga Moodelliar, Auditor, D.P.W., Controller's office, residing at Mylapore. Total ... 10 132 Dated the 13th November 1872. Witness to the above eignatuies. D. Vakada Chabiab. Amount of shares. ARTICLES OF ASSOCIATION OP THE MTLAPOKB HINDU PERMANENT FUND (LIMITED). Hindus to be sub- 1. That a Hindu may become a subscriber to the fund on any day and •cribers. month of a year. 2. That subscriptions to the fund shall be in the shape of fixed integral shares of Ee. 1 each per mensem. Duration of subscrip- 3. That every subscriber shall, from the date of his admission into the ^.jon. fund, continue to pay his subscription for a period of seven years. 4 That none shall be considered a subscriber to the fund, unless he has paid a month's subscrip- tion and an entrance fee of 6 annas per share, together with 4 annas the What constitutes a sub- yg^^g of a copy of rules and a receipt book to be furnished to him on •o"''^''- admission. (a) Another receipt bookcaUed acknowledgment book shall, if speciaUy appKed for, be supplied on pavment of 2 annas for the purpose of having payments by each subscriber entered and acknow- ledged immediately by the bm-coUector or clerk receiving them on behalf of the fund. 5 That applications for admission into the fund shall be addressed to the secretary and drawn in the printed form (Appendix A), which shall be supplied on payment of AppUoation for admis- 3 pies per copy. If disapproved, they shall be rejected without reasons being gion. assigned ; but, if approved, they shall be complied with, and a register number given consecutively to each applicant. 56 II 222 6. That subscribers shall be at liberty to increase, decrease, transfer, sell " g,,^*^'^'^y'°''''"'^*'^' *"•' or withdraw their share or shares within seven years from the dates of their respective admissions. 7. (Omitted as per Resolution, dated 15th May 1892, No. 2.) Old subacribers can join 8. That subscribers who have withdrawn from the fund, shall be at the fund. liberty to rejoin it as new subscribers. , 9. That the account of the share or shares of every subscriber shaU be soribOT^w to be^oloaeT''' ''^°^^^ ^^ follows on the expiration of seven years from the date of his admission : — («) Such of the subscribers as have not borrowed money shall be paid one hundred and two and-a-half rupees per share in full satisfaction of their claims. (b) Such of them as have borrowed money and cleared the debt shall have their title-deeds, bonds, jewels, Sec, returned to them, and they shall be paid the balance due to them on account of the shares held by them (c) That the subscribers referred to in both (a) and (J) should be paid also profits, if any, found on the annual settlement of the accounts, according to Rule 49. 10. That the collections of the fund shall be lent to the subscribers for all or any of the following purposes at once or at different times at the rate of Rs. 100 per each of the shares held by them : — (a) As a simple loan within the sums paid in subject to the stoppage mentioned in Rule No. 22. (i) For the purchase, redemption, or on the mortgage of immovable property, jewels and Government promissory notes. 11. That the immovable property mentioned in the last rule shall consist of buildings, gardens, ■KT u- * +V, fields or grounds situated within the jurisdiction of the Original side of the perty to be mortgaged^™" Madras High Court. The property to be lodged' as security shall be one in which the mortgagor has an unquestionable right and the directors shall be at liberty to reject the same without assigning reasons. 12. (Omitted as per Resolution, dated 15th May 1892, No. 7.) 13. That subscribers, who have discharged their loans in full or in part as per Rule 33, shall be allowed to draw loans again, as per the same register numbers, security and Repetition of loans, rules of the fund under which the fully or partly discharged loans were granted. Loans nnder different i^ That subscribers holding shares under different register numbers regis er num era o e gj^g^jj ]jg allowed loans on account of all the shares on one and the same srrantecl on tae same . .,,.. » /v>.i i aeonrity. security, provLded it is oi a sufficient value. . , . . 15. That a subscriber wishing to raise loans on the mortgage of his loans' ^^^ '™ ^°" °^ property shall send an application to the secretary, specifying therein the amount of such loans. 16. That applications for loans shall be submitted to the secretary in the Form B in the appendix to the rules to be supplied on payment of 3 pies accompanied by the title- Second appUoation for deeds and other documents, or by jewels or by Government promissory notes, ^°^^^- as the case may be. (Resolution, dated 15th May 1892, No. 8.) 17 and 18. (Omitted as per Resolution, dated 1st May 189?., No. 3, and 15th May 1892, No. 7.) 19. That a plan and estimate of the landed property proposed to be mortgaged shall be pre- pared by the land appraiser of the fund subject to revision by two sub- How real property to be scribers, who shall be appointed from time to time as surveyors : and who b B^yTyorT" "^™ ^^^^ ^"^^"^^ "" ^^P'^'' °^' *^« valuation and of the unobjectionable title of ^ ' the mortgagor to the property to be mortgaged to the fund. In each case, the applicant shall pay an estimate fee of 10 annas upon every Rs. 100 or part thereof that he may borrow, and he shall also provide them with conveyance. (a) That in the estimates of buildings the value of brick work be calculated at 7 pies per cubic foot, or at 16 bricks per cubic foot, rating 1,600 bricks for a pagoda. (Resolution No. V of 10th January 1873, adopted at general meeting, dated 28th June 1874.) (i) That if the estimate be submitted within a month from the date of the party first calling on him, the estimate-maker shall receive the fees in full, if within six weeks he shall receive 75 per cent, of the fees, if within two months 50 per cent., if within three months 25 per cent., and if still later, forfeit aUhis fees. And the date of the party first calling shall be invariably noted by the estimate- m.aker on the application of the party referred to him. (Resolution No. XI of 16th October 1894, adopted at general meeting, dated 16th May 1875.) {o) That when property once mortgaged to the fund is again brought up for mortgage to the fund within seven years from the date of the first mortgage ; and when the property has undergone no alteration to render a fresh estimate necessary again an estimate and bond fee of 7 annas for immov- able property, and 6 annas for movable property, for every Rs. 100 or part thereof be payable to the fund. 20. That in case of jewel proposed to be mortgaged, they shall be referred to the jewel appraisers . of the fund, who shall value and submit an estimate for the same, the appli- vainBfl' ^^ *'*^*' ^^ ^^^^ ^^^^' ^^^^^ required to pay an estimate fee of 8 annas upon every Es. 100 or part thereof that he may borrow. 21. That if the report or valuation made in the two cases referred to in Rules 19 and 20 be Tm-fcher xeBort of sur- ^^^'^^^ unsatisfactory, the nianaging committee shaU be competent to call veyors ^' a separate report or valuation from two other subscribers to be appointed for the purpose. The surveyors shaU, in aU cases, be held responsible for •the correctness of their report, and the appraisers for the correctness of valuation. 223 Stoppage in simple 22. That in granting simple loans as per Eule 10, the scale of stoppages loans. shall be as follows : — First year Second , , Third „ Fourth „ Fifth „ Sixth, ,, Seventh „ What percentage of the Talne to be lent. 12 per cent. 10 do. 8 do. 6 do. 4 do. 2 do. No stoppage. (a) That when a subscriber applies for a simple loan, the loan shall be given with the sanction of the president or the vice-president and the auditor. (Resolution No. VII of 10th January 1873, adopted at the general meeting, dated 28th June 1874.) 23. That in granting loans on the mortgage of landed property and jewels, no more than 75 per cent, of the estimated value, together with the amount of simple loan to which the subscriber is entitled, shall be advanced ; and in giving loans on the mortgage of Government promissory notes, 1 per cent, less their market value shall be advanced at the discretion of the directors. (a) That in giving loans on the mortgage of Q-overnment promissory notes, the nominal value of each paper be taken and a deduction of 12 J per cent, be made. (Resolution No. XV of 9th November 1873, adopted at the general meeting held on the 16th May 1875.) (i) That benefited subscribers should be allowed to raise a second loan on a fresh number to the luH extent on the property already under mortgage with the fund for adjustment of the first loan and the balance for their other purposes. (Eesolution, dated 11th September 1891, No. II.) 24. That from the amount to be lent to the subscribers all arrears of subscription and interest du» Deduction of arrears *™™ ^^^^ ^^^^ ^9 deducted at each time they receive the loan, as also" a from loans. hond fee at one anna per every hundred rupees or any part thereof on mortgage loans only. 25. That simple loans shall be paid to subscribers only on execution of the necessary documents ; Loans to be paid after ^^^ mortgage loans shall be' paid to subscribers only after ^they^ have given the execution of the ne- cessary dooumenta and the delivery of title-deeds and property. Mortgage deeds to be executed or attested by all co-partners. Loans allowed to be paid either at once or at dif- ferent times. possession of the landed property with the title-deeds thereof or the jewels or the Q-overnment promissory notes on the security of which money is to be advanced, and have executed under their hands, deeds of mortgage of such property in approved forms. 26, That mortgage deeds shall be executed or attested by aU parties, whether subscribers or not, who are in the opinion of the directors interested in the property to be mortgaged. 27. That if the state of the fund do not allow the payment at once of the whole amount of loan sanctioned for any subscriber, the bond shall nevertheless be taken for the whole amount, and such sums as can be spared shall, from time to time, be paid to him until they come up to the whole amount. " (a) That in addition to the loans grantable to subscribers under Eule 10, special loans not exceeding three times the amount of such loans be granted to subscribers on Special loan. mortgage of jewels only, bearing interest at 8 per cent, per annum. "(b) Such interest shall be payable monthly. Penal interest at 3 pies per rupee per mensem shall be charged on aU overdue instalments of interest. " (o) That aU such special loans shall be allowed to be repaid in instalments at the oonvemenoe of the borrower, provided that the whole amount of the loan with interest, if any, shall be repaid within three years from the date of the loan, or when he ceases to be a subscriber to the fund, if this event should happen earlier. . ■- , ■ ^ . -j! i. j- -i ^ " (d) If at any time, the borrower falls in arrears of six months' interest or if he fails to repay the loan together with interest, if any, within the period specified above, the mortgaged prbperty will be sold in accordance with the provisions of Rule 38. .-,-,-,. j ^i, v i j- " (e) Interest at the rate of 2 pies per rupee per mensem shaU be charged on the balance of principal and interest due at the end of the period specified above. "(f) The amount of special loans and of instalments, in repayment thereof, shall be Es. 12-8-0 or any multiple of Es. 12-8-0." (Eesolution, dated 10th March 1895, "[No. 7.) 28 That all-payments to the fund shall be made within the 20th of each month to the biU- coUector who shall caU on every subscriber only once a month ; and if no Payment. payment could be made then, the subscriber shall remit the amount direct to ■the treasurer or, in his absence, to the secretary. , j » xi, m i. ^ at, j. (a) That for the purpose of the fund, the month be reckoned from the 21st of the one to the 20th of the next following month, and that papers, receipts and disbursements be disposed of or regulated accordingly. (Eesolution No. 14 of 31st August 1873, adopted at the general meeting held on the 28th June 1874.) 29 That subscriptions to the fund shall be paid in advance and interest in arrears for the fuU month or months, no broken periods being allowed. 30. That in aU cases of transfer or sale of share or shares, a fee of & Transfer fee. annas shall be paid for each share. Subscriptions in ad- vance and interest :aRears. in 224 T, V ^i • i,: , , 31. That if a subscriber loses his receipt book, he shall pay 4 annas Dnplicslce receipt-book fee. » , i n , . , tor the dupheate. 32. That subscribers -who are desirous of increasing their shares shaU. be required to pay at once- the arrears of subscriptions on the increased shares, together with the entranc&- How shares increased. j^^^ ^j^j^ compound interest at six and-a-quarter per cent, per annum. 33. That such subscribers, as have drawn loans from the fund and are desirous of repaying them in whole or in part, shall be allowed to do so, provided the amount refunded [ Befand of loans. shall not consist of fractional parts of a rupee. 34. That interest on the transactions of the fund shaU be charged Interest. ^^ ^-^^ following rates :— (a) One pie per rupee per month on the amount of loans of all kinds whether paid or reserved in the fund at the request of subscribers. (5) Two pice per rupee per month on the arrears of subscription and interest due every month. (Eesolution, dated 6th December 1891, No. 1.) (o) That simple interest at twelve and-a-half per cent, per annum be chargeable upon any balance that may remain due to the fund in closing accounts after the full term of seven years. (Recommended in paragraph 13 of the report for 1872-73, adopted at [the general meeting held on the 28th June 1874.) 35. That where a subscriber, by whom subscription and interest are due, pays any sum, it shall be appropriated in the following order, namely, firstly, to fees due, from the Appropriation of pay- subscriber on account of notices of default served upon him by the secretary ™®°*^' or the vakil, secondly, to additional interest that may be due, and, thirdly, to the interest and subscription that inay be due. 36. That if subscribers, who are not benefited, fail to pay their subscriptions for three consecutive months, or fall in arrears of six months' subscription at any time, they may IDetau ers. ^^ removed from the list of subscribers' and shall have no right whatever to amy benefits arising from the fund, but shall be repaid only the subscriptions paid in by them, minut any interest that may be due from them on arrears. 37. That if subscribers who have received simple loans fail to pay their subscriptions and interest for three consecutive months, or should the arrears of payment due by them exceed at any time six months' subscriptions, they shall be subjected to penalties mentioned in the foregoing rule. 38. That if subscribers who have received mortgage loans fail to pay thair subscriptions and interest for three consecutive months, or should the arrears of payment due by them exceed at any time six months' subscriptions, they shall be subjected to the penalties mentioned in Eule 36. The managing committee shall be at liberty to cause the mortgaged property, whether movable or immovable, to be sold by public auction at any time they may deem it proper to do so. {a) That the directors be at liberty to cause notice of such default to be served upon the de- faulting subscriber by the secretary or by a vakil, a fee of 1 anna being charged in the former case and whatever fee is claimed in the latter case being recovered in the same way as the former. (5) That in cases where subscribers execute and send promissory notes in favour of the fund from the mof ussil, they be required to send them after registering them . (Resolution, dated 6th May 1883, TSo. 13.) {e) That when a simple loan is granted to a resident in Madras, one of the fund clerks or peons shall be present at the execution of the promissory note and make an entry of the fact in a register to be kept for the purpose, giving particulars of the name and number of subscriber, the amount and date thereof and the place of its execution and certifying to their being correct by his own aignatuxe. ° (Resolution, dated 6th May 1883, No. 14.) {d) That a fee of 5 annas only be charged for every sale notice issued. (Resolution, dated 6th December 1891, No. 5.) 39. That from the sale-proceeds, all expenses and costs shall be deducted, and the remainder carried to the account of the subscribers ; but if the remainder be less than Disposal of sale-pro- the debt, the deficit shall be recovered from them or their heirs, executors <'<^^^- or administrators ; but if greater, the surplus shall be paid to them or their heirs, executors or administrators. 40. That subscribers who have mortgaged their premises to the fund, and who are desirous of making any addition or improvement to them, shall be allowed to do so at morteagirreal'property. *^«,f own expense but with the previous sanction of the managing com- ^ ^ mittee, and under the supervision of the person to be appointed by them. Should they fail to obtain such consent, they shall not only lose all benefits of the fund, but als» be proceeded against for the recovery of the full amount due by them, at the option of the managing committee. (a) That when a house or building under mortgage with the fund is proposed to be materially altered, the mortgagor shall be required to furnish a plan of the proposed alteration and also a security or two sureties for the mortgage amount, and that no such alteration be commenced or proceeded with before a written permission is granted by the secretary. (Eesolution No. VII of 5th March 1876, adopted at the general meeting held on the 25th March 1877.) (J) That all immovable properties under mortgage with the fund shall be inspected and reported upon once a quarter by the fund clerk, and once a year by subscribers to be deputed for the purpose. (Resolution No. VIII of 5th March 1876, adopted at the general meeting held on the 25th March 1877.) 225 41. That subsciibers, whether benefited or otherwise, may be allowed to withdraw from the fund on affording satisfectory reasons for so doing. In the case of benefited sub- -to^ grounds °" '^*'^*''°- scribers, any balance due from, or to them, will be received from, or paid to them, allowing them interest not exceeding 3^ per cent, per annum on the amount of subscription paid in by them ; and in the case of non-benefited subscfibers, their subscriptions, tninits interest on arrears due by them, shall be refunded within three months from the dates of applications, together with interest thereon not exceeding 3^ per cent, per annum. (ff) That withdrawals from the fund shall be closed on satisfactory grounds only in the case of the subscribers who oie within three years from the date of admission and subscribers of more than three years' standing should in every case have their accounts closed on satisfactory grounds. (Resolution, dated 6th December 1891, No. 4.) 42. That when subscribers, whether benefited or otherwise, withdraw from the fund for reasons . which may be deemed unsatisfactory, they shall be liable to the penalties faaory gro'^nds"" ""^ ' prescribed in Eule 36, and the balance due to them shall be paid within three months. ri f ti, ^^- '^^^^ t^^ grounds of withdrawal from the fund of any subscriber, if drawal tobe'stated ^' ' ^^y' ^^^^^ ^^ stated fully in the application for withdrawal, and certified to, by two of the subscribers. 44. That if any subscriber dies before the close of seven years from the date of his admission „ „ . . , . „ into the fund, his interest in it shall be transferred to the person named in the Transfer ot interest of i-x-j-j-- ji, • jj.i,'iii_- the deceased subscribers. application for admission, and when no person is named, to his legal heir, if not opposed by other claimants within three months, but if opposed, the transfer will be suspended till the dispute between the claimants shall have been settled by a decision of a competent Court of Justice, or till the disputing parties shall have signed a duly executed deed of compromise in Ihe presence of the directors. In either case, the liabilities of the deceased subscriber, if any, shall have to be fully satisfied before the transfer can take place. 45. That any person, whether a subscriber or not, intending to become a deppsitor in the fund, _ . shall make an application to the secretary in the printed form (Appendix A), and he shall be at liberty to deposit any sum not less than Rs. 1-4-0 or any multiple thereof, subject to any maximum that may be fixed from time to time by the managing committee, before the 20th of each month, interest being allowed at 5 per cent, per annum upon such deposit. Such interest shall be allowed for the month in which it is deposited and not for the month in which it is repaid. All interests accruing upon deposits shall be paid half-yatirly at the end of April and October of each year. (a) That the depositors who are not subscribers shall pay an entrance fee of 1 2 annas, whatever may be the amount of deposit, and as often as they may renew account, and that a person opening more than one deposit account, whether subscriber or not, shall be treated as a new depositor for each account so opened. (Eesolutions Nos. XIII and XIV of 9th November 1873, adopted at the general meeting held on the 16th May 1875.) 46. That the person depositing money as per Rule 45 shall, at his own cost, be furnished with a copy of rules and a receipt book in which all payment shall be acknowledged jointly by the president and treasurer. 47. That when applications are made for the repayment of the deposit amount in part or in full, payment shall be made in the order of their receipt, from the collections of the fund, the requisite stamp charges being borne by the depositor himself. (a) That when a depositor applies for repayment of his deposit money, he be repaid imme- diately, if money is available, with the sanction of the president or the vice-president. (Resolution No. VI of 10th January 1873, adopted at the general meeting held on the 28th June 1874.) (b) That when applications are received for the repayment of the deposit amount in part or in fillip payment shall be made in the order of receipt of such applications, provided that the aggregate amount in any month shall not exceed a moiety of the collections made during the month. (Resolution No. V of 10th October 187 i, adopted at the general meeting held on the 16th May 1875.) (o) That the directors shall treat as genuine every signature made in the receipt book in acknow- ledgment of such repayment. (Resolution, dated 20th January 1884, No. 13.) (iT) That disbursements of each month on account of repayment of deposit, and paid-up sub- scription in cases of withdrawal, and establishment charges, shall not exceed a moiety of the aggregate monthly collection, and payment of simple and mortgage loans shall be made out of the surplus. (Resolution, No. XI of 7th March 1875, adopted at the general meeting held on the 27th February 1876.) 48. That when the managing committee think it proper to return any deposit, they may do so by giving a month's notice to the depositor beforehand, after which no interest will be allowed. 49. That the accounts of the fund shall be closed annually, i.e., up to the end of the month preceding that in which they shall have commenced; and that after setting Annual closing of the agjije what is due to the subscribers in the shape of principal and interest, one- accounts and the disposal fg^j^j^ ^f ^jj^g surplus money, that may remain, shall form a ' Reserve Fund' of the surplus. ^^ ^^^^ ^^^ unforeseen and unavoidable deficit, seven-twelfths shall be divided among the subscribers with reference both to the number of their respective shares and the number of months during which they have held them, and the remaining one-sixth among the oflace- bearers and directors in such manner as may be determined by the managing committee. 57 226 (a) That the remuneration of the directors shall be proportioned to the number of meetings which they have attended, and the amount forfeited by them on account of abBence ehall be added to the reserve fund. (Eesolution No- XI of 6th December 1874, adopted ai the general meeting held on 27th Febrnary 1876.) (b) That a clear statement of the several sources of profit be prepared and laid before the general meeting every year. (Confirmed at the general meeting held on the 16th May 1886.) (c) That once a year the ledgers maintained in the office shall be on the occasion of the annual audit of accounts, compared as far as possible, by the permanent auditor of the fund with the receipt or pass-books granted to the constituents of the fund and any case of difference shall be noted. (ResolQtion, dated 15th May 1892, No. 12.) 50. (Omitted as per Resolution, dated 15th May 1892, No. 13.) Breaking np of the re- 51- That the reserve fund shall be brokea up once in four years, and be serra fnnd, divided as particularized in Eule 49. 52 That all fraction of a pie shall be either omitted or considered as Fraction of a pie. ^^^ ^j^ ^^ ^^^^^ ^f ^■^^^ f^^^ 63. That all bonds to be executed by the subscribers shall be made out Bonds in whoso names j^ ^Jj^q names of the president, the two trustees, and the secretary or the to be drawn. treasurer for the time being. 54. That title-deeds, bonds, jewels, &c., shall be lodged in a box, secured Title-deeds, &o., to be })j three locks, the keys of which shall remain in the custody of the presi- sBcnred in a boi. ^^^^^ ^^^ ^^ ^^^ trustees and the secretary. (o) That title-deeds so lodged in the fund be open to the inspection of the executants on due notice being given and on a payment of 4 annas for each inspection. (Resolntion, dated Cth May 18S3, No. 15.) 55. That disbursements from the fund shall invariably be made in cheques bearing the signa- tures of the two trustees, except in cases in which the amount to be paid is DisbureementB to be ^qq small to allow a cheque being granted under the rules of the bank where made by cheques. ^j^^ fund money is lodged. In every case of payment by cheque, a fee of 1 anna shall be levied. (o) That every disbursement amounting to Rs. 20 or less be payable by a cash-order drawn. and signed by the trustees on the treasurer. (b) That when a cash-order is lost, a duplicate may be supplied on payment of half an anna. (Eesolution, dated 16th March 1886, No. 14.) 56. That if any subscriber deceives the directors by false statements or fictitious documents or in any other manner whatever, or if he has unjustly or unlawfully recourse to thVprrt orsnbloribTrs °° ^^^ ^ ^^^^ ^^**®^ whatever connected with the fund, or if he wiLfuUy or deliberately disobeys or counteracts any of the rules or proceedings, he shall not only render himself liable to expulsion, but shall also be liable to the penalties prescribed in Rule 36, and shall never again be admitted into the fund. " (a) That a board consisting of 30 subscribers residing in Madras be elected by the general Board of electors body of subscribers once in every five years ; and such board shall have power to appoint directors for the management of the fund. That at the end of five years the members of the said board shall retire and fresh members be elected in their place. The retiring members of the board shall be eligible for re-election. '• (b) Vacancies occurring in the board during the period of five years shall be filled up by the members of the said board by nomination by a majority of them. " (o) That none shall be eligible for election as a member of the board unless he holds not less than ten shares in the fund. " (i) The president of the direction for the time being shall be an «x-offioio member of the board, and with the exception of the president no member of the board shall be a director. "(e) The appointment of directors shall be by nomination by a majority of the board. The majority for the above purpose shall be not less than ten for each vacancy. " (/■) That none shall be eligible for appointment as a director unless he holds not less than fifteen unencumbered shares. He shall be considered to have vacated his seat in the direction the moment he encumbers the said minimum of fifteen shares." (Eesolution, dated 10th March 1895, No. 2.) 57. That the management of the fund shall be vested in a committee consisting of not more than sixteen directors including a president, a vice-president, two trustees Managing committee. to be selected from among the subscribers holding not less than fifteen unencumbered shares each. (Resolution, dated Ist May 1892, No. 4.) " (a) That directors when appointed as office-bearers, excepting the president, shall, in addition, to shares prescribed in Rule 57, increase their interest in the fund in the shape of a deposit account carrying at no time less than Rs. 2,000 at the credit of such directors during the incumbency oi such offices. (Resolution, dated 15th May 1892, No. 16.) 227 " (i) That a paid secretary, a paid auditor aad a paid treasurer be appointed in the place of Office establiahment. the present director secretary and assistant secretary, director senior and junior auditors and director treasurer and assistant treasurer; that their pay he fixed at a sum not exceeding Es. 100, Es. 75, and Es. 70 respectively. " (c) That the paid secretary, the paid auditor and the paid treasurer be not directors of the fund. " (d) That an outside auditor be appointed to conduct concurrent and annual audits. " (e) In order to provide for this additional expenses incurred, the portion of the profits allotted to directors be reduced from one-fourth to one-sixth. " (/) '-Tliat the rules of the fund inconsistent with the above proposition be rescinded." (Resolution, dated 10th March 1895, No. 4.) 58. That in the case of insolvency, continued absence lor a period of six months, or incapacity of any of the directors, or in the case of death, resignation or retirement of a director, or for any other sufficient cause, his name shall be removed from the list of directors and another appointed in his place by the general body of subscribers at a general meeting. (Passed by general meeting held on 16th September 1888.) Ketirement of directors. ?^- That four of the directors, including office-bearers, shall retire by rotation at the close of each year, but they shall be eligible for re-election. (Confirmed at the general meeting held on the 16th May 1886.) 60. That the directors shall meet every month, or oftener, if necessary, to conduct the affairs Mooting of the directors °^ *^® fund, and that seven o"f them shall form a quorum, without which no business shall be transacted. How t a i " th b ^^^' '^^^^ ^^ *^^ president and vice-president be absent at the monthly senee of the president. ° " ™66tiiigs, one of the directors present shall be appointed to act for him for the time being. 62. That at the meetings of the directors, all matters shaU be decided by a majority of votes, and that in aU cases of an equal division of votes, the president, or the vice- Votes, president, or in the absence of both, the director acting for him shall have a casting vote. 63. That the directors shall decide all matters according to the I'ules of Directors to decide »o- the fund. When doubt arises as to the constractions of any rules or any cording to the rnlea. other matter, they shall be guided by the decision of a general meeting of the subscribers. Appeal to a general 64. That from the decision of the directors, any dissatisfied subscriber meeting. jjiay prefer an appeal to a general meeting. 65. That the managing committee shall have the power of making, passing or altering bye-rules „ , consistently with the main ones, should their experience render such measure ^ ' ^ ■ necessary for the benefit of the fund. Such proceedings of the committee shall be held good, unless disapproved of by a general meeting of the subscribers. Proceedings of the direo- 66. That all proceedings of the managing committee relating to ordinary tors to be binding on sub- or important matter shall be binding on every and all subscribers, unless scribers. such proceedings are rescinded in a general meeting of the subscribers. 67. That the secretary shall lay for disposal all applications in their order before the committee _ . , , , at their monthly meetings, and record their decision and obtain their initials e e e ary. tj^greto. He shall conduct all the correspondence between the committee and the subscribers, &c., and may dispose of papers by circulating them, should he deem such measure necessary for the benefit of the fund. (a) That the appointment, suspension or dismissal of the paid secretary, the paid treasurer and the paid auditor, and the dismissal of the rest of the office establishment shall vest in the managing committee (the directors) ; and that the president shall, in other j'espects, exercise full power over the whole office establishment. (Resolution, dated 10th March 1895, No. 9.) 68. (Omitted as per Eesolution, dated 7th April 1895, No. 4.) 69. That the treasurer shall receive all payments to the fund and acknowledge the receipt thereof by aflSxing his signature to the receipt book accompanying the money. Duties of the treasurer, -g.^ ^-^^^-^ deposit all such coUections in a Chartered Bank, or in a respect- able House of Agency in the names of the trustees, and the amount of cash in his hands shall in no instance exceed the sum of Es. 50. When the biU-collector collects Es. 50 or more in one day and finds it convenient to deposit the collection in the bank before going to the treasurer, he shall do so and take the bank receipt to the treasurer instead of cash. 70, That the trustees shall have the custody of all the collection de- Duties of the trustees. posited by the treasurer in the bank, and shall keep no money in their hands. 71. That a general meeting of the subscribers shall be held annually, soon after the closing of each year of the fund, for the purpose of reviewing the proceedings of the General meeting. past year. Fifty subscribers shall form a quorum at such meeting. (Confirmed at the general meeting held on the 16th May 1886.) " (ffl) That notices for the convening of general meetings shall ordinarily be served by leaving a copy of the notice at the registered residence of every subscriber living within the municipal limits of the City of Madras, and in the case of mof ussil subscribers, living within the Presidency of Madras, the service shall be by posting the notices to the registered address of such subscribers, so that in tha 228 ordinary course the notice may reacli the destination seven days before the date fixed for the meeting- But in the case of all the subBcribers of the fund, whether living in British India or elsewhere, publi- cation of such notice in a local newspaper fifteen clear days before the day fixed for the meeting shall be deemed good service under section 78 of Act VI of 1882. " (Passed by the general meeting held on 16th September 1888.) " {b) That subscribers of not less than ninety days' standing shall be alone entitled to vote at general meetings. " (Confirmed at the general meeting; held on the 2nd November 1890.) 72. That the general meetings may also be convened by the managing committee, as often as the business of the fund may necessitate, and the managing committee shall be bound to convene general meetings at the requisition of not less than 50 subscribers, specifying the reasons for the same within thirty days from the date of the requisition. (Confirmed at the general meeting held on the 2nd November 1890.) 73. That the general meetings shall be presided over by a chairman to Chairman of the geue- ]j,q nominated from among the subscribers present at the meeting, and that he ral meetings. ^-^^-^^ ^^^^ ^ casting vote in all cases of an equal division of votes. Secretary to the gene- 74. That the secretary of the managing committee shaU act as the ral meetings. secretary of all general meetings. 75. That the general meetings shall have power of adding to, modify- Power of the general jjig^ or rescinding any of the rules of the fund or proceedings or bye-rules meetings. made by the managing committee. 76. That all matters submitted to the general meetings shall be decided by majority of votes, and that such decision shall be final and bin(£ng on the subscribers. 77. That in the construction of these rules, words in the singular number shall include the plural, words in the plural shall include the singular, and words in the masculine Definition of certain gender shall include the feminine, except when the contrary appears from *""''• the context. 78. That the Regulations of Table A in the first schedule annexed to Exclusion of Table A. Act VI of 1882 shall not be applicable to this fund. FoEM A. Register No. Application Jor admission into the Fund as a Subscriber or Depositor. To The Secketaby to the Mylapoeb Hikthj Permanent Fund (IjImitbd), Sir, I request you will be good enough to admit me as a to the above fund for shares. 2. Myself and my heirs or representatives will abide by the rules of the fund which are in exist- ence and which may hereafter be made, 3. I declare that the foU-Owing informations are correct : — (a) *My name in full. (5) t The names of my heirs under the law : son, wife, daughter, daughter's son, mother, father, and brothers (whether divided or not). (e) My age. ((/) My father's name. If female, husband's name. («) Religion and caste. (/) X My place of residence. Postal address. (g) My means of livelihood. (A) The names of the members of the undivided family to which I belong. If a female, the names of the husband's brothers. (i) § The names and ages of those to whom I intend to make over all my interest in the fund on my death. (?) If the subscriber is a minor, who is to pay and draw during minority ? {k) If abeady a subscriber before this application, the register number of those shares should be given. Madras, Tours faithfully, 189 . (Signature as usual.) * This mnst be written clearly. t The names of all these miast be given. X Change of residence should be reported. § Change of the intention under this head should be reported. 229 FOKM B. Application for Mortgage Loan on Immovable Property/. To The Sbokhtaky to the Mylapoke Hindu Pekmanent Ftjitd (Limited). 1. Name in full. Age. General Register No. All shares held by applicant. Father's name in fuU, alive or dead. If female, husband's name, alive or dead. Religion. Caste. Occupation. Dwelling place, street and house No. 2. Amount of loan now required and in what ledger Nos. ? Amount of former loan, if any. And why it is required ? Means of discharging the loan. 3. Whether the property is encumbered ; if so, how ; with whom ; for how much ; and for what purpose ? 4. Description and identification of the property to be pledged. 5. If landed property, whether ancestral or self-acquired, and who owned and held it for the last 12 years, and how they are related to applicant ? 6. Names of aU. co-heirs. Father. Sons, grandsons and daughters and their age. Brothers, brother's sons (divided or undivided), their interest in the property, if any. Dayadies and their interest in the property. If female, husband's name. Names of brothers of husband. Names of dayadies of husband. If property, her father's property, the father's dayadies and their interest in it. 7. Title-dee^s of the property together with deeds of division, or gift, release, &c., relating to the property with quit-rent and assessment bills heretofore received. Deed of partition between brothers and dayadies. If female, deed of division between husband and his brothers and dayadies. If property, her father' s property deed of division between her father and his brother and. dayadies. 8. Names of widows, children and others entitled to maintenance from the family, and the settlement made for them, if any. 9. Names of tenants (if the property be a house and names of people who cultivate for rent (if it be landed property) at the time of mortgage. Will the tenants attest the documents that wiU be executed to the fund ? Whether tenants have executed lease for a term ? Whether tenants have advanced rent or loan ? 10. Will you deliver aU quit-rent and asessment bills every time they are received ? 1 1 . Will you every year submit the names of such as may hereafter occupy the property ? 12. WUl you pay interest if money be reserved for you ? (Signattire.) 1 return this form duly filled in and declare that what is stated herein is true to the best of my knowledge and belief. Date, 189 . (Signature.) To FOEM C. Application for Mortgage Loan on Movable Property. The Sbckbtaet to the Mylapoeb Hihtdu Pbemanent Fund (Limited). 1. Name in full. Age. General Register No. All shares held by the applicant. Father's name in full, alive or dead. If female, husband's name, aUve or dead. Religion. Caste. Occupation. Dwelling place, street and house No. II 68 230 2. Amount of loaa nov required and ledger Nos. in which required. Amount of former loan, if anj, and in what ledger Nos. ? And why it is required ? Means of discharging the loan. 5. Names of all co-heirs. Father. If female, husband's name, alive or dead. Sons and daughters and their age. Brothers (divided or undivided) and their interest in the property, if any. If female, names of brothers of husband. Dayadies and their interest in the property, if any. If female, names of dayadies of husband. 4. Whether the property is encumbered, and if so, how and with whom and for how much ? 5. If jewels, who are the wearers thereof? 6. I shall pay interest if money be reserved for me. 7. I return this form duly filled in and declare that what is stated herein is true to the best of my knowledge and belief. (Signature.) Date, 189 . BYE^LAWS. Resolution, dated 3rd Augutt 1873. Eesolved that in case of jewels, promissory notes be taken instead of bonds and renewed on the expiration of thirty months from the date of execution and that mortgagor's signatures be obtained in the key-guardian's book wherein the jewels will be retained. Resolution, dated 9 leceive'a fixed monthly pension of Rs. 10 for a period of twenty years. 32. In case of death his legal heirs will be entitled for the remaining: period. 33. Special arrangements can be made with the company on the above terms. 34. The following regulations of table A annexed to Act YI of 1882 and rules of the Parent Fund are incorporated with the foregoing articles, that is to say, regulations and rules. Notices. 35. All notices or other documents requiring to be served by the company upon the shareholders :may be served either personally, or by leaving the same for, or sending them through the post in a 236 letter addressed to each or any shareholder at his registered place of abode, and every notice sent •through the post shall he deemed to have been served at the time on which, in the nsual course of j)ost, it would have been delivered. 36. All notices to be g^ven on the part of shareholders shall be left at the registered office of the company or sent through the post. Pkocbbd^ngs of Diebctoes. 37. The directors may meet together for the despatch of business, adjourn and otherwise regulate "their meetings as they think fit and determine the quorum necessary for the transaction of business ; but until some other quorum shall be determined, two directors shall form a quorum for the transac- •tion of business. Questions arising at any meetings shall be decided by a majority of votes; in case of an equality of votes the chairman in addition to his original vote shall have a easting vote Three directors may at any time summon a meeting of the directors. 38. The directors may delegate any of their powers to committees consisting of such members of their body as they think fit ; any committee so formed shall, in the exercise of the powers so dele- gated, conform to any regulations that may be imposed on them by the directors. Management. 39 Under the general control of the directors and subj ect to any resolutions of the Board by way of exception or otherwise, the agents shall manage all the business of the company and do all things which they shall think fit for carrying out its objects, and unless otherwise prescribed by the directors they shall be entitled to exercise all or any of the powers by the regulations for the time being of the company conferred upon or vested in the directors ; and no resolution of the directors shaU invalidate any prior act of the agents which would have been valid if such resolution had not been passed. 