Government loans.

139. Money was very occasionally advanced to cultivators by Government before the Assignment, when it was very difficult to get enough land occupied to secure a good revenue; it is now issued either for permanent improvements or for temporary purposes. The general name applied to all these loans is takavi or takai; they are made under the Land Improvement Loans Act or the Agriculturists' Loans Act according to the permanence or otherwise of their object. Owing to the changes which have occurred in the composition of the District it is impossible to get complete figures about the matter. In the famine of 1896-1897 Rs. 29,000 under the Improvement and Rs. 6000 under the Agriculturists' Act were advanced in five taluks, but the advances in Akola taluk are not known. Basim taluk received the largest sum under the former Act and more than half of the total under the latter. In the great famine of 1899-1900 it would appear that in the same five taluks about Rs. 75,000 were issued under the one and Rs. 30,000 under the other, Basim again having the largest total; but the figures preserved are very incomplete. Since the famines the figures have been about Rs. 1000 a year for each taluk under the more important Act, except that Akot takes less than half that amount, and mere trifles under the Agriculturists' Loans Act, except again that Basim takes an average of Rs. 2000 a year. The rate of interest is only 6 per cent. per annum, whereas from 12 to 24 per cent. is commonly charged by money-lenders, but takavi advances are clearly not popular; the reason seems to be summed up in the word rigidity. Applicants find themselves faced with numerous formalities and officials and by considerable delay; perhaps also there is sufficient positive outlay, in travelling and otherwise, appreciably to reduce the cheapness of the loan. To some extent these difficulties are inevitable, but they may perhaps be reduced.. During the last few years Co-operative Credit Societies have been introduced; they are described in a later paragraph.

Private loans.

140. Sahukars in all parts-of the District have lower rates of interest among themselves than for the public in general. The rate within their own community at Akola depends upon the bank rate and varies immensely at different seasons elsewhere it is often 8 or 10 annas a month, that is 6 or 7½ per cent. per annum; but it might be as little as As. 6 or as much as As. 12. The rate for other people depends chiefly on the security they can offer but largely also on their position and character and on the season. Legal processes are slow and expensive and a sahukar requires more interest from a man who may compel him to resort to them than from one in whom he has confidence. When crops are good the rate of interest falls, owing to the decreased demand for loans, but two or three bad seasons make it rise considerably. In a few parts of the District, owing to three successive bad seasons, it is said just now that the sahukars have lent all their capital, or that they are afraid to lend any more on land, and that therefore loans are not to be had at all, but this is very rare. The standard rate for loans on land seems to be from As. 12 to R. 1 a month for a perfectly safe cultivator, and R. 1.8 or Rs. 2 for one of ordinary or poor standing; Rs. 2, sometimes called dohotra, is quite a common rate. In a few places it is said that these rates have been constant ever since the famine of 1899-1900, but generally one hears of a slight rise through the poor harvests of the last few years. On the other hand rates run a little lower than this in an occasional village where there happen to be a number of capitalists. Deductions are occasionally, but rarely, made in the name of a gorakshan, home for cows, and at least one large firm makes other deductions on petty loans. Another system, sawai, is often followed for small loans to poor people, especially for loans made in the sowing season which are to be repaid at harvest. According to the sawai agreement the borrower must repay five-fourths of what he borrowed, and as the period for repayment in these cases is only four or six months the rate comes to 50 or 66 per cent. per annum. Loans to be repaid in kind are now very rare, but in a few villages a man might borrow a maund of cotton seed and return a maund of cotton in the boll. Sahukars complain, truly or otherwise, that people's trustworthiness, iman, has greatly declined during the last generation or two. They say that formerly when a loan was made it was common merely to make a rough memorandum on a scrap of paper and to utter the formula Saksha Parameshwar, God being witness, but now debtors resort to all kinds of fraud, pledging their land, for instance, over and over again to different sahukars; a few add that the law favours debtors. Borrowers on the other hand complain that a sahukar finds it very easy to get the law on his side in order to enforce unreasonable demands; the rule of damdupat prevents a Hindu from suing for more than twice the original sum lent, however long interest may have been accumulating, but when he comes under this limitation he gets a fresh deed drawn up with the original capital and interest thrown together as its base; again, he may insert in the deed provisions in his own favour which the ignorant borrower wholly fails to understand and a venal sub-registrar omits to explain, for sub-registrars are considered to have wide opportunities for petty exactions and corruption; a third course is said to be easy with the rough account books in use, especially perhaps with the very irregular pathani-wahi-the Indian ink of the entry is rubbed out with a moistened thumb and a fresh entry is inserted. A man in whom a sahukar feels full confidence can still borrow without pledging any property as security, but it is said that the practice of demanding security is growing. The amount required is as much as will ensure both the return of the original loan and the payment of overdue interest, which at 24 per cent. per annum soon amounts to a large sum. On land or houses sahukars seldom lend more than one-half or one-third of the value of the property, but if gold or silver is left with them in pledge they will lend three-quarters of its value.

