April 1, 1902.] Supplement to the ''Tropical Agricultufist.'* 
7H 
CO-OPEEATIVE CREDIT SOCIETIES. 
In a late number of the At/ricultural Magndne 
•we drew attention to the desirability of devising 
some system of Agricultural Biinks for the 
cultivators in Ceylon. As one travels through 
the country it appears evident that in spite of the 
abolition of the paddy tax the condition of the 
native cultivator has not improved, and in many 
places one finds land passing into the hands of the 
Mohammedan usurer, who, starting with a clean 
sheet and a natural energy which has been 
steadily diminishing in the Sinhalese cultivator, 
arebeginiiiiig to prove that paddy cultivation is — 
■what it was "once upon a time"— a very paying 
industry. 
Mr. Eeg. Murray, writing in the BanJcer^s 
Magazine points out that what is wanted to 
ameliorate the distressful condition of the Indian 
(and Ceylon) cultivator, is not momentary 
support so much as intelligent organization. 
Credit is already available, but of a kind which 
leaves the recipients worse off than they were 
before. 
In June last there met at Simla a Committee, 
composed of experts, appointed to report on what 
remedial measures can be devised for improving 
the condition of the Indian lyot. This Committee 
has iilready published its report, and it may be 
confidently expected that Lord Curzon will not 
allow the proj osed legislation to wait long for its 
practical application. 
The object of such legislation is not as is 
popularly believed, that the Government should 
establish a kind of credit mobilier to pay the 
outstanding debts of the cultivator and release 
him from the grasp of the moneylender, — a 
policy, the defects of which need not be enlarged 
upon here. 
Going to the cause of the trouble we find that 
the ordinary rate of interest payable by the culti- 
vator is scandalously high, and that in addition 
the money-lender secures to himself the sale of the 
crops at a price unfavourable to the borrower, 
•while in many cases the laud itself is at his 
mercy. And this is the chief point, that lending 
for agricultural purposes has long since reached 
the sta e of usury, the effects of which is the 
gradual effacemeut of the borrower and his credit 
and the reduction of himself to an unproductive 
cypher. Thus has it come about that the industry 
becomes handicapped and unprogressive, and 
hence follows the obvious suggestion that no im- 
provement is possible until the cost of borrowing 
on the part of the cultivator is reduced below 
the rates charged by the native money-lender. 
As a first step something must be done by the 
borrowers themselves to improve their credit and 
make them free agents, since in their present 
condition they have nothing to offer as security. 
It is not to be expected that under any cir- 
cumstances they will be able to improve their 
credit to the extent of clearing their debts, but it 
is pf^ssible for them to improve it to the extent of 
deriving a profit from the result of their present 
and future labour and intelligence and with such 
surplus to gradually pay off old debts. To enable 
them to do so, it is proposed that Government pass 
an act and frame special rules for the encourage- 
ment and formation of Co-operative Societies on 
similar lines to those of the Friendly Societies 
in England and the Raffeiseh Societies on the 
Continent. 
The argumeut is that the united security of a 
number of men can raise advances on consider- 
ably easier terms than one man, wlio, as things 
go, is required to pay rates of interest which 
make it impossible for him to ever reap the just 
fruits of his labours. Co-operative Credit Societies, 
therefore, have for their object the lianding of 
individuals together in order to obtain money at 
reasonable rates of interest and to distribute the 
money so obtained among the members under 
fixed rules. The margin of profit between the 
rate at which the Society borrows for and lends 
to its members should gradually create a reserve 
fund, which, being indivisible, must annually 
improve their credit. The action of Government 
must be confined to shewing the people how to 
act and to provide legislation and rules for their 
guidance and protection, and thus encourage self- 
help and self-reliance. 
Societies already formed in the N.-W. 
Province and the Punjab show that the 
Co-operative credit is well understood and 
appreciated both by borrower and lender. In 
Madras it is likely that native banks will soou 
remodel their system in order to obtain the 
privilege and exemptions which the legislature 
propose to afford to Co-operative Societies. 
With such a system in operation it does not 
seem likely that Government will be applied to, 
unless under special circumstances, to make loans 
for the promotion and support of the Societies, 
nor beyond the inspection of a Registrar or other 
District Officer, will the Government direct, 
regulate or interfere with the free action of 
the Committees of management. The Eaffeisan 
system has been so eminently successful on the 
Continent that, with conditions at least equally 
favourable for its growth, it is reasonable to 
suppose that it will be equally suitable and suc- 
cessful in India and Ceylon. 
With the successful application of the Co- 
operative banking system to Indian agriculture, 
it only remains for some one to agitate for its 
adoption in Ceylon under Government auspices. 
BY HIGHWAYS AND HEDGES. 
It is surprising to see the enormous extent of 
land under citronella grass in the Southern 
Province, an! that too, in spite of the big drop in 
the price of the oil — now procurable fv r about 60 
cents the bottle. There is no doubt that this hardy 
grass, growing as it does without any special 
attention, has spoiled the people for better cul- 
tivation. In these citronella districts the abortive 
attempts to grow coconuts, Liberian coffee, cocoa, 
etc., only go to prove that even if these economic 
products are suited to the districts, they will not 
tolerate the kind of treatment that is meted out to 
them by the careless citronella planter, 
