ANNUAL MEETING OHIO STATE BOARD OF AGRICULTURE. 33 



Credit Foncier, a mortgage credit based on the value of the land and of the 

 building to be erected. When the building is finished the credit can be converted 

 into a Credit Foncier loan. 



The real estate bonds issued by the Credit Foncier have no fixed maturity, 

 but are called for payment by lot. Each payment of bonds must be of such an 

 amount that the bonds remaining in circulation will not exceed the balance of the 

 principal owed upon the hypotheticated loans. If the government approves, there 

 can be added to the bonds called for payment certain prizes and premiums. The 

 funds received from the usual amortization, or anticipated payments must be 

 used to amortize or redeem bonds, or to make new loans. In general the bonds 

 bear 3% on the nominal capital, and the cost of the loans to the company, in- 

 cluding interest and amortization, is about 3.60% which places them on a par with 

 municipal bonds. At the present time the company is redeeming bonds to the 

 amount of about 30,000,000 francs per year, but the amount of redemptions can- 

 be increased, if it becomes necessary in order to keep the balance between the 

 bonds and the loans. The bonds are sold by public subscription. About every 

 three years the company issues bonds sufficient to yield from 300,000,000 to 

 350,000,00^ francs. The bonds are subscribed for by people of small means, and 

 usually remain in their hands ; consequently the quotations of the bonds show 

 little fluctuation. The company always keeps a few bonds on hand for sale, but 

 the bulk of them are disposed of by public subscription. 



It is not necessary for us here to inaugurate a new and untried scheme of 

 finance to enable farmers of the United States to borrow at low rates and for 

 long periods. We can profit by the long and successful experience of other 

 countries. ' We can take the French and German models and revamp them to- 

 harmonize with conditions in this country. The principles that underlie the mort- 

 gage loan organizations in France and Germany are familiar to us here, and we 

 know that they are economically sound. If those countries could successfully- 

 initiate, can we not adopt? 



There are several conditions that must be observed if organizations for the 

 loaning of funds to land owners in this country are to be successful. The cor- 

 porations or associations must have a large capital. They must be established* 

 for the single purpose of loaning money to land owners at low rates and for as. 

 long periods as possible. There should, be no profit to promoters in the organiza- 

 tion of such corporations, and the return to the stockholders must be kept within? 

 very reasonable limits. In other words, the borrowers, and not the stockholders,, 

 should be the chief beneficiaries of the success of the undertaking. The active 

 assistance and co-operation of the state or nation must be obtained. The mort- 

 gages held by the company should be exempt from taxation. Special laws would 

 be needed and the provision made for thorough examination by state or national 

 authorities, or both. It might be wise to have some of the executive officers 

 receive their appointment from the state or nation. 



There are many patriotic men of great ability heretofore engaged in the 

 accumulation of wealth who, realizing, as many of them do, the supreme im- 

 portance to the lasting welfare of the nation of stimulating and assisting the 

 movement of population back to the farm, would be willing to give freely of 

 their time and money to an undertaking of this sort. The old school of public 

 spirited business men regarded material prosperity as the end of everything, but 

 of late business men have assumed a somewhat different attitude and it is due to> 

 them that most of the reforms in business and political life have been successful. 

 Prosperity must be guarded as sacredly as in the times of McKinley, but it is- 

 now more fully recognized that there are other essentials that must go hand in- 

 hand with prosperity. Because of their recognition of these things American, 

 business men undoubtedly can be relied upon to assist the development of agri+- 



8 AD. BD. AGR. 



