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Les diagrammes suivants illustrent la m6thode. 1 2 3 1 2 3 4 5 6 ft PROSPECTUS 07 TBS ♦ I y.*^ Canata f anW teiiit dtmitpnn, INCORPORATED BY 22 VICTORIA, CHAPTER 133. ■^^.^j>.jkj>^.^>^^.^^>^^» " LTBLRATIO.V PAH AMORTISSEMENT. N. •^•s.-WW"«r^ -^-N. -^-v-i. •w-^^^ MM >7i TORONTO : 1S30. PREFACE. The Act 22nd Vic, chap. 133, incorporating this Company, has founded in Canada a great institution. In giving to landed property a mode of credit conformable to its nature and proportioned to its necessi- ties, it has furnished it with the means, at once easy and powerful, of freeing itself from incumbrances and of promoting its permanent improve- ment. The agricultural interest has long raised its just complaints on the scarcity and consequent dearness of money which is lent to it, upon the enormous charges which borrowers are occasionally put to, and upon the great difficulty which is found to exist in repaying, at a short date, capital which is employed in the cultivation of the soil, only brought to perfec- tion by a successive augmention of its products at the end of a great number of years. Thus, whilst money had on mortgage increases every day, property, far from being able to free itself from the incumbrance, and at the same time to permit of proper cultivn.tion, has at length, in numberless cases, succumbed under the Aveight of burdens too great for it to bear. Is it not the case, that a proprietor who borrows on mortgage, sees his income absorbed in the payment of interest and taxes, and family expenses '{ That in the impossibility of his repaying the capital when it becomes due, he is forced to solicit, to him, very burdensome delays, and at length arrives, not unfrequently, at the point where he is dispossessed and ruined. This is the every day experience of many who are, and have been, landed proprietors, and if so, it is a deplorable situation, and it desorve.i the best energies of every thoughtful man to sec that it is not prolongf^d; to adopt and support any plan which holds out the propcct of a gradual JhlukMion of an amount borrowed, of a freedom from incumbrance so iidjusted, tliut an advanee made to a landed proprietor shall be, as it were, imperceptibly cancelled. If you do not iind some such means— if you do not procure for agriculture, capital at a moderate price, it can never rise beyond depression, aud the onward progress of the l^rovinco will be Hcriously impeded. Wc arc led to enquire, to what causes these difliculties ought to be attributed. Why should immoveable property, tiio most solid of all Secu- rities, not succeed in attracting capital to it except on conditions more strict and onerous than commerce and trade, why ? Because, when it 4 PROSPECTUS OF THE has contracted loans, it finds much difficulty, almost amounting to an impossibility, in repaying them. In the old countries of Europe there was little security to the capital- ist who lent on mortgage. There Avas no publicity of Titles. There might be hidden mortgages", annuities, or rent charges, and in the case of a loan or purchase being cficctcd, no possibility of ascertaining these facts ; exposing the lenders to such groat risks, that it was said in Franco, "When one purchases, one is never sure of becoming the pro- prietor, when one lends on mortgage, one is never sure of being re-paid." This defect of security, however, docs not apply to Canada, inasmuch as the Registration of deeds being of universal obligation throughout the Pro- vince, the true state of title is at once easily and cheaply ascertained ; and when to this advantage is added the important fact of titles being derived directly, or almost directly, from the Crown ; and also when the annually progressive increase in the value of landed property, is con- sidered, one sees that the mortgage in this country, even on the old sys- tem, is the very best security, as a security, the capitalist can have ; yet there is one serious drawback— the great sacrifice which a lender must make if he wants his capital before the mortgage is run out, and the costs and the delays, if a suit of foreclosure is resorted to. So that wc comprehend how it is that lenders exact from borrowers, over and above the natural price of money, a sort of premium, which is to them a compensation for the dangers and difficulties of repayment. Another principal cause is in the mortgage system itself, which re- quires the debt to be repaid in one sum all at once. The great attraction which attaches to the possession of the soil gives to it a value far above its prouctivc power. Too often wc buy beyond our resources— too often wo burden ourselves to excess. The income of the mortgaged estate is often- times insufficient to pay even the interest ; with what reason then is it expected that the whole capital itself should be repaid all at once at a short date ? Whilst the farmer accumulates slowly, by an annual econo- my, or by the gradual increase of his produce, the term of repayment, the inexorable term, comes upon him rapidly, and he finds it an impossi- bility to make payment all at once of the whole amount. Hence the constant torture of mind of the landed i)roprictor, henco the irregularity in the payment of tlic interest and in the repayment of the capital Avhich has 1)een lent to him ; hence also, by a very natural conscciuence, the strictness of the conditions which he is very often forced into by the lender. Such are the causes which have exorcised so dire an influence on landed credit, and which have so long paralized the development of agri cultural industry and production in this country. CANADA LANDED CREDIT COMPANY. 6 ' " It would here be vevy natural to indicate the working of the plan now established amongst us, and by which the evils of this vicious mort- gage system will soon disappear ; but before doing so, we will endeavour to give a short history of the Landed Credit system as now established on the continent of Europe. The system of paying off a mortgage debt by little and little, dates from the earliest times of which wo have any account, and even in Eng- land it obtained at a very early period, so that there is nothing new or original in the plan now under notice. But although in England, ages ago, it became incorporated, and ultimately lost in a more vicious system, it was again revived, and has been the one almost universally organized on the Continent of Europe for the last 80 years. The origin of these institutions in Europe is now well known. The most ancient dates back to the year 1770. It was founded in Silesia. The country, we are told, was in a deplorable state. The effects of the seven years' war, the rise in the rate of interest and the low price of agricultural produce after the war was over, had reduced the proprietors of land to a sad extremity. Their credit was ruined, and capital at once deserted them. In this wretched state, a Berlin merchant, M. Buring, came to their rescue and proposed a remedy. His plan was simply to combine all tlic estates of all the proprietors into one security, and to