12 CO-OPEKATION IN DANISH AGRICULTURE 



Bond stated the name of the estate to which the loan was 

 granted, it gave right of foreclosure of the mortgage on that 

 estate, and the other estates in the province were only collateral 

 secm"ity for the loan. 



Every estate was assessed by officers of the Association, 

 and loans were granted only up to a certain proportion, gene- 

 rally one-half, of the amount of the assessment. The borrower 

 received, instead of ready cash. Bonds to Bearer, which he 

 himself had to sell in the open market. The borrower was 

 entitled, on giving six months' notice, to warn the committee 

 that he required the Bonds, issued to him, to be exchanged 

 for cash. It became the general rule for the borrower to give 

 this notice immediately on receipt of the bonds, and the com- 

 mittee, therefore, had to get the bonds sold within the six 

 months or to redeem them out of the sinking fund. It had 

 been taken for granted that the bonds were such a good 

 investment that it would be an easy matter for the committee 

 to sell them, but this was often far from being the case. At 

 first the borrower paid interest direct to the buyers of the 

 bonds ; later on the Associations undertook to intervene 

 between creditor and debtor. In spite of these and other 

 shortcomings of the first Credit Associations they exercised a 

 great influence. The first of them, the Silesian I^andschaft, 

 met the need of agricultural credit in the province ; it secured 

 loans on reasonable terms at 5 per cent, interest. The im- 

 portance of this association is proved by the fact that in 1782 

 it had aheady lent the sum of 16,880,000 thalers (£5,500,000 

 in round figures), which for that time was a very large amount. 

 King Frederick II. estimated that more than 400 noble famiUes, 

 estate owners, had by means of this " Landschaft " been saved 

 from economic ruin. 



It goes without saying, that the Associations gradually 

 gained experience and improved their business method. Com- 

 pulsory membership ceased, the Bonds were made payable by 

 the Associations on demand, the borrowers were given facilities 

 for repaying the loans by yearly instalments, and the right of 

 contracting loans was extended to other landowners than 

 noblemen, either by the " Landschaft " being opened to such 

 or by special Associations being formed with a wider cHentele. 