40. That two of the directors who are not office bearers, shall retire at each annual meeting by rotation according to the dates of their appointments, and members so retiring, shall be eligible for re-election ; but if experience shows that the change is not necessary, the directors may be allowed to remain as they are. 41. Should the conduct of any director be found unsatisfactory to the executive body, they shall remove such a director by a majority of votes of not less than three-fourths of the members present at a meeting and appoint another in his place ; such proceedings being brought for the information of the shareholders at the next annual general meeting. 42. That the appointment of all the representatives, and the working establishment of the company, and their remuneration shall be made and fixed by the agents, and shaU. be binding of the company, unless objected to by all the directors (save the chairman) unanimously, in which case such appointment and remuneration shall be made or fixed by a general meeting of the shareholders, which may be convened immediately, if necessary. The directors and agents shall, subject to the control of shareholders, have powers to borrow money and secure the payment thereof by means of the credit, property and assets of the corporation, to be dealt with by them for that purpose as they, subject to the control aforesaid, shall think fit. Atidit. 43. The accounts of the company shall be examined and the correctness of the balance sheet ascertained by one or more auditor or auditors to be elected by the company at the ordinary general meeting in each year. 44. If not more than one auditor is appointed, all the provisions herein contained relating to auditors shall apply to him. 45. The auditors need not be shareholders in the company. No person is eligible as an auditor who is interested otherwise than as a shareholder in any transaction of the company, and no director or other officer of the company is eligible during his continuance in office. 46. The election of auditors shall be made by the votes at their ordinary meeting, or if there are more than one, at their first ordinary meeting in each year. 47. The remuneration of the auditors shall be fixed by the company at the time of their election. 48. Any auditor shall be re-eligible on his quitting office. That the accounts of the bank shall be closed once in nine months ; and that after deducting the necessary contingent establishment charges, &c., from the gross income, the following guaranteed dividend of profit will be credited to the accounts of shareholders and subscribers, viz., Es. 4-14-0 to each stock shares Re. 1 to each subscriber's ordinary share. Of the remaining profit 1/16 portion shall be credited to the general account of the Parent Fund. 6/1 f) of thp profit fhall be divided among the stock shareholders, and carried to their credit in the accounts as an additional profit and an equal amount to the directors of the bank, 1/8 to the affents and the remaining 3/16 to the office bearers as hereunder particularised : — ' Shares. Manager . . . . . . , . . . . . . . , ^ 2 Trustee . . . . . , . . . . . , . . . _ ^ Appraisers . . . , . , . . . . . . , _ 2 ■ Inspector . . . . . . . . , , . . _ j 49. Previously to the directors' recommending any dividend or bonus, they may set aside out of -the profits of the company such a sum as they think proper as a reserve fund. 50. No unpaid interest or dividend shall ever bear interest as against the company. 287 51. No member stall be entitled to receive payment of any dividend or bonus in respect of his share or shares, whilst any moneys may be due or owi^g from him to the company in respect of such share or shares, or otherwise howsoever. 52. The directors may deduct from the dividend or bonus payable to any shareholder all sums of money due from him to the company. MiSCBLLAWBOUS. Following are the regulations of table A and the rules of the Parent Fund referred to in rule 84 :~ Regulations: Nos. 4—5-6—7—8—9—10—17—18—19—20—21—22—23—24—25—26—27— 28—29-30-31-33—34—35—36-38-39-40-41-42-43-44-45—47—48—49—60—51—52— 53— 54— 55-56— 57— 60— 63— 64— 65— 66— 67— 69— 70— 71— 73—74— 75— 76— 77— 78 — 79— SC- SI— 82-^83— 84— 85— 87— 88—89— 90— 91— 92— 93— 94— 95- 96— 97 ; Rules : Nos. 14-15-16-17—21-25—26-27—28—29—30-43—44—45-46—58—59—60- 61—62—63-64—65 — 66-67—73-74—75-76—80-81-82—83—84—85-86—87. Printed forms referred to in the foregoing rules may be had on application to the agent or manager. 31 60 238 CHAPTER VII (MISCELLANEOUS). LAW OF SOCIETIES IN GENERAL. It was originaUy intended to give in fuU a translation with notes of the company and banking law of several countries of the West, and material has been'gathered for the purpose ; the idea has been abandoned for the present as space and time are wanting, and as the subject is not absolutely necessary for present purposes. As a partial collection of foreign company law the reader is referred to a Parliamentary report (Commercial No. 4 of 1889), which is a compendium or notice, in English and French, of company law in general for the following countries : — Austria-Hungary, Baden and Hesse, Bavaria, Belgium, Bulgaria, Coburg, Denmark, France, Germany, Greece, Italy, Montenegro, Nether- lands, Portugal, Eoumania, Russia, Saxony, Servia, Spain, Sweden and Norway, Switzerland, Txirkey and the United States. This compendium is formed of the reports of the British embassies in the above countries, which either notice, abstract, translate, or send in French, the general company law for the above countries. A great deal is of course lacking in such a compendium for the proper under- standing of the laws, and much is omitted that would be necessary for a complete view of the law affecting co-operative societies and credit or other banking. DUTIES OF THE ITALIAN MINISTER FOR AGRICULTURE, INDUSTRY, AND TRADE.* The Minister for Agriculture is also the Minister for Industry and Trade ; his duties under the first branch are entered under 39, those under the second under 14, and those under the third under 19 major heads, each major head involving numerous sub-heads, and in fact, often including the work of a whole department such as ' woods and forests.' The major heads which are germane to the present study are mostly within the purview of the Minister as Minister of Industry and Trade, and are as follows : — (1) fairs and markets ; (2) land (real) and agricultural credit ; (3) approval and supervision of, and other measures regarding banks and joint stock com- panies ; (4) measures for the benefit of the working classes, including a consultative commission respect- ing provident institutions and labour, the supervision of savings banks, the conversion of charitable institutions (opere pie) into savings banks or other provident institutions, and supervision over mutual benefit (friendly) societies, and other provident institutions. As explained in Vol. I, the full provision of public fairs and markets [item (1) supra] is very important in assisting ryots to obtain the full value of their labour and to avoid the middleman who is too often a usurious broker and money lender. In dealing with items (2), (3) and (4) supra, the Minister by his deputies enquires into and supervises institutions granting credit on real property (credito fondiario), and agricultural credit (credito agrario), and also supervises savings banks, being guided in each case by the laws and regula- tions upon the subject ; f he makes enquiries into co-operative societies and co-operative popular banks ; he publishes a monthly 'Journal (Bollettino) of savings banks,' the 'Annals of Credit and Provident Institutions, ' and the monthly journal (Bollettino) of the same ; also statistics of ordinary credit, of real and agricultural credit (triennial), of popular banks (triennial), of savings banks (triennial), and of friendly (mutual benefit) societies (quinquennial). J He is also concerned with provident institutions for the protection and assistance of the working classes (including, of course, agriculturists) ; with life insurance companies ; with mutual aid societies ; with pension banks ; with accident insurance funds; with institutions for encouraging and assisting working-men to found and join provident institutions. He is assisted by a consultative and advisory committee respecting provident institutions and labour, and institutes enquiries and researches relating to the introduction, illustration, and promotion of all institutions intended for the material and moral improvement of the working classes. * In Italy the department under the Minister for Agriculture, Industry, and Trade is very comprehensive and appears happily to comhine the executive power of individuala with the experience and consultative value of standing —and largely honorary — committees of experts. It appears indeed, as a whole, to be well worth study as a possible example in many respects for India. In the present note only so much will be noticed as relates to the functions of this Minister and his department in the matters of credit, thrift and providence. For a catalogue with, occasionally, a brief description of the general duties of the department, the reader is referred to the following Parliamentary papers, viz.. Commercial Nos. 12 of 1889, 24 of 1889 and 3 of 1894. The present note is taken partly from these papers and partly from a manual of the Barbara series. + The laws relating to these subjects in^ Italy will be found fully translated awpra, and the supervision of the Minister is mentioned therein. J The journals and annals are most valuable papers, usually issued monthly ; in them is to be found information coUeoted from all other countries. 239 Much, of the work of the department in. its numerous branches is done directly by the paid stafip of inspectors, &o., and by its business organization, as, for instance, by the body of six commissioners or inspectors expressly appointed for watching the working of the savings and agricultural banks. But the Minister is not solely dependent on the departmental officers ; on the contrary, he is, by means of consultative and advisory committees, in touch with the experience, advice, information and assistance of business experts in every matter falling under his comprehensive notice.* There are no less than twenty-three standing committees who assist the Minister of this department with their deliberations, enquiries, and advice, and the more important committees must be exceedingly valuable and exceedingly hardworked ; such are the standing councils or committees of Agriculture, of Agricul- tural education, of Forestry, of Agricultural credit, of Industry and Trade, &c.f The Committee for Agricultural Credit is consultative ; its duties are to give its opinion upon the demands and claims of institutions or societies granting agricultural credit (that is, credit to agricul- turists not based directly upon real jproperty) in regard to the issue of agricultural debentures ; J to study any improvements possible in the arrangements for agTicultural credit ; and to give its views on any other questions which may be laid before it by the Minister. The committee is composed of twelve members appointed by Eoyal Decree. The office of secretary is held by one of the inspectors appointed for the supervision of . credit institutions. The minutes of the committee's discussion are published in the ' Annals of Credit and Providence.' § The ' Committee for institutions of providence and for labour ' is a consultative standing commit- tee of eighteen members ; the objects of its nomination are the study of the condition of the working classes ; the provisions necessary to bettnr their condition ; the study and preparation of legal measures regarding savings banks, friendly societies, popular associations (co-operative) of credit, production, and consumption; the study of measures for securing the welfare of the working classes; and the searching out of all matters which may prove useful to the classes of labourers. Thus far the functions of the Minister of Agriculture, &c., and of the consultative committees connected with the subjects of thrift, providence, and credit, have been dealt with, but it is deemed useful to add here the constitution and duties of the Council of Agriculture organized to assist the Minister and consisting largely of the Presidents of the Chambers of Agriculture (Comizi Agrari), the rules for and duties of which are also given : the extract is taken from Commercial 24 of 1889. No nieasna:e seems better adapted to assist agriculturists and the Director of Agriculture in all matters whether relating to agriculture itself or to rural economy in general, including in particular the organ- ization of credit, than the establishment of a quasi-official Council for Agriculture recruited as in Italy but meeting much more often, and of practical Chambers of Agriculture recruited as mentioned in the succeeding extract. With such a Council and Chambers, endowed also with the express duty of encouraging and organizing rural associations for credit, supply, aud sale of produce, it is believed that the work of the Madras Agricultural Department and the progress of rural economy would receive an extraordinary impetus. H Council of Agriculture. — Its Constitution. The Council of Agriculture, re-organized by Eoyal Decree No. 4423 of the 20th March 1887, con- sists of — (a) Twenty -four Presidents of Chambers of Agriculture (" Comizi Agrari ").^ Six Presidents of Economic Societies, Agricultural Academies or Associations, Veterinary Socie- ties, or other bodies established for purposes connected with agriculture, forests, or cattle- breeding. The above are selected every year by the Minister from a list of all bodies entitled to representa- tion in the Council. (i) Fifteen Councillors, appointed annually by Eoyal Decree, selected from among the persons most versed in economic science and other branches of learning connected with agriculture. (c) The following ex-offioio members : — (1) The Secretary-General of the Ministry for Agriculture, Industry and Commerce ; (2) The Director-General of Agriculture ; (3) The Chairman of the Zootechnic Commission ; (4) The Chairman of the Committee on Horse Breeding (" Comitato Ippico ") ; (5) The Chairman of the Council of Woods and Forests ; and (6) The Chairman of the Commission oa Vine Culture and Wine Making. * It is in this matter that the Italian department of Agricnlture, Sec, and not only this particular department is so noteworthy, and displays an example to India worthy, if not of imitation, of adaptation. The committees in qnea- tion are not the associations elsewhere in this volume and in volume I {see " Agricultural Associations ") recommended as being, on the one hand, independent bodies for the promotion of self and mutual help, and, on the other, auiiliarie* to the Director of Agricnlture for enquiry, for experiment, and for obtaininaf and disseminating information; they are standing semi-oflSoial bodies composed chiefly of non-ofiicial experts but with the assistance of officials and conducting official work(c/. the District Boards and Municipal Councils of the Madras Presidency). It has always appeared to the writer (see footnote in the section on ' Agricultural Associations ' ) that the assistance of non-official experts though occasionally, obtained, is not obtained systematically by the official or semi-official association of such experts in standing committees. Standing committees of well selected expeits are much more cautious and accurate in their advice and opinion than experts — who are not always experts — casually called upon for opinion, while it would be considered a distinct honour to be admitted to a share in the administration as the expert advisers and assistants of Government. t The composition and duties of such of these committees as belong to the agricultural branch will be found in commercial No. 24 of 1889, and of some of those in the branches of Industry and Trade in commercial No. 12 of 1889. The description of the work of the Chambers of Agricnlture and of the Council of Agriculture on pages 50 and 51, and pages 43 and 44 of commercial No. 24 of 18S9, is especially interesting »nd suggestive ; see this section adfinem. X See Vol. I, pp. 130, 131 ; also the law of 1887-88 translated in the present volume. § These annals form valuable volumes in which the several questions are fully discussed. II See Vol. I, Chapter VIII, pp. 218 — 221, especially the first paragraph in thit chapter; also the chapter on Agricultural Associations, especially the introduction and the description of the "Irish Agricultural Organization Society " in the present volume. % See the extract on Chambers of Agrioultnre, immediately succeeding. 240 A President and Vice-President, selected from the members of the Council, are appointed by Royal Decree, but whenever the Minister is present at a meeting he is entitled to the chair. The Secretary is a Olerk in the Ministry of Agriculture, &o., nominated by the Minister. Meetings. The ordinary annual session of the Council of Agriculture takes place in April, but the Minister may summon extraordinary meetings at any other time. _ ._ One-half of the members form a quorum, and decisions are taken by a simple majority of those present. In case of an equal dirision, the President has the casting vote. Atlributions. The CouncD. of Agriculture is consulted respecting — Questions affecting bodies representative of agriculture ; Questions relating to the administration of woods and forests and to Gam Measures of rural police ; Proposals for the cultivation or planting of waste lands ; The undertaking of irrigation works and agricultural improvements, the grant of public funds for such purposes, and the assignment of contracts for carrying out such improvements ; Appeals against the decisions of the commission for improving the Uoman Campagna ; Questions relating to the improvement of breeds of cattle ; Measures intended to promote the development of agriculture, agricultural industries, and forest industries, or the interests of the agricultural classes. The Council of Agriculture may also, of its own accord, propose and discuss measures which it may consider useful or necessary for the advancement of agriculture, the improvement of the condition •f the rural population, the administration of woods and forests, or the development of cattle breeding and agricultural industriet. Repretentation on other Boards. The Council of Agriculture is further represented — On the Central Oommiission for Customs Valuation, by three delegates ; On the Council for the Assessment of Railway Rates, by three delegates ; On the Council for Agricultural Instruction, by four delegates ; On the Technical Council for the Salt and Tobacco Monopolies, by members nominated by the Minister of Finance ; and On the College of Customs Experts, by members nominated by the Minister of Finance. Members of the Council who reside out of Rome are allowed their travelling expenses and a sub- «i»tenoe allowance of 15 lire (12«.) per diem when attending its sessions. The proceedingi of the Council of Agriculture are published in the " Annali di Agricoltura." Chambers of AgriouUare (" Comizi Affrari"). The Chamber* of Agriculture (" Comizi Agrari") instituted in accordance with tbe provision* of the Royal Decree of the 23rd December 1866 (No. 3452), as amended by subsequent Royal Decrees of the 22nd June 1879, and the 3rd April 1884, are bodies created in every " ciroondario " (adminis- trative divisions of a province corresponding to the French " arrondissements ") for the purpose of advancing the interests of agriculture, and especially — (1) Of advising the Government as to general or local measures calculated to improve the condi- tion of agriculture ; (2) Of collecting and forwarding to the Central Government and to thq representatives of their province in Parliament any information of agricultural interest ; (3) Of making known and introducing into their respective districts improvements in the systems of tillage, in agricultural implements, breeds of cattle, &c. ; (4) Of helping to carry out all measures tending to promote and protect the development of agriculture ; (5) Of promoting and organizing agricultural shows and competitions, and acting as judges ; and (6) Of promoting the necessary steps for improving and assimilating the customs in force among tenant farmers; for carrying into effect the Laws and Regulations respecting the health of cattle, for preventing the spread of epizootic diseases, and in general for the progress of agriculture. Each commune within the "ciroondario," elects a representative to the Chamber of Agriculture; the chief town of the " ciroondario " or the seat of the Chamber, elects three representatives. In addition to these local representatives, the Managing Board are authorized to admit as mem- ber* any persons interested in the progress of agriculture who may apply to them for admission, but must report such nominations at the next general meeting. The Managing Board of a " Comizio Agrario" consists of a President or Chairman, a Deputy Chairman, Secretary, and such number of Councillors as the Act of Constitution may determine. The members of the Managing Board are elected for three years, one-third retirino- each year but the retiring members are re-eUgible. Besides the regular members of the Board, there are also elected substitutes who may speak at the meetings of the Board, but may only vote in the stead of any regular members who may be absent. Cham,ber8 of Agriculture may form themselves into Associations with those of the same province or with any others, for the purpose of efiecting any special object, or generally of promoting the interests of agriculture in their province. Chambers of Agriculture are recognized as 'institutions of public utility, ' and are entitled ns corporate bodies to acquire, hold, and sell property. They have two regular sessions annually in April-May and in October-November. 241 At the former of these the final balance-sheet of the preceding year is discussed, as -well as the- proposals for the Chamber's action ; and the subsidies to be asked of the Central Government and the provincial and communal authorities for the ensuing year. (The Chambers of Agriculture correspond with the Ministry of Agriculture, Industry and Com- merce through the Prefect or Sub-Prefect of their respective district; and with the communal authorities through the Syndic or Mayor of the chief town of their district.) The second session is specially devoted to the approval of the estimates for the ensuing year, to the examination of the annual report submitted by the Board of Management, and to the election of the new members of that Board. The annual report, as well as the estimates of receipts and expenditures for the coming year, must be approved by the "Oomizio Agrario " in general session, and forwarded to the. Ministry of Agriculture, &c., before the 10th December. CHAPTEE XXXVn OF THE GENERAL LAWS OP THE STATE OF NEW YOEK. The Banking Law. Article. 1. General provisions (§§ 1-33). 2. Banks (§§ 40-92). 3. Savings banks (§§ 100-135). 4. Trust companies (§§ 150-163). 6. Building and mutual loan corporations (§§ 170-175). 6. Co-operative loan associations (§§ 180-191). 7. Mortgage, loan and investment corporations (§§ 200-205). 8. Safe deposit companies (§§ 210-216). Article I. GBNBBAL PB0VI3I0NS. Section. 1. Short title. 2. Definitions. 3. The banking department ; superintendent. 4. OfiB.cial seal of superintendent of banks. 5. Deputy clerks and examiners of the bank department. 6. Eooms and furniture. 7. Expenses, how defrayed. 8. Powers of superintendent. 9. Examination of securities deposited. 10. Unclaimed balances. 11. Examiners. 12. Examination and certificate as to payment of capital. 13. Affidavit to be made before commencing business. 14. Deposit of bonds or mortgages with superintendent. 15. Exchange of securities. 16. Publication of report of examiners. 17. Impairment of capital. 18. Proceedings against delinquent corporations. 19. Examination by order of court. 20. Reports. 21. Penalties for failure to report. 22. Publication of reports. 23. Annual report of superintendent. 24. Reports presumptive evidence. 25. Restrictions. 26. Calculation of profits. 27. Losses in excess of profits. 28. Publication of unclaimed dividends and deposits. 29. Change of location. 30. Approval and certificate of superintendent upon incorporation. 31. Permission and certificate of superintendent in case of foreign corporations. 32. Appointment of superintendent as attorney for service of process. 33. Appointment of receiver. 1. Short title. — This chapter shall be known as the banking law, and shall be applicable to all corporations and individuals specified in the next section. 2. Befinitims. — The term bank, when used in this chapter, means any monied corporation autho- rized by law to issue bills, notes or other evidences of debt for circulation as money, or to receive deposits of money and commercial paper and to make loans thereon, and to discount bills, notes or other commercial paper, and to buy and sell gold and silver bullion or foreign coins or bills of exchange. The term, individual banker, when so used, means a person who has complied with the require- ments of law, and is authorized by the banking department to engage in the business of banking, ani is subject to the supervision of the superintendent of banks and the banking law. II 61 242 The term savings bank, when so used, means a corporation only authorized by the laws of this state to receive money on deposit and pay such rates of interest thereon, and to invest the same in such securities and obligations, as may be prescribed by law. The term, trust company, when so used, means any domestic corporation formed for the purpose of taking, accepting and executing such trusts as may be lawfully committed to it and acting as trustee in the cases prescribed by law, and receiving deposits of moneys and other personal property, and issuing its obligations therefor, and of loaning money on real or personal securities. The term, building and mutual loan corporations or associations, when so used, means a corporation formed for the purpose of accumulating a fund for the purchase of real property, the erection of build- ings, or the making of other improvements on lands, or to pay ofE incumbrances thereon, or to aid its members in acquiring real property, making improvements thereon or removing incumbrances there- from, or of accumulating a fund to be returned to its members in specified cases. The term, co-operative loan association, when so used means a corporation formed for the purpose of encouraging industry, frugality, home-biiilding and the saving of money by its members, the accumulation of savings, the loaning of such accumulations to its members, and the repayment to each member of his savings when they have accumidated to a certain sum, or at any time when he shall desire the same, or the association shall desire to repay the same. The term, lauilding and mutual loan corporations or associations, and, co-operative loan associa- tions, shall include every corporation, company or association doing business in this state and having for a part of its title or name the words building association, building and loan association, savings and loan association, savings association or co-operative bank, and every corporation, company or association whose stock is wholly or in part payable by a cumulative fund in regular or periodical instal- ments, or which is doing business in the form and of a character similar to that authorized by articles five and six of this chapter organized or incorporated in any state or country outside of this state. The term, mortgage, loan or investment corporation, when so used, means any corporation other than an insurance corporation formed under the laws of this state or of any other state, and doing business in this state for the purpose of selling, offering for sale, or negotiating bonds or notes secured by deed of trust or mortgages on real property or choses in action, owned, issued, negotiated or guaran- teed by it, or for the purpose of receiving any money or property, either from its own members or from other persons, and entering into any contract, engagement or undertaking with them for the withdrawal of such money or property at any time with any increase thereof, or for the payment to them or to any person of any sum of money at any time, either fixed or uncertain ; and when applied to any foreign corporation doing business in this state shall include any association, co-partnership, joint-stock company, individuals or firms organized or existing under the laws of any other state or country, and engaged within this state in any such business. The term, safe deposit company, when used in this chapter, means every domestic corporation formed for the purpose of taking and receiving upon deposit as baUee for safe-keeping and storage, jewelry, plate, money, specie, bullion, shocks, bonds, securities and valuable papers of any kind, and other valuable personal property, and guaranteeing their safety upon such terms and for such compensation as may be agreed upon by the company and the respective bailors thereof, and to rent vaults and safes and other receptacles for the purpose of such safe-keeping and storage. 3. Hie hanking department ; superintendent. — There shall continue to be a banking department charged with the execution of the laws relating to the corporations and individuals to which this chapter is applicable. The chief ofi&cer of such department shaU continue to be the superintendent thereof, to be known as the superintendent of banks, who shall be appointed by the governor, by and with the advice and consent of the senate, and shall hold his office for the term of three years. He shall not either directly or indirectly be interested in any such corporation, or as an individual banker. He shall receive an annual salary of five thousand dollars, to be paid monthly in the fijst instance out of the treasury on the warrant of the comptroller. He shall, within fifteen days from the time of notice of his appointment, take and subscribe the constitutional oath of office and file the same in the office of the Secretary of State, and execute to the people of the state a bond in the penalty of fifty thousand dollars, with two sureties to be approved by the comptroller and treasurer of the state, conditioned for the faithful discharge of the duties of his office. 4. Official seal of swperintendent of hanks. — The Secretary of State shall proivde the superintendent of banks with an official seal. Every paper executed by him as such superintendent in pursuance of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence and may be recorded in the proper recording offices in the same manner and with the like efEect as a 'deed regularly acknowledged or proven. 5. Deputy, olerhs, and examiners of the hank department.— Th.Q superintendent of banks shall employ from time to time such clerks and examiners as he may need to discharge in a proper manner the duties imposed upon him by law. They shall perform such duties as he shall assign to them. 6. Rooms and furnitwe. 7. Expenses ; how defrayed.— Mi. the expenses incurred in and about the conduct of the business of the department, including the salary of the superintendent and clerks, shall be charged to and paid by the corporations and individuals required to report to the superintendent under the provisions of this chapter in such proportions as the superintendent shall deem just and reasonable. The expenses incurred and services performed on account of any such corporation or individual shall be charged to and paid by the corporation or individual for whom they were incurred or performed If any corporation or individual shaU not, after due notice, pay any such charges, the superintendent may apply the proceeds of the sale of or the dividends on any stock or the interest on any bonds and mortgages m his hands deposited by such corporation or individual to the payment of such charp-OH with interest, at the rate of six per cent. '>'^s"Bj The moneys so applied, and all moneys received by him in payment of such charees shall b* deposited and paid by him into the treasury of the; state, to reimburse all sums advanced' from the 243 iireasury for such expenses, except moneys received from any corporation or individual banker for expenses incurred or services performed on account of any such corporation or individual, which moneys shall be applied by the superintendent in payment of such expenses and a verified account thereof included in his annual report. If any such corporation or individual shall fail to pay such charges as herein required, and there are no stocks, bonds or mortgages in the department, the dividends or interest on which can be applied in payment thereof, the superintendent shall report to the attorney-general the failure of any such corporation or individual to pay such charges, and the attorney -general shall thereupon bring an action in the name of the people for the recovery of such charges. 8. Powers of superintendent. — Every corporation and, individual banker specified in section two of this chapter shall be subject to the inspection and supervision of the superintendent of banks. He shall, either personally or by some competent person or persons to be appointed by him, to be known as examiners, visit and examine every such corporation and individual banker, other than savings banks, at least once in each year, and savings banks once in two years. On every such examination inquiry shall be made as to the condition and resources of the corporation, the mode of conducting and managing its affairs, the action of its directors, the investment of its funds, the safety and prudence of its management, the security afforded to those by whom its engagements are held, and whether the requirements of its charter and of law have been complied with in the administration of its affairs ; and as to such other matters as the superintendent may prescribe. He shall have power in like manner to examine every corporation and individual banker specified in section two whenever, in his judgment, its condition and management is such as to render an exam- ination of its affairs necessary and expedient. The superintendent and every such examiner shall have power to administer an oath to any person whose testimony may be required on any such examination, and to compel the appearance and attendance of any such person for the purpose of any such examination. If the examination shall be made by the superintendent, or by one or more of the regular clerk in the department, no charge shall be made except for necessary travelling and other actual expenses. The result of such examination of a savings bank shall be certified by the examiners, or one of them, upon the records of the corporation examined. 9. Examination of securities deposited. — The president or cashier of every such corporation, and every individual banker, shall once or more during each fiscal year, and at such time or times during ordinary business hours as he may select, examine and compare all securities deposited by such corpo- ration or banker in the office of the superintendent with the books of the department, and, if found correct, execute to the superintendent a receipt stating the different kinds of such securities and the amounts thereof, and that they are in the custody and possession of the superintendent at the date of the receipt. Any individual banker unable to make such examination in person may, by written appointment, authorize an agent to make the same in his behalf, whose receipt shall have the same force and efifect as if executed by the banker in person. If any such corporation or individual banker shall refuse or neglect to make such examination during any fiscal year, the comptroller. Secretary of State and superintendent shall appoint some suitable and discreet person as agent for such corporation or individual banker, who shall make such examination, and if the securities so held by the superintendent shall be found to agree with the books of the department, such agent shall execute the receipt before mentioned, and it shall be of like force and effect as if executed by the president or cashier of any such corporation, or by any such individual banker, or by any agent appointed by him. Such corporation or individual banker shall pay on demand to the person so appointed and making such examination and executing such receipt, such compensation for his services and expenses in making such examination as the superintendent shall certify to be just and reasonable. 10. Unclaimed balances. — To be paid into the State treasury it unclaimed for six years. 1 1 . Examiners. — Every examiner appointed by the superintendent shall, before entering upon the duties of his appointment, take and file in the office of the clerk of the county where he resides, the constitutional oath of office ; and he shall forthwith examine fully into the books, papers and affairs of the corporation or individual banker specified in his appointment, ^and report on oath to the super- intendent the result of such examination. No such examiner shall be appointed receiver of any corporation or individual banker whose books, papers and affairs he shall have examined pursuant to such appointment. 12. Examination and certificate as to payment of capital. — When any such corporation or individual banker shall have filed with the superintendent the requisite certificate prior to commencing business under the laws of this state, and shall have made the deposit, if any, required by law, the superin- tendent shall, before such corporation for individual banker shall be authorized to commence business, examine or cause an examination to be made in order to ascertain whether the requisite capital of such corporation or banker has been paid in, in cash. The superintendent shall not authorize such corporation or individual banker to commence business unless it appears to his satisfaction from such •examination or other evidence satisfactory to him that the requisite capital has been in good faith subscribed and paid in cash. 13. Affidavit to he made before commencing business. — No such corporation shall commence its corpo- rate business untU its president and cashier or treasurer or secretary, or its two principal officers, by whatever name known, shall have made and subscribed a.n affidavit stating that the whole of its capital stock, or such portion thereof as by law shall be required to be paid or secured before the com- mencement of its operations, has been actually paid or secured to be paid, according to law. Such affidavit may be made before any officer authorized to administer oaths in the county where the corpo- ration has its principal place of business, and shall be filed in the clerk's ofiice of such coiuity. Every •such corporation shall cease to be a corporation if the affidavit above required shall not be made and filed within one year from the time its charter shall be granted. 14. Deposit of bonds or mortgages with superintendent. — Every such corporation, except banks, ■savings banks and domestic corporations specified in articles 5, 6 and 7 of this chapter, engaged 244 in receiving deposits of money in trust in tliis state, and required to make a report of its affairs to the superintendent of banks, shall, if it has not already done so, within six months from the passage of this chapter ; and every such corporation hereafter proposing to engage in such business in this state shaU, before engaging in such business, transfer and assign to the superintendent registered public stocks or bonds of the United States, or of this state, or of any city, county, town, village or free school district in this state, authorized by the legislature to be issued, to the amount in value, and to be at all times so maintained by the corporation, of 10 per cent, on its paid up capital stock. Such stocks must be registered in the name of the superintendent, officially, as held in trust under and pursuant to this chapter, and the same shall be held by the superintendent in trust, as security for the depositors with and creditors of such corporation, and subject to sale and transfer, and to the disposal of the proceeds thereof by the superintendent, only on the order of a court of competent jurisdiction. Until the order of such court, authorizing such sale or transfer or other disposition thereof, the superintendent shall pay over to such corporation the interest which may be received on such securities. Should any corporation, at any time, have deposited with the superintendent more than the amount hereby required, the excess may be refunded. With the approval of the superin- tendent, such a deposit may be made by the corporation, either wholly or in part in bonds or mort- gages satisfactory to the superintendent on improved, unincumbered, productive real property in this state, worth at least 75 per cent, more than the amount loaned thereon. 15. Exchange of securities. — The securities deposited by any corporation pursuant to the provisions of this chapter with the superintendent of banks in trust for any purpose, may be exchanged from time to time for other securities receivable as provided in this chapter; and so long as the corporation so depositLag shall continue solvent and comply with the laws of the state, it may be permitted by the superintendent to collect the interest or dividends on such deposits, and from time to time to withdraw any of such securities on depositing with the superintendent other like securities, the par and market value of which shall be equal to the par and market value of such as may be withdrawn. When any such deposit consists of bonds and mortgages, the president or authorized agent of every corporation depositing the same shall annex to every such mortgage his affidavit that the mort- gage was made and taken in good faith for money loaned by the corporation which he represents, to the amount therein named, and that no part thereof has been since paid or returned ; or if any part has been paid, the amount unpaid and that he has reason to believe and does believe that the premises thereby mortgaged are worth at least 75 per cent, more than the amount of the mortgage thereon ; and the superintendent shall prescribe such regulations for ascertaining the title and value of the real property mortgaged as he may deem necessary. 16. Publication of report of examiners. — Whenever the superintendent shall deem it proper, a copy of any report made by any examiner shall be published in the state paper and in at least one daily newspaper in the city of New York, and in one newspaper published in the county where the principal place of business of such corporation or individual is located. 17. Impairment of capital. — Whenever the superintendent shall have reason to believe that the capital stock of any corporation or individual banker, subject to the provisions of this chapter, is reduced by impairment or otherwise below the amount required by law, or by its certificate or articles of association, he shaU require such corporation or individual banker to make good the deficiency. He may examine or cause to be examined any such corporation to ascertain the amount of such impairment or reduction of capital, and whether the deficiency has been made good as required by him. The directors of every such corporation upon which such requisition shaU. have been made shall immediately give notice of such requisition to each stockholder of the corporation, and of the amount of tlie assessment which he must pay for the purpose of making good such deficiency, by a written or printed notice mailed to such stockholder at his place of residence, or served personally upon him. If any stockholder shall refuse or neglect to pay the assessment specified in such notice within sixty days from the date thereof, the directors of such corporation shall have the right to sell to the highest bidder at public auction the stock of such stockholder, after giving previous notice of such sale for two weeks in a newspaper of general circulation published in the place or county where such corporation is located ; but such stock shall not be sold for a smaller sum than the valuation put on it by the superintendent in his determination and certificate ; and the necessary costs of the sale shall be paid out of the avails of the stock sold. If any such corporation or individual banker shall neglect for sixty days after the superintendent shaU have required such deficiency to be made good, to comply with such request, the superintendent shall report the fact to the attorney-general, who shall institute such action or proceeding against such corporation or individual banker as is now authorized in the case of insolvent corporations. If, from any such examination or report, the superintendent shall have reason to conchide that any such bank or individual banker is in an unsound or unsafe condition to do banking business he may forthwith take possession of such bank or individual banker's property and business, and retain such possession until the termination of the action or proceeding instituted by the attorney-general. 