Evening journal., 1897-02-04


II, nor anything Of their plans. But
the plan itself is worthy of commenda-
tion. and OF its meritswe wish TO speak.
Credit foncier banks have been long es-
tablished in the countries of Continen-
tai Europe, and theirsuccess there
shows that the plan will also be sue
cessful here. The plan Of credit fon-
cier bank is TO loan money at low
rate on land, secured by first mortgage,
for a long term of years. In Europe
the term of the mortgages is from
twenty-five 20 seventy-five years. The
Chicago idea is to loan money on farm
lands for not less than twenty-five nor
more than seventy-five years, the loans
to be made at not over per cent, and
fractional part of the annual interest
payments to be set aside as a sinking
fund Such a bank cannot loan at 4
per cent, unless It can borrow money at
not more than per cent. for cores
pondingly long periods. This can now
be done A long time three per cent
investment, absolutely secured, Will
find plenty of takers. One per cent.
profit Is deemed q sufficient return to
pay the expenses Of the bank, and has
been ascertained to be a perfectly safe
working balance in the business. The
promoters, contrary to custom among
banking institutions, are to seek,
rather than try to prevent, official
supervision. Branches are to be es-
tablished IN several states, and busi-
ness is to be carried on in all. In each
instance the state banking officials will
be requested to make regular inspec-
ton of the books Of the concern, and to
publish the results of their labors. 1t
probably will puzzle some to under
stand why credit foncier banks in
Europe have had such success. such
an institution loans its money on the
above-described long-term mortgages,
which IL holds as security on which to
base the issue Of long-term debenture
bonds. The debentures are offered TO
investors in the great financial mar
kets. and sell with any other bonds.
with the funds thus brought to the
bank managers new loans are made.
The French Credit Foncier Societe has
loaned az much as $4,000 600 at one
time, the Russian Government having
taken the money. In case ike thal
the bonds Of the borrower, and, IN
other cases, some like securities, are
given in exchange for the loan. Ihis
again is first-class security, and may be
hvpothecated for new funds.
Every opinion comedies that the ad-
vantages of the credit foncier, as gath
cred from experience, have been mar
velous In France, which Is not the
home Of the system, though one might
think so from it's title, it came into use
when the government was almost II
despair as to q safe method of reliev
ing the communes of high mortgage
taxes. The landed proprietors were II
receipt of a gross income OF $3SOOOO,
600. and paid out SlO5, 100000 in inter
est on loans. Such a state of affairs
! justified the active concern which th'
government of Louis Napoleon mani
tested in the foncier principle. Reduc
tions in the rate of interest were Sc
curd by the system.
Th suggestive condition of the mort
gage debtors of this country is not e
be compared with that Of the Frencl
farmers of those days, yet it may be IN
structively compared with what
should be. With government bond
worth only from to per cent. to tn
investor in Europe, and less than pc
cent. in the United States there shoul
be a lower rate of interest on mort
cages than is now obtained in thi
country, provided, of course, the secul
ity Is as good or approximately as goo
as government unds.-Toledo Blade.