28 AGRICULTURAL ORGANISATION 



ing to 2,000,000 francs (£80,000) a year, and (2) having 

 placed at its disposal, without interest and up to the year 

 1920, a sum of 40,000,000 francs (£1,600,000), the whole 

 to be applied to the extension of agricultural credit. 



Following on these new arrangements, though not until 

 after prolonged discussion, there was passed the law of 

 March 31st, 1899, which created the regional banks of 

 mutual co-operative credit. These regional banks were to 

 group the local banks into federations, discount their bills, 

 and be the means of transmitting to them loans from the 

 State funds in question to constitute their working capital. 

 In 1901 — that is, within two years of the passing of the 

 Act — there were 16 regional banks at work, and by 1910 

 there were 96. 



Meanwhile, various causes had led to the desire for a 

 further extension of the credit system, among them, as 

 set forth in the " Bulletin of the Bureau of Economic and 

 Social Intelligence " for January, 1912, being : (1) The 

 newer and constantly-increasing needs of agriculture as 

 an industry ; (2) the progress made by the principle of 

 co-operation for agricultural production ; and (3) the 

 growing necessity for small families to develop and consoli- 

 date small properties threatened by too minute a 

 parcelling out or by the rural exodus. 



So the existing system of agricultural credit at short 

 date was supplemented by a system of long-date credit 

 granted, under a law passed in 1907, to co-operative 

 societies, and, under another law passed in 1910, to 

 individual farmers. 



In the former case the regional banks advance loans at 

 the almost uniform rate of 2 per cent., and for periods not 

 exceeding twenty-five years, to agricultural co-operative 

 societies engaged in production, the purposes to which the 

 loans may be applied being, however, restricted to the 

 following : Production, manufacture, preservation or sale 

 of agricultural commodities ; acquisition, construction, 

 installation, or adaptation of buildings, workshops, store- 

 houses, or transport conveyances ; and collective purchase 



