42 SPAIN - CREDIT 



landed property. The Central luind may lend funds to other agricultural 

 institutions, even if these undertake business of this kind, but may not in 

 such case issue bonds for a sum in excess of that part of the loan which 

 these institutions guarantee exclusively in the form indicated in para- 

 graphs e), i) and g): 



The most important of the functions of the Central Fund which aim 

 at intensifying the contact between banking establishments and agricultural 

 associations is indubitabty the influence it should exercise on the relations 

 between the syndicates and the rural funds and the Bank of Spain, which 

 is the ofi&cial issuing establishment. The Central Fund of Agricultural Cre- 

 dit may foster these relations in two ways, namely : 



i) The syndicates will determine what sums they need for their opera- 

 tions and prepare a list distributing these according to the amount demanded 

 by each member. This work once accomplished, and the guarantee of 

 the solvency of each syndicate having been fitly established, each syndi- 

 cate will draw on each of its members an order for the sum granted to him, 

 and when this bill has been accepted by the Central Fund the syndicate, 

 having endorsed it, will discount it at the Bank of Spain, thus rapidly and 

 easily obtaining the funds necessary to its business. The bank should 

 for its part obviate two inconveniences. One consists in presenting the note 

 atthehome of the member on thedayonwhichitfallsdue, and can be avoided 

 by appointing as the place of payment the headquarters of the agricul- 

 tural syndicate or the capital town of the province. The other consists in 

 the costs of a renewal. This operation may by the care of the syndicate be 

 effected at the competent branch of the bank without troubling the mem 

 ber. The costs in question will then be taken into account in the bonus 

 which the bank will allot to the syndicates for their intervention in these 

 operations. 



2) The bank will open for the district funds depending on the Central 

 Fund a credit account, guaranteed by the commercial bills which the syndi- 

 cates will remit to these funds and on which the bank will advance sums to 

 the funds in question for their operations. Thus each syndicate, after 

 having brought together and classified the individual demands of its 

 members, will subscribe a bill or note to the district frmd for the total amount 

 of the loans demanded by its members. The Central Fund will take all 

 necessary precautions to ensure the good working and the perfect solvency 

 of the syndicate in question ; and if its decision is favourable it will endorse 

 the bill, already signed by the syndicate, to the Bank of Spain which will 

 discount it if it is for a short term, or accept it as guarantee of the afore- 

 said credit if it fulls due in a longer term than three months, but not if this 

 ternf is longer than the nine or twelve months which cover the cycle of 

 agricultural operations. 



The Central Fund of Agricultural Credit will be constituted with an 

 initial capital of 10,000,000 pesetas in shares of 500 pesetas each, of which 

 half must be paid up when the fund becomes active. This capital will be 

 subscribed as follows : 2,000,000 pesetas by the j>6sitos, deducted from the 



