AGRICULTURAL ECONOMICS 



payment each year until the whole amount is paid. 

 If, for example, the rate of interest charged by 

 the institution is four per cent., five per cent, will 

 be collected each year. Four per cent, is interest 

 and the one per cent, is a partial payment which 

 accumulates with interest until at the end of a 

 little over forty years sufficient has been paid in to 

 cancel the debt. It is also possible for the more 

 thrifty farmers to make other payments which 

 shorten the period required for canceling the debt. 

 In some cases, these partial payments must be paid 

 in mortgage bonds, which can be bought at the 

 market price. 



These mortgage bonds make a safe and ready 

 means of investing the farmers' savings. In 

 them the farmer finds a safe investment which is 

 as permanent as he may desire to have it, and at 

 the same time an investment on which he can 

 realize at any time in case he decides to invest in 

 land. The German form of the institution may 

 not exactly meet our needs, but it is certainly true 

 that the principle of association is especially 

 desirable in any system of land credit. 



Not only do such institutions make it possible 

 for the young farmers to invest their savings until 

 they are ready to buy, and then to borrow money 

 to finish paying for the land, but they make it 

 more desirable for the retiring farmers to sell their 

 land, as they can invest in bonds which are as safe 

 as the investment in land and pay practically the 

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