Co-operative Credit Societies.

141. The interest demanded seems needlessly and oppressively high, and Co-operative Credit Societies have recently been started to provide money at lower rates. The principle seems to have been first put into operation six or seven years ago by the Industrial Association of Akola, under the leadership of Rao Bahadur Deorao Vinayak. Grain banks were instituted by this agency at three villages in Akola taluk; those at Bhorad and Morgaon still survive and it is proposed to register them under the Co-operative Credit Societies Act. After several months of careful enquiry throughout the District 13 Societies were started by Government in 1906., Mangrul taluk having three and each of the other taluks two. Mr. Krishnarao Purushottam Bhat, Extra Assistant Commissioner, has been in charge from the beginning. He says that the scheme was everywhere received with much appreciation. The local organisation consists in each case of a secretary, treasurer, and banker guided by a committee of five, six, or seven villagers and controlled by a central committee of three, including the Tahsildar; both the last-named and the Subdivisional Officer audit the accounts. Two systems have been followed, that of share-capital and that of deposit. The former has been applied only at Keli Weli and Palsoda in Akot taluk; members must buy one or more shares at Rs. 10 each, and that sum, together with as much as can be borrowed at a low-rate from capitalists, forms the loanable capital of the Society. The total capital at Keli Weli is Rs. 2710 and that at Palsoda Rs. 2100, over a half in each case consisting of share money. The Society at the former village has been working admirably; half the members have loans of about Rs. 100 each at unusually low rates, while all are getting over 12 per cent. interest on petty sums which would otherwise have been uninvested; the members number over 50 and more are eager to join. The deposit system was alone applied in the other Societies; a considerable sum of money is borrowed at 4½ per cent. for a term of five or more years and forms the bulk of the loanable capital; members are invited to invest small sums at 4½ or 6 per cent. but are required to pay only an entrance fee of eight annas. This has the great advantage of imposing only a very light burden on poor cultivators, but the disadvantages of depending altogether on loans made from mainly charitable, not economic, motives and of giving little opening for small investments by members. Only one of the deposit Societies has a capital of more than Rs. 1000, and most of them have from Rs. 300 to Rs. 500. The rate of interest charged has in all cases been R. 1 a month, 12 per cent. per annum, and various regulations provide for reserve funds being built up and other measures of security being taken. Two Societies advance small sums for trading purposes, but otherwise the only objects recognised are agricultural. The scope of operations is in some places confined to a single village and in some to a circle of about 4 miles radius. Loans are sometimes advanced without any security, sometimes on the personal security of one or two well-to-do villagers. One of the smaller Societies has failed to take any action, in some others the money has been allowed to lie idle for months, and sometimes interest has not been promptly repaid, but the system has been at work for so short a time and in such bad years that the progress made cannot be considered unsatisfactory; it is too soon to form any more positive conclusion. It is under consideration to start a central bank at Akola, but this has not yet been carried into effect. Village sahukars have not shown any hostility to the system and have often been ready to help, but they might possibly regard its extension with apprehension. Villagers generally are of course conservative, but they hear of the scheme with interest and agree that it may prove very valuable.