18. Proceedings against delinquent corporations. — If any such corporation or individual banker shall refuse to submit its books, papers and concerns to the inspection of any examiner, or if any oflScer thereof shall refuse to submit to be examined upon oath touching the concerns of such corporation or individual banker, or if it shall be found to have violated its charter, or any law of the state bindins? -upon it, the superintendent may report the fact to the attorney-general, who shall institute such action or proceeding against such corporation or individual banker as is authorized in case of in- eolvent corporations. If it shall appear to the superintendent that any such corporation or banker has violated its charter or any law of this state, or is conducting business in an unsafe or unauthorized manner he shall, by an order under his hand and ofiicial seal, addressed to such corporation or banker direct a discontinuance of such illegal or unsafe practices, and conformity with the requirements of it's charter and with safety and security in its transactions ; and whenever it shall appear to the superintendent 245 that it is unsafe and inexpedient for such corporation or banker to continue business, he shall com- municate the facts to the attorney-general, who shall thereupon institute such proceedings against the corporation or banker as are authorized in the case of insolvent corporations, or such other proceedings as the nature of the case may require. 19. Bxamination ly order of oomH . — The creditors and shareholders of any such corporation|[,who8e debts or shares shall amount to one thousand dollers may make application to the supreme court by a verified petitition setting forth facts showing that an examination of the affairs of the corporation should be made, and the court maj"^ thereupon, in its discretion, order such an examination to be made by a referee for the purpose of ascertaining the safety of the investments and the prudence of the management of the corporation. The result of every such examination, together with the opinion of the referee thereon, shall be published in such manner as the court shall direct. The court shall make such order in respect to the expenses of the examination and publication as it may deem proper. 20. Reports. — Every corporation and individual banker subject to the provisions of this chapter shall make a written report to the superintendent of banks, in such form and containing such matters as he shall prescribe. In the case of a bank or individual banker, the superintendent shall, at least once in every three months, designate some day therein in respect to which the report shall be made. If a savings bank, trust company or saf^ deposit company, such report shall be made semi-annually on or before the twentieth day of January and July in each year, and shall contain a statement of its condition on the mornings of the first days of January and July preceding. If a savings bank, such report shall state the amount loaned upon bond and mortgage, together with a list of such bonds and mortgages and the location of the mortgaged premises, as have hot been previously reported, and also a list of such previously reported as have since been paid wholly or in part, or have been foreclosed and the amount of such payments respectively ; the cost, par value and estimated market value of aU stock investments, designating each particular kind of stock ; the amount loaned upon the pledge of securities with a statement of the securities held as collateral for such loans ; the amount invested in real estate, giving the cost of the same, the amount of cash on hand, and on deposit in banks or trust companies, and the amount deposited in each ; and such other information as the superintendent may require. Such report shall also state all the liabilities of such savings corporation on the morning of the said first day of January and July ; the amount due to depositors, which shall include any dividend to be credited to them for the six months ending on that day, and any other debts or claims against such corporation which are or may be a charge upon its assets. Such report shall also state the amount deposited during the year previous, and the amount withdrawn during the same period ; the whole amount of interest or profits received or earned and the amount of dividends credited to depositors, together with the amount of each semi-annual credit of interest, and the amount of interest that may have been credited at other than semi-annual periods, the number of accounts opened or re-opened, the number closed during the year, and the number of open accounts at the end of the year, and such other information as may be required by the superintendent. If a trust company or safe deposit company, such report shall contain such particulars as the superintendent may prescribe. If a co-operative loan association, or a building and mutual Joan corporation, or a mortgage, loan or investment corporation, such report shall be made annually on or before February first in each year, and shall contain a statement of its condition on the first day of January preceding. The super- intendent may, for good cause shown, extend the time for making any such report not exceeding thirty days. Every such report shall be verified by the oath of the president and cashier or treasurer of such corporation or by such individual banker, to the effect that the same is true and correct in all respects, and that the usual business of such corporation or banker has been transacted at the location required by this chapter, and not elsewhere. The superintendent shall serve a notice designating the day in each quarter when a report shall be made upon each bank and individual banker required to report to him by delivering the same to some officer or clerk thereof at their respective places of business or by depositing the same in the post-office inclosed in a post-paid wrapper and properly directed to each of them, or some officer thereof, at their places of business respectively. 21. Penalties for failure to report. — If any bank or individual banker shall fail to make such report within ten days from the day designated for the making thereof, or to include therein any matter required by the superintendent, or if any savings bank or trust company shall fail to make such report within the time required by this chapter, or to include therein any matter required by the superinten- dent ; every such delinquent bank, banker, savings bank or trust company shall forfeit to the people of the state the sum of one hundred dollars for every day that such report shall be delayed or withheld, and for every day that it shall fail to report any such omitted matter. Every other corporation subject to the provisions of this chapter which sh^ll fail to make such report within the time herein required, or to include therein any matter required by the superintendent to be stated, shall forfeit to the people the sum of ten dollars for every day'for which such report shall be delayed or withheld, and for every day that any such omitted matter may remain unreported. Banks, including saving banks are liable to a fine of £20 per diem ; other corporations under section 2 supra £2 per diem. The moneys forfeited by this section, when recovered, shall be paid into the state treasury to be used to defray the miscellanous expenses of the department. If any corporation or individual banker shall fail to make two successive reports as herein required^ every such corpqration shall forfeit its charter, and every such individual banker shall forfeit his: privileges as such banker; and every such corporation or individual banker may be proceeded against and the affairs of such corporation closed, and such individual banker be restrained from continuance in business, in the same manner as an insolvent corporation or individual banker may be proceeded ■against. In case of the failure of any corporation or individual banker to make any report required II 62 246 of him by law, the superintendent shall immediately cause the books, papers and affairs of such corporation or banker to be examined as directed by section 8 of this chapter. 22. Publication of reports. — Within thirty days after any such report shall be made, the superinten- dent shall, with the exception of the reports made by savings banks, publish a summary statement thereof in a paper at Albany, in which notices by state officers are required by law to be published, and the separate report of each corporation and individual banker shall be published by such corpora- tion or individual baujjer in at least one newspaper of the place where its principal place of business is located, if there be one; if not then in the newspaper published nearest where the bank is located. Such summary statement shall contain the items of capital, circulation, if any, and deposits, specie, and cash items, public securities and private securities and such other matters as may be necessary to inform the public as to the financial condition and solvency of any such corporation or banker, or which the superintendent may deem proper to include therein. In the publication of such statements, the superintendent shall arrange the individual bankers in a separate class, and specify the name and place of business of each, and the names and residences of the general partners. , 23. Annual report of superintendent. — The superintendent shall report annually to the legislature, at the commencement of its fiirst session : — (1) A summary of the state and condition of every corporation and individual banker required to report to him and from which reports have been received the preceding year, at the several dates to which such reports refer, with an abstract of the whole amount of capital returned by them, the whole amount of their debts and liabilities, specifying particularly the amount of circulating notes outstanding, if any, and the total amount of means and resources, specifying the amount of specie held by them at the times of their several returns, and such other information in relation to such corporations and bankers as, in his judgment, may be useful. Such corporations shall be divided into classes so as to correspond with the designations thereof in section 2 of this chapter. (2) A statememt of all banks and individual bankers and other corporations and individuals authorized by him to do business during the previous year, with their names and locations and dates of incorporation, and particularly designating such as have commenced business during the year. (3) A statement of the banks and individual bankers whose buisiness has been closed during the year, with the amount of their circulation redeemed and the rate per cent, of such redemption, and the amount outstanding. (4) Any amendments to the banking lew, which, in his judgment, may be desirable. (5) The names and compensation of the clerks employed by him, and the whole amount of the expenses of the department during the year, and the amount, if any, for which the treasury shall be in advance. Such report shall be made by or before the last day of the year, and the usual number of copies for the use of the legi3lature shall be printed and in readiness for distribution by the printer employed to print legislative documents, and one thousand copies shall be printed for the use of the department, the expense of which shall be charged among the general expenses of the department. Such report may be divided into parts, and the part or parts containing the reports of corporations other than banks may be made on or before the first day of March in each year. 24. Reports presumptive evidence. — Every official report made by the superintendent to the attorney- general, and every report duly verified of any examination made, shall be presumptive evidence of the facts therein stated in all motions in any action or proceeding for the appointment of a temporary receiver of any corporation to which such report relates. 25. Restrictions. — No corporation or banker to which this chapter is applicable shall : (1 ) Make any loan or discount to any person,* company, corporation or firm, or upon paper upon which any such person, company, corporation or firm may be liable to an amount exceeding the one-fifth part of its capital stock actually paid in and surplus ; but the discount of biUs of exchange drawn in good faith against actually existing values, or of commercial or business paper actually owned by the person negotiating the same shall not be considered as a part of any such loan or discount. (2) No such corporation nor any of its directors, oflicers, agents or servants, shall directly or indirectly purchase or be interested in the purchase of any promissory note or other evidence of debt issued by it for a less sum than shall appear on the face thereof to be due. Every person violating the provisions of this sub-division shall forfeit to the people of the state three times' the nominal amount of the note or other evidence of debt so purchased. (3) No president, director, cashier, clerk or agent of any such corporation, and no person in any way interested or concerned in the management of its affairs, shall as individuals discount or directly or indirectly make any loan, upon any note or other evidence of debt, which he shall know to have been offered for discount to such corporation, and to have been refused. Every person violating the provisions of this sub-division, shall, for each offence, forfeit to- the people of the state twice the amount of the loan which he shall have made. 26. Calculation of profits. — Interest unpaid, although due or accrued on debts owing to the corporation or banker, shaU. not be included in the calculation of its profits previous to a divided. The surplus profits, from which alone a dividend can be made, shall be ascertained by charging in the account of profit and loss and deducting from the actual profits : (1)_ All expenses paid or incurred, both ordinary and extraordinary, attending the management of its affairs and transaction of its business. (2) The interest paid, or then due and accrued, on debts owing by it. (3) All losses sustained by it. In the computation of such losses, aU debts owing to it, shall be included which shall have remained due, without prosecution, and upon which no interest shall have been paid for more than one year, or on which judgment shall have been recovered that shall have This appears to mean to atiy one person. 247 Temained for more than two years unsatisfied, and on which no interest shall have been paid during that period. 27. Losses in excess of profits. — All losses sustained by any borporation or banker subject to this chapter, in excess of its undivided profits then realized and possessed, shall be charged as a reduction of its capital stock, and no dividend shall thereafter be made on its shares of stock until the deficit of capital so created shall be made good, either by the recovery cf the moneys charged as lost or from the subsequently accruing profits of the corporation. 28. Publication of unclaimed dividends and deposits. 29. Change of location. 30. Approval and certificate of superintendent upon incorporation. — No corporation to which this chapter is applicable shall be incorporated hereunder, or transact any business in this state other than such as relates to its formation, without the written approval of the superintendent of banks and "without his written certificate stating that it has complied with the provisions of this chapter and with all the requirements of law, and that it is authorized to transact within this state the business specified therein, and that such business can be safely intrusted to it, which certificate shall be recorded in the office of the superintendent in a book to be kept by him for that purpose and a certified copy thereof filed in the oflBce of the clerk of the rounty where the corporation is to have its principal business office. New. 31. Permission and certificate of superintendent in ease of foreign corporations. 32. Appointment of superintendent as attorney for service of process in the case of foreign companies or assoeiations only. 33. Appointment of receiver. — If it is made to appear upon application of any creditor or share- holder in any such corporation, company or association, residing in this state that the funds on deposit •with the superintendent of banks are insufficient to pay in full the creditors and shareholders residing in this state, or that it is insolvent, or has suspended business, or that insolvency or bankruptcy pro- ceedings have been taken against it either voluntarily or involuntarily, the supreme court may, upon due notice to the attorney-general, and Tipon such notice to the corporation, company or association as the court shall prescribe, appoint a receiver of such funds ; and pending such application, the court or any judge thereof may enjoin the commencement or prosecution of any other action or proceeding against such corporation, company or association. Upon the qualification of such receiver, the super- intendent of banks shaU pay over to him the funds remaining in his hands less any charges which he may have against the same, and the receiver shall distribute such funds among the creditors and share- holders of the corporation, company or association residing in this state in the manner prescribed by law for the payment of creditors in the case of voluntary dissolution of a corporation. USURY LAWS. Gbrmany.* I. The following sections shall be added to the Penal Code : — 302. (o) Whoever, taking undue advantage of the distress, simplicity, or inexperience of another ("Wer unter Ausbeutung der Nothlage, des Leichtsinas, oder der Unerfahrenheit eines Anderen) makes * A stndy of the organization of credit necessarily includes a consideration of the question of usury, for which indeed, the organization of credit throngh association is a principal remedy. In India the nsnry problem is demand- ing, and, to some extent, reoeiTing attention ; enquiries, commissions, and legislative bills are attacking the problem and there are clear indications, such as the Government order which initiated this report, the recent proposal in the legislature to revive the law of ' damdiipat," and other enquiries and bills now in hand, that some legislative answer wSl be attempted to the vexed question of usury. Whether the law can successfully deal with the problem is in itself a problem, and it is wholly doubtful whether direct legal interference may not exacerbate the evils of usury and hinder the solution of the difficulty. What, for instance, is nsnry P can the law define it ? can the law so differentiate between true usury and l>oni fide insurance that the courts can punish the one and assist the other .' can usury be so defined and legislated for, that its thousand forms and wiles can be detected and circumvented ? It is not contended that the law cannot at all interfere in the money-lending trade ; on the contrary, it is believed that without the assistance of the law in various ways, contracts will too often be inequitable, business will be mis- conducted ; wealth and poverty, greed and necessity, knowledge and ignorance cannot do business on equal terms if the laTv remains neutral or careless. The old laws, of which those repealed in India in 1855, and those still existing in France, the United States and elsewhere, are sjeoimens, are mere rough-and-ready expedients ; they simply laid down an arbitrary maximum, e.g. 6 per cent., for interest, and rates exceeding such maximum were called u^rions. The inutility of such feeble efforts is notorious ; they dealt merely with one form of usury, viz., that relating to money-loans, and even in that respect were and are as ludicrously inefiicient as a mop to keep back the sea. This was recognized in England and in India and the repeal of the old laws followed (in 1855) in India ; Germany followed suit, and absolutely repealed her usury laws in 18S7, leaving the rates of interest wholly free. But in 1879 Germany took fright at the exploitation of society, especially of the small folk, by the usurer, and in 1880 the legislature passed a new and drastic law against usury, in which, however, wholly new ground was taken. The law no longer fixed an arbitrary maximum for interest, but, framing a certain definition of usury, left it to the courts to decide in each case whether, according to the circumstances of the case, usury had been practised : this law will be found translated in the text. It was, however, found that the law only dealt with cases of usury in money, and a further law was passed in 1893, amending the former law. To judge by the reports of economists, newspapers', and societies, especially the " Terein fiir social-politik," the new law has had little or no effect in restraining usury, while many consider that it has aggravated the terms of usury, since there is now a heavy personal risk to be insured against in all cases of hard bargain to which the small folk are incessantly liable. As a matter of fact, between 1882 and 1890 989 persons were prosecuted under the new law of whom' 466 were convicted and 523 acquitted. Austria followed the example of Germany, and Russia, in 1893, passed a similar law. These laws are translated here merely for what they are worth, and as a contribution to the Indian enquiry regarding credit and usury ; it is hoped to deal with the subject of usury more fully elsewhere. The two laws of 1880 and 1893 will not he given separately, but only that df 1880 as amended by that of 1893. 248 to that other a money-loan or consents to prolong the period of a money-loan,* or makes any other contract haying a similar business object {i.e., credit), and in virtue of ench loan, or contract, obtains or agrees to obtain material advantages (Vermbgensvortheile) which, considering the circumstances of the case, are extraordinarily disproportionate (in aufEiilligem Missverhaltniss) to the service rendered, shall be punished as a usurer witb imprisonment which may extend to six months, and also with fine not exceeding £150. The court may also sentence the accused to the loss of his civil rights.f 302. (i) "Whoever, for himself or for another, disguises the advantages mentioned in 302 (a), or obtains an entry of the same in a promissory note or bond, shall be punished with imprisonment which shall not exceed one year and also with fine not exceeding £300. The loss of civil rights may also bo decreed. 302. (o) The same penalties as are entered in 302 (a) and {h) are also awardable to any one who having knowingly acquired a debt (claim, Forderung) bearing usurious interest either sells the same to a third party, or makes use of his usurious advantage. 302. [d) Whoever practises usury as defined in sections 302 (a) to302(tf), habitually or as a business, shall be punished with imprisonment for not less than three months, and also with fine which shall not be less than £25 or more than £750. He shall also lose his civil rights. 302. (e) The same penalty as in 302 (i) shall be inflicted on any one who, in any contract not men- tioned in section 302 (a), habitually or as a business takes advantage of the embarrassments, simplicity, or inexperience of another, to obtain the promise of or to obtain, for himself or for another, profits which under the circumstances of the case, are gravely disproportionate to the service rendered. II. Section 360 (12) of the Penal Code (1876) shall be modified as foUo(vs : — 360(12). Whoever, as a pawn broker (Pfandleiher) or second-hand dealer (Eiickkaufshandler), acts in the exercise of his business, contrary to the regulations governing such business especially in demanding a rate of interest higher than that fixed by law or by the orders of competent authority, shall be punished with fine which may extend to £7-10-0, or with imprisonment. Section 367 (16) shall run as foUows : — 367 (16). Whoever contravenes the police regulations regarding the holding of public sales, or regarding the distribution of spirituous liquor before and during such sales, shall be punishable with fine which may extend to £7-10-0 or with imprisonment.! III. Contracts which contravene sections 302 (a), (b) and (e) are null and void. All usurious profits paid by or for a debtor under sections 302 (a) and (e) shall be returned to him and shall bear interest from the date of the original payment. All persons who have practised or participated in usury shall be jointly responsible, save only that a person guilty of the offence contemplated in 302 {c) is only responsible for such amount as he or other co-contractor shall have received. The (civil) responsibility of any person (connected with the usurious bargain) who shall not be criminally liable for usury, shall be determined by the general law. The right of demanding restitution expires at the end of five years from the date of the original payment. The creditor in a cancelled contract has the right of demanding repayment of the principal actually lent, such repayment being secured by the guarantee (pledge, mortgage or surety) given by the debtor. Any other rights of the creditor which, according to the provisions of the Civil Code, are not cancelled by the voidance of a contract, are not affected by the present law. rV.§ Whoever makes a regular business of trading in money or in credit must, at the close of every year, make up the account of every person who has dealt with him and^has become his debtor, * The lavr of 1880 did not oontain the sentence following the words ' money-loan.' It was fonnd that the law did not cover the nnmerous malpractices attending rural credit and dealings, especially loans repayable in kind, or loans and contracts relating to cattle. For example, at public sales of land the auction price is nsually payable by instal- ments ; the Bale-pTrrohaser pays so much down and the rest by bills : since the sale-vendor is, ex hypothesi, in urgent need of money (or he would not have allowed the sale), he endeavours to discount these small bills, and as banks do not exist for such small and local business, the money-lender is able to buy these notes at usni'ions discount : hence a ruinous loss to the sale-vendor, and the beginning of danger to the sale-purohaser, who now has the money-lender as creditor. Similarly, when cattle are bought on credit, any failure to pay an instalment may, by the contract, result in the instant reversion of the cattle to the vendor. Similarly, the money-lender frequently agrees to lend seed-corn or to prolong a loan, upon the promise of usurious consideration in kind at harvest, or he debits the borrower with an excessive value for goods sold or lent and credits them with proceeds far below the market value for the produce repaid. These and other transactions are called ' Sachwucher ' (usury in kind), usury in money being ' Creditwnoher.' f It will be observed that the court has to decide in each case whether, nnder the circumstances of that case usury has been practised, the position of the borrower as regards the lender, viz., his distress, &c., being especially con- sidered. Usury is so protean in its forms, so elusive in its vriles, that it appears hopeless for the law to attempt to define it ; hence, since a usury law was considered necessary, the only alternative was to grant to the courts the power to determine whether, in any given caee, there has been usury, a general suggestion alone being given as to the circumstances in which a contract might be usurious. The severity of the penalties are noteworthy : imprisonment and fine are both necessary, and civil rights may also be lost. J It ia a common device at land auctions in Europe to provide free liquor for those attending the sale ; the conse- quence, of course, is reckless competition. In a report regarding the credit question in Alsace-Lorraine it is stated that the ' Jews ' who have obtained the sale of an estate, split up the estate into small lots, ply the bidders with liqnor- and thus obtain most absurdly high bids, so that they derive large profits not merely from the sale itself but from the unfortunate bidders who are unable to meet the subsequent calls for payment. § This section contains one of the most important provisions of the new law, and one which may usefully Ibe adopted, or, rather, which should be adopted, in any usury law which may be passed for India. It has already been elsewhere advocated by the writer, and must prove of extreme value, especially if enacted in conjunction with a pro- vision for enforcing the keeping of proper accounts in bound and duly verified books, in which the accpunt of each individual shall be properly ledgered. This latter provision is universal in the commercial codes of the European continent. The present section is aimed at those tricks and delays of the money lender by which a debtor is kept in ignorance of the state of his account, so that interest and compound interest aoonmulate to an overwhelming sum while opMrtunit is, by snoh delays, afforded to the creditor of making omissions or false entries which, from lipse of time the debtor is unable to prove or disprove. ' The eioeptions in the text are entered to prevent the provision from interfering with respectable business firms. 249 -and, within three montlis from the close of the year, must send to such person an extract in writing' phowing not only the total due but also how such total has been arrived at. Whoever wilf uUy neglects to comply with this regulation shall be punished with fine which may extend to £20, or with imprisonment, and shall lose his claim to interest for the past year on all items which ought to appear in such extract. The above provisions are not applicable — (1) when there has been but one single and closed transaction during the year between the creditor and debtor, and when the debtor, holds a written document reciting the amount and origin of the debt; (2) to public banks, banks of issue, land and mortgage banks, public loan institutions, credit and savings banks belonging to public bodies and to registered co-operative societies (Genossenscbaften) in so far, as regards the last class of society, as concerns transactions of the societies with their members ; (3) to business transactions between business men whose business name is registered in the trade register. V. Clause 1 of paragraph 3 of section 35 of the commercial code is modified as follows : — The same restriction* is applicable to those who deal habitually in the leasing out of cattle, in the buying and selling of cattle, and in buying and selling plots of land. EussiA.f 1707. A person is guilty of usury (1) when he grants a loan under such conditions as, to his knowledge, constitute an extremely unjust burden on the borrower; (2) when, being an habitual money lender, he disguises the excessive interest either by lumping it with the prLacipal, or by entering it as expenses of maintenance, or otherwise. Such person shall be liable to imprisonment for a term of from two to six months. J Any person who acquires a usurious bond knowing it to be usurious, or proceeds to recover upon it, or obtains payment thereof, shall be liable to the same penalty. § 1708. Any person found guilty of making a business of the offences contemplated in the first part of the preceding section, shall be liable to be deprived of all rights and special privileges acquired either personally or by virtue of his position, and to exile to some distant province other than Siberia, or at least to a penalty of the first or second class mentioned in section 33 of this code.|| 1709. Interest which does not exceed 12 per cent, per annum shall not be considered usurious. A bond impeached of usury shall be considered null and void, but the lender is entitled to the repay- ment of the principal which he shall have actually lent less any repayments already made. BuLGAMA. The legislature of Bulgaria is now (1896) engaged in considering a new usury law. The bill provides that the demand of interest above 12 per cent, per annum shall be punishable with imprisonment for a period not exceeding six months, and with fine of from £4 to £20. Not only does this law forbid usury in the case of money loans, but by its provisions any one who buys standing crops at 10 per cent, below their value according to prices ruling at the time, is liable to the same punishment, as well as any person selling goods for a subsequent payment in produce, who makes an excessive profit from his customer. Further, any person carrying on such transactions under the cover of written acknowledg- ments of debt, bills of exchange, &c., is liable to imprisonment up to two years. {Board of Irade Journal, January 1896.) * Section 35 of the code authorizes the proper authority to forbid persons to exercise certain trades or indnstries when there is evidence that such persons are not of sufficiently good character : such trades are the teaching of dancing, swimming, &o. To these trades are now added those entered in the text. The new addition is aimed at those persons who exploit the rural classes in the supply of cattle, or in baying up land for the purpose of re-selling it. t Usury in BuBsia is terribly prevalent, and the ' Jews ' exploit the peasantry beyond measure. Hence, while Government on'thejone hand is endeavouring to find some mode of supplying or promoting cheap agricultrural credit, on the other it is attempting to repress usury by legal enactment. The text gives the provisions of a bill translated from the French ; this bill became law as an addition to the Penal Code in 1893, but the text of the law is not available : it is stated, however, that the substance of the bill is contained in the law which is somewhat lengthier, and contains provisions against habitual usurers, against those who employ (at auctions ?) intoxicating liquors (c/. the German law, article II), &c. t The law, as passed, provides that, in the case of rural usury, culpability shall depend upon the question whether the lender, by taking advantage of the embarrassment of the borrower, has obtained, whether in money, in kind, or in labour, undue advantages contrary to local custom. This latter phrase (' contrary to local custom ') is not only vague but, since local custom has usually allowed usurious terms, it does not hinder usury. § This, whether intentionally or not, extends to mere agents such as lawyers or bankers, the penalties incurred -by their employers : probably it has been altered in the law as passed. 11 This appears to be removal from his own village, but without other penalty save obligatory residence in a. particular place and police surveillance. II 63 250 BOOKS OF COMMEEOE. * COMMEBCIAL OoDB OF ItAL"?. CHAPTER IV. 21. Every business person (commerciante f) must keep a day-book which shall show, day by day^ all items on the credit and debit sides, all acts of trade (business transactions), the negotiation, acceptance or exchange of biUs, and, generally, every receipt and payment under any head whether civil or commercial, together with, month by month, a statement of the sums laid out on the expenses- of his household (casa). This day-book shall be kept, independent of any other books which may be required in the person's business. Every business person must also keep files of all letters and telegrams received, and copy-booka for all letters and telegrams despatched. 22. Every business person must make annually an inventory of his movable and immovable property and of debts owed by and to him of whatsoever nature or origin. The inventory must be closed by a balance sheet and statement of profit and loss, and must be entered and signed, year by year, by the party in a book opened for the purpose. 23. The day-book and inventory book shall not be brought into use until each leaf thereof shall have been numbered and countersigned by a judge of the commercial court, | or by the praetor (petty magistrate and judge) of the place of residence of the party : on the last page of the abovementioned books and of the letter copy-book shall be entered the number of pages comprised therein, and the judge or prsetor shall append to such entry his signature with the date. No charge shaU be made for any of the above duties. * In oonneotion with the trade of money-lending in India, it has been reooramended in Vol. I, pp. 322-23 that persons dealing habitually in money and credit shonld be compelled to keep proper and easily verified accounts in order not merely to facilitate courts and others in ascertaining the history of a debt or bond, but to ensure that the creditor shall annually or periodically furnish the debtor, whether on demand or otherwise, with a complete statement of account, fairly free from suspicion of error or fraud. The codes of commerce of the various countries of continental Europe invariably contain provisions that all ' business persons ' (oommerij'ants) shall keep certain books and files which are subject to the vis4 of various authorities such as the judge of the commercial court, the mayor, &o., and it can hardly be considered objectionable to prescribejfor Indian money-lenders conditions — with all necessary modificatio'ns — which are universal for all classes of trade on the European continent. Extracts are therefore given from the com- mercial codes of several European countries. See also Article IV of the German usury law in this chapter with the - note thereon. The Government of Madras has already adopted the suggestion, in their letters to the Government of India, No. 2671, Judicial, dated 6th November 1894, Judicial, and No. 2081, dated 8th October 1895. f The ' commerciante ' may be an individual or a society : section 8 defines a ' commerciante ' as follows : — " Commeroianti are those who carry on trade (esercitano atti di commercio) as a regular business, and trading societies (companies, &c.)." ' Acts of commerce ' are further defined in section 3 under 24 heads of which the following may be mentioned as relevant to the subject of this study : — " (1) The purchase for resale of produce and goods, whether raw or manufactured, &o. ; " (2) The sale of such goods when they have been bought for resale ; " (11) Banking operations ; " (12) The exchange and other disposal of produce ; " (24) The deposit of goods in public (generali) warehouses and all transactions based on such deposit and on bills " or warrants relating thereto." By section 5 it is provided that the purchase of produce and goods for domestic 'consumption or use, or the resale of the same, is not an ' act of trade,' nor is the sale by a land-owner or cultivator of the produce of his land. Hence persons engaging in such operations do not thereby become traders, and therefore, under section 1, are not subject to oouimeroial law, but only to the ordinary law ; all ' acts of trade ' are under the commercial law. These are the provisions of the Italian code, and those of other countries, especially Latin, are similar. J The commercial courts, as separate courts, have now been abolished in Italy, their work being done by the ordi- nary courts but under the provisions of the commercial code. It was intended to give a complete account of the com- mercial courts, but time and space prevent, while the matter is not absolutely relevant. Sufiice it to say that, taking France as an instance, there are commercial courts in every town of importance, that the members of each Tribunal consist of a President with several Judges and Deputy Judges ; these are not legally trained officers, but are business men of standing, probity, and good sense ; they are elected at a meeting consisting of merchants also selected for their probity, sense of order, and capacity the number of such electors shall not exceed one-tenth of the number of licensed (patentes) traders, nor be less than fifty ; the list of electors is drawn up by a commission consisting of the President and a Judge of the Tribunal, of the President and a member of the Chamber of Commerce, or of a Municipal Councillor of three members of the Council of the District, of the President of the Conciliation Council (Oonseil des Prud'hommes) or of a Justice of the Peace it there is no such council in the town, and of the Mayor of the town. The followino- are ineligible as electors : persons convicted of crimes, such as theft, cheating, usury, indecent assault, &c., or persons%pho have suffered any degrading punishment ; persons convicted of infringing the gambling or lottery laws, certain other criminals, dismissed public officials, bankrupts who have not been rehabilitated, and, generally, all who have not the right of public voting ; various precautions are taken for the publication of this list, and for the lodging of objections. Persons eligible for election as judges are traders of thirty years of age, domiciled within the jurisdiction of the court persona who have been directors of a company for five years, masters of sea-going vessels under certain conditions • men cannot become judges till they have first been deputy judges, nor President till they have been judges. The election of judges and deputy judges shall be by ballot, and of the President by a special ballot, in presence" of the existing commercial court presided over by the Mayor, ° Judgments in the commercial court are delivered by at least three judges; advocates (avoues are not allowed to practise in these courts, but other perspns may be personally instructed by a party if present. The functions of the judges are wholly gratuitous. The commercial courts have jurisdiction over all disputes relating to contracts and transactions between merchants shopkeepers, and bankers, arising in the course of their business ; over disputes between partners in matters arisino- out of a business partnership, and over disputes relating to business (trade) transactions between all persons ; trade trans- actions however are limited as in the second note in this article (on the word ' commerciante ' in Italy) The courts have also other functions as may be read at large in the French and other codes ; it is noticeable that disputes about bills of exchange are not cognizable by the commercial courts unless at least one of tho parties is acommeroant The procedure of the commercial courts isthat provided in Title XXV of Book II of Part I of the Procedure Code and is that known as ' summary ' ; judgment is final when the parties both declare their desire that tl-e iud.'ment shall be final and without appeal, when thg,. matter at issue does not involve any claim in which the principal exceeds 261 The day-book must be presented once in every year before the cotamercial court or praetor, and shall be viseed by Mm without charge immediately below the latest entry therein. In communes where there is no praitor the visa may be obtained from a notary who shall enter the transaction in his register. 24. The commercial courts shall maintain a register in which shall be entered the names of the parties who have presented their books, the nature of the same, and the number of leaves counter- signed ; this register shall be entered up at the annual visa of tlie day-books. Prsetors who have countersigned and vtshd the above books must send an annual memorandum of the fact to the commercial court. The same duty is owed by notaries when they have acted as in section 23. 