Arizona republican., 1913-07-19

the Bank of France. Of the profits of the bank. a 5 per cent dividend is
 first paid to stockholders and then from to 20 per cent is carried over into reserve until the reserve shall equal at least one-half of the capital i The board of directors controls the in- vestment Of the reserve. These severe
 restrictions upon the investment of the funds of the bank, coupled with the government control exercised. insurcs conservative management and pre- vents all likelihood of investing the surplus funds merely to personally profit the directors as was done at one time in the big life insurance companies of the United States. AS a result the debentures of the Credit Foncier enjoy the highest possible rep utation, as high or, perhaps, q little higher, than that enjoyed by the se- curities of the Government It is this reputation which creates the enor- nous demand for them and which ac- counts for the fact that an issue of $100, 0,O0O,OGO of debentures at the low interest rate of 3 per cent in 1912 was oversu bscribed eighteen times. When an attempt is made to establish a mortgage banking system in the
 
 made to secure as sound a reputation for the debentures of the bank as has been done in France. Government supervision should be solicited and the management should be conducted on as conservative lines as though the reputation of the Government itself was at stake. Only in this way will a market ever be created for the sale of American mortgage debentures abroad and the farmers of the United States should have an opening into the cheapest money markets. not only of the United States. but of the world.
 The problem of esta blishing a mort gage system over so large territory as the United States will present many state institutions will have to be or ganized and such state institutions might either be copied after the Ger man cooperative organizations or af- ter the German land banks. If or ganized along sound and conservative lines such state institutions could very probably command a good market for their own debcntures and the national | land bank would have to be relied | upon only to dispoc3 of such surplus l IS 1t was desirable to place in the | or international market. The | national organization could be started | md could extend it's benefits to the | farmers of cry state at first. Then | IS state institutions were organized | sither by the farmers themselves or 1y private companies. the national and bank could retire to the secon- lary business of buying the debentures If the state institutions and guaran- eeing them or reissuing national land based upon them for sale n the intcrnationa! market. The ques- ion of whether cooperative or priv tely owned land banks should be ormed in the States would probably ake care of itself Since the co-op- rative organizations operate without
 vleg to making q profit. they could outbid any private company [ their organization was sound and hey were properly conducted. There ore, wherever practicable. the CO., perative form of land bank would undoubtedly he the one to survive. On he other hand. in states where for any eason the farmers were disinclined ) form such an organization. the priv