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Les diagrammes suivants lllustrent la mAthode. f-'-f..-- ' t 3 1 2 3 4 5 6 R] TO PRIN1 THE '^CREDIT FONCIER," BT I*' a. B. DE BOUOHERVII.r.E, i ■1 ANNEXED TO THE REPORT OF THE SPECIAL COMMITTEE APPOINTED BY THE LEGISLATIVE ASSEMBLY, 3rd MARCH, 1863, TO ENQUIRE INTO THE EXPEDIENCY OF ESTABLISHING IT IN LOWER CANADA. ^vlnUA hii iBxAtv «l tite ^t%\»Mivt '§,mwUti, ^ mrii ij 1 QUEBEC: PRINTED FOR TllK OUNTRAOTORS BY HUNTER, ROSE * CO., ST. URSULE STREET. 1868. Ill CONTENTS. A rAGvr AdmisRion Hi Advantages — UobuUs 25 Agricultural Credit P8, 98 Algebraical abbreviationg 75 Algebraical Formula 51 Alienation 106 Anticipation — Indemnity 113 Annuities 83 Annuities reckoned at par 42 Anticipatory payments 100 Application for Loans 99 Appeal 105 Arbitrators , 113 Associations of Borrowers 21 do of Lenders 22 B Bavaria 18,22,90, 107 Banks of Discount and Circulation projected in France 33 do do ia Bavaria 108 do do ill Duchy of Kaiieau 112 Belgium 19, 93, 112, lU Borrowers, Associations of 21 Bond (or Lottres de Gage) Ilolders — their rights 90 Bremen 18, 111, 120 o Capital U Capitalists, Societies of. 24 Causes of Credit Foncior Kstablishmeuts 20 Committee of the Legislative Aasumlly 7 du do their Ucpurt 7 do do their Fvucccding!; i Conditional Contract 100 Credit— Agricultural '. 88,98 do Collective 8S do on Mortgage 15 do Landed 13, 16, 17, 18, 19, 52, 88 do Personal 88 do Public 88 (^osts of Administration 78 Compound interest 75, 76 Currency of "Lottres do Gago" 58 D Decimals of dayii, their use , 58-59 Definitive Loan Act 10 Delay in Judgmontu ■ 105 Denmark 18,21,111 Drawing of Bondi or " Lattrcg de Gage" , .„„,..........., 50,51 ■•< .il 'a ' I • i II f [ IV Endowment— (See Quarantee). Eetimato. PAOER. ... 27 ... 100 Exchange Execution without process. Ezpropiiation 36 lOR 103 F Forced rate 2^' ^*'' ^^^' Formalities for a Loan '* Formalities of the " Purge" in Franco 104 Formula (Algebraical) to find the amount nt credit 77 do Jo to find the period of " Amortisscment" 75 do do to find the Annuity 75 do do to find the Sinking portion 77 do do to find the amount of Simple Interest 76 France "'i ^^i ^■^> ^^ ""'' following. G 106 «liigerio Guarantee 27 H History. 19 5«>' Ob. Ob, Ob Oc Op Indemnity Inspection by Governments. Intercolonial Railway Interests 11.1 90 30 K!, 19, 21, 22, 2.{, 54,89 Landed Credit Law 36 I.auilod Credit Bonds, " Lettres do Gage " 4,'), -19. 50 Loans, applications for gg l.oiins lit early maturity 13, yg, 119 Loans' at lung date of maturity — (See .Siniting Fund) 72 Lots, and lots with premium. 50 H Management — Inspection — In Austrian Gallieia do do do do do do do- do do do do do do do do do do du do do do do do do do do do do 91 91 93 93 in Bavaria in Belgium iu Duchy of Poscn in Kustorn Prussia 93 in France , y^ in (icrraany gf^ in Hanover y,"; iu Prussia, Kleotornl March and New Marcii 03 in Pomcronia y;; in Kussia gj in Saxony 02 in Silesift , 92 in Western Prussia <);t in Wurtemberg yd cohaniim of Credit Foncier Institutions 42 ..odols of Bonds or " Lottros do gaje" , , 45 4^ 4; ulUplioilyof Crfdit Foncjor ipslitutions in n lountry a mistaltc J'd Notice of reimbursement . PAOBB. ... M Object of Landed Credit laititutioni 24 Objection! 114 Obitaolei 16, 17 Occult Title* 16,101 Operations— In Bavaria 107 do Belgium 113 do Bremen 111,120 do Denmark Ill do Duchy of XaiBau 112 do Duchy of Poaen 100 do Electoral- Hesse Ill do East Prussia 109 do France 95 do Oallicia , 109 do Hamburg Ill do Hanover 110 do Haute Lusace 110 do Hesse-Darmstadt 112 do Lubec Ill do March (Prussia) 109 do Mecklemburg Ill do Poland 108 do Puuierania 109 do Prussia 108 do Russia 108 do Saxooy 110 do Silesia 108 do Switzerland 112 do West Prussia 109 do Wurtemborg 108 Organisation , 89 Personal Credit 88 Postage 108 Postscript . 120 Privileges 102 Production of Wealth 11 Public Credit 87 Purge 100,101 I: ■• M ■ 4 m »i Registration, its veuewul • 100 Restrve Fund , 119 Results — Advantages 25 ResponsibiliUei ...« ,... IH Tl s Plan. Sale lO* Hcqucstrution ^^^ Scries of BonJd or " Lettrcs de gage" 47, 49 Sinking Fund—" Amortissoment," 72 Society of Lenders 22 Hubiiidics — guarantee 27 Summnry ^'^ T able No. 1— Sinii»lo interest, per day 68 do 2 — do per mouth 69 do 3— do per year m 89 ilu 4— Compound interest — Progress of the Sinking Fund 80 do 6 — do do timo to pay off a debt 81 do 6 — do do acquired value after years 82 do 7 — do do annuities to repay 83 — Taxes iOS w Wealth 14 APPENDIX. bavuria, — Statutes 165 France. — Decree organizing the institution, 22th Feb., 1S52 121 do do of 22ndMarch, 1852 127 do do 28;h do 127 do do Iflth December, 1852 129 do do 6th July, 1854 131 do Kxtractfrom the Law of 28th Feb., 1852 129 do Extracts from Reports of Credit Foncier institutions 149 ft 151 ilo Usitracts from observations of Censors 155 do Law of 19th June, 1857 132 do Statutes of the CrCdit Foncier 131 do Table of the Hituation and operations 154 do do do do 156 1164 (Jallicia.— Statute* 172 Official Document* 122 I V > ?; I • Tf REPORT Of the Select Committee appointed to enquire into the expediency of establishing a " Landed Credit System" in Lower Canada. I I LEGTSTiATIVE AfiSEMBLY, Srd March, 1>^G3. Resolved, That a Select Committee, composed of Messieurs de Boucliervillc, Dcsaul- nicrs, Joseph Dufresne, Alexandre Dutrcsnc, Lat'ramboisc,Sylvain, Mon,<:enais,Kieizkow.-ki, Paoust, Carol), and Labrcche-Viger, bo appointed to take into consideration the expe- diency of establishing a System of Credit Foncicr in Lower Canada, with a view of affording aid to the agricultural classes, and the best means to be adopted to enisure its successful operation ; with power to send for persons, papers and records, and to report from time to time by Bill or otherwise. Attest, Wm. B. Lindsay, Ckrk, L. A. 18//i March, lPfi3. _ The Committee appointed to take into consideration the expediency of establishing a " System of Landed Credit" in Lower Canada, for tho purpose of coming to the assistance of the agricultural class, &c , &c., Have the honor to present to Your Honorable House their First Report: — Your Committee, immediately after organization, lost none of the ti.i:c at their dippnsnl in arriving .is speedily and as suro'y as possible at some practical and advantageous result. Your Committee, in the first instance, took advantage of the studies and general knowledge of several of its members. After some discussion as to the plan of prficeedings to bo adopted, Your (Committee entered upon the consideration of projects submitted by .Messieurs Alcxandie and Jo-cph Dufrcsne. If their propositions h.ivo not been adopted by Your Conniiittee, they Imve. nevertheless, been of considerable service in the elabmiion of the plm now submitted. The third proposition, which is by far the most important one, and which Your Committee have examined and stu'licd, is that of Mr. George de Boucherville. Tho information obtained by that gentleman is of tlie highest importance It was collected by him on the spot, during his visit to Europe last summer. By studying the work.s of the best authors, and by communi ating personally with individuals in imitcly connected with the working of the Landed Credit Institutions in Europe, Mr. de Boucher- ville has . acquired that extended and ample knowledge of tho subject which ho now possesses. The work of Mr. de Boucherville, which is in reality merely an amplific:ition of his evidence, is so interesting and is so applicible, th;»t Your Committee have cansidercd it proper to annex it to their Report. Moreover, a work of this nature '\-i of the greatest nee iSiity at a time when tho whole country is excited with regard to this subject, and when public men are called upon to act either in fav r or against tho proposed : ystcm. Tbo subject of " Landed Credit" has been considered to be of such vast imp;)rtaaco 2 ! Ml M I. that Tour Committee considered it to be their duty to neglect no meane by whieh ita principles should become known to all those who take an interest in tha welfare and prosperity of the most important class of our commanity. Your Committee have become more and more convinced, both by diioaasioD aod study, that the establishment of a Landed Credit Bank is one of the best mearares whieb could be adopted to relieve the agricultural class from the state of embarrassment in which it now finds itself. Finally, Your Committee, after lengthy and serious deliberation, have arrived at the following conclusions : — Resolved, That it has become necessary, in the interest of the agricultoral olasi, to establish a Landed Credit Bank. Resolved, That this bank shall be called the Landed Credit Bank of Canada. Resolved, That the object of this bank should be to loan money, on mortgage only, at long dates, with a sinking fund. Resolved, That the bank should have the power of issuing notes for double the amount of its paid-up capital, and for an amount equal to the bonds (lettres de ffoge) whioh it may negociatc. Resolved, That the subscribed capital of the bank should be ''one million of dollars," and it should be permitted to commence operations on the payment of one-tenth of that capital. Resolved, That power should be granted to the bank to ascertain accurately the existence of secret or unknown incumbrances, and to clear them off easily and econo- mically, at the same time protecting third parties. Resolved, That power should also be granted to the bank to collect promptly its jost claims. The whole, nevertheless, respectfully submitted. L. L. L. DXSAULNIIRB, Chairman. B 1 the es I and w Credit I Mr.C C moned instant and do order % Committee Room, Tuesday/, 3rd March, 1863. IN COMMITTEE ON ORDER OF REFERENCE No. 4. PRESENT Messienrs de Bouchxrville, Joseph Dufresne, Alexandre Dcfresnx, Labreche-Viger, Desaulniers, Daoukt, Caron. The Order of Reference having been read. It was moved by Mr. de Poucberville, seconded by Mr. Daoust, that Mr. Desaolniem do take the Chair. — Carried. After some discussion, the Committee agreed upon the following definition of Credit Fonder. " We understand the term Credit Fonder to mean a monetary institution which loans money to proprietors of land on mortgage, at long dates, and with a sinking fund." The Committee then adjourned until to-morrow at 10 o'clock a.m. T Credit R pare ai nest a T A.M. Wedneidajf, Ath March, 1868. THE COMMITTEE MET. PBESSMT : Mb. DESAULNIERS, Presidint. Messieurs J. Dcfresne, Alexandre DvfRisifE, Labreche-Viosb, Daoust, Caron, • KlERZKOWSKI, Sylvain, monoenais, Laframboise. Moved by Mr. Labreche-Viger, seconded by Mr. Laframboise, and resolved : That Mr. Alexandre Dufresne be requested to explain to the Committee his plan for the establishment of a Landed Credit Institution. In accordance with this request, Mr. Dufresne explained his views on the subject, and what he considered to be the best means to adopt in establishing a Bank of Landed Credit. After some discussion in Committee, it was moved by Mr. Laframboise, seconded by Mr. Caron, and resolved : Ordered, That George de Boucherville, Esquire, Advocate, of St Hyacinthe, be sum- moned by the Clerk to appear before the Committee on Tuesday next, the 10th March instant, at 10 o'clock in the forenoon, and that he be prepared to produce all papers, notes and documents which he may have in his possession on the subject of Landed Credit, in order that they may be submitted to the Committee. The Committee then adjourned until to-morrow at 10 o'clock a.m. iff., :1* Thurtday, 5rt March, 1863. THE COMMITTEE MET. PBESENT : Mr. DESAULNIERS, President. Messieurs Joseph Dufresne, Alexandre Dufresne, Laframboise, Sylvain, KlERZKOWSKI, Daoust, Caron, Labreohe-Vioeb. The Committee having debated for some time upon the different plans of Landed Credit proposed to them, it was unanimously Retolved, That Messrs. Joseph and Alexandre Dufresne be hereby requested to pre- pare an analysis of their plans of Landed Credit, to be submitted to the Committee at its nest meeting. The Committee then adjcarned to Tuesday next, 10th Mareh instant, at 10 o'olook A.M. i !. .1): ■ i.- '■■;< II 10 IxMtdai/, IQth March, 1863. THE COMMITTEE MET. pnESENT : Mh. BESAULXIERS, PRESIDBIfT. Messieurs Laf iamboise, Caron, Alex Dufresne, Labreche-Vioer. • TIic Order of the Committee of the 4th inst., summoning Geo. de Bouchervillo, Esq., t'. appear bcforu the Committee this day, having been read, and the said Geo. do Boucher- vil!e not appearinjj, The Couimittee adjourned until tomorrow at 10 o'clock A.M. \S'eUFRE8NK, JoSKl'il DUFRESNE, LAiUAMBOISE, SVLVAIN, MONOENAIS, KlEUZROWSKI, Caron. Mr. do Boucherville being present, tho Committee resumed the oonaideration of th« IH iV 1 12 propoAitioQ to grant to the institution (le droit de purge) " tho right of clearing off mortgages to secure priority." This was discussed at length, and finally adopted. The reading of Mr. de iiouchcrville's plan of Landed Credit was then continued as follows : — Loans shall not be in excess of one-half the value of the property ; the minimum of loans shall not be less than one hundred dollars ; the institution shall possess (droit de gage privileged claim, on the crops of the borrower for the arrears, the annuity then next du* and intiretz moratoires ; it shall have the power of naming arbitrators ; it shall also enjoy the right of exicution puree, (privilege of proceeding without judgment) ; no oppo- sition shall be authorised except for payuicut ; the amount of the debt may be claimed in the event of non-payment or deterioration in *he value of the property; the cost of judi- cial sales shall be added to the debt. The Committee having discussed the said plan for some time, deferred its further consideration to Monday next. Ordered, That Mr. DeBouchcrville do again appear on that day. Tho Committee then adjourned until Monday next, at 10 o'clock, a.m. Monday, Wth March, 1863. THE COMMITTEE MET. PRESENT : Mb. DESAULNIERS, President. Messieurs Daoust, Alexandre Dufresne, Joseph Dufresne, Laframboise, monoenais, KlERZKOWSKI, Caron. Mr. DeBouchcrville again appeared before the Committee The Corjmittce resumed the consideration of his plan of Landed Credit, and having read it and again discussed its details, arrived at the following conclusions :— Resolved, That it has become necessary in the interest of the agricultural class to establish a Bank of Landed Credit. Resolved, That the said institution should bo called " The Canada Landed Credit Institution." Resolved, That its object shall be to loan money on mortgage only, at long dat«, and with a sinking fund. Resolved, That it uhall have the power of issuing notes to the extent of donbU its paid-up capital, and up to the amount oUaUres de gage which it may negociatc. Resolved, That its subscribed capital shall be One million of dollars, and it may oommence its operation on the payment of the tenth part of its capital. Rerolved, That it should possess the power of ascertaining the existence of secret or unknown incumbrances, and of clearing them off early and economically, at the same time protecting the rights of third parties. Resolved, That it should also have the power of exacting in a speedy manner pay ment of all claims which may be justly due. Ordered, That the Chairman do report the proceedings of iho Committee and the said resolutions to the House, as a principal basis upon which a Landad Credit Institotioo may be founded, and that the interestiiip work of Geo. De Bouchcrville, Esquire, contaia- his evidence, and the inf irmation furni: icd by him to the Committee on this subjeot, be aanezed as the Appendix to tho said Report. The Committee thep adjourned. SYSTEM OF CREDIT FONCIER, BY G. B. DkBOUCHERVILLE i I If An iDfititutioD, for the first indication of whose existence we must go back to thts last century, and the first trial of