958 READINGS IN RURAL ECONOMICS 



the nineteenth century, when such leaders as Durand, Rayneri 

 and Rostand undertook to do for France what had been done 

 for Germany and Italy. 



The various banks which these leaders founded have rendered 

 splendid service to small farmers, especially in southeastern 

 France. But so great were the obstacles to be overcome that 

 the progress of the movement was slow, and consequently the 

 government felt called upon to undertake the reform of agricul- 

 tural credit. After various attempts it finally created a system 

 of local and regional banks which derived their funds from free 

 grants by the Bank of France. These banks have made loans 

 to farmers at the discount rate of the Bank of France and often 

 at a much lower rate. Yet, despite the tempting rates, the 

 French farmers, much to the chagrin of the government, have 

 availed themselves of but a small portion of these funds. No 

 adequate provision for the reimbursement of the State has 

 been made. 



In Germany a large part of the mortgage loaning is done by 

 institutions especially organized for the purpose : (i) the Land- 

 schaften, which are cooperative associations of borrowers ; (2) the 

 State and Provincial Banks, which are public institutions and 

 (3) the Joint Stock Mortgage Banks, which are commercial insti- 

 tutions organized under the Imperial Mortgage Bank Act of 1899. 

 Of the other institutions which make mortgage loans, the sav- 

 ings banks are the most important. The total farm-mortgage 

 indebtedness in Germany is approximately $2,000,000,000, and 

 of this slightly over one-half is borne by the specially organized 

 institutions, as follows: (i) the Landschaften, jg/ 50,000,000 ; 

 (2) the State and Provincial Banks, $100,000,000 and (3) the 

 Joint Stock Mortgage Banks, $170,000,000. The savings 

 banks bear $850,000,000. The special mortgage-credit insti- 

 tutions derive funds from the sale of bonds issued against long- 

 time, non-foreclosable mortgages. The savings banks, however, 

 make the bulk of their loans against short-time, foreclosable 

 mortgages. 



The 3,5 per cent bonds of the Landschaften sell at the present 

 time around 95 and net the investor about 3.7 per cent. The 



