AGRICULTURAL CREDIT. DAVIDSON. 471 



in their own localities. All of them have large deposits with 

 other banks in Canada and elsewheie; and it is the Fanners' 

 Congress of New Brunswick, the home of the small bank in the 

 Canadian system, that calls for this report on Agricultural Credit. 

 The proposals to establish land banks are generally charac- 

 terized by an entire absence of knowledge of banking conditions 

 and of the history of credit institutions. If any principle has 

 been established by bitter experience it is that land is not a 

 satisfactory basis for a bank. One agitator declared in the 

 House of Commons (Hansard, 1884, p. 213,) that money based 

 on the landed property of a country is perfectly safe, whereas 

 experience has shown again and again that money might as well 

 be issued based on the rings of Saturn. To attempt to modify our 

 banking system in this way would destroy all its present value, 

 which is, however, commercial rather than agricultural. And 

 the problem before us is not how to destroy the credit which 

 the merchant and the manufacturer enjoy, but how to make 

 that credit, or some credit, available for the farmer. In my 

 opinion, the Canadian banking system is doing all it can do, and 

 one might even venture the assertion that it is sometimes doing, 

 by " liberal banking " in this province and elsewhere, and by 

 undue concession of purely personal accommodation, more than 

 it is safe for banks to do. For the farmer, as a seller of 

 produce, it does and can do much ; for the farmer, as a member 

 of the general public, it does and can do much ; for the farmer, 

 as a farmer, it can do but little ; and it is strictly forbidden by 

 law to attempt more than it does do. The banks are forbidden 

 to lend on mortgage or the security of land. They may, and do, 

 to a large extent, I believe, evade this prohibition by making 

 land the basis on which personal accommodation is given. But 

 the prohibition stands. Further, the wording of the act was 

 amended so as to stand in the way of the bank making advances 

 to a farmer as a "producer." This was done professedly to 

 protect the interests of the farmer. It was pointed out that the 

 general credit of the farmer " with merchants and others rests 

 on the visible possession of certain personal property, such 