which was made in the year 1770, — has been so well developed in Europe, that there are hut four Governments under which it has not been put into operation. Two of these iiavc sent Commissioners to study the question specially, with the view of its speedy introduction within the limits of their jurisdiction. This institution is the Credit Fonder. What is this of which so much has been said on this side of the Atlantic, and which has conferred so much benefit on the people of Kuropc; which, after having been submitted to the most severe tests that any financial institution can be compelled to undergo, has passed unscathed through the serious crisis and frightful disasters which spread over Europe after the upheavings of the French Revolution and the wars of the Empire, and which now finds itself strong- er, more vigorous and more prosperous than over ? The Cridit Fonder is merely u, financial institution, a Bank, which restd upon the security of the soil, the main source of all wealth, and which offers this same soil as debtor to the capitalist, who becomes creditor. As a guarantee of interest and capital, it offers the labor of the agriculturist, whose means of improving his land are doubled by the funds placed at his disposal by the Bank. It is a substitution, through the agency of this Banking institution, of the credit of the soil for the present credit of the agriculturist, and it is effected by the soil itself. The Cridit Fonder is no longer an insiitation which is on its^ trial in Europe. It is DO longer in its infancy. Its principles and basis are well known, and they are universally the same. Some difference may occasionally bo remarked, but this is in matters of detail, which have been introduced to suit the peculiar habits and customs, or the special laws of different countries. The Cridit Fonder \a known under different titles: the institution is called " Agrioultn> ral Bank," " Mortgage Bank," either " Banqiie Hypothicaire," or " Caisse Hifpothicai^e" " Proprietors' Bank," "Association of Borrowers," " Association of Lenders on Mortgage," Ac, &c. All these institutions are worked upon the same principle, have the same object in view, and use the same means to procure the capital rcfluired, which they then offer to the proprietors of the soil. In each and all it is the soil, the land itself which acts as the principal agent ; it is that soil which gives its credit, and certainly none could be better. But if it is the best kind of credit, why docs not the proprietor himself use it to procure the capital which ho requires, and which for this reason ho should bo able to procure on better conditions, while it is notorious that the farmer is always obliged to pay a higher rate of interest than the trader, the latter not having as good security to cffer as the former? It is this anomaly which induced serious men to study this phenomenon. Their studiM enabled them to discover its caase ; when they had found this cause, they sought the means of remedving it, and they have found it. The result of these studies is well lioowD ; the institution was productive of great benefit in all the ooantries in which it t i| II '/ \^ 14 was established. It is these studies nnd their results which it is important to andorstand. It is this which I purpose examining in the present work. On the 7th November, 1862, I uisde !i pr iliminary report to the Central Committee then sitting at St. Hyacinth, in which I troatel of tho several Fjandcd Credit Institutions which are in cperation in Europe, with their orgmization and the manner of working them. I now purpose entering into a more ample consideration of the question, which I merely pointed out in my preliminary report. PRODUCTION OF WEALTn. There are three general principles which unite in the production of wealth: these are I.iabor, Capital and Trade. All three hail from a commou suurce, — tho activity of man; but their mode of action differs. Political economists assert that tho terra labor may bo divided into productive and unproductive labor. Productive labor is that which gives to any particular article a degree of utility from whiuh an exchangeable value mny be realized, cf|ual to or greater than the value of the labor expended. Labor is productive when the use or service which is its natural result gives an exchangeable vahie, altlmu^h this use or service may cease to exist so soon as produced. The labor of the agriculturist, tlic tra'icsinan, the artisan, the trader and the banker, is tho jjrincipal source of wealth ; but we must not forget that although manual labor is necessary, the labor of the brain is not less impor- tant under many circumstances in the assistince anl direction of the former. Watts, Fulton, and many other inventors are examples of thin. Unproductive labor is that which does mt produce any value. Capital is the product of accumulated labor. The agriculturist who uses agricultural implements in the improvement of his farm, makes use of articles which he has purchased out of his previous earnings; this is bis capital, whether he purchased these implements with money, or acquired them in any other manner, they represent work previously done, the value of which he has preserved ai'd accumulated. Productive capital is that which affords a revenue susceptible of accumul.ition, which can reproduce capital in its turn. Unproductiy'c capital is that which cannot produce any revenue. Commerce is the traffic and exchange of the fruits of hibour, industry, and capital. Thus not only does the farmer who plouglis his field and takes in his crops, produce; not only is the manufacturer who mikes cloth out of wool, or who uses the raw material with which he fabricates other articles, a producer, but the capifali.>>t who furnishes stock and tools, &c, , to these different branches of industry, and w'lo thereby li;^htcns the labours of others, is also a producer; and the banker who doubles his capital by a proportionate eniis- eion of paper bearing his signature is also a producer. Manual labour, capital, commerce, manufactures, exchange or bank operations are all dilTercnt modes of producti)n. Capital, taken in its most extended sense, means everything which can bo disposed of, and which has a value. But as all articles are fixed at a comparative value acconling to the sum of money which can be obtained for them, the name of capital is generally replaced by tho term money. Labor produces capital ; this capital in turn, when placed at tho dispo.sal of the laborer, is rfiproduccd with increased power. J. 15. Lay writes : "The attributes of capital are to furnish advances to the different branches of industry ; wliero it is used, in order that it may re-appear in different f^irms; and so on cternMlly, provided that the same capital sum is used with suflScient ability to cause its constant revival, with a view to its further use for the purpose of reproduction. In other words, capital i- a sum of a certain value specially set apart for the purpose of making advances to a-sist [iroduction " It is not in all cases the owner of capital who employs or uses it directly to effect re- production; frequently, and in the greater number of crises it is the borrower who pays for the use of this capital a certain amount per annum which is termed inti-rrst. If tho use which the borrower may have ma'le of thig amount, produces for his b:nclit a profit in excess of tho amount of interest which bo has had to pay, tho transaction is one to his Advantage. There are certain branches of industiy which, by the celerity of their operations, ro- producie in a short time tho value of the capital which they have employed ; in '.his ooso, tho abl '\ 15 of lis- to ho ia lis those who may have used the capital are in a position to loan money at short dates and are able to meet their engagements with case. Traders are of this class. Some branches can only reproduce the capital employed after some monthd. There are also other branches of industry which, from the nature of their operations, never repro- duce che capital employed in a stipulated sum or amount, but only by a gradual annual in- crease of production. In this category we may place the use of capital in the development of agriculture. The soil gives up its produce at certain stated periods each year ; the oper- ation is slow but may bo gradually accelerated iu such a manner as to reproduce annually a portion of the capital invested over and above the interest. This is as much as can reasonably be expected, particularly in cold climates wher^ vegetation is not so luxuriant as in tropical climates. He who contracts a loan has two things to take into consideration : whether he can realize the capital to reimburse it at maturity, and the interest which he is obliged to pay, is not more than the profit which he can derive from his loan. It is easier to borrow at short date than at long date; particularly when the rate of interest is high, and when capital is not abundant in the country. Traders and manufacturers, whoso transactions enable them to realize their capital promptly, easily obtain accommodation at the banks. The same facility is not obtainable by those who require to borrow at long dates, and much less by the agriculturist, who can only manage to reimburse the capital of any loans he may contract by fractions payable annually. CREDIT ON MOHTQAQE. ( Crfdit Hypothieairi.) Although the security offered by the agriculturist, by means of a mortgage on his property, is undoubtedly of u more solid nature than a personal guarantee, it is a positive fact that his credit is less secure, and he is never able to borrow at a rate of interest as favorable as that at which the trader can effect a loan. In the Report of the Commission appointed by the French Government to consider the question of " Reform in the System of Mortgages and the Landed Credit System" {Riforme, hypotMcaire ct Cridlt Fonder), presented to the National Assembly of Franco on the 29th April, 1851, wc find it alleged, that " all parties agree in the opinion above enunciated." " That of all the kinds of material security which can be furnished to the lender, landed security based upon mortgage is the most solid and most undoubted, pro- vided always that the value of the immovable mortgaged bears a fair comparison with the figure oi the loan. It is equally an established fact that in France, capitalists have a natural propensity for investments by mortgage, and prefer them to all other investments — even to investments in public securities. From these two general tacts, the natural result would seem to be. that the proprietor who con.sent8 to give a mortgage upon his immovable property should bo enabled to find with certainty the capital which he requires on the most favorable conditions which the general state of credit in the country would justify. It is certain, nevertheless, that even in the most prosperous times, when capitalists were satisfied witli a revenue of 1 and even 3* per centum by investing in the funds, when even the best eomnierciul paper was discounted under that moderate rate of interest, the proprietors of immovables were compelled to pay at least 5 per cent, per annum, and the rate was always niuoh higher, in spite of the prohibitions and penalties which legisla- tion seemed to enact uselessly against usury. The Minister of Agriculture and Commerce in a memorauduui upon which ho based his projected law, concluded that the annual rate of interest paid in France for the use of capital loaned on mortgages, may be fairly estimated at i'rom 9 to 10 per centum per annum. In the Court of Incjuiry organised by the Couseil d'Etat, M. de la Chaume, Notary, of Paris, estimated the rate of interest on loans on mortgage in Paris at six per cent., ex- clusive of costs. Mons. do Mornay, Inspector General of Agriculture, considers seven per cent, a general average. M. JJenoist d'Azy, one of the-Vice Presidents of the National Assembly, mentions six to seven per cent, (costs included) as an average rate, in the best financial seasons, and on the most favorabl« conditions. M. Silry, Manager of tho Mortgage Bank {^Caisse hypotUcai're), states that in some departments in tho vicinity of Paris, loans on mortgage are effected at nine per cent. ■ 3 'llli 16 We submit a recapitulation of the replies given by the General Departmental Councils iu Franco, to the (juostions submitted to them in 1815 with regard to Agricultural Credit. 1»< Qiics. Is agriculture now iu a position to borrow easily capital which is required to be devoted to useful works of improvement? Hixty-scven Departments furnished replies. Forty-five General Departmental Councils replied in the negative; two of these estab- lish a distinction between the credit afforded to graziers and that given to ordinary farmers. Graziers, owing to a prompt realization of their profits, are enabled to borrow without difficulty. Nine General (Jounces replied in the affirmative, admitting, however, that the rate of interest is high, and that the loan is generally followed by the expropriation of the bor- rowers; flcven General Councils replied in the affirrautive, but simply stating certain special eases ; five General Councils replied in the affirmative, but declared that the amount of the loans is not used for agricultural purposes ; four General Councils declared that the loans were effected for the purpose of acquiring property. 2nil Qttcs. At what rates and by what means do agriculturists procure (he use of capital ? Sixty-one General Councils replied. Fii'ty-scven Councils declared that agriculturists always borrow at a rate in excess of the legal rate, either by agrecnieuts of a usurious character, or through the costs entailed by the agreement, Amoui: these Councils, 11 complained of usury in loani. "or agricul- tural purposes, without giving details; two state the rute of interest, including with the nominal rate, the cost of contract and renewals, at from 12 to 22 per cent. ; one from 12 to 1 5 per cent.; two from 10 to 12 per cent; 12 from seven to 10 per cent.; five from seven to eight per cent. ; five from six to eight per cent. ; 17 from six to seven per cent. One Coun- cil states that the rate of interest on loans for one year is 15 per cent., for two years 10 per cent., for three years 8 33-100 per cent., for four years 7 40-100 per cent. ; three Councils replied that money can be borrowed at five per cent., but they omit the consideration of costs ; one Council alone declares that, with costs, money can be borrowed at from five to fix per ct nt. 3n/ Qites. What is the general term of loans contracted for agricultural purposes? Fifty-five Councils replied. Seven Councils replied that loans are generally effected at short date, without deter- mining any particular limit; four Councils state that all loans arc effected to be reim- bursed within the year : 17 Councils replied that all loans contracted on notes vary from three months to one yerr. With regard espec ally to loans on mortgage, six Councils limit the duration of loans to one year; two from nne to two years ; two to two years; one from one to three years ; one to one year to the smaller class of farmers, three years toothers; one to (wo years for loans under 1000 franc , four years in excess of that amount; five from two to five years ; four to three years ; th ,*ce from three to four years ; three from one to five yours ; 1 1 from three to live years ; t\,-o to five years ; one from six to light years ; one from live to ten years; one to one year fi." inhabitants of the mountains, 10 years for inhabitants of the valleys. 