218. Government loans, takavi or tagai, are as elsewhere
advanced to cultivators under two
Acts, the Land Improvement, and the
Agriculturists' Loans Act. The latter was only applied to Berar in 1891, but the former in one shape or another has been in force since 1871. Loans under it are chiefly given for the sinking of wells, the eradication of scrub and deep rooted weeds from fields and the making of embankments. In the thirty years from 1877-1907 a sum of only two lakhs of rupees was advanced, and of this Rs. 30,000 were given out in the famine years of 1896-97 and 1897-98 and almost a lakh in 1899-1900 and 1900-01. In 1908 also, as the 1907 rains were a partial failure, it was thought well to stimulate the demand for labour by this means and about Rs. 83,500 were advanced. Omitting, however, these years the average yearly amount advanced to cultivators in ordinary times was only Rs. 2631. Loans under the second Act have also been as a rule trifling. In the famine years above mentioned some eighty-four thousand rupees were distributed and in 1908 Rs. 13,375, but apart from these exceptional cases the average yearly amount is but little over Rs. 1000. Many reasons have been given for the comparative unpopularity of Government loans, the most common being perhaps the delays connected with the system. In Berar there is no record of rights in land and each separate case accordingly entails a reference to the Registration Department: procedure must always, therefore, be somewhat more lengthy than in the Central Provinces, though a recent simplification in other respects has resulted in an increased demand for the loans. It has been urged by some officers that the local conditions are unfavourable to the grant of loans in normal seasons, the
facilities and need for irrigation being small and the rich soil producing good crops without much trouble or expense. But this is contraverted by other officers, who ascribe the small demand for loans to the delays and trouble of the system of distribution and to the want of interest taken in the matter by Government officials. To this may be added a few factors which elsewhere also operate against the success of takavi. Government occupies an infinitely stronger position than the ordinary creditor, and insists upon prompt repayment; the latter moreover will lend for marriages and the like ceremonies which make indebtedness a social necessity to the average cultivator, and he is naturally chary of doing so when the land is already pledged to a far stronger claimant: hence the cultivator who may need such a loan is careful not to do anything which may endanger his chance of getting it. It seems probable that, with an improved system of distribution, Government loans will increase in popularity. In the Melghat, where cultivation is in a much more backward state, it is possible that a promising field may be found when settlement operations are complete. The Korkus are heavily indebted and pay most extortionate interest on their scanty loans: but at present their agriculture is entirely subordinated to timber cutting. In times of scarcity of course the loan system is of immense use everywhere in enabling Government to finance the coming crop.
219. Private moneylending takes various forms; between
bankers and men of business accommodation in one form or another is often
necessary and this is given to persons of well-known
financial stability. Such loans are commonly made upon note
of hand only or bill of exchange payable in one case at sight
(darshani), in the other at 30 or 61 days from execution; and a
commission of R. ¼ to Rs. 2 per cent, is charged. The
ordinary rate of exchange on Bombay varies between ¼ per cent.
discount in the cotton season and ¼ per cent, premium at other
times. To cultivators loans are made on mortgages of land,
and for these the usual rate is 1 per cent, per mensem where
the security is good and the reputation of the borrower
excellent; 1½ per cent, is the ordinary rate for loans to
cultivators of substantial standing, and 2 per cent, or even
more will be charged in more doubtful cases. These rates are not really so high as at first sight they seem. The lenders are often persons engaged in various other trades, who may require all their capital at very short notice to meet a sudden call, and mortgages are of all forms of property the most unrealisable in an emergency. Thus it is notorious that in the recent financial crisis which swept from America throughout the world several of the local sahukars were very hard pressed to find the requisite cash, and had to sell land and mortgage rights at a loss. The great firm of Bansi Lal will have nothing to do with this traffic, and the danger above described accounts in part for the high rates being maintained even in a District where money is comparatively plentiful. Subsequent loans on the same security must pay 2 or even 3 per cent, per mensem, though the latter rate would only be charged in the most risky transactions. Grain is sometimes advanced by sahukars on a stipulation that it will be paid back at harvest in a ratio of 5: 4 (laoni) or in unfavourable cases 3: 2 (wadhididhi), and in the Melghat the rates are even higher; the system however is a vanishing one, all the larger firms having given it up. Persons who can neither show well known credit in the money market nor produce landed security must pawn valuables to the amount of their loan and will then receive the money on terms similar to those in force for mortgages. If they cannot do this, they will have no choice but to resort to the village Shylock or the Rohilla who deals in petty loans at high risk and shows but little compassion either in the rates he charges or in his method of collecting debts.
