372 PROVISION OY BORROWING FACILITIES. 



when the loans are, as in this presidency, the petty loans evidenced 

 by registration, court and other statistics. The vast bulk of all 

 loans are below Rs. 50 ; even mortgages below Rs. 100 number half 

 the total mortgages and average only Rs. 44 ; the records of the civil 

 courts tell the same tale, since, in this presidency, for 1893, no less 

 than 5 9 '4 per cent, of all suits, exclusive of those in village courts, 

 were for sums below Rs. 50 including the interest claimed; if 

 village courts are included, the proportion is 68*9 per cent. Again, 

 including village courts which tried 61,000 suits, the percentage of 

 all suits below Rs. 20 was 45*25 per cent., so that nearly half of all 

 suits were below Rs. 20. This being so, it is clearly useless for any 

 bank outside a very small circle to think of supplying the country-side 

 with the credit it needs. Nor is it conceivable that the borrower 

 could obtain from such a bank either facile, cheap or safe credit, the 

 expenses of enquiry, the risks of loss on petty loans to unknown 

 persons, would preclude facility, while the element of safety, would be 

 largely wanting, since 'safety' requires that the destination of the 

 loan shall be a productive one, that it shall be used in production or 

 towards economy, and that money shall only be borrowed for such 

 purpose. Credit banks cannot and do not enquire into the purpose 

 of a loan provided the security is sufficient, whereas it is of the essence 

 of village credit that the lending institution shall be a powerful aid to 

 the borrower in checking extravagance and in suggesting useful 

 outlay. 



Nor is it possible that State banks should satisfy the need for 

 rural credit. Still less than Central banks can they satisfy proximity ; 

 their agents indeed may be amongst the people, but a paid agent is 

 merely a machine to pay out, to receive, and to enforce hard and fast 

 rules ; the loans might be made secure to the lender, but solely by 

 the overwhelming powers reserved by the State creditor, while the 

 safety of the borrower, except as regards loans similar to those 

 under the Land Improvement and Agriculturists Loans Acts, 

 would fail of being met, since the State can hardly influence the 

 individual in the matter of prudence in his individual actions. 

 The borrower need not be thrifty, nor would the loan proceed 

 from voluntary savings but from the national taxes, unless 

 the State deliberately utilized the funds of the Savings banks 

 in such loans. But it is difficult to see how the State could ensure 

 that its loans should be granted only to thrifty persons and for 



