508 IOWA DEPARTMENT OF AGRICULTURE 



be issued than the value of the mortgages held and the capital of 

 the institution. I would have the capital large. I would not have 

 them issue bonds for more than 25 per cent of the capital. There 

 would be no individual liability at all. There is a mistake a great 

 many people make. They think this is a government institu- 

 tion. The Credit Foncier of France, which is an incorporated 

 capitalized institution, has no liability of the mortgagor. You 

 couldn't introduce a system like that in Iowa, where there would 

 be a responsibility over and above the amount of the mortgage, 

 Avhile in Germany they are never called upon to pay anything 

 above that. 



Henry Wallace : Are the stockholders not liable for anything 

 above their stock in this Credit Foncier ? 



Mr. Hogan: No, the stock is large. The owner of bank stock 

 in this country is liable, and I think the owners of capital stock 

 would be liable. 



Mr. Wallace : But unless you increase the credit you are not 

 going to get any decrease in interest, and the interest rises and 

 falls inversely in proportion to credits. Unless yon have this un- 

 limited liability you are not going to have unlimited credit. 



Mr. Hogan : Will any man here say that the value of Iowa 

 land is less stable than the value of the pt-operty of the North- 

 western Railroad Company? The value of the security is of 

 course the fundamental thing in regulating the price of interest, 

 but in this case the value of the property is unquestioned ; there is 

 no better security than Iowa land. 



J. R. Doran : Will you state which of the systems you have de- 

 scril)ed has the l)est rate of interest? 



Mr. Hogan : The landschaft gets the best rate of interest. We 

 found it something like 4 per cent. Under the Credit Foncier I 

 think about 4.3 per cent is the rate. 



Mr. Doraii : The formation of this landschaft had better be as 

 local as we could make it? 



Mr. Hogan: The Credit Foncier of France operates through 

 the entire republic of France. Most of the German institutions 

 operate only in the states in which they are organized. 



Mr. Wallace: Then you don't think that the co-operative l)ank 

 would be a practical thing in tlic state of ToAva ? T quite agree 

 with you there. 



Mr. (lo-^jiii: I liclicvc in iiicoi-porjitiug fMiMu mortgage lianks 

 iiiidrr state supci'visioii. There is nothing to i)r(vent Hint being 



