principle of self-help. The following is the plan of banks adopted:
“Every member is obliged to make a certain weekly payment into the common stock. As soon as it reaches a certain sum he is allowed to raise a loan exceeding his share in the inverse ratio of the amount of his deposit. For instance, after he has deposited one dollar, he is allowed to borrow five or six; but, if he had deposited twenty dollars, he is allowed only to borrow thirty. The security he is compelled to offer is his own and that of two other members of the association, who become jointly and severally liable. He may have no assets whatever beyond the amount of his deposits, nor may his guarantors; the bank relies simply on the character of the three, and the two securities rely on the character of their principal; and the remarkable fact is, that the security has been found sufficient, that the interest of the men in the institutions and the fear of the opinion of their fellows has produced a display of honesty and punctuality such as perhaps is not to be found in the history of any other banking institutions. Such is the confidence inspired by these institutions that they hold on deposit, or as loans from third parties, an amount exceeding by more than three fourths the total amount of their own capital. The [pg 533] monthly contributions of the members may be as low as ten cents, but the amount which each member is allowed to have in some banks is not more than seven or eight dollars, in none more than three hundred dollars. He has a right to borrow to the full amount of his deposit without giving security; if he desires to borrow a larger sum, he must furnish security in the manner we