AGRICULTURAL CREDIT IN THE UNITED STATES 963 



regions who are seeking to become owners and whose capital has 

 been exhausted by the first payments. 



Secondly, it has been found in Europe increasingly difficult to 

 market the debenture bonds at favorable rates owing to growing 

 competition of other securities. In this country it has been gener- 

 ally assumed that such bonds would be so eagerly sought by in- 

 vestors that they would bear a rate of interest second only to that 

 borne by bonds of the federal government. The probable rate 

 has been estimated at 5 per cent and by many even at 4 per cent. 

 Here, again, European experience has been disregarded. The 

 bonds of the early Landschaften had the moral support of a 

 powerful king. In the oldest Landschaften the security included 

 all the property of the district, and in later times it has included 

 all that of the borrowing members. The bonds were issued at a 

 time when land was a chief source of wealth and therefore the 

 main field of investment ; and before the Landschaften were 

 obliged to meet any considerable competition their bonds had 

 already become familiar to investors and gained their confidence 

 confidence, it should be added, which has never been abused. 

 But despite these favoring conditions, the bonds have gained only 

 a local market, and the attempt to broaden the market by the 

 formation of a Central Landschaft was unsuccessful. It is ad- 

 mitted that under present conditions the Landschaften cannot 

 make loans at lower rates than can unorganized agencies. So 

 that the only inducements they can offer borrowers are the longer 

 term and the pre-pay ment privilege. 



The Credit Foncier, as is well known, resorts to a lottery to 

 facilitate the sale of its bonds, but it does not attempt to compete 

 with unorganized agencies for the mass of French farm loans. 



If in Europe, despite the favoring conditions, the farm deben- 

 ture bond finds a market with difficulty owing to the competition 

 of other securities, how many times more difficult would be the 

 marketing of such bonds in the United States, where such favor- 

 ing conditions are wanting, and the obstacles to be overcome 

 are much greater ! In this country land is not regarded, as in 

 Europe, as the foundation of national prosperity, and landowner- 

 ship is not the basis of social distinction both among people of 



