Report of the Royal Commission on Labour in India

Bibliographic data

Monograph

Identifikator:: 1850495947

URN:: urn:nbn:de:zbw-retromon-233603

Document type:: Monograph

Title:: Report of the Royal Commission on Labour in India

Place of publication:: London

Publisher:: His Majesty's Stationery Off.

Year of publication:: 1931

Scope:: xviii, 580 S.; graph. Darst., Kt.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIII. - Indebtedness

Collection:: Economics Books

INDEBTEDNESS 229 Danger of Credit, Even if the co-operative credit movement were to spread among industrial workers to a much greater extent than we anticipate it would not strike at the heart of the workers’ difficulties. Credit, in the sense of borrowing capacity, is not the worker’s need ; it would be nearer the truth to describe it as his curse. There are frequent occasions when a misfortune makes it necessary for him to obtain a small loan, but such loans are often obtained from relatives. Even where this is not possible, they could frequently be obtained on reasonable terms, if it were not for the larger debts already incurred. As matters stand at present, if these loans could all be secured on terms of easy repayment, the majority of workers would be little nearer to freedom. It is the large debts which are incurred not from economic necessity but on account of social pressure and custom that most enslave the worker. The fatal weak- ness in the present system is the comparative ease with which the worker can borrow sums which he has little prospect of being able to repay. His lack of education tends to prevent him from taking long views ; and the offer of cash to the extent of a hundred or two hundred rupees in exchange for a thumb-print is almost irresistible. The lack of forethought in mortgaging the future is illustrated by the fact that the thumb-print is frequently given ona blank document or the page of a book. It is by no means uncommon for the money-lender to fill in both the capital sum and the interest rate subsequently, and in any case the borrower has no copy of the transaction and has usually to rely entirely on the money-lender for a periodical reckoning of the position. Quite apart from the dangers of this practice the workman has often no real percep- tion of the effect of compound interest, and his readiness to let the future take care of itself is fatal to him. Laws against Usury. Laws against usury have been a prominent feature of various religions and national codes, and-the leading religions of India affirm the principle underlying them. Unfortunately, as we think, the influence of economic thought in the nineteenth century led to the removal ofall legal restrictions on usurious practices in India, and it is only within the last generation that there has been a tendency to re-impose them. This has led to a few legislative experiments but (with the possible exception of Some measures relating to land) the attempts so far made have not been effective. The leading measure of general application is the Usurious Loans Act of 1918. This measure enables the court hearing a suit for bhe recovery of debt to re-open the transaction and relieve the debtor of excessive interest, provided that the transaction was substantially unfair nm the first instance. Excessive interest is defined as meaning interest In excess of that which the court deems to be reasonable having regard to the risk incurred as it appeared, or must be taken to have appeared, to the creditor at the date of the loan ”. Tt is agreed that the law has not been generally successful. We doubt if the interest in the type of trans- action we are considering is © excecaiva ’ within the meanine of the

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