AGRICLTLTURAI, CREDtT IN BOSNIA AND HERZEGO\T:nA 57 



The contract established whether interest should be paid in specie or 

 in kind. In the latter case it was equivalent, when the debt had been incur- 

 red by a purchase of provisions, to the difference between the quantity of 

 provisions received on loan , and the quantity paid back when the term of 

 the loan expired. Generally the latter surpassed the former quantity by 

 from 50 to 100 per cent. 



The loans in specie might in certain respects be called agricultural loans 

 for the peasants were the only class of the population who could obtain them, 

 they sought them at least partl}^ for reasons inseparable from agriculture, and 

 in greater or less proportion the}' repaid them with the products of the soil. 



The same cannot be said as to credit operations made with certain spe- 

 cial funds, such as the funds of churches and mosques, those of the Vakouf 

 properties and of the unions, those guaranteeing the property of wards, etc : 

 None of the institutions managing these funds granted loans to peasants 

 but only to traders and artisans. 



When however the middle of the century had been passed the Turkish 

 govemmxcnt made a first attempt to encourage the development of agricul- 

 tural credit, and formed the institutions known as menafi- sandonks. 

 Founded in all the vilayets of Bosnia and Herzegovina they were specially 

 intended to utilize their funds in granting loans wliich should favour the 

 development of agriculture. Their funds were derived from a tax incum- 

 bent on all the peasants and equivalent to a tenth of the value of all the 

 products of the soil, exclusive of the usual tithe. 



At first the menafi sandonks only granted loans in kind, and in this res- 

 pect they acted as real institutions of land credit. Later however they 

 substituted loans in specie for loans in kind. Little by little they lost 

 their special character as institutions for the encouragement of agriculture 

 and were transformed into credit institutions. They granted loans gener- 

 ally to government servants or to traders and hardly ever to peasants. 

 Thus the intention of the law was defeated by facts. As regards the history 

 of these special credit institutions, the first menafi sandouk was formed in 

 1863 by Mitad Pacha, vali of the vila3'et of the Danube. In 1865 a law was 

 promulgated which decreed that they shotdd be founded in all the vila- 

 yets of the Turkish empire. 



§ 2 Development of agricuetural credit in bosnia 

 and herzegovina after the austrian and hungarian occupation. 



The occupation of Bosnia and Herzegovina by Austria and Hungary 

 contributed largely to the improvement in these two provinces of the con- 

 ditions of agricultural credit, to which it gave a new impulse. 



In the first place the population, both floating and fi.Kcd, was ver}' per- 

 ceptibly increased, by the added mihtary element which was very numerous 

 in the early days of the occupation, and by the government servants who 

 also were present in sufficiently important numbers. Especially the latter 



