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bonds or debentures, but their security and financial support lie 

 rather in the connection with government than in the value of 

 the land; they serve to facilitate the distribution of subsidies, 

 usually among some particular class of persons, and so their 

 effect on the general and proper organization of land credit is 

 slight. Included in this last class are most of the institutions 

 for reclaiming land by embankment, drainage or irrigation; 

 these are always localized. 



Illinois has one of the best laws, something quite like the 

 Landschaft, and that is this: on the Mississippi River there are 

 great areas of land which are sometimes flooded. It was not 

 fair to make the State pay for reclaiming that land for the 

 benefit of the individuals who owned it, so Illinois has enacted 

 laws by which drainage districts are constituted, and this plan 

 is patterned largely after the Landschaft. They have those 

 great drainage districts and build the embankments and drain 

 the land, and the obligation rests upon that district, which is 

 partitioned off by the law of the State, like a Landschaft. They 

 use the taxing machinery of the State to collect the installments 

 of interest and principal and to meet those loans. Now they 

 did not need the help of the government to institute a bank to 

 take care of that; all they had to do was to make that law 

 and make it possible to create those securities, which was a 

 collective obligation upon that whole community, and they sell 

 immediately in the market at a fair price. It would have been 

 absurd for the State of Illinois, or any of those States, to start 

 a bank to buy the securities, because they would say, "That 

 can't be done unless the State advances the money." All they 

 have to do is to give character to the security. 



In no country do land-credit institutions, no matter how few 

 or how many, monopolize the business; all they can do is to 

 supplement the work of other agencies. The real-estate 

 mortgage is so popular that it goes everywhere. Nearly all 

 savings banks and life-insurance companies maintain depart- 

 ments for investing their own funds in it, while many trust 

 companies and other corporations acquire it to hold or to sell. 

 The operations of such investors, brokers and agents would be 

 more extensive if the laws were better. Hence, legislative 

 reform ought not to stop with the creation or authorization of 



