t 



e 

 388 PROVISION OP BORROWING FACILITIES. 



Loan Banks), are able to apply substantial sums to the relief of the 

 indebtedness of their members. 



The organisation of German mortgage credit presents the further 

 important feature of decentralisation. The savings banks provide 

 nearly every district with a public mortgage credit institution ; and 

 the special organisation or organisations for mortgage credit in each 

 Prussian province, or in each State, bring their services within the 

 convenient reach of farmers throughout their areas by their system of 

 local representatives. 



Except in the case of the saving banks, capital is mainly obtained 

 by the issue and sale of land mortgage bonds, for whose interest and 

 capital the particular institution undertakes the responsibility. The 

 Landschaften alone appear to leave to the borrower the realisation 

 of these bonds, facilitating this, however, through their loan banks ; 

 the other institutions pay the borrower in cash at a rate slightly below 

 the current market rate, realising the bonds on their own account at 

 the same time or at some suitable future date. The borrower has 

 usually to pay from J to 4 per cent, as commission for this service. 

 Loans by the issue of bonds are advantageous as not being subject to 

 recall or to an increase in the rate of interest on the part of the lender, 

 and as allowing the borrower to repay his debt by the purchase and 

 presentation of bonds of the same class and issued by the same 

 institution when such bonds are low in price. Their principal 

 disadvantage consists in the possible depreciation in value at the time 

 of loan, although the borrower is liable to pay interest on and to 

 redeem the loan at the amount of the nominal value of the bonds (or 

 must purchase and present such bonds when higher prices 

 prevail). 



The organisation of institutional mortgage credit in Germany 

 has been immensely facilitated by the complete system of registration 

 of title in that country. The uniform system, based on the Prussian 

 medel and introduced for the Empire in 1900, provides for obligatory 

 registration of title, prority of each registered charge in the order 

 of its registration, and freedom of inspection of the registers. These 

 registers, drawn up for small areas and maintained by them, Describe 

 each estate and recite all personal charges (e.g., usufructuary rights) 

 and other charges ; and in general, no claims against such states not 

 duly registered are valid in a court of law. It may be added that 1 

 the total costs in connection with the registration or cancellation of 