substitute that combined security for the indi- vidual security of each separate debtor. Tiie plan at first was very imperfect, for there was yet wanting the grand principle of the system, a sinking fund. Yet it produced the most admirable effects— the rate of interest fell, capital returned, and usury, which feeds on the poor man's hard necessity, fled the country. Proprietors who had been in momen- tary expectation of being dispossessed of their estates, were now enabled to obtain fresh and additional loans— agriculture more than ever pros- pered, and the land, in consequence of these new advantages, increased rapidly in value. Tlie success of thi? first experiment (which was made under the auspi- ces of Frederick the Great, a succes--* of which any Sovereign or Govern- ment might be proud) brought about by degrees the foundation of a great number of establishments of the same kind in the rest of Germany, Pomerania, Bavaria, Wurtemburg, Hanover, Gallioin, I^Iecklenburgh, Saxony, and many other States. Principalities or Duchies, have seen them successively established amongst them. ^Many Sovereigns encou- raffod them by subsidies. In some countries the State managed them, in others they were formed by an Association of Landed Proprietors or by Commercial Companies, but all were under the surveillance, and many of them had the care and countenance of the Government. ;i PROSPECTUS OF THE Submitting to strict rules, invested with privileges and powers which assured the prompt repayment of their advances, these establishments every where inspired a just confidence, and we find that even in the most difficult times they were enabled to hold on their way Avithout having recourse to any rigorous proceedings against the borrowers ; and what is remarkable, in the midst of the most grave crises which occasioned wars or revolutions, the value of their debentures, under the title of " Lettres de gage," maintained a rate always superior to that of the public funds, and Avhy ? The capitalist knew that he had good and immoveable land for his security. Nor were the benefits of these institutions confined to the great estates, for whose special benefit they were at first organized. Every where, where they were established, they worked to the advantage of the landed proprietors great and small, more especially in the reduction of the rate of interest. They lessened the encumbrances on the land, and they furnished it with the means of cultivation. These institutions, we have seen, have extended themselves all over the Continent of Europe, and it may occur to some, if their tendency is so beneficial, why have they not been established in England, the answer is, that in England there is no general registry of landed property where- by the state of a title can be easily and cheaply ascertained, an essential element in the working of these institutions. A writer in the Edinburgh Review for October, 1857,* says that, "without such a register no plan for effectually facilitating mortgages on land can be devised, such a register exists in other civilized countries of Europe, and the fact of our not having one ourselves is a disgrace to our Legislature." So that in this respect we are in Canada in a much better position than they are in England. We possess a registry of titles — a registry, as a general rule, well kept and admirably adapted for the working of a Landed Credit Institution, We have embraced the opportunity, and a Landed Credit Company is now organized amongst us. Thus we have endeavoured to shew, why capital is not attracted to the land, and we have given a short history of the rise and progress of institutions founded on the Continent of Europe, for the express purpose of relieving agriculture, sufi'ering from the very same causes which weigh down and oppress that important interest in our own country ; and we now direct attention very briefly to two or three of the important features of the Landed Credit System as established by the Act of last session. •The writer is indebted to the able article in this Review titled "Landed Credit," and also to the " Traits du Credit Fonder, par J. D. Josseau," for many valuable suggestions ; and he would also express his acknowledgments to the aid derived from that' valuable work, "Tocia'g History of Prices." CAWADA LANDED CREDIT COMPANY. COMBINED SECJRITY. The first is the just confidence which a lender will have, when he knows he has for his security the accumulated securities of a great num- ber of estates, all vested in one individual or company. If a party had lent perhaps his all, on an estate which, through fraud or forgery, turned out valueless, he is utterly ruined ; but if he had lent his money to a well managed Landed Credit Company, so terrible a calamity could not have happened. The rest or reserved fund, which the Company has, meets a contingency of this sort; or put it in the worst point of view, if that fund was insufficient, or if there were no fund at all, then all that could hap- pen would be that the next half-yearly dividend would be a quarter or half per cent less. We do not like diminished dividends, but the wide spread misery of a ruined family has been averted and not a complaint is heard. SINKING FUND. In connexion, and forming an essential feature in this Company, there is a sinking fund. The repayments by the borrower, which are small, and made at long intervals, become his capital, and by the steady application of interest and compound interest to it, the growth of that capital is so rapid that in a few years it reduces considerably, and event- ually pays ofi- the principal debt. The wonderful rate at which a sinking fund increases must be obvious to most persons. The following table is given to demonstrate the soundness of the principle embodied in this undertaking, and will show, on a small scale, the progressive increase in 13 years, of an annual payment of ^400, at 6 per cent. : First years payment ^"^^^ Second with interest on former payment added 824 Third ^l^^ Fourth ^'^^^ Fifth 2*^^^ Sixth 2^?