Former economic position of cultivators.

142. It is very difficult to get a convincing view of the extent to which cultivators indebted. General statements, whether made by prominent residents of the towns or by the villagers themselves, are helpful but inadequate, because the standard of comparison employed is uncertain; and indeed very few individuals combine the wide outlook and detailed knowledge required. Cultivators willingly construct a typical balance sheet showing the items of income and expenditure, but they are so cautious that the first result is generally a large annual deficit; they admit that this is wrong, and perhaps suggest such alterations as would balance the account, but corrections made solely with that object are clearly untrustworthy. Some points however stand out with greater or less clearness. It is universally said that there was little karja-bajari, indebtedness, in Muglai times; this is very partially true and requires large qualifications. Firstly, land had scarcely any value, and the cultivator had no rights in it; fear of both thieves and the Government prevented him from possessing either ornaments or other forms of wealth; he could, and did, borrow upon his crops and personal security, but had very little else to offer. The total debt may have been small, but it was apparently as much as the cultivator could bear. This is proved by written records and supported by traditions. The earliest Revenue and Settlement Reports speak of debt as having been a very heavy burden but one rapidly decreasing. Thus Major P. A. Elphinstone wrote in the Jalgaon Settlement Report of 1865: ' There will be little chance of the sowcar ever again obtaining the absolute power he had previously exercised for centuries past over the ryot.' The Berar Gazetteer of 1870, p. 226, says, ' Even until within the last few years the cultivator of this part of India was a somewhat miserable and depressed creature. He was deeply in debt.' Universal tradition relates that cultivators frequently gave up their land and ran away to avoid paying the land revenue, but they were brought back and made, by a mixture of force and conciliation, to cultivate again. When revenue became due a jhapti sipahi was sent to a village and prevented any goods leaving it till payment was assured; security was given by sahukars who apparently recouped themselves by getting rights over the growing crops. One hears of barbarous means being employed by the money-lenders of the time to compel payment. Clears therefore the tradition of light indebtedness is misleading. It may be in part due to the tendency, common perhaps in all ages and all countries, to magnify the good and minimise the evil of the past. It is partly true in that people were far less able to borrow then than now, because their wealth was much less. Perhaps also a distinction should be made between the different classes in a village; relatives of the pargana and village officers must have had a firmer position than the other cultivators, who are still called asami's, tenants, clients; but it is impossible to work out the details of this at present. Tradition says again that common food-grains were not only cheap but easily obtainable; a man might give up his land at any time and turn labourer in another village confident of finding employment and support. Whatever may have been the case in a good year it is hard to see how this could have occurred when the harvest was generally poor. Another explanation would be that in such years people regarded suffering as a matter of course and therefore gave it no prominence in tradition.

Present economic position.

143. Unfortunately no records of the general material condition of the cultivator for the first few years after 1853 are available at Akola. It is said, however, in all parts of the District that both cultivators and labourers now have houses, food, and clothes much better, as well as more expensive, than they had 50 or 60 years ago; they give entertainments on a far larger scale, and they feel no necessity to work for long hours. The subject is certainly very complicated, but these indications appear unmistakeable; it is difficult to doubt that the general economic position of the cultivator has immensely improved. At the same time his condition is not wholly satisfactory; cultivators themselves feel the burden of debt keenly. Two prominent considerations apply to this. The first is that 24 per cent. per annum is a common rate of interest for long loans and 50 per cent. for a small loan made for sowing or weeding. Such high rates on the one hand make even a small debt serious and on the other ensure that a man shall keep his total debt within fair limits or be speedily ruined; if he can pay so much interest in poor seasons he will be able easily to repay the capital in good years. The second is that, though cultivators are in most respects frugal, yet social events, especially weddings, are made the occasions of great extravagance; for instance, a man of 55 says he can remember when a wedding in his family cost Rs. 100, but now it costs Rs. 1000. People say as a matter of course that they must copy any fresh extravagance of their soyaras, the set with whom they intermarry, and that this involves them seriously. Extraordinary economic changes have occurred within the memory of men still living; the Muglai condition, 60 years ago, was one of very plain living and scanty wealth, except in a few official circles; high-priced cotton and low-priced land, under greatly improved political conditions, brought for many years a new and ready prosperity and constantly supported fresh expense, but now more economy is becoming necessary; thus villagers will point to a field which was sold 20 years ago for Rs. 150 and has just been sold again for Rs. 2000. It may be that these changes have not yet worked themselves out, and in particular that the new system of economic freedom has not become adjusted to the endless grades of the caste system. There is clearly room for mixed results from changes so considerable.

