The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1912-08-07

''""S iiOih HIS SoCietS Oh lonS tl'le
and easy terms, and. at the same
time. is permitted to share IN his
society's profits. The loan societies
are of two classes-the loan savings
associations and the societies of small
credit They are both cooperative,
and the aim of each is to lend small
amounts To the farmers through gov
ernmental assistance The difference
between the two classes of societies is
that the members of the loan savings
associations are obliged to make de-
posits of a small amount in order to
form reserve capital for their So
ciety, while members of the societies
of small credit do not participate per-
sonally in the formation of their So
ciety's capital. The latter societies
are adapted to the poorer and more
sparsely settled communities.
The management OF all the societies
| is placed under the control Of the
Ministry of Finance and is directly
supervised by a department Of the
State Bank. When a group OF twenty
or more individuals wishes to form a
co-operative loan society petition
to that effect is presented to the Gov
ernment. A Government inspector
then makes a personal investigation
of the responsibility of the sgners of
tD ,Att
land. Upon his recommendation the
Government grants the society loan
|of one to three thousand rubles
Cs500 to $4,000 for period of
thirteen years. at an interest rate of
3 per cent. payable annually This
loan serves as the foundation capital
of the society. For it's working capital
the State Bank is authorized by the
Government to lend money to the So
ciety upon application. The amount
of the loan from the State Bank de-
pends upon the number of members
In the society. their aggregate wealth,
etc. but is not restricted to any one
amount. and generally varies from
between $1,000 to $1,000 and $685.
900 to $4,000.
The State Bank loan is at the same
rate of interest as the Government
loan. e., per cent-but is made
for short time only. usually for
twelve months. Besides the founda-
tiep- capital from the Government and
the loans from the State Bank, the
societies may obtain other loans from
banks or individuals, usually at from
s to 10 per cent interest. Savings de.
posits are received by the societies.
The average society begins business
with total capital-that is, both
four dation and working capital-of
from $4,000 to $4,000. 1t is then in
a position to make loans to it's mem.
bers. who are responsible to the So
ciety.
These loans are Of three kinds %
Those used for current expenses for
a term of not more than one wear:
CD those used for the purchase of ag-
ricultural machinery. horses, ETC.. up
to three years; and (S) those used in
agricultural improvements. irrigation
works, ETC., which run generally. for
five years.
Loans to members usually bear an
interest rate of s per cent to IL per
cent. On small loans up to- $3.50, no
other guaranty is required of the bor-
rover than his personal word or that
of another responsible indy - !.
Where security is given on the land or
the farm products of the debtor the
farmer may borrow as high as $500.
i'm case of failure of crops or other
misfortunes coming To the Dor. ,.vrr
an extension of time is granted him
I'm which to repay his loan. and when
the harvest is not good i'm any dis
trict the State Bank will also extend
the same leniency to the society for
the repayment of its loan.
III the Socie'les Oh snlalI credit the
initial loan from the Government
made for IL years. is repaid by re-
serving 90 per cent Of the society's net
earnings as q reserve fund This is
done only in times when the society
has had a prosperous year, but. SO
FAR, prosperity for the societies has
proved almost the nvariablc rule.
sociations put aside 10 per cent for
the repayment of loans, and IA divi-
dend, not exceeding To ~ per cent,
Is then paid to- irs depositors
I'm The Dnli1n Enn,t