25. The abovementioned books must be kept in order of date and sequence, without blank spaces, interlineations, or marginal alterations. No erasures are allowable, and where any correction may be necessary, it must be made in such way that the words struck out shall be completely legible. 26. Business persons must preserve for ten years from the date of the latest entry in the (court) registers, the books obligatorily kept, and the letters and telegrams received. 27. The communication of the contents of the above books, inventories and files, shall not be claimable by parties in court except in cases of succession, formation or dissolution of partnership, and bankruptcy. Inspection in such cases shall take place in the manner agreed upon by the parties ; failing such agreement by deposit in the office of the court.* 28. During the progress of any dispute (controversia) even though not of the nature mentioned in section 27, the judge may, whether of his own motion or on the petition of one of the parties, order the production of the books, but solely for the grant of an extract of so much as shall be relevant to- the matter at issue. The production of particular letters or telegrams which may be relevant may also be ordered.! REPORTS FROM HER MAJESTY'S MINISTER AT WASHINGTON ON THE HOMESTEAD AND EXEMPTION LAWS IN THE UNITED STATES.f No. 1. (Omitted.) § Inclosure in No. 1. Bepnrt. Previous to the year 1862 the only means of acquiring tracts of pubHo land was under the pro- visions of the Pre-emption, Timber Culture, and Desert Land Acts passed by Congress in 1841 ; but in 1862 the Homestead Law was passed, with the object in view of encouraging the settlement, posses- sion, and cultivation of the land, in small quantities, by a class of industrious citizens, who, by their occupation of the soil and establishment of homes, would tend to form communities adverse to lawless- ness and social or civil disorder, and to the exclusion of individual land speculators and Land Com- panies, It is also held that the possession of proprietary rights in the land tends to promote industry and thrift, and to foster a feeling of independence and love of country. With this view provisions were introduced into the Act protecting the settler and his family from the loss of their homestead and a certain amount of personalty by execution or sale, in the event of the settler being overtaken by debt, whether through illness, bad seasons, or other misfortunes. Unfortunately, the beneficent object held in view by this legislation has been partially defeated, the provisions of the Act having been converted £60 • this principal does not exolade oounterolaima even though these, aggregated with the original claim, do exceed £60. Appeals lie in other cases to the nsnal court of appeal for the district, but the appellate courts cannot stay execution of the original judgment, though they may allot a special hearing. All appeals shall be treated as appeals from ' summary ' judgments. Where there are no commercial courts, thelordinary civil judges shall exercise the functions of commercial courts, and shall decide similar matters with similar procedure. The above is entered to show the use made of honorary (unpaid) judges chosen from experts not in the law but in trade ; they must immensely relieve the ordinary courts, and would be very valuable in disputes between rural banks and their customers, if the Village Moonaiff's courts should not be equal to the task. But the Village MoonsifE's court with slight developments, appears to be admirably adapted for village business disputes. By the Belgian law the initial or countersignature of the judge, &c., may be replaced by the official seal of th» court or commune. * Section 28 extends this section so that parties in suits for debt or for an account shall have the benefit of the production of the books in so far as the parties are concerned. •j- The Belgian law is so similar to that of Italy that it needs no translation. But section 20 of that law provides that the books shall be admissible in evidence in suits between business persons as regards trade matters. So also section 20 of the French Code of Commerce is as follows, viz. : " Business books, if regularly kept, may be allowed by the judge as evidence between traders (oommer^ants) in matters which concern trade " ; this evidently refers to the particular books, specifically ordered, as in the text aupra, to be kept. Section 17 of the French Code is as follows : " If the party whose books are offered in proof of any fact refuse to produce them, the judge may accept the oath of the opposing party." X See Vol. I, pp. 46, 323-24. The report from the Minister has been reprinted in full together with the Consular report of tbe (British consular) district of Mississippi, and the Homestead exemption law of Louisiana, one of the States of that district. It should here be stated, what was unknown to the writer when volume I was written, that several countries of Europe are now studying, and some economists are urging the importance of introducing Homestead exemption laws; either under that particular name or under some local name. The limitation of the power of proprietors, especially amall ones, to divide or to encumber their property, and of creditors to touch it or a registered portion thereof, is beginning to receive European consideration, and the question will be hereafter dealt with separately. § Merely the covering letter. 252 by speculators into a meana of acquiring posseBsion of large tracts of land by making fraudulent entries at the various Land Offices throughout the States, and also a method of 'dishonest evasion of debts lawfully contracted. During the debate in the Senate last Session on the repeal of the Pre- emption, Timber Culture, and Desert Land Laws, it was stated that- the Land OommisMoner had made the admission that 40 per cent, of the entries under the Homestead Law were of a fraudulent nature. . ■ j ^ v, i A settler desirous of availing himeeK of the benefits of the Homestead Law is required to be the head of a family, and to be 21 years old, and under these conditions he is entitled to enter »* t^^e District Land Office a quarter section consisting of 160 acres of public land, which he is expected to occupy as a residence within six months after fiHng his entry. The fees of the Land Office, whicH are of small amount, are the only payments required of the homesteader in return for his privileges. After five years of continued residence and cultivation of the soil, the homesteader, on making appli- cation to the Land Office, is entitled to a patent for his quarter section six months after proving to tHe satisfaction of the Registrar that he has complied with the necessary conditions. If the settler, having filed his homestead entry, fails to occupy and cultivate the soil, his rights are forfeited to the State, as is also the case where an attempt at fraud or a want of good faith can be proven. In the event of the death of the settler before the issue of the patent, his widow succeeds to the homestead right, and in the case of the death of both father and mother, the children are entitled to the home- stead right, and in no case can this right be devised away from the widow or minor children. The homesteader is also permitted, should he wish to do so, to commute to cash his homestead entry, after six months' occupation and cultivation of the land, at 2 dol. 50 c. or 1 dol. 50 c. per acre, the price varying according to the nature and quality of the soil and the improvements made. In almost all the States of the Union the homestead, up to a fixed limit of value, is under certain restrictions exempted by State legislation from levy by execution, but this exemption can only be claimed so long as the settler occupies the land and makes it his home. Should he cease to do so, the land could be sold to satisfy his creditors. A very liberal allowance of the personal property of the homesteader is also exempted from execution or sale, the articles exenipted varying in the different States according to what is considered by the local Legislatures as necessary to enable the debtor to continue bis residence on the land, to pursue his vocation, and to provide for the maintenance and welfare of his family. The following is a summary of the legislation in the various States of the Union relating to the exemption of homesteads and of the personal property of the settler : — Alabama. In the country, a homestead of 160 acres not exceeding 2,000 dollars in value, and in cities, towns, and villages, a lot with dweUing, &c., value not to exceed 2,000 dollars, is exempted. Personal property consisting of necessary wearing apparel for each member of the family, portraits, books, and wages for labourers not exceeding 25 dollars per month is also exempt. Similar exemptions are provided for the widow in support of the family for the space of twelve months. Arkwmas. A homestead of 160 acres of land, and the buildings thereon, up to the value of 2,500 dollars, are exempt ; and in a city, town, or village, 1 acre with improvements up to the same value. Personal property to be selected by the debtor is exempt to the value of 200 dollars, also his or her wearing apparel. If the debtor be married, 500 dollars is similarly exempted, with the wearing apparel of the family. Cali/ornia, A homestead with buildings thereon, not exceeding 5,000 dollars in value, is exempt; and of personal property, a certain number of horses and stock, farm implements, tools, household and kitchen furniture, wearing apparel, one month's provisions, a sewing-machine, lawyers' and ministers' libraries, and in fact almost everything needed for personal comfort and safety. Colorado. Homestead not exceeding 2,000 dollars in value is exempted ; and nearly the same generous provision for personal property as in California exists in Colorado. In the case of a single person his tools, implements, and stock of trade to the value of 300 dollars are exempt. ' Connecticut. Homestead and buildings to the extent of 1,000 dollars in value. Personal property consisting of wearing apparel, household furniture, tools, implements of trade, library not exceeding 500 dollars in value, a certain amount of stock and poultry, provisions, and other items amountine in all to abont 1,000 dollars. * Dakota. Homestead, otherwise acquired than under Homestead Act, not to exceed 80 acres in the country or 1 acre ma town. Personal property, comprising pictures, books, instruments and tools, wearing- apparel for debtor and family, furniture in use to the extent of 500 dollars, certain Uve stock waeeon? farming utensUs, &c., valued in all at 1,000 dollars. ^° ' 253 Delaware. No homestead is exempt; but personal property, consisting of wearing apparel, books, pictures, and other household goods, tools, implements of trade, &c., not exceeding '200 dollars in value, is exempted. Florida. Homestead to the extent of 1 60 acres, and a residence with half an acre of land, if in a village of city with 1,000 dollars' worth of personal property. Gfeorgia. Homestead not to exceed 1,600 dollars in value is exempt, together with personal property of the heads of families to the value of 600 dollars. Idaho. No homestead is exempt. Household and farming utensils, with food, seed, tools and instruments, tents and mining equipment, &c., are exempt, the whole not to exceed 100 or 200 dollars of each exempt class of goods. Ultnoia. Homestead not to exceed 1,000 dollars in value, except where the right of exemption has been specially waived. Personal property, consisting of wearing apparel, books, ^pictures of all the family, and 300 dollars' worth of other articles at option of debtor, is exempt. Indiana. No homostead is exempt. Personal property is exempted to the value of 600 doUars as the debtor may select. No property can be sold at less than two-thirds of its value. This can be waived in notes and contracts by the clause, "Payable without relief from Taluation or Appraisement Laws." Iowa. Homestead not exceeding 40 acres, and half an acre it in a town, with buildings and improve- ments, without limitation of value, except in cases where it is specially stipulated that exemption of the homestead is waived. Personal property, consisting of such domestic and agricultural tools and utensils as are needed for the maintenance of a family, with certain cattle, &c., are exempt. Kansas. Homestead consisting of 160 acres, or 1 acre in a town or city, with all improvements. Personal property, consisting of household furniture, food and clothing for a year, tools and implements and three months' wages, farmer's utensils, seed, grain, stock to a limited number, and taxation of personal property to the extent of 200 doUars, is exempt. £^entueky. A homestead not to exceed 1 ,000 dollars is exempt, together with a limited amount of live stock, and domestic implements not to exeed 100 dollars in value; and libraries, tools, instruments, &c., not to exceed in value 200 doUars, are exempt. Louisiana. Homesteads consisting of lands, buildings, &c., whether rural or urban, to the value of 2,000 dollars, are exempt, together with bed and bedding, arms, furniture, tools, implements for pursuit of trade, &c., to a sufficient degree to enable the debtor to support his family. or A homestead with buildings, &o., to the value of 500 dollars is exempt ; also wearing apparel and fuxnitore up to the value of 50 dollars ; bedding, family portraits, books, food, tools, cattle, grain, and implements of trade, the whole not to exceed 600 dollars in value. Mary Land. This State has no Homestead Law, but certain personal property designated by law is exempt, such as all wearing apparel, books and tools not kept for- sale to the sum of 500 dollars. Wages or salary to the amount of 100 dollars are also exempt. MassaehusetU. Homesteads with the improvements thereon are exempt to the value of 800 dollars. This exemp- tion continues after the debtor's death for the benefit of the widow and children, until ,the youngest child becomes 21, or the widow dies. An exempt homestead cannot be sold unless more than 800 doUars is bid for it. The 800 doUars are returned to the debtor if sale be made at a higher figure for taxes or other contingencies provided by law. The foUowing personal property is also exempted : all necessary wearing apparel, bedding, stoves, 20 dollars' worth of fuel, books to the value of 60 doUars,. certain cattle, tools, implements of trade, and provisions for family use to the value of 50 doUars. r. ' 64 254 Michigan. Homesteads not exceeding 40 acres in the country, or a honse and lot in a city, town, or village, the value in either case not to exceed 1,500 dollars, are exempt. Also personalty, including furnitur* to the value of 250 dollars, implements and stock-in-trade to the value of 2o0 dollars, boots no* exceeding 150 dollars, pictures, provisions and fuel for subsistence for one month. Minnesota. Homesteads -to the extent of 80 acres are exempt from seizure, together with a certain amount of oattle, 500 dollars worth of household goods, one year's provisions and fuel, also waggon and tarm implements to the value of 300 dollars. Homesteads to the extent of 80 acres with improvements to the total value of 2,000 doUars, andm cities, towns, and villages, the land and buildings occupied by the debtor, with personal property to b« selected by him to the value of 250 dollars, are exempt. The homestead exemption to the value of 2,000 dollars was made solely for the benefit of the family of the debtor. Mistouri. Enral homesteads consisting of 160 acres of land to the value of 1,500 dollars are exempt, as ar« also 18 square rods of ground to the value of 3,000 dollars in cities of over 50,000 inhabitants and 30 square rods of ground to the value of 1,500 dollars in towns of less than 50,000 inhabitants. Wearing apparel, tools, furniture, stock-in-trade, books, &c., are also exempt. The property of husband and wife are both exempt from Habilities incurred by the other before marriage. Montana. Exemption covers a homestead not excee ling 2,500 doUir» in value, together with considerable personal property. Nelratka. The exemption extends to 40 acres of land, with necessary household goods to the value of 100 dollars to be selected by the debtor ; also certain cattle and implements for farming ; also tools of mechanics, books, &c. Heads of families who have no exempt real estate have 500 dollars' worth of personalty exempt. • Nevada. Homesteads and their appurtenances to the value of 5,000 dollars are exempt. So, also, nejessary household furniture, wearing apparel, fireilood for one month, certain cattle, tools, &c., to the extent of about 1,500 dollars. New Hampshire. Homesteads not exceeding 500 dollars are exempt, together with wearing apparel, furniture, provisions, tools, boots and a certain amount of live stock not exceeding a total value of 500 dollars. No homestead can be sold in execution unless 600 dollars be bid. New Jersey. The lot with the buildings thereon occupied as a residence to the value of 1,000 dollars, are exempt, together with 200 dollars' worth of "goods and chattels," and all wearing apparel for the debtor and his family. New Mexico. A homestead not exceeding 200 acres or 1,000 dollars in value, clothing, bedding, and books in use by the family, provisions to the extent of 25 dollars, other furniture to the value of 10 dollars, and tools and implements to the value of 20 doUars, are exempt. New York. Homesteads to the extent of 1,000 dollars in value, and various articles of domestic use, in all about 500 dollars in value, are exempt. No release of such exemption is valid unless in writing and signed by the householder. Married women are entitled to the same exemptions of homestead and personalty. North Carolina. A homestead not exceeding 1,.500 doUars in value, to be determined for the debtor by three disinterested appraisers appointed lay the Sherift, is exempt from execution ; also household goods to the value of 500 dollars. Ohio. A homestead not exceeding 1,000 dollars in value is exempt, together with clothing, bedding, fuel for sixty days, books, food, a certain amount of live stock, mechanical or agricultural implements not exceeding 100 doUara in value, and other necessary famUy articles. If the debtor is not a house- owner he may hold as exempt 500 dollars of personal property in addition to the chatties exempted above. 255 Oregon. A generous allowance of personal effeota, reaching possibly l,o5o dollars in value, is exempt. A debtor's family, if he die, is maintained from the estate by order of the Court, in preference to any -^ther daim, except for funeral expenses. Pennsylvania. There is no Homestead Exemption Law in this State, but real or personal property to the value of 500 dollars, in addition to wearing apparel. Bibles, school-books, and a sewing-machine, are exempt. The debtor may retain such property as he pleases to the amount exempted, but he must make his claim before sale or his daim is void. He may formally waive all exemption ii ho please. Rhode Island. No homestead is exempt ; but personalty consisting of the wearing apparel and tools of the debtor to the extent of 200 dollars is exempt, together with his furniture, books, stores, other household articles, and one cow, a hog, and a pig. South Carolina. The law of exemption of real and personal estate is the same in this State as in North OaroUna. A homestead to the value of 2,200 dollars is exempt, but the exemption must be claimed in due iorm at the Registrar's office, in case of the death of the debtor, this exemption holds for the widow and children. Fersooalty to the value of 1,200 dollars is also exempted. Texas. Homesteads of 200 acres in extent, or lots in a towQ to the value of .5,000 dollars, are exempt, together with all household furniture, tools, and a liberal supply of useful articles. In case the debtor dies, the Court appropriates an equivalent in money from the estate, in lieu of exempted articles if they do not appear, or are not desired. Utah. A homestead valued at 1,000 dollars, 200 dollars in cash for each member of the debtor's family, and a liberal allowance of household or farmin>< utensUs, are exempt. Vermont. A homestead not exceeding 500 dollars in value is exempt from seizure for debt, and in the case of -the debtor's death passes to the widow and children. A generous amount of personal property is also exempt, such as apparel, bedding, and furniture "necessary or upholding life," together with a certain •niimber of cattle and provisions, fire-wood, books, &c. Virginia. Property to the value of 2,000 dollars is exempted in this State, which may, however, be waived . in writing. Wearing apparel, bedding, furniture, household utensila not exceeding 100 dollars in value, and a certain quantity of live stock, are also exempt. West Virginia. Homesteads, declared in due form as such, not exceeding 1,000 doUars, are exempt, together with .certain live stock, agricultural and domestic implements, furniture, provisions, books, &e. Unmarried men are entitled to exemption of 'tools of trade to the value of 50 dollars. Washington Territory. Family homestead not to exceed 1,000 dollars in value; all clothing, kitchen-ware to the extent •of 150 dollars, tools, certain stock, &c., are exempt, except for the price of their purchase, taxes, or jnortgage. Wisconsin. The Exemption Law covers a homestead not exceeding 40 acrfis in extent in the country, or a house and lot in town or village to the extent of 1^ acres ; also personalty consisting of a limited amount of live stock, one year's provisions, fuel, seeds, &c., also a waggon and farm implements to the value of -300 dollars. The homestead is exempted to the value of 1,500 dollars, also 500 dollars' worth of household .goods, 150 dollars ' worth of wearing apparel for each person, with tools and stock-in-trade to th& value of 300 dollars. No property of a person about to leave the Territory is exempt. The following restrictions prevail in the exercise of the Homestead and Exemption Laws in the various States : — . , c .■ ^.r- n ■ tt- The homestead exemption does not, by the Constitutions of the States of Michigan, Virgima^ Nevada, and Alabama, avail against — (1) Any mortgage or pledge thereon lawfully obtained ; or in the States of Kansas, Arkansas,, .and Nevada as against any Uen. 256 (2) Nor in the States of Kansas, Virginia, West Virginia, North Carolina, Tennessee, Arkansas, Texas, Nevada, South Carolina, Georgia, Florida, and Louisiana against any obligation or debt contracted for the purchase of the premises (or property), or (except in Virginia, North Carolina, and Arkansas) for improvements thereon. (3) Nor in the States of Kansas, West Virginia, Virginia, North Carolina, Tennessee, Arkansas^ Texas, Nevada, South Carolina, Georgia, Florida, and Louisiana against a sale for taxes. (4) Nor in Virginia, Florida, and Louisiana, against a claim for services thereon by a labouring person or mechanic. So also in North Carolina, Arkansas, Georgia, and Alabama not against labourers ' or mechanics ' liens. (5) Nor in Virginia, Arkansas and Louisiana against a debt incurred by a pubHc officer, fiduciary, or attorney-at-law, or in Arkansas, by a trustee of an express trust. (6) Nor in Virginia against a claim for rent, nor against a claim for the legal fees of an officer. (7) Nor in Georgia against a debt contracted for the removal of incumbrances thereon. By the Constitutions of the States of Michigan, Kansas, North Carolina, Tennessee, Texas, Nevada, Alabama, and Florida a homestead cannot be alienated or mortgaged without the joint consent of husband and wife, and instruments of waiver of homestead rights, besides being so signed, must in Alabama be attested by one witness. By the Laws of Texas and Louisiana no mortgage, trust deed, or other lien on the homestead is ever valid, except for the purchase-money therefor or improvements^ thereon, whether such mortgage, trust deed, or lien is created by the husband alone, or together with his wife, and all pretended sales of the homestead, involving any condition of defeasance, are void. In Louisiana no waiver of homestead rights is valid. In Georgia all homestead rights may be waived by the debtor in writing, except 300 dollars' worth of household furniture, provisions, and wearing apparel. In Texas no temporary renting shall change the character of a homestead, no other homestead having been acquired. By the Constitutions of the States of Michigan, North Carolina, Tennessee, Arkansas, West Virginia, Alabama, and Louisiana the homestead estate continues exempt from the owner's debt after his death during the minority of any of his children. So it would seem to be implied in Texas, where the Constitution provides, " that on the death of the husband, wife, or both, the homestead descends and vests like other real property of the deceased, and shall be governed by the same laws of descent and distribution, but shall not be partitioned among the heirs of the.deceased during the lifetime of the husband or widow, or so long as he or she occupy or use the same as a homestead, or the guardians of minor children be permitted so to do by order of Court." In the States of Michigan and North Carolina the homestead estate continues exempt during the life and widowhood of the widow, unless she be the owner of a homestead in her own right. So also in Tennessee, Alabama, and Louisiana it is provided, in general terms, that it shall inure to the benefit of the widow. In Florida the homestead exemption ' accrues to the heirs ' of the party enjoying it. It is hard to state definitely to what extent the provisions of the Homestead and Exemption Laws are taken advantage of, since this varies to a great degree in the different States. In some districts they are rarely resorted to, except in cases of sickness, when the debtor secui-es protection from ejectment and sale of his homestead and property, while in other districts they are very generally made use of. In the Eastern States the Homestead and Exemption Laws are stUl in their infancy, and so far have not attracted the attention of officials engaged in drawing up statistics, and it is impossible to procure reliable data showing to what extent the registration of homesteads is practised in these States. The existence of such beneficient Laws is very little known to the ignorant classes, and this caluse, coupled with the fact of the smaHness of the value of personalty exempted, affords the most plausible reason for the small number of registrations effected. The exemption of personal property is effective, since no process of law is required to render it valid, while in many cases homestead exemption is not taken advantage of, since a declaration has to be recorded, and there are many improvident people who, relying upon their possessory rights, and on having complied with the law in every respect, fail to make the necessary declaration intended to afford them lawful protection in the hour of need. Cases, however, constantly occur where the debtor avaUs himself of aU the privileges provided by legislation against judgment made on his property for debt, and sometimes also with the intent to cheat and defraud legitimate creditors. In the Western States these Laws are in much more general use, and the accompanying tables compiled from the Land Commissioner's Eeports for the years 1883, 1884 and 1885 show the extent to which registration is practised at the diffeient Land Offices scattered throughout the West. In. many cases, homestead entries which have been filed are never completed, the homestead being prematurely relinquished by the settler, who has grown weary of struggling to make money out of farming without capital, and has not complied with the conditions needful for final proof, ov who has forfeited his rights by failing to act in good faith. In cases of distress, advantage is invariably taken of every privilege granted to the debtor by law. Whether these laws are beneficial or otherwise to the community at large can only be answered by considering the question from different points df view, but it is to moralists that it must be left to decide whether it is beneficial to the community to protect a debtor from the payment of his lawful debts to the detriment of the creditor, and whether it is well to encourage people to live from hand to mouth in a position which they cannot improve. There can be no doubt that to the artizan and labouring classes the benefits accruing from such legislation are very great, and the general consensus of opinion is in favour of these Laws as is nroved by the fact that the tendency shows itself to be in the direction of extending rather than curtailine the exemptions offered, and any attempt to diminish or repeal by legislation the privileges granted would be indignantly resisted on all sides. People of small means find these laws a great blessinj' to the since in the case of sickness or other misfortunes they enjoy the feeliag of security that their ho ™' assured to th^m, and that they will not be reduced in the moment of failure to a state of b^ ^t 257 poverty. The weak are protected against the strong, and against unsorupnlous merchants and nsurers who wish to take advantage of the ignorance and poverty of the settlers to wring from them their uttermost farthing. They also aflord protection to the wife and family against the folly of the husband, since a homestead cannot be sold, mortgaged, or abandoned by the husband without the consent of the wife. There are, undoubtedly, thousands of families in the States which have been saved from complete ruin by these humane provisions. Certain drawbacks connected with the system are, however, apparent, as. it is more difficult for a homesteader to raise money on credit than for one who has waived his rights to the advantages offered by these laws, and there are many who abstain from filing their entries, not wishing to impair their credit for the rainy day. Also, in leasing property in a State where the Homestead and Exemption Laws prevail, a landlord runs an extra risk, and, consequently, charges a higher rent than he other- wise would ask if the exemptions were waived. On the other hand, these laws are considered by merchants and capitalists as an injustice to business men, and a mistaken kindness to the poor man as wrecking his credit and preventing him doing business on a cash basis. Washington, Ootoler 28, 1886. (Signed) Charles Hakdinqe. In the country, 80 acres with improvements to the total value of 2,000 dollars. In cities, towns, and villages, the land and buildings occupied by the debtor, and personal pro- perty to be selected by him to the value of 250 dollars. In Alabama, Arkansas, Florida, Missouri, and Mississippi, the mere possession (no matter how acquired) of what we call the fee simple of a house and lands, by one who has a family or some one dependent upon him for support constitutes such property a homestead ; and all the immunities and exemptions provided by law attach to it without any special act on his part to acquire them. In Louisiana those who intend to claim the benefits of the Homestead Law must register their property as homestead, in the office of the Eecorder of Mortgages of their parish. In this State, therefore, it is optional with the proprietor whether his property shall or shall not be homestead ; and consequently it would seem that it is in this State that an answer may be found to some of the questions bearing upon the value of Homestead Laws to the individual and to the community. The law as above stated is embodied in the Constitution of 1882, and was probably devised out of the experience with regard to exemptions provided by an Act of the Legislature of 1874, which exempted from seizure under any legal process almost every article of furniture, useful or ornamental, likely to be found in an average household, and 600 dollars besides. This law was passed in the (supposed) interests of poor people and small traders, but its effect was to put a stop to their credit, and paralyze their business. The wholesale houses would not provide stock except for cash in hand, and the landlords required rent to be paid in advance. In 1876 the Modified Exemption Act now in force was passed, and I presume that the framers of the Constitution of 1882, perceiving that large exemptions did not confer unmixed benefits, made the homestead privileges optional. As a rule, he does not register his property as a homestead. It may be that he is content witb the exemptions generally enjoyed, and the widow's allowance of 1,000 doUars. It may be that, if a farmer, he does not wish to encumber his credit for the rainy day that is sure to come, sooner or later, in his precarious calling. Take this case : Parmer A has registered his property as a homestead, Farmer B has not done so. There comes a bad year, flood, drought, army worm, mildew, any one of a score of accidents, and they both have to borrow money to put next season's seed in the ground. Farmer B can raise what he wants on first mortgage at 8 per cent. Farmer A must go to the factor and consider himself lucky if he gets what he wants at 40 per cent. In the parish | of Orleans (in which the city of New Orleans is situated) not 3 per cent, of pro- prietors qualified to register homesteads actually do so. In the large and well-cultivated parish of Plaquemines the registrations are under 4 per cent., in West Feliciana 1 per cent., in Iberville 1 per cent., and so on. The highest return I have received is from St. Landry, where almost one- third register. I have presumed that this disinclination to accept homestead exemptions is based upon the effect they might have upon credit, and tJiis may be the reason on the prospective debtor's side ; but I find, upon inquiry of large houses which do business with farmers and store-keepers in the parishes, that when a man wants goods on credit the question, " Has he registered his property as a homestead ? " is not specially asked. His general character and his surroundings are taken into consideration and determine the point. Indeed, one informant (in the hardware hue) told me he would rather trust one who had become a homesteader, as he had thereby shown thrift and caution. But, as a general rule, I found that in case of preference between man and man, or where the pros and the cons were balanced, the non-homesteader would have the advantage, and the homesteader would be refused. I am indebted to Mr. Daniel Dennett, an eminent authority on farming and agriculture in the South, for the following letter on this subject : — " Broohhaven, Mississippi, September 3, 1886. "Dear Sir, " In reply to yotir note of the 31st ultimo, it is difficult to say precisely to what extent the Home- stead Laws benefit the people of this or any other State. " The merchants, I believe, generally think these laws an injustice to business men, and claim that they are little or no benefit to the farmer or poor man. * 'J'his means the consular district of Mississippi whiot includes several great States, as mentioned in the text, jnclnding Louisiana of which the actual law follows. t For Louisiana the divisions elsewhere kno?rQ as ' oouuties ' are called ' parishes.' II 65 258 " I think nearly everybody avails himself of the benefits of this law when his necessities and his interests require it. I think the law is strongly approved by those for whose benefit it was made. " The friends of the law contend that merchants and business men generally should not credit poor men with an eye to homestead exempted property, and that all credits should be based on personal integrity and ability to pay without bringing in exempted property. I think, however, that merchants often risk debts on account of property covered by Exemption Laws. " I think the people protected by Homestead Laws, and the State -also, are benefited by these laws, from facts which follow : — " ' Mississippi has a large number of business men, merchants, many of them exceedingly sharp and unscrupulous, and a certain proportion of them honest and upright in their dealings. Many of them came here strangers to make all the money that could possibly be made out of the farmers and the people. "' The farmers of this State are most of them poor and ignorant; merchants often take great advantage of their poverty and ignorance. Cash prices for goods are usually pretty high, but credit prices are usually not less than 40 per cent, above cash prices, often 75 and 100 per cent., and even more. For instance, they often charge 10 dollars a barrel for flour sold in August and September, payable in cotton in November, which is better than cash in hand, since they make a handsome profit on the cotton. This flour could be sold at a profit, for cath, at 6 dollars a barrel — i dollars for the use of 6 dollars three months would be 12 dollars for the use of 6 dollars one year, and the same credit prices are often charged for bacon, dry goods, &c. " ' Some well-informed statisticians in this State think that the merchants own more than half of the farms of Mississippi. I know of a Jew merchant at Summit, Mississippi, who some years ago- owned about 100 farms. " ' Mississippi in the year 1860 had 42,840 farms ; in 1880 the State had 101,772 farm", with areas of from 3 to over 1,000 acres each. The area of 14,356 of these farms is from 3 to '20 acres ; the area of 87,416 from 20 to over 1,000 acres each. " ' The average size of farms in 1860 was 370 acres ; in 1880 they averaged 156 acres. " ' Merchants have divided farms which they have absorbed since the war, and sold to negroes and poor white farmers, retaining mortgages ; but few of these farms will ever be paid for — Number. Per cent. " Farms in Mississippi cultivated by owners in 1880, most of them mortgaged .. .. .. .. .. .. 57,214 Eented for fixed money rental . . . . , . . . 17,440 Eented for share of products .. ., .. .. 27,118 44,558 Total .. 101,772 "'As to borrowing money in Mississippi, few farmers are ever able to obtain Ipans of money. Those who are fortunate enough to have money to loan get from 16 to 25 per cent, per annum for it on good security. " ' The banks of New Orleans are hermetically sealed against planters and farmers. The planters usually get money on hard terms from city merchants as advances on cotton, sugar, rice, or other products, and the farmer sometimes gets a little from the country merchants as an advance on his little crop, and the country merchant ships cotton to the city merchant and obtains money from him. This is the chain that extends from the banks to the city merchant, and from him to the planter, the country merchant, and the farmer. " 'The illiteracy of Mississippians, and the advantase which sharp educated business men have over them, furnishes another excuse for Exemption Laws to protect the weak against the strong. " ' The population of Mississippi in 1880 was — White 470,403 Coloured 652,199 1,122,602 ._ri . n -1 N"nmber. Per cent. White, 10 years old and upwards, unable to write .. 53,448 = 16-2 Coloured, 10 years old and upwards, unable to write . . 319^753 = 75-2 ' ' ' The future welfare of Mississippi and the South will rest on her small farms and mixed farming not on plantations and great staple crops. The best protection possible should be given to sm& farmers by the laws against those who have the ability to swallow them, and reduce them to peonage Gbeat numbers of them are in reality peons now, though called free and independent men and sovereigns.' " Pardon me for not answering your letter systematically as you put your questions. Perhaps I have said much more than you desired me to say. You of course will select the marrow if it has anv and throw the rest away. -^ "Very, &c., " (Signed) Daijiel Dennet. " Hon. A. de Fonblanque." Mr. Dennett's facts and figures may be taken as correct, but his deductions may perhaps be open to discussion. The picture he draws of farms passed into the possession of creditors of a number of small farmers against whom the banks are " hermetically sealed," and who are subi'ect to such hard bargains as he describes, gives the idea that capital or— what comes almost to the same thing— credit is the missing factor for obtaining prosperity, and leads one to suppose that its Umitation bv Homestead Law does not improve the position of the individual. Then the question, " Is it well for the State to 259 encourage a number of persons to live from hand to mouth in a position which they cannot improve ? " arises and cannot be discussed in this country. The sentimental side is so strong for defence, and provides such potent weapons for attack, that no one who has the faintest hope of ever obtaining an office would dare to assail it openly. There would be political danger even in discussing it in the press or on a platform from the unpopular point of view. The only way, therefore, to find out what people really think and want on the question is to make it the subject of friendly conversation with individuals. Tied by my duties to the city of ISew Orleans, I am unable to gather information in this way respecting the other five States of this large district. Prom what I can glean in the local circles from Judges, lawyers, notaries, merchants, factors, and others practically conversant with the subject, and taking into consideration the habits and generous character of the Southern people (even including the much-abused merchant), I fiud no reason why the ordinary laws of political economy should not prevail. Indeed, if I read the lesson taught in Louisiana aright, it has been proved better for all that it should. With regard to general exemptions, it will be observed from the text of the Laws abstracted in the inclosure that in Alabama .Louisiana, Missouri, and Mississippi it is not for the debtor to reclaim the privileged articles, &c., from seizure, the Sheriff is forbidden to seize them. In Arkansas and Florida the debtor may indicate property — specified in the Law of the former State, and up to the value of 1,000 dollars in the latter — which he wishes to retain. From what I am able to ascertain, these exemptions are almost invariably claimed. It is a moot point whether the personal exemptions of Louisiana are good as against a landlords There are decisions both ways, and no case has as yet been takeA up to the Supreme Court. I have, &c. (Signed) A. De J. De Fonblanqub. Law of Louisiana. Homesteads and Exemptions. — Constitution. ' 219. There shall be exempt from seizure and sale by any process whatever, except as herein provided, the " homesteads " hand fide owned by the debtor and occupied by him, consisting of lands, buildings, and appurtenances, whether rural or urban ; of every head of a family, or person having a mother or father, a person or persons dependent on him or her for support ; also one work-horse, one waggon or cart, one yoke of oxen, two cows and calves, twenty-five head of hogs, or 1,000 lbs. of bacon or its equivalent in pork, whether these exempted objects be attached to a homestead or not ; and on a farm the necessary quantity of corn and fodder for the current year, and the necessary farming implements to the value of 2,000 dollars. Provided, that in case the homestead exceeds 2,000 doUars in value, the beneficiary shaE be- entitled to that amount in case a sale of the homestead imder any legal process realizes more than that sum. No husband shall have the benefit of a homestead whose wife owns, and is in the actual enjoy- ment of property or means to the amount of 2,000 dollars. Such exemptions, to be valid, shall be set apart and registered as shall be provided by law. The benefit of this provision may be claimed by the surviving spouse, or minor ehild or children, of a deceased beneficiary, if in indigent circumstances^ 220. Laws shall be passed as early as practicable for the setting apart, valuation, and registra- tion of property claimed as a homestead. Rights to homesteads, or exemptions under laws or con- tracts, or ior debts existing at the time of the adoption of this Constitution, shall not be impaired, repealed, or affected by any provision of this Constitution, or any Laws passed in pursuance thereof. No Court or Ministerial officer of this State shall ever have jurisdiction or authority to enforce any Judgment, execution, or decree against the property set apart for a homestead, including such improvements as may be made thereon from time to time; provided the property herein declared to be exempt shall not exceed in value 2,000 doUars. This exemption shall not apply to the following cases, to wit : — (1) For the purchase-price of said property, or anj- part thereof. (2) For labour and material furnisheri for building, repairing, or improving homesteads. (3) For liabilities incurred by any public officer or fiduciary, or any attorney-at-law, for money collected or received on deposit. (4) For lawful claims for taxes or assessments. 