INFORMATION REI^ATING TO CREDIT 49 



of a hsten into two territories at most, or for the union of two hsien into a 

 single banking territory. * 



The shareholders of these banks must be recruited in the first place 

 among the persons bom in their respective hsien, living in them or posses- 

 sing property in them. If the number of shareholders of this descrip- 

 tion be insufficient others may be recruited outside the bank's territorial 

 sphere until the fixed number has been reached. Corporations within a 

 bank's territory may become shareholders in it. The share certificates 

 of the agricultural and industrial banks are all nominative and their sale 

 to persons who are not Chinese citizens is forbidden. 



The following classes of operations may be effected by the agricultural 

 and industrial banks : i) mortgage loans repayable by instalments graduated 

 over a period of five years ; 2) mortgage loans repayable at a fixed date, 

 namely at the expiry of a term of three years ; 3) loans on pledged and 

 imperishable agricultural products, to be repaid at the end of a year or by 

 instalments graduated over a year ; 4) loans on the pledged products of 

 fishing when the borrower has an exclusive fishing right, to be repaid in a 

 year or by instalments graduated over a year — a supplementary pledge of 

 public securities or an additional mortgage may be exacted by the bank as 

 a guarantee of these loans ; 5) loans on pledged titles to provincial or cen- 

 tral government loans or on shares in commercial companies, repayable 

 at the end of a year or by instalments graduated over a year ; 6) loans 

 repayable at the end of three years and not guaranteed by a mortgage, 

 being granted to groups of at least ten agriculturists or industrial workers 

 who are completely solvent : 7) loans not guaranteed by a mortgage, 

 granted with the authority of the competent local ofiicial to local corpo- 

 rations in enjo3''ment of certain and easily realized profits. 



These loans may be granted only for the following objects : 



i) the improvement of uncultivated lands and crops in general ; 

 2) irrigation and reafforestation ; 3) purchase of seeds and manures and all 

 kinds of primary materials used in agriculture and industry ; 4) storage of 

 and traffic in agricultural and indu.strial products ; 5) purchase and repair 

 of machines, implements and live stock useful to agriculture and industry ; 

 6) construction and repair of buildings for agricultural and industrial pur- 

 poses ; 7) purchase of live stock with a view to the improvement of breed- 

 ing ; 8) purchase of silkworm eggs, young fish and instruments of all kinds 

 for the development of sericulture and pisciculture ; 9) all works aiming 

 at the development of agriculture and industry. 



If the real estate to which these provisions refer be not already re- 

 gistered and insured the agricultural and industrial banks cannot accept 

 mortgages of it as security for loans. The amount of a loan made by the 

 baak nmst not exceed two thirds of the value of the mortgaged property, 

 the value as estimated by the lending bank being taken as basis. 



Only first mortgages are accepted as security and mortgaged real 

 estate must be productive. If the value of mortgaged property diminish 

 after it has been estimated the bank may require a supplementary esti- 

 mate, and may, if the borrower do not fulfil such requirement, proceed 



