Just as the State bank dealt with Central banks, so in their
turn did Central banks under this regime deal with their mem-
ber banks. A 200 M. share would entitle to 3,000 M. credit,
a 1000 M. share to 8,000 M., and so on. *

All this, of course, was to have been foreseen. Give a man
credit without exacting adequate security, and he will not care
how much liability he pledges, so long as a mere stroke of the
pen and a promise will do the business. Humour him in his
recklessness, and reckless he will become to the length of
foolishness. It was with this inevitable result in view that, some
time ago, I ventured to put the problem of co-operative banks
in this way, that their business really is to make credit difficult
in order that they may make it possible; they must bind and
require the borrower to do so much by his own efforts, that
by such means he will really produce security worth lending
upon. That, it appears to me, is the argument for co-operative
credit, the secret of its possibility, in a nutshell.
