AGRICULTURAL CREDIT.—DAVIDSON. 467 
the industry and the agriculture of the country. One writer says 
enthusiastically :—*“ In the space of a hundred and fifty years it 
raised its country from the lowest state of barbarism to its pres- 
ent, proud position,’ and “the far-famed agriculture of the 
Lothians, the manufactures of Glasgow and Paisley, the unri- 
valled steamships of the Clyde, are its proper children.” This, 
as applied to agriculture, is no exaggeration, and it is not a little 
significant that the founders of the agricultural banks on the 
continent of Europe, to which reference will be made later, 
adopted from the Scottish Cash Credit System the idea of per- 
sonal responsibility, which was its essence. We have not now 
the cash credit system in Canada, It was tried in the early days 
and had detinitely to be abandoned because it was not suited to 
a country where the population was as migratory as it is with 
us. But the system of overdraft is quite as useful, and our banks 
are able to maintain the essential benefits of the cash credit 
system which did so much for agriculture in Scotland. 
Our banks to-day do more for the farmer than the Scottish 
banks can now do. In Scotland itself, the cash credit as applied 
to agriculture is a thing of the past, and has been little used for 
half acentury. The cash credit was partly, at least, a device 
for increasing the note circulation of the bank. An extra risk 
was taken on the loan to secure an extra profit on the notes 
which were thus got into circulation, When the right of 
issuing notes at discretion, secured only by the general assets of 
the bank, was withdrawn in 1845, the banks no longer had any 
motive for encouraging borrowers in this way, and the cash 
credit system was gradually withdrawn from agriculture and 
confined ina restricted way to commerce and industry. And it 
must be remembered that the farmers of the Lothians were 
already men of some financial standing, and that the benefits of 
the cash credit were never experienced by the small farmer and 
crofter of the north. Our Canadian banks, however, still prac- 
tically retain the right and privilege of note issues at the discre- 
tion of the bank, and they are thus able to extend ercdit facilities 
to districts which would otherwise go unserved. They still have 
