PROVISION OF BORROWING FACILITIES. 379 



expenses are kept as low as possible, and are often waived by the 

 well-established Associations ; the necessary contributions towards the 

 cost of administration of the Associations are, moreover, relatively 

 inconsiderable, as the office holders, apart from the Syndics, usually 

 give their services gratuitously. Proper consideration of loan 

 applications is secured by the fact that these organisations are 

 thoroughly conversant with agricultural conditions, and are 

 in a position [to appraise the value of estates and the business 

 capacity of owners through their local representatives, who 

 are themselves agriculturists and members. Through these 

 local representatives, who as members are directly interested in 

 the Associations are also the good management of their Association, 

 enabled to secure continuous supervision of the mortgaged security 

 without incurring expense. 



Of the sixteen Mortgage Credit Banks, which have been established 

 for the whole of a State, Province, or District within a Province, and 

 whose liabilities are guaranteed by the public authority of such areas, 

 only one, namely, that at Hanover, restricts its mortgage loans to 

 those on rural property. The original purpose of many of these 

 institutions was to assist medium and small landowners, by loans on 

 reducible mortgages, to redeem burdens or servitudes which still 

 attached to the possession of their holdings at the- time when the 

 emancipatory legislation declared such charges to be commutable. 

 They have lost this special character, and have all developed into 

 institutions for mortgage and communal credit. The total of their 

 outstanding loans amounts to about 100,000,000, of which half has 

 been lent on mortgage security. Funds are mainly obtained by the 

 issue of bonds, which are recognized as trustee securities, but working 

 capital is also provided by deposits, payments by borrowers into 

 sinking fund accounts, accumulated funds, and grants or loans from 

 the State or other authority concerned. The bonds of these Banks 

 are, in most cases, redeemable by the banks themselves, (but not by 

 the holders) by drawings, but as a rule a certain period must elapse 

 after the issue of bonds before a Bank may include them in a drawing. 

 Most Banks pay their loans in cash, not in bonds, as in the case of 

 the Landschaften. 



These banks have served in an especial manner the needs of 

 medium and small landowners, and afforded them facilities for obtain- 

 ing loans at moderate rates of interest, not subject to recall, and 



