AGRICULTURAL CREDIT IN BOSNIA AND HERZEGOVINA 



able to accumulate the savings necessary to the formation of popular banks 

 and the constitution of bases for the operations of these. The man who 

 was first called upon to govern Bosnia and Herzegovina had also a conser- 

 vative spirit. Kalaj's economic policy was alwa3's inspired by the idea 

 that all innovations were to be avoided because they might run counter 

 to the ancient customs of this primitive people and provoke discontent 

 and disorder. We must add that religious hatred had a certain influence 

 in placing obstacles in the way of the spirit of association in a country in 

 which the adherents of one faith always felt themselves too different from 

 those of another to be able to unite with them for any object whatsoever. 

 The departmental banks eventually contributed to no negligible extent to 

 bringing home to the peasants of Bosnia and Herzegovina the need for co-op- 

 erative credit societies. The first co-operative society of this kind was 

 founded in 1909, after which year about a hundred of them were formed, 

 most of them RafEeisen in type although at first it was the Schulze-Delitsch 

 type which predominated and which the government favoured. Of late 

 3'ears however the Schulze-Dehtsch has gradually given place to the Raiffei- 

 sen model, to which four fifths of the co-operative societies in Bosnia and 

 Herzegovina now conform, one fifth being of the Schulze-Delitsch type. 



There are no statistics relative to the activity of these co-operative 

 societies, but their operations in credit are known to be unimportant. Sta- 

 tistics as to the personal credit afforded by credit institutions or private 

 individuals are also lacking. In general credit institutions do not willingly 

 make loans to peasants who are not allowed to give guarantees in the shape 

 of bills. On the other hand num.erous private persons, most of them usur- 

 ers , are in the habit of exploiting this state of aft'airs by granting loans 

 to peasants on onerous terms. These loans are said to be in the aggregate 

 numerous and important in Bosnia and Herzegovina. The continual 

 increase of the peasants' total debt to private individuals was largely due 

 until 1910 to the defective solution of the problem of the kmeti. We have 

 already said that the existing institutions of credit in Bosnia and Herze- 

 govina do not lend to the kmeti more than half the value of the land these 

 propose to redeem. The kmeti were therefore obliged to have recourse 

 to the credit afforded by usurers in order to effect redemption. There- 

 fore the redemption of lands, which was intended by the law to improve 

 the condition of the cultivators of Bosnia and Herzegovina, served on the 

 contrary, for the reasons given, to aggravate the economic situation of man}^ 

 -of them. 



