62 AUSTRIA AND HUNGARY - CREDIT 



and Herzegov-ina. It was called the department for the purchase of lands 

 and was given competence in all matters touching on this question, in par- 

 ticular competence to afford mortgage credit in order to solve the problem 

 of the kmeti. 



The initial capital of 500,000 crowns was provided by the State, on con- 

 dition that capital should in the future be procured by the issue of mort- 

 gage titles, guaranteed by the State, and bearing interest at the rate 

 of 4 14 per cent. 



The administrative department we have mentioned, which exists 

 for the redemption of lands, grants loans up to the total value of the mort- 

 gaged land. The loans are for long terms, from thirty to fifty years, and 

 bear interest at the rate of 4 14 P^^ cent. The sum which is due to the aga 

 as a consequence of the redemption, because he has renounced his rights 

 in the land, is paid to him in specie unless he himself prefer whole or par- 

 tial payment in mortgage titles. 



The department for the redemption of lands also provides, in the form 

 of loans, the sums necessary to the conversion of debts incurred before a 

 given holding is redeemed. 



This institution granted between the beginning of 1912 and the end 

 of October 1913 11,258 loans having the total value of 20,250,000 crowns, 

 which sum was distributed as follows : two thirds to the redemption of lands 

 burdened when the loan was incurred with feudal servitudes, and one third 

 to the conversion of debts previously contracted for the purpose of redemp- 

 tion. 



B. Personal Agricultural Credit. 



The institution of personal agricultural credit is due, hke that of mort- 

 gage credit, to government initiative and government measures. Credit 

 of this kind is directly afforded by the Bezirksiinterstutzungsfonds, that is 

 to say the departmental credit banks. The first of them was founded in 

 the department of Gazco in 1886. They have since been multiplied through- 

 out the country' to such an extent that today they number no less than 

 fifty, namely one for each department. They are truly State credit insti- 

 tutions, and are managed by the administrative authorities of the depart- 

 ments, helped in each department by a sort of assembly to wdaich peasants 

 belong. Until 1905 these assemblies had only a consultative capacity 

 and therefore did no more than suppl}" the departmental administrative 

 authority with useful information as to the solvency and relial)ility of those 

 applying for personal loans and the purpose for which such loans were in- 

 tended. The right to resolve as to the acceptance or the rejection of an appli- 

 cation for a loan was exclusively reserved to the departmental administra- 

 tive authority. Since 1905 however the power to vote on resolutions of 

 this kind has been extended to the peasants' assembly, for a reason which 

 must be explained. In this year the law established that all the taxpayers 

 of a department were liable for the debts to the Landesbank which the de - 

 partmental bank might incur. The grant of a v^ote to the peasants con- 



