116 



to successful lending is to be able to return the money 

 quickly. 



BASES FOR RURAL CREDIT. 



In examining the interest required for different 

 classes of loans, one remarks that on an average loans 

 for agricultural purposes, pay a higher rate than do- 

 ordiriary commercial advances, the difference is gen- 

 erally more than twenty per cent. Theoretically the 

 higher the rate of interest the greater the risk: one of 

 the preliminary steps to efficient agricultural credit r 

 then, is to reduce the risk. 



The practise of trading on borrowed capital is now 

 ^80 common, and the development of the banking sys- 

 tem has made it so easy for commerce, that it is a most 

 natural thing to obtain funds. The limit of one's busi- 

 ness is not bound up in one's capital, nor is one's cre- 

 dit limited to the actual extent of business undertaken, 

 but rather in 'what is known as one's commercial in- 

 tegrity . 



None will deny that it is on these facilities for cre- 

 dit that the whole economic edifice has been built up, 

 and that the perfecting of the system and the creation 

 of new sources of credit will give still greater scope to 

 the enterprise of the inhabitants. 



A recognised principle of sound Government is 

 the seeking- for new sources of credit and introducing 

 them into the customs of the* country. It has been re- 

 cently exemplified in the attempts to establish a new 

 banking entity for agricultural purposes, in the crea- 

 tion of the Prenda Agraria, etc. It is to the interest ' 

 of all, and particularly those called upon to direct the 

 affairs of State, to study and facilitate every means 

 whereby ample and efficient credit can be obtained. 



I do not pretend that Credit can replace initial 

 Capital : capital in some form or the other is not less- 

 eSsential to the farmer than to -the business man or in- 

 dustrial ; it is of prime importance that the own/er or 

 exploiter of the land should possess cash sufficient to* 

 work the land and make the improvements necessary. 

 If the farmer possesses nothing he is wasting the land. 

 and his time. 



Given the nature of the undertaking, the condi- 

 tions ruling in the country and the consequences of & 

 policy avowedly favouring the ocupation of the land, 

 no matter by whom or how, the absence of capital, 

 other than the initial sums inverted in beasts and im- 