221. The owner of a homestead shall at any time have the right to supplement his exemption by adding to an amount already set apart, which is less than the wliole amount of exemption herein allowed, sufficient to make his homestead and exemption equal to the whole amount allowed by this Constitution. 222. The homestead shall not be susceptible of mortgage, except for the purchase price, labour, and material furnished for the building, repairing, or improving homestead ; nor shall any renuncia- tion or waiver of homestead rights or exemptions be vaHd. The right to sell any property which shall be recorded as' a homestead shall be preserved, but no sale shall destroy or impair any rights of creditors therein. 223. Equitable laws shall be passed for the protection of creditors against the fraudulent claim* of debtors, for the punishment of fraud, and for reaching property and funds of the debtor concealed irom the creditor. 260 Homstead and Exemptions. — Session of 1880. Be it enacted by the General Assembly of the State of Louisiaaa, the person or persons claiming the benefit of the homestead and exemptions provided by law, pursuant to Articles 219 and 220 of the Oonatitution of 1879, must execute a written declaration of homestead. This declaration must contain — 1. A statement of the facts that show the person claiming the homestead and exemptions is a person of the description to be entitled thereto. 2. A statement that the person claiming it is residing on the land or lot claimed as homestead, and owns it by a hand fide title, stating the nature of title. 3. A description of the lot or tract of land. 4. An enumeration of the other exemptions. 5. An estimate of the cash value of the homestead and exemptions ; a statement of intention to claim such homestead and exemptions. The declaration must be sworn to and recorded in the book of mortgages for the parish where the homestead claimed is situated. Widows' Homesteads. — Revised Civil Code, Chapter 5. 3252. Whenever the widow or 'minor children of a deceased person shall be left in necessitous circumstances, and not possess in their own right property to the amount of 1,000 dollars, the widow or legal representatives of the children shall be entitled to demand and receive from the succession of the deceased husband or father a sum which, added to the amount of property owned by them, or either of them, in their own right, will make up the sum of 1,000 dollars, and which amount shall be paid in preference to all other debts, except those for the vendor's privilege and expenses incurred in selling the property. The surviving widow shall have and enjoy the usufruct of the amount so received from her deceased husband's succession, during her widowhood, which amount shall after- wards vest in and belong to the children or other descendants of the deceased husband. Exemptions. — Act No. 79, 1876. Section 1. The Sheriff or constable cannot seize the, linen and clothes belonging to the debtor or his wife, nor his bed, bedding, or bedstead, nor those of his family, nor his arms and military accoutrements, nor the tools and instruments, and books, and sewing-machines necessary for the exercise of his or her calling, trade, or profession by which he, or she makes a living, nor shall he in any case seize the rights of personal servitude, of use and habitation, of usufruct to the estate of a minor child, nor the income of dotal property, nor money due for the salary of an officer, nor labourers' wages, nor the cooking stove and utensils of the said stove, nor the plates, dishes, knives and forks, and spoons, nor the dining table and dining chairs, nor wash-tubs nor smoothing irons and ironing furnaces, nor family portraits belonging to the debtor, nor the musical instruments played on or practised on by any member of the family. Section 2. That any person offending against the provisions of this Act, or who shall by any artifice or subterfuge induce or procure another to sign away, by contract or otherwise, any of the rights which he or she may have under this Act, shall be deemed guilty of a misdemeanour, and on conviction shall be fined in a sum not exceeding 200 dollars, or imprisonment for a term not exceeding six months, or both, at the discretion of the Court. • Section 3. That all laws and parts of laws conflicting with this Act or contrary to any of its provisions, and all laws on the same subject-matter, the amendment of Article 644 of the Code of Practise, be and are hereby repealed. Section 4. That the repealing clause of this Act shall not be construed or interpreted so as to afieot the exemption of the homestead, the widows' 1,000 dollars, nor the rural and agricultural exemptions now in force by existing Laws, it being the true meaning and intent of this Act that those exemptions should not be aflected by this Act. GREAT BRITAIN AND IRELAND. The laws for the establishment, working, powers and supervision of special classes of Land Improvement Companies in Great Britain and Ireland are several in number, but do not seem to require insertion. The Inclosure Commissioners are the Government authorities who deal with sucli societies, and it is_ usual to give powers of distraint for arrears of annuities as though the societies were landlords while the charge for interest and the maximum period for amortization of the debt are also stated in the several laws. INDEX TO VOLUMES I AND II. Accountant the only paid oiEcial in RaitTeisen Credit unions, and the duties of, I, 15S ; II, 111. Accounts maintenance of, a means of controlling tho usurer, I, 328-329. by money-lenders should be insisted on, I, 323, 370. forms of, necessary for a -village bank, I, 383. in the Agricultural Bank of Mysore, examination of, XI, 78, 79. in the Nidhis of Madras. state of, generally good and closed annually, I, 249 ; II, 225. in Friendly societies of England. rights of members to inspect books of, I, 187. in Eaiffeisen Credit unions, how cheeked, 1, 149 ; II, 105. in Schulze-Delitzsoh societies, audit of, II, 100, 101. Accounts current in Co-operative banks of Ital}', II, 121. in the Nidhis of Madras, 1 1, 234. in Sohnlze-Delitzsoh societies, II, 100. in Scotch banks, deposits of small sums treated as, I, 184. Act (Administration) of Germany, I, 51. (Agricultural Associations) of France, I, 13. (Agriculturists' Loans) of India, I, 9. (Bills of Sale) of England, II, 65-71. (Building Societies) of England, II, 137-145. (Charitable Loan Societies) of Ireland, II, 1G9-172. (Companies) of India, I, 31. (Contract) of India, I, 35. (Disciplinary) of Germany, I, 51. (Friendly societies) of England, II, 157-107. (Industrial and Provident Societies) of England, I, 53 ; II, 145-157. (Inspection Committee) of England,[II, 203, 204. (Land Improvement Loans) of India, I, 49. (Land Mortgage Debentures) of England, I, 59. (Loan Societies) of England, H, 167-169. (Provident Nominations and Small Intestacies) of England, I, 23. (Eegistration) of India, I, 31. (Stamp) of India, f, 31. (Transfer of Property) of India, I, 31, 310. (Usury) of India, I, 30. of Europe, II, 247-249. See ' Law.' Administration internal, difficulties of, how can be met, I, 267. necessity for legislative precautions owing to greed and fraud of directors and office .bearers, I, 287. necessity for economy in, I, 379-380. methods of, recommended, I, 338-341, 363-364, 379. methods of, in Agricultural associations of Italy, organs of, II, 199. of Belgium, I, 221. in Agricultural banks of Roumania, II, 58. of Mysore, If, 75. of Neuwied, II, 110. in Boden Credit Institute of Hungary, I, 102. in Cassa Loreggia, gratuitous and the organs of, I, 175-176. in Casse Rurali of Italy, I, 174-175- in Cattle Loan Societies of Switzerland, II, 115. in Central banks, I, 152. in Communal banks of Alsace Lorraine, supeiTised by Government officers, J, 156 ; II, 112-114. in Co-operative societies of Germany, II, 84-86. in the Credit Foncier, organs of, I, 71, 72 ; II, 19. in the Fund associations of Madras, I, 268-270. in the Hypothekarkasse of Berne, I, 86 ; II, 40- in Joint Stock banks of Europe I, 100. in Land banks of Italy, I, 79. of Roumania, I, 90. of Europe, gratuitous public service by members, a striking feature of, I, 100-103. Administration— coil. methods of — cont. iu the Landsohaften of Girmany, I, 51, 57. in Loan offices of Roumania, II, .jS. of Alsace Lorraine, II, 1 1 2-114. in Luzzatti Popular bonks gratuitous and organs of, I, 165 ; II, 122-125. cost of, does not include fees to directors, I, 169. in the branches closely supervised by the Central banks, I, 171, 172. in the groups or unions, local autonomy and decen- tralization preserved combined with federation, mutual support and knowledge, 1, 172. in mortgage banks of Canton Berne, I, 102. of Canton Vaud, I, 87. in Mouts de Pi6t6 organs of, I, 198. in the Nidhis of Madras defective and an unpaid directorate, the desideratuifi I, 245-249, 261, 202. in the People's bank of Liege, organs of, and their duties, T, 182. iu the Positos of Spain, gratuitous and by Communal councils, 1, 197. in RaiSeisen Credit unions local and absolutely gratuitous, I, 12, 147, 148-149. organs of, I, 148-149 ,- II, 103-106. in Savings banks of Prussia, I,;201-202. of Italy chief features, selection of proper persons with great care and absolutely gratuitous, I, 206. of Milan, gratuitous, I, 207, 208. of France, chiefly Government, J, 212-213. of the United States, I, 216, 217. in Schulze-Delitzsch societies autonomous and democratic, I, 138. organs of, I, 138. in Unions of Co-operative societies, of Germanv II 108. ^ ' ' Administrative Council of the People's bank of Liege and the duties of, I, 182. Admission of members. See ' Members. ' form of application for, in the Nidhis of Madras II 228. ' ' Advances in anticipation of sale of produce, I, 34. for undertaking contracts or business enterprises I 35. upon crops granted by Agricultural associations of Prance, I, 181. for agricultural pui-poses, &c., in the Nidhis, I, 230-231. not made to depend on chance or lot. in Building socie- ties, II, 144. Agencies as a means of bringing credit to small folk, expensive and uncertain, I, 92. compared with affiliated local institutions, I, 204. of Land banks of Europe, duties of, I, 100-101. of sooietici |for' agricultural ^credit in Belgium, duties and liabilities of, I, 128. of Luzzatti Popular banks their true work, duties and general methods I 170-171. ' development of, into autonomous banks, I 170. the importance of similar institutions for Madras I 171. ' ' of Scotch banks how established, I, 185. See ' Comptoirs .Agricole.' Agents of Scotch banks and their work, 1, 185. of the jigricultural Bank of Mysore and duties of II 75, 76. ' ' Agricultural a ssociations definition of, and their aims and objects, I, 218. the importance of, in promoting agriculture and credit I, 218. develop ideas of association and co-operation am one- ryots, I, 218. ^ as complements of Ponular banks, I, 218. 66 262 INDEX. Agrionltare associations — coni. o£ France conatitution and objects of, 1, 13, 179, 219. the secret of their suooesa, I, 179, 219. development of, with credit annexes, J, 13, 127, 179. afford usefal suggestions for India, 'I, 379. methods and results of, I, 13, 179, 219. dne to the initiative and liberality of one member, I, 179. reforms proposed, J, 180. grant advances upon crops in hand to-enable peasants to get best prices for their produce, I, 181. originally prohibiti;d and their growth and develop- ment, I, 219-220. formation of, into unions, I, 220. model articles of, II, 192-196. of Belgium objects and operations of, I, 220. of Germany, I, 221. of Italy and the model articles of, 1, 221 ; II, 198, 199. proposed law relating to, I, 366-368. Agricultural bank definition of, I, 1. establishment of, not a panacea for indebtedness, I, Ifi. general failure and rare as independent institutions, ' I, 9-10, 15, 225. the work of small folk led by energetic and devoted men of their own class, I, 229. of Segovia successful because local, I, 10. rules of, II, 136. of Treves result of League against usury, I, 155. founded to supply the needs of small peasants, I, 155. as a store for the purchase and sale of agricultural produce and goods, I, 155. prevent usury by purchase of sale certificates, I, 155. character and operations of, and its special value for India, I, 155. of France laws relating to, II, 46-49. of Belgium law and articles relating to, II, 49-52, 136. of Italy law relating to, II, 52-58. of Roumania law relating to, II, 58-65. of Mysore law relatinr^ to, II, 71-80. abstract of the draft scheme for the establishment of, II, 72. model memorandum and articles of, II, 74-80. of Neuwied articles of, II, 109-112. Agricultural branches of Savings banks and their success, I, 204. Agricultural credit distinguished from real credit, I, 9. not provided fur by any Central or State bank, I, 9, 15, 179. necessity and nature of, I, 33, 37. compared with that of the tradesmen or professional, 1,33. costly and dangerous to borrowers, I, 33. duty of State to make, safe, cheap, accessible and pro- ductive, I, 33. special features of banks dealing in, I. 37. (!) length of credit. (2) method of amortization. true form of, personal credit, I, 265. in France State inquiries for the organization of, I, 123. law relating to, II, 46-19. in Germany institutions dealing in, as a secondary matter, I, 155 in Russia the history of the development of, I, 158. in Italy how g.ranted by Popular and Savings banks, I, 169, 170, 203 ill, 127. laws relating to, II, 52-58. in Belgium law relating to, II, 49-52. Agricultural credit — cont. in Roumania law relating to, II, 58—65. Agricultural debentures issue and payment of, to be supervised by Government, I, 334-336. laws relating to, in the Agricultural banks of Italy, II, 56-57. rules for the issue of, by groups of Popular banks, II, 131. Agricultural fund of Madras, the peculiarity of, I, 269. Agricultural Improvements. See ' Improvement.' Agricultural Indebtedness. See ' Indebtedness.' Agricultural Loans should be for long term, I, 109, 131, 142. how granted in Luzzatti Popular banks, I, 166. in the Agricultural bank of Segovia, II, 137. See ' Loans.' Agricultural Organization Society of Ireland and its work, II, 188-191. necessity for a similar society for Madras, II, 191. articles of, II, 197. Agricultural produce Agricultural Bank of Treves as a store for the sale and purchase of, I, 155. Agriculture credit, an essential of, I, 33. laws for the promotion of, io Germany, I, 63 j II 41-45. needs of, (1) long term mortgage credit for land improTemont, 1, 121. (2) short term for current needs, I, 122. the improvement and development of, as effected by Land Banks of Europe, I, 112. Schulze-Delitzsch societies in relation to, 1, 142. obtain rapid and thorough progress through associatiom and co-operation, I, 218. necessity for co-operation in, II, 186-191. advauces for, how granted in the Nidhia of Madras, II, 235. duties of the Minister of, in Italy, II, 238, 239. council of, its constitution, meetings, attribntioit and representation on other banks, II, 239, 240. chamber of, II, 240, 241. Agriculturist necessity of, to borrow, I, 33. nature of credit required by, I, 121-122. general principles and results of banks for, in Kai'ope and their application to Madras, I, 225-229. See ' Ryot ' and ' Peasant.' Agriculturists' Loans Act of India, I, 9. Aider a faire not laisser faire, the true function of state in credit, I 39. Amortization repayment of long-term loans by the Sinking Fund System, I, 109. principle of, adopted for land improvement loans in all coujitries, I, 37, 109. Annexes of Agricultm-al banks for dealing in agricultural credit I, 155. Annuities repayment of long-term loans by fixed, in Land banks of Italy, I, 80. in Land banks of Europe, I, 109. in Raiffeisen Credit unions, I, 150. in the Nidhis of Madras, I, 269. in the New West Prussian Landschaft, II, 10. in Land banks of France, II, 15. in the Credit Poncier of France, II, 20. in the Mortgage bank of Canton Vaud, II, 41. Application form of, for admission and mortgage loans in the Nidhis, II, 228, 229. Appraiser^ for valuation in the Nidhis and their duties, I 247 249, 269. Arbitration between member and bia creditors, may be made compulsory within certain Umita, I, 30. INDEX, 263 Arbitration — cont. by Commissioner, Village Courts, &o., I, 30, 346-347. prior to resort to Courts in Agricultural Associations of Europe, 1, 220-221 ; II, 199. rules for the settlement of disputes between members by, in Building societies, 11, 141. Arbitrators Co-operative banks act as, in compounding -with original creditors, I, 15. Committee of in Luzzatti Popular banks, I, 165 ; II, 125. in the Agricultural associations of France, II, 195. not needed for Village banks, I, 383. Area of operations of a bank must be limited to allow of frequent intercourse be- tween members, I, 163. effects of limitations of, I, 175. in Schulze-Delitzsch societies, limited, I, 137. in Raifteisen Credit unions, limitation of, ocnsidered absolute, 1, 12. Arrears in the Nidhis of Madriw how recovered, I, 258. difficulties in the recovery of, a cause of failure, I, 263. im the Pomeranian Landsohaft, payment of, II, 5. in the New West Prussian Landsohaft, how realized, II, 10. in the Land banks of Italy, recoTery of, II, 37. Articles of association should be scrutinised to ensure their being legal and equitable, I, 2S. necessity for a model set of, I, 279. proposed law regarding and the subject matter of, 1, 279, 327. specimen, for a Co-operative Village bank, I, 388-396. •f Agricultural associations, I, 367. of France, II, 192-190. of Italy, II, 198, 199. •f Agricultural banks of Mysore, II, 75-79. of Neuwied, II, 109. of Association of Vine-dressers in Prance, II, 196, 197. of a Communal Loan society formed for the purchase of cattle in Switzerland, II, 115. of Co-operative societies of Germany, II, 81-83. of the Co-operative Rural bank of Wollemborg, II, 129. of the Co-operative Credit Society of Poligny, II, 132-134. of the Credit Fonoier of France, II, 18-22. of group of Popular banks of Italy, II, 130. of Land banks of France, II, 18. of the Nidhis of Madras, II, 221-230, 233-237. incomplete and redundant, I, 249. of the Popular bank of Liege, II, 135. of the Popular Co-operative Agricultural Bank of Bel- gium, II, 136. of the Popular Co-operative Bank of Italy, II, 117-1 25. of Raiffeiseu Credit unions, I, 152; II, 102-107. of Savings banks of Italy, II, 209-211. of Cortona, IT, 213-217. of Austria, II, 217-220. of Schulze-Delitzsch societies, I, 141 ; II, 95-102. of Union of Rural Co-operative societies of Germany, II, 107-109. ArtiEans Schnlze-Delifczsch societies principally started for, 1, 10. purchase of stock in trade for, one of the applications of credit, I, 34. Assembly General. See ' 6 eneral. assembly. ' Founders. See ' Founders' Assembly. ' Association moral and material effects of, in co-operative socie- ties, I, 34. power of, by ryots unhampered and not unknown in Madras, I, 373, 374. law authorizing professional, in France, II, 191, 192. See ' Co-operation. ' . Attachment shares and deposits up to a certain amount should bo exempt from, in Co-operative banks, I, 26. Attachment — cont. exemption from, of the property of a debtor to a certain area or value, a safe guard of cheap credit, I, 46. power of, granted to the Landschaften, I, 54. formalities and methods of procedure observed in Land banks of Europe, I, 111 ; II, 16. exemption from. See ' Homestead Exemption Laws.' Auction sale loans granted on the results of, in the Building societies, I, 191. in the Nidhis of Madras, I, 254. Audit of accounts must be compulsory and frequent, I, 138, 266. universal in Europe, I, 248. internal. See ' Supervision. ' external compulsory in Indian law, but no provisions for proper, as in Europe, England and America, I, 290. necessity for provisions regarding the efficiency of, I, 26, 291. rules for the efficiency of, I, 341, 362, 384. by Government Examiners and Inspectors recom- mended, I, 381, 391. in Building societies, annual or more frequent, I, 191 ; II, 141, 142. in Communal banks of Alsace Lorraine, I, 156. in Co-operative societies of Germany, II, 86. in Industrial and Provident societies, II, 148. in Land banks of Europe by special committees of control and snpervisio* and the duties of, I, 103. in the Nidhis advantages and the necessity for, 1, 248 ; II, 236. in the Positos of Spain appointment of special Inspectors for, I, 197. in Raiffeisen Credit unions, I, 149. in Schulze-Delitzsch societies, I, 11, 138, 139. Audit committee duties of in the East Prussian Landschaft, II, 8. in the Agricultural bank of Mysore, II, 78, 79. Auditors necessity for provision in Indian law regarding the com- petency of, 1, 291. rights of members to call in the services of, in Friendly, Industrial and Provident societies, I, 187, 188 ; II, 166. duties of in Building societies and qualifications, I, 191. in Co-operative Credit society of Poligny, II, 133. in the Credit Foncier of France, I, 72 ; II, 19. in Land banks of Europe, I, 103. in Luzzatti Popular banks, I, 165. in the Nidhis of Madras, I, 247, 270 ; II, 236. in the Savings banks of Italy, I, 206 ; II, 214. Authorization of Land banks of Italy, II, 33. Autonomy tendency of branches and agencies of Popular banks in Italy to preserve, I, 170. Bail h, Cheptel, I, 39. Balance Sheet monthly and weekly, to be prepared by Directors, I, 138. should be laid before the, general meeting, I, 138. rules for the compilation and inspection of, I, 141. should be prepared with care, I, 384. in the Savings banks of Italy, submitted annually to the Minister, I, 206. of the Nidhis and the necessity for external supervision of, I, 249. of the Co-operative banks of Italy, II, 122. Ballot grant of loans by in Building societies now forbidden, I, 191, 192. allowed in the Nidhis of Madras, I, 254. Banco Agrioola of Spain gradually evolved out of experience and practice, I» 182, 183. description of, I, 183, 184. ability to meet the demands of depositors, I, 184. 264 INDEX . Banks establishment of, by State or by the people, the object of the report, I, 1. the several classes of, and the natvire of credit granted by, in Europe, I, 2, 13. the different classes needed for India and their value, I, 2, 5, 13, 15. classification of, according to credit and the lessons to be learnt from each class, I, 2, 7-15. forms of, suitable to the ryots of Madras, X, 15, 21, 372, 373. snited to small folk and their common featnre, I, 13-15, 116. a necessity in a develoj)ing country, I, 15. proximity to clientele, a postulate of small rural credit. I, 15. fulfilling the requirements of thrift and credit and promoting^ national character, I, 16. advantages of, over money-lenders, I, 16, 34, 37. must bo founded on co-operative and communal prin- ciples, 1 , 21. promotion of, directly by the establishment of State banks, impossible and inadvisable, I, 23. indirectly (1) by legislation inadequacy of the present Company Law and reforms where necessary, I, 25, 26. how to be promoted, I, 31, 38, 277-279. (2) grant of privileges, fiscal, legal and executive, 1,26. (3) supervision, a necessity, I, 29, 38. (4) liquidation of debts, not necessary if restricted to small folk, I, ,29. (5) registration, I, 30. (6) amendment of Usury Law, I, 30. establishment of, why considered advisable, I, 34. State inquiries for the establishment of, in Germany and France, I, 55, 68. central and local, advantages and disadvantages, I, 57. of Murope general resume of, by countries and their application to Madras I, 221-224. general principles and results of, I, 13-15, 225-229. feasibility of applying land, agricultural or other banks to Madras ryots, I, 228-229. as defined in the Draft Bill, I, 325. difiiculties in the way of the establishment of, and the best means of promoting them, I, 31-32, 373-376. (1) Social difficulties considerable and real and how removable, I, 374. (2) Commercial difficulties apply only to Central banks and not to Villagebanks, I, 374. (3) Fiscal difficultiea not serious and may be removed for Go-operative societies, I, 376. (4) Legal difficulties not insurmountable, I, 374^376. agricultural. See ' Agricultural banks.' central. See ' Central banks.' co-operative. See 'Co-operative societies.' joint stock. See ' Joint Stock banks.' land. See ' Land banks.' land improvement. See 'Landlmprovement banks.' peasants' land. See ' Peasants' Land bank.' popular. See ' Popular banks.' rent charge. See ' Rent Charge banks,' savings. See ' Savings banks.' state. See ' State banks.' village. See ' Village banks.' Bank of Hesse Cassel a State bank and the history of, I, 67. Bank of Madras may be made a Central bank for accepting debentures of local banks, I, 26. Bank of Naples a consolidation of seven monti and the business rela- tions of, with Popular and Savings banks, I, 196. Bank of Sicily a grain bank, and the business relations of, with Popdar and Sa vines banks, 1, 196. Bank notes issue of, a peculiarity of Scotch system, I, 99. not generally allowed elsewhere, I, 99. Banking what is, and restrictions on, in Industrial and Provi- dent societies, I, 189. Banking laws of Building and Co-operative Loan associations of the- United States, II, 172-180. of the Savings banks of the United States, II, 204- 206. general, of the United States, II, 241-247. Banking organization absence of any, except the Nidhis, in Madras, I, 17. Bankruptcy of trustees or ofiicers of banks, priority of banks' claims in case of, I, 26. no instance of, in Eaiffeisen Credit unions, 1, 146. proceedings in, in Co-operative societies of Germany II, 90. Banqne Foncier a synonym for Land bank, I, 1. Bauei'. See 'Peasant.' Bauernvereine a peasants' association in Germany, I, 221. objects and results of, I, 221. Benefit Building societies the primary object of, I, 189. See ' Building societies.' Benefit Fund of the Milan Savings banks, I, 208. of Madras, I, 273. Benefit societies of England, registered under the Friendly Societies'" Act, and enjoy the same privileges, I, 186. Bibliography books, reports, &c., consulted, I, 403-408. Bill-book system, 1, 249. Bill of exchange how and why discounted in Luzzatti Popular banks, I, 168. a form of granting loans in the Savings banks of Italy and the inadvisability of, I, 205. Bill of sale power of pledging movables without delivery of possession, I, 317. European and English law relating to, I, 317-318. not recognised in the Indian law, I, 318. proposed provisions of law for legalizing them, I, 30, 36, 318. (1) by making them compnlsorily registrable. (2) by granting them charge over classes of article* or animals instead of specified articles. as provided for in the specimen articles of village- banks, 1, 393. Bills discount of, a means of granting loans in the Agricul- tural associations of France, I, 13, 179. transactions in, by Schulze-Delitzsch societies, I, 140. Bills of sale Act of England, II, 65-71. Birkbeck a notable example of Benefit Building societies, 1, 189. the ease with which it overcame the run on its deposits I, 189. ' Board of control and supervision local, to be appointed by Commissioner for purpose of supervision over banks in Madras, I, 29. duties and powers of, I, 29. arbitration by, between a member and his creditors, a means of liquidating prior debts, I, 30. charged with the supervision of rural thrift and cre- dit in the United States, I, 39. District, duties and powers of, in the Pomeranian Landsohaft, II, 2. Loan Fund, of the Charitable Loan societies of Ireland and the duties and powers of, II, 169. of Oonciliators and advice in the Agricultural associa- tions of France, II, 195. of Electors, constitution and powers of, in the Nidhis of Madras, II, 226. Boden Credit Austalt of Austria the establishment of, aided by special laws and privileges, I, 14. sketch of, I, 5, 77. of Berne, sketch of, I, 87. Boden Credit Association of Galicia, an Association of proprietors, sketch of I 76 Boden Credit Institution ' of Hungary, a State aided Co-operatire society, I, 78. INDEX. 265 Boden Credit Institution — cont. of Hungary — cont. description and methods of administration of, I, 78, 102. laws relating to, IT, 24, 25. Boden Credit Institute a synonym for Land bank, 1, 1. Bonds registration of, to have the effect of a confession of judgment, I, 26. registration compulsory to the validity of, I, 100. transactions in, by Sohulze-Delitzsoh societies, I, 140. long-term, an important mode of raising funds in Popular banks, I, 161. advances upon the security of, 1, 166. received in banks for safe custody upon payment of a commission, I, 166. interest on, collected by banks on behalf of depositors, I, 166. under the guarantee of a group, how issued, I, 170. loans granted on joint instalment, in the j4 gricultnral bank of Mysore, II, 77. in whose name drawn in the Nidhis of Madras, II, 226. deposited with the Superintendent in the Banking societies of America, 11, 243. Books of account rights of members to demand inspection of, necessity for, I, 291, 292. in Building societies power of inspection of, by members, 1, 191. experts for the inspection and report on, when ap- pointed, I, 191. of the Savings banks of America, U, 208. Books of Commerce, II, 250, 251. Borrower postulates of credit demanded by, facility and safety, I, 35, 36. advancement of, the principal object of co-operative banks, I, 84. facility of, in obtaining and repaying loans, I, 36, 37. safety of, from the entanglements of lender, I, 37. safety of, promoted by banks especially of the co-opera- tive type, I, 37. the interest of, opposed to that of lender in Sohulze- Delitzsoh-sooieties, I, 153. no such antagonism in Kaifieisen credit unions, I, 154. associations of, as compared with those of lenders, I, 133, 134. obligations to be undertaken by, in the New West Prussian Landschaften, II, 9. rights and modes of execution against, by Land banks of Prance, II, 16. duties of, in the Credit Foncier, II, 20. Borrowed capital deposits and debentures, and the desirability of fixing the limit, I, 281. the methods of obtaining, recommended for Madras, I, 379. of the Land banks of Europe, I, 98. the only source of fund in Eaiffeisen credit unions, ' I, 150. Borrowing an essential of agriculture, I, 2, 33, 232. power of, by directors should be restricted, I, 25. agricultural, means a temporary mobilization of capital and not parallel with that of the tradesmen or professional, I, 2, 33. facility of, as a cause of indebtedness, I, 43-45. powers of, of the peasant compared with those of Commerijant in France, I, 46. legal restrictions on, make credit dear, I, 46, 47. restrictions on, must be social, I, 47. remedy for reckless, by peasant, I, 2, 47. by members in Co-operative societies of America, II, 174. power of, how calculated in Building societies, I, 192. process of, in the Building societies of the United States, I, 193, 194. causes of, in Madras, I, 232. encouraged in the Nidhis and should be controlled, I, 263. Branches. See ' Agencies.' Brokers the methods of, in Madras and how can be counter- acted, I, 18, 231. 3nilding societies strictly mutual or co-operative, I, 9. compared with the Nidhis and Saviligs banks, I, 7, 9. special laws for their furtherance and good manage- ment when passed, I, 14. II Building societies — cont. of England exemplars of the Nidhis of Madras, T, 7, 9, 189. object and character of, I, 9, 13, 189. the leading methods and their number, I, 189, 190. classes of, permanent or terminating, I, 190. advantages and disadvantages as compared with an ordinary company and Industrial societies, I, 190. power of, as regards the holding of land, I, 190. rights and liabilities of members of, I, 190. privileges of members as regards payment of money due at death, 1, 190. how funds are raised, I, 190. rules regarding proportion of deposits and loans, I 190. provisions for audit and settlement of disputes I 191. ^ ' ' defects of, as regards agriculture and how remedied. I, 9, 191, 192. ' necessity for a proper.law providing for inspection, I, Acts governing, II, 137-145. Benefit not incorporated and cannot be added to, I, 189. object of, and share values, I, 189. documents of, exempt from stamp duties, I, 189. a notable example of, Birkbeck, I, 189. of the United States are co-operative and similar to those of Great Britain but more developed, 1, 193. distinguished from Savings banks, I, 193, 194. origin, history, description and the advantages of. I. 193, 194. security demanded is real estate, I, 393. share and shareholders and the process of borrowinff I, 193. profits not offset by large expenses and highly - salaried officers, I, 194. the influence of, in cultivating economy and thrift, I, 194. laws relating to, II, 172, 173. Buoni Fmttiferi deposit receipts for a fixed term, I, 168, 169. Bye-laws power of directors to draw up, in the Nidhis, I, 249. as provided for in the specimen articles of Villaee- banks, I, 390. ■ of the Nidhis of Madras, II, 230-232. Capital legislation proposed regarding its proportion, &c.. I 279,280. . ". -i, loss of, as resulting in dissolution, I, 280, 288, 328, 329. shall be limited but variable in Co-operative societies I, 353. ' may be working or guarantee, paid up, subscribed or merely guaranteed, I, 376. the several methods of providing, for banks, I, 376, 377. how obtained by banks in Europe I, 379. Own may be either subscribed or the general property of members duly charged for the security of loans I 27. J , , banks dealing only in, are defective in two wavs I 27,376. ^ ' should be used only as a collateral guarantee for deposits and debentures, I, 27, 376. of the Pomeranian Mutual Land bank and the management thereof, II, 6. of the Savings banks of Italy, II, 217. Borrowed may be accepted by the State or public, I 27. what are, and the desirability of fixing the limit of I, 281. the utility of, to the bank and how to be attracted I 376,377. ' ' central debentures for financing local banks, I, 379. Working subventions by Government as, for Village banks, how and when granted, I, 27, 377, 378. in the Landschaften, I, 51. in the New West Prussian Landschaften, II, 10 in Schulze-Delitzsch societies, IT, 95. Foundation. See ' Foundation Capital .' Share. See ' Share Capital. ' in the Agricultnral associations of Italy, II, 198. 67 266 INDEX. Capital — cont. in the Agrioultnral tanks. of France, II, 48. of Roumania, II, 60. in the Agrionlfcnral Central Credit Bank of Neuwied, II, 110. in the Banking societies of America. examination and certificate as to payment and im- pairment of, II, 243. in Building societies, derived from monthly snb- scriptions, I, 9. in Co-operative societies. the use of, as compared with that in Joint Stock com- panies, I, 279. of Poligny, II, 132. of America, II, 174, 176. in the Credit Fonoier. of France, derived by the issue of debentures, 1, 8, 72, 95; 11,19. of Egypt, I, 91. in Industrial and Provident societies need not be fixed and may be withdrawn, 1, 188, 190. in Joint Stock banks, I, 279. in Land banks of Austria, 1, 75. of Italy and how invested, II, 36. of Europe sources of, and the necessity for, I, 95. not possessed by the oldest forms of, I, 7, 95. may be foundation or ordinary, variable or fixed, I, 95. proportion of, to debentures, I, 95. in Loan offices of Boumania, II, 58. in Lnzzatti Popular banks, I, 164. in the Nidhis of Madras, amount and rules of, II, 233. in the People's Bank at Liege, I, 161 ; II, 135. in the Popular banks of Italy, II, 117. in Baiffeisen Credit unions, I, 150. in Savings banks, the whole to be subscribed and half paid up, I, 361, i.e., 361. in Schulze-Belit!!sch societies, consist of the shares of members and an absolute necessity, I, 139. in Tillage banks, to consist of small shares, I, 382. Capitalist associations of, as compared with those of borrowprs, I, 133, 134. C apitalization of honesty, 1, 164. Caxtelle or the debentures of Italy, I, 79. Cartelle Agrarie or privileged agricultural debentures of Itlay, I, 131. Cash credit in the Credit Poncier et Agrioole of Algeria, opening of, for land improvement, 1, 74. in Sohulze-Delitzsoh societies form and advantages of, and should be granted with caution by young banks, I, 140 ; II, 100. in EaifEeisen Credit unions opened chiefly for the better class, I, 150, 151. in Eclectic societies of Germany, I, 154. in Scotch banks definition of, I, 39, 184. invented for profitable investment of small deposits, I, 184. the effect of, on Scotch farmers, I, 184. in Savings banks grant of, covered by mortgages, I, 204. recommended for Tillage banks, I, 385, 394. in Agricultural banks of Italy privileges granted for guaranteeing, II, 52, 53. in Lnzzatti Popular banks, II, 127. Cash deposits how withdrawable, I, 166. Cashier duties of, in Oassa Loreggia, I, 176. in the Co-operative banks of Italy, II, 124. meet the needs of others, I, 12. of Eaifleisen societies and its duties, 1, 152. INDEX. 267 Certified Loan societies of Ireland maybe benevolent, mutual and general, 1, 192. description and the objects of, J, 192. Bee ' Loan sooieties. ' Ohairman of the General union of Co-operative societies of Ger- many and the rights and duties of, II, 108. of the Board of Directors and the powers of, in Co-opera- tive banks of Italy, II, 123. Chamber of Agriculture, II, 240, 241. Character banks promoting national, 1,16. Charges in Land banks of Europe, I, 108. (1) of administration. (2) of valuation, a cause of their inadaptability to small folk. (3) Sundry. State, I, 330. upon land, methods of recording, by registration and mere deeds, I, 371. Charitable Loan societies of England, supervision in and law relating to, I, 301 ; II, 169-172. Charity to the poor favoured in Sohulze-Delitzsoh societies I, 141. from Government discarded both by Baifieisen amd Sohulze-Delitzsoh sooieties, I, 154. Charity committee of Monti Frumentarii of Italy and the powers of, II, 180,181. Chattel Bills of sale of personal, II, 65-71. Chattel oredit based on movables by actual pledge or bills of sale, I, 35. in Germany, ignored and why, I, 122. in France, stiU under discussion, I, 122. Cheap credit without due safe-guards, a cause of indebtedness, I, 43, 44. Safe-guards of, legal or otherwise, 1, 45—47. See ' Credit. ' Chetty the professional money-lender of Madras, J, 15. Children endowments for, in the ITidhis of Madras, II, 235. Children's Penny banks of Switzerland, minimum of in-payments, half -penny I, 211. members must withdraw at sixteen or twenty, I, 211. Chit associations of Madras the importance of, as indicating the power of associ- ation and mutual confidence possessed by ryots, I, 230, 272. Nidius are a probable development of, I, 21, 230. chiefly found in Malab'ar and TinneveUy, I, 230, 272, 273. the description of, I, 230, 242, 272, 273. origin and development of, I, 272. desirability of regulating, I, 272. results of, as promoting savings, 1, 273. Circle committee of the Landschaften, constitution and duties of, I, 52. Circle meetings in the Pomeranian Landschaft, constitution of, II, 3. OUentele of Land banks of Europe. nobles, large and medium holders, I, 6, 100. restricted by the minimum prescribed for loans, I, IOC. -of Popular Loan sooieties, small folk, I, 6. of Schulze-Delitzsch sociecies, qualifications, rights and liabilities of, 1, 10, 137, 138. of Madras societies as compared with those of Europe, 1,20. of the Nidhis of Madras, I, 22, 245. of banks need not necessarily be solvent except in large Central banks, I, 30. of Luzzatti Popular banks, chiefly urban, I, 166. limitation of, the best guarantee of a bank, I, 172. See ' Members, ' »Ood6 of Commerce. See ' Commerce.' Code Napoleon. provisions of, regarding restrictions on borrowing* by peasants, I, 46. Coercive process employed in the Credit Fonoier to recover dues, I, 73. frequently resorted to in Switzerland, I, 87. Special, of the East Prussian Landschaft, II, 6. iSee ' Summary process . ' Collectors or Presidents of districts in Prussia charged to encourage and aid the establishment of Savings banks, I, 39. Commerfant power of borrowing of, compared with that of the peasant in France, I, 46. Commerce Books of, of Italy, II, 260, 251. extracts from the code of, relating to Co-operatir* societies of Italy, I, 166 ; II, 116, 117. of Belgium, II, 134. Commercial banks Joint Stock Mortgage banks of Germany as, 1, 69. Commercial Code. See ' Commerce. ' Commercial Courts Boden Eredit Institut of Hungary under the jnrisdiction of, II, 24. Commercial oredit not the object of the report, I, 1. Commissioner State, watches over the management of Land banks and the issue of debentures in Europe, I, 8, 51, 55, 105. Necessity for the appointment of, to exercise super- vision over banks in Madras, and the duties and powers of, I, 29, 31, 303, 325. Arbitration by, between a member and his creditors, I, 30. the supervising authority in the United States, I, 39. powers of in the Land banks of Austria, I, 75- in the Landschaften of Germany, II, 1, 8. in the Boden Eredit Institut of Hungary, II, 25. in the Popular Bank of Liege, II, 135. in the Savings Banks of the United States, II, 207. Committee the several kinds of of the Landschaften, and the duties and powers of, 1, 51, 52. proposed for Village banks, I, 383. of the Co-operative banks of Italy, II, 124, 125. of Arhitration. in the Agricultural associations of Italy, II, 199. of Auditors in Luzzatti Popular banks of Italy, 1, 165. Centrai in the Popular banks of Italy, duties of, I, 172. Charity in the Monti Pmmentarii of Italy, and the powers of, II, 181. Consvitative for agricultural oredit in Italy, duties and constitu- tion of , II, 57, 58. of Control in the Hungarian Boden Eredit Institut, duties and functions of, I, 102. in the Luzzatti Popular banks of Italy, I, 165. District in the Monti Frumentarii of Italy, and the duties of, II, 181. Discount proposed for village banks, I, 383. in the Co-operative banks of Italy, II, 124. Executive in the People's Bank of Liege, I, 182. in the Agricultural Bank of Mysore, II, 77. Qeneral in the Pomeranian Landschaft, constitution of, II, 3. Mamaging. See ' Managing committee.' Select. in the Pomeranian Landschaft, constitution of, II, 3. Standing of the Positos, constitution and duties of, I, 197. of Supervision internal standing, outside the directorate should ba provided for, I, 25, 289, 292, 339, 340. 