The commercial. (Union City, Tenn.) 190?-193?, 1915-11-26


securities?" And he replied: "They
are holding their own as they did in
panics and wars before now. The
Bourse, as you know, is at present
closed, but the Landschaft bonds in
passing from hand to hand maintain
their values as before the war"
Mr.. Smith. How does the farmer
get hold of one of these bonds?
Mr.. Lubin. The farmer gets them
from his own Landschaft, from his
board of directors.
Mr.. Smith. What security does he
give?
Mr.. Lubin. The mortgage on his
Hand.
Mr.. Smith. That seems to be a
simple thing. Could we do the same
thing here?
Mr.. Lubin. Yes, we could; but
something has to be done before we
can do what the German farmer can
do under the Landschaft. Unless we
can do that something the bond
would not float. 1t would fall fiat to
the ground. 1t would prove of no
value whatever.
Mr.. Smith. What is that "some-
thing?"
Mr.. Lubin. That something"
really consists of two something's"
The first relates to the tenure of
land. Under the Landschaft there
can be no question raised as to title.
A mortgage on a piece of land with
in the Landschaft is in fact equiva-
lent to judgment, and foreclosures
may be effected by the Landschaft
without any further recourse to law
suit.
And then there is no doubt as to
the correct valuation of the land and
for processes to maintain it's profit
earning value.
Mr.. Smith. That would be mat
ter requiring special laws, not only
by the United States but also by the
States.
Mr.. Lubin. Certainly. There
would have to be laws governing the
question of titles and the waiver of
foreclosure suits. And then, as to
valuation, that has to be provided
for. 1t has to be determined what
is the depth of the soil, whether it is
subject to overflow or atmospheric
troubles, what it produces, what it's
net earning power is, and there must
be a method for the maintenance of
that earning power during the life of
the mortgage.
These things must be settled; set
tied to the satisfaction of the Gov
ernment; settled to the satisfaction
of the borrower; settled to the sat
isfaction of the expert; and settled
to the satisfaction of the novice. And
there will be no trouble to sell the
bonds in the open market at the
same rate as Government bonds.
In fact, they will be better than
Government bonds, for Government
bonds fall during political troubles
or wars, but Landschaft bonds of the
character above set forth maintain
their value for 50year or 75-year
term, as they do in Germany.
Mr.. Smith. This bond, then, is
really mortgage given by the bor-
rover to the bank?
Mr.. Lubin. There is no bank. The
does not require a bank
There is simply an organization of
borrowers, an organization of farm
ers who borrow, an organization
called the Landschaft, with it's board |
of directors, and the public bourse
or exchange, and that is all. The
bonds are sold the same as shares
Of stock of the United States Steel
the copper corporation,
shares of Erie, or Lake Shore, or
Pennsylvania Railways.
Mr.. Smith. The farmer who bor-
rows pays interest, does he not?
Mr.. Lubin. Yes; certainly he
1oes.
Mr.. Smith. What advantage over
he present system would it be to the
farmer who borrowed from this or
ganization? Is the interest less?
Mr.. Lubin. 1t is decidedly less.
IN Germany it is 3, 81, or per
cent The farmer has the choice of
either one of the three rates of in
crest with amortization. The bonds
'un from so to rs years. The mort
rage may run all that time, but it
nay be Cancelled at any moment by
he farmer buying the bonds in the
pen market. He may then bring
hem to the Landschaft directors,
Vhen he can receive back his mort
,age on the land on demand.
Mr.. Smith. Am 1 to understand
hat when farmer goes to the Land
chaft to borrow that he is given /,
'ond rather than money, and that
e negotiates this bond in the open
market?