74 GRANT OF LOANS AND ADVANCES OP AGRICULTURISTS. 



there would be no objection, according to the principles stated above, 

 to the acceptance of a perpetual charge equivalent to the interest 01* 

 the capital advanced, instead of an instalment sufficient to extinguish 

 the debt within a term of years. This proposal deserves examination. 

 In some Native States money is frequently advanced for well cons- 

 truction in return for an additional assessment upon the land bene- 

 fited. But in the Northern Provinces of British India, where the 

 period of the exemption of improvements from taxation is not per- 

 petual, this practice could not be worked at all ; and in Southern 

 India it might be looked on. though erroneously, as infringing the 



cT* * f-J * ' Cr* ci* 



principle of such exemption. Many good authorities doubt whether 

 the ryot would like the perpetual charge. This is a matter of opinion 

 which cannot be settled until the feeling of the people has been 

 tested. But we are ourselves somewhat reluctant to suggest perma- 

 nent indebtedness as a possibility. There is an undoubted stimulus 

 to thrift, and advantage to the borrower, in arrangements enabling 

 him to extinguish his debt within a reasonable period ; and, if the 

 period of repayment be made long enough, the excess of the annual 

 payments over the perpetual charge will not be large enough to deter 

 people from borrowing. Thus, supposing the period which might be 

 allowed for wells in the Bombay Deccan, where, if properly made and 

 maintained, they are virtually indestructible, to be fifty years, then 

 at 5 per cent, interest, a payment of Rs. 5-8 would extinguish within 

 that period a debt of Rs. 100, whereas the perpetual charge would 

 be Rs. 5, or only 8 annas less per annum. No reasonable man would 

 prefer the perpetual charge for the sake of saving the eight annas. 

 On the other hand, as the figures given below show, the perpetual 

 charge would be a far easier annual burden than the instalment 

 required to discharge the short-term loans now given, in which the 

 period extends to but seven or ten years, or even a loan for as long as 



twenty or thirty years. 



. 



Sum required to discharge a Joan of Rs. 100 at 5 per cent. 



in 7 years 



10 



20 ,. 



30 



50 



perpetuity 