4lh (Jius. By whom is l\e capital used for agricultural purposes loaned, and through what medium is that capital tirnished? Councils replied. Eleven Councils stated that the capital reciuircd for agricultural operations is generally furnLshcd through bankers and notaries; two Councils mention the intervention of Swiss capitalists ; one ('ouncil states that 'n towns, the savings of workmen and servants arc loaned to agriculturists through notaries ; they withdraw their funds from the saving banks in order to obtain higher rates of interest ; one Council mentions the Mortgage KanI of Marseilles ; soiuu other Councils replied that a notary generally between the cajiitalist and tha borrower, and that it is impossible to from whence the capital is obtained. gage Kank acts as a medium ascertain the source evil IV 5th Ques. How are these loans generally repaid ? Do any difficulties arise in the operation, and what are they ? Twenty-seven Qencral Councils replied. Twenty-five Councils replied that in all loans on mortgage the repayment must be in full ; that frequently at maturity, it is either very difficult or impossible to accomplish that payment, and the borrower is therefore compelled to resort to costly renewals, transfers of amounts due him, aad sometimes his inability to pay is followed by expropriation and ruin ; two Councils mention the existence of institutions useful to agriculture, which permit the reimbursement of the amount of loans by the payment of annuities. One of these states that even the payment of annuities was frequently impossible, and the ruin of the proprie- tors who had borrowed was equally the result ; four Councils find that reimbursement is not at all difficult ; eight Councils denounce in strong terms the abuses of the system of Kales with right of redemption, (yeiite i\ rimere). One of them remarks that " sale, with right of redemption," vente d r6m6re, is a system adopted by usurers to despoil victims of their property, — the sale being generally made at a figure much smaller than the actual value of the immoveable. %th Ques. In which way would it be possible to improve upon the actual condition of agricultural credit ? Sixty-nine Councils replied. Three Councils were averse to facilitating loans to agriculturists ; 46 General Councils recommended a reform of the mortgage system ; 36 Councils advised the establishment of agricultural banks ; two Councils were opposed to the German Bank system in particular : one Council was of opinion that the time had not yet arrived for the establishment of similar institutions in France ; 16 Councils prayed for the abolition of registration taxes or their reduction to a fixed rate on loans on mortgage ; ten Councils were in favor of revising the law relating to expropriation and the re-enactment of execution without judg- ment, (yoie parie) ; six Councils asked for the repeal of the law of 1807, which relates to the rate of interest; six Councils asked for a reduction of the taxes on landed property ; lour rccoa^mended the establishment of I nsuratjco Companies by the State, to provide against agricultural losses ; two Councils asked for power to transfer mortgage titles by simple endorsation ; three others were strongly opposed to this mode of transfer. Before the establishment of Landed Credit Institutions, with regard to the credit of the trader compared with that of the farmer, nearly the same condition of afiairs might be found to exist in all countries. The eflfect produced by these institutions, where they have been put into operation, haa invariably been the reduction of the rate of interest to a figure which could be fairly borne by the resources of agriculture. I shall merely repeat the reasons of the reduction in the rate of interest paid by the agriculturist since the establishment of Landed Credit Institutions. They have been discovered for some time. The lleport already quoted says : " The true cause, the original cause of the existing evil, is in the very small and doubtful security which mortgage investments offer to capitalists. He who loans on mortgage is not certain of being paid. Whatever precaution he may take, he must always be in dread of secret incumbrances, which he has been unable to discover, and which suddenly appear to endanger the capital which he has invested. However secure his investment may apparently be, he may rest assured that he will only realize at maturity if his debtor should be willing to act in good faith, and this is a quality seldom found in that class. " If there should happen to be any hesitation on the part of the debtor, or if his affairs arc complicated, the costs of expropriation or other legal proceedings, and the delay caused by such proceedings, create a long interval between the actual maturity of the loan, and the reimbursement of the amount loaned. From this results want of confidence in such investments, and a dread is created which naturally tcnd.-i to increase the rate of interest. The want of punctuality in the payment of arrears is added to the uncertainty of recovering the capital. This want of punctuality, frequently inevitable when a debtor is involved, has become as it were a fixed habit, even with the most Bolvcnt debtors. This is an additional cause of mistrust on the part of the lender, and is a fresh reason for demanding a higher rate of interest. Th§ cost of notarial deeds, which is par- i i f* 18 ticularly felt in small transactious, is another cause of discredit. When it becomes neces* sary to recur to expropriation, new expenses have nrccssarily to be incurred, and the recovery of the debt is as it were indefinitely postponed. A graver inconvenience arises from the fact that the lender, when he requires his capital before maturity, is at a loss to find a grantee or party to whom he can transfer his claim, unless ho submits to a sacrifice. Moreover, the transfer entails new and onerous costs ; mortgage claims are in this respect so difficult to negotiate, that large amounts of available capital, are from preference other- wise invested. But it is not sufficient to rc-apsure the creditor with legard to the nature of the security which is furnished to him, and the case with which he can realize upon it; it is also necessary to see that the obligations of the borrower bear a just proportion to the amount of his resources; and this result can only be attained in two ways : firstly, that the rate of interest should at least be as near to the average current rate as possible ; secondly, that a certain long period of time should be granted to the borrower to rc-iraburse a capital which has become absorbed, and the payment of which in full, if promptly required, would be extremely injurious to his prospects. Instead of this, it would be well to substitute the power of repayment by instalments in the form of annuities in a gradual scale, which would be imperceptibly felt in the discharge of the annual interest. " This is not all : it is a notorious fact that capital which seeks investment on mortgage is unequally distributed — abundant in some localities, rare in others; this inequality is frequently found to exist to the detriment of the interests of the rural population and of the numerous proprietors who till the soil at a distance from the great industrial and com- mercial centres. The result of this isolated condition, of this mutual ignorance of respective means and requirements, is, that capital is uselessly offered at one point, while at other points it is urgently asked for." In addition to the uncertainty of searches at the registry offices- even after the most careful examination of minutiae, there is is still a risk of cousiderublo expense. All these reasons, with others, which a careful examination of titles to immoveable property will disclose, easily account for the difficulties experienced by the agriculturist in obtaining loans on favorable conditions. Although he ofiers the best security, he is compelled to borrflw at an exorbitant rate of interest, and on the most disadvantageous conditions. This uncertainty in mortgage investments has naturally induced inquiry, with the view of discovering a remedy. " It was important to reestablish in the minds of the lenders some confidence in the security ofi"ered them. This could only be accomplished by legis- lation which would permit the discovery, without possible error, of all mortgages, rights, titles and claims which might be presented against the immoveable offered as security by the borrower. This was called ' Reform of the Mortgage System' (^Ln Riforme du regime hypothecaire). This reform, however, may require some year.<;, and another plan was discovered. It is called ' the Purge' (discharge of mortgages). It is a simple, prompt, economical and efficacious way of establishing, without any doubt, the existence of any rights or mortgages, whether secret or unknown, which may still exist upon the property. It also furnishes the means of cancelling them." This was the first step, but it was not all. The lender is not disposed to take much trouble: he does not feel prepared to enter into the details of tin- researches usually undertaken in the different offices to a.sccrtain the existence of titles and their registra- tion ; and in addition to this, to take measures for the recovery of interest and capital as well as to institute legal proceedings, &c., &c. It therefore seemed to be important to discover an intermediate party willing to take charge of all the minute — numerous, but necessary — details which are inevitably involved. This intermediate power would have the advantage of being the centre of operations, at which both lenders and borrowers would meet ; it would act as a beacon by which would be guided persons having money to loan, and persons wishing to borrow on mortgage. This legal intermediate power already existed in banking transactions; these institutions, by their nature and mechanism, admirably suited mercantile wants, but they could not extend their discounts to favor agriculture. The idea of Commercial Banks gruduully cieutod the idea of Agricultural Banks; and the Landed Credit System was first established in I'ru-.-ia, and then, step by step, throughout Europe. When it was first established in France in 18r)2, important enquiries were made by Government ; men of great distinction gave their attention to it ; and Com- 19 missioners were appoiDted to r.r.: the question into consideration. In Paris, I found everything that ^ould be learned with regard to these institutions ; in the voluminous documents which have been published with a view of forming public opinion, I found cverythiDg which induces mc to believe that no government can any longer ignore the existence of such institutions. In 1S45, the French Government published Mons. Royer's report. He was then .Minister of Agriculture. All documents and information which he had obtained in his journey to the north of Europe and Germany, on the subject of Landed Credit institutions, were also published. In 1851, Mons. Dumaa, Minister of ComiEcrce and Agriculture, instructed Mons. Josseau to collect all documents that the Government had procured, which related to the same subject. In treating the question of the Landed Credit Sys- tem, I shall refer to these several reports, as well as to more recent documents published on the subject. In important matters I shall quote freely from the originals. HISTORY. Mr. Di6t6rici writes : " Struens6c, Prime Minister to Frederic II., accounts for the deplorable condition of agricultural credit after the peace of 1763, which followed the seven years' war, in the following manner : 1st. Many properties were completely destroyed, particularly those on which the armies had been encamped for a length of time. It is true that the soil still remained in existence, but everything necessary to give it value had completely disappeared ; the fnrm buildings had been consumed; the cattle scattered about had died from starvation; working utensils were in a miserable condition, and the fields were either uncultivated, or in very bad condition Under these circumst,ance;i the value of proptMty had diminished by from 50 to GO per cent., and when a ])ni|iriet(ir htill owt'd frmn .')IJ to tiU jur cent, on the purchase price of his property, he wis unablo to pay the intori.st uf his debt, still lee-s to rc-imbursc the capital at maturity. A number of failures resulted, and the sequestration which followed increased the depreciation in the value of landed property, and brought discredit on that species of investment in the eyes of capitalist.^. The latter having no longer any confidence in the guarantee offered to them by legal registrations, suddenly demanded payment of all sums advanced by them to landed proprietors, and thus brought on a crisis of disaster and general perturbation. 2nd. During the war, proprietors had obtained enormous prices for their produce, and had paid both taxes and the interest on sums which they had borrowed in a kind of money called tiers saxous. These circumstances had enabled the class of small proprietors to keep up their position in spite of what they had to endure in requisitions, forays by cavalry, and the loss on their crops which were never permitted to come fully to maturity. But after the establishment of peace, everything suddenly changed ; the price of grain was reduced ; taxes and interest had to be paid in currency ; and while the cost of labor did not diminish, the intrinsic value of money increased. Moreover, the high cost of provisions during the war had compelled these proprietors to increase their expenses ; and as they con- tinued on the same scale, their ruin seemed inevitable. 3rd. The high price of grain, and the spurious coin in circulation, had largely increased the value of property, but this increase was in reality purely nominal and fictitious ; after the establishment of peace, there was a proportionate depreciation. The fortunes of pro- prietors could not suffice to meet this unforeseen reaction. 4th. Interest was irregularly paid after the declaration of peace • creditors received sums on account, and the credit of proprietors was completely destroyed. r>th. So long as spurious coin passed current, and while the presence of the army pro- cured it.s circulation, money was plentiful, and those who possessed it loaned it at a mode- rate rate of interest. The hoarding-up of specie was not cared for, as its viiluc was merely conventional at the time, so that during the war, proprietors could borrow it with facility, and pay the interest regularly; thus, their deplorable condition was, as it were disguised or hidden. But, so soon as the troops left Silesia after the establishment of peace, when their pay was no longer expended there, and when the currency was reduced two- thirds iu value; when capitalists required their money; when the citizen wished to rebuild his liouse ; when the trader desired to incrcass his business ; when a father wished either to establish his son for life, or to purchase a " trousseau" for his daughter, money was want- >■ 'I ir Uli i § i m 4 20 ing for all these purposes ; and the proprietors who fouud themselves in a eritioal position could DO longer succeed in borrowing. Gth. It has been considered a '"ttlcd opinion in Silesia, that an obligation legally guaranteed offered every security, and that in the worst circ unistanccs, there could be no risk of losing the capital. In order to preserve their rredit, proprietors were induced to grant registered mortgages (utscriplimix hi/potlicrdins) upon their properties, and when creditors insisted upon obtaining judicial roijistratiou, thoy produced the extract from the register showing the position of their jjroperty with regard to mortgages, which appeared in a very favorable light; but when legal proceedings were tnketi, tlio attention of all the cre- ditors was awakened, and it was discovered that the pitiprietors were completely involved. Matters were in this state, when the large proprietors, whose position was still sound, form- ed an association for the purpose of borrowiug money, Thoy petitioned the King for cer- tain special rights of seizure, by which they would be authorized to sue debtor.