CEEDIT ASSOCIATIONS 137 



power of foreclosure with regard to these bonds, but they are 

 "redeemable by the Association fari passu with the repayment 

 of their debt by the members. It rests with the borrower 

 himself to realise the bonds to the best advantage through a 

 bank or broker, but all Credit Association bonds are quoted 

 daily on the Copenhagen Stock Exchange. In fact, in these 

 securities is invested by far the greater part of the private 

 and public wealth of the kingdom. The member or borrower 

 pays a contribution to the reserve fund, generally amounting 

 to 2 per cent, of the loan, either immediately on receipt of the 

 loan or in the course of two years, and a half-yearly charge, 

 consisting of the interest on the outstanding debt, a contribu- 

 tion to the cost of administration and to the reserve fund and 

 about J per cent, to a sinking fund. This half-yearly charge 

 is generally a fixed one, and remains the same however much of 

 the loan may have been paid off. A loan is generally redeemed 

 in 60 to 65 years. 



The portion of the members' half-yearly contribution set 

 aside for reduction of the loan is employed in the redemption 

 of bonds. It is decided by drawings every six months which 

 numbers of the bonds are to be redeemed, and these are re- 

 deemed at their nominal value, at par. The numbers of the 

 bonds drawn for redemption are advertised in the daily papers. 



In some Associations an attempt was made in virtue of 

 sanction given by Law of April, 1896, to estabhsh sections 

 granting wholly irredeemable or partly irredeemable loans, 

 with corresponding irredeemable bonds. These irredeemable 

 loans or irredeemable parts of the loans were not to exceed 

 one-third of the assessed value of the property, while the 

 redeemable part was to be paid back in 60 years or less. The 

 quotations of the irredeemable bonds proving less favourable 

 in the long run, these sections have enjoyed no great popularity 

 among borrowers. 



The only extraordinary way in which the Credit Association 

 can favour the members is by converting the bonds when the 

 state of money market allows of such action. Bond-holders 

 cannot, of course, be compelled to accept a conversion of the 

 bonds to carry a lower rate of interest than that at which they 

 were originally issued, and if they refuse their consent they 