^ Seventh ^^^^ Eighth ^^^^ Ninth ^^^^3 Tenth ^269 Eleventh ^^^^ Twelfth .... = = = = = = .. ^'^4^ Thirteenth *. "^^^^ In the thirteenth year the interest is actually greater than the an- 8. PROSPECTUS OP THE •nual payment, and it would go on increasing rapidly, and if continued for ten years longer would extinguish a debt of §20,000. The law of accumulation of money at compound interest is so simple, and yet its powers are so prodigious, that it has been demonstrated with mathematical certainty, thi".t any sum, however small, increasing at that ratio, would, in a given time, extinguish any debt however great ; and the table just referred to makes this so plain, and shows the applicability of the principle to paying off mortgage debts, that we would only further notice the early history of this principle, and then remark on one or two of the^ advantages this Company holds out, by adopting it on the one band, in order to make available the principle of progressive liquidation on the other. George the Third, in 1790, had the credit of establishing, or rather reviving at Zelle, in Hanover, the system of extinguishing a mortgage debt by little and little every year, instead of repaying the principal in one sum. This was an improvement on the system established in Silesia in 1770. " Experience," says the writer already referred to, " has shown under ordinary circumstances, that agriculture cannot repay in one sum, all at once, the capital advanced by way of loan to the soil. Any new plan giving adcUtional facility in advancing money for that purpose, will, unless a plan of gradual repayment be enforced, in the course of time,' increase the difficulties of the borrower. The temptation to borrow be- comes greater, the time for repayment more distant, more and more impossible. The proprietors, overwhelmed with debt, at least recognized that a system must be bad which is not only powerless in preventing them from being dispossessed, but which, by delaying it without cause! makes that rmn more and more certain, and retains them always on the brink of the precipice." We have, at the outset, referred to some of the advantages of the system, we may further remark on one or two others The repayments by little and little to a sinkirg fund liold out a great advantage to a borrower who at any time may wish to sell We suppose him to have an estate of 300 acres, 200 of which are cloar-d he has had difficulty in getting on for want of a little capital ; his Jan'd h not half so productive as it would bo with but a slight addition of labour bestowed upon it ; his stock arc few and poor; his farming implements o.Tn?'"''*' ^"' """""^^ ''''^" '"^ '^"^'^^^ «f '^"^"f^^-t- No^v, with tho 34000 borrowed of this Company and lai<] nut with judgment, he sees his crojs greatly increased ; his cattle numerous and in fine condition; his implements of husbandry of the best construction and which he uses CANADA 1A^'DED CREDIT COMPANY. 9 without stint, and his dwelling enlarged and nov; affording every neccs- sary comfort ; and, moreover, he has added to his really productive farm 50 acres of the 100 acves left in wood. He had borrowed the $4000 repayable in 23 yer,-, by §80.80 yearly, a payment easily made and almost insignificant in comparison with his present advantages, and he has enjoyed his bettered condition, we will suppose, for five years, and now for some cause or other wishes to sell. Had the money bor- rowed been an ordinary mortgage liable to be called in on six months notice, he would have found this next to impossible, except at a ruinous sacrifice : a purchaser woidd shrink from any negotiation unless the first condition was that the mortgage must be discharged, which the mortgagee might not just agree to at that time. Humiliated he seeks a purchaser from door to door in his own little world, and employs at great expense first one agent and then another who do the like, l)ut the mortgage bug- bear is seen in every face, and so in time he Avcaries of the search. The load is borne for many a year, and at length being unable to repay so large a sum all at once, he is relieved from it by being relieved of his estate, which has been sold by order of the mortgagee to pay himself his principal, interest and costs. Now, with the inconsiderable repayments allowed by the Company this mortgage is no objection whatever; but rather to the small capitalist at least, the very person the borrower is mo.'t likely to meet with, a posi- tive advantage. For he having at his disposal perhaps only just the agreed value of the estate and stock, pays down all but the remainder of the mortgarje money, which he retains to pay off gradually, and this very sum enables him to carry on the requirements of his new and really handsome farm with advantage, comfort and independence, and without the least fear of a six months notice to pay off the mortgage. An im- mense advantage it is to the borrower that he has the entire control of the mortgage money for the full term agreed on, whilst if he wishes by giving three months' notice he can pay it oft' at any time. The company by having connected with it a sinking fund, will destroy most of the evils attendant on the present system of mortgaging ; it will create habits of order among proprietors, by rigorously enforcing the pimctual payment of the interest when it becomes due ; by receiving and investing these small annual payments at compound interest, it not only is enabled to restore to the borrower his estate perfectly free, but also makes him feel that every year his debt is decreasing in amount through his own prudence. And he sees in the spirit of our motto, there is " freedom from debt by means of a siuking fund." ■ Another advantage of the sinking fund is, that it is at least a check on the inclination of some parties to bori ow for undesirable objects. They 10 PROSPECTUS OP THE know before hand that they must pay back annually, and therefore if they do not invest the money borrowed judiciously, it will be out of their power to comply with this requirement, and their estates will be lost to them. The cliief object of the Company is to assist Agriculture— an ^. it looks to the annual increase of the land as the best and surest means of repayment of both principal and interest. Experience, however, shows that some few persons -v/ill borrow for extravagant and undesirable objects, no matter at what cost. It cannot be prevented, but it is believed the system pursued by the Company will at least act as a check on such pro- pensities. Another important feature in the new system is, THE DEBEXTURE. Whilst the plan of paying a mortgage debt off gradually was in use in England at a very early period, the plan of raising mortgage money by debenture or "Lettre do gage," as it is called in Europe, is of modern date, at least it is coincident with the system established on the conti- nent of Europe. Tlie debenture,* in fact, supplies the place of the mortgage deeds which represent the land, and which instead' of being handed to the lender, remain in the hands of iiis agent, or, in other words, with the Company', who hold them for him. The lender may keep the debcntm-e in his strong box, contented in km wing that ho has improved land for his security and that h j receives the interest with re- gularity half-yearly, just as he would do if it were an ordinary inortgag(< with thia diifcrence and this great advantage, that if at any time he wished again to have the use of his principal, the debenture is "easily ne- gotiated, and being made payable to bearer, is transferred without ex- pcnse. ft is a marketable commodity, and at any moment can be con- verted into money. Bankers and Capitalists not only accept but seek after these Landed Credit Debentures, for if on the one hand they lose the advantage of having a debt which they can demand payment of only at a fixed period (a questionable advantage,) on the other hand they find in these simple instruments, the precious facility of receiving their capi- tal when convenient to them by negotiation. If the lender had merely the mortgage deeds in his possession, ho would find them only nn encumbrance ; he could make no use of them, uo one would advance money upon them, and even if he had been so fortu- nate as to have had his interest punctually p;wd, if the time came when ho wanted Ins principal, his only course would bo to "ive r, sjs months* notice —if the mortgage w ere not for a specified time— to the borrower to pay •It is a promissory nolo based upon the credit of the capital of the Company, andou lcut"o tU Com .nv *"^*** ^ *'''' Company, and given in eichange lor laonej CANADA LANL'ED CREDIT COMPANY. 