226 CHAPTER XIII,
the full amount of interest with regularity. But defaults are recorded
and go to increase the liability, so that the borrowing of a trifling sum
can, and not uncommonly does, lead in a few years to a permanent and
heavy load of debt. In a number of cases a stage is reached when the
money-lender takes from the worker the whole of his wages, paying
him only sufficient for subsistence, and even puts the members of the
worker’s family to work on a similar basis. The statistics which are
available of the actual payments by workers are even less reliable than
those of debt and liability for interest; one anna per rupee of income
for those indebted is a conservative estimate of the average payment ;
one month’s wages in the year is probably a more accurate guess. All
these figures can vary widely from industry to industry, and from centre
fo centre, and the variations in individual cases are very large. But
whatever the figure, the result is almost invariable ; the indebted worker
has to give all of what might otherwise be his savings to the money-
lender, and these payments are not merely the surplus that would be
spent on petty luxuries ; they have often to be provided by trenching
on the primary needs of a healthy life. We have been impressed by
the number of cases in which an industrious worker is obliged to stint
himself and his family of necessities to meet interest charges without
the faintest prospect of ever being able to reduce the principal. Many
money-lenders take the precaution of making their dues the first charge
on labour, and outside the gates of many, perhaps most, large factories
on pay-day, stands the Pathan or other money-lender, awaiting his dues.
In some cases the money-lender gets his dues at the source by being
allowed to come to the pay-desk, but we have no reason to believe that
this is a common practice.
Indebtedness and Efficiency.
The evil done by indebtedness is not confined to the hardship
involved in the loss of money. We entirely agree with the Railway
Board in their observation that the “ tyranny of debt degrades the em-
ployee and impairs his efficiency ”. Indeed, we believe that debt is
one of the principal obstacles to efficiency, because it destroys the
incentive to effort. The indebted worker who makes an extra effort has
little hope of securing a proportionate reward ; in many cases the only
result may be to enrich the money-lender. Many workers, however
hard they work, cannot expect to secure anything above the level of
subsistence ; the “iron law ”” of wages is a reality in their case. The
most powerful incentive to good work with the great majority of
mankind is the prospect of securing a better livelihood : for too many
Indian workers there can be no such prospect.

Causes of Indebtedness.

Our information goes to show that the most important single
cause of borrowing is the expenditure on festivals, and particularly mar-
riages. Births, deaths and other events of life may lead to the necessity
for taking small loans, while periods of unemployment due to sickness,
dismissal or trade stoppages have an appreciable effect. In Bombay.