140 CO-OPERATION IN DANISH AGRICULTURE 



and equip many hundred co-operative factories. Although 

 cases of abuse of the facihtics for raising loans offered by the 

 Credit Associations do undoubtedly exist, the benefits accruing 

 from these Associations have been evident and widespread. 

 Internally the Associations have secured for their members 

 constantly improved conditions, and externally they have 

 gained unprecedented confidence, so that the security offered 

 to capitaHsts, even in the minds of investors abroad, approxi- 

 mates to that offered by the Government. The Danish Credit 

 Associations may, therefore, be said to have fulfilled their object 

 in a very satisfactory manner, and to have contributed in 

 no insignificant degree to the economical prosperity of the 

 country. 



The Credit Associations, as already explained, grant loans 

 only on a first mortgage on the properties, and they never 

 grant loans up to the hmit allowed by law, viz. up to three-^ 

 fifths of the value of the properties. Further loans, on second 

 mortgage, were sometimes raised by owners by private arrange- 

 ments. A Law of 1897 authorised loan societies on co-opera- 

 tive lines to grant such secondary mortgage loans, ranking 

 after the loans granted by credit associations, savings banks, 

 pubHc institutions, insurance companies and similar bodies. 

 Such societies are called " Hypothec " Societies or Mortgage 

 Associations. The bonds issued by them may be bearer bonds ; 

 inscribed bonds may be transferred free of stamp duty ; but 

 it is a condition that the name of the association as well as the^ 

 bonds plainly indicate that the loans are issued on second 

 mortgages on real property. Nine such associations have been 

 formed, of which three deal with landed properties. Their con- 

 stitutions are similar to those of the Credit Associations : they 

 all have a guarantee fund, and both the borrowers and the bond- 

 holders have, as a rule, a voice in the management. The total 

 mortgage on properties is restricted to 75 per cent, of the value. 

 The interest on loans granted by these associations is naturally 

 higher than on loans granted by Credit Associations, and the 

 contributions to the reserve fund are larger. 



