86 UNITED STATES - CREDIT 



tes. In intensive farming the Germans are far ahead of our own farming 

 population, and the average production in Germany has increased greatly, 

 while our average yield per acre has increased but slowly. In Germany the 

 population in a given district is largely homogeneous, and the individual is, 

 so to speak, attached to the soil, the same farms continuing in the same 

 famiUes for generations. In tliis country such a condition is seldom found. 

 Id Germany, on account of the limited supply of land and the large popula- 

 tion, and on account of the known productivity of each piece of land, the 

 value of that land is easily ascertained and varies within very slight 

 limits. In this country the variations in value are very great. In Germany 

 the average farm is about twenty acres ; in this country the average farm 

 is 138 acres. In German}^ the credit and resources of the individual in 

 a community are known to practically every other individual in that com- 

 munity ; in this country no such accurate information is obtainable. In 

 Germany the small farmer, his wife and children all do manual work on 

 the farm ; in this country such a condition is rare. In Germany the peo- 

 ple have been trained to a supervision and control of their operations by 

 strict Government regulations which would not be favoured in this country ". 



It is hardly necessary here to follow the Commissioners in their expo-^- 

 ition of the practice and principles of European land mortgage institutions. 

 The ground covered is already familtar to readers of the Bulletin, so that 

 we may proceed to consider the recommendations embodied in the Bill 

 which accompanies the Report. 



In brief, it is proposed to permit any ten persons to organize a land mort- 

 gage bank, under a Federal charter and subject to Federal supervision, 

 but Umited as to its sphere of action to the territory of a single State. The 

 minimum capital necessary is fixed at $ 10,000 in shares of $ 100 each (ex- 

 cept in the case of co-operative banks whose shares may be as low as % 25), 

 and each bank would be empowered to issue bonds, guaranteed by first mort 

 gages on farm land within the State, to an amount not exceeding 15 times 

 its capital and accumulated surplus. Under certain conditions the mort- 

 gage bonds issued by such banks could be used : (i) as security for the 

 deposit of postal savings funds ; (2) as a legal investment for funds accum- 

 ulated as t^'me deposits in national banking associations ; {3) as a legal 

 investment for trust funds under the charge of United vStates courts. 



The capital of the banks, as well as the mortage bonds themselves, would 

 be exempt from taxation. For the supervision and control of the banks, and 

 in general for the carrying out of the provisions of the Bill, it is proposed to 

 create, in the Treasury Department, a special bureau under the direction 

 of a " Commissioner of Farm-Uand Banks ". 



The Commissioners explain that the plan of a single central mortgage 

 bank for the Unites States was rejected by them after the most careful con- 

 sideration in favour of a system of independent banks each operating within 

 the limits of a vState. The Commissioners are of the opinion that the plan 

 recommended, which in fact follows very closely the lines of the national 

 banking system as recently modified, is more in harmony mth public sent- 

 iment in America, which is strongly in favoin- of free competition and op- 



