SMALL-HOLDINGS AND CREDIT UNIONS 51 



recognised as a freeholder from the moment that he 

 enters on his land. 



Now I come to the method and scale of the re- 

 payment of the amount advanced to the small-holder 

 by the State. These are rather intricate ; indeed I 

 fear that all this subject cannot be made otherwise 

 than dull reading. Still, if it is seriously contemplated 

 that such State small-holders are to be called into 

 existence in this country, details of this nature are 

 well worth the study of all concerned, and especially of 

 those statesmen and reformers who advocate the move- 

 ment. On their proper appreciation and application 

 to local circumstances may possibly depend the success 

 or failure of any system that is ultimately devised. 



Three per cent, is the rate of interest, as distinct 

 from sinking-fund, charged towards the repayment of 

 capital. According to a provision of the Act, during 

 the first five years this interest, but no capital, is pay- 

 able. The total loan is divided into two parts, one of 

 two-fifths and one of three-fifths. This three-fifths 

 section of such loans is converted into a kind of public 

 stock, and through the Mortgage Bank of Denmark is 

 put upon the market with a State guarantee. 



To return to the two-fifths section of the debt of 

 any individual small-holder. After the five years 

 of grace during which he pays 3 per cent, only, he 

 must pay 1 per cent, more, which 1 per cent, accumu- 

 lates as the sinking-fund for the redemption of the 

 loan. This total of 4 per cent, however, he continues 

 to pay throughout the entire period, with the result 

 that as the borrowed capital shrinks through repay- 

 ments, those repayments automatically increase in 

 proportion year by year. When the two-fifths section 



