306 P&OVISIOtf OF BOR&OWING FACILITIES. 



improvement, pure and simple ; such are the land improvement 

 societies of England, and the Landeskulturrentenbanken of Germany; 

 these are generally, if not invariably, the last development of 

 land credit. 



Hence banks which grant land credit are as follows : (1) land 

 credit banks proper, whether mutual, joint stock or State, such as 

 the Landeschaften, the Hungarian Boden credit institution, the Credit 

 Foncier of France and the State Banks of various German States 

 and Swiss cantons ; (2) the rent charge redemption banks as in 

 Germany and Russia ; (3) communal and benevolent societies of 

 various sorts ; * (4) the Savings banks ; (5) ordinary 



banks, * (6) Central land banks; (7) Land Improvement 



banks or annexes of banks. 



Capital. The oldest forms have practically no original capital ; 

 they were assisted at starting by a subvention, at low interest (e.g. 

 2 per cent.) by the State, but they had neither shares nor capital, 

 their funds, beyond the above subsidy which was only intended for 

 first expenses and as a reserve, proceeding entirely from debentures 

 issued in representation of loans granted, at first in immediate 

 representation of specific loans, afterwards, en masse in representation 

 of the aggregate of mortgage, loans granted by the society. On the 

 other hand, the banks of Naples and Sicily have immense capitals, 

 derived from religious foundations (Monti Pie), but no shareholders, 

 so that they have no dividends to distribute. But, in general, modern 

 institutions are joint-stock companies with a substantial capital, 

 usually partly paid up. This capital may be foundation or ordinary, 

 variable or fixed. Foundation capital is that provided by persons 

 either merely philanthropic or interested in promoting cheap credit ; 

 such are the Hungarian banks above alluded to. In the Hungarian 

 Boden credit institution the founders' shares were 417 each, of which 

 10 per cent, was paid in cash and the remainder in bonds which were 

 merely kept in deposit, and in fact in that bank have been returned 

 to the subscribers as not required, owing to the formation of a strong 

 reserve to which all net profits go. This foundation capitol bears a 

 fixed interest of 5 per cent, which is below the ordinary Hungarian 

 market rate, and has no claim to any dividends out of profits. 

 Foundation shares may be paid off whenever the property of the bank 

 permits it, but are also retained as fixed deposits. The State 

 Subvention may be called a foundation share, and, as in the cantonal 



