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

maintained their value.
Mr.. Smith. 1 wish to ask, MI
Lubin, does the German Government
have general supervision over tn
Landschaft system?
Mr.. Lubin. Yes.
Mr.. Smith. If adopted in thu
United States the United States Gov
ernment would then have genera
supervision?
Mr.. Lubin. Supervision, yes; but
no guarantee, nor would the Gov
eminent be called upon to buy any
of the bonds.
Mr.. Smith Who gets the benefit
of this sysem?
Mr.. Lubin. The farmers who are
members of the Landschaft, but this
is by no means all, for the public,
the lenders, are also benefited.
Under the laws of Germany the
Landschaft bonds are considered so
safe that the German Government
directs that the trust funds of wild
ows and orphans must be invested in
these Landschaft bonds. Then there
are a great many merchants and
others who may have surplus which
they would very much like to invest
in bonds that are as mobile and as
safe as the Landschaft bonds are
and as easily convertible into cash.
Where is the avenue at the pres
ent time for the investment of wild
ows' and orphans funds in the
United States? Where is the OPP
portunity for investments to run
from SO to IS years that would be as
safe as the Landschaft bonds are in
Germany? Then, again, there are
the great life insurance companies
who have hundreds of millions OF
dollars to invest in farm mortgages.
Would they not be better off to in
vest their money in Landschaft bonds
if we could have them in the United
States of as safe a character as they
are in German.
In other words, what the ordinary
money lender does on small retail
scale of searching records, of diving
down into the real value of piece
of land, is all done, as it were, at
wholesale under the Landschaft sys-
TEN. So long as the money lender
does all this in detail he alone knows
the character of the risk. This
knowledge is his monopoly and he
charges for it accordingly.
Mr.. Smith. AS a matter of fact,
the Landschaft becomes a financial
institution from which some people
derive profit?
Mr.. Lubin No; the Landschaft is
not a financial institution. 1t is
simply an agent between borrower
and lender. The Landschaft is not
bank. 1t never has any money, ex-
cepting it be few dollars for paying
rent of a room or to buy few office
chairs, desk, or a safe. Otherwise
it has no money.
MIR. Smith. I understand that
there are bonds, and that these bonds
draw 8 per cent interest?
Mr.. Lubin. Yes. The Landschaft
issues these bonds, gives them to the
borrower in exchange for his mort
gage. The Landschaft collects from
= the borrower per cent interest on
y that bond and Immediately pays it
= over to the holder of the bond.
Mr.. Lubin. I do not see where
they get the per cent from to pay
Mr.. Lubin. They get it from John
son and Thompson from the farmers
the members of the Landschaft who
have deposited their mortgages and
received their bonds and sold them.
Mr.. Smith. Then the Landschaft
becomes a financial institution fol-
gain?
Mr.. Lubin. No. The Landschaft
is not financial institution for gain
The Landschaft merely acts as g
medium or agent between the Dor
rover and lender for the collection
: of the interest from the borrowers
I and the distribution of it among the
holders of the bonds.
| Mr.. Smith If such a system were
established in the United States, t.
1 what extent would the financial in
stitutions here oppose to it? Wht
( would benefit by the per cent in
. terest?
= Mr.. Lubin. AS for the first ques
M ton, can understand that there ar
certain number of farm-mortgag
money lenders who are at presen
receiving high interest rates VIII
would be likely to oppose the Land
schaft.
In contradistinction to these Their
are the great railroad corporation
who may quite likely favor the Land
schaft, for the railroads are begin
ming to understand that the value
of their railroads are determined b
the economic status of the farmer