11 him ; and the great probability is, that having undergone the disagreeable business of pressing his debtor for months after the expiration of the notice, ho at length only gets paid by a sale of the estate. How much more satisfactory to be freed from so disagreeable a necessity ; to bo sure of his interest to the day, and of his principal the moment ho wants it. The Company will only advance its monies upon first mortgages, and this circumstance, combined with the important fact that, by its returns to the Government it cannot issue more debentures than there are secu- rities to represent them of double their value, must be an assurance to the capitalist, that tliese Landed Credit Debentures are issued upon a permanent and safe basis. Such is a general outline of the Landed Credit System which has jiow — we say it advisedly — taken deep root amongst us. It has, however, still many difficulties to surmount. It will have, like every great dis- covery on its first introduction, to contend with the prejudice of one party and the sordid interest of another party. But it is destined to overcome all opposition ; and we feel assured that when the true spirit of this new institution conies to be well understood, the entire population of tiiis great country will fully appreciate, and with one voice proclaim its benefits. CANADA LANDED CREDIT COMPANY. INCORPORATED BY ACT OF PARLIAMENT. CAPITAL, 81,000,000. SHARES, 850 EACH. DEPOSIT, ?2 PER SHARE. PRESIDENT : LEWIS MOFFATT, Esq. VICE-PRESIDENT : W. P. ROWLAND, Esq., M.P.P. DIRECTORS. The HON G W. ALLAN, M.L.C. THOS. D. HARRLS, Esq. V H m-irrbv Esq m.p.p. lewis MOEFATT, E.sq. ?„.?^(S. MAIXOLM CAMER0N,M.P.P ^M ^Ic^MASTER Esq rll fs 'miNALDSON ' E.q Mu. SHERIFF SMITH, Collingwood. W. P. HOWLAND, Esq., M.P.P. , E. U . IHOMSON, h.-,Q. BANKERS : BANK OF BRITISH NORTH AMERICA IN CANADA AND IN ENGLAND. MESSRS. GLYN, MILLS & CO., LONDON. STANDING COUNSEL : STEPHEN MAULE JAR VIS, Esq. AUDITORS : WILLIAM ALEXANDER, Esq. CHARLES ROBERTSON, Esq, SOLICITOR AND SECRETARY: JOHN SYMONS, Esq. HEAD OFFICE -VICTORIA HALL, TORONTO. LONDON AGENTS: MESSRS. ROBERT BENSON & CO., G2, Gresham House, 0:d Broad Street, London, E. C. Tho object of tliis Company is to oneoun.-o tl.o llow of cnpitnl to the soil of this Provmco. Tl.o Company is tho receiver of such cup.tal, which it then ones . j^ij., ^^,.p--jj,(Q,.« ,>f th» Im'l wli,. ivni.v th.) s;inio bv luoaiis ol u siiilvUi|,' UinU. "similar associutions have Im.- uhtai'ncd, unci aro now univon^aliy or-anizcd on the Continent of Eur..po, wl.cro thoy have proved to bo ot such Mj;m,l bone . , both to tho londor and bonuwor. as entirely to supersede ^•'^^;lJl''"''-"f 'J/^^'i;"', The advantages tho "Canada Laudd ^!rodit Company" offers tlio boxiowcr may bo shortly biuted : 14 PROSPECTUa OP THH 1st. He is enabled with great ease to borrow of tlio Company the sum he re- quires, without having recourse to the heavy expense of employing a number of Agents. He has merely to satisfy the Company that he is entitled to the estate which he proposes to give as secuiuy, nn estimate is made of its value by the Company, and the estate is duly rcgi.stered as a security to the Company for the amount advanced. 2nd. By borrowing of this Company there is uo possibility of the borrower ever being called upon suddenly or unexpectedly to pay off the debt. When the money is borrowed ho enters into a contract to pay a certain fixed sum yearly, in addition to the interest into a sinking fund, and the Company agrees with him that when the amount of theso»smyll sums, which boar compound interest, equal the amount lent, his debt will be cancelled and his estate will have become entirely free. Experience has shown, under ordinary circumstances, that mort- gage debts are rarely repaid in one sum all at once. The repayment is seldom if ever made until after a lapse of years, and then generally by a sale of the es- tate. The Company offers the borrower the great advantage of paying off his mortgage debt, little by little, so that at the end of a certain definite time the estate will be his own. and once more, through his own prudence and foresitrht, entirely free. It is a Savings Bank for him, in which he can conveniently place a small annual saving to accumulate at interest and compound interest, and bo the means eventually of paying off his debt. It cannot be expected that an in- dividual lender will take any such trouble and agree to receive these small yearly or half-yearly instalments, nor will any borrower take the trouble of in- vesting for himself a small annual payment for a great many years together with the interest as it accrued. The debt is expected by the lender, when paid, to be paid off in one sum or several large sums. But what the borrower cannot do for himself, and what the lender will not do for him, will be done with the greatest ease by this Company, 'S. The borrower, on giving notice, will be allowed to pay off his debt at any time, and the different sums lie has paid to the Sinking Fund, with < interest, will bo reckoned in the account Th compound 'he advantages offered by this Company to the lender, are reciprocal : St. The lender has the security of a number of Estates collectively, together with the certainty of his interest beinir paid regularly to the day, without his ever having to seek after, annoy, or dispossess any individual The ('onipany alone being responsible to him. 'ind. The lender ' as no anxiety, care, or oven thought, as to the character of any individual borrower, or yf the value of the land mortgaged. ;kd. The security or d.;bentuve which be holds is a jnarkctable commodity, easily transferred from iuuul to hnml, so that ho can convert it into money ai any moment. 4th. The Sinking Fund of the Company — whilst it makes the h()irow('r feel that every year his debt i.i decreasing in amount, and secures to him. in course of time, perfect freedun from debt — is every day ini[iroviiig .'ind making iiKtre effectual the seciuity of the lender. There is thiily, as it were, money accumu- lating to meet the sum auvarieed by the lender, and his security i.s. in cdti.se quence, more and more Citabli.'hcd. In explanation of the applicability and advantage ot'a sinking fund for paying oU' n mortgage, suppo.'^n ^KMM.) are lent ; at the end of each hidf year the borrower pay.s the interest, and half yearly al^n, .<*HH.1I!> have aetua.Iy been repaid, the balance being made up by interest and compound interest, CANADA LANDED CREDIT COMPANY. 