226 AGRICULTURAL ORGANISATION 



the disadvantages of the agricultural as compared with the 

 mercantile and commercial classes in obtaining credit, they 

 said : 



There is no doubt that farmers have a difficulty in obtaining 

 advances, and are often forced to realise stock or produce which 

 they might otherwise more profitably hold. 



One result of the absence of legitimate and recognised facilities 

 for obtaining credit has been in many instances to drive farmers 

 into the hands of money-lenders of the worst type. In one 

 case brought before your Committee, it was stated that, during 

 seven months of last year, 105 bills of exchange were given by 

 small farmers and dairymen to a money-lending agency operating 

 in agricultural districts all of them for the minimum sum of 

 30 allowed by the Act. It appears that in a large majority of 

 instances in which loans are thus given the amount of interest 

 charged is 60 per cent, or more. 



The Committee considered that the extent to which the 

 abuses of money-lending existed, especially in rural districts, 

 called for the serious consideration of the Legislature. 

 There appeared to them, however, to be difficulties insepar- 

 able from the conditions of farming in the way of assimilating 

 mercantile and agricultural systems of credit, and, though 

 they considered that the principle of the agricultural credit 

 banks advocated by the Agricultural Banks Association was 

 a sound one, it was important to remember, they said, that 

 while such banks might probably be of considerable service 

 to labourers, small holders and village tradesmen in strictly 

 limited areas and under favourable conditions, they would be 

 of no use to the larger tenant farmers. As for the Conti- 

 nental agricultural credit banks designed for the accommo- 

 dation of large occupiers of land, they appeared to offer 

 no advantages not already secured here through our highly 

 developed system of joint stock banking. The report 

 concluded : 



In view of the great difficulty attending the whole subject, 

 and of the alterations which would be necessary in the law before 

 agricultural could be assimilated to commercial credit, your 

 Committee regret that they are unable to make any definite 

 proposal which might lead to the improvement of the methods 

 now in operation for obtaining agricultural credit. 



