54 RURAL DENMARK 



there have been several instances of the failure of such 

 banks, and I believe that I am right in saying that 

 one of them was involved in a recent and very notable 

 scandal. 



To return to the Credit-Union Banks. The answer 

 to the questions set out above is : 



(i) A Credit-Union Bank is a private institu- 

 tion, and is not organised by any public 

 authority. 

 (2) To the ordinary Credit-Union Banks no 

 assistance is given from the State by 

 means of guarantee or loan. But these 

 are inspected and their accounts are con- 

 tinually audited by Government auditors 

 as a safeguard against fraud. 

 There exist, however, other Credit Unions known 

 as the Hausen Credit Unions, designed, as I under- 

 stand, to advance funds to small-holders. These are 

 founded on the same principles as the ordinary Credit 

 Unions, with the important difference that the State 

 guarantees the interest up to 4 per cent. Therefore 

 the value of their bonds naturally stands higher than 

 does that of those of the ordinary Credit Unions. I 

 was informed by Mr. Waage that no losses have been 

 incurred by the Credit Unions during the last fifty 

 years, and that the Government is satisfied with their 

 position. 



In order that all this question may be made quite 

 clear, I will now give a translation of the substance of 

 a memorandum most kindly written for me upon the 

 matter by Mr. Waage. 



A Credit Union of landowners is formed with the 

 object of securing for its members mortgages on their 

 properties. This is done thus. A landowner who 