16 In few cases, however, would a mortgage be allowed to run out,— at the end of ten years it would be so greatly reduced that by a little effort, if it were wished, it could be wholly paid off, and the great probability is, that by the aid which has been afforded by a timely How of capital to the soil, its fertility being thereby trreatly increased, the borrower would find his circumstances so improved, that at the end of five years he would be in a position to take back his estate wholly free from the niortgajjo debt. But suprosing he does not wish or is not able to redeem the mortgsige before tho time agreed upon, if ho only pay the interest and the 2.02 percent., the sinking fund will do the rest, and daily, as it were, be diminishiua, till ultimately it has extinguished the entire debt. From these, which are only a few of the advantages this Company offers to ihe lender and the borrower, it will be seen that tlie question of facilitating the means of borrowing, and of eueoura-iinir the flow of capital to the laud is one of the greatest importance in a national point of view. The farmer who desires to render his land in the highest degree productive, to adopt a system of drainage, to keep cood fences, to build barns, to use the best implements, and to enlarge and improve his dwelling, will not hesitate to borrow capital when it can be had and repaid with such certainty and case. To borrow money on landed security will cease to be a sis^n of poverty, and ho. one f.f tho ways ot becoming more wealthy and of benefitting society— the labourer, the artizan, the merchant, as well as the landowners will all be materially benefitted by the stimulus given by this great undertaking. . , . ,• .1 Asrerrardsthe Companv itself. Its object is to be the intermediary, the friend ot" both lender and borrower. It has to see that the payments are made with rcsiularity, and to invest them, or a portion of them again as the aceuuiu- latiii^ fund to pay off the debt according to previous agreement. The Lompany has also to pay the interest to tho lender, on the day it becomes due. Tn every- thing the Company holds the balance equal between the capitalists and the landed proprietors. , A part of the capital will be raised in England. There are thousands there, as well as in (Canada, who will eagerly invest their surplas funds where there can be no risk, and where the interest is certain to be paid to the day. Capitalists advancin.r money on the security of productive land in a country, prosperous beyond parallel and where the monied institutions are upon a hrm basis, have the highest and best security it is possible to give. The accounts of the Company, which will be under the supervision ot the Inspector General, will bo made up and the dividend and interest paid hult- vcarly, cither in Toronto or London. As regards the interest and profit which shareholdt^rs may expect, some Com- panies held out the indueeaicnt of a very high interest, when, as in the case ot investments in railwavs, the returns are based on assumed traffic, which may or may not be, and which rarely is realized, to the L-reat disappointment and ottcn ruin of many ; but this cannot happen in a well managed Landed Credit (^om- pany, whose 'capital is at once invested on tho security ot land, Urn return from which is ascertained and sure. The interest, therefore, may ta.rly bo expected to br fnmi 7 to S p per .hare will be called up at any one time, and then only at long intervals, mw, v;.,».lc in ll.i.. Cmnmuv rannul tail to he n.orc atlractivc limn any other Cima- dian Stock, whil.st t!i.; Slia.i^ Capilal icmuins the same 111 nmoi.nl, li.c_ l-'^' '^^"tji.i^e Lapi- Ivil ho increased to a c.unsidl-rahio ..xtcut, and tl,- r.clit made hcmg 1 uMhfrerouco botwern. my C. i.rr cent, on the capital h,,rr<.vvod where nu.ney is cheap, and H per cent, al whiei; it is hM.t here, ^vill yearly augment the Shareholders dividend, winch careful culeidtttion nhews will in u very short tune ho 12 per cent. 16 PROSPECTUS OF TITE The foregoing prospectus -will have given a general idea of the scope and aim of the Company and to fill up the outline, to some extent at least the following observations arc offered. CAPITAL. The capital has been fixed at 31,000,000. But it is expected that hereafter power will be granted to increase it to a considerable amount. It is a peculiar feature of this Cor.ipany that it is empowered to borrow on its own security— the Company being itself secured by the accumulated securities of a number of estates all mort^-ao-ed — the exact amount of money wliich it has lent. If, for example, $100,000 be let out on mortgage, the coinpany m:iy issue its certificates or debentures for a corresponding amount, bearing interest and these may be issued, not one debenture for one mortgage, say of $2,000, but in debentures of various amounts from $50 upwards, altogether making up $2,000. They are issued in small amounts so as to be easily negotiated, and so as to suit die small as well as the large Capitalist. Without some check there might no doubt be more debentures issued then there were securities to represent them. The act therefore provides that audited returns similar to what the banks are required to furnish, shall be made half yearly to the Government and published in the Gazette and certain newspapers, of the then state of the affairs of the Company, shewing the amouut of securities in its possession, and the amount of debentures issued and afloat, which arc never to exceed the amount lent or due on those securities. As already stated the capital is raised by two classes, shareholders and lenders or depositors. Both arc certain of their interest being paid to the day, the only difference being that the former, who incur all the risk of establishing the Company and are responsible for its good man- agement, will be entitled to share in any profits that may be made, they will have chc Government of the Company, be entitled to vote, and eligible to bo elected on the direction, and have and enjoy all the rccog- nized privileges of shareholders. As most of the capital will bo raised in Euiopo, the Ccmpany is invested with, and if hereafter it should bo thought desirable will cxcr- else any powers which the Parliament of Great B.iitain may from time to time give to it, as regards sufli f«npit»l nr any other matter connected with the government of the Company, provided that sucli powers be not inconsistent with the Provincial Act of Incorporation, or the Statute Law of this Province. CANADA LANDED CREDIT COMPANY. 