Note 33 — Chapter VII · GOVERNMENT OF LHASA—CUSTOMS, FESTIVALS, ETC.

According to the laws of Tibet, the interest on money, grain, or any other commodity is twenty per cent., or one measure for five measures yearly. The courts in a few cases admit contracts at even a higher rate of interest; but those who claim more according to their contract deeds may be punished as usurers, though sometimes their claims are allowed. In urgent cases thirty-three per cent. have been known to have been agreed upon. All contracts are required to be made in writing, attested by witnesses, and duly signed and sealed. The interest must be paid at the end of the year. If the debtor abscond, the witnesses are called upon to make good the loss sustained by the lender; but if he die, or become insolvent, and the money be not realized, the witnesses are not held responsible. If, however, the money has been lent by the Government, by certain monasteries, or lamas, or by the paymaster of the army, the amount is realised from the relatives, witnesses, and neighbours of the debtor. At every military station, a certain amount of money is generally lent out by Government, on the interest of which the militia is paid by the quartermaster, who is one of the chief Government money-lenders. Usually when the person soliciting a loan is not known, or if doubts about his honesty are entertained, securities are required. Not so in Tibet, where the lenders have been known to use their power to collect debts from the heirs of debtors to the third generation. The more the debtor exceeds the fixed term for the payment of his debt the more urgent is the creditor in his demands. The court, when it sees that the creditor has extracted compound interest for many years from the debtor, can put a stop to the accumulation of further compound interest; but there is no fixed period mentioned in the law after which compound interest must cease to accumulate.33