The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1910-08-09

The farmers of Germany have credit
associations which it is claimed are
applicable TO American conditions, one
class OF them. the Landschaften, hay
ing performed useful work in Prussia
since 1863 Some Of the agricultur-
lists or the United States having
heard OF these associations, have been
anxious TO secure fun Information,
which the consul general al Hamburg
has supplied.
These cooperative organizations
resemble. TO some extent. the Ameri-
can building and loan associations,
with this distinctive difference, that
whereas the American societies are
composed OF persons who deposit mon
ey for The purpose Of obtaining a reas-
enable interest thereon and others
who borrow such deposits. the German
Landschaften associations are com
posed exclusively of borrowers. whose
combined credit is made available
practically to each constituent mem
Der.
The Landschaften organizations are
societies OF farmers, usually farmers
OF considerable Importance. whose
members are authorized to issue mort
gage bonds guaranteed by all members
OF the society. and which being so
guaranteed. are readily saleable upon
favorable terms. The bonds are pay
able TO bearer. and thus constitute a
form OF collateral which can be used
IN the most convenient manner, so that
the farmers constituting the society
can command the money market as
readily as the great business corpora
lions OF the country.
Members joining these associations
are required 10 submit an appraisal of
their estates. and thereupOn are ena-
bled 10 make mortgage loans for the
ultimate repayment Of which the soci-
ETY. assumes responsibility up to one
half or two-thirds of the appraised
value Of the land. The association
itself pays interest as it comes due, and
eventually pays the principal. reim-
bursting itself from the borrowing
member. together with such additional
amounts as may be necessary TO meet
the costs OF administration and amor
tization.
Each association is empowered TO ac-
quire real property and to issue mort
gage bonds payable to the holder
thereof. only persons who own agri-
cultural or wooded lands can become
members, and then only when their
estates represent a certain earning
power or determined value. As no.
body joins this association unless in
need Of capital, the initiation fee is
calculated at One-tenth OF one per cent
of the amount TO be borrowed.
Persons who acquire property en-
numbered with mortgages guaranteed
by the association must become MEM
bers thereof. and must assume all liza
bnities arising under the mortgage
contract Refusal 10 do so is followed
by the cancellation of the mortgage
itself. Members who enter the asso-
citation by reason of the acquisition
Of encountered lands pay no initiation
fee. Members who have discharged
all their obligations to the association
may resign. The personal liability Of
members ceases when the property has
been sold on which money has been
borrowed. the purchasers Of such
property succeeding TO the liability at
tsching thereto.
Mortgage bonds are issued and are
quoted and sold in the. financial ex-
changes. brokers specializing on this
class OF securities. Members of the as
rectorate OF the association are obliged
20 effect a sale OF the bonds without
charge 10 the person chiefly interested.
The purpose OF the Landschaften is
to secure farm loans at the least posi-
BILE cost to the borrower. owing 70 the
number Of such associations in Ger
many it is probable the desired result
as being achieved. OF course the farm
er pays interest, which, owing to adj
equate security. is comparatively low.
and a small fee in addition. In no in
stance. however. is the farmer who
borrows money on his land compelled
70 pay usury.