254 THE POPULAR SCIENCE MONTHLY 



Agricultural Credit in the Province of Saxony 



The agricultural credit institutions of the province of Saxony in 

 the kingdom of Prussia are as highly developed as in any place in 

 Europe and are typical of the German system. The province of 

 Saxony lies in central Germany, contains an area of 9,750 square miles 

 and in 1910 had a population of 3,088,000, equal to 315.7 per square 

 mile. The largest cities in the province are Halle and Magdeburg with 

 180,000 and 280,000 population, respectively. It is the heart of the 

 sugar-beet district of Germany and the richest agricultural section of 

 the entire empire. It contains 97,000 farms of over five acres in size. 

 The estimated worth of the land per acre is $300 (for the whole of 

 Germany it is $150 per acre). It is a typical agricultural province, in 

 which the most intensive systems of agriculture have been developed, 

 necessitating the investment of a large working capital per acre, which 

 has been made available through the development of agricultural credit 

 institutions. 



These may be divided into two classes: (1) the institutions furnish- 

 ing real credit, that is, loans secured on farm mortgages made through 

 the public land mortgage bank — the so-called Landschaft of the prov- 

 ince of Saxony, (2) institutions for furnishing personal credit, that is, 

 working capital on short time loans and on personal security which is 

 provided through the farmers' cooperative banks. 



The Land Mortgage Association 



The German Land Mortgage Association {Landschaft) was first 

 established in 1770 by the nobility of eastern Germany, with the ap- 

 proval of Frederick the Great, for the purpose of securing loans on 

 their farm real estates. Instead of borrowing individually they or- 

 ganized an association and issued a common mortgage bond against 

 all of the real estate owned by the members of the association. 

 Furthermore, the management of the association was under the direct 

 control of the government and the officers were quasi-public officials. 

 Other similar institutions were soon established, but confined their 

 members to the nobility and large landowners. However, the results 

 secured were so satisfactory, the rates of interest so low and terms of 

 the loans so favorable that the plan extended and the farmers of the 

 middle classes organized in a similar manner. 



The province of Saxony, in which the farmers of the middle class 

 predominate, did not organize a land mortgage association until 1864. 

 A few years later came the war between France and Prussia (stopping 

 industrial development) so that in reality the association did not make 

 real progress before 1880. To-day the total mortgage indebtedness of 

 the province is 830,000,000 marks, and over 220,000,000 marks of 

 these loans have been made through the Provincial Land Mortgage 