268 INDEX. Oommittee ~cont. of Supervuion — cont. in the Mortgage Bank of Canton Vand, I, 88. in the Communal banks of Alsace Lorraine, I, 156. in Cassa Loresgia, I, 176. in the People's Bank of Liege, and the powers of, I, ^ 182. in the Boden Kredit Institut, II, 25, 26. in the Co-operative societies of Germany, dnties aad powers of, II, 85. in Schnlze-Delitzsch societies, II, 96, 97. in Rdiffeisen Credit unions, II, 104. in the Agricultural Central Credit Bank at Neuwied, II, 111. in the Luzzatti popular banks of Italy, II, 129. in the Agricultural associations of Italy, II, 199. Communal banks of Bungary, I, 78, 128. of Alsace Lorraine purely a State bank, I, 156. history, origin, privileges, administration and loans of, I, 156. chief characteristics of, a purely lending bank and liability of communes, I, 156, compared with Baiffeisen societies, I, 157. Communal council of the Positos responsible for the loans granted, I, 197. management by, and duties and powers of, I, 197. of Swiss Land hanks, duties of, I, 85, 86, 102, 103. of Bo^vinqs tanks of Prussia, duties and liabilities of, I, 201. Communal life still strong in Madras, I, 374. Communal Savings banks of Prussia foundation and administration of, I, 201, 202. of Merzig intended for small agrioulturists and the description of, I, 202. best serve personal rural credit as adjuncts of Popn- lar banks or Loan societies, I, 202, 203. Communes the responsibility of, in Swiss banks, I, 86. Compagnie FonoiSre of France, as a branch of the Credit Ponoier for land improvement, I, 70. Company. Definition of, I, 325. Company law of India defective and does not provide for Co-operative Booie- ties. I, 25, 274, 275. proposed amendment of, I, 30, 276. Competition money-lender 'can be' 1 controlled by only wholesale, I, 31, 323. Comptoirs Agriooles failure of, as agencies of Central banks to lend fnnds to agriculture, I, 10, 125, 127, 128, 204. or loan oflnces of Agricultural banks of Belgium, II, 49-51. Conciliators. Court of, settlement of disputes by, I, 320, 321, Board of, in the Agricultural associations of Prance, II, 195. Condition of the peasantry of Europe, I, 5, 144. as regards (1) tenure of land. (2) prevalence of indebtedness. (3) rapacity of the usurer. of the peasantry of Madras, I, 15 — 17- absence of any banking organization except the Nidhis, I, 17, 21. as regards credit systems, I, 17—20. Conservator of mortgages to secure debenture values, duties and powers of, I, 59. of Swiss banks, dnties of, I, 86. Contracts advances for undertaking, one of the applications of credit, I, 35. sanctity of, an important consideration in credit, I 35. terms of, not generally fair when the borrower is an ignorant peasant, I, 35. not iniqnitons in Madras, I, 35. Control Committee of in the Boden Credit Institution of Hungary, dutiea and functions of, 1, 102. • in Co-operative banks of Italy, II, 124. Monopoly oi,hy the stock vote system in the Nidhis, . I, 266. in Laud banks of Europe. how provided for, 1, 103, 105. by Government universal and a sine qvA non, I, 103, 104, 105, 107. Conveyance forms of, prescribed in Building societies, II, 139. Co-operation the common principle of Popular banks, I, 10, 133. the moral and material effects of, I, 34. the principle of, how used in Schulze-Delitzsoh sooi- ties and Raiffeisen Credit unions, I, 154. necessity for, in agriculture, II, 186—191. Co-operative Agricultural bank articles of the Popular, of Belgium, II, 136. Co-operative societies a desideratum for every village, I, 5. the great dangers of, dividends and honoraria, I, 11. special laws for their furtherance and good manage- ment when passed, I, 14. act as arbitrators in compounding with original creditors, I, 15. main principles of, promotion of production, prudence, facile and safe credit, thrift, self and mutual help- among members, I, 25, 31, 34, 37. power of, to determine succession of members and depositors to a certain value, I, 26. reject large State advances, I, 27. moral and material effects of, I, 34, 134. advancement of members, the principal obiect, I, 34, 163. the common feature of, I, 1 33. distinguished from joint stock companies, I, 133,134. supervision in, I, 300, 301. proposed law relating to, I, 353-359. of ^Europe Popular banks are, I, 10. governed by a special law, not so in Madras, I, 187. of Germany law relating to, I, 155 ; II, 81-94. of limited and imlimited liabilities, special provi- sions and the transformation, II, 91-93. articles of the General union of, II, 107-109. of Russia the history of the development and the leadine features of, I, 158—160. of England. Building, Industrial and Provident societies, I, 9, 187. of the United States principles and methods of, similar to those of Germany, I, 193. distinguished from Savings banks, I, 193, 194. laws relating to, II, 173-180. of Italy extracts from the Code of Commerce relating to II 116, 117. ^ ' ' model articles and business rules of a Popular II 117-129. ' ' of Poligny articles of, II, 132-134. of Belgium extracts from the Code of Commerce relating to, n, 134. Co-operative Tillage bank specimen -nrticles of, I, 388-396. model articles of, of Italy, 11, 129. Correspondents list of, consulted for the report, I, 401—403. Corvee gratuitous labour, by borrower, a kind of usurv I 43 Co-sharers J> > ^^• provisions for declaring loans to land improvement to be bmdmg on, I, 309. Council of supervision, duties and powers of, in Schnlze-Delitzsoh societies, I, 138. in Kaiffeisen Credit nniona, I, 148. of administration, duties of in the People's Bank at Liege, I, 182. district, dnties and powers of, in the Pomeranian Landsohaften II 2. of Agriculture ' ' its constitution, meetings, attribution and representa^ tion on other banks, II, 239, 240. "Presenta- INDEX. 269 Council-General the highest superviaing authority of the Mortgage Bank of Canton Vaud, I, 88. of the General Union of Co-operative societies of Germany, II, 108. Coupons interest, when payable in Land banks of Europe, I, 99. Court limitation of the powers of, to sell the property of debtors, a safe-guard of cheap credit, I, 46. of conciliators. See ' Conciliators.' village. See ' Village courts." Court fees no necessity for exempting banks freftn the payment of, I, 313. Credit rural, not urban or commercial, the object of the report, I, 1. should be preceded by, and based on, thrift and pru- dence, I, 2, 16. an essential of agriculture and not affected by the condition of countries, nature of land tenures or position of agriculture, I, 33. right use and modes of, as educative and disciplinary, I, 2, 33, 34. classification of, real, chattel and personal and the appropriate institutions, I, 2, 7, 35. conditions or postulates of, I, 3, 35. (1) demanded by both borrower and lender-proximity. (2) demanded by lender alone — secmrity. (3) demanded by borrower alone — facility and safety. (4) demanded by particular classes of credit, forms of, satisfying the postulates of, I., 3, 14, 16, 31, 35, 37. regime of money-lender judged by the postulates of I, 3, 38. function of, I, 3, 4. application of, and what should be discouraged, I, 34, 35. circumstances which enhance the price of, I, 15, 33. nature of, required by the peasant, long-term, chattel and personal credit, I, 15, 34, 118, 119, 121, 122. resum6 or summary of, I, 37. province of State, defined, I, 33, 38. results of the farmers' need for, indebtedness, I, 39- restrictions on, may make it dear,;I, 46,47. popularized and democratized in Popular banks, 1, 133. object and true soni-oe of, I, 136. maintained only if continually operated on by drawings and repayments, I, 184. general principles of banks dealing in different kinds of, in Europe and their application to Madras, I, 7-15, 221-224. Chea-p without due safe-guards, a cause of indebtedness, I, 34,43. evils and the safe-guards of, I, 43-47. facilities for, considerable in Switzerland, I, 85, 131, 132. isolated — a positive danger, I, 34. organised. See ' organised credit.' Agricultural. See ' Agricultural credit.' Beal. See ' Eeal credit.' Cash. See ' Cash credit.' Rural. See ' Rural credit,' and ' Credit Eural.' Individual. See ' Money Lender.' Personal. See ' Personal credit.' Credit Agricole definition of, I, 2, 121. nature of loans required by, I, 122. causes of its non-development, I, 122. in France histoi'y of attempts at thei organization of, 1, 122, 123. report of the select committee and its recommend- ation, I, 124. institutions for, and their description, I, 124H26. results of, and revival with credit unions as annexes, I, 127. in Germany and Bwitnerland not provided for specially but granted by all credit associations, I, 127, 128, 131. in Austria- Hungary granted by Communal societies, I, 128. in Belgium by means of Gomptoirs Agricoles and on the lines of Union du credit, I, 128. causes of the failure of, I, 128, 129. II Crfidit Agricole — cont. in Itaiy special laws for the organization of and their provi- sions, I, 130, 131. causes of the failure of, I, 130, 131. how granted by the Savings banks of Italy, I, 203. in Roumania how provided for, I, 132. summary of European attempts and reasons for failure, I, 132, 133. (1) if central, do not reach the peasant. (2) if provincial, expensive. Credit Agricultural. See ' Agricultural credit.' Credit Annexes of Agricultural associations, I, 13, 179- new law for the development of, 1, 13, 180. Credit banks several classes of, 1, 7-13. the general principles of, I, 13, 14. (1) failure of State banks to reach small folk. (2) necessity for State supervision. (3)' necessity for thrift, self and mutual help, special laws for their furtherance and good mana e- ment when passed, I, 14. as a method of safeguarding the abuse of cheap credit, I, 47. of Europe general resume of, by countries and their application to Madras, I, 221-224. Credit by exchange, I, 181. Credit Foncier of France. does not grant small loans and failed to touch the peasantry proper, I, 8. origin and history of, I, 8, 69. the establishment of, aided by special laws and pri- vileges, I, 14. its connection with Credit Agricole of Egypt, I, 70. growth and causes of its success. Sinking Fund and Land Mortgage debentures, I, 70. distinguished from the Laudschaften, I, 71. objects, methods and administration of, I, 71 ; II, 19. privileges granted, I, 71. capital, reserves, and organs of administration of, 1,72. loans, profits and coercive processes employed, I, 73. statistics of, I, 73. operations and branches of, I, 74. articles of, II, 18-22. authorized to lend to districts, comm«ines and syndic associations, II, 23. Credit Poncier of Egypt, description of, I, 91, 92. Credit Poncier et Agricole of Algeria, an offshoot of the Credit Foncier of France,. and its description, I, 74. Credit operations what are, as defined in the Draft Bill, I, 326. Credit register in Luzzatti Popular banks, II, 129. See ' Castelletto.' Credit, rural universal necessity for, especially for small farmers, I,- 33. necessity for, not affectsd by, I, 33. (1) condition of the country. (2) nature of land tenure. (3) position of agriculture, should be safe and cheap, I, 33. why dear and productive of cruel usury, I, 33. cheap and facile, liable to abuse, I, 34. guarded, guided and productive, a necessity, I, 34. Credit system of Madras the peculiarities of, I, 17-20, 229, 230. (1) chiefly grain credit. (2) ryot, the chief money lender. (3) no banking or organized credit except the- Nidhis and the Chit system. compares favourably with that of Europe, I, 20. necessity for reform, I, 20. the nine classes of lenders and the remedies proposed to eliminate them, I,^ 19, 230, 231. ' Borrowers all rvots borrow and many live by mean.1 of borrow- ing, I, 232. purposes for which credit is taken, I, 18, 232, 233. Loans method, size, repayment, rate, period, and renults of, I, 18, 233-237. 68 270 INDEX. Credit unions operationa of, I, 7. leading principles, thrift, self and mntual help, I, IV. as annexes of Agricultural associations, I, 179, their status and administration, I, 179. loans, how granted, I, 179. Kaiflfeisen. See ' Baiffeisen Credit unions.' Creditors security of ample and perfect in Land banks, I, 99. insufficient in Building societies, I, 191. See ' Lenders.' Crise Agricole condition of the small farmers, I, 39. Crops advances upon, granted by Agricultural associations, I, 181. Cultivation expenses loans for, primarily required by the ryoti of Madras, I, 15, 232. Current credit Popular banks for, I, 13. Custom enhances the price of credit to the ryots of Madras, I, 15. Dead loans, I, 385. Death of trustees or officers of banks, priority of bank's claims in case of, I, 26. of members and its consequences in the .Agricultural banks of Mysore, II, 78. transfer of interest in case of, of members, in the Nidhis of Madras, II, 225. Debentures a principal means of financing sooieties dealing in mortgages, I, 26. rules regarding the issue and payment of, land mort- gage and agricultural, I, 26, 331-336, 347, 348. necessity for legalizing and safeguarding the issue of, I, 282-284. Land mortgage, ordinary and agricultural of Europe, I, 282, 283 ; II, 56, 57, 131. free from attachment in Europe, I, 307. Land mortgage foundation of land credit and issue of specially safe- guarded in Europe and England, I, 96-98, 282, 283. chief source of fund in land banks and their forma old and new, I, 96. when repayable and method of redemption by lottery, I, 96 ; II, 22. necessity to cover, by proper securities, I, 96. what banks may issue, I, 97. rules restricting the issue of, and penalties for dis- regard, I, 97. equilibrium between loans and debentures to be maintained, I, 97. legal privileges of, I, 97. advantages of, over deposits, I, 97, 385. rules governing the issue, transfer and redemption of, in England, I, 98., II, 30. law relating to, in Hungary, II, 29. ■Ordinary issue of, to be similarly regulated, I, 284. Agricultural. See ' Agricultural debentures.' Communal of the Credit Foncier, I, 74. -Central, importance of, and how issued, I, 98, 379. how issued and supervised in the Agricultural banks of Italy, II, 56, 57. in the Banco Agricola of Spain, I, 183. in the Eoden Kredit Institut of Hungary, II, 27. in the Charitable Loan sooieties of Ireland, II, 171. in the Credit Foncier. of France, privileged legally and fiscally I, 8, 73, 74,11, 21. of Hgypt, I, 91. in Joint Stock banks distinguished from those of the Landaohaften I 58, 59. of Switzerland, issued without reference to loans I, 89. not issued without express authorisation of Gov- ernment, I, 8. in Land banks of Austria, I, 75. of Italy, I, 79, 80; 11, 30-37. Debentures — cont. in Land banks — cont. of Switzerland, not generally privileged, I, 88. of Pomeranian mutual, II, 1. of Prance, II, 15. in Land Improvement banks of Germany, I, 64. in [the Landschaften of Germany, I, 7, 61, 56; If, 1, 6, 7, 11, 12. in Le Credit Agricole, I, 125. in mortgage bank of Canton Yand, I, 87 ; II, 41. in Popular banks of Italy, I, 169, 170 ; II, 131. differ from those of Germany, I, 170. in the Savings banks of Italy, I, 204. in Tillage banks, I, 393. Debenture holders rights of in the TSew West Prussian Landsohaft, II, 11. in the Boden Kredit Institut of Hungary , II, 28. Debts liquidation of, by Government not necessary as a preliminary to the establishment of banks, I, 15, 29, 30. relief from prior, how granted by banks, I, 15. relief of, not attempted by the Prussian Government, I, 29. redemption, facilitated by arbitration, I, 30. relief from prior, one of the applications of credit, I, 34, 232. means of recovery of (1) courts, the only instrument available in India, I, 36. (2) power of distraint. (3) power of sale without intervention of Govern- ment. (4) recognition of a bond or bill of sale, advisability of granting (2), (3) and (4) to banks, I, 36. amount of, mortgage, personal and chattel in Europe, I, 40, 41. Special procedure for the recovery of, in the Land- schaften, I, 54. amortization of, due to third parties by the Mortgage Bank of Fribourg, I, 89. should be valued at their actual value and not at their nominal amount, I, 191. Procedure for the recovery of, whether to be privi- leged or not, I, 311. Facilities of, available in Madras, I, 311-314. Summary process for the recovery of, I, 315-317. Debtor Exemption from attachment or sale of the property of, to a limited extent, a safeguard of cheap credit, 1,46. See ' Borrowers. ' Deed of Association of Savings banks, II, 209, 211. Defaulters how dealt with in the Nidhis of Madras, II, 224. Delay in the repayment of loans in the Land banks of Europe not allowed by courts, I, 110. Department of Agriculture, Commerce and Trade, the supervising authority of Italian banks, I, 39. Deposits exemption of, up to a certain value, from attachment I, 26, 307. beyond a certain amount should be invested in Gov- ernment securities, I, 26. compared with debentures, I, 97, 385. what banks' can attract, with safety, I, 211. dangers of, in the absence of a fixed limit, I, 281. must be encouraged if Credit societies are to be really useful, I, 281. proportion of, to capital and how to be invested, I, 281. necessity for one month's notice before withdrawal 1, 281. provisions for the transmission of, I, 307. proposed law, regarding receipt, payment and invest- ment of, I, 331, 364, 365, 366. in Building societies receipt of, how far restricted, I, 190, 192; U, 144 in the Credit Foncier of France, how invested, 11 19 in Friendly societies, how far received, I, 186. ' in Joint Stock banks, attracted by issue "of share capital and reserve, I, 3. in Laud banks, not generally received and a sonree of expense and danger, I, 7, 98. in Le Credit Agricole, limit of, 1, 125. INDEX. 271 JDepositB — cont. in Mortgage Bank of Canton Berne, II, 40. in the Nidhis of Madras, inability to attract, I, 22. want of sufiBoient secnrit.y for, I, 250, 267, 268. limit and the modes of repayment, I, 250, 268 ; II, 225, 234. in the Popular banks of Italy as a source of fund, I, 168 ; II, 121. ordinary, savings and fixed term, II, 127. in Baifieisen Credit unions, the only source of fund, I, 150. in Savings banks of Prussia, limit of, I, 201. ofltaly security of, first consideration and their utilization only secondary, 1, 205. ordinary and special and their usefulness, I, 206, 207. of Switzerland, receipt and withdrawal of, I, 211. of the United States, modes of investment, I, 215 ; II, 205, 207, 208. of Austria, amount and interest of, II, 218. in Scotoh banks of very small sums received and treated as account current, I, 184. how attracted and invested, I, 184, 185. in Schulze-Delitzsch societies, why received and how restricted, I, 139. in Village banks should be the mainstay the finance of, I, 385. ordinary or savings, at call or fixed term, I, 392. Deposits, cash. Bet ' Cash deposits. ' Deposit receipts how issued in Luzzatti Popular banks, I, 168. in Scotch banks, I, 184. in the Savings banks of Italy, II, 215, 216. Depositors succession up to a certain value determined in Co- operative and Savings banks and Building societies, I, 26 ; n, 140. representation of the rights and interests of, I, 26, 282, 331, 364. Deputy. of the Landschaften, duties and powers of, I, 52. Deterioration. of mortgaged property as affecting security, I, 310. Directors duties and responsibilities of, should be defined and their powers of borrowing restricted, I, 25. should be unpaid or granted but moderate honoraria, I, 262, 383. should take an active interest in, and a large share of, the actual work, I, 262, 383. should have a considerable stake iu the society, I, 262. should not be allowed to borrow or become surety, I, 262, 383. should not be made too permanent, I, 266. negligence of, to attend meetings, &c., I, 266. proposed law regarding the appointment, rights and duties of, I, 288, 289, 338, 339, 341. • selection of, and when removable, I, 383. rights and duties of in the Agricultural associations of Italy, II, 199. in the Agricultural bank of Mysore and their proceedings, II, 76, 77. of Neuwied, II, 111. in the Boden Kredit Institut of Hungary, I, 102. in the Building societies of America, I, 193 ; II, 173. in Cassa Loreggia, I, 176. in Co-operative societies of Germany, II, 84. of Italy, n, 116, 117, 123. of America, II, 180. in the Credit Poncier, I, 72 ; H, 19. in the Mortgage Bank of Canton Taud, I, 88. in the Nidhis or Loan funds of Madras, paid, I, 247, 262, 268, 270, 271 ; II, 227. proceedings of, II, 236. in Popular banks of Italy, services, gratuitous, I, 165, 169, 172 ; II, 129. of Belgium, II, 135. in EaifEeisen Credit unions, I, 148 ; II, 103. in the Savings banks of Italy, I, 206 ; II, 209. in Schulze-Delitusch societies, I, 138 ; II, 95, 96. stimulated by substantial honoraria, I, 11. status of, compared with those of English and Madras societies, I, 138. in Village banks, I, 383, 390. Disbursements in the Nidhis of Madras, made by cheques, II, 226. Discount of bills of exchange in Luzzatti Popular banks, I, 168 ; II, 120. in Schulze-Delitzsch societies, II, 100. in the Nidhis of Madras, II, 234. Loans granted by, of bills iu Agricultural associations, I, 13, 179. Law establishing sub-offices of, in Prance, II, 47. Discount bank Le Credit Agrioole as a, I, 124, 125. Discount committee of Luzzatti Popular banks, its constitution and function, I, 165 ; II, 124. not needed for Village banks, I, 383. Disputes provisions of Indian law for the settlement of, only permissive, I, 819, 321. European and English law regarding the settlement of, I, 319, 320. necessity for provisions of law for special disposal of, to prevent unnecessary litigation, I, 319. proposed law regarding the settlement of, (1) by arbitration, I, 319, 320. (2) by court of conciliators, I, 320, 321. (3) by commissioner, I, 345, 346, 366. provisions for the settlement of in Banco Agricola of Spain, by judicial arbitration, I, 183. in Building societies, by arbitration, registrar or court, I, 191 ; II, 141. in Friendly, Industrial and Provident societies, I, 187, 188 ; n, 152, 164. iu Raiffeisen Credit unions, II, 107. in Savings banks of England, II, 203. of Austria, II, 220. in Village banks, I, 391. Dissolution of companies, modes of, I, 188, 190. provisions for in Agricultural Bank of Mysore, II, 79. in Building societies, II, 140, 143. in Co-operative societies of Germany, II, 88, 89. of Italy, n, 125. in Friendly societies, II, 165. in Industrial and Provident societies, II, 154. in Raiffeisen Credit unions, II, 107. See ' Liquidation. ' Distraint a mode of recovery of loans, I, 26. of movables vrithout recourse to law, necessity or other- wise of, I, 36, 315, 316. right of, for default in payment of loans in the Land banks of Europe, I, 54, 111. provisions of law regarding, I, 343-345. District committee of the Landschaften, its constitution and duties, I, 52. of the Monti Prumentarii of Italy, II, 181. Dividends earning of, not the object of Co-operative societies, 1,34. fatal to the efficiency of Popular banks and desira- bility of fixing a limit, I, 11, 164, 170. need for legislating against fictitious, and ascertain- ing surplus profits I, 284. to be paid from actually accrued profits only and penalties for breach, I, 329. in the Agricultural bank of Treves, proscribed beyond a certain limit, I, 155. in Building societies of America, payment of, II, 173. in the Landschaften not allowed, I, 7. iu the Popular banks of Italy, kept low and how distri- buted, I, 11,169. in Raiffeisen Credit unions forbidden, I, 12, 147. in Savings banks of America, how divided, II, 206. in Schulze-Delitzsch societies kept high to attract savings, I, 141. how allotted, I, 139 ; II, 100. Documents prescribed by the Industrial and Provident Societies Act, II, 149. of Friendly societies, evidence in a Court of Law I, 187. Double-entry system, I, 249. Draft Bill scope of, and definitions, I, 325. registration, how may be effected, I, 325, 326, 272 INDEX, Draft Bill— comi. penalties how leviable, I, 326. objects of each bank and credit operations, I, 326. power of holding laud and articles of association, I, 326, 327. provisions regarding Joint Stock banks the several methods of financing, I, 328-338. management and administration, I, 338-342. the grant of various privileges, I, 342-349. supervision by means of State Commissioner, I, 349—352. Co-operative societies, I, 353-359. grant of various privileges, I, 335-359. Savinga banks the several methods of financing, I, 359-362. management and audit, I, 362-364. the grant of various privileges, I, 366. Agricultural associations method of operations, I, 367, 368. privileges and supervision,'!, 368. Land Improvement himlcs methods of operations, I, 368, 369. Bills of Sale, Vsury, Money Lenders' Accounts and Home- stead Exemption, I, 369, 370. Drainage development of, one of the applications of credit, I, 34. compulsory and other associations for, in Germany, I, 63. Dues special facilities for the recovery of, granted to the Credit Fonoier, I, 8. results of non-payment of, in the Co-operative societies of America, II, 173. Smration of loans in the Land banks of Europe, I, 108. in the Nidhis, I, 357. See ' Loans '. Eclectic societies of Germany similar to Schulze DeUtzsch and RaifEeisen societies, character and operations of, I, 154. Education loans for, an application of credit, I, 232. Electors Board of — See ' Board of Electors.' Encumbrances prior, prevent Land banks from lending to small folk, I 30. not essential to the establishment of village or local banks, I, 30. difficulty of ascertaining prior, removed by the new form of registration indexes, I, 30, 36. ease and certainty of ascertaining, an item of security to lender, I, 36. Endowments for children in the Nidhis of Madras, II, 235. Endowment fnnd of the Savings banks of Italy, how provided for, I 205 ■ II, 209. EntrR-nce fee demanded in Schulze-lJelitzsoh societies, I, 139. not levied in Raiffeisen Credit unions, I, 149. a source of the reserve in the Co-operative societies of Belgium I, 181. Estate attachment and management of, for failure to repay loans in the old Landschaften, I, 5 k provisions for the sale of, I, 54. See ' Property.' Eviction mode of, in Land banks of France, II, 16. Evidence documents of Friendly societies, in a Court of Law I 187. Examination by competent auditors in Co-operative societies of Ger- many, II, 86. method of, by G-eneral Union of Co-operative societies of Germany, II, 109. ^Examiners duties and powers of, in the societies of America publication of the report, II, 243. Exchange credit by, I, 181. Executive committee constitution and dnties of, in the People's bank at Liege, I, 182. in the Agricultual banks of Mysore, II, 77. Expenses in the Savings banks of Italy, I, 205. See ' charges.' Extracts of the books and acconnts of the Boden Kredit Institut of Hungary admitted as complete proof, II, 24. Facile credit — See ' Cheap credit ' Facility of borrower in obtaining and repaying loans, I, 36, 37. evils of, in borrowing I, 43 — 45. Family pensions in the Nidhis of Madras, II, 235. Famine grain banks as store-houses against, I, 10. Famine Commission proposal of the members of, to establish granaries as store-houses against famine, I, 10. Farmers of England position of, as compared with those of Madras, 1, 184. indebtedness of, I, 39. condition of English, not peculiar, I, 39. the nature of credit required by, I, 121, 122. See ' Peasant I.' Farmer's unions, I, 218, 220. Federation to maintain the unity of all Co-operative banks, I, 182- See ' Groups ' and ' Unions,' Fees of registration, I, 188, 190. Feudalism prevented encumbrances of laud by the peasant in Europe, I, 61, 74. Finance privilege of, granted to Land banks of Europe, I, 107. difficulties of, in the Nidhis, I, 267. Fines for non-payment of monthly dues, interest, Ac, in Co- operative societies of America, II, 177. Folk small, banks suited to, I, 13. Formation of societifes, provisions of law regarding, I, 277-270. Foundation of Land banks, the degree of State intervention in I 104. ' ' Foundation capital what is, and how provided for in the Hungarian banks I, 95. proposed for Village banks, I, 377. of the Mortgage Bank of Canton Berne, II, 38. Founders of the Boden Kredit Institut, II, 25, 26. of the Popular Bank of Belgium, rights and duties of I 182, ' ' shares of, issued at a discount, I, 183. Founders' Assembly of the Hungarian Boden Credit Institution, duties and functions of, I, 102. Founders' shares. in Hungarian banks, I, 95. as a method of assisting the establishment of Villao-e banks, I, 377, 382, 392. ° Friendly societies of England special laws for their furtherance and good management when passed, I, 14. not Loan Societies proper, 1, 186. the classes of societies admitted under the law relating- to, I, 186. ° ohiefobjectsof., and the nature of privileges granted I loo, 187. ' loans granted only to members and their limit, I 186 deposits how far received, I, 186. ' rights of members to nominate heirs, I, 187. INDBX 273 Triendly societies of England — cont. limited in character, and privileges granted,' I, 187, 188. rules regarding disposal of sums due at death, I, 188. roles regarding the granting of credit and banking, I, 189. supervision in, by the Eegistrar, I, 300, 301. law relating to, II, 157-167. Funds for first expenses of banks, may be granted on favourable rates in small sums by the State, I, 31. banks should in general rely on the public for, through depoBibs and debentures, I, 31. surplus, may be invested in Government treasury, I, 396. Borrowed and own in the Land Banks, I, 98 ; II, 6. Sources of, in the Agricultural associations of France, II, 193. in the Agricultural Bank of Mysore, II, 77. in Building Societies by (1) issue of shares, (2) receiving deposits and loans, I, 190. limited and the evils of, I, 191. in Casse Rurali of Italy, difficulty of, only at the outset, I, 175, 176. in Central banks or unions, I, 152. in Industrial and Provident Societies, II, 151. in Land banks • of Germany, I, 51, 56. of Italy, I, 79. of Europe, I, 95, 96. in Mortgage bank of Canton Vaud, I, 87. in the Nidhis of Madras, subscriptions, deposits and foundation shares, I, 249, 265, 268, 270. in the People's Bank at Liege, I, 181. in Popular Banks of Switzerland — an important mode of raising, I, 161. of Italy — shares and profits, 1, 168. in Eajiieisen Credit Unions the result of local thrift, I, 147. shares, reserves and borrowed capital, \1, 150; II, 106. in Schulze-Delitzsch societies, share capital, reserve, deposits and borrowings, I, 10, 139. in Tillage banks, 1, 384, 385, 391. how invested in the Agricultural Central Credit Bank of Neuwied, II, 111. in Cattle Loan societies of Switzerland, II, 116. in Central banks or unions, I, 152. in the Landschaften of Germany, II, 10, 13. in Savings Banks of Prussia, T, 201. of Italy, I, 204, 205, 207, 208 ; II, 214. of Austria li, 218, 219. in Scotch banks, I, 184. Bee " Capital." Tund associations or Xidhis of Madras development of the fund idea, I, 243, 244. ieveral classes of, I, 244. (1) the Nidhis. (2) terminating societies. (3) Chit associations. (4) Benefit societies, description of the three types of, (1) lending chiefly on mortgages, I, 268-270. (2) lending on personal security, I, 270-271. (3) rural fund worked by villagers, I, 271. memorandum of association, bye-laws and articles of II, 221-237. See " Nidhis." General assembly constitution, duties, power and meetings of, in the Agricultural Bank of Mysore, II, 76. in the Landschaften, I, 61. in the Nidhis, T, 246. in the People's Bank at Liege, I, 182. in the Popular Banks of Italy, I, 165 j II, 122, 12S. in Baiffeisen Credit unions, attendance of members compulsory, I, 148; General committee of the Landschaften, constitution and functions of, I, 51. jOeneral meeting should be properly convoked and conducted for the exercise of necessary powers, I, 289. constitution and powers of, in the Agricultural Banks of Mysore and the pro- ceedings thereat, II, 75, 76. General meeting — eont. constitution and powers of — cont. in the Agricultural Central Credit Bank at Neu- wied, II, 110. in the Banco Agricola of Spain, I, 183. in the Boden Kredit Insticut of Hungary, II, 25.' in Cassa Loreggia, I, 175. in the Co-operative Credit Society of Poligny, II 133. in the Co-operative Societies of Germany, II, 85, 86. in the Credit Foncier, I, 72 ; II, 19. in the Nidhis of Madras, II, 227, 228. in Kaiffeiaen Credit Unions, II, 104. in Schulze-Delitzsch Societies, I, 138 ; II, 97. in the Union of Co-operative Societies of Germany,, II, 108. in the Village Banks, I, 883, 389. Genossensohaften or Agricultural loan societies of Austria, I, 78. of Germany, I, 155. Gesellschaften, I, 155. Goods pledge of, Monts de Pi^t6 for, I, 13. Government Dues payment of, on application of credit, I, 232. See " State Arrears." Government grants. See " Subventions." Government initiation : See " Initiation.'' Government intervention universal and a sine qui non in the Land banks of Europe, I, 103, 104, 258. the different degrees and kinds of, in foundation, ini- tiation, promotion, subvention, guarantee, control, supervision, and grant of privileges, I, 104-107. private organization more beneficial than, II, 190. in the Nidhis — practically nil and the necessity for,, I, 258, 259. in Popular banks of Italy, nil, I, 169. of Russia, an objectionable instance of, I, 160. in the Savings banks of Italy, nature of, I, 203. in Schulze-Delitzsch societies, very little and whea necessary, 1, 136, 142. Government subvention. See ' Subvention.' Government supervision. See ' Supervision.' Government Treasuries may be used for depositing boxes and funds of banks, I, 26. Governor the executive head of the Credit Foncier, I, 72. of the Land banks of Austria, I, 75. duties of, in Land banks, 11, 109. Grain advance of, to the peasant for seed or maintenano* and the necessity for, I, 10, 195. Grain banks of Europe. (1) Monti Frumentarii of Italy, I, 10, 195. (2) Positos of Spain, I, 10, 196. (3) Monts de Pi^te of Prance, I, 10, 198. their importance as institutions for advancing grain,- seed, &o., and as pawn-broking establishments, I, 195. chief features of, I, 195. law and rules relating to the management of, of Spain,, II, 182-184. Grain credit very dear in Madras, I, 235. Grain loans form the bulk of village credit in Madras, I, 18. the grant of, provided for Village banks, I, 394. Granaries proposal of the Famine Commission to establish, ai store houses against famine, I, 10. , communal or local, of Europe, I, 10. lend grain to the peasant for seed or maintenance, 1,10. Agricultural associations as, I, 181. usefulness of, in famine years, I, 196, 387. specially recommended for Madras, I, 387. See ' Grain Banks.' Grants. Bee ' Subventions.' Gratuitous Administration a characteristic of BaiSeisen Credit Unions and Italian Banks, I, 11, 12, 149. See ' Administration.' Gratuitous Public Services obligation of members to render, in the LandsehW- ten, I, 53. 69 274 INDEX . Greed enhances the price of credit in Madras, I, 15. Groups of Popular banks of Italy decentralization and local autonomy preserved in, combined with federation, mutual knowledge and support, I, 172. administration of, I, 172, model articles of, and rnles for the issue of agricul- tural debentures by, II, 130, 131. See ' Unions. ' Group system the necessity for, and the duties of, in BaiSeisen societies, I, 12, 152. utilized for the issue of bonds in Luzzatti Popular banks, I, 170. necessity, objects and the influence of, in Casse fiurali, I, 178. See ' Unions.' •Growth natural, a condition of the success of banks, I, 14. Grundbnch the land register of titles in Germany, I, 49. Guarantee State. See ' State Guarantee.' Guarantee Fund the formation of, in the New Landschaften, I, 56. H Hand loans how granted in the Agricultural Bank of Mysore, 11, 77. Hardenberg results of the legislation of, in Germany, I, 3, 4. Head and Tail system of Madras, I, 272. Hindu Pension Fund gratuitous seryioes of directors, a peculiarity of, I, 252. Holders large and medium, hanks for, I, 13. Homestead Exemption laws exemption from sale of house and lands up to a certain value, I, 323. advisability or otherwise of a similar provision for India, I, 323, 324. safeguards of the abuse of cheap credit, I, 46. proposed alterations to the Civil Procedure Code, I, 370. of America, II, 251-260. Honesty capitalization of, of members, I, 164. Honoraria of the directors substantia in Sohulze-Delitzsch Socie- ties, I, 11. kept low in Luzzath Popular banks, I, 11. Houses building and famishing of, one of the applications of credit, I, 34, 232. Hiilfskassen or help banks of Germany, I, 104. Ilypotheoaire a synonym for Land banks, I, 1. Hypothekarkasse Mortgage Bank of Canton Berne. operates through the communal councils and the Re- gistrar of Mortgages, I, 85, 86. peculiarities and description of, I, 85, 86. Implements purchase of, one of the applications of credit I 34 232. ' ' ' loans for the purchase of, granted by the Monti Frumentarii of Italy, 1, 195 Improvements loans for land, a secondary consideration with the rvots of Madras, I, 15. ^ credit for land, not sought for, in Europe or India I priority of banks' claims to loans for land, I 26 308 State loans for specific land, in Europe I 27. ' Land, not a cause of indebtedness, I, 41. Improvements — cont, laws for the promotion of land, in Germany, I, 63, 247-251. loans for land, should be for long term, I, 109, 121, 142. Land, what are, and the conditions under which loans are granted for, in the Agricultural Bank of Italy, II, 53, 54, 56. law relating to land, in France, II, 200. of mortgaged property not to be undertaken without the consent of the managing committee in the Nidhis of Madras, II, 224. Income-tax no necessity to exempt banks from paying, I, 26, 306 Banks exempted from paying, I, 99, 187, 188, 189 ; U, 150. Banks not exempted from paying, II, 25. Indebtedness when dangerous, I, 2. universality of, especially among small farmers, I, 3, 39. not due to agriculture and usurer alone, I, 3, 15. liberty of action and equal rights of inheritance not a remedy, I, 4. cheap and facile credit not a cure but a possible cause of increase, I, 4, 15, 16, 41. agricultural, means not necessarily embarrassment and may be productive, I, 33. results of, I, 39. causes of, and the remedies proposed, I, 3, 4, 15, 16 20, 39, 41, 42, 47, 51, 241. agricultural improvement not a cause of, I, 41. money-lender and cheap credit as causes of, I, 42—44. safeguards of, legal or otherwise, I, 45-47. as effected by Land Banks in Europe, I, 117-119. of Europe. mortgage, personal and chattel, amount and causei of, I, 6, 40-42. compared with that of Madras, I, 20, 29, 44, 239. of Madras. mortgage, cash and grain, I, 237-240. Individual credit. See " Money-lender." Industrials also admitted in BaiSeisen and WoUemborg Banks, I, 1. Industrial and Provident Societies of England, are co-operative societies, I, 187. governed by special law not by the Company Law, I, 188. advantages of, as compared with a society registered under the Companies Act, I, 188. provisions of, similar to those of Friendly Societies I, 188. objects and privileges of, I, 188. special remedies for false representation or imposi- tion, I, 188. rules regarding the grant of credit, I, 189. business of banking carried on by, and the rules relating thereto, I, 189. Act governing, II, 145-157. Initiation Government, varies from direction or direct fiat to that of passing laws favourable to the establishment of banks, I, 94. difficulties of, in Madras, how can be overcome I 267 373,374. Insane member, power to deal with the property of, in In- dustrial and Provident Societies, 11, 150. Inspection of books of account, rights of members to demand, in Friendly and Co-operative Societies of England and America, I, 191, 291, 292 ; II, 149. only permissive in India and proposed law, I, 291, 292 341, 363. ' right of demanding Government, by members conditions under which the right is allowed in Europe, America and England, I, 293, 294. mockery of the present law in India and proposed alteration, I, 293, 294. in the Savings Banks of Italy regular and special insisted on, I, 206. nature of, and by whom, I, 206. in the General Union of Co-operative Societies of Germany, methods of, II, 109. Inspection committee °^o^ Trustee Savings banks, power of, I 214- II 203. * * INDBX 276 Inspectors appointment of, the Indian Law and the proposed alterations to facilitate, I, 293. of the Land banks of Italy, duties of, I, 81. of the Savings banks of Denmark, duties of, I, 217. of Building societies examine and report on the affairs of the society, I, 191, II, 143. rights of members to apply to Eegistrar to appoint, I, 191. of the Positos of Spain audit and examine accounts, I, 197 ; II, 184. of the Savings Banks of Italy, duties of, I, 206. of the Industrial and Provident societies, power to appoint, II, 1 53. Instalment privileges for the recovery of, I, 110. repayment of loans by in EaiEEeisen Credit unions, I, 12, 150, 174. in Loan societies of England, II, 168. Insurance against risks enhances the price of credit, I, 15. branch of the Funds of Madras, I, 269. Insurance Fund formation of, should be enforced by Government, I, 28. uses of, I, 28. of the New West Prussian Landschaft., II, 10. Interest power of courts to modify, in case of usury, I, 30. equitable, a postulate of credit, I, 36. necessary for expenses, losses and profits, X, 141. rate of, whether reduced by European banks, I, 227. rate of, in Madras vary according to circumstances, I, 233. registration statistics regarding, I; 234. high but not ruinous, I, 18, 235. not based on the market value but the result of monopoly and custom, I, 235. reasons for the dearness of, I, 236. on loans need not be reduced at first, I, 380, 381. on arrears, when to be reduced, I, 266. heavy in the Nidhis, I, 269, 271. rate of in the Agricultural Bank of* Mysore, fixed by the general assembly, II, 77-78. in Casse Rurali, fixed by the general meeting, I, 176. in Charitable Loan societies of Ireland, II, 171. in Credit Foncier of Prance, fixed, II, 20. in the Nidhis of Madras, I, i254, 255, 269, 271 ; II, 224, 234. in the Landschaften of Germany not charged on loans, I, 56. payment and collection of, II, 4, 5, 9. in Lnzzatti Popular Banks of Italy, I, 167, 169. in EaiSeisen Credit unions, I, 151. in Savings banks of England, rules for the regu- lation of, II, 206. in Sohulze-Delitzsch Societies, I, 141. Interest coupons when payable in Land banks of Europe, I, 99. payment of interest to holders of, in the Pomeranian Mutual Land Bank, II, 6. Intervention by Government. See ' Government Intervention.' Intestacy provisions for, of members, in Building, Industrial and Provident, and Friend societies, II, 140, 150, 162. Investments of funds or deposits, methods of ; in Building Societies, II, 140. in the Savings banks : of Prussia, I, 201. of Italy, I, 207 ; II, 214. of the United States, I, 215 ; II, 208. of Austria, II, 219. Irrigation development of, one of the applications of credit, I, 34. compulsory and other associations for, in Germany, 1,63. •Jaya Lakshmi Bhandara a fund association or Nidhi of Madras, memorandum and articles of association of, II, 232-237. Jewels as security for loans how valued in the Nidhis of Madras, II, 222. Joint Stock banks the value of, for India, I, 5. description of, especially the Credit Foncier of France, I, 8. interests of lenders and borrowers are opposed to each other, I, 34. lack the effect of mutual help found in co-operative societies, I, 34. of Qermany origin, object and operations of, I, 58. compared with the Landsohatfen, I, 59. compared and distinguished from co-operative societies, I, 133, 134. their capacity to grant credit to the peasant, 1, 134. abound largely in Switzerland and are able to grant cheap credit, I, 161. money and not the person of the shareholder th* main object, I, 163. provisions of law relating to — the several methods of financing, I, 328-338. management and administration, I, 338-342. the grant of various privileges, I, 342-349. supervision by means of State Commissioner, I, 349-352. Kabak or the gin shop, the curse of the Bussian peasant, I, 83. Kantiin system the repayment of loans by instalments, I, 380. Eassenscheine or 'Bank's bonds,' the source of funds in Swiss Popular Banks, I, 161. Knri the chit associations of Malabar, I, 273. results of, as promoting savings, I, 273. Kuttu Chit system development of, into Nidhis, I, 31, 242. description of, I, 242. See ' Chit associations.' Labour laws of the United States, n, 178-180. Laisser Faire not the true function of State in credit but aider i faire, I, 39. Land State loans for the purchase of, in Europe, I, 27. purchase and improvement of, one of the applications of credit, I, 34, 232. sale of, free of encumbrances for State arrears, an item affecting security to lender, I, 36. evil eflfeots of the passion for, I, 41. saleabUity of, whether to be restricted, I, 45. advisability of restricting transfer, mortgage, Ac, of, I, 45, 46. as security for loans, how valued in the Landschaften, I, 49, 50. in the Nidhis of Madras, 11, 229. purchase of, how promoted in BaiSeisen Credit unions, I, 152. loans for the purchase of, not granted in Communal Banks of Alsace Lorraine, I, 156. power of Building societies to hold, I, 190. power of holding, restricted in the Savings Banks of America, I, 201. necessity to restrict societies to hold, I, 286, 326. revenue law of sale of, free of encumbrances, a stumbling block in the way of banks, I, 309, 310. sale of, without intervention of Court surrounded by lengthy formalities in Europe, I, 316. should be granted cautiously in India, I, 317. two methods of passing title to, or recording charges on, by registration ajid mere deeds, I, 371. Land banks definition of, I, 1, 7. lend only on mortgage, I, 1. do not meet the general wants of agriculturists, 1, 1, 15. may be State, Mutual or Joint Stock, I, 7, 8. lessons to be learnt from the study of, I, 7-9. State, success due to proximity, e.g., Switzerland, 1.7. 