562 



Peasant Class on the Continent. 



[dec, 



could, on application, get his power of incurring liabilities 

 denned. This law, which is universally admitted to be " harm- 

 less," is naturally without results, since it is clear that peasants 

 without debts will not put it in motion. Finally, there is a 

 school who look to instruction and education as a means of 

 achieving the result. The desire to possess land is, however, 

 so strong that no education will persuade the peasant not 

 to incur debts for that purpose, and as long as a peasant 

 can choose between a debt on which he need only pay interest 

 and a debt which he must redeem, so long will he choose the 

 easier course. These facts and arguments are the justifica- 

 tion for the resolutions passed in 1900 and 1901, that " the 

 only basis of loans on real property is to be found in redeemable 

 mortgages that cannot be foreclosed." 



The result of such a law as this would be to put a stop to 

 second mortgages. Since all loan societies would restrict their 

 loans to unencumbered estates further loans could only be raised 

 by personal credit. Private lenders cannot, however, afford as 

 a rule to receive their capital back in small instalments, and 

 such a law would act as a restraint on excessive borrowing. 

 This is the chief benefit of the law, but a secondary result would 

 be the liquidation of debts on landed property. For the old 

 mortgages would disappear in thirty to thirty-five years 

 and the second mortgages would rank as first charges. 



It is, however, a matter of first importance that a system of 

 credit banks on a stable basis such as the Raiffeisen banks, should 

 exist everywhere. It has, on the other hand, been objected that 

 little is gained by this. Buchenberger has declared that it 

 matters little whether the peasant is burdened with debts on 

 his real estate or his personal credit. To this it is replied that 

 the peasant is less likely to incur debts on his personal credit, 

 since there is a greater need to pay them off, and he will 

 therefore be obliged to practise greater economy. Of course 

 it will not abolish over-indebtedness, since there will always 

 be failures due to misfortune or lack of skill, and it is not 

 proposed to relieve the peasant from all possible risks. If this 

 proposed law were to damage the personal credit of the peasant 

 it might be objected to, but it is claimed that it will improve it. 

 Another remarkable effect claimed for this law is that it will 

 reduce the selling price of land, a result which would be viewed 



