86 AGRICULTURAL INDEBTEDNESS 



should be the object of all public men to remove, and 

 they are amenable to remedial treatment ; but we shall 

 be better able to understand the case of the Indian 

 cultivator if we recognise that his condition is not by 

 any means abnormal — that, on the contrary, the small 

 farmer all over the world is constantly in debt. 



As Sir F. A. Nicholson says at the beginning of his 

 invaluable Report upon Land and Agricultural Banks, 

 ' the lesson of the universal history from Rome to 

 Scotland is that an essential of agriculture is credit. 

 Neither the condition of the country, nor the nature of 

 the land tenures, nor the position of agriculture, affects 

 the one great fact that agriculturists must borrow.' 



The facts upon which Sir F. Nicholson bases this 

 generalization are of so much interest to students ol 

 Indian economic conditions as to justify a somewhat 

 lengthy extract. 



' Probably nowhere in the world except among the 

 richer farmers of England is sufficient capital owned 

 by the farmer himself; even the English farmer, with 

 the advantage of renting land largely developed by 

 his landlord's capital, and finding, therefore, only the 

 working capital, is accustomed to borrow freely from 

 his banker, whether for advances at seed-time, for 

 purchase of manure, for extra wages at harvest, etc. ; 

 this he usually does by a short bill, or, in Scotland, by 

 a cash credit. But in Europe, where small and medium 

 cultivation is the rule, and where the farmer so fre- 

 quently owns the land he tills, the bulk of the farmers 

 are in debt, and that heavily ; the necessary comple- 

 ment, in fact, of the peasant proprietor is the money- 

 lender. There is little or no waste land, so that all 

 land has to be bought or inherited ; the purchase 

 price, owing to severe competition and love for the 

 land, is extremely high, returning only a small per- 

 centage to the most diligent labour; succession duties* 



* The State taxes on the transfer of property in Europe are very 

 high. In France an ordinary sale pays 6^ per cent, duty, or ^65 on 



