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PROVISION OF BORROWING FACILITIES. 



Some banks, however, have had a purely philanthropic or patriotic 

 origin. Apart from the Savings banks the Italian banks were in 

 many cases works of charity (Monti Pie) and the great bank of 

 Naples is the result of a fusion of seven Monti of old and charitable 

 foundation. The chief land banks of Hungary are patriotic and 

 philanthropic institutions, e.g., the Boden credit institution of Buda 

 Pesth, which was established in 18G3 by a number of large landed 

 proprietors who subscribed foundation shares at fixed interest below 

 market rates in order to start the society. It has no shareholders 

 proper, and no dividend, and is very successful in its way. Another 

 society was similarly founded in 1871, and another, specially for the 

 relief of small proprietors, had a similar philanthropic origin in 1879. 



The remaining banks, principally those founded in the latter half 

 of the century, are joint-stock banks, due to private initiative, but 

 though very successful, they deal chiefly with urban property ; in 

 Germany alone thirty-one were founded between 1860 and 1880, 

 and others since ; these come under the ordinary law of the Empire 

 and not under any special law ; on the other hand they are not 

 restricted to land mortgage operations unless by their own statutes, 



Principles. The foundation principle of the several banks is 

 various; some are based on the principle of mutuality; the Old 

 German Landschaften are the best types of this class, which are 

 generally founded by persons likely to become borrowers, who, in 

 order to obtain cheap credit, unite with an unlimited guarantee, and 

 who divide all profits among themselves usually by reducing the price 

 of loans. They give very cheap credit through having neither 

 capital nor dividends, and through there being no antagonism, but 

 rather identity of interest, between the banks and their clients. Some 

 are Government institutions founded in view of providing cheap 

 capital for agriculture ; Russia, the small German States, Switzerland 

 and Austria are tbe chief exponents of this principle. The modern 

 type is that of the joint-stock bank limited, in which money is 

 invested for the sake of dividends. 



Objects. The objects of the socities are diverse ; in the Old 

 Landschaften, the chief object was the relief of the " noble " 

 proprietors, who were much distressed by usury and war. The 

 redemption of ancient and oppressive private mortgages by loans 

 from the society at moderate interest and on long term is a secorjd ' 

 and general object. The relief and development of agriculture (a) 