17 They THE COMPANY. The Company is not in the interest exclusively of either capitalist or landed proprietor, but of both. It is their agent or intermediary. It does not seek to obtain for one very large profits at the ruinous cost of the other ; but it will give to the capittilist in Canada the highest market value for his money, and to the Capitalist in England a much higher value for his money than can there be obtained and with that regularity and ease, the absence of wliich are so severely felt by mortgagees on the old system in both countries, at the same time that il accomplishes all this by facilitating the means of mortgaging — of encouraging the How of capi- tal to the soil, it will confer inestimable benefits on agriculture and on all persons connected with it from the owners dovm to the humblest laborer employed. Whilst, however, the company holds the balance even between the lender and the borrower, it will be bound to seek a slight advantage on the behalf of the shareholder who has risked his capital in establishing it, and who, so long as the Company exists, is responsible for its good or bad management. THE BOARD. The Company is governed by a President, Vice-President and Board of twelve Directors, six of whom go out of office by rotation in each year, but are eligible for re-election as Directors. The Board is responsi- ble to the shareholders for the appointment of their officers and for the conduct and management of the afiairs of every department subject and in accordance to the net of Parliament and the By-Laws made thereunder. NATURE OF SECURITY. It is a fundamental rule of the Board that no advance be made but on improved landed property yielding an annual income, (with, however, an exception hereafter mentioned), which term includes buildings, fully insured in an office approved of by the Board ; and therefore only those borrowers who arc possessed of such property will be treated with ; and although the Board cannot dictate the application of the money, yet since it is one of the ciiief ol)jectrf of the company to assist agriculture, those parties will always receive consideration who can show to the satisfaction of the Board that the money proposed to be borrowed, is for the purpose of being laid out in the furtlier improvement of the land ofTered as security. An exception to this rale is, hoAvever, made in tlie case of a borrower .seeking a loan on the security of wild land or for drainage of land, in which cases the amount must be laid out on that land under the superin- tendence and to the satisfaction of the Company's Surveyor. 18 PROSPECTUS OF THE No advance is allowed to be made on personal security or on personal property. Nor will the Company lend except on a first Mortgage. The proportion of the sum lent to the value of the estate will be determined on from time to time by the directors, but as a general rule it will not exceed in amount one half of the value ascertained by the sur- veyor of the Company. LENDERS. t It is one great advantage of this Company that the lender deals exclusively with it. He has no anxiety, care or even thought as to the character of any individual borrower — he does not even know what parti- cular estate or estates are his security for the money he has lent. He has to look to the Company alone and to satisfy himself of the respecta- bility and responsibility of that Company, and to satisfy himself that it will not issue more debentures than it has securities in its possession ; and to secure this latter object, audited returns are to be made to the Govern- ment of the Company's affairs, as already staved, thus giving the strongest guaranty to the public for the good managemeit of the Company. In Canada, where there are so many industrial enterpises, offering large returns for capital employed in them, it is not to be expected that any great amount of capital will be diverted from them, even though the investment offered by this Company be on the most solid basis — the interest fixed and certain, and the repayment attainable at any moment. But are there not a great number here, and with how much greater force does it not apply to England, where interest is low, who will eagerly seek after the debenture which is secured by good land to twice its value 'f Such are, for example, mercantile houses, who frequently possess current funds, often considerable, which are unproductive, would not these invest in the debentures of this Companp, for whilst getting a good interest they can realize at any moment ? — the funds of those who are incapable of managing for themselves — those arising from rigid economy, or peri- odical savings — those belonging to the public establishments — the cautious capitalist — all those who seek after sure investments, rather than very high interest obtained at great risk of security. Will not all these invest in the Landed Credit Debentures, when issued on an unexceptionable basis ? As a guaranty for the performance of its engagements with the holders of the Debentures, the Company offers to them : Ist. The advantage which it possesses of the first half years annuity of the borrower being paid in advance. i CANADA LANDED CREDIT COMPANY. 19 2nd. The rigour with which it will enforce the punctual payment of future interest. 3rd. The resources which the sinking fund places at its disposal. 4th. The strict punctuality with which it makes its own payments. DURATION OF THE MORTGAGE. Although the Company adopts the period of 23 years as the utmost limit to the term of repayment, it must be understood that it is not com- pulsory. It does not prevent the borrower himself, who may wish it, for some particular reason, agreeing for a shorter period, when his means will permit of hjs doing so. The shortest period the Company will lend on mortgage will be five years, and the longest period will be twenty-three years. The advantage of the longer period to the borrower is obvious, and no doubt will generally be embraced, whilst it is a matter of indiffer- ence to the Company whether the period be long or short. In either case it is always sure of its interest, which is its chief concern, in order to enable it to meet its engagements with the lenders. Tlie only real difference being, that if every mortgage were for the longer period a less number of proprietors would be accommodated. But as in the longest terra allowed, 23 years, there would be few cases where the mortgage would run out, for circumstances would be sure to arise, such as the change of possession, the deaths of parties, or the improved position of the owner, rendering it desirable that notice be given to the Company to pay off the debt ; so that it is probable the average duration of the mort- gages would not exceed ten years. It is therefore a matter of no moment to what period of time, within the limits mentioned, the mortgage is allowed to extend. The following table will show at a glance the amount to be paid the sinking fund for a loan of 100 dollars for any given number of years, from five to twenty-three inclusive: 20 PROSPECTUS OF THE TAILES OF THE SINKING FUND OF THE CANADA LANDED CREDIT COMPANY. T^^BXiE aSTO. 1- Of the cmount of contribution to the cAnldn^ fund, for the purpose of liquidating ftiino advnnce'd. Payments to be made every six months, and in advance; tne firM ill (He time of the loan, accumulated at 6 per cent, compound interest i also showing the amount of the total annuity payable by the borrower. , j IlIAtF-YEARLY 1 DURATION OF '•■ ^TVTTIKQ rUXU 1 HALF-Y KARIA' 1 TOTAL 1 PAYMENT 1 THE LOAN 9UNKIN0 FUNl: ANNUITY. ! THEllEOF. 1 s? ^• ^ C. ^ c. § c. 1 5 I G 'ears 16 94 8 47 24 94 ^ .12 47 ! a V?