We can, however determine the bank s priorities regarding the loans for intensification of agricultural production PBR favored seed production and artificial fertilizers.

Long-term loans

Looking for the right form of long-term lending, PBR chose mortgage bonds and bonds, i.e. securities with long amortization periods. First, the long maturity was particularly important for agriculture, where the production cycle was much longer than in other sec- tors of economy. Second, mortgage bonds and bonds guaranteed gradual and continuous inflow of capital. The issue of mortgage bonds and bonds in different options: in zloty, in gold and in foreign currencies, on the basis of long-term loans granted, was guaran- teed by PBR s articles of association and provisions of law. PBR s role was not limited to issue of securities; the bank was obligated to execute them and, thanks to Poland s improving economic situation, it did so without major problems. Especially because as a state-owned bank it received, just like Bank Gospodarstwa Krajowego (BGK), the privilege of placement of securities in the Polish market before the issues of private and social long-term credit institutions. Originally PBR issued only mortgage bonds but with time, discerning an opportunity to raise foreign capital, it decided to issue 7-percent irrigation bonds, constituting collateral for long-term loans earmarked for the purposes associated with broadly understood irrigation of farming land. The irrigation loans were addressed to both legal entities, water utilities, rural municipalities, cooperatives and individual farmers.

Support for parceling out

PBR executed the task of supporting parceling out, that was imposed on it in the inter- war period as its basic task within the framework of the state agricultural policy, not only through granting loans for this purpose but also through purchase of land estates for ownership or on a consignment basis. This way the acquired estates were under the bank s administration and, until parceling out, they were leased in full or in part. Using the powers granted, PBR parceled out the acquired land estates and the farms and plots created as a result were sold on favorable credit terms. Very frequently the purchasers of the land obtained additional loans from PBR earmarked for start-up. The bank financed the purchase of construction materials, production means, farming tools and livestock.

Funding of leading industrial facilities

In the two decades between the wars, the Bank made a significant contribution to devel- opment of the leading industrial plants associated with agricultural production. To ensure a sufficient quantity of artificial fertilizers for the domestic market, it supported

4,5% OBLIGACJA MELIORACYJNA O WARTOŚCI NOMINALNEJ 1000 ZŁ

I OKRESIE WYKUPU 30 LAT, WYEMITOWANA PRZEZ PAŃSTWOWY

BANK ROLNY W 1939 R.

4,5% FIXED RATE DRAINAGE BOND WITH NOMINAL AMOUNT

OF 1000 ZŁ AND MATURITY TERM OF 30 YEARS, ISSUED IN 1939

BY PAŃSTWOWY BANK ROLNY

102 T H E H I S T O R Y O F B G Z