276 INDEX. Lttnd banks — cont. Special, object and deaoription of, I, 8. ot Italy, the establishment of, aided by special laws and privileges, I, 14. State enqniries for the establishment of, in Germany, 1,55. Analysis of European, I, 93-121. eharaoter of, I, 93-94. private (1) of borrowers, (2) of lenders, public, state, provincial or communal. origin or initiative — Government, patriotic or philan- thropio and private, I, 94. general principles of, I, 94. (1) mutuality for providing cheap credit. (2) joLut stock for high dividends. objeois of, 1, 94. oa/pital Subventions and debentures in the oldest forms, I, 95. foundation or ordinary, variable or fixed in the modern institutions, I, 95. reserve an obligatory element, I, 95. soxiroes of, and how invested, I, 95. Fvmis sources, of, I, 95, 96. Land mortgage delentures original form and subsequent development of, I, 96. how and when repaid, I, 96. rules regarding the issue of, J, 97. privileges attached to, I, 97. advantages of, I, 97, 98. Deposits a source of expense and danger, I, 98. Borrowed funds, I, 98. Banh notes a peculiarity of Scotch system, I, 99. not generally allowed elsewhere, I, 99. Beeurity of creditors ample and perfect, I, 99. Privileges various kinds of, granted, I, 99, 100. Bate of taxation, I, 100. Clientele who are, the large and medium holders, I, 100. Administration methods and organs of, chiefly under the supervi- sion of Government, I, 100-103. a striking feature of, compulsory gratuitous public service by members, I, 101. Audit and Control ' by special committee of control and supervision and their duties, I, 103. State intervention in all degrees, the most noticeable feature of, I, 103, 104. universal and a sine g«a non, I, 104. the several degrees and kinds of, I, 104-107. Uonopoly and privileges of procedure and finanet, 1, 107. Loans variety of, granted, I, 107, 108. privileges for the security of, I, 108, 109. repayment of, especially by amortisation, I, 109, 110. recovery of necessity for facility in, I, 110. privileges granted for the, 1, 110-112. general results not reached the small folk generally and why, I 13, 15, 30, 93, 112-117, 225. as regards, I, 112-119. (1) redemption of mortgages and debts. (2) improvement and development of agricul- ture. (3) the increase or decrease of rural indebted- ness. resumt of, I, 93, 119, 120. the feasibility of applying, system of Europe to Madras ryots, I, 228. nature of supervision in, I, 298. Statute of the Pomeranian mutual, II, 1-8. laws relating to, of France, II, 14-18. of Hungary, II, 24, 25. of Italy, U, 30, 36. of Switzerland, II, 38. rnles of business of, of Italy, II, 33-36. See " Eeal Credit." Land branches of the Savings Banks of Italy, I, 204, 208. Land Credit banks which grant, I, 95. law relating to societies for the grant of, in France^ II, 14-18. See ' Heal Credit.' Land Improvements. See ' Improvements.' Land Improvement associations or banks Continental and English and their value for India, 1, 5, 9. of Germany, origin and description of, I, 63-65. laws for the establishment and articles of, in Prussia, II, 41-45. law relating to, in France, II, 200. proposed law relating to the establishment of, I, 868, 369. Land Improvement loans. privileges of, I, 345. See ' Loans. ' Landlord rights of, over the stock and goods of tenants as affect- ing credit, I, 122, 123. necessity for the limitation of the rights of, to stock- of tenant, I, 129. Land Mortgage loans on, why avoided, I, 270. See ' Mortgage.' Land Mortgage Debentures. See ' Debentures.' Landschaften type of mutual land banks and the description of, I, 7. the establishment of, aided by special laws and privi- leges, 1, 14. solely for the relief of the nobles, I, 48, 55. history and description of, I, 48. modus operandi — long term mortgage loans and land mortgage debentures, I, 7, 49. formalities observed in granting loans, I, 49, 50. results of loans granted by, I, 50. funds, debentures, working capital, sinking and special- fund, I, 7, 51. methods of administration of, I, 51. ■ status and privileges of, I, 7, 52-54. supervision how provided for, I, 54. associations of borrowers, I, 55. different classes of, Old, New, Central and New Bran- denburg, I, 48, 56, 57. the suggestive models for the rest of Europe, I, 58. compared with Joint Stock Mortgage Banks, I, 59. compared with the Credit Foncier, I, 71. annexes of, for dealing in agricultural credit, I, 155, Landschaften, New distinguished from the old, I, 55. started for the relief of the non-noble holders, I, 55. history and general description of, I, 56. Landschaft, Central advantages of central, linked to local banks, I, 57. loans how granted in, I, 57. Statute of, II, 11. Landschaft, New Brandenburg description of, I, 57. Landschaft, Pomeranian methad of, in granting loans, I, 49. Statute of, 11, 1-6. Landschaft, East Prussian Statute of, II, 6-9. Landschaft, New West Prussian method of, in granting loans, I, 49. Statute of, II, 9-11. Landskulterrenten Banks of Germany, for land improvement only, I, 1. See ' Land Improvement Banks.' Large holders banks for, Central and Provincial Land Banks, I, 13. Law the functions of, in favouring the formation and' management of banks, I, 14, 31, 38. (1) by grant of privileges, fiscal, legal and executive. (2) by providing for considerable degree of supervi- sion, difficulties of banks arising from, I, 267, 374, 376. of societies in general of the West, II, 238-247. of agricultural credit of France, II, 46-49. of Italy, I, 130, 131. banking, of the United States, II, 172-178. of Boden Kredit Institut of Hungary, II, 24, 25. of Building Societies of England, I, 191 ; il, 137-145. of Communal Banks of Germany, I, 156. of Co-operative Societies of Germany, 1, 155 • H Sl-QA of Credit Foncier, TI, 23. y> > ° . ii, si »4. . of debentures of Austria and Hungary I, 75 • II 29 of Friendly Societies, II, 157. > > , . Homestead exemption, of America, II, 251-260, INDEX. 277 Law — cont. of Industrial and Provident Societies, II, 145-157. Labour, of the United States, II, 178-180. of land banks of Italy, I, 82. of Switzerland, I, 85. of France, II, 14-18. of land improvement of Germany, I, 64; II, 41-45. of land improvement associations of France, II, 200. of liquidation of debts of Prussia, I, 29. of loan offices of Alsace-Lorraine, II, 112-114. of loan societies of England, II, 167-169. of Monti Frumentarii as Opere Pie of Italv, II 180- 182. ^ of mortgage bank of Canton Berne, II, 38-40. of pledge of cattle of Switzerland, II, 111. of Positos of Spain, II, 182, 183. of professional associations of Prance, II, 191, 102. of public servants of Germany, I, 53. of real credit of Italy, II, 30-37. of registration, I, 30, 371. See " Registration." of Savings banks of Italy, I, 205 ; II, 209, 211. of Great Britain and Ireland, II, 201-204. of the United States, II, 204-208. of Prussia, II, 220. of usury of Europe, II, 247-249. to what extent to be modified, I, 30, 35. See "Statutes", "Act." Law of Societies for Madras must provide for each class of banking societies, I, 25. necessity for the amendment of, as regards mofussil societies, I, 273-276. (1) insufficiency of the Indian company law. (2) failure of chit societies and loan funds for want of proper supervision. (3) tendency to deviate from the principles of co. operation. (4) impossibility of establishing unions, reforms where necessary, (1) classes of societies to be provided for, I, 276, 277. (2) promotion and formation of societies, I, 277- 279. (3) article^ of association, I, 279. (4) capital, deposits and debentures, I, 280-284. (5) dividends, I, 284. (6) reserve, I, 284-286. (7) property, I, 286. (8) members, I, 286, 287. (9) management and administration, I, 287-289. (10) loans, I, 289. (11) audit, internal and external, I, 290, 291. (12) supervision, internal, external and State, I, 291-303. (13) privileges, financial, fiscal and legal, 1, 303-319. (14) settlement of disputes, I, 319-321. (15) usury law, I, 321-323. (16) homestead exemption, I, 323, 324. Le Credit Agrioole of France grant credit to agriculture otherwise than on mortgage, I, 13. nxethod of operations and the real causes of failure, I, 10,124-126. Legal expenses an applica.tion of credit, I, 35. . Legal proceedings in the Industrial and Provident societies, II, 155. Legislation : necessity of, for tbe introduction of new olasses of banks in Madras, I, 14, 25, 26. See " Law. " Lender security to, one of the conditions or postulates of credit, T, 35. means of, for recovery of dues, I, 36. association of, as compared with those of borrowers, I, 133, 134. in Madras chiefly the ryot and not the professional money- lender, I, 15. the several classes of, I, 230, 231. Les Paysans the passion for land, and its results, I, 41. Liability of members unlimited considered absolute in Eaiffeisen credit unions, 1, 12. in Schulze-Delitzsoh societies, I, 10, 137, 164, 181. special provisions of co-operative societies of, II, 91, 92. Ijimited how may be developed, I, 25, 277. in Italian popular banks, I, 11, 164, 181. II Liability — cont. of members — cont. Limited,— oont. co-operative societies of, special privileges of, II, 92, 93. Limited liability. See " Liability. " Litigation an application of credit, I, 232. Liquidation of debts not necessary as a preliminary to the establishment of banks, I, 15, 29, 30, 63. of banks provisions regarding, I, 341, 342. how effected in co-operative societies of Germanv. 11,88,89. in Sohulze-Delitzsch societies, II, 101. Liquidators rights and duties of, of the co-operative societies of Geimany, II, 89. Loans granted by Agricultural banks are petty and for short terms, I, 9. real credit, no state or central bank able to advance, to the peasantry, I, 9. See " Mortgage loans." paying off of usurious, a productive use of, I, 12. for current needs primarily required by the ryots of Madras, I, 15. for land improvements a secondary consideration with the ryots of Madras, I, 15. privileges of I, 26, 345. should be for long term, I, 109, 121, 142. repayment of, by periodical subscriptions, whether suitable to agricultural classes, I, 22. security or safety of, a condition of credit, I, 35, 37. means of recovery of, I, 36. items affecting the security of, I, 36. facility in obtaining and repaying of, I, 36. long term, can be granted only by banks and not by money-lenders, I, 37. ' only Swiss banks have succeeded in granting small, to small holders, I, 89. nature of, required by credit agricole, I, 122. necessity to fix and limit the amount of, to any one person, I, 289. to directors should be restricted, I, 289, 290. privileges in securing (a) priority of bank's claims, I, 308. (h) the purge, I, 308. (c) provisions for declaring loans binding on co- sharers, I, 309. (d) modifications of the revenue law of sale of land free of encumbrances, 1, 309. (e) alteration of Transfer of Property Act relating to the deterioration of mortgaged property, I, 310. privileges for the recovery of (1) judicial procedure, no change necessary, I, 311— 314. (2) registration equivalent to a decree of court, I 314, 315. (3) summary process, I, 315-317. recommendations regarding the duration, repayment and rate of interest of, I, 380, 381, 386, 387. the various classes of, and those recommended, I, 385— 387. registration statistics regarding, in Madras, I, 397-400. in Madras generally granted by the ryots and not by tbe piofes- sional money-lender, I, 15. nature of, mortgage, cash or in grain, I, 18. by ryots and professional men compared and distin- guished, I, 19. purpose of, generally for maintenance and cultivation expenses, I, 18, 233. method, size, repayment, rate, period and results of, I, 18, 233-237. want of control of the use of, I, 262. necessity for keeping control over the use of, I, 262. difficulties in matters of security of, I, 267. in agricultural associations purpose of, I, 13. granted by the discount of bills and in kind, I, IS 179, 180. in Agricultural Banks of Belgium, secured by special privileges, II, 49, 51. of Italy privileges granted to guarantee, II, 52-53. for agricultural improvements and changes and to association, conditions under whicb granted, IL S3, 54, 55, 56. 70 278 INDEX. Xoana — cont. in Agricultural Banks — cont. of Roumania how granted and recovered, II, 61, 64. of Mysore granted only to members, II, 77. limit, purpose and application for, II, 77. repayment and rate of interest on, II, 78. when rnoalled, II, 79. granted by Government, recovered as an arrear of land revenue, II, 79. of Segovia, how granted, II, 136, 137. in Banco Agricola of Spain on mortgage, crops, stocks, &c,, how granted and repaid, I, 183. for long term how granted, I, 183. size and the form of, I, 184. in Boden Kredit Institut of Hungary not subject to the injunction of judicial or revenue courts, II, 24. how granted and reoorered, II, 27. in Building societies of England the three modes of granting, I, 9, 190, 191 ; II, 144. (1) priority in order of time. (2) auction sale. (3) ballot or rather decision by lot. amount of, to any one member limited, I, 191. of the United States given at auction to shareholders at monthly meet- ings, I, 194 ; II, 174. in Cassa Loreggia granted only for three months in order to retain control over members, I, 176. in Casse Burali of Italy granted on the security of borrowers alone within two years up to a certain amount, I, 174. carefully considered and regulated and granted only if beneficial to borrowers, I, 176. period for which grantfcd, three months' bills peri- odically renewed and the advantages of, I, 174, 176. right of demanding repayment at any time, I, 176. for long term, covered by mortgage, sureties or pledge, I, 176. for short term on personal security, I, 176. ■purpose of, I, 177, 178. in charitable loan societies of Ireland, limit of, II, 169. in Communal banks of Alsace Lorraine how granted, I, 156. application for, must be accompanied by a declai'a- tion of the use, I, 156. when immediate repayment demanded, I, 156. in co-operative Rural banks of WoUemborg how granted, II, 129. See " Casse Eurali." in co-operative societies of America how granted and repaid, II, 177. in the Credit Foncier of France, how granted and repaid, I, 72 ; II, 20, 21. of Egypt, how granted, I, 91, 92. in Friendly societies of Enojland granted only to members and the size of, I, 186 • II 163. in the Funds of Madras classes of, and the interest charged, I, 268 269 270 271. granted in order of priority and after careful inquiry 1,269. on mortgage, why avoided, I, 270. amount of, overdue, I, 271. purpose of, I, 271. in the Hypothekarkasse of Canton Berne small, to landholders, a peculiarity of, I, 85. the method of granting and when recalled, I, 85 • 11, 38, 39. in Joint Stock banks limit of, to bo granted to members and directors I 336. repayment of, I, 336. for agricultural purposes without delivery of posses- sion, I, 336-337. term of, and provisions regarding .releases and re- ceipts, I, 337—338. for land improvement, privileges of, I, 345. in .Joint Stock Mortgage banks of Germany,' I, 59. in Land banks of Germany necessity to watch the object and expenditure of, I, 53. statistics regarding the size of, granted, I, 65-67. do not reach the small folk, I, 65. on what properties granted in Pomeranian II, 1. Loans — cont. in Land Banks — cont. of Austria. the methods of granting, I, 76, 77. of Itcdy for land improvement, not the object of the peasant, I, 79. how granted and repaid, I, 80. of France mode of granting, II, 15. privileges granted for safety and recovery of, n, 15, 16. of Europe variety of, especially for long term with amortiza- tion, I, 107, 108, 109. limit, duration and interest of, I, 108. privileges for the security of, purge and conditional mortgage deed, I, 108-109. method and condition of repayment of, I, 110. the vf hole cannot be demanded of a borrower at the same time, I, 110. necessity for facility in the recovery of, I, 110. privileges for the recovery of, I, 26, 110-112. long term, repayment of, by amortization, I, 108, 109. short term, how repayable, I, 112. in Land Improvement banks how to be granted, I, 368. repayment of, by equal annuities, I, 369. shall be a charge on the land and follow it, I, 369. of Germany grant, recovery and repayment of, I, 9, 64 ; II, 41, 42. in the Landschaften of Germany are for long periods and repayable by half-yearly instalments, I, 7. Old formalities observed in granting, I, 49. results of, granted by, I, 50. privilege of demanding instant repayment granted to, I, 54. privileges granted for the recovery of, I, 54. Neiv how granted and whether interest charged, I, 56. repayment of, how made and when demanded, I, 56. Central and New Brandenburg, how granted, I, 57. Portieranian, payment of interest on, II, 4. East Prussian, on what properties granted, II, 7. New West Prussian on what properties granted, II, 9. right of demanding repayment at six months' notice II, 10. in Lb Credit Agricole, I, 125. in Loan offices of lioumania, how granted, II, 59. in Loan societies of England to whom granted and how repaid and recovered, I, 192 ; II, 168. in Monti Frumentarii of Italy in grain or money, for cattle or implements granted, I, 195. in mortgage bank of Canton Vand, method of granting, I 87-11 40. of Canton Berne. See " Hypothekarkasse."' in the Nidhis of Madras nature of, simple, regular, temporary and small lot, inability of, to grant at any time for any amount for long term, I, 23. granted on mortgage or on personal security I 252; II, 222. •" ' securities for, I, 253 ; II, 222. method of repayment and ascertaining title, I 253 different classes of, and the method of allottinsr I 254 ; II, 223, 234, 235. ^' ' rate of interest on, I, 255. statistics of loan values, I, 256. duration and purpose of, I, 257. purpose for which required not oared for I 257 means of recovery of, I, 257. > > - use made of, I, 260. form of application for mortgage, II 229 in the People's bank of Belgium ' ' ""' " granted only to members, and for three months at most with prolongation, I, 181-182. rules regarding the grant of, I, 182 ; 11 136 m the Popular banks ' of Bussio, granted only for nine months with prolon. gation, I, 160. i"-"'""- of Italy granted only for productive purposes, I, 163 small, have preference over larc^e, I 164 :^i:iTi65;n,\^o,Ti^^ '°'' ^"-^^ ^- ^--*ed, size and the chief forms of, I, 167 168. INDKX. 279' lioans — cont. in the Positos of Spain how granted, repaid and recovered, I, 197, II, 18-t. in Kaiflfeisen Credit unions, II, 106. size of, very small, I, 12. granted only to taembers and always with an addi- tional guarantee, I, 147, 174. enquiry into and grant of, by directors, I, 148. granted for all terms, 1, 150. classes of, mortgage, personal and oaah credit, 1, 150. application for, how disposed of, I, 150. how and when repaid, I, 150. should be for some useful and productive purpose, I, 12, 150. duration of, chiefly long term, I, 12, 147, 150, 151. short term, with prolongation repaid by instalments, I, 150. long term, repaid by annuities, I, 150, 174. repayment and late of interest, I, 12, 151. necessity for punctuality in repayment of, I, 151. compared with those of Sehulze-Delitzsoh societies, I, 145. , compared with those of Casse Rurali, I, 174. in Eeal credit banks of Italy, how granted, II, 31. in savings banks of Italy, method of granting, I, 204. of Switterland, method of granting, I, 210. of England, prohibited to trustees and how granted, II, 205. in Schulze-DelitzBch societies granted only for productive purpoaea, I, 10, 11. classes of, limit, term, rate of interest, securities, methods of repayment and recovery of, I, 10, 11, 139-141 ; II, 100. for short term with prolongation, a characteristic of, I, 140, 143, 151. compai-ed with those of Kaiffeiseu credit unions, I, 145. in Swiss banks how granted, I, 89. granted only on the recommendation of communal council or village assembly, I, 99. in village banks method of granting and the several kinds of, I, 393, 394. Xoans Act Agriculturists, of India, I, 9. Iioans, Agricultural for what purposes and how granted in Luzzatti Popular banks, I, 166-169. See " Agricultural loans." Loan associations for the small needs of the poor or for the purchase of cattle, &o., I, 13. See " Loan societies." Loan Fund of Madras. See " Fund associations " and " Nidhis." Loan Fund Board of Charitable loan societies of Ireland, supervision exercised by, and |duties of, I, 301 ; II, 169. Loan offices of the Agricultural bank of Belgium, II, 49, 51. of Roumania, description of, II, 58-60.;| law for the establishment of Public," in Alsace Lor- raine, II, 112-114. Loans on honor granted by Popular bank of Padua, T, 173. ranted only for productive purjioses and to whom, in the Popular banks of Italy, T, 163, 173. not permitted in Schulze-Delitzscih societies 1, 141. Loans on trust or honor to whom given in Luzzatti Popular banks, 1, 165 ; II, 121, 126. Loan societies of Germany. (1) founded by Schulze-Delitzaoh, 1, 134-143. (2) founded by Eaiffeisen, I, 144-154. (3) other institutions, I, 154-157. of Italy adaptation of Eaiffeisen societies for rural classes, I, 174. due solely to the private initiative of Wollemborg, T, 174. history, organization and methods of, I, 174. compared with Kaiffeisen societies, 1, 174. loan operations of, carefully considered and regulated, I, 176. periods for which loans are granted, I, 176. sources of the funds of, I, 176.1 description of the working of, I, 176-177. moral and material effects of, I, 177. Loan societies — cont. of France. Agricultural associations, I, 179- of Oh'eat Sritam their importance for India, I, 185. characteristics of, I, 185. (1) chiefly of the mutual or co-operative type. (2) regulated by speoial laws. (3) granted certain privileges. (4) subject to considerable and increasing control not only in laws but by a speoial officer, the classes of, I, 185. (1) Friendly societies, I, 186. (2) Industrial and Provident societies, I, 187- (3) Building societies. Benefit and Incorporated, I,. 189. (4) Certified Loan societies, I, 192. distinct from one another and governed by distinct laws, 1, 186. effects of registration of, I, 186. laws relating to, II, 167-172. Certified of England object of, grant of loans to the industrious, 1, 192. may be benevolent, mutual and general, I, 192. rules of, to be submitted to the Registrar and hi» duties, 1, 192. operations in loans, I, 192. managed by trustees, 1, 192.< may receive deposits and issue debentures, I, 192. loans how paid or recovered in case of loss, 1, 192. exempted from stamp duty, I, 192. increasing in strength though decreasing in number,. I, 192. of Ireland are benevolent institutions and require Government authorization and supervision, I, 192. operations of, I, 193. supervision in, I, 301. law relating to, II, 169-172. of the United States law relating to, II, 172-176. of Madras. See " Nidhis " and " Funds." Local banks only can bring credit to the peasant, 1, 14, 154. not granted many privileges or subventions, I, 14. laws for the furtherance and good management of, when passed, 1, 14. advantages and disadvantages of, as compared with Central banks, I, 57.' Long-term loans. a, necessity of the peasant, I, 121. See " Loans." Losses how met in Sehulze-Delitzsoh societies, 1, 141. how made good in Communal banks, I, 156. Lottery repayment of land mortgage debentures by, in the- Cr^dit Foncier, II, 22. grant of loans by in Building Societies of England, I, 191. in ohit associations of Madras, I, 272. Lunatic member, power to deal with the property of, in Indus- trial and Provident societies, II, 150. Luzzatti Popular Banks adaptations of Schnlze-Delitzsch societies, I, 11, 162. founded by Luzzatti, 1, 11, 162. objects and character of, I, 163. autonomons local banks preferred to branches and agencies, I, 164. origin, due to private initiative of small local begin- nings, 1, 164, 169. principles of, limited liability and capitalization of honesty, I, 164. compared and distinguished from German societies, I, 11, 164. methods of administration of, 1, 164-165. operations of, I, 165 ; II, 119. causes of their growth, I, 166. results of, I, 166, 170. clientele,, largely urban, 1, 166. general statistics of, I, 167. shares, funds, loans, interest and profits of, I, 165, 168, 169. taxation heavy, I, 169. grant agricultural credit by issue of debentures, I, 169, 170. their relations with Savings banks, I,' 170. branches and agencies, their importance, work and- general methods, I, 170, 171. federation of, in groups, I, 172. compared with the Casse Enrali, I, 179. model articles and business rules of, II, 117-129. 280 INDEX. m Maintenance advance of grain by banks for, an application of credit, 1, 10, 12, 13, 35, 232. loans for, primirily required by ryots in Madras, 1, 15. Jlanagement necessity for legislative precautions owing to greed and fraud of directors and oflSoers, I, 287. in, the Agricultural associations of France, II, 193. in the Agricultural bank of Mysore, II, 75. in the Building societies, cheap, I, 9. in the Co-operative societies of I'oligny, II, 133. in the Funds of Madras, I, 268, 270. in the joint stock banks, I, 338-341. in the Nidhis of Madras, II, 236. in the Popular banks of Italy, II, 129-130. in the Popular bank of Lioge, II, 135. in Savings banks, I, 363-364. in Schulze-DeUtzsch societies, II, 95. See " Administration." duties of in Luzzatti Popular banks, I, 165. in the People's bank at Liege, paid, I, 182. in the co-operative banks of Italy, II, 124. Managing committee constitution and powers of, in the Nidhis of Madras, II, 226, 227. Manure loans for the purchase of, an application of credit, I, 13, 34, 232. purchase and sale of, how promoted in the Agricultural associations of France, II, 194, 195. -Market weekly, the value of, to the ryots in ascertaining prices, 1, 18. how to be utilized for obtaining fair price to prodr.ce, 1,231. Market associations of Madras, I, 273. Market days best adapted for receipts and disbursements, I, 172. Marriage loans for expense of, an application of credit, I, 232. Marwari the professional money-lender of Madras, I, 15. Medium holders banks for. Central and Provincial Land banks, 1, 13. Meetings ordinary and extraerdinar]) of the General Assembly of Co-operative banks of Italy, II, 122, 123. general. See " General Meetings." Members shares and deposits of, to a given amount shall not be attaoheable by any process of court, I, 26. power of Co-operative and Savings bank to deter- mine the succession of, up to a certain amount, I, 26., advancement of, the principal object of Co-operative banks, I, 34, 163. should be allowed frequent opportunities of inter- course with one another, I, 163. limitation of, a bank's best guarantee, I, 172. borrowing and non-borrowing, I, 263-264. risk of dealing with non- 1, 272.' withdrawal of, should be free but accompanied by co-equal liability, I, 286-287. rights of, to demand inspection of books of account, I, 291. in Agricultural associations proposed law regarding the withdrawal, rights and liabilities of, I, 367. duties and liabilities of France, II, 49, 192, 193. of Italy, n, 198. in Agricultural banks of Myscre, qualification, admission and votes of II, 75. removal, resignation and death of, II, 78. in Building societies of England. rights and liabilities of, I, 190 ; II, 138. rights of, less extensive than those of Friendly societies, I, 190. insufficiency of powers for the safety of, I, 191. Members— coji*. in Buildings Societies of England — cent. payment at death of, II, 140. in Casse Kurali of Italy qualifications, dismissal and withdrawal of, I, 175, 179. attendance of, enforced under pain of penalties, I, 178. in Co-operative societies of Germany, retirement, bankruptcy and responsi- bility of, II, 83, 87, 88, 90. of Belrjium, II, 134. of Italy representation, admission, withdrawal and ex- pulsion of, II, 117. of America powers of borrowing of, II, 174. qualifications of, II, 175. proposed law relating to qualifications and admission of, I, 354. I'egister of, I, 354. right of voting and transfer, I, 354. withdrawal, expulsion and decease of, I, 354,-355. in Industrial and Provident societies, rights and liabilities of, I, 188. under age are admitted, I, 188. disposal on death of the shares of, I, 188. power to deal with the property of insane or lunatic, 11, 150. power of nomination by, II, 150. in Land banks of Europe who are, I, 100. in the Landschaften of Germany, unlimited liability of, I, 7. rights and duties of, I, 7, 8, 56. obligation of, to perform services, I, 53. in the Nidhis of Madras. rights, duties and qualifications of, I, 245, 261, 268, 270 ; II, 221. fraudulent conduct on the part of, how punished, II, 226. in the People's bank of Liege rules regarding admission, expulsion, withdrawal'and liabilities of, I, 182. joint liability of, for all the engagements of the society, I, 182. the two classes of, founders and ordinary, and their rights and privileges, I, 182. rights of, to demand loans, 1, 182. rights and duties of, II, 135. in tlie Popular banks of Italy the rule of limited liability of, universally adopted, 1, 164. regulations for the admission of, strict, I, 164» largely urban, 1, 167. amount of credit to any one, fixed, I, 165. who are 1, 163, 179 ; II, 118, 125. the interests of, how guaranteed materially and morally, 1, 163. right of voting, I, 164. of Belgium, qualifications of, I, 181. in tho Kaiffeiseu credit unions. improvement of, bcth materially and morally, the object of, I, 148. rules regarding admission, dismissal, rights an liabilities of. I, 148 ; II, 102. investing and borrowing, distinguished, I, 153-154. in the Savings banks of Italy. elected by co-members, I, 205. rights and duties of, II, 209, 213. in Schulze Uelitzsoh societies ' unlimited liability of, enforced, I, 164. solidarity, qualifications, rights, liabilities, admission resignation and transfer of, I, 10, 137 ; 11, 98. ' can withdraw at will, with certain limitations, I 11 in Village banks ' should be elected, I, 382. admission, withdrawal, expulsion, rights and liabi- lities of, I, 382-384, 393. Membership essential condition of, in the People's bank of Liege, I, of the General Union of co-operative societies of Ger- many, II, 107, 108. Memorandum, of association of the Agricultural bank of Mvsore, II 74 of tho Nidhis of Madras, II, 221, 232. ' INDEX , 281 Middleman the methods of, in Madras and how cau be counter- acted, 1 , 18. , Buppressuin of, for the purchase and sale of goods, one of the objects of Agricultural assooiatious, I 219, 231. Hilou Savings banks origin, chief characteristics and description of, I, 207, 208. administration, absolutely gratnitous, I, 207. the land branch of and its operations, I, 208. operations of, and the Benevolent IPund, I, 208. Minister of Agriculture the supervising officer of banks in Germany and Italy and the duties of, I, 55, 62, 81, 205 ; II, 238, 239. Minor may be elected as members in Building societies, II 141. momberuhip of in Industrial and Provident societies, II, 151. in Friendly societies, II, 163. in Building and Co-operative societies of America, II, 173, 175. Mission banks in the Madras Presidency, II, 185. Money-lender the r%ime of, judged by the postulates of credit, I, 3,38. of Madras, the ryot and his importance, I, 15, 18, 31. advantages of banks over, I, 16, 34, 35, 3U, 37. sole source of credit in Madras, with the exception of the Kidhis, I, 17, 31. essential to the ryot but expensive, I, 19, 39, 43. entanglement of the borrower the interest of, I, 37. action;of, on credit, 1 , 42. demands of, besides the cash terms, 1 , 43. replaced by equally exacting banks in Switzerland, I, 24, 85. not a dominant factor in Madras, I, 231. methods of controlling, I, 24, 31, 322, 323, 370. Monopoly the nature of, granted to the land banks of Europe, I, 107. in land mortgage business whether granted to banks in Europe, I, 227. Monti Prumentarii of Italy as communal or local granaries, I, 10, 387. work compared with the Indian Takkavi, I, 10. attempt to convert, into Agricultural banks, I, 10. origin and growth of, I, 195. objects of, lending grain for seed, food, and loans for buying cattle and implements, I, 10, 195. necessity for a strong and capable supervision, I., 10, 195, 196. privilege of, priority of claims for dues, I, 196. their business relations with Popular and Savings banks, I, 196. Monte Pecuniarii branches of Monte Prumentarii for lending loans for buying cattle and implements, I, 195. Monte Pie or charitable foundations, the origin of Land banks of Italy, I, 94. Monts de Pidte the value of, for India, especially where savings are invested in jewellery, I, 5. their importance as institutions for advancing grain . and as pawn-broking establishments, 1, 10, 195. the chief features of, I., 195. of France character and adnpinistration of, I, 7, 197, 198. communal Savings banks, the transmuted forms of, I, 205. Mortgages in Madras, where prevalent, I, 18, 19, 44, 45, 234, 237-242. of land, limitations regarding, I. 45. conservator or registrar of, in Germany and the rights and duties of, I, 59. transactions in, by Sohulze-Delitzsch societies, I, 140. discharged by a mere endorsed receipt without re-oonveyanoe,I, 187, 188, 189, 190 ; II, 142, 151. a statement of, to be submitted by the Building socie- ties to the Eegistrar, I, 191. advances upon second, forbidden in Building socie- ties, I, 192. 11 Mortgages — cont. immense amount on, a noticeable feature of the Saviags banks of Switzerland, I, 210. loans on, why avoided in Nidhis, I, 270. deterioration of property under, as affecting security, I, 310. the nature of, accepted by the Credit Foncier of Prance, II, .20. loans upon, in the Agricultural bank of Segovia, II, 136. deposit of, with the Superintendent of the Banking societies of America, II, 243. Mortgage banks of Canton Vaud, description and the rules of business of, I, 87, 88 i II, 40, 41. of Oermany, compared with the Landschaften, I, 59, 60. of France, absorption of, in the Credit Poncier, 1, 70. of Berne, description of, and law relating to, I, 85 ;. II, 38-40. of Friboiirg, amortizes debt due to third parties, I, 87. Mortgage debentures of Austria, I, 75. See ' Debentures.' Mortgage indebtedness — see ' Indebtedness.' Mortgage loans much resorted to in Madras and their duration, Ac, I,. 18, 19, 44, 45, 234, 237-242. system of long-term, in the Landschaften and Credit Poncier, I, 49, 71. conditions of granting, I, 393. how granted in the Agricultural bank of Italy, II, 53-54, 56. Mortgaged property deterioration of, and its consequences, in the East Prussian Landschaft, II, 7. in the Credit Poncier, II, 21. subject to the inspection of Commissioners in the Sew West Prussian Laudsohaft, II, 10. owner of, may make extra payments in the Centril Landschaft, II, 13. improvements to, not to be undertaken without the consent of managing committee, II, 224. Municipal savings banks of Italy, I. 205. Mutual credit societies success of, depends on the character of members, I, 164. of Madras governed by a law inapplicable to their con- ditions, I, 188. of Europe, governed by a special law, I, 188. Mutual fund of Madras, I, 133. Mutual help or association power of, developed by Co-operative societies, I, 14. popular movements in, the result of individual efforts and not of authority, I, 14. Mutuality or co-operation, the common principle of the Popular banks, I, 10. Mutual land banks. types of, Landschaften and Boden Kredit Anstalt, I, 7. IT National bank, I, 134. Ifeuwied union, I, 152, 153, II, 107-109. New Landschaft : see ' Landschaft.' Newspaper Banks possessing, of their own, I, 11, 12. Nidhis grant all classes of credit, I, 2, 31. sole exception to the absence of banking organization, in Madras, I, 17, 31. a germ for popular banks, I, 17- necessity for a special law relating, I, 23,31, 188, 275. origin and history of, I, 7, 21, 22, 31, 185, 242, 244. objects of, I, 244. the four classes of, and their constitution, I, 244. principles of, limited and mutuality, I, 242-244. clientele of, I, 22, 245. methods of administration and finance, I, 246- 252. loans, the different classes of, and methods of allot- ment and recovery, I, 22, 252-258. results and advantages of, I, 259-261. defects of, I, 22, 31, 261-266. difficulties of, I, 267. description of three model, — (1) lending chiefly on mortgages, I, 268, 269. (2) dealing chiefly in personal credit, I, 270, 271- (3) established and worked by villagers, I, 271. 71 282 I VDEX. Vobles •ondition of, as regards credit, I, 6. relief of, the chief obiect of the old Landsohaften, I, 55. Kobles' Land bank of Russia deaoriptiou of, I, 83. risky investments and doubtful benefits of, 1, 83.. Nomination of heirs, rights of members to make — in Friendly societies, I, 187 ; 11, 162. in Industrial and Provident societies, 1. 188; 11,150. in Building societies, I, 190. Koie system a cause of success of Scotch banks in facilitating com- munication, 1, 184. results of, in Scotland, 1, 185. Xotice priority of banks' claims over all unregistered claims not made after, I, 26. to members or borrowers how served — in the Agricultural bank of Mysore, II, 79. in the Nidhig of Madras, II, 235, 236. Oflenees what acts constitute, in the Industrial and Frorident societies, II, 155. Officers representatives liable in case of death or bankruptcy of, I, 26. should not be made too permanent, I, 266 . in charge or receipt of money should give security and render proper accounts, I, 187, 189 ; II, 139, 140, 152-163. »ot allowed to receive any bonus in Building societies, II, Hi. •liould give previous notice of resignation in charita- ble Loan societies of Ireland, II, 171. duties and privileges of in Friendly and Building, &c., societies, I, 187, 188, 190, 191. in the Bast Prussian Landschaft, II, 8 in Co-operative societies of America, II, 174-176. Opere Pie of Italy. Land and Savings banks and the laws relating to, I, 81, 205 ; n, 180-182. Orchard planting of, one of the applications of credit, I, 34. Orders execution of in the Pomeranian Landschaft, II, 4. io the Bast Prussian Landschaft, II, 8. Organization more beneficial than Government interference, n, 190. Organized credit substitution of, for individual, a step in civilization, 1,3. need for, as opposed to individual, I, 3, 15, 34. advantages of, especially over individual credit, I, 34, 37. general resume of institutions for, in Europe I, 221-223. Ornaments manufacture and purchase of, an application of credit, I, 25, 232. Pass books of Savings banks proposed law regarding the issue, transfer, and examination of, T, 365. of Italy payable generally to bearer, I, 172. special category of, I, 205 ; II, 209, 210. loss, theft and objection to repayment, I, 205 : n, 217. of Austria, II, 218. Patrimony of the Savings banks of Italy, I, 204. Pawn-broking the two ways of, in the Savings banks of Italv I, 207. ' provisions of Indian law defective, I, ;il8, 319. Pawn-broking banks most useful as adjuncts to credit, I, 10. of Europe, Monti Fmmentarii, Poeitos and Monts de Pi^tg, I, 10, 195-198. Pawn-ticket advantage of, as «vidence of contract, I, 319. Payments bow made and appropriated in th* ITidhis of KadrMt, n, 224. Peasant difficulties of, removable not by cheap credit but by the enforcement of thrift, prudence and heed- fulness in borrowing, I, 16, 118, 119. history of the emancipation of, in Germany, I, 61. can obtain credit only from local banks, I, 161. necessity for the combination of, for the improve- ment of agiioulture, I, 220; n, 190. in Europe condition of, I, 5, 144. banks available, none except in Germany, I, 55, 134, 225. in Madras condition of, and the banks suited to them, I, 15. Peasants' associations of Germany, objects and description of, I, 221. Feasants' land bank of Russia the result of the Emancipation Act, I, 8 83. lends for the purchase of land by ex-serfs, chiefly through communes, 1, 83. statistics and results of, I, 84. recent decline of operations, I, 84. extensive reversion of lands to the bank for arrears, 1,84. Peasants' unions, I, 218, 220. Penal Interest on arrears, when to be reduced, I, 266. See " Interest." Penalties for negligence and disobedience should be provided fer by legislation, I, 303. how leviable and when to be imposed, I, 326, 396. for breach of rules in Co-operative societies of Germany, II, 93. in Building societies, U, 142. in Industrial and Provident societies, II, 155. in Friendly societies, II, 165. Pensions family, in the Nidhis of Madras, II, 286. People's banks as a safeguard of the abuse of cheap credit, I. 47. Period of loans must be for long term, I, 36, 37, 380 . See " Loans." Personal chattels Bills of sale of, of England, II, 65-71. Personal credit based on character, T, 35. development of, in France and Germany, I, 122. true form of agricultural credit, I, 265. Personal security. efficacy of, in Scliulze-Delitzsch societies and BaiSeisen credit unions, I, 141, 150. loans on, as provided for, in the specimen articles of village banks, I, 394. Pfandbrief a synonym for debentures. See " Debentures." Pledge of movables and cattle, without delivery of possessiom laws relating to, I, 317, 318 ; II, 114. in Swiss Banks, I, 162. in Monte de Piet6, 1, 13, 195, 198. in village banks, I, 393. Poligny association methods and results of, I, 179. Pomeranian Mutual Land Bank, statutes of, n, 1-6. Pooling ' the system of periodical, small sums in Madras I 21 241, 272. ' ' ' Popular banks deal chieily in personal credit, I, 7. variety of, in Europe, England and America, I 10 11, 133, ' ' leading principles of, co-operation, thrift, self and mutual help, I, 10, 17, 133. how assisted by savings banks, I, 13 ; result of individual efforts not of authority, I, 14. riipeoial laws when passed, I, 14 ; as a method of safeguarding the abuse, of cheats credit, I, 47. the only successful institutions for small rural credit 1, loo. distinguished from joint stock banks, I, 133, 134. effects of, on poor olasseB, I, 134. IKSBX. 283 Popnlar banks — lent. of Qermany (1) Sohulze.Delitzaoh sooieties, I, 134-143. (2) Eaiffeisen credit uuions, I, 144-154. (3) Mixed institutions or Eoleotio sooieties, I, 154. (4) Agricultural bank of Treves, I, 155. (6) institutions dealing with agricultural credit only as a secondary matter, I, 155-157. (o) Savings banks. (6) Landsohaften. (c) State and Communal banks. ■of Austria- Hungary with a limited liability, their number, I,. 