> 70 6 85 21 70 , 10 85 1 u 11 38 5 GO 19 38 9 69 ' 8 (( 9 64 4 82 17 64 8 87 1 9 u 8 30 4 15 16 30 8 15 10 (( 7 24 o 62 15 24 7 62 11 u 6 3(5 3 18 14 36 7 18 12 a 5 60 2 83 13 {jQ 6 83 , 1 1^ u 5 04 2 52 13 04 6 52 ! 14 a 4 54 ' 4-j 27 12 54 6 27 i in u 4 10 2 05 12 10 6 05 ' 1 16 a 3 70 1 85 11 70 5 85 ; 17 a 3 38 1 69 11 38 5 09 18 ii 3 08 1 54 11 08 5 54 ; 10 a 2 82 1 41 10 S2 5 41 i 20 (( 2 58 1 29 10 68 5 29 1 : 21 a 2 38 1 19 10 38 5 19 1 22 a 2 20 1 10 10 20 5 10 1 " . 2 U2 1 01 10 02 5 01 ; 1 The annuity includes the interest, the amount to be paid to the sink- ing fund, and the charges of management. Thus, the annuity of S 10.02 shown in the table for the loan of $100, returnable in 23 years, is thus composed, as near as circumstances at present will admit of calculation : Interest 87.50 Costs of management 50 Sinking fund 2.02 Total 810.^)2 In other terms. The borrower pays annually for interest and costs of management rmcnt the and to repay the ^100 borrowed, pay] CANADA LANDED CREDIT COMPANY. 21 further sum of |2.02, destined for the liquidation of the principal at the end of 23 years. Thus 23 payments, of ,^2.02 each, amount to ^46.46, and the Com- pany adds to this suni for compound interest at 6 per cent, which it has made for the benefit of the borrower, §53.54 ; total .^100. In fact, 23 payments of $2.02, divided and made half yearly, will, with interest at the rate of 6 per cent., produce $100. If the borrower elects to pay a larger amount to the sinking fund, say 5.04 per cent, instead of 2.02 per cent, the debt is paid off in 13 years. The annuity for the respective terms from five to ten years inclu- sive, is too high for general adoption, and would only be selected to answer some special purpose. Most borrowers, as already stated, would no doubt prefer taking the longest period, which involves the smallest annual payment, and if able to pay the loan off sooner, would take advan- tage of the rule which permits of his giving three months' notice for that purpose. To find the annuity of any loan, multiply the loan by the annuity, according to its duration and divide the product by 100. EXAMPLE. What is the annual repayment of a loan of $1000 for 23 years at 6 per cent, interest ? The annuity in the table for $100 is $10.02. Therefore $iooo x 10.02 = $100.20. 100 In other words : — The amount to be paid for interest, and to the sinking fund annu- ally, for a loan of $1000, is $100.20, or half yearly $50.10. A privilege is accorded to borrowers in this Company of paying off the mortsao-e debt at anv time. The Loans are, on the part of the Company, made for a long dur- tion of time, in such a way as to require of the borrower, over and above the interest, the payment of a small sum annually, destined to form insensibly, by way of accumulated interest, the capital of the borrower which is to pay off the mortgage. But the borrower has always the privilege of liberating his estate from the mortgage debt by anticipation, on giving three months' notice. The Tables, to facilitate the calculations for discharging the debt on receiving such notice, have not yet been perfected, and as it will neces- 22 PROSPECTUS OF THB sarily be several years before they are required, it is unnecessary further to allude to this point than to say, that this privilege of repaying the mortgage by anticipation, which permits a debtor to rescind his part of the contract at anv time which suits his convenience, whilst the Com- pany remains bound to the end of the time first agreed upon, is one of the great advantages of the Canada Landed Credit Company, in favor of borrowers. INTEREST. The interest charged on all loans will not exceed 8 per cent, per annum. The punctual payment of interest on the part of borrowers is an essential condition of the success of the Landed Credit System, for with- out this the Company would be unable to observe extreme punctuality in their payments of interest to the liolders of the debentures which could not in consequence be negotiated. The Company therefore will be bound to see that the strictest attention be paid to this very important point. CANADA LANDED CREDIT COMPANY MEETING. ANNUAL GENERAL {From the Toronto Leader, Jan. 6, 1859.) The first annual general meeting of the " Canada Landed Credit Company " was held yesterday, in the rooms of the Company, Toronto Street. There was a large number of shareholders present, among whom were Lewis Moffatt, Esq., President; Hon. Malcolm Cameron, M.P.P., W. P. Ilowlnnd, Esq., M.P.P., Col. Thomson, R. L. Denison, Esq., T, D. Harris, Esq., William McMastcr, Esq., S. M. Jarvis, Esq., and Samuel Spreull, Esq. of Toronto; F. H. Burton, E>^q., M.P.P., Wm. Wallis, Esq., and W. H. Whitehead, Esq., of Port Hope ; J. A. Tidy, Esq., Norwichville ; Sheriff Smith, Collingwood ; Wm. Lati- mer, Esq , Howard ; C. Donaldson, Esq., St. Catherines ; John Lynch, Esq., Brampton; John Beard, Esq., Woodstock ; Benjamin Walker, Esq., St. Thomas; H. Hatch, E.sq., Guelph; Arthur Macdonald, Esq., Cobourg; Thos. NichoHs, Esq., Goderich ; and R. H. Smith, E-q., Newmarket. John Syraons, Esq., Secretary, read the notice calling the meeting. The President tiien said: Gentlemen, you have heard the notice calling the meeting read and it now devolves upon me to mention the business that will be required to bo done on this occasion. You will shortly have read to you n report setting forth the steps that have been taken to organize this institution, and I fully hf- -< they will meet with your approval. It will be necessary u. e'ul Directsrs for the en ng year. As the in- stitution is likely to bo one of a v.rjr ;.ia->ortant character, it would bo well that you tiUouid elect such men as you Lave <'uU cc' ■adcrice in, and in order that there may be a full quorum always in the city, it would bo desirable to have a sufficient number of gen- tlemen from Toronto on the board, for that purpose. Although there may seem to bo Bome sort of apprehension that if the direction is composed entirely of Toronto gentlemen, they would be apt to monopolise the means of the Company, I can assure you there is no ^^ CANADA LANDED CREDIT COMPANY. 23 y further lying the is part of ;he Corn- is one of 1 favor of cent, per ers is an for with- tuality in lich could be bound t point. fERAL " was held number Of n. Malcolm », Esq., T, preuU, Esq. iliead, Esq., ; Wm. Lati- Brampton ; latch, Esiq., ; and R. H. the meeting uired to bo th the steps I meet with As the in- II that you •e may be a vber of gcn- ' seem to bo I gentlemen, I there is no ^1 .ground for any such feeling. The gentlemen who have already acted on the board are gentlemen who are possessed of property different to that on which we intend to loan. It will bo the business of this Company to confine its operations to advances on land ; and it is the farmer that will be principally benefitted by this, though of course whatever benefits him will indirectly benefit the merchant. The Company will also see that the money is loaned on such security as is not in the least doubtful. So far, the Company has succeeded beyond our most sanguine expectations, and if we only do justice to it, it will be one of the most important institutions in the country. (Hoar, hear.) The Secretary will now read you the report. The Secretary then read the following report: — DIRECTORS' REPORT. The first meeting of the Directors with the Shareholders of this Company, is one of con- gratulation and encourngement. In the belief tbnt the institution now inaugurated is destined to confer great and sub- stantial benefit o:.