58 AUSTRIA AND HUNGARY - CREDIT 



formed among the citizens of the country a special class, who in the e>dsting 

 conditions were obliged to buy all the}' needed in the market with their mon- 

 ey. The immediate consequence of this rapid and notable increase in 

 the population was a corresponding increase in the price of all the goods in 

 the market. 



Added to this first cause, which had an immediate effect on the econo- 

 my of the country , was a second — the construction of new lines of com- 

 munication. These had a propitious influence on the development of trade 

 which they rendered more active, and not only the trade within every inhab- 

 ited district in the country but also foreign trade. Thanks to these ele- 

 ments of progress the general activity of the market was more and more in- 

 tensified, the quantity of products on the market increased, and an 

 economy based on cash gradually replaced natural economy in the country. 

 Thus the indispensable and fundamental basis for credit was found. The 

 institution of the land registers and of the cadaster, begun in the first per- 

 iod of occupation and actively continued, finally completed the work un- 

 dertaken for economic progres.-?, in that it gave the necessary basis to mort- 

 gage credit. 



Special institutions of agricultural credit were founded, and they large- 

 ly contributed to the improvement of the country's general economy. 

 We wiU proceed to speak of them 



§ 3. The institutions of rural credit. 



A. Mortgage Credit. 



The institution of land credit in Bosnia and Herzeogvina is due to the 

 initiative of the Austrian and Hungarian government. 



In 1883 a first contract between the government and the Wiener Union- 

 bank was drawn up for this purpose. 



By its terms this bank was bound to instal at Sarajevo a branch which 

 should begin to afford land credit in the country. 



The government for its part engaged : i) to furnish this bank with all 

 information relative to the solvency of debtors; 2) to authorize the post 

 offices of the country' to receive the annual payments owed by debtors on 

 behalf of the Wiener Unionbank. 



But the Wiener Unionbank afforded land credit only for three years. 

 In 1886 it ceased to grant mortgage loans, thus obliging the government to 

 enter into a new contract with the fund for the retirement of State employees. 



According to the rule of 1887 this fund makes loans of two kinds, as 

 follows : 



a) Ordinary mortgage loans, that is loans of sums the use of which 

 is not controlled. Loans of this kind ma}' be made only when the mortgaged 

 land is entered in the land registers. 



b) Special mortgage loans granted to the kmeii (cultivators) in order 

 that they may free the lands they till from feudal burdens due to the aga 



