960 READINGS IN RURAL ECONOMICS 



investor do not come into personal relation with one another ; 

 but it differs from them in being issued, not against a unit of 

 property, under one management, but against a constantly changing 

 mass of unrelated units of property, of which the management, 

 in a country like the United States, may undergo a complete 

 change in the course of a few years. Owing to this peculiarity 

 of the security of debenture bonds, the greatest caution must be 

 exercised in their issue. Among the farms constituting the se- 

 curity, there must be uniform conditions, well-established agri- 

 cultural practices, little danger of disaster from crop failure or 

 other cause and comparative absence of the speculative element 

 from land values. Evidently the requirements are more nearly 

 met in Europe than in the United States. In the greater part, 

 indeed, of the agricultural area of our country they are not met at 

 all. This is true of most of the South, most of the region west 

 of the Missouri river and considerable parts of our best agricultural 

 states for instance, northern Michigan, northern Wisconsin, 

 northern Minnesota and southern Illinois. And even in the 

 same communities there are often wide variations in this respect. 



The accurate appraisement of farms against which debenture 

 bonds are to be issued is of the greatest importance. But it is 

 exceedingly difficult, because farm incomes are subject to wide 

 variation and farmers do not, as a rule, keep books. Hence, 

 wherever debenture bonds are issued to a considerable extent, 

 the appraisement is performed by public authorities, or, if not, is 

 usually based on public tax valuations. In Germany, the Land- 

 schaften make their own appraisement, but usually on the basis 

 of the tax-assessment lists ; and the same method is used by 

 those joint-stock mortgage banks which, owing to their having 

 been established before the law of 1899, are permitted to make 

 their own appraisements. 



Owing to its extreme centralization, the great mortgage bank 

 of France, the Credit Fonder, has found appraisement difficult 

 and expensive a fact which has tended to restriction of its 

 farm-mortgage loaning. 



It is hardly necessary to point out that in the United States 

 there is little to guide us in making appraisements. Changes in 



