68 HUNGARY - CREDIT 



The first board of directors was not successful in carrying out the above 

 programme and the special general meeting of February, 1881 decided on the 

 complete reorganisation of the institute. 



It was also decided that it must do communal credit business. 

 Consequently, the share capital was increased to 10,300,000 fls. and a great 

 impetus was given to the business of the society. 



After 10 years' work, in fact, in 1881 the total lent amounted to crs. 

 7,188,851 ; in 1891 it had increased to crs. 36,854,605. At the beginning 

 of its career, the bank granted rural mortgage loans almost exclusively; later 

 it has continually extended its urban business, so that at the end of 1910 

 about 60 % of the business was represented by rural loans and 40 % by 

 urban loans. In fact, at that date, of 278,805,946 fls. lent on the guarantee 

 of mortgages 180,000,000 fls. represented value of rural mortgages and 

 122,000.000 that of urban mortgages. 



The communal loans amounted to 306,045,033 fls. 



In 1 90 1 the Hungarian Mortgage Bank appreciably extended its in- 

 fluence on the Hungarian mortgage market by the purchase of the greater 

 number of the shares of the New Hungarian Agricultural Credit and Im- 

 provement Bank, of which we shall now give some account. 



2. — The Hungarian Agricultural Credit and Improvement Bank was 

 founded at Budapest in 1895 with a capital of 24,000,000 crowns, under the 

 form of a society limited by shares, with the object of favouring the interests 

 of agriculture, increasing the means of communication, and promoting the 

 formation of co-operative societies, extending credit and facihtating 

 improvement works. 



The progress of this bank has been rapid enough, especially since 1901. 

 At that date the mortgage loans amounted to 28,633,189 crs.; in 1910 they 

 had increased to 70,837,738 crs., of which 62,530,796 crs. represented 

 rural loans. 



This institute has also made communal loans (to the amount of 

 6,515,568 crs. in 1910), loans for the reconstitution of vineyards (for 

 11,860,336 crs.), loans for viticulture (11,863,200 crs.) and railway loans 

 27,517,600 crs.). The reserve fund amounted in 1910 to 2,705,683 crs. 



3. — Central Mortgage Bank of the Hungarian Savings Banks. — The 

 idea of founding this institute, reahsed in 1892, was due to the consid- 

 eration of two points characteristic of the needs of mortgage credit in Hunga- 

 ry, on the one hand, the necessity of decentralising the land credit institutes 

 in a country in which there are large rural regions not well provided with easy 

 means of communication, and, on the other hand, that of centralising the 

 issue of land bonds to facilitate their being placed on the large national 

 and foreign central financial markets. It was precisely a large number of 

 small credit institutes, savings banks, people's banks etc., that made pro- 

 vision for the foundation of this Central Bank with a capital of 4,000,000 

 crowns. 



This Bank has rendered considerable services to the small local institutes, 

 undertaking for them such mortgage loans as the nature of these institutes 

 did not fit them for. The best proof of the success of this institution is 



