FOURTEENTH ANNUAL YEAR BOOK— PART VI. 503 



years; a little more than 6 per cent on the mortgage will retire the loan 

 in thirty years; about 5^/^ per cent will retire the loan in forty years: 

 4.88 per cent in fifty years and 4.66 per cent in sixty years. These figures 

 will no doubt surprise you as they did me. 



Thus you see, the farmers of Germany have a simple, reliable and in- 

 expensive means of obtaining credit on their lands. The objection can- 

 not be made that it is new and untried. It has worked successfully for 

 about 150 years and has never lost a dollar to its bondholders as far as I 

 could learn. Even in times of political calamity such as the Napoleonic 

 wars, when government bonds were greatly depreciated, the landschaft 

 bonds maintained a high value because their security was the earth itself, 

 which wars cannot destroy. Panics, changes of government and severe 

 agricultural depressions have not shaken the confidence of the bond- 

 holders. 



SAME IN OTHHIR COUNTRIES. 



Austria, Hungary, Denmark, Russia, Switzerland and Roumania have 

 adopted the landschaft system with variations, and it has been lextensively- 

 used in those countries to supply agriculture with cheap capital. The 

 celebrated Credit Foncier was established in France in 1852, following 

 many of the methods of the German landschaft. It is a semi-public 

 institution. Its governor and part of its directors are appointed for 

 life by the president of the republic. It practically enjoys a monopoly 

 of the real estate loan business of France. Its rates are extremely low, 

 as its bonds are held largely by small investors and the French are the 

 most thrifty people in the world. It operates on the same long term 

 amortization plan as the landschaft and loans on city property also. 

 Its present capital is $40,000,000. A borrower can not obligate himself 

 to pay a greater annuity than the total annual income of the mortgaged 

 property, while on the other hand, the society is not allowed to charge 

 borrowers more than six-tenths per cent over the rate which it obtains 

 money on its debentures at the time the loan is made. 



There are also in Germany a number of institutions that loan on real 

 estate mortgages as a part of their business, whose liabilities are guar- 

 anteed by the state, province or district that established them, but I 

 will not take the time to describe them. 



FARM MORTGAGE BANKS. 



There are, however, thirty-seven joint stock mortgage banks that 

 operate in Germany under the imperial mortgage bank act of 1899, that 

 deserve close study. They loan on both city and country real estate and 

 their business has attained an enormous development. In 1880 their 

 total loans were less than $400,000,000, while at the present time they 

 total about three billion dollars. 



The loans of those banks on rural property are small, only about 6 

 per cent in 1911. The greater part of their loans is on city real estate. 

 This is probably accounted for from the fact that the landschaften covered 

 the farm loan field pretty thoroughly before the joint stock mortgage 

 banks were ijjtroduced. These banks may loan on either the amortized 

 pjlan or the fi«4'd term plan, except that one-half of the total rural loans 

 jyi effect must be amortized. They issue bonds against the collective 



