ii8 Agricultural Credit in Denmark. [may, 



The establishment of agricultural loan societies for the pur- 

 pose of granting advances on land dates from the year 1850, 

 and the methods then adopted have under- 

 A^ricultural gone but little change. The law of the 

 Credit in ^ . , o 1 1 • .u • r 

 Denmark.* ^^^"^ June, 1850, legalizmg their formation, 



authorized the issue by them of bearer 

 bonds exempt from stamp duty. Loans to borrowers are given 

 not in cash but in these bonds, and it rests with them to obtain 

 the best price they can for them in the open market. These 

 bonds, which bear a fixed interest, are repurchased from time to 

 time by the societies out of the repayments made by the 

 borrowers, and it is to be noted that the amounts of the bonds 

 and of the debt due on the mortgages always balance one 

 another. The management consequently is very simple, as it 

 chiefly consists in acting as an intermediary between the bor- 

 rowers who repay their loans and the creditors who receive 

 their interest. The rate of interest was at one time 4 per cent, 

 but in 1895 it was reduced to 3 J per cent., with one-half per cent, 

 added for repayment of capital, which is usually extended over 

 sixty years. The amount of the advance varies from 50 to 

 60 per cent, of the total value of the holding. 



In 1880 the creation of two societies was authorized especi- 

 ally for the benefit of small cultivators. The amount of each 

 loan was limited to £220^ afterwards extended to ^^330, and the 

 payment of the interest on the bonds of these societies is 

 guaranteed by the State, which also granted a subvention to- 

 wards the cost of their foundation. 



According to a ireturn in the Danish Statistical Year-Book 

 for 1905, these various societies (nineteen in all) had granted 

 156,576 mortgages on which loans to the amount of ;^6i,6oo,ooo 

 were outstanding. 



Societies for the purpose of obtaining advances on personal 

 security also exist in Denmark, but they are based on a some- 

 what different principle to the German and other Continental 

 credit societies. They owe their foundation to a law (26th March, 

 1898) which authorized the advance out of State funds of 



* See also articles on " Agricultural Credit Banks," May, 1905*, p. 96 ; '"Agricul- 

 tural Credit in France," June, 1905, p. 149; "Village Banks in England," June, 

 1905, p. 154 ; " Agricultural Credit in Hungary," July, 1905, p. 2IO ; " Agricultural 

 Credit in Belgium," August, 1905, p. 279; "Agricultural Credit in Germany," 

 March, 1906, p. 725. 



