haw likewise not, attained any success in this direction; 

 attributable primarily to the absence of efficient secur- 

 ity or storage for the goods offere.d in security. 



LoaTts, then, on produce are limited to advances 

 from those interested in acquiring the said products, 

 that is to say, the cereal brokers or the 



PRODUCTION, THE THIEF SOURCE OF CREDIT 



j 



I may here draw attention to the fact that, prac- 

 tically speaking, loans for the farmer, or rural credit 

 in the great majority of the cases, are only obtainable 

 on what the farmer produces, or is about to produce. 



His products are his sole means of credit, their 

 prospective value limits the extent of his credit. The 

 conditions under which he obtains advances, the rate 

 of interest, and the limit to the amount of the advance 

 are fixed more or less by his prospective crop and its 

 value on the market ; his profits are not dependent on 

 the value of his crop on the world's market, but on the 

 conditions under which he obtains his loans. 



When we study the conditions under which the 

 greater part of this rural credit is accorded we see that 

 as far as its sources are concerned the most of the mo- 

 ney comes through private sources; the banks play a 

 minor part in financing our farmer, that is in financing 

 him directly. 



Not more than 20 per cent. >f the money lent to 

 the farmer is obtained from- the banks direct, at cur- 

 rent rates of interest and^ customary "plaza".. 



The greater part of the money lent by the banks 

 for agricultural purposes is accorded the commercial 

 houses, which in turn pass it on to the farmer. The 

 limited number of local rural banks, the facilities of 

 commercial credit through the "casas mayoristas ", the 

 huge capital of the principal grain-broking houses, all 

 tend to make loans direct to the farmer extremely com- 

 plicated, and loans to commercial houses exceptionally 

 easy. 



THE CHIEF SOURCE OF CREDIT. 



Let us examine the working of a farm in the ordin- 

 ary way, and the customary manner in which credit 

 is used by the average farmer growing cereals. 



We will take, for example, a cereal farmer grow- 

 ing grain on a farm of some 200 hectareas, which ac- 

 cording to the statistics represents the average extent 