220. Mention should be made of a rule of Hindu law
which applies in Berar but not in the
Central Provinces. The doctrine of DamDupat is probably the oldest existing attempt to put a check upon usury, for it does not owe its origin to the commentators but is to be found stated at length in the Institutes of Manu. In brief it declares that the amount of interest payable at any one time can never exceed the principal or balance of the principal remaining due. Thus it is both a check upon usury and a law of limitation since though it imposes no bounds to the rates which may be charged it
forces an extortionate creditor to sue promptly and prevents the accumulation of sleeping claims. It is only enforceable where both parties to the transaction are Hindus; if a Muhammadan takes up the interest or liabilities of a Hindu, the rule applies for just so long as the matter is in Hindu hands. It has been held in Bombay that the law is not applicable when there is a liability on the creditor to keep accounts as when a mortgagee having been placed in possession is accountable for profits received by him as against the interest due; but an opposite ruling has always prevailed in Berar, where in consequence the law has a much wider application than on the Bombay side.
221. A branch of the Bank of Bombay has been
established in Amraoti since 1868 and
is strongly supported. Messrs. Ralli Brothers to a large extent do their own banking. Of native firms Raja Seth Gokuldas and Rai Bahadur Bansi Lal both have local agents, but the chief business lies in the hands of Shriram Saligram of Dhamangaon, Shriram Rupram, Dhanraj Pokarmal, and Ramratan Ganeshdas, all of whom have extensive dealings throughout the District. In Ellichpur the best known firm is that of Lalasa Motisa owned by Nathusa Pachusa. Moneylending business is transacted also by a few Brahmans, the most notable being Ramchandra Renko Dole.
222. It is an interesting question how far the indebtedness
of the cultivator is or is not leading to a transference of the land to non-cultivating classes, but it is a question which in Berar is considerably more difficult to answer than in the Central Provinces, for the Land Records throw no light whatever on the matter and Registration records very little. It is certain that the value of land has gone up by leaps and bounds every year and is still increasing; and instances are common of fields changing hands in 1909 at prices about six times what the same fields fetched twenty years before, while even greater increase is met with in some localities. Mortgages, moreover, are commonly framed with a condition of foreclosure and not of sale, and some of the firms just mentioned have undoubtedly acquired large but scattered
estates of several thousand acres in different parts of the District. But the ryotwari tenure, which makes it impossible to acquire a whole village by a single transaction as is done in proprietary tracts, militates against them; and as the management of a large ryotwari estate entails infinite expenditure of time and trouble, land-grabbing is naturally confined to much smaller men and does not make great headway. It is a control-of the cotton trade rather than the actual ownership of land that the moneylenders look to acquiring; and in the trade neither ryot nor moneylender can afford to do without the other and neither is completely at the mercy of the other; they fulfil different and complementary functions, the one growing the cotton, the other financing, organizing and exploiting it. Even when a mortgage is foreclosed it generally pays the creditor better to resell than to cultivate the land himself.
The prosperous and contented aspect of the villagers, their sturdy independence of manner and high standard of intelligence, all arising from their prosperity, are indeed among the first things always remarked upon by visitors from other parts of India, and the remark is borne out by numberless statistics; to take two instances the proportion of goldsmiths to the general population is large and the amount spent annually on luxuries as evidenced, e.g., in the yearly Excise Bill, extremely high. Women even of the lowest castes may commonly be seen wearing heavy ornaments of silver and gold; and among the men Coimbatore scarves and coats of serge and superior cloth are common. The oldest inhabitant of a Daryapur village put the matter somewhat quaintly when he said that in days gone by one coat was enough for a family of four or five members, that each might wear it as occasion arose but that to-day they would not be content without four or five coats to each man of them. The general wealth of the cultivating classes throughout the plain taluks is undoubtedly very large; and is generally very evenly distributed, prosperity being "evidenced rather by a generally high standard of comfort and of outward display than by large accumulations of capital in a few hands. The population is fairly dense in comparison with the system of cropping, and thrift is not a common virtue in
the ryot's moral code nor are the facilities for it great. What is easily come by is easily spent, and as long as his income is sufficient for the rude plenty of the day, he takes but little thought for the morrow. Whenever, therefore, unusually high expenditure is necessary, recourse is had to the moneylender.