LOANS TO THE AGRICULTURAL CLASS 107 



tion of wealth. It would appear as if some impene- 

 trable barrier intercepted the overflow of wealth and 

 barred the channels of communication between the 

 reservoirs of capital and the parched fields of industry, 

 dried up for the want of wealth-bearing and fertilizing 

 moisture. . . . The Presidency Bank of Bombay 

 alone has at this moment more than fifty millions of 

 rupees of deposit receipts which it does not know how 

 to use, and which drives it in despair to refuse muni- 

 cipal and other private deposits except as current 

 accounts which bear no interest. Nearly twenty mil- 

 lions of rupees are locked up in the Post-Office Savings 

 Banks in the Presidency alone, and as many as fifty 

 millions of rupees are similarly locked up all over 

 India, which Government cannot turn to account 

 except by buying its own paper and maintaining from 

 the interest proceeds its Paper Currency Depart- 

 ment. . . . Meanwhile the cultivating and artisan 

 classes can get no loans except at rates of interest 

 ranging from 12 per cent, to 24 per cent.' 



It seems natural to conclude that a reduction in the 

 current rate of interest on rural loans would immensely 

 benefit the Indian peasant, and this was avowedly the 

 object which the late Mr. Justice Ranade had in view. 

 Towards the end of his address he said : ' All that the 

 Government has to do is to organize district or city 

 committees of Indian capitalists, to empower them to 

 receive deposits at fixed rates, and lend them at slightly 

 higher rates to the borrowers on the security of lands 

 or houses, etc., the excess rate providing for a gradual 

 amortization of the debt in a definite period, as also 

 insurance charges and working expenses.' 



Unfortunately the experience of Europe demon- 

 strates only too clearly that facile credit — i.e., loans 

 easily negotiated at a low rate of interest — are hardly 

 less baneful to an ignorant peasantry than the 

 dangerous advances of the usurer. 



' Cheap and ready credit,' to quote again from Sir 