^ in arrears summarily, .-.nd to take possession of their properties when the interest was not regularly paid. They also asked for authority to tux the properties on a uniform principle, in order to verify estimates. The provisional plan of this credit system sanctioned in July, 1770, dates from October, 1769. Silesia was then composed of 14 principalities, each one of which formed a separate board of management, and all these boards were placed under the direction of a General Provincial Board. The following was the fundamental principle of the system : — 1st. To advance to each propriet^se arc institutions founded and managed by financial companies, with or without the san jtion of the State, but work- ing under Government supervision. ASSOCI.\TIONS OP UORKOWERS. The first Landed Credit Institutions were established by associations of borrowing pro- prietors. With few exceptions, nearly all there institutions are so constituted. Monsieur Royer remarks that they are agencies for loaning and borrowing money rather than banks. These institutions do not take advantage of the use of credit; they issue no notes, but merely bonds or ^^lettres de ffnjc" which bear interest at 8, oV or 4 per cent, interest, the latter being the highest rate. These bonds are disposed of for cash, and are repaid in the same manner, by means of an annuity proportionate to the duration of the loan, and which thus replaces each half year a portion of the capital loaned on the well understood principle of a sinking fund, with compound interest. The object ofthe.se Credit Institutions is merely to assure to the lenders the payment of interest on their capital with the same regularity as it is paid on monies placed in the funds, and the repayment at par of the said capital at a stated time. Tlie greater number of these societies give to the borrowers their bonds (lettres ile yagi-), which arc transferable without expense, and are negotiable on 'Change, in the same manner as consolidated securities (litres payment, he receives his share then in hand, he also receives a sort of voucher which bears interest at 2* per cent, for the amount oi' hLs probable share during the years which have to run between the date of his liberation and that at which he was obliged to pay his debt, if he had merely paid the annuity mentione*! in his bond. This seems to be a puerile arrangement, and therefore bad. The day of \m payment, he should cease to participate cither actively or passively in the affairs of the 'Dstitution, It must be remarked, as a strange contrast -ith the financial habits of the French, that in Germany, Landed Credit Institutions arc ■ • ^ .nvcV' formed ,.od managed by, and in the interest of, borrowing proprietors, win o;.t any ■'.uther trouble as to that of the lenders than the obtaining all necessary guarnrt-sed, by means of viiichthey are content I I if. to reoeire a vory moderate rate of interest. Moreover, the lenders have no claim whatever upon the reserve fund which, in this country, they would expect to belong to them. In Wurtemberg this fund is the property of the borrowers, e^ h in proportion to the sum borrowed and the date of his admission to the Association. The rights and participation of the lenders, while attoudinp; all meetings of the Association, are limited to taking cognisance of all deeds whi* h may interest them, and to giving advice upon all operations which they believe might T ct the secuityof their inveafments. The borrowers are in realitv the Directors, as luay be seen by the Statutes. The borrowers are, as wo have already stated, the oul ' Shurehol tie proceedings of which all the actual debtors of the Association have u right to f. iki p:.rt. They also have the right of selecting delegates to represent ihem in the C^.< u ■':"5 .' Management, which is selected at the General Meet- ings from among tl^ I'^Bel'":^. I le Credit Association of Wurtemberg possesses this peculiarity : that, accrdi"^ to its kws. Article 124, when five members are elected to the Committee of I^lanageiaci.i hy a majority of votes, at a General Meeting composed of at least '60 i^sbtor l'^ the Association, they can act, although not members of the Association. In the Nort'i ! < ■ srmany, those Associations generally select their Managers from their own members exclusively, by e'ection. At General Meetings the electors may be represented by proxy, but no person can pos.scss more than two votes. Participation in the profits of the Association is established by an equal division of the reserve fund among all the borrowers. At the general meeting of 183S, this right was set- tled in the following manner : — § 6. All debtors have the same proportional rights to the reserve fund, from which the following deductions are first made : Ist. 4i per cent, for cost of first organization. 2nd. Contribution for cost of management and losses. 3rd. Compound interest on these amounts. The surplus is divided in proportion to the amount of annuity paid by each debtor for one complete year. § 7. Each borrower (member of the Association) who has paid up and has received his discharge, receives his part of the reserve fund as it then stands, and he also receives one or several bonds which bear the inferior rate of interest of i per cent. This interest is not paid each year, but is capitalized in compound interest, and payment can only be demanded at the expiration of 50 years from the date of the loan. These bonds are in favor of bearer. We have already stated that this prospective participation in the profits of the reserve fund after payment in full by borrowers, offers, it is true, a trifling advantage to those bor- rowers, but it is not worth consideration, and it gives rise to excessive complication. The inconvenience of the system, therefore, seems to us to be greater than its advantages, and we do not consider it to be a feature worthy >f imitation. The other German Landed Credit Associations have not adopted this complicated system, and for this and other reasons, their tr.iieriorityscpms to us quue apparent. All these institutions are in perfect working order ; : . .onds wl li they issue are quoted at the highest current rates, — as it will appear by luc tabular statement which we append to this work. The following are the principal Landed Credit Institutions created in the exclosive interest of borrowers : — Tboae of Silesia, Brandenburg, • Pomerania, West Prussia, East Prussia, Grand Duchy of Posen, Lunenburg, Those of Gallicia, Wurtemberg, Saxony, Upper Lusace, Mecklenberg, Hamburg, City of Bremen, ^1 24 Calculiorg, Gnibcnha'^cii, Ilildoshciin, Huchy ofBrciucu, Vc'vden, West Friesland, Denmark, Credit System of Livonia, Peaa- anth' Bank, Esthonia, Courland, Territorial Credit, Poland. ASSOCrATIONS OP CAPITALISTS. These [Societies are in reality banks, with a capital stock divided into a certain num- ber of ffliare.s subseribed ami paid up by capitalists. They might fairly be classed in the categorv ut' private institutions, ii' the shareholders were not restrained in their natural de- sire to derive theCTcatest possible profit from their transactions with the borrowers, in mak- in;^ them pay a liiiili rate of interest. In (ider to give them a more national and extended character, to place them more at the disposal of the ajfricultural class, different governments have granted to them, as they liavc tt) societies oi' borrowers, eousiderable subsidies and important privileges. But, in graiitiiii;' these subsidies, the governments have exacted, in return, the condition that these banks shall li.v the rate of interest on their loans, and regulate the dates of reim- buisemeiit la siieb a manner as to be of the greatest possible advantage to agriculturists, permitting at the same time a reasonable protit to the Shareholders. The jirineipal of these are : — In t'^rance, — The J^anded Credit Bank of France. Bavaria, — The jMortgage Bank. Ilesse-Darmstadt, — The lleut Institution. SwitzerlaiHi. — The Mortgage Banks of Berne and Bale-Champagne. Belgium, — TIk! Proprietors' Bank, — The Mortgage Bank. In addition to tliise two groups of Landed Credit Institutions, there are some which are exclusively conducted by the (.lovernment. Of this kind we may mention : In llesse (.'assel, — The Bank of Territorial Credit. In Prussia, — Tiie l>ank of Westphalia. In Hanover, — The JiUnded Credit Institution. There is one in existence ut BadeUj'and another in Denmark which was established in 178G. THE OBJECT OF LANDED CREDIT INSTITUTIONS. Mr. Boyer writes that when first established, the object of these institutions seems to have been to loan money on morti:age to extensive proprietors, or to the middle classes of proprietors, but no lower, a;.d particularly on property held in feudal tenure, " hicns voL/i\t." The desire of seeing tiiat species of property placed at its true value, by mean.i of capital borrowed on favorable conditions; the necessity of procuring this capital for the projirietors, to save them from tlie inevitable ejectment which threatened them on account of the eiKinuous delits wliieii they liad eoutraeted in the several provinces, particularly in Silesia, after the peace in I7ti:j ; tiuully, the hope of freeing thrm entirely from the onerous burdens which had always weighed upon these properties, seemed tc been everywhere the principal object wliieli tlie several per cent, brokerage, we find reduced by the institution to 5 per cent, in the first instance, tlien to -4 per cent., and, finally, when the system was generally revised in 18oS, to .'>! per cent. There is no doubt that the creation of the bank immediately reduced tiic rato of interest on loans on jnort- gage, in such a manner that a rate of interest which would have been dosir:il)le before the creation of these institutions, and which, in consequence, tlie banks would appear to have l)een authorized to charge, is now greatly reduced, and, we think, naturally causes the question to be asked, "What can be the object of the bank in purelrisniL;',!ind, consequently, i'orleiting during the tenth year the great privileges which could have been enjoyed for DU years more?" iSuch a result, moreover, so promptly obtained, seems to deserve some compensation. It has been remarked that the establishment of a Lauded Credit Association iu any province has instantly, and in a remarkable manner, increased the value oflaiuled property. Mr. ('hanccllor Chretien Brudcr states that the value of property has almost doubled through the establishment of the institution, and properly has generally passed into tho hands of those who work it. In 1851,10 years later, tho French Government having instructed iis diplomatic agents throughout Europe to enquire into the results of Landed Credit Insliiutions, a^ numbnr of documentii were forwarded, and .M. Jos^eau, who was selectoil by the Minister of Commerce and Agriculture to undertake the tnsk of compiling and putting them in form, gives the following information which ho has gleaned from them : — T is ri t.i m f i ' 'II 1 ii 26 " If Landed Credit Institutions arc unable to create capital, they possess at least the virtue of circulating it and of better distributing that which is available. In this respect they are really circulativg machines. " Collective credit may, in a more successful manner than industrial credit, ward off crises, or at least prevent their disastrous effects. Wherever they are established, they facilitate the disburdening of property, and procure the means of furnishing to the soil implements with which to improve it, while they place an obstacle in the way of excessive division or parcelling of property. In Germany, property belonging to the peasants had been indebted or mortgaged to the seigniories in an immense amount of feudal, real and personal burdens. Since 1815, several laws have legalized the redemption of the greater timber of these burdens. Landed Credit Institutions have produced the effect of render- ing this redemption possible, by advancing funds to the peasant proprietors, which the latter are enabled to return at long dates. These operations, which have not yet been perfected, particularly in Austria, have, as a general rule, freed property from debt. The peasant has become wealthy, and his independence has rendered (lie land more valuable. " The following recapitulation will shew the advantages offered by Credit Institutions both to the lender and the borrower: — " To the borrower : " Ist. They enable him to find capital without the costly intervention of a third party. " 2nd. He avoids unforeseen demands to reimburse the amount borrowed " 3rd. He hss the facility of repaying by small instalments. " 4th. As he is compelled to pay the interest regularly, he becomes imbued with a spirit of punctuality, which produces its effect upon all his transactions in connection with farming operations. The institution is in fact inexorable, and if the debtor should get into arrears by neglecting to pay this small annuity, sequestration is inevitably resorted to. " 5th. They increase the value of rural property. " To the lender : " 1st. He is offered a secure investment and the regular payment of interest. "2nd. He is saved the trouble of watching the immovable mortgaged. "3rd. He is exempt from the embarrassment of complicated proceedings, as the bond of the institution {lettre de gage) carries execution with it titre par6. ** 4th. He is not obliged to pay brokerage and other contingent expenses which are generally called for in the payment of interest, the investment and recovery of capital, &c., &c. " The effect produced by these establishments, wherever they have been organized, has been found to be an increase in the value of property, and to place them in the hands of those who cultivate them. The institution offers to capitalists who desire to invest in mortgages, all the advantages without tiie inconvenience formerly experienced in that species of investment. " In fact, a person who purchases a landed credit bond, ' httre de gage' does not pos- sess a distinct mortgage among all those deposited with the institution, with the risk of good and bad chances, but all these mortgages belong conjointly and m soUdo to the holders of bonds. " On the other hand eachof the latter is relieved of all the care and intricacy of verifying the solidity of the mortgage, as well as the legalizing and registering of the same, which a creditor has to submit to in dealing ordinarily with a proprietor who desires to borrow. He ceases to have any anxiety about having recourse to spcoial procedure in ejectment ; he is assured of the receipt of his interest every half-year on the day at which it matures, as well as the reimbursement of his capital within a limited period, which he can shorten at any time by negociating his bond. While offering these advantages to capitalists the institu- tion settles in favour of the borrowers the diflioulty of reimbursement of capital at a fixed date of maturity ; it becomes for them a species of Savings Hank with compulsory con- ditions, by aid of which the capital represented by its bonds, ' kttret de gage,' is recora- posed. As the iustitutiou permits of no clir.'c^ relation botwoen the borrower and the capitalist; as alljipplitjations for loans are iirnie at the (;oiiiinoii centre of operations, while the bonds are universally negotiable, a proprietor in one locality is not more I'avored than one in another locality, and the interest on a small amount is not greater than that on n large amount of capital. Finally, while the inconvcniepce of an irregular distribution of 27 capital loaned