The Lakeland evening telegram. (Lakeland, Fla.) 1911-1922, 1913-06-21
N
EUROPE GIVE
GOOD REPORTS
COMPANIES IN GERMANY AND
FRANCE DC FARM MORTGAGE
BUSINESS.
Report Tell How This Plan Is Car
ried Out to Benefit
Of All.
(By Winfield Jones.)

Washington, June 21.-Letters
received here from the American
commission on agricultural co-ope.
lations, of which Senator Duncan
U. Fletcher, of Florida, is chair
man, tell Of the interesting investi.
cations the commission is carrying
on in fourteen European countries
in agricultural cooperation and
rural cooperative banking.
The American commission has
found many companies carrying on
the farm mortgage business in Ger
nany and France. No farmer OF
these countries today would give Il
mortgage to a private lender or to
IL mortgage broker as he would in
the United States. Instead the
mortgage would be placed with a
company or association which
woul dissue a mortgage bond based
upon the mortgage. Such bonds,
since they are the obligation of a
big company or association with
millions of dollars in cash or Sc
curity back Of them, can be sold
anywhere and are readily negotia-
Eie. The plan is so logical and has
worked SO well in every European
country in which it has been tired
that 1t is almost inconceivable that
the American people have not adopt
ed 1t.
The European countries which
stand between the farmers and the
investors may be divided into two
classes, companies of lenders, and
companies or associations or bor-
lowers. Companies of lenders are
organized on the lines Of a private
Joint tsock corporations; associa-
tons of member just as they do in
the short-timc cooperative credit
societies which have already been
described, except that every men,
ber receiving a loan places a mort
sage with the association instead Of
securing the loan on his personal
credit.
In France there Is cn,y one mort
gage bank, the credit foncicr, which
is practically a national institution.
The government exercises a strong
voice In its management. The dis
position Of it's profits, the maximum
rates of interest chargeable to farm
ors and the investments of its cap
tai and reserve funds, are -egulat.
cd by law. 1t Is. however, pri-
vate corporation, with a share cap
ital of Si0,000,000, owned by pri-
ate investors who receive divi-
dend sfrom the profits of the insti
tuition. Theoretically the interests
the borrowers are not represent
ed in the organization of the COM
'cny. In practice, however, the con-
irol exercised by the government
iEsures every safeguard to the bor-
loWer's interests, and it Is difficult
to see how the French land owners
could benefit by a change Of the
credit foncier from company of
lenders to an association of borrow
crs, whereby many important fea-
change.
In Germany companies of lenders
rr joint stock mortgage banks, and
.ssociations OF borrowers, exist. The
German system is far more deccn-
rallied than the French. What are
e the two systems, and which OF
lem can best be depended upon to
ring relief to American farmers is
.hc question to be decided
The Germans were the first pco-
,'c to or"anize their MORTGAGE bust
oes. Nearly a century and half
10 Frederick tho Great of Prussia
.orced his feudal landowners to join
n association, pledging all of their
anGs as security for the debts to
c incurred by the association. Thus |
'c secured a collective liability of
lie lands practically of an entire
'cuntry, Whenever a landowner
~ished to mortgage his land and |
rs request was approved by the as
ociation he could enter the money
market with the security all the
ands OF Prussia at his back. Real
2ing the advantages of such con-
entration OF security, the landown-