The daily sentinel., 1913-07-26
LAND BANKS OF PRUSSIA MAY
Be TRIED IN UNITED STATES
Edward keatng Describes the Workings Of the landschaen
System; Agricultural Co mHission Will Make a
Report in Decem Der TO Congress-.
Aiding the Farmer.

All of which brings us to a consid-
GRAFTON of the activities of the com
mission named by the president to
visit European countries for the pur-
pose of studying agricultural coop.
GRAFTON and rural credits. You re.
member some 20 years ago we wasted
a good deal of cheap wit on the pop
ulists' scheme to have the govern
ment lend money to the farmer on his
crops and his land at reasonable
rate of interest. Ii was denounced
as chimerical. or something like that,
and the farmer continued to pay the
banker from to 12 per cent for the
little accommodations he required
Since then the country has adopted
practically all the other planks in
the populist platform - Wilson,
Roosevelt and Bryan have led the
movement-and now We find that the
European countries have seized on
this populist scheme for rural credits.
And-wonder of wonders-Kaiser
Wilhelm's country has developed the
idea more successfully than any other
nation! ] have before me a letter
from one of the most distinguished
members of the presidents commits
sion, David Lubin. He has been
studying the land banks of Europe.
and he says they have proven of lin
ealculahe benefit to the farmers of
Europe and could be made of equal
benefit to the farmers of the United
States-if properly safeguarded by
the state and national governments"
Lubin lays great emphasis on that
last proviso. European land banks
have been successful solely because
the government has rigidly supervis-
ed them and kept them out of the
hands of exploiting spectators.
Prussia's Plan.
Lubin Is convinced that the most
adaptable plan and the one which
would permit of the widest applica-
tion in the United States is the Land
schaften system of Prussia. The
plan of the Landschaft is very simple
A Land schhaft is a land bank and
the laws of Prussia provide that these
banks may be organized under gov
ernment supervision. They have
limited and well defined functions
They may accept mortgages on land
and issue bonds for the face value of
the securities. The bonds are then
sold by the borrower on the open
market. Practically no capital is
required to establish landschaft.
~ DOul Vi tlliLthS III q ttl ioNuiity
band together for the. purpose of or
ganizing land bank. They apply to
the government for a charter After
an investigation. it is granted and
the government names the president
of the institution. He is an expert
and holds office for life or during
good behavior. The organizers Sc
lect the other members of the board
of directors, who by virtue of their
offices become quasi public officials.
Now the bank is ready to do business.
Adolph Schneider appears seeking a
loan on his land. The directors ap-
praise his holdings and agree to ac-
cept a mortgage-perhaps so per
cent of the appraised valuation
Schneider agrees, the mortgage is ex-
ecuted and Schneider receives bond
for the amount of his mortgage. sign
ed by the directors of the landschaft.
He sells this bond on the public mar
ket and pockets the proceeds.
Schneider is charged small fee
to meet the expenses of the land
schaft, and he is expected to meet the
interest charges on the bond. Should
he default the landschaft is authoriz-