October, 1911.] 



333 Agricultural Finance & Co-operation, 



out. The Decean Agriculturist Relief 

 Act with its rules against usurious rates 

 of interest has not, however, done much 

 good to the Bombay Presidency. The 

 rules of equity against unconscionable 

 bargains have not also in other Presi- 

 dencies done much in the way of relief 

 against mahajans aud sowcars. Advan- 

 ces from Government treasuries in the 

 shape of taccavi have not only failed to 

 relieve distress, but they had in many 

 instances a positive demoralising effect. 

 The Public Loan offices started in the 

 different districts are not much better 

 than mahajans so far as the industrial 

 and agricultural populations are con- 

 cerned. Their demoralising has con- 

 tinued uninterrupted. 



The history of the economic progress 

 of Germany, Austria and Italy demon- 

 strates the futulity of ordinary banks or 

 Government advances in improving the 

 condition of the masses by relieving them 

 from permanent indebtedness. If a mere 

 low rate of interest were a sufficient basis 

 of improvement in the condition of the 

 ryots in any country, philanthropic 

 advances would have been of consider- 

 able benefit ; but experience has shown 

 that such advances have generally a 

 demoralising effect. My own experience 

 in money-lending to cultivators on a 

 small scale has shown in the utter 

 futility of a low rate of interest. Causes 

 other than usurious rates of interest are 

 at work in the cases of uneducated and 

 reckless people. In many cases the 

 mere facility in obtaining loans at low 

 rates of interest has a degenerating in- 

 fluence on the debtors. Without check 

 against improvidence and waste, with- 

 out moral and social safeguards against 

 disproportionate marriage and funeral 

 expenses, against luxuries in imitation 

 of the costumes and manners of the 

 fashionable world, and without acquisi- 

 tion of the habit of thrift, we cannot 

 expect improvement in the economic 

 condition of a people. If each member 

 of the society is security for the debts 

 of the other members, the liability being 

 unlimited, he would not, on the death 

 of a parent of one of them, incite 

 extravagant expenses by borrowing ; 

 he would, on the other hand, check 

 waste of money by his neighbour, for 

 his own sake, if not for the sake of his 

 neighbour himself. Thus each would be 

 a check string of the other members of 

 the society. There must be means of 

 creating habits of economy and of im- 

 proving morality before we can expect 

 permanent good of not only the 

 agricultural classes but also of the indus- 

 trial population. 



Caste and Sociology. 



It has been said that the caste system 

 divided the Hindu population into water- 

 tight compartments, and it is sometimes 

 thought that caste prejudices constitute 

 a insuperable bar to the formation of 

 People's Banks on co-operative principles. 

 The evils of the caste system have been 

 overstated by social reformers fond of the 

 European social system ; but as a matter 

 of fact, social relations between the 

 different castes in rural areas were very 

 friendly, and associations, except as to 

 inter-marriage and inter-dining were 

 never prohibited. Persons of different 

 castes mixed freely with each other, 

 and no difference attended business 

 relations merely on account of caste. 

 But with the advanced culture of 

 the higher classes and the un- 

 changed primitive intellectual con- 

 ditions of the masses, the friendly 

 relations between the higher and 

 lower caste is fast disappearing. The 

 age of a person, whatever his caste is, 

 commanded respect, and he would be 

 addressed as an elder brother or a 

 paternal uncle or grand-uncle by even a 

 person of a superior caste, but the old 

 feeling of respect, of brotherhood, and 

 equality and of affection is not now as 

 apparent as one would wish. If the old 

 state of feelings had lasted with the 

 advance of psychological ideas of 

 equality and brotherhood of men and 

 with apparent but not real social 

 progress, the caste system would not 

 have been considered an unmixed social 

 evil. With, however, the advance of 

 present intellectual and sociological 

 ideas and the existence of the caste 

 system, which has taken too deep a root 

 in Indian soil to be easily removed, some 

 time of unity besides the old village 

 community system is necessary to unite 

 apparently discordant units. Petty 

 quarrels and jealousy giving rise to 

 faction and leading to ruinous litigation 

 ought to abate if the solidarity of the 

 people be desirable. Co-operative Banks 

 and co-operative sales and purchases may 

 afford a common platform for better 

 and more friendly understanding of each 

 other's interests. India in its piesent 

 state is best suited for the success of the 

 operation of co-operative principles, and 

 in the words of Mr. Henny Wolff, 

 the greatest English authority on co- 

 operative credit principles :—" Of all 

 countries, in the old world and the new, 

 there seems none so specially marked 

 out for the practice of co-operative 

 credit as India." The success also has 

 been, according to the same authority, 

 phenomenal. But the decay of com- 

 mercial ideas in village umta, added tq 