on mortgage is avoided, this kind of investment is, by means of bonds for a small amount, placed within the reach of a number of small savings now shut out from the luxury of investing in mortgage security. " These circumstances, added to a greater share of advantage offered to capitalists, pro- cure for the borrowers a rcductiou in the rate of interest on money. In speaking of Hanover, he states that " these banks have done great service in clear- ing property from feudal dues and charges, with which it was over burdened. They have also exercised a happy influence on the dcvelopemcnt of rural industry, which has in Hanover, attained a remarkable condition of prosperity." Another very remarkable and important result is, that the greater number of those who have been assisted by the Landed Credit Institutions, in being furnished with the means of clearing off the debts on their property, have become more regular, prudent and economical. Whenever a person finds that by bad conduct, extravagance or other reasons, he has been brought to the brink of ruin, he learns a salutary lesson from his experience, and he rarely falls into the same errors a second time. The more he was indebted, the smaller the prospect before him of retrieving his lost ground, the more discouraged did he become ; he found nothing in the future but eject- ment and ruin. The effect of this was that he neglected the cultivation of his land, and the care of his cattle, &c., &c. The Landed Credit Institution by coming to his assistance in furnishing him with the means of clearing off the debts due on his property on conditions adapted to the resources of the soil, gives him new courage and fresh hope. He works with greater energy, his system of cultivation improves, his crops increase, his cattle attains better condition, joy is at his fireside, and contentment in his family. A man so situated knows well the value of his experience. Mr. Josseau in a recent work, published in 1861, entitled " Le Credit Foncier de France," states the following at page 40: — "Moreover, as T predicted at the outset, the mere fact of the Landed Credit Institution being in possession of these privileges, baa produced with us, as in Germany, the excellent effect of creating greater regularity on the part of borrowers on mortgage, and at the present moment, is it not admirable, that after loaning upwards of 180 millions, the institution has scarcely been compelled on one single occasion to put into operation the system of special procedure in ejectment?" Mons. Jo.iscau is good authority, as he is the legal adviser of "Le Credit Foncier do France." The institution also prevents the parcelling out of property. A father of a family, who has two or three sons to settle in life, lo whom he wishes to give a fair shara of their rights, is frequently obliged to suu-divido the homestead or the ancestral inherit- ance into several i>arts. Where a landed credit institution exists, he can easily borrow money and distribute it among his sons who settle on forest lands, and they too in their turn will be in a position to borrow I'unds to assist in the clearing and improvement of their property. I could multiply quotations, but the facts are so positive and so uniform that I consider it unnecessary. I shall publish further on, CKtracts from the Reports of the management of " Le (y'rcdit Foncier do France," from its first establishment to last year. Interesting informa- tion will be found therein. Such results should open the eyes of every government, which oinceroly desires to ussifst (he agricultural class and cause the country to prosper. SUUSIDIES — fiUAIlANTEE. Every financial institution which is permitted to operate according to its own way of proceeding, is tempted iu seek the greatest possible profits, without taking any special care of the embarrassment or inconvenience which it may cause to those with whom it may have transactions. Probably the samo effect would have been produced with Ijandcd Credit IrKStitutions had not govcrnniejit intervened to impose restrictions. These restrictions imposed a peremptory oblijiaf'nii to loan numey only on conditions the most favorable to farmers, and in aecordimeo witli their resources, at the same time at the lowest possible rate of interest, liut, while; (iovernment imposed these restrictions in the interest of the agricultural class, on the other hand it became u duty to grant to these institutions ample privileges and pecuniary assistance sufiicicnt to compensate them for the inconvenience n ilr m !Ji I 38 produced by these restrictions ; which, without that, would have rendered their establish- ment an impossibility. It was particularly during the first years of their existcnee that these institutions required assistance. This is easily accounted for by the difference between the current rate of interest and tho rate which it was required that they should flx on loans which they would effect. Governments did not hcsitiitc to grant donations!, subsidies, loans at a moderate rate to be repaid by annuities, and some to offer tlieni a guarantee. This aid was not in reality so much a loan to the Banks of Landed Credit themselves as to the agricultural class. As regards the Bank, it was merely conipeusution for profits which could have been made by loaning to agriculturists. I have been able to obtain some information with regard to subsidies granted to several of the £uroDean Landed Credit Institutions : France,— Endowment 10,000,000 francs, Westphalia 1,108,000 Silesia — Association Provincial 1,125,000 '< Institute Royal 1,125,000 Caissc d'encouragement of Coslin 1,125,000 '* " Brandenburg 1,125,000 Marches of Brandenburg 750.00O u IC Pomcrania Prusbia West Prussia East Posnania Panderborn Hanover Calenberg West Friesland Mecklenburg Saxony , Bavaria, 8 sub-agencies , Wur tcmburg Hesse Electoral Baden . Nassau Hamburg Gallicia 1,020,:{00 750,000 1 ,02!),;iOO ■750,000 270,800 it u 11 a 11 u ii And these are probably not tho only cases in which a.ssistancc liii:. been granted to Landed Credit Institutions. In addition to these subsidies, several states guarantee the bonds (/i/fn-K ier.'Iy been noMiinal. In the report made by tho Commi.s«ion to the National liC^islative Assembly, (ju 2l>tli April, 1851, wc read the following: — With the laudable intention ol' giving to l.andcil Credit Institutions at tho outset of their career every possible assistance, in the niea.sure of the Government, by articles three and four, it is proposed to enact as follows : lat. On the establishment of societies duly authorised, the Department and the State shall have the power of guaranteeing the reimbursement^ each to the extent of one third of the amount ol' capital of and interest on bonds. 2ii(l. That the institution failing to pay, the holder of a bond shall have his recourse against the State and the Department for two-thirds of the value of his said bond. Tn giving his reasons, the Minister of Commerce and Agriculture does not pretend to say that a State Guarantee is necessary ; he expressly acknowledges that it is superfluous. In those reasons we read the following: It seems difficult to suppose that, after draining the reserve fun(i,'aftcr cxcrcisicg the right of expropriation on the immoveable mortgaged, after putting into eft'cct the right of personal action against the other properties or efl'ects of the debtor; the association would be unable to meet its liabilities to bondholders. It is moreover not so much to add to the validity of the security as to render its sufficiency apparent to all observers that the Government thought it advisable to give in addi- tion to the immoveable and tlie person of the borrower a last guarantee, the solvency of which cannot be doubted, viz : — " The Department and even the State itself." The jMinistcr adds: — "This provision, which is borrowed from the happy experience of the foundation of Banks of Discount, examined with regard to its eflfeet upon tlie liiianci.il aft'air.s of the county, after mature deliberation, and in spite of the contrary opinion entertained by the Council of State, appears to him to be without risk, and tiio Governnicr.t persisted in maintaining it as part of the projected law." The Commission, however, did not feel justified in recommending the guarantee. ]n its stead, it was decided to make a grant as a gift of ten millions francs. The l"'rcncii Government, as I have already stated, gave further assistance to its Landed Credit institutions by investing in them 35 millions francs of their bonds (letters de gage.) Kinally, by decree of liSth Sept , 1858, and at the Convention of 28th April, of the same y(!ar, the uovonimont guaranteed the bonds of " Le Credit Foncier" for drainage opera- tions. Many of those subsidies are of trifling importance, but as I have already stated, Inrm; amounts may have been granted since that time, of which no account can be found. iMuioovor, if we take into consideration that in Europe capital is plenty, and the rate of interest comparatively low, the Landed Credit Institutions, being enabled to negociate their paper on change, we can easily understand that these subsidies were sufficiently large, in i'act the (juotatious on change shew that Landed Credit Bonds are on an average current above par in relation to the rate of interest which they generally bear. This is so much the case now in Europe, that the borrower from the "Credit Foncier" is glad to accept bonds of the institution for the amount of his loan, as he is certain to be able to negociate them on change without trouble for specie, and very frequently they are at a premium. But in'Caiiadu, whore capital is scarce, and the rate of interest exhurbitaut, it would be impossible to settle with the borrower by giving him bonds issued by the institution. The iJunk itsoir could not negociate them without paying a rate of interest, which would hi too lii'^Ii to enable him to loan to the farmers at a rate in accordance with his interests and rci|uiromcr'.ts. It is only on change in European cities that the bank could hope to negociate its ]i;iper on advantageous conditions, and in Europe the bank would be unknown. A Iriendly hand would be rc(iuired to introduce it to the bankers of London; and could this duty lie bettor periormey affect the credit of the Province in the money market. I do not at all fear the exerciseof political influence. In the first place, I do not believe that the Provincial guarantee would render such an exercise of influence probable ; in the second place, if any power were thus given to a ministry, I do not think that under our system of responsible Government were the majority of the electors create the ministry, we need have any apprehension of its force or power. The fears of those who think that granting the Provincial guarantee to the bonds of the Landed Credit institution mi^ht affect the credit of the Government ; are more reasonable and at least plausible. I will submit a plan ; some better one may be found, but it is not new, and is practised in France and elsewhere. Let the Government purchase annually from the Landed Credit institution a certain amount of its bonds " /wi^rcs rfe i/ar/e" bearing 6 per cent interest, at any trtne when Provincial debentures are negotiable at a rate which would not exceed 5J per cent. This investment would greatly assist the institution which, by procuring funds at 6 per cent, would be able to loan money at the same rate. This assistance would have the effect of calming the fears of those who believe in the exercise of political influence; because, as the honorable Attorney General remarked at the meeting of delegates held at St. Hyacinthc on the 15th April, 1862 : " the Government concurs in the creation of a project of indubitable efficacy with- out mixing itself up in the ulterior management of the bank." As regards the Board of Management the Government is nothing more than a lender or a creditor, bound by conven- ventioual engageuients which are only brought buck to memory by the recurrence of the period of payment. Its action is of no consequence ; individual exertions take its place in the management of the bank, which is therefore not submitted to any inimical control. This assistance cannot affect the credit of the Province, because it can only be granted on conditions that debentures are not negociated above 5} per cent. The negociation of Provincial Debentures is now effected at a rate rather in excess of five per cent calculated at par. Tho Government is compelled to borrow annually to pay interest on loans and the capital at maturity, which is equivalent to loans contracted at compound interest. In addition to the annual interest the Government is also obliged to pay the capital at maturity, which renders the formation of a sinking-fund, or the contracting of a new loan necessary. When the loan is at five per cent the sinking fund is 48 cents per 100 for 50 years ; when the loan is at five and half per cent, the sinljing-tund is 41 cents per $100 for the same period (see table 7). Well, let us suppose that the Government invests one million dollars (for whi 'h it would pay, at five per cent, $50,000 annual interest) in bonds {lettert de (jage) of the LanJed Credit Institution, bearing six per cent interest, and payable at the same date ai the maturity of the Government loan, viz., in 50 years. The Government Would receive annually six per cent interest, that is to say $60,000, from which, having deducted $50,000, amount ot interest on its loan, it would derive $10,000, or one per cent as siuking-fuud towards the capital. But one per cent is more than sufficient to form a sinking-lund, 48 cents being the amount required. The difference would be a clear gain to the Govrenment, and this gain is of no mean importance, as it would exceed the capital j if 48 cents give $100, and $1 would give $208.33c., or in other words, $10,000 annually received from the Landed Credit Institution over and above the interest which the Qovernmeut is required to pay on its loan would, at maturity, give the sum of $2,083,333, 'I'tllM \ il ' i I 82 from which deduct $1,000,000 due as borrowed capita!, and a clear gain of $1,083,333 on tutere^t alone will have been made by the Government. This appears to be of sufl5cient importance, but it is not all : when the bonds of the institution (/e«re« de gage) fall due, the Government will receive $100,000 from the Landed Credit Institution, which together with the former amount, establishes a nett profit of $'2,U!S3,333 on an investment of $1,000,0001 The question deserves examination. At the present moment, when public attention is directed to the intercolonial railway, which is considered to be of smch vast importance, from an imperial point of view, as ree Landed Credit Institution, would still leave a balance of $27,083,333, without counting the capital of the bonds " lettres degnge," which at maturity would produce a further sum of $10,000,000 (ten millions dollars). By this operation alone, with the Landed Credit Institution, the Province would, while doing good service to the agricultural class in both Provinces, succeed in constructing the railway; and, with the exception of interest at 8i per cent on the capital used in completing it, draw from the Landed Credit Institution all the capital borrowed, both for that institution and the Intercolonial Railway; nnd more- over will have realized a net profit of $37,083,333. Thirty-seven millions cigbty-three thousand three hundred and thirty-three dollars, in addition to the fifteen millions of dol- lars paid for the Intercolonial Railway ; nearly two-thirds of the whole debt of the Pro- vince; — what an enormous sum this appears to be? It is so in fact — but it is the truth. Figures cannot lie. Let us reflect for one moment on the