Illustration.

144. An illustration given to the writer personally in apparent good faith by the leading men of a village, and corroborated by enquiries in villages in all the six taluks, will show how these considerations apply. A man whose land is worth Rs. 1800, his pair of bullocks Rs. 100, his house Rs. 200, and his ornaments Rs. 100-a total of. something under Rs. 2500-would spend from Rs. 200 to Rs. 300 or even Rs. 400 to marry a son, and half as much for a daughter; if he wanted an adult wife for himself he would spend perhaps Rs. 1000 to marry a widow, though again he might be able to make the same amount by re-marrying a widowed daughter (his own expense then being perhaps Rs. 25). He could run into debt up to Rs. 400, paying Rs. 100 a year interest and getting small loans at higher rates every year for temporary purposes; but if his debt increased much more he would be ruined by the interest; his land revenue would be Rs. 30. In a hilly village in the south of Balapur it was said that the holder of 20 acres, worth from Rs. 300 to Rs. 400 and assessed at Rs, 10, might be Rs. 200 or more in debt, paying Rs. 50 as interest. The term sadharan, common, is generally applied to men who have 70 or 80 acres of land and three pairs of bullocks, but this is misleading; in the village first quoted it was estimated that about 12 men had holdings of this size, 40 or 50 had over 24 acres but less than 80, and about 75 had less than 24 acres (which is generally considered just as much as one pair of bullocks can cultivate). Land is often held on a rather smaller scale, but these proportions are not uncommon; only a small minority of cultivators would be called sadharan. Land is generally cultivated by the actual holder, but in every village some fields are held on the payment of either a fixed rent or (by batai) a share in the crops. The ratio between assessment and value varies so much that people commonly say there is no connection; that is probably an exaggeration, but in fact the actual condition and value of a field are dependent on many other causes besides its permanent factors of fertility. Perhaps the first cultivator quoted is rather favourably situated in regard to assessment; he has a larger capital than the average; but the figures given for him appear fairly typical.

Indebtedness in general.

145. It is difficult, again, to say how much debt he would be likely to incur. Probably half the cultivators are as deeply in debt as they can endure with any comfort, but the debt is not large in comparison with the interest they manage to pay. Large land-holders who can borrow at about 12 per cent. are often as seriously involved as the poorer classes. Absolute freedom from debt on the one hand and bankruptcy or hopeless debt on the other both appear uncommon. Indebtedness has been in existence for very many years; it is said to have increased distinctly during the famine of 1899- 1900 (not merely because of the revenue demand but because people often sacrificed a field in order to postpone application for relief), and in a few parts where the seasons were especially unfavourable it has increased during the last two or three years. The land revenue assessment is of course a serious item of expense but is not burdensome; the main cause of debt is the undue expenditure on ceremonies; people recognise this, and Marwaris have made a deliberate and apparently successful attempt to reduce the expense, but most castes feel helpless in the matter. On the other hand the burden of debt is seldom overwhelming; a really good season has not come for six years, and people hope to be greatly relieved by one or two good harvests. The cultivating classes are, with many limitations, shrewd and intelligent men; the more fixed features in their economical position are favourable, and there is no reason to think that the long period of their prosperity has come to an end.