sept. 1006. J 



209 



Miscellaneous. 



account of which will be given later on. The success of the Credit Foncier was 

 so signal, that ifc was at once copied by Russia, Austria and Italy. Even 

 Germany, which had furnished the original prototype, now founded associations 

 in imitation of the French model. The Credit Foncier de France differs from 

 the old German land banks (landschaften) in several important points. The 

 Credit Foncier has a share capital, while the German banks had neither share 

 capital nor dividends, but simply aimed at providing cheap loans by the united 

 guarantee ot the principal land-owners. The German banks have unlimited 

 liability, while the Credit Foncier is a joint stock company with limited liability. 

 In the German banks the debentures are secured by the mass of mortgages held by 

 the bank and by the unlimited liability of all members, while the security of t,he 

 Credit Foncier are the share capital and reserve. The loans of the Credit Foncier 

 are given in cash, whereas the old landschaften granted the loan on debentures to 

 the borrower. The landschaften banks are comparatively local, operating in 

 moderate areas ; whereas the Credit Foncier is a vast centralised institution 

 extending over the whole of France by means of agencies. The Credit Foncier 

 acts in certain respects as an ordinary bank receiving deposits and employing part 

 of its capital in short term loans. Loans are probably cheaper in the landschaften 

 since their credit is unlimited, no share capital to absorb profits as dividends, and 

 all profits return to the members in the shape of cheap loans. 



Most of the other countries of continental Europe have introduced agricul- 

 tural and land banks founded on the model of the German landschaften or the 

 French "Credit Foncier," or on a partial adaptation from each. A brief description 

 of the Constitution and working of the land banks in continental Eiu-ope will be not 

 without interest to us, particularly as the continental nations are governed as we 

 are by highly bureaucratic methods, and they afford therefore apt models for 

 our imitation. 



Origin.— Their origin in almost every instance is due to the impulse given by 

 the state. The old landschaften of Prussia came into being by the fiat of 

 Frederick the Great of Prussia, who wanted to give relief to his noble 

 proprietors, who were crushed down by war and usury. He ordered 

 that not merely all members of the bank, but every noble owning lands 

 within the province where a (landschaften) bank was situated, should be wholly 

 responsible for the operations of the bank. He also granted financial aid to the best 

 five old landschaften in the form of subvention by the state, partly to supply the 

 first instalment of funds and partly as a reserve against contingencies. Tzar 

 Alexander of Russia gave all the funds necessary for starting the Land Credit Bank 

 of Russia in 1818. The Credit Foncier de France, which is a joint stock company, 

 received a subvention of £400,000 from the state in addition to a guarantee that the 

 state and the district councils would purchase a quantity of its debentures, not only 

 to provide the first funds necessary to set it afloat, but chiefly to create public 

 confidence in its stability. So all the land banks of Europe without exception have 

 come into being by the efforts of governments of their respective countries, and have 

 been subsidized by such Governments and watched over by them with fostering 

 care. The Government connection and support were found to be essential, 

 inasmuch as banks, being institutions of credit, the advertisement to the public 

 that the Government has an interest in the bank, believes in its usefulness and 

 desires its success, acts as an incentive to the shareholders and establishes public 

 confidence in the stability of the undertaking. There are, however, no land banks 

 in Europe which are directly owned and managed by the state except in Russia 

 and in some of the small German states and the cantons of Switzerland. 



Administration. — When once the Banks had been started by the impulse 

 given by the state, the governments of the different European states appear to have 

 watched the growth of these institutions with jealous care, and to have had a large 



