Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1913-07-11

4
been sufficient to keep its stock al
ways in demand and that is all that
is necessary. For the aim of the
company, or at least of the govern
ment in permitting the organization
of the company, was to help the
farmers and only incidentally to pay
stock holders. The stockholders must
be allowed enough to induce them to
keep their money in the company,
but there is no need of that inter
fering with the requirements of the
borrowers.
The Credit Foncier is placed direct
| ly under the supervision of the min
istry of finance or treasury depart
ment of the French government It's
governor and two sub-governors are
appointed for life by the president of
the republic. In these officials rests
the executive power. Three high
| government officials must always be
on its board of directors, The board
of directors consists Of the governor,
the two governors, the three au-
ditors of the company, and 20 to %
others The board is elected at the
annual meeting of the stockholders
Only the 200 largest stockholders
may be present at this meeting, al
though other stockholders may be
represented by proxy. Each member
has vote for every 40 shares of
stock held either personally or by
proxy. However, no stakeholder may
have more than five votes for per-
sonally owned stock and five for
stock held by proxy. The meeting
also elects the auditors, receives the
reports of the governor and auditors,
and votes upon all matters not speci-
| fically taken from its control by law.
OF the profits of the society a 5 per
stockholders, and then from to 20
per cent of the remainder is carried
over to the reserve fund until it is
equal at least to one-half of the cap
ital stock. The investment of the re-
serve is left to the directors, but of
the share capital, one-fourth must be
invested in French government Sc
curities and one-fourth in office
buildings of the society, securities de-
posted with the bank of France as a
guaranty for advances, or loans to
Nhn mi,
be used in the mortgage business of
the society or in acquiring CONNER
cial paper acceptable by the Bank of
France, or securities for deposit
therein. This form of management
greatly restricts the powers of the
private shareholders, places a large
portion of the power in the hands of
the government and for the protec-
ton of the bondholders, ensures the
maintenance of an adequate reserve
and capital invested in the most
conservative and sound securities
The Credit Foncier is never permit
ted to issue m ortgage bonds to more
than 20 times the value of it's cap
ital.
The debentures or mortgage bonds
of the Credit Foncier are issued pay
able to bearer and are exempt from
taxation. Trust and public funds
may be invested in them.
With regard to the rights of the
| hnrrnnnrC -
permitted to charge more than 6
per cent on loans to landowners over
and above the rate of interest which
it must pay on it's own debentures.
This shows the very small margin,
one-half of one per cent, practically,
on which a big land bank can oper-
ate and pay profits. At the present
time the rate of the Credit Foncier
is 4.3 per cent for mortgage loans.
| With the legal margin at 6 per cent,
this means that the Credit Foncier
must have secured its money at 81
per cent. AS matter of fact an
issue of $100,000,000 of mortgage
debentures in 1912 at per cent
was over-subscribed eighteen times.
1t is improbable that even a strongly
constructed national land bank in the
United States could get money at this
rate, but this shows the advantage it
would be to American farmers to
have national land bank which
could carry their mortgage de-
bentures into the European market
where cheaper money can be found.
! There is a secret, however, to the ex-
traordinary success of the French de-
bentures. Prizes are paid on a GER
tain number of debentures of each
issue, For instance, of the $780,
100000 worth spoken of above. the
first SO or first 100 drawn out of a
wheel at the time that the debentures
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