amount paid by farmers when they give 12 and 15 per cent interest ! The question really deserves some examination. If the Administration could use the surplus of £50,000 sterling which it would receive from the Landed Credit Institution in liquidating a portion of the debt of the Province, we would soon find the expenses of the country kept within the revenue, particularly if we consider the impulse that would be given to agriculture and every industrial branch throughout the country, there would very soon be a surplus. And let the Government, in order to ensure greater security, and by, as it wore, superabundant prudence, make the following peremptory condition : — That the institution should not be permitted to loan in excess of one-third of the value of the immovable (buildings excluded) with the additional obligation of insuring those buildings for the amount thus invested in bonds " lettres de gage." All this deserves serious consideration, and I have no doubt that the measure will be frankly examined, I do not pretend to say that the Provincial guarantee is absolutely in- dispensable in the creation of every Landed Credit Institution. If the financial condition of the Province were such, that its aid or guarantee would be an impossibility, there would still be a way of establishing a Landed Credit Institution which might be of great service to the agricultural class. But that institution would be compelled to charge a higher rate of interest on account of the high rate which it would be compelled to pay, probably 8 or 9 per cent. In France, Monsr. Martin (du Loiret) proposed the establishment of a Landed Credit institution, which would have the power of issuing notes for double the amount of capital paid up or deposited by the shareholders The Commission appointed by the Legislative Assembly to examine : 1st. The law projected by Government; 2nd. Monseur Wolowski's proposition ; 3rd. Mr. Royer's plan ; 4th. That of Monseur Martin (du Loiret,) thus gives its opinion at page 79 of the report : — " The establishment of banks of discount and circulation had in view as principal object and inevitable result, to obtain for solvent traders, advances of funds at a moderate rate of interest, while assuring at the same time to the stock-holders (whose capital had been used in the formation of these establishments) considerable profits on their shares. This singular phenomenon, of discount or loan opera- tions which produce in favour of the lenders more than the use of the capital costs the borrowers, is due entirely to the authority which these institutions have received to multi- ply as it were their original capital, by the issue of notes payable to bearer on presentation, further power being granted to the holders of the said notes, of insisting at any time upon the prompt reimbursement of their value, while public confidence attributes to them the full value of metallic currency, and in some instances even grants them a preference. It is not surprising, that many persons, who have observed the wonderful intluonceof banks in effecting a reduction in the rate of interest on commercial transactions, and who watch on the other hand the exorbitant increase in the interest exacted for the use of capital loaned on landed property, have oonoluded from the success of Commercial banks m *:j 94 of discount, that there is a probability, even a certainty of the saccess of Landed Credit institutions. By the slightest careful examinatioD, however, it is easy to perceive, that the analogy is more apparent than real, and that there is in the abstract, between the condi- tions of commercial and lauded credit, such an essential difference, that, what has been possible and useful with regard to the former, would bo impossible and even aisastrous in the latter, if we were to apply without discretion the same machinery to tAo descriptions of operations which so little resemble each other. If in fact we must establish as a first prin- ciple, that a bank of circulation must be compelled constantly to redeem its own bilU on presentation, the institution mu&t therefore at all times have at its disposal, whether at the instant or at early date an equivalent to represent these bills. Now it is in the ordinary nature of transactions, that the discount of commercial paper which is intended to facilitate prompt operations with tb« certainty of early realisation, may and in fact ought to bear ex- clusively on notes payable at short dates. For instance, the Bank if France only discounts paper at three months. The average of its notes in hand never have more than 45 days to run. Therefore, each day, the bank receives one- ninetieth part of its advances, or at the very least one forty-fifth part. If ex- traordinary and fatal circumstances were to force the bank to stop payment, its affairs could be wound up in some months, perhaps in a few weeks. We can therefore easily un- derstand how the bank is always in a position to pay the amount of its notes which are con- stantly represented either by specie in the vaults or by paper, the amount of which can be collected at short notice, as we have above stated. The situation of a Land Bank, which might issue notes to represent the amount of loans made to landed property, wculd be very different; because the amount of the notes thus placed in circulation for which the bank would be debtor, might be constantly called for, while the obligations for the amount, of which the institution would be creditor, would only be repaid, and could only be realised after a number of years ; from which fact, we can glean the result that every bank of cir- culation whose object might be to lend money on landed property, would soon find itself totally unable to pay its notes, the amount of which could always be called for, and would be compelled to close doors, unless it received the dangerous privilege of having its notes made a legal tender, the depreciation and debasement of which suid notes could not be expected if such a disastrous course were never resorted to. This objection which seemed at first so powerful aod positive to the establishment of a Land Bank, was not found in- superable by our honorable colleague Monseur Martin (du Loirct.) He considered it to be his duty to solve the difficult problem of establishing a credit institution which would find both its resources and its profits in the emission of notes payable on demand to bearer, and be repaid by annutics at very a position to meet its notes on at the same time to make advances to landed property, to long dates, without ceasing for one single instant to be in presentation. The combination proposed by our honorable colleague is borrowed from the constitu- tion of some of the American banks, as well as of some of our insurance companies It consists mainly in the following requirements for the establishment of a Land Bank : — Istly. A fi'-st capital composed of money. 2ndly. A second capital equal in amount to the first, composed of a deposit of State securities. These securities would continue to be the property of the depositing share- holders, who would also receive the dividends ; they would be merely placed at the disposal of the bank by irrevocable deeds or transfers, and would be reserved as a guaraa- tee deposit against the amount of notes circulated. A bank thus constituted wou'd be authorised to issue an amount of notes equal to the double capital paid in or deposited by its shareholders, and these notes, which would always be payable on demand, would be used in loans to landed property on the general conditions already explained in the first title of the project. Mens. Martin (du Loiret) has no hesitation in believing that such a combination would possess the triple advantage : — Istly. To permit of loans being made to landed property at a very modcrato rate of interest, which at the outset would scarcely exceed 4 per cent, and, perhaps, IJJ per cent., with a sinking fund, to be rapidly made up, the existence of which, taken in connection with the costs and ordinary profits of the bank, would not raise the rate of ani»uity to be paid by borrowers over a maximum of 6 per cent. 35 t:f )f State share- at the rate of 2T cent., iiection ty to be 2Dclly. To assure to the shareholden a snfioient profit to giT« them 6 per cent over and above costs, sinkiug and reserve funds, on the total amount of their shares. Srdly. To assure ths regular payment of bills on demand at the bank, as well as procuring the advantage of loans at long date on landed property. In order to arrive at a clearer view of the question, and to make use of figures, the following is the plan of organization, proposed by the author of the project, to bring into successful operation institutions of this description : — Let us suppose that the cash capital deposited by the shareholders is 1,000,000 francs. They would have to place in the hands of the bank, in addition to this, a second million in 60,000 franc rentes, bearing at 5 per cent. The bank would then be authorized to iR!. ^ 20c. from one day t« the next, and of lOo. for the Exchange of the same day. Agreements d primes pour recevoir, are the very ©pposito of ordinary free agreements, bcciuse while the latter are obligatory only upon the seller, the former also bind the purchaser. Thus you receive a premium of If. for 1500 francs, rentes three per cent at the current rate for the end of the current month ; should a rise take place, your seller can annul his agreement by forfeiting the earnest money j^rtme paid in advance. These transactions frequently take place c/u ^our au lenifeman from one day to the next. The three per cents are, let us suppose, at 64 francs ; believing that a decline is imminent, you pay a premium of 20o. to compel the ))arty to whom you have sold to receive from you 1500 francs rente at the current rate of tbe (liiy. Should a rise take place, your loss is limited to the premium of 20c., because by fui'feiting that sum to the purchaser the agreement is cancelled. The principle was at one time iidopted in the lobby coulisse of subdividing lots of rentes, say of 1500 francs of three per cents into 500 francs, and 1000 franc lots, but this system seems to have been abandoned. Arbitration. — We shall now explain the meaning of arbitration with respect to fpubiic securities, arbitrages des effcts publics. An operation by arbitration with regard to {(ui)lic stocks, is to make an exchange of public securities in order to derive the profit which may accrue by the variation of the current rates. Thus for instance, you own 4500 francs r«?7i/e,s, 4i per cent; the 4} per cents suddenly rise to 92 francs, while the three per cctitd remain stationary at 62 francs. Feeling certain hat the three per cents will in their turn rise in the market, you dispose of your 4500 francs rente, 4i per cent at 92 trades ........ 92,000f. You purchase 4449 francs, three per cent at 62 • - 91,946. And you make the diference. .... 54f. As you had anticipated, the 3 per cents rise to 64 francs while the 4} per centi only reach 93 francs; ycu instantly sell your 3 per cents at - - 94,912f, and you repurchase your 450U francs 4} per cent 93. • - 93,00 > difference, ,.-.., . l,912f. This operation has therefore produced a profit of 54x1,912 — 1966 francs deducting the cost of brokerage, and you find yourself possessor of the same amount of 4J per cent " riiitfs" OS before. Aihitration — We shall now explain the meaning of Arbitration with respect to public seeuritio,-, — '^arbitrages des effets publics." An operation by arbitration with regard to jpubiic stocks, is to make an exchange of public securities in order to derive the profit which may accrue by the variation of the current rates. Thus, for instance: you own 4.51JU IVaocs "rente," 4} per cent; the 4J per cents suddenly rise to 92 francs, while the 3 per ciiits remain stationary at 62 francs. Feeling certain that the 3 per cents will ib their mru rise in the market. You dispose of your 4,500 francs " rente" 4i per cent at 92 francs 92,000t. You purchase 4,449 francs, 3 per cent at 62 91,946f. And you make the difference 54f. As you had anticipated, the three per cents rise to 64 francs, while the 4i per cents only reaeh 93 franca; * Thp ipepiilators who transact business among themielTci without employing brolcerg, bear the n.ime of" cou/imerj "—iobbiera. Tliey occupy a place at tbe Exchange, nrar the entranco to the base- lufiit '' piirijuet." Their niitneroua trauiactions exercise considerable influence upun the rates of public securities ; tbey generally meet at mid-day and traniaci their busineci before and after tbe hour.' of opening and closing the £xchange. The settlements which take place among them frequently nroduce serious consequencei. « ' ■ I . ■ I , , I . , ___ You instantly lell your 3 per centa at 64 94,91 2f. And you repurchase your 4,500f., 4i per cent at 93 93,000f. Difference l,912f. This operation has therefore produced a profit of 54 and 1,912 equal to 1,966 deducting the cost of brokerage, and you find yourself possessor of the same amount of 4} per cent rentei as before. Report du comptant d la Jin du moU means the difference between the cash value of rentei, and their value at end of montu. Report d'un moisd I' autre, meaus the difference between the value of rentet at the end of the ensuing month. The increased value which rentet acquire at the approach of the expiration of thetrien- nial term is the cause of this difference. Report* often offer to capitalists the means cf realizing their funds in a most advantageous manner. A person can by means of reportt, invest his funds temporarily in public securities without necessarily becoming proprietor of any of these securities, and without risk, inas- much as he is by the same operation purchaser at one date and seller at a later date, and thus a rise or decline in the market is to him a matter of indifference ; the profit is limited to the difference between the rate of purchase and the rate of sale which constitutes the interest. These report* may be considered as loans on public securities and may be classed in the same category as mortgage investments. One person may wish to borrow on the security of rentet of which he will not dispose ; another may invest his capital for a month or two taking rentet as collateral security. In such cases, the Exchange Broker be- comes the medium so that at the maturity of the transactions the tender on the one hand receives the amount of his capital by cancelling the regiiitration of his claim and the bor- rower returns the amount of his loan in exchange for the certificate to the tffect that the claim is cancelled ] the broker who knows his client becomes responsible to the reporteur for the amount of depreciation in value of the security which might ensue in case of a fall in the market. This operation is of daily occurrence involving very large sums of money, and although it may be considered as a transaction on time d terme, it is nevertheless legitimate, and is decided so to be, by all the tribunals. The meaning o{ report sur prime, is the purchase for delivery and current month of a certain amount of rente /erme, consols which are imme- diately resold d prime, at a premium deliverable at same time. You purchase 300 francs rente, at 63 f. 50o. and current month, representing a capital of 63,000 francs, and you sell at a premium d prime, at the rate of 64f. 24c. of which 1 franc premium representing; a capital of 64,200 francs. If the earnest money ^ri'me be recovered, you make the differ- ence of 70c, if you are allowed to keep it, you find yourself purchaser of 3000 francs rente at the rate of 62f. 50c. Reportt also serve to extend operations either in a rising or dec.i- niog market, and in the following manner. Let us suppose that you