42 GERMANY - CREDIT 



the subject of numerous studies and discussions. Ir 1891 a law was passed 

 which created Rentenhanken of a new type. 



This law had been preceded by the colonization law of 26 April 1886 

 which was however applied only in the two provinces of Posnania and 

 West Prussia. It may be considered as partaking of the character of offi- 

 cial instructions as to colonization : it'indicates the methods of coloniza- 

 tion which it allows and protects, and presents some calculations as to re- 

 demption premiums, leaving the contracting parties otherwise free. 



On 27 June 1890 it was applied in all the provinces, and on 7 July 

 1 891 the so-called law of the Rentenhanken was passed and seemed to decide 

 all questions def^nitel5^ 



It is the aim of this law that the Rentenhanken, helped by State credit, 

 should buy the large landed properties, divide them into parcels of an aver- 

 age area of from five to fifteen hectares (i) and resell these to the peasants. 



The following are some details as to the organization and the manage- 

 ment of these banks. 



i) In each province a Rentenhank and a general commission are set 

 up. The latter is the intermediary between the seller and the buyer of 

 land and draws up the plan for subdivision ; the former undertakes the fi- 

 nancial business, paying tbe seller and receiving redemption premiums from 

 the colonists. 



2) The seller, that is the large proprietor who wishes to sell his land, 

 offers it to the general commission. The latter sends out experts charged 

 to draw up the plan for subdivision and to fix the price for the whole pro- 

 perty and the individual parcels. 



3) The plan for subdivision, the prices being indicated on it, is sent 

 to the proprietor on whom it is incumbent to find purchasers for the parcels. 



4) When these have been found and have declared before the general 

 commission their willingness to buy the parcels at the fixed prices, the sel- 

 ler applies to the bank for the total selling price. In jilace of cash he receives 

 Rentenhanken bonds, guaranteed by the State, and bearing interest at the 



rates of 3 V2 ^^^ 4 P^^ c^^^^- 



5) If the property' in question be burdened with debts the bank 

 must, before paying the proprietor, and in conformity with the provisions 

 voted in 1909, settle the debts in cash or bonds, and must only give the re- 

 mainder of the amount fixed by the general commission to the proprietor. 



On paying the proprietor the bank itself becomes proprietor of the land, 

 and in such capacity sells the parcels to the colonists. The amount of the 

 purchase price is paid by the latter by the method of redemption in sixty 

 and a half years. Instead of this term the bank may allow terms of fifty- 

 seven and a half and fifty-nine and a half 3^ears, in these cases discharging 

 the purchasers from obligation to pay the redemption premium for three 

 or for one years. 



The purchasers of parcels are authorized to pay their debts before the 



(i) I hectare = 2.47 acres. 



