Page:Indian Journal of Economics Volume 2.djvu/349

PI{INOIPLI?$ OF FIN?NOE 885 In reality the difference is exactly similar to that between the old-fashioned building societies, aptly called "dividing" societies. In the twenty persons societies, and the modern building old dividing societies fifteen or would club together and each agree to pay into the society's common fund so much per monthssay, if there were twenty members, at the rate of one annum. as to which of twentieth of Each year the the cost of a house each per they would. meet and draw lots members should build his house that year. after paying his first annual insraiment; unlucky members would have 'to wait The lucky member would secure a house but the most nineteen or twenty years, and would have paid most of the cost of the house long before getting it. In course of time it was discovered that the collective security of such a society would enable it to borrow fun?ls, some* times from members, more often from outsiders. Con- sequently a member who wished to expedite the building o! his house before his turn could borrow through the society and pay interest on the cost of the house until he drew the right to a year's annual subscriptions. T.hrough this stag? the building society has evolved into its modern form-- merely an institution for granting mortgage loans to all persons becoming members and purchasing houses. The .necessary funds are obtained by taking fixed deposits both ?rom members and from the general public. The great advantage is that every member can secure a house just at the time he wants it and may pay off the 1oau by insraiments in such a period as may suit his income. The same evolution has been taking place in the finance of local authori- ties in England? and it would be a grea? step for- ward .in the evolution of Indian public finance to make a similar change. The system of. 8?ants-in-aid whole