Saint Mary's beacon. [volume] (Leonard Town, Md.) 1867-1983, 1916-02-03
SOLVING THE PROBLEM
or LAND MORTGAGES
How the German Farmers Secure Lond
Term Loans Through Their Own
Land Mortgage Associations.
F. B. BoMBERGER.
Maryland Agricultural College

Association Of Germany Is co-opera-
i've union 81 landholdefs within a.
limited district for the purpose OF ses
curing long time loans for its mepti
bers on their land BY issuing Dor VT
against the collective value Of fafF
lands OF the members. Anyone wax
owns from ten 10 twenty 1--WE acres RI
land within the district may become, :,
member The association elects ii
own officers and. through an elective
Executive Committee and AudItiy9l
Committee, carries on iss own AFFAIRS.
but It is always under the regulation
and supervision 81, the government.
A landhoIder 4ishine 10 borrow
money through the Landschafl, makes
hts application setting form ihe
amount desired and The use which he
intends to make Of the money The.
title 10 hts land II examined. end. ID
Il Is satisfactory he Is permitted II
borrow 10 10 two.thirds 81 the assessed
valuation Of his land. b. giving d slsel
Landschaft a first mortgage On iha
land Tor the amount he b0irows I'll
prevent fraud or loss three Repnfata
appraisais 81 the land are made.
The association II not ! bank and
has no supply Of funds ON hand, Il does
not therefore. lend him the money VII
rectly but u issaes to him ns0fi gae8
bonds Of ~ amount equal 10 the faces
value ~ The morteare These bonds
are sold BY the borrower himself. 81
more usually. BY ihe Association III
the open market Thus tlse Suuds are
secured FOR the borrowers use.
Are sess OF security.
This mortgage bond 81 gpcafed ~
all DE property Of lne IAndsehafs. i4
made payable 10 bearer sad y trans
ferahie 81 any time wiihmi endorse
inent Although these bands d. nor
run for ans definite length * time and
are noi payable ou demand ihe Land
schAfi MAY cail them IN and pay them
Of 1t any sine. The amount 81 bonds
outstanding AZ any time caAaet exesea
the amount o. the merlgaep. held b.
the Association SO careful tha
management 81 fhoss IsandsChaften
and 10 strict 10 Inc governmental
supervision mat although fba average
rate u interest on fheea bonds Is very
INV ranging from 81 70 fss. they are
reaafded - the yery best form ~ IN.
sestneni FOR trust funds mYinr
bank funds. etc Thus on june 10
1919 while Germen fiosefumeai 4
bopds sold al hg Landschaften Al
bondp eald ~ 400. and On ihe same
date Government ~ bonds anid Il
1870 wlile I.srdsthagten ss i0lyas
sold al $3.50 Each o. these Land
sehsfien 81 Morteaee Associations II
united with others TO fern a central
81 Provincial Murteaae Union. ih
function o. vhich y 10 praglde 4 wider
market for HE bonds
Mortgage Is Gradually PAID Oh.
one q ihe most valuable Features
OF the loana secured through Theses AZ
saoialions 6 ths gradual amortization
or cancellation n he aebi b gaeans a.
ANAL periodical payments make a lht
time when he Interest lnsaalimsnis
are paid Theses snssil suanal Of ssaes
snanal payments. which fange hom
oaefousth 10 three goaNhs u one PEI
cent. are 0bhgntory upon she has
rover Thus on loan Al 4 per cent
\ u one per cent u aafed nj
amortization - cancellation and oaa
fourth per cent Is added 70 cover Tie
ppefating expenses 81 The Association
making total ~ ST.. ~ paying this
amount annually FOR ffnm forty ia
forty ave years the whole lpaa will 81
pNld Of IN other words. The laud
achatt requires this borrower. 81 mat
ms small paymeni8. to accumulate
sinking fund which viii. 10 tho term 81
YEAR, ~ the mortgage. amount 10
enough to pay The pfinapaI dobl Tho
longer The term u the MORTGAGE tha
lower VIII b. the amortization lee
Necessary Capital Easily Secured.
OF coarae. II tho borrower desires II
any time 70 pay On ihe loan before
tho moftsage Is due, be may 40 10.
The average Length Of time for which
loane run 10 the Province Of saxoay 81
about twenty Eve YEAR, IL most eases
provision + inside That when i0fs III
the original loan r. amorilEcd and al
ditionai loan for the same amount may
be made on the same land
In each district n a local nfiieef u
the IAndsehaft, elected at their 80
nual msciing. who assists members III
getting loans and looks after the IN
terrstG 81 che fandAchaft Ri the Gls-
irict, II borrower Il misuslng the
money borrowed. this ofIcer serves as
The agent Of the Landschaft III inc
matter Of The foreclosure Of the mort.
gage The expense OF operation 81
these Associations Is exceedingly
small The result IA that German
farmers are able to secure ample CAPT
tai. for long terms, al small rates. u
interest with the assurance that, SO
long NJ The interest and small amofl
izatioH fee II paid tho principal debt
4 slowly but surely being paid 81
The animal short courses a the Agri-
cultural College begin January 3. 1916.