134 CO-OPEKATION IN DANISH AGRICULTURE 



called " The Hypothec Loan Association of Landed Estate 

 Owners in Jutland." In 1860 two Credit Associations proper 

 were formed, viz. " The Credit Association of Property Owners 

 in the Island of Funen," and " The West and South of Jutland 

 Credit Association." 



In 1857 a financial crisis occurred which severely tested the 

 stability of these various associations. The Hypothec Loan 

 Association, which had from the first failed to attract the 

 requisite number of borrowers and afterwards accepted others 

 without sufficient discrimination, stopped payment. It had 

 to take over several of the mortgaged properties, and the credi- 

 tors suffered great losses, receiving only a quarter to one-third 

 of the amount of the bonds, while several of the members, i.e. 

 the borrowers, were ruined by their share in the joint liability. 

 But it should be borne in mind that this Hypothec Association 

 was in no real sense of the word a Credit Association. 



" The Credit Association for Jutland Towns " was compelled 

 to discontinue its lending operations, it was placed under 

 public administration, and had to bear the expenses connected 

 therewith in addition to the loss of about £53,000, sustained 

 on taking over some members' properties, and yet in spite of 

 this the owners of the bonds were paid in full, both as regards 

 principal and interest. This is the only Danish Credit Associa- 

 tion which has come to grief, and it affords a proof of the ex- 

 ceptional security afforded to capital by ^property owners' 

 co-operative Credit Associations that no holder of their bonds 

 has ever suffered any loss. 



A certain nervousness caused by this failure led to the 

 opinion that the existing Credit Associations ought to be enough 

 for the need of the country, and an amending Law was passed 

 in 1861, according to which new associations can only be formed 

 by a special Law in each case. By the same Law it was arranged 

 that the bonds issued by an association can be divided into 

 ** series," in such a way that the joint and several responsibility 

 shall only apply to bonds belonging to the same series, provided 

 that no series shall be closed until it comprises members 

 representing an aggregate amount of at least £1 67,000. Members 

 have the right — generally without notice — to pay off their loans 

 in bonds or in cash, but *' no member when retiring from the 



