British Mandate: A Survey of Palestine: Volume I - Page 354

CHAPTER IX.

Approximate allocation of the loans

To Arab farmers '£0 Jewish farmers

LP. 278,000 578,000

856,000

A little more than one half of the short term loans were issued to Arab farmers while most of the long term loans were issued to Jewish farmers.

105. These loans were secured by a charge on the produce of the land and on the property (not land) purchased with the loan, a joint and several guarantee, and by the application of the law for the collection of taxes. Government did not take mortgages of land, the reason being that it was desired to obviate the delays involved and any suspicion as to Government's motives in the event of foreclosure. The issue of these loans by Government was necessitated by the fact that the banks and other financial institutions would have refused loans to several farmers who would not have been regarded by them as eligible or credit-worthy. For example, in the case of the Agricultural Mortgage Company, its loans were restricted almost entirely to citrus growers because the company is empowered to lend only on first mortgage; it could not lend in the hill districts or elsewhere where land is still held under the system of masha'a (unpartitioned land).

106. ln respect of the total issues of £P.856,578, repayments of £P.586,153 have already been made representing 94% of the amount due for repayment up to 30th September, 1945. This satisfactory record of collections is not unrelated to the prosperity enjoyed during the war, and still being enjoyed, by farmers who, as a result of rises in the prices of their produce which have outstripped the increase in their costs of production, have been able to repay the loans without difficulty.

107. After October. 1944, the issue of further loans was stopped save in a few exceptional cases. Government considered that the greatly increased prices obtained by farmers for their produce during the war left them generally with ample resources to finance further development without the need for further loans. In those circumstances, the issue of further loans on any large scale would have served merely to make money conditions easier than they were and generally to increase the tendency towards inflation, to check which Government was making determined efforts.

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