AGRICULTURAL CREDIT IN BOSNIA AND HERZEGOVINA 59 



(owners) or in order that they may make some improvement on such lands. 

 These loans are granted even without the guarantee of the special registra- 

 tion by the ^wc?^z of the lands they till in the land registers. The fund how- 

 ever controls the debtor's use of the money be borrows. 



The loans are always for long terms (ten years) and the. rate of interest 

 does not surpass 6 per cent. The fund may not grant loans of which the 

 value is more than laalf the estimated value of the mortgaged lands. 



In 1889 however the society managing this fund ceased to act as an 

 institution of mortgage credit. All its credit was thereupon transferred to 

 another and newly formed institution which carried on credit operations 

 under the name of Mortgage Bank of Bosnia and Herzegovina. 



The contract between this bank and the government has the following 

 terms : 



a) The mortgage bank is authorized to issue mortgage bonds for 

 a total value equal to tv/enty times the reserve fund which was at first 

 200,000 crowns (i). 



b) The .State engages to provide the mortgage bank with the capital 

 necessary for effecting in the interests of the kmeii the operations necessary 

 to freeing the lands they till from all feudal burdens owed to the aga. 



c) The government offices of taxes are bound to furnish the bank 

 with all necessary information as to the solvency of debtors, from, whom also 

 they are obliged to recover the annual payments due to the bank. 



d) The bank grants mortgage loans for long terms — ten to twenty 

 years — charging interest at the rate of 6 per cent. 



The mortgage titles issued by the bank bring in 5 per cent. 



In 1895 the mortgage bank of which we have spoken was succeeded 

 b}'- another institution having the same object and caMed Landesbanh fiirBo- 

 snien und die Herzegoivina. 



The formation of this new institution and the supersession of the earlier 

 one were due to the government's desire to augment circulating capital. 

 With this aim the following measures were undertaken : 



i) The new bank was founded with a share capital of 10,000,000 

 crowns. 



2) It was authorized to issue mortgage bonds up to a value thirty 

 times that of its share capital. 



3) It enjo3'S all the privileges previously granted to the mortgage 

 bank. 



vSide by side with the credit institutions we have named, which emanat- 

 ed from the government directly and therefore enjoyed special privileges 

 and had a more or less official character — since they undertook credit tran- 

 sactions under the State's direct superintendence — , others were formed by 

 the initiative of private person.5. Their activity was much limited, yet it was 

 nevertheless to some extent that of institutions of land credit. Among 

 them were the various local banks, the Austrian and Hungarian banks, 



(i) I crown of gold = 10 — rf at par. 

 12 



