A cash discount of 3 to 4 per cent. is not much of an inducement in a country where the usual rates of interest are 18 to 40 per cent. Some of the banks of Central America, which secure but a small and unimportant share of the business going, and which pay less attention to the development of the country than to the needs of their own treasuries, often demand 1 to 11⁄2 per cent. monthly, with security worth two or three times the sum loaned.
There are no established commercial agencies in Central America which furnish information, but reliable information uninfluenced by personal interests can sometimes be obtained from the principal banking firms—such, for instance, in Guatemala, as the International Bank, American Bank or Guatemala Bank, Clermont and Co., Schlubach, Dauch and Co.; in Salvador, from the Banco Agrícola, Occidental or National Bank, and Messrs. David Bloom and Co.; in Panama, Messrs. Ehrmann Brothers; in Honduras, from J. Rössner and Co., P. Maier and Co., Francisco Siercke, and Juan Stradtmann; in Nicaragua, from the young and well-respected British Consul, Mr. Albert J. Martin; and in Costa Rica from the following banks: Anglo-Costa Rica, Commercial and Sasso and Pirie. These houses are better informed than anyone else about the amount of credit customers may deserve, because, knowing the promptness with which the various firms meet their outstanding drafts, they are in a position to form a reliable opinion of the solvency of prospective or actual customers.
The Banco Agrícola Comercial has a subscribed capital of $5,000,000, of which $1,000,000 is paid up. The Reserve Fund amounts to $100,000, and Eventualities Fund to $115,180. The Permanent Director is Señor Mauricio Duke, and the Consulting Directors Señores J. Mauricio Duke and Eugenio Aguila. There are two other Sub-Directors, Señores Rafael Guirola and Miguel Judice. Señor F. Drews is the General Manager.
The Banco Agrícola Comercial, which was established in 1895, has gone through more than one critical financial and commercial period, but it has come out of the ordeal with considerable credit to itself. There can be no doubt that the bank has been a great assistance to agriculture and trade generally in the Republic, nor that it has not done at all badly for itself, which fact is seen from the last balance-sheets issued. In 1908, upon a total turnover of $14,500,000, the bank's profits were $145,634 (silver pésos). There was a dividend of 8 per cent. paid to the shareholders upon the paid-up capital of $1,000,000 (pésos) after all charges for administration had been met, and a substantial addition made to the Emergency Fund. In 1909 the total amount of business transacted figured at $16,200,000 (silver pésos).
The following summary of the bank's financial transactions and position over a period of three years will be of interest:
| Cash. | Commercial | Accounts | Accounts | Circulation. | |
| Paper and | and | bearing | |||
| Mortgages. | Deposits. | Interest. | |||
| First half of 1907 | 717 | 588 | 906 | 780 | 816 |
| Second half of 1907 | 565 | 758 | 828 | 931 | 741 |
| First half of 1908 | 935 | 779 | 1,175 | 991 | 816 |
| Second half of 1908 | 1,441 | 1,013 | 1,485 | 1,186 | 984 |
| First half of 1909 | 1,424 | 1,213 | 1,954 | 1,142 | 921 |
| Second half of 1909 | 946 | 1,181 | 1,603 | 1,453 | 969 |
It will be observed that the last year's showing is less favourable to the bank, but this may be attributed to the heavy demands made upon its resources in financing the movement of the coffee crop. The metallic reserve for meeting outstanding obligations over the same period had been considerably weakened in consequence, as the subjoined table will prove:
METALLIC RESERVE.
(A denotes notes alone; B denotes notes, deposits and current accounts.)