INSTITUTES FOR KUKAL LAXD CREDIT 53 



§ I The PRUSSIAN landscha?ten. 



There are i8 I,aiidschafteii in Prussia. As they were founded at 

 various dates and in different localities, they present differences with 

 each other, but have all one essential point in common. They are co- 

 operative societies of landed proprietors, the object of which is to provide 

 their members with cheap mortgage credit, not to be repaid on simple 

 demand of the lender. They are all corporations in public law, managed 

 by their members and supervised by the State. Their duty is to bring land- 

 holders who have need of credit into relation with capitalists desirous of 

 investing their money. They issue the mortgage loans granted to their mem- 

 bers in accordance with a strict estimate of the 3deld of the holding, under the 

 form of land bonds {Pfandhriefe) which those receiving them can sell on the 

 public exchange. Some lyandschaften do not issue land bonds for their 

 own account but are affiliated to the Central Landschaft founded in 1873, 

 which places at their disposal the land bonds they have need of for their 

 loans. This union for the collective issue of land bonds serves principal!}' 

 to obtain a large market for the bonds by reducing the rate of interest t( 

 be paid. The issue of the land bonds is based on the mortgages registered 

 in favour of the lyandschaft on the farms serving as security for the loan. 

 However, in the most ancient Landschaften, all the land holders who, accord- 

 ing to the law, belong to the Ivandschaft, are liable to the extent of their 

 entire propert^^ for the engagements of the I^andschaft (general guar- 

 antee), independently of the fact whether they have received a loan or not. 

 Nowadays, the Ivandschaften have also, most of them, a sufficiently large 

 amount of capital of their own, accumulated in the course of years and have 

 also a considerable sinking fund formed by the annual regular instalments of 

 their debts repaid b}' the debtors. The security of the land bonds is further 

 increased by the character the Landschaften possess of institutions in pub- 

 lic law and above all by the rights granted them in the case of a debtor 

 not meeting his engagements. In fact, in such a case, they are authorized 

 to distrain upon the estate of the debtor, without judicial authorization 

 being necessary. Under existing conditions, the land bonds of the Land- 

 schaften are to be accounted among the safest of investments, so that their 

 value is quite the same as that of the best state securities. 



We do not want to enter too deeply into the characteristics of the or- 

 ganization of the Landschaften, but shall only now glance at the situation 

 of their business. 



The following table, in which we give figures showing the amount of 

 land bonds issued by the various institutes gives a view of the development 

 of their work in the last ten years : 



