136 



If it is to be a bank in the accepted sense of the 

 word, then it needs deposits. It is not easy to found 

 a bank unless wealth and prosperity are already exist- 

 ing in the neighbourhood, especially in the case of a 

 rural bank. The lands and commerce of the vicinity 

 must be well developed and are likely to continue to 

 be so. No bank trades on its capital alone, it works with 

 the money deposited by its clients (the general public) 

 and a bank cannot be a successful venture until it com- 

 mands their credit. 



The State can endow a bank with capital; it can- 

 not secure it deposits. It is not to the point to cite the 

 huge deposits of the ' ' Banco de la Nacion \ ( Capital 

 $130,000,000. Deposits $1,600,000,000) as an example. 

 These are immense not because the bank has a large ca- 

 pital or that the bank is rich, but because the bank'* 

 clients are rich. 



It would be more practical to utilise the huge de- 

 posits of the bank for the mutual benefit of depositor 

 and farmer, than to build up a separate and competing 

 entity . 



Unless a bank possesses deposits there can be no 

 advances or loans ; the deposits must come from the 

 clients, who must have money to begin with. It is use- 

 less, then, to talk of according credits to poor people. 

 Without something tangible in the way of security cre- 

 dit is impossible, in this country at least. 



In previous years the efforts of the "Banco de la 

 Nacion", despite the best intentions have dismally fail- 

 ed in regard to loans to small farmers, nor have the at- 

 tempts of the "Banco Hipotecario" to distribute rural 

 loans among small farms been crowned with success, as 

 not 10 per cent, of the loans have reached small farm- 

 ers. 



The banks have to circumscribe their loans, and do 

 so through the stringent rules which govern credits ge- 

 nerally; these in many cases prevent the farmer in ac- 

 tual need of funds from ever securing advances at all, 

 or in the best of cases only benefitting very slightly. 



If the bank insists on the farmer obtaining guaran- 

 tee (the customary proceeding, except where the farm- 

 er is free from all debts and has no other liabilities) 

 then it is only humbug to talk of special additional faci- 

 lities for farmers by bank loans. The bank directors 

 and managers are well aware that the signatures they 

 demand as guarantors are always the same, the "alma- 

 cenero" or the "consignatario", and these do not lend 

 their names without exacting their condition. 



