238 RURAL RECONSTRUCTION 



the prestige and commanding position of the bond-issuing body, it 

 is not surprising that the assistance of the State should have been 

 impressed in various ways, and not for prestige alone. For money 

 likewise was required. And on new ground money is scarce for 

 such an undertaking. 



The first off-shoot borrowing assistance (not yet in money) from 

 the State may be taken to be the system of bond-granting by the 

 Prussian Rentenbanken, introduced by the great statesman Stein 

 for the purpose, originally, of redeeming the former villeins' obliga- 

 tions under the feudal law. In modern times — in the eighties — 

 after such service had long been discharged — an even more valuable 

 service was discovered for these same Rentenbanken to render by 

 providing the necessary purchase money for estates to be cut up 

 into small holdings, the repayment of which was to be spread, by 

 means of terminable annuities, over a period of up to about seventy 

 years. This matter is touched upon in the chapter on Small Hold- 

 ings. Suffice it here to say that the process has proved distinctly 

 successful. 



A more material change in the system was effected in the creation 

 of the Credit fonder of France — which has become a most useful and 

 powerful institution, helping landed proprietors with credit, such as 

 before the War could be reckoned as cheap. At the present time it 

 stands at 7 per cent. Starting at Government instigation — on the 

 ground of reports collected upon the results of landschaft business — 

 and under Government direction — which has been steadily main- 

 tained—the Credit foncier has become, from a scattered group of 

 more or less local institutions, a powerful joint stock company, 

 having its seat in Paris, but doing business in all France, as well as 

 in Algeria and in Tunis — although those dependencies have their 

 own Credits fonciers as well — with power to issue shares up to the 

 maximum of 300,000,000 francs. The figure actually issued up to 

 last year was 262,500,000 francs. In its actual operations of business 

 the Credit foncier has departed some way from its German prototype. 

 For it engages in a general banking business as well as in mortgage 

 credit — which in part explains the high rate of interest that it has 

 seen itself obliged to adopt. For it draws its cash from the money 

 market. Furthermore, it has extended its business, first, to loans 

 made to " corporations," that is, departments, municipalities, 

 churches and similar institutions, which transactions have come to 

 constitute a large share of the business done — namely, at the close 

 of 1918, 2,486,535,542.60 francs out of a total of 6,263,622,804.92 

 francs. And, next, it has extended its mortgage business proper also 



