248 RURAL RECONSTRUCTION 



any time, for which applications are invited as constituting a con- 

 venient temporary investment ; and by larger bonds paying 5 per 

 cent, interest, to be secured by the mortgages granted, up to 90 per 

 cent, only of the latters' value. The bonds are repayable, if desired, 

 at one year from the date of purchase. Both deposits and bonds 

 are tax free and are issued under the liability of the province. One 

 of the prospectuses predicts that their market value will in all 

 probability rise even above that of ordinary bonds of the province. 

 The first results of the new institution are considered very satis- 

 factory. Within twenty-one months from the start, up to 

 March 20th, 1918, no fewer than 760 loans had been taken up, of 

 the collective value of above $2,000,000, making the average 

 amount of each loan about $2,600. It ought to be added that this 

 Farm Loan Act has been supplemented by a " Rural Credits Act," 

 providing for loans on personal security, which service is likewise 

 considered to have proved successful. 



In new countries, such as Canada and the United States, as has 

 already been observed, State assistance may probably be held 

 justifiable and even necessary for the starting of a popular mort- 

 gage credit institution. It will, however, probably be satisfactory 

 to not a few, at any rate in this older country, to people like our- 

 selves — not yet, thank goodness, at any rate permanently broken 

 in to bureaucratic ways, such as are, in truth, inseparable from 

 landschaft methods and their imitation counterparts — to learn that 

 the very same principle that so creditably distinguishes these 

 institutions has been found applicable also without State aid. Long 

 term bonds, being freely negotiable, repayment by sinking fund 

 spread over a long period, security for the loan for the borrower — 

 all this has been found readily attainable without any of those 

 antiquated paraphernalia, in a purely business way. 



Landschaft valuation, so it has often been complained, is too low 

 to meet actual requirements. Borrowers very often have to take 

 up additional mortgage loans. On the other hand, champions of 

 thrift object to the renewals of loans, so often granted, as defeating 

 the object of the institution, by making the advance practically a 

 permanent encumbrance. Finally, manifestly, the landschaft system 

 is not applicable, at any rate in any large measure, to urban property, 

 which needs the assistance of credit quite as much as rural. It 

 was the last-named defect which first led business men to direct 

 their attention to the solution of the mortgage problem on practically 

 the same lines as those adopted by the landschaft, but by purely 

 business methods, without the paraphernalia of a publicly-recognised 