have purchased rentet deliverable end current month at 62 francs, and that they have remained at a decline say 61 francs; if you think that there is a probability of an approaching rise in public securities, you sell at 61, and after having paid the difference, you immediately purchase deliverable end ensuing month at 61fr. 40o. provided the rate o( report transfer, from one month to the other be 40c. This is what is termed te/aire trantporter to effect a transfer. The same operation takes place in au op- posite manner when the funds are on the decline; a person purchases fur end current and sells for end ensuing month. This is what is termed reporter transferring. Another way of recovering from the effect of a losing operation, is to enter into a transaction on 'Change called " commune" " average purchase." Thus, for instance, you have purchased 3000 francs rentes 3 per cent at 63 ; they decline to 61 ; you purchase 3000 francs more at this rate, and you find yourself in possossicn of 6000 francs purchased at the average rate of 62 francs. If therefore, the rate rises above 62 francs, you make a profit. Perhaps the details into which I have entered with regard to the operations of the Exchange will be found rather lenj^thy; but should a landed credit institution ever be established in tne country, the direction and shareholders will not be very Jong without perceiving, how applicable the rudimentary knowledge of Exchange transactions will be, and the advantages to be derived from that knowledge in the negotiation of the bends lettres de gage of the institutioa. As it ii one of the principles of the L. Credit Institution 1 1 1 i ]. i fl I '' ... i ^, i^ 44 III a never to loan money at a higher rate than the rate I said for the negotiation of its ovn bonds, it nevertheless is very clear that this estimate must include oosta of brokerage and other expenses which may have to be disbursed in procuring the necessary capital. Not;? must at the same time be taken at the premium and descent which may vary on change and affect the valued of the bonds lettres de gage of the Institution. It may occur that the L. G. Institution will be compelled to issue bonds bearing different rates of interest to try the market particularly in the commencement of operations, when Ae the English and Canadian stock markets will both have to be tried. These diflerent rates will form series of issues. These bonds will be negotiated at a high or low rate, at a premium or at a dis- count, in a decline or in a rise of the market, according to the demand, and the credit which they may at the moment enjoy. In this case it would be necessary to reduce the wholt^ to par in order to arrive at the rate of the loan and the annuity. Let us suppose that the L. C. institution issues bonds payable in 20 years bearing 7 per cent interest, and that they bring a premium of 10 per cent in the market, or in other words that $1U0 pro- duce $110; then, instead of changing an annuity of $10.44 (See Table 7, page ) the institution would only charge $9.46 on a loan of $100. If, on the contrary, bonds are negociated at a loss, suppose for example that $100 only produce $00, for the same time and at the same rate of interest, then the institution would be compelled to charge an annuity of $11.60 on $100 instead of $10.44 as in the former case. It is very easy to calculate the annuity according to the current rate by the following rule of proportion : — The r tte on change is to the par rate, what the annuity of par, is to the annuity sought for. In order to arrive at the amount of annuity sought for in a very correct manner, the calculation must be made after deducting the portion included for cost of management from the annuity of par, and then adding it to the annuity arrived at by the calculation. MECHANISM. Commercial Banks loan money to trade. Merchants by promptly and ensily turning over their funds, can without difficulty meet their engagements at short dates. Banks which loan money at short dates, can issue notes payable on demand for a larger amount than they have in specie in their vaults. Thus they easily find capitalists to invest in their stock. But these banks cannot loan at long dates, on account of the very nature of the principles upon which they found their operations. The farmer cannot borrow at short diite, the revenue of his farm is slow incoming; crops are only husbanded once a year, and they only represent the interest on the value of the immovable, or but little more. He cannot therefore borrow a sum, comparatively large for the value of his farm, except on the condiiion of paying each year the interest, with a fraction of the capital, according to the revenue derived from his farm. In many cases, if not in all, by borrowing on any other condition, he is sure to be subjected to considerable embarrassment, if he is not completely ruined. It became necessary therefore to establish institutions which while loaning money at long dates could lit the same time procure a sufficient amount of capital to meet the re- quirements of borrowers. These sums were very large, as the reimbursement of the capi- tal invested was only to take place after in number of years. No financial institution of iUelf could furnish the requisite capital. The profits offered by the Lauded Credit insti- tution wore too small to tempt capitalists in sufficient number or of sufficient wealth to permit of their carrying on the institution alone. In fact the Landed Credit institution must disburse enormous sums to enable it to exist, while it cannot use its capital annually for the purpose of renewing loans. Each year, there is a new issue of funds, and the capi- tal loaned the first year must be multiplied by the number of years to elapse before maturity of the loan, less of course the sinking fund paid in by annuities during that time. Thia question seouied to be the cause of grave difficulty. It was tt one time thought that the Landed CreJit institution could be organized on the same principle as Commercial Banks; this principle was in fact the first which presented itself to the consideration of those who desired to come to the opsistance of the agricultural class. But it was found that it was impossible to organize the institution on such a basis. There are in finances os in mathe- matics certain fined rules and principles which cannot be departed from without danger. These principles which are known to all ecenomisU are : The proportion of fundi in hand, is in its relation to the amount of paper itsued to represent those funds, should be regulated by the period of loans. KanfmanQ Biihring, merchaot of Berlin, first solved this problem. It was certainly difficult to establish an institution which would loan money at long dates, and have continually on hand a sufficient sumia cash to meet its engagements, and at the game time never have too much money on hand in case of loss, or the possession of dor- mant capital. He discovered the solution, and it is this : — To divide the transaction, the people with o..z halft^n one side, and the banker toith the other half on the other — This was a happy idea. With a view to its organization he made the following proposition : — That a society be iormed of a certain number of persons ; that it be composed of per- sons, whose social importance, capacity and integrity, would command confidence ; that the society be the medium through which all those persons desirous of loaning, and those desirous of borrowing should transact their business. The institution, by undertaking the responsibility of er.amininy "nd assuring the perfect sufficiency of the immovable security offered by the borrower, javed the lender the trouble of searching for titles and at the same time gave a sufficient guarantee as to its own solvency. From that moment, the mechanism of the institution became a matter easily deter- mined upon. The institution gave to the lender an obligation under its sign, manual and seal, payable at a certain date, and bearing a certain rate of interest agreed upon ; with one hand it received the money from the lender, and with the other passed it to the bor- rower, who for his part gave an obligation to the institution as a first mortgage on a pro- perty worth double the amount of the loan, bearing a stipulated rate of interest, with a per centage for cost of management ; the latter obligation being p)>yable at a date to correspond with the former obligation granted by the institution to the lender. Having received the obligation from the borrower, tfce institution re-issued an obligation of similar amount to enable it to procure the funds to make fresh loans ; and so on, according to the wants of all. LANDED CREDTT BONDS. — " LETTRES DE OAGE." The obligation or bond issued by the institution was called *' lettre de gage," (Pfand- Brieffe). This bond is the collective guarantee of the Association instead of the individual guarantee of the borrower ; it is the process of rendering his immovables a moveable j it is for the purposes of negociation and circulation of the bill of exchange of the Landed Credit Association. In a short time these bonds, '* lettres de gage" rose to par, then com- manded a premium, and were negociated on 'chango, where they were sought for by all classes of capitalists who had money to lend or mortgage. Later, the institution paid the borrowers in bonds, " letires de gage," and they negociated them. This is the system now generally adopted by the L. C. institution of Europe. In this way, the institution never kept capital on hand, and had the opportunity of procuring as much as it required. These bonds " lettres de gage" were in reality drafts on the public, at sight, which were to be re-paid with annual or semi-annual interest. These bonds are made payable to bearer or order. At first, these bonds were drawn out without being made payable at any particular dates, but according to the will of the owner, provided always that a regular notice was given to the institution. This notice was called " dinonciation." A grave error was committed in permitting the bearer to have the right of asking for payment in full of these bonds at any time by giving the requisite notice, *' d^nonciadon." It might happen that a large amount of these bonds would be presented at the same time, perhaps when it would be ditficult for the institution to obtain the funds necessary to their liquidation. This did at lust happen. The experience thus ^ ^ '5? 5? ? Q-S w o 2 P-H ?i_3 2 B< hS»«s «J ^ ^ -• o- .^ a »■ =< -I S, o=-oae«erso V h— « ^ /n rV M "2 ??ji -" n (S ™ "I 2 D" B s-"^ t-S g 3" 2 Bs^Sd-^^9. St" d o-op 2 c5o- — O" 2 s. o o -'^ S 2. a 2 to ft* 3 ■^ ,» O O o ffl ^ » - « CB S' CA SD ^ n != ai o g p* 1 ff O " SD SB « o Oi 2 Q t» ^ *^. EC g> 2_ O t3 o S >K CO <» 2.13 " en p< ^ o s ,>^^ 48 c >«■ > x:>r>: ^S^3>ii!i!SI^SI^»ii^3^ ■■'■«*,1 49 1 ! I IS -;— — — mMimMW.'Sfimimms^M^.m^sm^imBm^^ .! ■'■ 50 LOTTERIES " TIRADE AC SORT." As the Tnetitution receives each year through the sinking fund a portion of the total amount of bonds issued in any particular year, nothing can bo better than to use this fund to redeem a corresponding amount of bonds, in proportion to the recovery of the sums set apart as a sinking-fund against the obligations of borrowers, and this ot course stopn the payment of interest on these sums. To accomplish this, all the bonds are numbered and registered, distinguishing one year from the other. Coi responding numbers engraved oa wood, ivory or metal, with the year, are placed in a wheel, and the drawing takes placi^ at certain dates fixed by the rules of the Institutions. There is a wheel for each year, during which an issue of bonds has taken place. From each wheel there are as many numbers drawn as the receipts of the Institution will permit payment of. The winning numbers are published, so that the owners of bonds may come forward to demand payment. All intenst ceases to accrue on any bonds thus drawn from the wheel, from the date of publi- cation in the newspapers. Some institutions continue the payment of interest until presentation, but this seems to me to be very inconvenient as well as a loss to the institu- tion, which can derive no profit from the funds which it has on hand to pay the bond, which may be presented at any moment. LOTS AND LOTS V/ITH PREMIUM — " LOTS ET LOTS ET PRIMES, " When the operations of a Landed Credit Institution arc commenced in any country, the Directors are sometimes obliged to give a premium on thj bonds which it may issue. This is generally done when their rate of interest is lower than the current rate. It was in this principle that " Le Credit Foncier de France" granted a premium of 200 francs on bonds of 1,000 francs, bearing 3 per cent interest, or in other words, the Institution promised to pay 1,200 francs at the maturity of the bond. At oth<-r times " lots" lots are added to the ^^ prime" premium ; that is to say, that in addition to the premium, the first '^ lots" which are drawn in the lottery gain a certain amount of money as prizes — more frequently however, these " lots" are without premium. This premium " /'/ prime" is not viewed with much favor; the inconvenience to which it gives rise is greater than the advantages which it affords. ^' Lots" are generally in favor; but it is stiil a question whether the profits which they may give are equal to the inconvenience to which they give rise. It is necessary of course in such matters to consult the national taste. These prizes which are by chance granted to certain numbers which are first drawn, are paid out of the interest which has been reduced to offer a reward to the tenders who prefer content- ing themselves with a smaller rate of interest to keep the chance in the lottery. The object is a good one, to reduce the rate of interest gradually. Several persons in France prefer to invest in bonds bearing 3 per cent interest with " lots et prime," lots and premium, to taking those which bear four per cent interest without premium, and even those bearing 5 per cent interest without either lots or premium. The Institution thall have the privi- lege of adopting this system, if it suits its interest, but it should not be made compulsory. The lottery-drawing is fixed upon for certain periods durii.g the year. In France, there are four annual drawings. The following is the distribution of prices, and the dates of drawing in France : — ill Drawing) of the 22nd March, 22nd June and22nd Septembtr. 1863. The I It number drawn will receive 100,000 fr. The 2nd do do 50,000 The 3rd do do 6ti,uoO The hi 17 18 lU 20 21 22 23 24 26 2(1 27 28 2y 3U 31 32 33 34 3i uli 37 38 3U 4(1 41 42 43 44 45 4(1 47 48 4U 111) 61 i2 63 64 bt> 60 67 OS 6U fjU Ci Bcoiinala of days. 0.00274 0.00548 0.00822 O.OIO'JO 0.01370 O.Olfill O.OI'JIS 0.02 1 U2 0.024()0 0.02710 0.03014 0.03288 0.03..U2 0.0383(1 0.04110 0.01384 O.OKiiS 0.0l',i;'2 0.0o2(i5 o.oji7y 0.067J3 (1.0(1027 0.0(1301 0.0(1673 0.0(1810 0.07123 0.073U7 0.07071 0.07yi6 0.0821 'J 0.0S(U3 0.0^7(17 0,Oi)(,.|l 0.0y316 o.oujsy 0.0U8(i3 0.10137 0.10411 hi(i86 O.loyju 0.11233 0.116(17 117S1 0.12U66 0.12320 0.120(13 O.I2>77 0.13161 0.13426 0.1 30U'.) (J, 13073 0.1-1247 1462: M79J t.lM,t6 0.1D;'42 .I.lOJtJ o.i6«yo 0.10104 0.16438 0.10712 1 per % 2 per % 3 per % 4 per % $0.00 00274 $0.00 00548 $0.00 00822 $0.00 01096 0.00 00548 0.00 01096 11.00 01644 0.00 02192 0.00 00822 0.00 01644 ' 00 02466 0.00 03288 0.00 01096 0.00 02192 1)0 03288 0.00 04384 0.00 01370 0.00 02740 0.00 04110 0.00 05480 0.00 01644 0.00 n"283 0,00 04932 0.00 06576 0.00 01918 0.00 03.S36 0.00 06754 0.00 07672 0.00 02192 0.00 04384 0.00 06676 0.00 08768 0.00 02466 t'.OO 04932 0.00 07393 0.00 09864 0.00 02740 0.00 05480 0.00 08220 0.00 10960 0.00 03014 0.00 06028 0.00 09042 0.00 12056 (■ 00 03288 0.00 06576 0.00 09864 0.00 13152 0.00 03662 0.00 07124 0.00 10686 0.00 14248 0.00 03830 00 07672 0.00 11503 0.00 15344 0.. 