CREDIT FOR COI.ONIZATION 59 



These short loans are banking business and form indeed the chief bu- 

 siness of the Algerian banks, which are above all agricultural banks. Their 

 paper cetainly includes many ordinan,' commercial bills which represent 

 realized transactions and settlemefits of debts. But it consists largely of 

 these loan titles which are in the traditional form of bills maturing in three 

 months, there being a tacit agreement that they are twice renewable in 

 order to bring them into line with the farming cycle. 



It is seen that personal credit is here concerned. Naturally the banks, 

 each in its own way, seek to surround their debtors with a network of se- 

 curities ; but these, excellent though they be, are only accessory, as appears 

 from what we have already said. The chief dependence is on a just esti- 

 mate of an}' colonist admitted to the benefits of credit. 



The paper of the Algerian banks represents therefore in part short-term 

 loans, certainh- recoverable with good management, but not maturing 

 as rigorously as ordinary banking notes because their realization depends 

 on the sale of the harvest. 



§ 2. The sources of the capital assigned to agricultural credit. 



Obviously the banks cannot find all the capital required by their bu- 

 siness in Algeria, but must supply themselves abroad, that is to say in 

 France. In what form do they acquire this capital — as capital, shares, 

 deposits at sight or financial bills — and in what proportion ? The very 

 special character of their business does not leave their choice entireh' free. 



They cannot count on that uninterrupted series of graduated receipts 

 which gives the desired liquidity to thf paper of French banks. 



Many of their advances are tied up for from eight to nine months in 

 a year. From the beginning of the agricultural year the number so im- 

 mobilized increases until the harvest releases all of them together. A new 

 financial effort is then necessary. Harvest-time, the single period in which 

 revenue is received, opens up a series of numerous settlements — purchases 

 of harvested products, payment of wages, payments for transport and various 

 acquisitions, repayments. Tliis accumulation of payments within so 

 short a time gives rise to a considerable need of money. The banks must 

 meet it, for the purchasers of the harvest, with whom the movement starts, 

 come to them for circulating funds in the form of seasonal credit. 



This progessive and uniformly periodic nature of obligations can- 

 not accommodate itself to resources which are too fluid and unstable: 

 banks subject to such obligations cannot run the risk of being suddenh- 

 forced to make large repayments.Therefore they must follow the example 

 of business banks and diminish their margin of liabilities by working 

 with a large capital in shares. But where can they find complementary 

 resources in a countr>' poor in capital ? On what reservoir can they draw- 

 in order to feed the stream of their business ? Is it possible that an agricul- 

 tural country, which has financial resources insufficient for its own needs, 

 can escape from strict subjection to the European banks, by avoiding the 



