ANNUAL MEETING OHIO STATE BOARD OF AGRICULTURE. 31 



that, not infrequently, he is unable to get funds when needed, and usually he is 

 obliged to pay a rate of interest higher than that to which the nature of the 

 security he has to offer entitles him. There are in this country no organizations 

 by which loans on land the safest of all security, can be mobilized, and access 

 obtained to the wide stable investment market. 



To show what has been accomplished in other countries in this direction, 

 descriptions follow of the Landschaften Associations in Germany and the Credit 

 Foncier in France. 



The Landschaften Associations are societies of farmers. The members have 

 the right to issue mortgage bonds based upon the mortgages held by the Asso- 

 ciation. These bonds are guaranteed by all the members of the Association. 

 By virtue of such a guarantee the bonds are readily salable upon favorable terms, 

 throughout the empire, to banks and all classes of investors. By means of these 

 bonds, and the conditions under which they are issued, the farmers belonging to 

 the associations can command the money market as readily as great business 

 corporations or municipalities. Those who join the associations must have their 

 estates appraised, and they are permitted to make mortgage loans up to one-half 

 or one-third of the appraised value of their land. The association assumes the 

 responsibility for the payment of the loan. The association pays the interest and 

 also the principal, when due, for which it is reimbursed by the borrower. In 

 order to show the actual working of one of these organizations, I will describe 

 one that has its headquarters at Kiel. This institution has the right to acquire 

 real property, and to issue mortgage bonds payable to the holders. Only those 

 that own agricultural or wooded lands of a certain earning power or determined 

 value can become members. As all those that join the association need capital, 

 the initiation fee is calculated at the rate of 1-10 of 1% of the amount to be 

 borrowed. Mortgage bonds are issued in denominations of 5,000, 2,000, 1,000, 500 

 and 200 marks, in four classes, bearing 3%, 3%, 4% or 4% interest. The bonds 

 are quoted and sold on the financial exchanges and find a ready market. The 

 Association guarantees the payments of the bonds when due. If the capital of the 

 Association is not sufficient for the purpose, then the individual members become 

 jointly liable to an amount not to exceed 5% of the money loaned and not re- 

 paid. The total amount of the bonds of the Association in circulation must not 

 be in excess of the total amount of the mortgage claims against its members which 

 the Association holds. The bonds are redeemed at intervals, the numbers being 

 drawn by lot. The mortgagor can negotiate a loan through the Association at 

 3%, 3%, 4% or 4&%. He selects a rate according to the circumstances of the 

 money market. The mortgagor pays into the Association, in addition to the 

 interest, and until the termination of the loan, -J of 1% for amortization, and 

 1-10 of 1% as a contribution to the cost of administration. If the mortgagor fails 

 to meet his obligations to the Association, it may demand full payment of the 

 loan upon six months' notice, and if the payment is not then made, the property 

 is sold. If property on which a loan has been made decreases in value partial 

 repayment of the loan is demanded. The surplus receipts of of the Association 

 go into a reserve fund from which losses are made good. The administration 

 of the affairs of the Association is under the supervision of the Prussian Minister 

 of Agriculture, and under the special control of a Royal Commissioner, who is 

 authorized, at any time, to inspect the books and fund, to attend meetings, and 

 to call meetings. On January 1, 1908, the bonds of the Landschaftliche Credit 

 verband, were as follows : 



Marks. 



4 per cents '. . . . 7,044,800 $1,676,662.40 



3 per cents 33,481,800 7,968,668.40 



3 per cents 1,813,200 431,541.60 



