The Bulletin. 83 



in tbe social life of the community. Of those engaged in industrial pursuits, 

 less than 5 per cent can ever hope to 'own their own jobs and employ them- 

 selves,' but of those that look to the land for their living, provided they are 

 well trained and work with energy and intelligence, 95 per cent can reasonably 

 hope to be their own masters." 



Experience in France and Germany conclusively proves that the develop- 

 ment of successful, scientific farming in large measure depends upon the 

 existence of facilities whereby landowners can obtain funds on favorable terms 

 to finance improvements. In France and Germany there are numbers of 

 organizations, uniformly successful, that loan money to farmers (particularly 

 to those owning and cultivating small tracts of land) on long and easy terms. 

 These organizations have been so successful that they can loan funds to land- 

 owners on terms as favorable as those secured by large railroad and indus- 

 trial corporations in this country. In this country loans on farm land as 

 security, with few exceptions, have retained their primitive immobile form. 

 The fai-mer when he needs funds for improvements, additional stock, or new 

 implements, can only borrow, if at all, in his own immediate neighborhood 

 and for short periods. The consequence is that, not infrequently, he is unable 

 to get funds when needed, and usually he is obliged to pay a rate of interest 

 higher than that to which the nature of the security he has to offer entitled 

 him. There are in this country no organizations by which loans on land (the 

 safest of all security) can be mobilized and access obtained to the wide, stable 

 investment market. 



To shov,- what has been accomplished in other countries in this direction, 

 descriptions follow of the Landschaften Associations in Germany and the 

 Credit Foncier in France. 



The Landschaften Associations are societies of farmers. The members 

 have the right to issue mortgage bonds based upon the mortgages held by the 

 association. These bonds are guaranteed by all the members of the associa- 

 tion. By virtue of such a guarantee the bonds are readily salable upon 

 favorable terms, throughout the Empire, to banks and all classes of investors. 

 By means of these bonds and the conditions under which they are issued, the 

 farmers belonging to the associations can command the money market as 

 readily as great business corporations or municipalities. Those who join the 

 associations must have their estates appraised, and they are permitted to 

 make mortgage loans up to one-half or one-third of the appraised value of 

 their land. The association assumes the responsibility for the payment of the 

 loan. The association pays the interest and also the principal, when due. for 

 which it is reimbursed by the borrower. In order to show the actual working 

 of one of these organizations, I will describe one that has its headquarters at 

 Kiel. This institution has the right to acquire real property and to issue 

 mortgage bonds payable to the holders. Only those that own agricultural or 

 woode<l lands of a certain earning power or determined value can become 

 members. As all those that join the association need capital, the initiation 

 fee is calculated at the rate of one-tenth of 1 per cent of the amount to be 

 borrowed. Mortgage bonds are issued in denominations of 5,000, 2,000, 1,000, 

 .500, and 200 marks, in four classes bearing 3 per cent, 3i4 per cent, 4 per 

 cent, and 4i/. per cent interest. The bonds are quoted and sold on the finan- 

 cial exchanges and find a ready market. The association guarantees the pay- 

 ment of the bond when due. If the capital of the association is not sufficient 

 for the purpose, then the individual members become jointly liable to an 

 amount not to exceed 5 per cent of the money loaned and repaid. The total 

 amount of the bonds of the association in circulation must not be in excess 

 of the total amount of the mortgage claims against its members which the 

 association holds. The bonds are redeemed at intervals, the numbers being 

 drawn by lot. The mortgagor can negistiate a loan through the association 

 at 3 per cent, Sy. per cent, 4 per cent, and 41/2 per cent. He selects a rate 

 according to the'circun>stances of the money market. The mortgagor pays 

 into the association, in addition to the interest, and until the termination of 

 the loan, one-eighth of 1 per cent for amortization, and one-tenth of 1 per cent 

 as a contribution to the cost of administration. If the mortgagor fails to 

 meet his obligations to the association, it may demand full payment of the 

 loan upon six'^months notice, and if the payment is not then made, the property 



