50 ITALY - CREDIT 



loans on first mortgages on real estate np to half the value of the latter. 

 Such loans are repayable gradually by annual instalments, within a period 

 not less than ten or more than fifty years. The annual instalment includes 

 the amortization quota, interest, the tax on income, commission and 

 expenses of administration, and the quota of the sum repaid which is 

 due as the tax to the Treasury, the latter being paid directly by the various 

 institutions on behalf of those who borrow from them. The debtor can 

 however free himself in advance of all or part of the debt, making the pay- 

 ments we have mentioned to the lending institution and the Treasury. 



The institutions of land credit are further able to acquire, by cession 

 or substitution on the same conditions as the loans, mortgage or privileged 

 credit, the debts being repayable by amortization. 



They procure the necessary means for operations of these two kinds by 

 issuing land bonds bearing interest at the various rates of 3 %, 3 ^/^, 4, 4 ^ 

 and 5 per cent., thus avoiding the great oscillations of the financial market. 

 Loans are made in bonds at a rate of interest equal to that of the bonds is- 

 sued for the purpose of making them. These bonds have a nominal value 

 of 500 liras and can be payable to bearer or nominative. They are gra- 

 dually redeemed at par, that number of them being withdrawn every half- 

 year which corresponds to the amount of the amortization due by the borrow- 

 ers in the preceding half. The total land bonds issued are secured by 

 the total mortgages held, the holders being thus safeguarded. 



Landowners in no immediate need of capital but only of ready money 

 can, before they apply for the loans regularly made in the form of bonds, 

 obtain that a current account, secured by a mortage, be opened for them, and 

 that advances in cash be made to them on this account, M a varying rate 

 of interest determined by the institutions. 



We will now briefly examine the work which these institutions of land 

 credit accomplished in Italy in 1916. 



§ 2. The " ISTITUTO itai^iano di credito fondiario ". 



This Italian Institute of Land Credit (i) was constituted in Rome on 

 7 February 1891, having by its by-laws a capital of 100,000,000 liras of 

 which 40,000,000 liras were paid up. 



In its report on the results of last year's business the administrative 

 council shows that in spite of the difficult times the course of affairs was 

 satisfactory. 



In 1916 applications to the institute for loans numbered 183 and covered 

 21,254,500 liras, as against 71 applications for 5,992,000 liras in 1915. Thus 

 applications increased by 112 and were for an amount which had increased 

 by 15,262,500 liras. The increase would have been larger " if the institute 



(i) See in this connection the interesting monograph "1,'opera dell'Istituto Italiano di 

 Credito Fondiario nei 23 auni dal 1891 al 1913 ". Report of the director general to the council 

 of administration, Rome, 191 6. 



