58 ITALY - CREDIT 



of many applications, frustrated hopes and led to the liquidation of 

 many institutes. 



As regards the Monte, land credit in bonds, cartelle, appeared at a 

 disadvantage in comparison with credit on mortgage as granted by 

 its central department. It is true that the latter does not enjoy pri\'ileges 

 for collecting its debts and makes the members pay at date of the contract 

 all the charges for stamps, registration etc, while in the case of the land cred- 

 it system these costs are included in the half yearly instalments and paid off 

 slowly, but the department lends in money and may advance amounts of 

 more than half the value of the landed estate and content itself with a 

 later mortgage. The land credit system, on the other hand, requires a 

 first mortgage, does not grant amounts of more than half the value and pays 

 in bonds {cartelle) These bonds were not immediately' well received by the 

 people; the borrower is a landowner who borrows to relieve his land of heavy 

 burdens, pay his debts, carry out drainage works or other improvements, a 

 landowner, who is not, as a rule, familiar with commercial business, and, so 

 much the less, with the business of the exchange and hence he does not 

 find it easy to negotiate a special number of bonds in order to obtain the 

 amount he is in immediate need of. 



Against these drawbacks and difficulties the Monte de' Paschi came to 

 their assistance, as it found that the purchase of bonds was a safe and lu- 

 crative investment of the money deposited with it ; and it arranged so 

 that the borrower could, in the same Institute, borrow from the land cred- 

 it department, receive the bonds {cartelle) and, presenting himself at an- 

 other office, obtain their value in money at the ordinary market price. 



Thus, the customers of the Institute became used to receiving their loans 

 in the form of cartelle. 



The land credit department of the Monte de Paschi at first carried on 

 business in the whole of Tuscany, in Umbria and in the Province of Pesaro; 

 it extended it then to Rome, but afterwards ceased w orking there, owing to 

 losses sustained through the building crisis ; it profited sparingly by the 

 right granted it to extend its operations throughout the whole Kingdom, so 

 that up to a few years ago they had not been carried beyond the original dis- 

 trict. It was only in 1909 that it abolished all territorial limitation, thus 

 considerably increasing its business. It closed its accounts on June 30th., 

 1913 with a total of 74,171,202 frs. in loans for land credit, as compared with 

 29,100,070 frs. in ordinary loans. 



Side by side with land credit we find agricultural credit either for im- 

 provements or for ordinary farm work; side by side, but perfectly distinct, 

 both in the manner and means of its working and its purposes. It may, 

 however, also assume the form of real credit, inasmuch as a special pre- 

 ference claim on the har\^est of the year or the produce stored or else a 

 short term mortgage may be granted as security for the loans to the 

 landowners, but in regard to its objects it cannot have the character of 

 real credit, in so far as the sums borrowed are spent on manure or ma- 

 chinery, the purchase of livestock, seed or plants, that is they go to 

 increase the working capital required for the farm work. 



