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INSTITUTE OF SOCIAL ANTHROPOLOGY PUBLICATION NO. 6 



LOANS 



From time to time most individuals find them- 

 selves in need of money or credit facilities be- 

 yond their immediate resources. The form of 

 credit extended in local stores has already been 

 mentioned. Loans for a fixed rate of interest 

 are almost unknown, and nobody in his right 

 mind, storekeepers excepted, loans money, even 

 in small sums, without ample security. Local 

 psychology is that anyone foolish enough to 

 loan money without security deserves to lose it. 

 Hence, except under special circumstances, un- 

 secured money loaned is money given away. If 

 a lender tries to collect such a debt, the debtor 

 drives his dogs at him and generally makes a 

 disagreeable scene. Natividad, in a burst of 

 generosity, loaned a sewing machine to a neigh- 

 bor, and spent the following 6 months in a vain 

 endeavor to get it back. Subsequently she re- 

 fused to loan a toy stereoscope which I had 

 given to Gaudencio to her own sister. Carmen. 

 Carmen — 1 get the story from her — says her 

 sister is stingy; Nati — 1 get the story from 

 her — doesn't want to lose the instrument. Sev- 

 eral years ago a merchant from Morelia open- 

 ed a store in Tzintzuntzan and extended credit 

 to everyone on a scale hitherto unknown. After 

 a while he realized that it was a losing game. 

 First he went from house to house, dunning his 

 debtors, with few results. Then he typed a list 

 of debtors' names, with the amount owed, and 

 posted it in conspicuous places around town, 

 with the footnote that he would be glad to sel- 

 tle for $0.50 on the peso. The debtors, in right- 

 eous indignation, drove their dogs on him when- 

 ever he appeared, and heaped insults upon him. 

 Finally, in desperation, he closed up the store 

 and returned to Morelia, a sadder but wiser 

 man. 



The only common exception to the rule of 

 unsecured loans is that involving compadres. 

 For example, a child dies and money is needed 

 for the funeral. The godfather loans the amount 

 needed, and the bereaved family, its honor at 

 stake, usually will return the loan if it is at all 

 possible. No interest is ever charged for such a 

 transaction. 



Normally, then, when an individual needs 

 money, be it a single peso or 200, the empeno, 

 or secured loan, is the only recourse open. This 

 involves giving property — land, animals, or 



household goods — in return for the money, the 

 lender to enjoy the use of the security during 

 the time of the contract. For larger sums of 

 money, land, oxen, or pack animals are the most 

 common forms of security. A formal contract 

 is drawn up to which are affixed the fiscal 

 stamps, and the terms of the agreement are out- 

 lined in minute form. A common contract is 

 that in which money will be loaned on a milpa, 

 with the stipulated right to plant and harvest 

 one crop of wheat and one crop of maize, for 

 a minimum period of about 15 months. The 

 owner continues to pay taxes, and should he be 

 unable to return the money at the end of the 

 period, the lender continues to use the land as 

 his own. Occasionally, when the debtor is un- 

 able to repay the money and finds himself in 

 need of more, he will sell the land to the cred- 

 itor. Should he die before repayment, his 

 heirs inherit all of his responsibilities. Should 

 he find himself in possession of the money be- 

 fore the expiration of the term, he may, if the 

 creditor is willing, pay a penalty to terminate 

 the contract. In case of agricultural lands this 

 may take the form of an agreement whereby the 

 real owner works the land and gives the creditor 

 a half of the harvest. When animals are given 

 as security, the creditor has the right to use 

 them for normal amounts of work, feeding them 

 and otherwise paying their upkeep. Should they 

 die owing to reasons beyond his control, he is 

 not responsible. Sewing machines are good for 

 from $10 to $25, and are much desired because 

 of their utility. Occasionally a house is given 

 as security, though if the owner must continue 

 to live in it the utility to the creditor is limited 

 to fruit trees and plants in the patio. 



Very small items, such as flatirons, may also 

 be given as security. One day Mariana Vazquez 

 came to Carmen with a flatiron; she needed 

 $1.00 to buy medicine for her sick husband and 

 no one would loan her the money on her word 

 alone. Carmen took the iron, for which she had 

 no need. Later Mariana came asking for $1.00 

 more on the same security, which was worth 

 perhaps $5. Carmen told her she had no money, 

 a half-truth. In practice, even between friends, 

 the empeno is a harsh affair, and it is a rare 

 person who will loan additional money on the 

 same security, once the agreement is made. 



When an individual is about to ask for a 

 large loan, the proceedings follow a rather ster- 



