40 ITALY - CREDIT 



response to the peculiar needs of single <iistTicts of Central, Southern and 

 insular Italy, founded in them special institutions of credit. The chief of 

 these laws are that of 7 July 1901 which authorized the savings bank of 

 the Banco di Napoli to afford agricultural credit in the provinces of the 

 southern continent of Italy and the island of Sardinia, and that of 29 March 

 1906 which instituted in the Banco di Siciliu a department for the exercise 

 of agricultural credit. We should also recall the laws of 21 December 

 1902, 31 March 1904 and 25 June 1906, which concerned agricultural cre- 

 dit in lyatium, Basilicata and Calabria, respectively, etc. 



The fundamental principle of this legislation is that credit should, as 

 a rule, be distributed among agriculturists not directly but by the medium of 

 local institutions, preferably co-operative in form, which are called in- 

 termediary. Most of them are rural funds, popular banks, agricultural 

 consortia, etc ; and since they are somewhat scarce in Southern Italy and 

 the islands the laws which have been cited provide for the encouragement 

 of their foundation by prize competitions and other means. Thus of re- 

 cent years numerous agricultural funds have arisen and have noticeably in- 

 creased the number of existing intermediary institutions These are usually 

 accredited by the various central institutions of credit (savings-bank of the 

 Banco di Napoli, agricultural credit department of the Banco di Sicilia, 

 Institute of Agricultural Credit for I^atium, etc.) with a given sum, fixed 

 according to their importance and the security they can offer. 



The business which the two cited banks — the most noteworthy of 

 Italian banks exercising agricultural credit — are authorized to undertake 

 by the laws which respectively regard them may be summed up as follows : 

 a) Acceptance for discount of bills issued by agriculturists for the va- 

 rious needs of their farms and ceded by the intermediary institutions ; 



h) Acceptance for discount of bills directly issued by the latter 

 either to procure the necessary means for the collective acquisition of 

 materials useful to agriculture or to make advances to members in the 

 case of collective sales of their products, etc. 



In order that this transaction may take place it is necessary that the 

 loan be proved to have an agricultural purpose. The borrowers are there- 

 fore specified : they must be landowners them'^elves farming their lands, 

 holders of long leases, metayers or labourers receiving partial profits, or 

 tenants of rural holdings. Moreover the land for the benefit of which the 

 loan is requested must be situated within the sphere of activity of the lend- 

 ing institution ; and the purpose of the loan miist be stated in the applica- 

 tion for it. 



Unless their purpose demands that they be less, loans must have cei- 

 tain maximum limits as rtgards their amount and the time for which they 

 are granted, such limits being i,ooq hras and one year for loans implying 

 a legal preference (over the harvest, crops, seeds, manures, fertilizers), 

 2,000 liras and three years for loans to finance cattle farms, and 3,000 liras 

 and three years for loans for the purchase of machinery. 



As has been said, loans cannot normally be made to single agricul- 

 turists, but only to intermediary institutions among which those having 



