AGRICULTURAL CREDIT BANKS 115 



selves to deposit, and which are only returned in urgent 

 cases or when borrowers completely sever their relations 

 with the bank. 



(d) Moneys in current account from village credit 

 banks, from native communities, and from public institu- 

 tions at a rate <of interest varying from 2 to 6 per cent, 

 per annum. 



(e) Borrowed moneys- 



The banks lend money chiefly for productive purposes 

 to individuals, to companies, and other associations prin- 

 cipally of native producers or consumers, and to native 

 communal credit banks for the benefit of agricultural 

 pursuits, trade, and sea fisheries, as well as for the 

 redemption of mortgaged lands and crops, and the pre- 

 paration of ground for cultivation. Money is also lent 

 for the erection of dwellings and on a moderate scale 

 for non-productive purposes. 



The banks encourage in this way production in every 

 field of labour and enterprise in which the native is 

 engaged or which are open to him. The interest charged 

 by the banks amounts to from 12 to 18 per cent., excep- 

 tionally 24 per cent. The banks have also commenced 

 to act as intermediaries in cash transactions between the 

 natives by the issue of drafts, cheques, and the opening 

 of current accounts, thus supplementing the work of the 

 large European banks. 



As security the banks demand a personal surety or, 

 especially in the case of small farmers, joint sureties 

 (" tanggoeng renteng " or " tanggoeng menanggoeng ") 

 consisting of small groups of borrowers. The latter 

 measure also tends to promote mutual confidence and 

 supervision as a basis of social responsibility and co- 

 operation. The banks have further been declared com- 

 petent to establish a credit charge on hereditary individual 

 and undivided substantial rights of natives in respect of 

 grounds belonging to' the State domain, and also on 

 existing or proposed buildings, works, and plantations of 

 natives on land on which native rights of usage are in 

 force (Netherland East Indies Government Gazette, 

 1908, No. 542). This credit charge is in its nature 

 identical with a mortgage, but is so far not accessible 



