848 



Credit Banks in France. 



[JAN., 



great precautions to see that the bills presented by the local 

 bank are satisfactory, it makes itself acquainted with all the 

 circumstances of the bank and of the district, and controls the 

 total sum lent to a local bank, so that this sum bears a relation- 

 ship to the paid-up capital, and to the contributions to the 

 capital of he disrict bank. Additional security, such as the 

 personal guarantee of the committee, is often required. 



By a law dated 11th April, 1905, the district banks are 

 required to make various returns to the Ministry of Agricul- 

 ture, and, as stated above, their accounts are to be examined 

 by Inspectors appointed for this purpose. All applications 

 for advances from State funds are to be submitted to a 

 committee of the Ministry, which is also to have before it 

 in the case of banks in operation, the last report of the 

 inspector. Any advance so made may be recalled in the 

 event of the regulations not being complied with. The dis- 

 trict banks in their turn are required to exercise a regular 

 and effective control of the local banks. 



It will be seen that the system represents broadly the 

 stimulation of local effort by public loans. A proportion of 

 the capital of these banks is subscribed by the persons 

 interested, and forms to some extent a guarantee that the 

 remainder of the capital furnished from State funds will be 

 properly used. The risk of loss arising is further diminished 

 by the deposit of a proportion of the loan as security with 

 the Bank of France, by the guarantees required with every 

 loan, by the supervision of the various bodies concerned over 

 one another, and by the fact that the loans are only intended 

 to be granted for well-defined objects, about which the com- 

 mittee of the local bank can obtain information. 



Long Loans to Small Holders. — The scheme described 

 above for the provision of loans for short periods has been 

 extended or completed by a law dated 19th March, 19 10, so as 

 to enable loans to be made, by means of the same machinery,, 

 to small holders to enable them to carry out permanent im- 

 provements, and to make changes in cultivation. It also 

 provides for the acquisition of land for holdings and the re- 

 demption of mortgages. The law is only applicable to "small 

 holdings" (petites exploitations), and no single loan is to 

 exceed £320. The duration of the loan is limited to 15 years, 