- Ihe ng;-iculturnl and commercial interests of this country, it is a source of much satisfacti'ju thvt the early cllorts of the Directors in establishing it, have been so cordially seconded, in tuc first instance by the public generally, and now by so large and wealthy n |iri>|irietary. Since liib lioyal assent was given to the Act of Incorporation on the 10th ot August last, the necessary steps have been taken for the disposal of the capital stock, and up to the present time 10,G01 slinres have been applied for ; of these 7507 shares have been allotted, and the deposits paid tliereon, and in a few days the further number necessary will have been allotted and the deposits in like manner puid It was originally intended to reserve 2,000 shares for the English market, but the appli- cations for shares here have been so much more numerous than was anticipated, that it lias been deemed advisable to limit the number for disposal in England to lOoO : and it will be a subject for the future consideration of the Directors, Avliether, in addition to other powers which they will apply for in the ensuing Parliament, and of which notice has been given, they should not seek fur an increase of Capital s» necessrry at the present tune for the full development of our agricultural resonrces, and for the relief of those landed pro prietors who have been and are tuilfering great depression, arising from causes unneces- sary here to enumerate, but which are set forth in the full prospectus, in course of pre- paration, and which will be ready for adoption at the first meeting of the new Board. The amount paid for deposits, together with a call of $5 per share, will enable the Company to commence business immediately, and no time will be lost in making those investments which will bring into operation the power to issue debentures. Issued as these will bo on so firm a basis, the directors anticipate that they will become a favorite investment both for the large and small capitalists, and will consequently bo negotiated with great ease. In that event, the calls on the shareholders will be very few, and be made at such long intervals and in such a manner as to press upon them as lightly as possible. , , , , ,. „„., The task of framing By-laws for the management ot the Company has been one ot con- siderable labor, and since it is also one of great importance, the Directors have deemed it desirable to submit them for the approval of the shan^holders iu general meeting. The introduction ".f a new institution into this country, embodying the pnncipleot pay- ing off . m '.rtgagc debt by Hitlc and little, mot at first with considerable opposition but when its true spirit became better knuwn, this soon gave way, and it was received trom one end of the Province to the other with the liveliest satisfaction. The Directors believe that this feelin.rwill continue to exist, and that when the system is in full operation, it will be the means of conferring inestimable benefivs, not only on the landowner, lor whose especial good it is designed, but through him on every class in the community. The Directors beg to lay before the shareholders the balance sheet of the Company tor the three months ending 31st December, 1858. Victoria. Hall, | Toronto, 6th January, 1859. / 24 PROSPECTUS OF THE CANADA LANDED CREDIT COMPANY. BALANCE SHEET. For three months ending 31st December, 1858. Dr. To SliarehulJers Capital, viz. : ^ Deposits of $2 per share on 7,567 shares allotted, ^'^'^^"^ ^^ 15,134 OO Cr. S c. By Cash at the Bank {}j20 80 C;ish IJOX ••••• ••• o'(;ki 3k Prcliiuiuary Expenses account ns per abstract "___._ . 15,134 00 Hon. Malcolm C.^muuon moved, and Wm. Latimeu, Esq., seconded the adoption of the report. It was carried unanimously. _ , . ., The election of directors bdug the next business bef..rc the nu-etiiijr, Hon M CvMiuoNpropo.ed The election of the old directors, with the exception ot one aentl n.m vl o hL ix-Mpied. pre.unun^^ that there couUl bo no difference ol opinion ?e°ml n ' t .0 n. He was entirely sntisti.d ^vith the report and the general ideas thrown om in The principle of paying by instalments was fwst adopted by Building soc.ot.es. Su re-inKd those soeietiesit w.as'more oUjeCionable the.e than tl.e plan p...posed by tMs n 'tim io . A plan si.nilar to this, which was tirst bro.ight in with snccesstn opera- io,. w.a .-oduced bv Mr. llineks in the m,.tter of certa.n loans to mu.o.pa .ties, in wlcl he payment of '^ per cent a yea,-, paid off .he ent,.;e debt in nO years he p... - d lo was idc-r and betteV for the agriculturist than a..yth.ng that eouU, be adopted. Is o ni.rwn« that the saf.ty of the Company depended on the p.;esent ^oa.d -a I5oa.-d •I. h.,d no ulterior objects in view-simply the advancement of the ag..euUural intcr- . of 1.0 coun„y. There were not in the city eight names less cha.-geable w„h specu- lation or a dJsire to beneht themselves by an institution of th.s kind, than the names "'SLiuMTMiTi:u.K-.,...«i'i that the Company had no object in viowb.it the ad- va ™;roJ';i^ a'ir^ltu.ld interests A.i institution of "^J^";;^;^- ^ ^^ J;^,::;^!; nos-^ibilitv br; made to answer the piuposes Oi mcichants. Ihey got all tli, aUv ante . R.^v mi ii-cH^^ f. o.n the banks, if they we.c men of any standing. Too great object wh.eh ly , 1 i V w,is the bonehtting of the farming co.nn.nity. and as a matter of cou.se :ir'cy be. .fitting themselves. Sl.onhl he happen to bo eleeted a member <.f the boa. d bis ibjoct would bo To endeavor to get the means of accommodating the farmer. (Hear. ^'*"v' ballot wiis then taken-this being the necessary mod? of aj^pointing di.-ecto,-s, as remihe Ibv^ tbe following g^ulemen we.-e appointed direetors: IIo.,. Malco .n Crio,;. M IM'.. Il.n. G. W. Alia... M.L.C.. C„l 'n.em^^n. IL '' />;— -V^^'^f'' !' \f rri^ ''\ !!';:• f ^ r";;;.':i ^;:'^I • :^i' iSr sn.uh.''mrr.^;i.;aid;.i. ^::r- hf : ^ 1 !l nl,; i to'et'e ;.;'the l;.d of ,h; yea... to giro place ^.r .he elee.io.. of si^ new d rectors in their .tea.l. Tl.o total number of votes represented was 2\...K.i d-ired to kn..w how soon tl.e Company would commence l"""•"!^ The V. B- sr r..pUe,l that the dbec.o.-s would have a meet...g t-morrow. an doc d. „„ o ir-i. . .n.d.. ..p-.a tl.. ^ha.vl,uhlers and so soon a- that >y ;^ responded to hev wotiVl be iu aV'Isition lo co.nmence loa..ing. I'robably about the middle of l-cbruary thev would go i.ito operation. Ill answer to another shi\reh(ddor, , ,,, » ..™ „f *Mi mm tmid The I'liKMURNr said that the act required that they should have a hum "f *'^'\';'^'» ^a"' 1110 I UK ' . , 1 , ., ,.f^(,ypac sUquM como from the kUnro- up, bet'ore liiey holders couM Cuiiirnrnrc ioiUiUij;, ani Mr. Wai.lis —How many in«lalment