157, 158. of Russia their growth and development, I, 158. leading features of, I, 159. clientele and the two types of, Stats and Private. I. 160. causes of decadence, I, 160. operations in loans compared with those of Schulze- Delitzsch societies, 1, 160. of Swilxerlani cattle societies of Thurgan, I, 161. joint atook and Savings banks take the place of, I, 161. of Italy based on the models of Sohulze-DeUtzsoh and Baiffe- isen sooieties, I, 162. origin and history of, I, 162. the two classes of, Luzzatti Popular banks and Wollemborg rural loan societies, I, 163-178. model articles and business rules of, II, 117-131 . •f France Agricultural associations with credit annexes, I, 179. origin, methods and results of, I, 179, 180. articles of, II, 132-134. •f Belgium general principles of, I, 181. results and advantages of, 1, 181. law relating to, I, 181-182. extracts from the articles of, II, 135. •f Spain developed gradually by practice and experience, and a precedent for Madras, I, 182. Banco Agricola and its description, 1, 182, 183. •f Oreat Britain not necessary for English farmers, I, 184. (1) Scotch banks, 1, 184-185. (2) Loan societies. the several classes and charaoteristios of (a) Friendly societies, I, 18-5-187. (6) Industrial and Provident societies, I, 187-189. (c) Building societies — Benefit and Incorpo- rated, I, 189-192. (d) <^ertified loan societies, •f the United States Building societies and the description of, 1, 193, 194. distinguished from Savings banks, I, 193. "Popular co-operative agricultural bank of Belgium and the articles of, II, 136. ' Positos the grain banks of Spain and their special value for India as granaries to store grain against famine years, I, 5, 10, 196, 387. •ompared with the Indian Takkavi, 1, 10. objects of, supply of soed grain and maintenance during crop season, I, 13. origin and development of, I, 196. attempt to convert, into agricultural banks, 1, 10, 196. (kdministration and management of, I, 197. loans in grain, how granted and recovered, I, 197. the importance and usefulness of, to cultivators, I, 198. law and rules relating to the management of, II, 182-184. the privilege of free, to banks, I, 26. Postal Savings banks the privilege of banks of opening accounts with, I, 26. Postulates of small rural credit, proximity to clients, I, 15. of credit demanded by (1) both lender and horlower— proximity, I, 35. (2) lender alone — security, I, 35. (3) borrower alone — facility and safety, I, 36. (4) particular classes of credit, I, 37. forms of credit satisfying, I, 37. Presidency town -why exempted from the report, I, 1. President of district, the supervising authority of banke ia Prussia, I, 39. of Raifteisen credit unions, I, 148. of the People's Bank of Liege, I, 182. of the Agricultural Banks of Mysore, II, 75, 76. Prestiti, suU'onore charitable loans to houest persons, I, 387. Prior debts relief from, how granted in banks, I, 16. Prior encumbrances difficulty of ascertaining, removed by the new form of indexes, I, 30. Priority of claims over all unregistered claims not made after du» notice, I, 26. in case of death or bankruptcy of trustees or officers of banks holding funds, I, 26. in case of loans granted for land improvement, I, 308. Privileges why granted to great central banks, I, 13. when granted to small local banks and credit societies, 1, 14. granted to banks in Europe,!!, 225,226. necessity or otherwise of the grant of, and to what banks may be granted, I, 303, 304. supervision, a corollary of, I, 304. aU banks in Europe are granted, except the Co-opera- tive loan societies of Germany, ordinary and special, to be granted to the different classes of banks, I, 342-345, 355-359, 366, 368. nature ot, financial, fiscal, legal and executive (1) f/nancial a.G.O. will suffice, I, 304. (2) fiscal registration fees, heavy at present and the proposed reduction, I, 26, 305. stamp duties, proposed alteration, I, 26, 305. income tax, exemption from, I, 26, 306. (3) legal registration of documents, 1, 26, 306. preferential lien of banks on the property of trus- tees, I, 306, 307. exemption of shares, debentures and deposits from attachment, I, 26, 307. transmission of shares and deposits by nomination and distribution of intestate estates, I, 307. in securing loans (a) priority of claims may be granted to land improvement banks only, I, 26, 308. (6) the Purge, not necessary in Madras ex- cept in certain cases, I, 26, 308, 309. (c) provisions for declaring loans binding on, co-sharers, limitations proposed, I, 309. (d) modification of revenue law of sale of land free from encumbrances, I, 309. (e) Transfer of Property Act, alterations pro- posed, I, 31C. for recovery of loans (a) procedurfe, whether to be privileged and facilities existing in Madras, I, 26, 311-314. (6) proposal to make registration equivalent to a decree of Court, I, 314, 315. (c) summary process, distraint and sale, I 315-317. (4) executive (a) use of Government treasuries for the deposit of strong boxes and funds, I, 26. (6) opening accounts with Postal Savings banks, 1,26. (c) free postage, I, 26. (d) subventions and guarantee, I, 27, 28, 377, 378. (e) Government supervision I, 26, 29, 296-303, 381. for the safety and recovery of loans in Agricultural banks of Belgium, II, 49, 51. of Italy, I, 130, 131 ; II., 52. of Roumania, II, 61, 62, 64. in the Credit Foncier, I, 71. in communal banks of Alsace Lorraine, I, 156. in Friendly societies of England, I, 187 ; II, 162. in Industrial and Provident sooieties, II, 149 150. in Land banks of Austria, I, 76. of Italy, 1, 80, 81. of Switzerland, I, 85. of Francp, II, 15. of Europe, various kinds of, I, 99, 107, 108, 110— 112. ;284 INDEX. PriTilegea — cont, in Land improvement banks of Germany, I, 64. in the Landschaften (1) gratuitous pnblio service, I, 53. (2) special procedure for recovery of dues, I, 54. (3) demand of instant repayment of loans in certain cases, I, 54. in Loan offices of Boumania, II, 59. rejected by Eaiffeisen credit unions and Schulze- Delitzsch societies, I, 147. in Savings banks of Austria, II, 219. Probate duty when levied in Industrial and Provident societies, II, 150. , Procedure privilege of, granted to Land Banks of Europe, I, 107. for the recovery of debts whether to be privileged or not, I, 311. facilities of, in Madras — the Tillage Courts, I, 311-314. Process coercive, result of, employed in the Credit Foncier, I, 73. summary : See ' Summary process.' , Produce advances in anticipation of the sale of, an application of credit, I, 34. Produce Brokers credit associations as, I, 181, 231. Professional Associations law authorizing, in France, II, 191, 192. Profits opposed to the co-operative idea and a source of danger, I, 11, 12, 251. must be subsidiary to the cheapening of credit, I, 251. how to be calculated and divided, I, 284, 329, 362, 395. Sources of in Casse Kurali of Italy, I, 176. in the Nidhis of Madras, chiefly from the unpunc- tnality of members, I, 251. how calculated and ascertained in Building societies of England, I, 191. in the Funds of Madras I, 269. in the Banking societies of America, II, 246, 247. how divided or utilized in the -Agricultural associations of Italy, II, 199. in the Agricultural bank of France, II, 48. of Mysore, II, 78. of Neuwied, II, 112. in the Banco- Agtioola of Spain, I, 183. in the Building societies of America, I, 194. in Oaase Rurali of Italy not distributed as dividends, I, 176. in communal banks, I, 156. in co-operative societies of Germany, II, 83. of Poligny, II, 134. of America, II, 175, 178, 180. in the Credit Foncier of Prance, I, 73 ; II, 22. of Egypt, I, 91. in the Funds of Madras, I, 269. in the Land Banks of Austria, not large, I, 76. of Italy, II., 36. in the Landschaften, 1 , 7. in loan offices of Boumania, II, 58. in mortgage bank of Canton Vand, I, 87. . in the Nidhis of Madras, I, 252 ; II, 225. pursuit of large, a, defect, I, 266. in Popular banks of Italy, I. 169 ; II, 122. of Belgium, I, 182. in Eaiffeisen credit unions go to the reserve I 12 147. in Savings banks of Italy, not divisible among mem- bers, I, 205-207 ; II, 215. in Soliulze-Uelitzsoh societies, large, I, II, 141 ■ u 100. ' ' in village banks, I, 388. JPromoters of societies, liabilities of I, 277, 278. Pro-notes loans granted on joint, in the Agi'ionlturftI bank of Mysore, II, 77. Property valuation of, in the Landschaften of Germany, I, 49, 50 ; II, 12. in the Credit Foncier of France, II, 21. deterioration of mortgaged, as affecting securitv, I.. 310. purchase of real, by the Co-operative societies of America, II, 175. • i duty of borrower to inform alienation or deteriora- tion of, in the Credit Foncier I, 73, deterioration of mortgaged and its consequences in the East Prussian Landschaften, II, 7. in the Credit Foncier, II, 21. what, may obtain loans in the Pomeranian Mutual Land Bank, II, I. in the East Prussian Landschaf t, II, 7. Provident societies. See 'Industrial and Provident. Societies.' Provincial Land bank of Moravia ; for large and medium holders, I, 13. sketch of, I, 77. Proximity a postulate of small rural credit and the first cause o£ the success of banks, I, 5, 14, 15, 31, 35, 116. forms of credit fulfilling the condition of, I, 35. Proxy Vote hy, allowed in mortgage bank of Canton Vand, I, 87. Eaiffeisen credit unions, only to female members I 148. ' " Credit Foncier of France, 11, 19. Agricultural bank of Mysore, II, 75. co-operative societies of Italy, II, 117. not allowed in Schulze-Dehtzsch societies, I, 138. Eaiffeisen credit tmions, I, 148. Luzzatti Popular banks, I, 164. Prudence development of habits of, the aim of Popular banks,. Public accounts the privilege of banks to open, with Postal savings - banks, I, 26. ® Pnblio reserve formation of should be enforced bv Government and the uses of, I, 28, 330. Publicity elaborate provisions for, through registration and' returns, 1, 155. of accounts in Luzzatti Popular banks enforced bv legislation, I, 169. ^ provisions of Indian law defective and afford no guarantee for correctness, I, 294. need for legislation for ensuring, I, 294, 295. conditions of, prescribed in Agricul'tnrai banks of" France, II, 49. Punctuality in repayment of loans rigidly maintained in Eaiffei- it° "^^,?''^ ^"'O'^^ ^id Casse Eurali, I, 150, 151 175, 177. ' not insisted on in the Nidhis, I, 261. Purge the method of ascertaining and getting rid of prior encumbrances, I, 26, 308, 345. a privilege granted to Land banks of Europe for security of loans, I, S, 72, 108, 109, 308. whether necessary for Madras, I, 308, 309. Q Quorum neces^s^ty to raise, to prevent undue control by a few, what constitutes in the Credit Foncier of France, II 19 in the .agricultural bank of Mysore 11 76 m Co-operative banks of Italy II 122 ' ' in the Nidhis of Madras, H, 227 ' R Eaiffeisen Credit Unions aim at the moral and not the material develor,me„<- of the rural classes, I, 12. "«veiopment founded by Eaiffeisen for rural classes, I 12 14* origin and history of, I, 12, 144 145 ' general results of, I, 145, 146. IWDEX , 285 Kaiffeisen Credit Unions^con^. prinoipleB of, self-help, solidaritT and thrift, I, 12, 15, 147. oompared with Schalze-Delitzaoh sooietiea, I, 147, 153, 154. general features of, absolntely looal and no dividend, I, 147. objects of, I, 148, 152. menibers of, rights and liabilities, I, 148. administration of, by Board of Directors, Connoil of sapervision, and General Assembly, I, 148. shares, subscription of, a qualification of memberahip, I, 149. reserve, not payable to members, I, 149. how reformed the poor classes, I, 150. funds, sources of, I, 150. savings banks, an usual adjunct of, 1, 150. Loans granted only for productive purpose, I, 150. size, duration and repayment of, I, 150-151 . necessity for punctuality in payment of, I, 1 51-152. articles of, I, 152 j II, 102-107. formation of general unions and groups for developing and protecting local societies, I, 152-153. the sii primary conditions of, I, 152. resume of, I, 153. compared with Coinmunal banks and Caase Burali of Italy, I, 157, 174. fiaw material purchase of, an object of credit, I, 232. Beal credit based on land and immovables, I, 35. to be aaed only for long term improvement loans seonred by mortgage, I, 35. its original form, the money-lender, I, 48. the growth and development of, I, 48. in Germany the three classes of institutions dealing in and their history and description, I, 48-64. state enquiries for the establishment of institutions for, I, 58. resum6 and results of, suitable only to large and medium holders, I, 65-68. in France State enquiries for the establishment of institutions for, I, 68-69. general history and description of Credit Foncier, I, 69-74. in Austria history and desOTiption of the four classes of institu- tions, I, 74-77. in Hungary, I, 77-78. in Italy its peculiar history and special importance for India, I, 78-81. State legislation for the promotion of, I, 82. object of, n, 30. law regarding, 11, 30-37. in S'leeden, I, 82. in Russia different classes of, and their special importinoe for India, I, 83-84. in Switzerland highly advanced, and the several classes of institu- tions dealing in, I, 85-88. peculiarity of, smallnesa and cheapness of loans, I, 89. in Boumania the special law governing, I, 89. in Belgium, Portugal, Spain, Denmark and Egypt, I, 89-92. resume of the European system of, and the banks granting, I, 13, 93, 95. See ' Land banks.' Keal credit loans no State or Central bank able to grant, to the pea- santry, I, 9. See ' Mortgage loans.' Keal property see ' Land.' -^Recommendations regarding (1) form of banks— village banks, I, 372-373. (2) removal of difBculties iu the way of banks, I, 373-376. (3) provision of capital, I, 376-378. (4) methods of administration, I, 379. (5) grant and repayment of loans, I, 380-381. (6) nature of supervision, I, 381. (7) audit, I, 381. lesumfi of, I, 381. II Recovery of loans privileges of, distraint, sale without intervention of Court, registration of bond, I, 26, 36, 110. advisability of granting privileges of, to individual money-lender, I, 36. means of, must be easy, quick and cheap, I, HO. costly in Madras, I, 236. difficulties of, due largely to unpunctuality of mem- bers and laxity oi administration, I, 267. procedure of, by banks whether to be privileged, I, 311. facilities of, available in Madras, village courts, I, 311-314. summary process of, I, 315-317. in the Cridit Foncier of France, special privileges for, I, 8, 72, 73. iu the Landschaften, privileges granted, I, 54. in Schulze-Delitzsch societies, no special means, I, 141. in the Nidhis of Madras, by coercive measures, I, 258. See ' Loans.' Begister of credit, to ascertain the amount of credit to be granted to members, I, 165 ; II, 129. maintained by the Agricultural banks of Mysore, II, 7S. Begistrar of Building societies the supervising authority of banks in England, I, 39 J II, 143. insufficiency of the powers of, for he safety of mem- bers, I, 191. the chief public functions of, X, 186. of Friendly societies duties and the chief nublio functions of, I, 300, 301 ; II, 159. of Joint Stock Companies of India has no power of supervision, I, 295. necessity for legislation regulating the duties of, 1, 295. of Loan societies of England, power of, 1, 192. Kegistration Latv of necessity for the development of, from one of mere assurance to one of title, 1, 26, 30. provide means for ascertaining prior encumbrances, 1,36. of title a desideratum if not an absolute necessity for Cen. tral banks, I, 36. want of, not felt by money-lender and looal banks, I, 30, 36, 371. the two systems of, and the advantages and dis- advantages, 1, 371. proposal to make, equivalent to a decree of Court, I, 26, 314^315. of societies effects of, a material help to good management and a check on dishonesty, &c., I, 186. provisions of law regarding, proposed, I, 297-298, 326. in Great Britain, voluntary but universal, on account of many privileges, I, 186 ; n, 147, 159. in Belgium of Agricultural banks, II, 50. of docv/ments fees for, I, 188, 305. desirability of reducing charges of I, 26, 306. Registration Act amendment of, I, 30. Reglements rules issued by Government and having the force of law, I, 274. , Rent payment of, an application of credit, I, 25, 232. loans for the payment of, primarily required by the ryots of Madras, I, 15. Rent charge banks of Qermaivy « a State bank for the emancipation of the peasant, 1 8, 61. history and description of, I, 61-62. restricted character and operations of, I, 62. their lesson for India, I, 62-63. Repayment of loans facilities in, I, 36-37. by petty instalments on the sinking fund principle- recommended for Madras, I, 380. 72 286 INDEX. Eepayment — cont. of loans —cont. in Building societies, convenient for artizans and not for farmers, I, 9. in Land banks of Enrops, I, 110. in the Nidhis of Madras, I, 253. in Sohulze- Delitzsch societies, in lump, I, 141. See ' Loans. ' Report object of, development of credit in an organized form on co-operative principles, I, 1, 2, 5, 17. its limitations and applications, I, 1-2. the central recommendation of, I, 17. summary of, I, 31-32. list of correspondents consulted for purpose of, I, 401-403. Reserve State subventions as, induce a tendency to recklessness, I, 27. should bo need as a guarantee capital, securing the deposits, debentures, &o., I, 27. formation of, optional in England and India, I, 284- 285. *n absolute necessity and compulsory throughout Europe and America and added annually by a share of the profits, I, 285. special need for making it compulsory and permanent in India, I, 25, 285-286. sources, limit, investment and non-divisibility of, I, 25, 286. proposed law regarding, I, 329-330. the two forms of, recommended, Insurance and Public, I, 378-379. in Agricultural associations of Italy, II, 199. in Boden Kredit Institute of Hungary, II, 28. in Oasse Eurali of Italy sources of, I, 176. the importance of, as a guarantee for credit and s safeguai'd against loss, I, 176. utilized for works of public utility, I, 176. in cattle Loan societies of Switzerland, II, 115. in charitable loan societies of Ireland and the uses of, II, 171. in Communal Banks, I, 156. in Co-operative societies of Poliguy, II, 134. of America, II, 178. in the Credit Fonoier of France, I, 72 ; U, 2J. -in the funds of Madras, want of, I, 268. in the Land banks an obligatory element and the source, employment and the various classes of, I, 95. of Austria, I, 75. of Italy, I, 79 ; II, 36. of Germany, formation of, I, 56. in the loan offices of Koumania, II, 58. in the Nidhis small and invested in small and short loans, I, 250 ; 11, 225-226. " necessity for a permanent, recouped by annual profits, I, 250, 266. In the People's bank at Liege sources of, and eventually divided among members, I, 181-182; II, 136. in the Popular banks of Italy sources, proportion to paid-up capital and how utilized, I, 11, 164, 165 ; U, 122. in Eaiffeisen credit unions, sources nf, and how utilized, I, 12, 149-150; II, 106. in Savings banks of Italy general and special, and their objects, I, 205, 206, 208. in Sohulze-Delitzsch societies sources and rules, I, 139 ; II, 99. in Tillage banks ' formation of, should be compulsory and the sources, I, 382, 395. Besignation of members and its consequences in the Agricultural bank of Mysore, II, 78. fieturns submitted by Building societies to Registrar, I, 191. prescribed in the Draft Bill, I, 363. prescribed in the Industrial and Provident societies, n, 148-149. of the Savings banks of America, II, 208. Bevenne loans for payment of, primarily required by the lyots of Madras, I, 15. payment of, an application of credit, I, 35. Revenue law of sale of land free of enenmbranoes a stumbling block in the way of banks, I, 309. advisability of modifying, in case of advances to- land improvement only, I, 309-310. Rotation directors and office-bearers should go out by, I, 266. Rural as defined in the Draft BiU, I, 325. Rural classes of Europe condition and oharaoteristios of, I, 5-6, 33. See ' Peasant ' and ' Ryot. ' Rural credit universal necessity for, and its cause, I, 3, 33. when abused, I, 2, 33, 34. conditions and functions of, I, 3, 35. division of, into Credit Foncier and Credit Agricole, I, 35, 121. proximity to clientele, a postulate of, I, 15, 37. Rural credit banks the several classes of, in Europe and th» nature of credit granted by, I, 2. Rural loan societies of Italy and the model articles of, I, 174-179 ; II, 129. See ' Casse Rurali.' Ryot of Madras correspond in status to the small folk of Europe, I, 15. poverty and indebtedness of, and means of relief, I, 4, 15, 44, 45, 118, 119, 237-242. nature of credit required by, I, 15, 121, 122. the condition and habits of, I, 15. forms of banks suitable to, I, 15. the chief money-lender in Madras and its importancs in the future of village banks, I, 15, 17, 18, 230. as clientele of banks compared with the small folk of Europe, I, 20. feasibility of applying land, agricultural or other banks of Europe to, of Madras, I, 228, 229. chit associations as indicating the power of association and mutual trust possessed by, I, 272. power of association by, unhampered and not nnknown in Madras, I, 873-374. s Safety of borrower a postulate of credit, I, 36, 37. promoted by banks especially of ths co-operativ* type, I, 37. Sale pojver of, whether, to be restricted, I, 45. exemption from, to a, limited extent a safeguard of cheap credit, I, 46. of land without intervention of court power of, may be granted to co-operative banks, I, 26, 36. surrounded by lengthy formalities in Europe, I, 316. should be gi'anted cautiously in India, I, 317. formalities observed and methods of procedure in the Land banks of Europe, I, 111 ; II, 16-18. revenue law of India regarding an item affecting security to lender, I, 36. a stumbling block in the way of banks, I, 309. advisability of modifying in case of advances to land improvement only, I, 309-310. Bill of. See ' Bill of Sale.' Sale certificate usury in, how combated by the Agrioiiltural Bank of Treves, I, 155. Sale-proceeds disposal of, in the Nidhis of Madras, II, 224. Sale system of granting loans in the building societies of England, Savings _ facilities for, should be provided for in every village. Savings banks classification of, public or private, with free or limited disposal of their funds, 1, 12, 156, 199. their methods of assisting credit, I, 12,13, 199. object of, encouragement of thrift and granting of credit as a means of investing funds, I, 13, 198, 199. special laws for the furtherance and good management of, when passed, I, 14. necessity for, but ill suited to grant continuous nett-r oredit, I, 16. ' INDEX. 287 :Savinga banks — cont, as a methoQ of safegaarding the abuse of cheap credit, 1,47. as a section of Schalze-Delitzsch and RaiSeisen credit unions, I, 141, 150. distinguished from ordinary banks, I, 398-199. general principles of, I, 199. of minor use in an agricultural country, I, 199. of Prussia regime of, peculiar, I, 199. gaaranteed and managed by local authorities, I, 199. statistics regarding the number, deposit accounts and modes of investment of, I, 199-301. foundation and administration of, by communal councils, I, 201-202. loans on pledge and lending of funds to other banks, I, 202. rules regarding the pass books of, I, 202. of Merzig description of, I, 202. as branches of Popular banks or Loan societies, 1, 202-203. laws relnting to, II, 220. of Aristria similar to those of Germany, I, 203. model articles of, II, 217-220. of Italy origin and the classes of, I, 203, 205, 206. operations of, in agricultural credit, I, 203-204. foundation, administration, funds, supervision and audit, I, 168, 170, 205-207. law relating to, II, 209-210. Grovernment rules for the guidance of, II, 211-212, articles of, II, 213-217. of Milan. See ' Milan Savings Banks.' of Switzerland nature of, I, 89, 161, 208. the fire classes of, and their liabilities and assets, 1, 209-210. deposits how attracted, I, 211. investments very minute, I, 211. the moral of, I, 211. of Taud, a state institution and description of, I, 211. of Moutiers and Ardeshim, description of, I, 161, 211-212. of France must invest their funds in Government paper, I, 212. the three classes of, I, 212, administration and supervision of, I, 212-213. of Great Britain the three classes of, I, 213, 214. laws relating to, II, 201-201. of the United States distinguished from Co-operative banks, I, 193. nature of, chiefly deposit and credit institutions, I, 215. statistics and modes of investment of funds, I, 215.' nature of supervision exercised, I, 216. banldng laws and statutes relating to, II, 204-208. of Denmarli nature of state supervision, I, 217. general summary and the chief features of, I, 217- supervision exercised in, I, 300-301. proposed law relating to, I, 359-366. ^Savings deposits in Sohulze-Delitzsoh societies, II, 100. rules regarding, in Luzzatti Popular banks, II, 128. ■Schulze-Delitzsch societies founded by the individual efforts of Sohulze-Dehtzsch, I, 10, 134-135. general history of, I, 10, 11, 135. principles of, self-help, limited area of operations and unlimited liability of members, I, 10, 11, 136-137. methods of, I, 137. formation of, by drawing up statutes, registration and number of members required, I, 137. clientele or members, admission, resignation, transfer, qualifications, rights and liabilities of, I, 10, 11, 137- 138.' . _, administration, autonomous and democratic, and organs of, I, 138. audit, how provided for and by whom, I, 11, 138, 139. funds, share capital, reserve and deposits, I, 10, 139. debentures, not issued, I, 139. loans, classes of, size, term, rate of interest, security, repayment and recovery of, I, 10, 11, 139-141. profits and dividends, very high, I, 11, 141. •articles of, I, 141, II, 95-102. savings banks, a section of, I, 141-142. unions, classes and object, I, 10, 142. -^Government intervention very little and when neces- sary, I, 142. irelatiou to agriculture, I, 142, 143. Schulze-Delitzsch societies — cont. started chiefly for urban classes, I, 14Z . defects and general results of I, 11, 143. how reformed the poor classes, 1, 150. compared with Kaiffeisen societies, I, 152-153. Scotch banks not agricultural banks in the ordinary sense, I, 184. twofold development of, 1, 184. causes of success of, I, 184-18S. (1) power of attracting deposits ; (2) issue of notes ; (3) cash credit j (4) thrifty and prudent characteristics of th» people, penetrate into villages and within everybody's reach, I, 185. how branches are established without loss, I, 185. application to Madras considered, I, 185. Secretary, undue powers of, can be controlled only by external supervision, I, 261, 266. of the Nidhis, powers of, considerable, I, 249, 270; II, 227. of the Building societies and his duties, II, 141. Security of lender. a postulate of credit, I, 35. elements of, I, 35-36. the nature of, required in Schulze-Delitzsch societies — personal credit, 1, 141. in Building societies of the United States-real estate, I, 193-194 ; II, 175. defective modes of valuing, in Building societies of England, I, 191. difficulties in the matter of, how removable, I, 267. deterioration of mortgaged property by mortgagor as affecting, I, 310. ample and perfect in Land banks of Europe, I, 99. insufficient in building Societies of England, I, 191. available in the Nidhis, I, 253. rules concerning the cancellation of, in co-operativ* banks of Italy, II, 125. examination and exchange of, in the societies of America, II, 243-244. Personal. See ' Personal Security.' Seed advance of grain by banks for, I, 10. purchase of, one of the applications of credit, I, 34, 232. supply of, by Positos of Spain, I, 13, 196-198. Select committee function and duties of, in the Landschaften, I, 51. Self-help the motto of Schulze-Belitzgoh societies, I, 11, 135, 136, 154. a principle of Raiffeisen credit unions, I, 147, 154. the basis of Popular banks, I, 163. Servizio di cassa undertaking of collections and payments on behalf of members without charge, I, 166 ; II, 121. Share capital banks which have no Building societies of England, I, 9. Landschaften of Germany, I, 56. Agricultural bank of Mysore, II, 75. of the Credit Poncier, subscribed by shareholders, I, 8. in Joint Stock companies should be fully subscribed and partly paid up, I, 328. what portion to be invested, I, 328. the minimum of, and the effects of the loss of, I, 328-329. in Raiffeisen credit unions considered useless and mischievous, I, 12, 150. in Savings banks of Italy when returned to shareholders, I, 203. in Schulze-Delitzsch societies a source of fund and an absolute necessity, 1, 139, 149. See ' oaptial ' and ' Shares.' Share Holder ■ advisability of limiting the interest of, in shares, I, 280-281. in the. Agricultural central credit bank at Nenwied who are, II, 111. in the Building societies of Englamd power and process of borrowing by I 193. of America, and their liabilities, II, 173. in the Co-operative credit society of Poligny, II, 133. in the Nidhis of Madras, II, 234. ^88 INDEX. Shares necessity forj, the exemption cf, from attachment up to a certain amonnt, I, 26. -objects of, as a means of investment and of obtaining and paying off loans, I, 249-250. advisability of limiting the interest of members in, I, 280-281. directors should hold a certain number of inalie nable, I, 288. exemption of, from attachment in America, I, 307. provision for transmission of, I, 307- proposed law regarding the value, limit, Ac, of, I, 354, 361. should be paid in full or in part, I, 382, 391. founders. See ' Founders' shares ' in Agricultural associations of Italv, II, 198-199. of Belgium, I, 221. in Agricultural central credit bank of Nenwied, II, 110. in Banco Agricola of Spain the four series of, and how payable, I, IS.*?, in Benefit Building societies, value and how payable, I, 189. in Building societies of England are either modes of thrift and investment or means of repaying loans, I, 9. the source of fund, 1, 190. may be held jointly, II, 141. of America the value of, and when matured, I, 193-194. in Central banks, I, 152. in Co-operative societies of Germany not returned and the reduction of the value of, how far permitted, II, 83-84. of PoUgny, II, 132. of America, withdrawal, payment, transfer and ex- emption of, II, 174, 175, 176, 180. in the Credit Foncier of France, II, 19. in the Landschaften, nil I, 7. in the Nidhis, II, 221, 233. compared with those of Joint Stock companies, I, 263. in Popular banks of Italy, I, 168 ; II, 119, 126. limited, inalienable and compulsory, I, 164, 168. in People's bank of Liege, limited and inalienable, I, 181-182. in RaifEeisen credit unions not essential, I, 149 ; 11, 106. small and cannot be transferred or pledged, I, 12, 149 150. in Saving banks of Italy not transferable except to heirs in case of death, I 205. b<>ar no dividend or interest and cannot be with- drawn, I, 205. in Sohnlze -Delitzsch societies considered a necessity as improving thrift, I, 10, 137, 139. value of, I, 139 ; II, 99. Shopkeepers admitted in Saifieisen and WoUemborg banks, I, 1. as lenders in Madras and their transactions in loans I, 18. Short loans by bills or note of hand, cash credit and bill of sale I, 122. See ' Loans.' Short-term loans how repayable in Laud banks of Europe, I, 112. with prolongation the characteristic of Schube-De- litzach societies, I, 140. when and how repayable in Raiffeisen credit unions I, 150. Sindaci auditors of the Savings banks of Italy and the duties of, I, 206. committee of control in Co-operative banks of Italv n, 124. ^' Sinking fund means of repayment of long-term loans bv fixed annuities, I, 109. the uses and applications of, in the Landschaften of Germany, I, 51, 57 ; II, 10, 13. Small Cause Courts privileges of, I, 76. Small folk privileges and subventions not enabled Central banks to- grant credit to, 1, 13. ryots of Madras correspond in status to, of Europe, I,. 15. banks which grant credit to, in Europe and their com- mon feature, I, 13, 14, 15, 89. why Land banks prevented from lending to, I, 15, 30. Society agricole re-established ,as agricnltural associations with credit annexes, I, 13. Societies promotion and formation of, I, 277-279. law of, in general, II, 238-241. Solidarity of members essential in Schulze-Delitzsch and Baiffeisen socie- ties, I, 10, 137, 147. a fundamental principle of Casse Burali, the advan- tages and results of, I, 175. not universal in the Popular bank of Belgium, 1, 181 . Solvency of borrowers frequently examined in Baiffeisen credit unions, I, 151. Sowcar. See ' Money lender. ' Special laws for the furtherance and good management of small local banks or credit societies when passed, I, 14. Stamp right of vending, to members by banks, I, 396. Stamp Act Amendment of, I, 30. Stamp Duties on documents of ban^s in Europe, I, 305. proposals for the reduction of, in India, I, 26, 300. banks exempted from Land banks of Europe, I, 99. Friendly, Building and certified Loan societies of England, I, 187, 189, 190, 192 ; U, 141, 162, 168, 169. Savings banks of Italy, I, 203. Agricultural bank of Belgium, II, 60. banks not exempted from Industrial and Provident societies of England, I, 187. State function of, in the matter of rural credit, I, 24, 33. province of, in credit defined, I, 38. the intervention of, in Land banks of Europe universal and sine q"A non, I, 103. State advances for the immediate needs of the cultivation season I 10. ' ' See ' Subventions. ' State arrears sale of land for, free of all encumbrances, an item affect- ing security to lender, I, 36. State banks not suited to small folk, I, 7, 9, 13. the noticeable feature of, and the secret of, their suc- cess, I, 7, 9, 31, 89, 210. introduction of, impossible and inadvisable, I, 23 372. of Germany, origin and description of, (1) Rent charge banks, I, 61-62 ; (2) Land Improvement banks, I, 63-64 • (3) Other banks, I, 67-68. of Austria, I, 77. of Switzerland (1) Hypothekarkasse of Canton Berne, I 85 ■ (2) Mortgage bank of Canton Vaud, I, 87 ■ ' (3) Mortgage bank of Friburg, I, 88. of Russia, the four classes of, I, 83, 94. State Funds. See ' Subventions.' State Guarantee ^°fnndsT*2r ^'"''^ °^ subvention not requiring State- dangerous' if covers the whole of the bank's transac- must be confined to the amount of interest only and to- cease upon liquidation, I, 28, 378. INDEX. 289 state Guarantee — cont. losses on account of, how to be recouped and guarded I, 28, 378. to what banks given in Austria, I, 75. nature of, in the Land banks of Europe, I, 105. Btate intervention in Land bauks of Europe universal and a sine qu& nnn, I, 103. the several degrees and kinds of, I, 104i-107. in Rchulze-Delitzsch societies, I, 136. in Savings banks of Italy, I, 203. iSee ' Government Intervention.' State subventions. See ' SubventioUs.' State Supervision most common in Europe and very necessary for the safety of the public, I, 296, 381. Italian rules of, for trading companies, I, 296-297. ontlinns of the more important modes of, in Earope, I, 297-302. proposed supervision by Government officials and their rights, duties and penalties for neglect of rules, I, 302-303, 381. in the Mouti Frumentarii of Italy, II, 182. See ' Supervision.' Statute of the Pomeranian mutual Land bank, 11, 1-6. of the East Prussian Landschaf t, II, 6-9. of the New West Prussian Landschaft, II, 9-11. of the Central Landschaft, II, 11-14. of the Savings banks of the United States, n, 207- 208. Stock loans for the purchase of primarily required by the ryots in Madras, I, 15. one of the applications of credit, I, 34. in the credit annexes of Agricultural associations, I, 13. Stock vote encourages monopoly of control, I, 266. Subscriber fraudulent conduct of, how punished in the nidhis, II, 226. Subscriptions Montkly the source of capital in Building societies, I, 9. in the Nidhis, unsuitable to agriculturists, I, 264 ; n, 221. Subventions forms of State (1) small advances for first working expenses, I, 26 ; (2) loans of considerable sums at favourable rates of interest or without interest, I, 27-1 large State, inadvisable and objectionable, I, 27 moderate and temporary for initial expenses, not only permissible, but desirable, I, 27, 28, 377, 392. conditions under which granted and secured, I, 28, 29, 348-349, 362, 377-378. for what purpose granted in Europe, I, 13, 27, 28. by Government, connote supervision, I, 28. occasionally received by German societies, not at all in Italy, I, 174. to Land banks of Europe and the use made of them, I, 105. to cattle societies, I, 162. to Popular banks of Austria-Hungary for initial work- ing expenses, I, 158. Succession power of determining, of members and depositors in Co-operative societies and Savings banks, I, 26. See ' Nomination." Succession duties a, cause of indebtedness in Europe, I, 39. Sndder Court fund the first Nidhi started in Madras by officials, I, 242. Suit instituted by the funds of Madras, I, 271. Summary process for the recovery of dues (1) distraint of movables, necessity or otherwise of, I, 315, 316. (2) sale of land surrounded by lengthy formalities in Europe, I, 316. should be granted cautiously in India, I, 317. Superintendent of b^nke in America, duties and powers of, II, 242-247. Supervision internal, by members, committee of supervision and inspeotors, 1, 291-294. external (1) non-official by unions, I, 295. (2) olfioial, by registration or by special officers, I, 296-303. by Government, universal and a sine qui non in the Land banks of Europe, I, 8, 29, 103-104, 105-107, 296. committee of, necessity of, to control and audit the work of the society in general and that of the direc- tors in particular, I, 25, 289. in agiicultural associations of Italy, by committee, II, 199. in the Agricultural bank of Italy, by Government, II, 57. in the Agricultural central credit bank at Nenwied by committee, II, 111. in the Bodea Kredit Institute of Hungary by com- mittee, II, 25. in the Co-operative societies of Germany , by com- mittee, II, 85. in the Credit Foncier of France, how maintained, I, 8, 72. in the Friendly societies of England, by Begistrar, I, 297, 300. in the Land banks of A ustria state, I, 76. of Italy, largely Government, I, 81 ; It, 36, 37. of Europe, nature of, I, 298. in the Land improvement banks of Germany, I, 64. in the Landsohaften of Germany state, I, 54, 55, 57. in the loan societies of Ireland by the Iioan fund board, I,«301. in the Monti Frumentarii of Italy, State, II, 182. in the Mortgage bank of Switzerland, by committe*, I, 88 i 11, 40. in the Nidhis of Madras nature of, and the necessity for Government, I, 259, 270. in the Popular banks of Italy, by committee, 11, 129. in Baiffeisen credit unions, by committee, II, 104. in Savings banks of Itcdu, I, 205 ; II, 210. of the United States, Government,1, 216-217, 301-308. of Denmark Government, I, 217. of Avslria, II, 220. of England, I, 301. in Schulze-Delitzsoh societies, by committee, II, 96-97. in village banks, by committee, constitution and dntiet of, I, 383, 391. Supervisors of the Credit Foncier and the duties of, II, 19. Suretyship the keystone of organization in Sohulze-Delitzsch and Raiffeisen credit unions, I, 141, 150. condition of, in Baiffeisen credit unions, I, 150. Surplus funds may be paid into Government treasuries, I, 396. Swiss banks character and peculiarities of, I, 89. compared with Popular banks and credit unions, I, 132. Syndic Legal advisers consulted when loans are granted in the Landsohaften, I, 49, 51. Syndical associations law relating to, of France, 11, 200. Svndicats agricoles "of France, I, 219-220. See ' Agricultural associations.' Takkavi State advances for seed or maintenance, I, 10. granted in Earope by communal institutions, I, 195. development of, in spite of being discouraged and sup- pressed, I, 10, 195. Taxation rate of in the Land banks of Europe, I, 100. in the Land banks of Austria and Italy, items of, 1, 76,81. in Luzzatti Popular banks, I, 169. Taxes payment of, one of the uses of credit ia the Fopnhu' bank of Lodi, I, 173. 73 290 INDEX. Tenant right of landlord over the goods and stock of, as affect- ing credit, I, 122, 123. Term of loans in Schnlze-Delitzsch societies, 1, 140. should be in harmony with the reproduction of capital lent, I, 142. See ' Loans.' Thrift the power of, and the institutions which develope, I, 4, 9, 13, 16. must precede and be made a condition of credit, I, 14, 16. facilities for, should be provided for in Madras, I, 16. the basis of credit both in Sohulze-Uelitzsch and Raif- feisen credit unions, I, 10, 139, 147, 153. development of the habits of, the aim of Popular and Savings banks, I, 17, 163, 199. fostered by dividends and profits in Schnlze-Delitzsch societies, 1, 153. promoted for moral and social results in Baiffeisen credit unions, I, 154. Till money. amount of, in Scotch banks, 1, 184. Title ease and certainty of ascertaining, an element of security to lender, I, 36. an insuperable difficulty of Central banks, I, 30, 36. method of ascertaining, in Madras, I, 253. two methods of passing, in land, by registration or by mere deeds, I, 371. registry of a desideratum of the registration systeni of Madras, I, 26, 30, 36. want of, not felt by money-lenders and purely local societies, I, 30, 36. Title-deeds in the Nidhis of Madras, where secured, II, 226. Traders admitted in 3chuIze-DeIitzsch societies, I, 10. Transfer of land, limitations regarding, I, 45. of shares, in Co-operative societies of America, II, 180. of interest, in case of death of members in the nidhis of Madras, II, 225. Transfer of Property Act proposed amendment of, I, 30, 310. Treasurer duties of, in the People's bank at Liege, I, 182. in the nidhis of Madras, II, 227. Treasuries the use of, by the Credit Foncier, I, 71. Trustees preferential lien of banks to the property of, in case of death, I, 26, 306-307. transfer of stock in the name of, how made after death in Friendly societies, I, 187 ; II, 163. in Industrial and Provident societies, I, 188 ; II, 151. in Building societies, I, 190. ■duties and liabilities of in Friendly societies, I, 187. in Industrial and Provident societies, I, 188. in the Nidhis of Madras, I, 248, 270 ; II, 227. in the Savings banks, I, 360-361 ; II, 202, 205, 206. Trustee Savings banks of England nature and the number of, I, 213. origin, history and development of, I, 213. want of supervision and its results, I, 213-214, 301. necessity for stringent supervision, I, 215. laws governing, I, 213-214. Trust loans the grant of, as provided for a Village bank, I, 394. See ' Loans on Trust.' Unions isolation and want of, in the Nidhis of Madras, I, 284. general meeting to decide whether to be a member of I, 396. of Co-operative societies of Germany powers of supervision and inspection by, I, 295-296. articles of, II, 86-87, 107. of BaifFeisen credit societies. Unions — cont. of Raiffeisen credit societies— ctmt. for mutual support and supervision, I, 152. duties of, I, 152. of Schnlze-Delitzsch societies local or central for strengthening one another's operations, I, 142. classes and objects of, I, 142. Unlimited liability. See ' Liability.' Urban credit not the object oi' the report, I, 1. Usurer action of, on indebtedness of the peasant, I, 42. demands of, besides the cash terms, I, 43. replaced by equally exacting banks in Switzerland, 1, 85. legal precautions to control, I, 322-323. Usnre sur le betail a form of cattle usury, I, 144. Usury in cattle, I, 42, 162. evils of, in Europe, compared with Madras, I', 42-44, 141-145, 156, 178. remedy for, I, 47. the result of greed and monopoly and not of insecurity and poverty, I, 178. as affected by mutual credit associations, I, 178. in Madras not so severe as is supposed, I, 237. necessity for laws against, I, 321-323. changes in the law of, not j ropoaed and why, I, 369. Usury law to what extent may be modified, I, 24, 30, 35, 321-322. of Europe, II, 247-249. Valuation of property difficulty and cost of, prevents Land banks from lending to small folk, I, 30. charges of, I, 108. how made in the Landschaften when granting loans, I, 49-50 ; II, 12. in the Credit Foncier, II, 21. in the nidhia of Madras, I, 269 ; 11, 222. Valuers public, the right of Friendly societies to call in the service of, I, 187. See ' Appraisers.' Viehwucher or cattle usury, I, 39. Village association not an unknown idea among the ryots of Madras, I, 374. See ' Co-operation.' Village bank desideratum of rural classes, I, 16. of the oo-operative type, the central recommend- ation of the report, I, 17, 372-373. the advantages of, and the forms they may assume I 372-373. the ideal of, and how it should be promoted and worked I, 27, 30, 382-396. principles of, co-operative or joint stock, I, 17, 382. objects should be distinctly stated, I, 382. area of operations to be prescribed, I, 382. capital to consist of small shares, I, 382. shares to be paid in full or in part according to the nature of the bank, I, 382. reserve, compulsory and the sources of, I, 382. members to be elected and the rights and liabilities of I, 382-383. general meeting, the constitution of, and the system of voting to be adopted, I, 383. directors, qualifications, rights and duties of, I, 383. committee of supervision, its constitution and dutv I 383. ' other committees, I, 383. accounts, forms of, and audit, I, 383-384. office business of, where to be conducted, I, 384. examination of affairs, distinguished from audit of ac- counts, I, 384. necessity for outside supervision, I, 384. funds, sources of, I, 384-385. necessity for a savings branch, I, 385. loans, the various classes of, and those recommended I, 385—387. granaries, the special value of, I, 387. profits, how to be utilized, I, 388. specimen articles of, I, 388-396. INDEX 291 Village councils. See ' Communal Councils.' Village courts the use of, iu recovering small debts, I, 36. arbitration by, between a member and his creditors, I, 30. jurisdiction, work and advantages of, I, 311-313. as modified by the new Act of 1889, I, 312. necessity for the development of, I, 312. Village granaries the advantages of, and tlie purpose they servo, I, 387. See " Granaries," Vine dressers articles of the association of, of France, II, 196-197. Vorschussvereiue Schulze-Delitzsch societies of Germany, I, 10. See ' Schulze-Delitzsch societies.' Vote stock system of, causes monopoly of control, I, 266. in Agricultural bank of Mysore, II, 76. in Co-operative societies of Italy, by proxy, II, 117. of America, II, 174. in the Nidhis, single or stock, I, 246. in the Popular banks of Italy, single, I, 164. Vote — cont. in RaifEeisen credit unions, I, 148. in Schulze-Delitzsch societies, I, 138. to be adopted in Village banks, I, 383. W Weekly markets advantages of, to ryots, I, 19. Withdrawals rules relating to in Schulze-Delitzsch societies, I, 142. in the Nidhia of Madras, II, 225.j WoUemborg banks open to both industrial and cultivating classes, I, 1. model articles of, II, 129. See ' Casse Eurali.' Working Capital in the Landschaften, sources and uses of, I, 51, 56. See ' Capital.' Working men law relating to Co-operative societies of, n, 178-180. Working men's clubs, of England, registered under the Friendly Societies Act and enjoy the same privileges, I, 186. EEPOET REGAEDING THE POSSIEILITY CF INTROI.UCIN* LAND AND AGmCULTUilAL BANKS i I ■"**>^. TNTO THE MADEAS PEESIBENCY VOLUME II, II A D 11 A S : TRINTED BY THE .SUPERINTENDENT. GOVERi>'i!SNT PUEb,- 1 ■■ y •