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AGRICULTURAL CREDIT 59 



the government to decree their suspension by the law of 2 July 1892, and 

 to supersede them, by the Agricultural Credit which began business on i Jan- 

 uary 1913. 



Instead of the decentralization which had hitherto prevailed a cen- 

 tralization of business was brought about by the law of 1S92. An agricul- 

 tural bank was formed which was situated at Bucharest and had branches 

 in all the departmental centres in which there had previously been an agri- 

 cultural departmental bank. 



Tliis institution of agricultural credit is a State institution depenchng 

 on the Minister of Finances (art. 9). It has three sections : 



a) Section I. is concerned with mortgage credit. 



b) Section II. is concerned with long-term debts of a particular 

 kind, debts namely incurred for initial installation under the law of 1889. 



c;) Section III., formed in 1906, grants long-term credit for the plan- 

 tation of vineyards. 



The capital in shares paid by the State is 25,000,000 francs, namely : 

 20,000,000 francs to the first, 3,000,000 francs to the second and 2,000,000 

 francs to the third section. The capital was paid as follows : 



i) The first section received the sums granted by the State in the form 

 of a loan to the departmental banks, namely 7,000,000 francs, and i': received 

 13,000,000 francs in State bonds (art. 12). * 



2) The second section was granted a current account at the National 

 Bank and the »State issued bonds up to the value of the credit granted. 



3) The third section received for four years 500,000 francs a year 

 — namely a total sum of 2,000,000 francs -— deducted from the net profits of 

 the first section . 



Besides the capital in shares belonging to the State the Agricidtural 

 Credit uses capital emanating from other sources. The first section is 

 authorized : u) to accept deposits ; I) to borrow from the National Bank 

 proportiotiately to the credit granted to its clients. The third section is 

 also authorized to issue bonds secured by the credit granted. These 

 bonds of 100-200 francs and 500 trancs are at 4 ^/2 per cent, redeemable in 

 twenty years, and the total value of those issued must not surpass 

 20,000,000 francs. 



Section I. grants short-term credit, for from three to nine months, secured 

 b}'' pledged agricultural products and machines and live stock. The 

 rate of interest is 11 per cent, for costs of administration, plus 2 per cent, 

 for unpunctual debtors. The total credit granted to a borrower must not 

 be more than 1000 francs. Section I. is, as has already been said, authoriz- 

 ed to accept deposits and also to receive payments on behalf of the Na- 

 tional and the Agricultural Bank. 



From 1903 to 1906 Section I. had the responsibility of acting as a 

 central bank for the agricultural co-operativ^e credit societies ; and as such 

 was authorized to discount and rediscount the societies' bills and make loans 

 to them on current account. In 1906 a truely independent central bank 

 for the co-operative societies was formed, and thus the Agricultural Credit 

 no longer undertook business of this description. 