04110 0.00 08220 0.00 12330 0.00 16440 0.00 04384 0.00 0S7C8 0.00 13162 000 17536 0.00 04058 0.00 09316 0.00 13974 0.00 18632 0.00 04932 0.00 09864 0.00 14796 0.00 19728 0.00 06205 0.00 10410 0.00 16615 eoo 20820 0.00 06479 0.00 109)3 0.00 16137 0.00 21916 0.00 06763 0.00 11606 0.00 17269 0.00 23012 0.(10 0(1027 0.00 12054 0.00 1S081 0.00 24108 0.00 (1(1301 0.00 12602 0.00 1^903 0.00 25204 0.00 0(1.^75 0.00 13160 0.00 19725 0.00 26390 0.00 0(1^49 0.00 13698 0.1.0 20647 0.00 27396 0.00 07123 0.00 14246 0.00 21309 0.00 28492 0.00 07397 0.00 14794 0.00 22191 000 29583 0.00 07671 0.00 16342 0.00 23(113 0.00 30684 0.00 07945 0.00 15890 0.00 23835 0.00 31780 0.00 08219 0.00 16438 00 24657 0.00 32876 0.00 0S493 0.00 169S6 0.00 26479 u.oo 33972 0.00 0K767 0.00 17634 0.00 20301 0.00 35096 0.00 09041 0.00 18082 00 27123 v.OO 3G164 0.00 093 1 J 0.00 18030 0.00 27945 0.00 37260 0.00 09689 0.00 19178 0.00 28767 0.00 38366 0.00 09803 0.00 197"6 0.00 296S9 0.00 39452 0.00 10137 0.00 20274 0.00 30411 0.00 40543 0.00 10411 0.00 20822 0.00 31233 0.00 41644 0.00 10085 0.00 21370 0.00 32055 0.00 42740 0.00 10959 0.00 21918 0.00 32877 0.00 43836 0.00 11233 o.no 22466 0.00 33699 0.00 44932 0.00 11607 0.00 23014 0.00 34621 n 00 46028 0.00 11781 0.00 23662 0.00 36313 00 47124 0.00 12065 0.00 24110 0.00 36105 0.00 48220 0.00 12329 0.00 24658 0.00 36987 OdO 49316 0.00 12603 0.00 252('6 0.00 37 809 O.dO 60412 0.00 12877 0.00 25754 u.oo 38631 0.00 51508 0.00 13161 0.00 26302 0.00 39153 O.OO 62604 0.00 13425 0.00 20860 0.00 4(1275 0.00 53700 0.00 13699 0.00 27398 0.00 41(197 0.00 54796 0.00 13973 0.00 27946 0.00 41919 0.00 55892 0.00 14247 0.00 28494 0.00 42741 0.00 56988 0.00 14521 0.00 29042 0.00 43663 0.00 58084 ' 0.00 14795 0.00 29690 0.00 44385 0.00 59180 0.00 16068 0.00 30 1 36 0.00 46204 0.00 60272 0.00 1,6342 0.00 30684 0.00 46026 0.00 61368 0.00 15616 0.00 31232 0.00 46818 0.00 62464 0.00 15h9a 0.00 31780 0.00 47670 0.00 63560 0.00 16161 0.00 32328 0.00 48492 0.00 64656 0.00 16438 0.00 32876 0.00 49314 0.00 65762 u.oo 16712 0.00 33424 0.00 &J136 0.00 06848 59 ,, '■If » No. 1. at all the rates from 1 to 10 per cent inclusively. i! Dayi. 6 per % 6 per % 7 per % 8 per % 9 per % 10 per % 1 fo.oo 01370 $0.00 01644 ' $0.00 01918 $0.00 02192 $0.00 02466 $0.00 0274 2 0.00 02740 0.00 03288 0.00 03836 0.00 043t4 0.00 04932 0.00 0648 S 0.00 04110 0.00 04932 0.00 05754 0.00 06576 0.00 07398 0.00 0822 4 0.00 05480 0.00 06576 0.00 07672 0.00 08768 0.00 09864 0.00 1096 6 0.00 06850 0.00 08220 0.00 09590 0.00 10960 0.00 12330 0.00 1370 6 0.00 0822C 0.00 09864 0.00 11708 0.00 13152 0.00 14796 0.00 1644 ij 0.00 09590 0.00 11508 0.00 13426 0.00 15.344 0.00 17262 0.00 1918 8 0.00 10960 0.00 13152 0.00 15344 0.00 17536 0.00 19''28 0.00 2192 g 0.00 12330 0.00 14796 0.00 17262 0.00 19728 0.00 22194 0.00 2486 10 0.00 13700 0.00 16440 0.00 19180 0.00 21920 0.00 24060 0.00 2740 n 0.00 15070 0.00 18084 0.00 21098 0.00 24112 0.00 27120 0.00 3014 12 0.00 16440 0.00 19728 0.00 23016 0.00 26304 0.00 29592 0.00 3288 13 0.00 17810 0.00 21372 0.00 24934 0.00 28496 0.00 32068 0.00 3562 u 0.00 19180 0.00 23016 0.00 26852 0.00 30688 0.00 34524 0.00 3836 15 000 20550 0.00 24660 0.00 28770 0.00 32880 0.00 36990 0.00 4110 10 coo 21920 0.00 26304 0.00 30688 0.00 35072 0.00 39456 0.00 4384 17 0.00 23290 0.00 27948 0.00 32606 0.00 37264 0.00 41922 0.00 4658 18 0.00 24660 0.00 29592 0.00 34524 0.00 39456 0.00 44388 0.00 4932 19 0.00 26025 0.00 31230 0.00 36435 0.00 41640 0.00 46845 0.00 5205 20 0.00 27395 0.00 32874 0.00 38353 0.00 43832 0.00 49311 0.00 5479 21 0.00 28765 0.00 34518 0.00 40271 0.00 4U024 0.00 51777 0.00 5763 22 0.00 30135 0.00 36162 0.00 42189 0.00 48216 0.00 54243 0.00 6027 23 0.00 31505 0.00 37806 0.00 44107 0.00 50408 0.00 56709 0.00 6301 24 0.00 32875 0.00 39450 0.00 46025 0.00 52600 0.00 59175 0.00 6575 26 0.00 34245 0.00 41094 0.00 47943 0.00 54792 0.00 61041 0.00 6849 26 0.00 36615 0.00 42738 0.00 49861 0.00 56984 00 64107 0.00 7123 27 0.00 36985 0.00 44382 0.00 51779 0.00 ■76 t.OO 66673 0.00 7397 28 0.00 38355 0.00 46026 0.00 53B97 0.00 .168 0.00 69039 0.00 7671 29 0.00 39725 0.00 47670 0.00 55615 0.00 63660 0.00 71505 0.00 7945 SO 0.00 41093 0.00 40314 0.00 57633 0.00 65752 0.00 73971 0.00 8219 31 0.00 42465 0.00 50958 0.00 59461 0.00 67944 0.00 76437 0.00 8493 32 0.00 43835 0.00 52602 0.00 61369 0.00 70130 0.00 78903 0.00 8767 33 0.00 45205 0.00 54246 0.00 63287 0.00 72328 0.00 81369 6.00 9041 34 o.ou 46575 0.00 55890 0.00 65205 0.00 74520 0.00 83835 0.00 9315 35 o.ou 47945 0.00 57534 0.00 67123 0.00 76712 0.00 86301 0.00 9589 86 000 49315 0.00 69173 0.00 69041 0.00 78904 0.00 88/67 o.oo 9863 37 0.00 50685 0.00 60822 0.00 70969 6.00 81096 0.00 91233 0.01 0137 38 0.00 52055 0.00 62466 0.00 72877 0.00 83288 0.00 93699 0.01 0411 39 0.00 53425 0.00 64110 0.00 74795 0.00 85480 0.00 96163 0.01 0085 40 0.00 54795 000 65764 0.00 76713 0.00 87072 0.00 98031 0.01 0959 41 0.00 56165 0.00 67393 0.00 78631 0.00 89864 0.01 01097 001 1233 42 0.00 57585 0.00 69042 0.00 80549 0.00 92050 0.01 03663 O.Ol 1607 43 0.00 68905 0.00 70686 0.00 82467 0.00 94248 0.01 06029 O.Ul 1781 44 0.00 60275 0.00 72330 0.00 81385 0.00 96440 0.01 08496 0,01 2065 45 0.00 61645 0.00 73974 0.00 86303 0.00 98632 0.01 10961 O.Ol 2329 48 0.00 63015 0.00 75618 0.00 88221 0.01 00824 0.01 13427 0.01 2603 47 0.00 61385 0.00 77262 0-00 90139 0.01 03016 0.01 15893 0.01 2877 48 0.00 65755 0.00 78906 0.00 92067, 0.01 05208 0.01 18359 O.Ol 3.51 40 0.00 67126 0.00 80550 0.00 93976 0.01 07400 0.01 20825 0.01 3425 50 0.00 68495 0.00 82194 0.00 95893 0.01 09692 0.01 23291 0.01 3699 51 0.00 69865 0.00 83838 0.00 97811 0.01 11784 0.01 25767 0.01 3973 52 0.00 71235 0.00 85482 0.00 99729 0.01 13976 0.01 28223 0.01 4247 53 0.00 72605 0.00 87126 0.01 01647 0.01 16168 0.01 30689 O.Ol 4521 54 0.00 73975 0.00 88770 O.Ol 03565 0.01 18300 0.01 33155 0.01 4795 55 0.00 75340 0.00 90408 O.Ul 06476 0.01 20644 0.01 35612 0.01 5068 56 0.00 76710 0.00 92062 0.01 07394 0.01 22736 0.01 38078 01 5342 67 0.00 78080 0.00 93696 0.01 09312 0.01 24928 0.01 40544 O.Ol 6616 68 0.00 79450 0.00 95340 0.01 11230 0.01 27120 0.01 43010 0.01 5890 59 0.00 80820 0.00 96984 0.01 13148 0.01 29312 0.01 46476 0.01 6164 60 0.00 82190 0.00 98628 0.01 15066 0.01 31504 0.01 47942 0.01 6338 61 0.00 83560 0.01 00272 0.01 16984^ 0.01 33696 0.01 50408 0.01 6712 1 1 'T,: ^\k a V' h i 4 60 TABLE No. l.-Simple 1» n J) I > !i Days. Decimals of days. 1 per % 2 per % 02 0.16986 $0.00 16986 $0.00 33972 63 0.17260 0.00 17260 0.00 34620 64 0.17534 0.00 17534 0.00 35068 65 0.17S08 0.00 17803 0.00 35016 66 0.18082 0.00 18082 0.00 30164 67 0.18356 0.00 18356 0.00 36712 68 0.18630 0.00 18630 0.00 37260 69 0.18904 0.00 18904 0.00 37808 70 0.19178 0.00 19178 0.00 38356 71 0.19452 0.00 19452 0.00 33904 72 0.19726 O.OJ 19726 0.00 39452 73 0.20000 0.00 20000 0.00 40000 74 0.20274 0.00 20274 0.00 40548 75 0.20548 0.00 20548 0.00 41096 76 0.20822 0.00 20822 0.00 41644 77 0.21096 0.00 21096 0,00 42192 73 0.21370 0.00 21370 0.00 42740 79 0.21fil4 0.00 21644 0.00 43288 80 0.2I'.M8 0.00 21918 0.00 43836 SI 0.221U2 0.00 22192 000 44384 82 0.22466 0.00 22466 0,00 44932 83 22740 0.00 22740 0.00 45480 84 0.23014 0.00 23014 0.00 46028 85 0.23288 0.00 23288 0.00 46576 86 0.23afi2 0.00 23562 0.00 47124 87 0.23836 0.00 23836 0.00 47672 83 0.24110 0.00 24110 0.00 48220 89 0.24384 0.00 24384 0.00 48768 90 0.24058 0,00 24658 0.00 49316 91 0.21932 0.00 24932 0.00 49864 92 0.2.V205 (1 00 26205 0.00 50410 93 0.2,V]79 00 25479 0.00 50968 94 0.25763 0.00 26753 0.00 51606 95 0.20027 0.00 26027 0,00 62051 06 20301 0.00 26301 0,00 52002 07 0.2K,i75 0.00 26575 0,00 53150 98 0.20819 0.00 26849 0,00 53C9S 99 0.27123 0.00 27123 0,00 54246 100 0.27397 0.00 27397 0.00 54794 101 0.27071 0,00 27071 0.00 55342 102 0.27945 0.00 27945 0.00 55890 103 0.28219 0.00 28219 0.00 56438 104 0.28193 0.00 28493 0.00 56986 105 0.28767 0.00 28767 0.00 57634 106 0.29041 O.iiO 290 a 0.00 68082 107 0.29315 0.00 29315 0.00 58630 108 0. 29689 0.00 29589 0.00 59178 1U9 0.29S63 0.00 29863 0.00 59726 110 0.30137 0.00 30137 0.00 60274 111 0.30111 0.00 30111 0.00 60822 112 0.30085 0.00 30685 0.00 61370 113 0.3(I9;/J 0.00 30959 0.00 61918 114 0.31233 0.00 31233 000 62466 115 0.31607 0.00 31507 0.00 63014 116 0.31(81 00 31781 0.00 63562 117 0.32055 0.00 32055 0.00 64110 lis 0.32329 0.00 32329 0.00 64668 119 0.32603 0.00 32603 0.00 6'.206 120 0.32877 0.00 32377 0.00 65754 121 0.33151 0.00 33151 0.00 66302 122 0.33425 0.00 33425 0.00 66860 123 0.33699 0.00 33699 0.00 67393 124 0.3:(973 0.00 33973 0.00 67945 125 0.31247 0.00 31247 0.00 68-194 126 0.34521 0.00 34521 0.00 69042 127 0.3479r. 0.00 37124 0.01 30686 0.01 74248 160 0.43836 0.00 43836 0.00 87672 0.01 31508 0.01 75344 161 0.44110 0.00 44110 0.00 88220 0.01 32330 0.01 76440 162 0.41384 0.00 44384 0.00 88768 0.01 33152 0.01 77536 163 0.44658 0.00 44658 0.00 89316 0.01 33974 0.01 78632 164 0.449:;2 0.00 44932 0.00 89864 0.01 34796 0.01 79723 165 0.4J206 0.00 45205 0.00 90410 0.01 35615 0.01 80820 166 0.45479 0.10 46479 0.00 90968 0.01 3!;437 0.01 81016 167 0.45753 0.00 46753 0.00 91506 0.01 37259 0.01 83012 168 0. 46027 0.00 46027 0.00 92054 0.01 38081 0.01 84108 169 0.40301 0.00 46301 0.00 92602 0.01 S8903 0.01 85204 170 0.46575 0.00 46576 0.00 93150 0.01 39725 0.01 8fi3u0 171 0.46.849 0.00 46849 0.00 93698 001 40647 0.01 87396 172 0.47123 0.00 47123 0.00 94246 0.01 41369 0.01 88492 173 0.47:197 0.00 47.397 0.00 94794 0.01 42191 001 89588 174 0.47671 0.00 47671 0.00 96342 0.01 43013 0.01 90684 175 0.47945 0.00 47945 0.00 96890 0.01 438:^5 0.01 91780 176 0.48219 0.00 48219 0.00 96438 0.01 44657 O.OI 02876 177 0.48493 0.00 48493 0.00 96986 0.01 45479 0.01 93972 178 0.48767 o.oo 48767 0.00 97534 0.01 46301 0.01 95068 179 0.49041 0.00 49041 0.00 98082 0.01 47123 0.01 96164 ISO 0.49315 0.00 49315 0.00 98630 0.01 47945 0.01 97260 ISl 0.49589 0.00 49589 0.00 99178 0.01 48767 0.01 98356 182 0.49863 0.00 49S63 0.00 99726 0.01 49589 0.01 99442 183 0.60137 0.00 60137 0.01 00274 0.01 50411 0.02 00548 184 0.50411 0.00 60411 0.01 00822 0.01 61233 0.02 01644 185 0.60685 0.00 50685 0.01 01370 0.01 52055 0.02 02740 186 0.50959 0.00 50969 0.01 01918 0.01 62877 0.02 03836 187 0.51233 0.00 51233 0.01 021 66 0.01 53699 0.02 1932 188 0.51607 0.00 616(17 0.01 03014 0.01 54621 0.02 061128 189 0.61781 0.00 61781 0.01 03662 0.01 56343 0.02 07124 190 0.52055 0.00 62055 0.0 1 04110 0.01 56165 02 08220 191 0.62329 0.00 62329 O.Ol 04658 0.01 66987 0.02 09316 192 0.62603 0.00 52603 0.01 05208 0.01 57809 0.02 10412 193 0.62877 0.00 52877 0.01 05754 0.01 58631 0.02 11608 194 0.53161 0.00 53151 0.01 06303 0.01 69453 0.02 12604 63 mple Interest on $1. — Continued. Dayg. 18 :4 10 A 2 18 129 110 i:n 134 i;to i:t7 i:!8 no 141 142 143 144 145 14G 147 148 149 U.O li)l 162 153 154 156 150 157 158 159 160 ll;l 1C2 103 103 164 185 166 107 108 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 1S5 180 187 188 189 100 191 192 193 5pcr % $0.01 0.01 0.01 001 0.01 0.01 0.01 0.01 0.01 001 0.01 0.01 0.01 O.Ol 0.01 0.01 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0'02 0.02 0.02 0.02 0.03 0.02 0.02 0.02 0.02 0.02 0.02 per r/„ 76710 78080 70450 80820 82190 83560 84930 80300 87070 89040 90410 91780 93150 94520 95890 97260 98030 OOOOO 01370 02740 04110 05480 00850 08220 09590 1 0960 12330 13700 15070 16440 18810 19180 20550 21920 23290 24060 20025 27395 28705 30135 31505 32875 34245 35015 36986 38355 39725 41095 42405 43835 46206 46575 47945 49315 50085 ,'■^2055 53425 5J795 50166 57535 58905 60275 01645 63015 64385 65756 9 $0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0,02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 O.ii. o.or 0.0^ 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 7 per % 12052 13690 15340 10981 18028 20272 21910 23500 25204 20848 28492 30130 31780 33024 35468 30712 38356 40000 41644 43288 44932 40570 48220 49804 515(18 53152 64790 66440 58084 .')9728 61372 63016 04000 00304 07948 09592 71230 72874 74518 70102 77806 79450 810T»4 S2738 84382 86026 87070 89314 90958 92602 94246 95890 975.34 99178 00822 02400 04110 05764 07398 09012 10686 12330 13974 15018 17262 18906 $0.02 002 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0-02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0,03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.0» 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.93 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 8 per f/o 9 per (/o 47394 49312 51230 53148 55006 50984 68902 60820 62738 64050 60574 68492 70410 72328 74246 70104 78082 80000 81918 83836 85754 87672 89590 91508 93420 95344 97202 99180 01098 03010 04934 00852 08770 10088 12006 14521 10435 18353 20271 22189 24107 26025 27943 29361 31779 83697 35015 37533 39451 41369 43287 46206 47123 49041 60969 62877 54795 56713 58031 60549 02407 04385 00303 68221 70139 72067 $0.02 0.02 0.02 0.62 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 O.03 03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0-04 04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 82736 84928 87120 89312 91604 93096 96888 98080 00272 02404 04660 06848 09040 11232 13424 16616 17808 20000 22192 24384 20576 28708 30900 33152 35344 37636 39728 41920 44112 40304 48496 50688 62830 55072 57264 59450 01040 63832 66024 08216 70403 72600 74792 70984 79170 81308 83560 85762 87944 90136 92328 94520 96712 98904 01096 03288 05480 07072 09864 12050 14248 10440 18632 20824 23010 26208 $0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.0.3 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.04 0.04 0.04 0.04 0.04 6.04 0.04 0.04 0.04 0.04 04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.'"4 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 10 per % il'l 18078 20646 2.3010 25476 27942 30408 32874 36340 37806 40272 42733 45204 47070 .^0136 62002 55068 67534 60000 62466 64932 67398 69864 72330 74790 77262 79728 82194 84060 87120 89592 92058 94524 96990 99456 01922 0438S 00845 09311 11777 14243 16709 19175 21041 24107 26573 29039 31505 33971 30437 38903 41309 43835 40301 48767 51233 53099 56165 58031 61097 03563 06029 68495 70961 73427 76893 78369 $0.30 0.03 0.03 0.03 0.03 0.03 0.03 0.03 O.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 6.'i42 6610 6890 6104 0438 6712 6989 72.30 7588 7852 8030 8300 8074 8958 9122 9400 9770 0044 0243 0522 0896 1070 1344 1618 1991 2166 2440 2714 3088 3202 3538 3810 4184 4358 4032 4905 5279 5463 5727 6001 6375 6549 6823 7197 7371 7645 7919 8293 8467 8741 9016 9389 9563 9837 0111 0485 0659 0933 1207 1581 1705 2029 2355 2603 2877 3161 .1 M Interest I)ecimalij Days. of days. 1 per % 2 per % 3 per c/o 4 per fo 195 0.53425 $0.00 53425 $0.01 06850 $0.01 60275 $0.02 13700 196 0.53699 0.00 53699 0.01 07398 0.0 1 • 1097 0.02 14790 197 0.53973 0.00 53973 0.01 07946 0.01 61919 0.02 15892 198 0.54247 0.00 54247 0.01 08194 0.01 62741 0.02 16988 199 0.54621 0.00 54521 0.01 09042 0.01 C3563 0.02 18084 200 0.54795 0.00 54795 O.Ol 09590 0.01 64385 0.02 10180 301 0.55068 0.00 55068 0.01 10136 0.01 65204 0.02 20272 202 0.55342 0.00 56342 0.01 106S4 0.01 66026 0.02 21368 203 0.55616 0.00 55016 0.01 11232 0.01 66848 0.02 22464 204 0.55890 0.00 55890 0.01 11780 0.01 67670 0.02 23560 205 0.56164 0.00 56164 0.01 12328 0.01 68492 0.02 24656 206 0.56438 0.00 56438 0.01 12S76 0.01 69314 0.02 25752 207 0.66712 0.00 56712 0.01 13424 0.01 70136 0.02 26848 208 0.56986 0.00 56986 0.01 13972 0.01 70958 0.02 27944 209 0.57260 0.00 57260 0.01 14620 0.01 71780 0.02 29040 210 0.57534 0.00 57534 0.01 16068 O.dl 72002 0.02 30136 211 0.57808 0.00 57808 0.01 15610 0.01 73424 0.02 31232 212 0.58082 0.00 58082 0.01 16164 0.01 74246 0.02 32328 213 0.58356 0.00 58356 0.01 16712 0.01 7606H 0.02 33424 214 0.68630 0.00 58630 0.01 17260 0.01 76890 0.02 34520 215 0.58904 0.00 58904 0.01 17808 0.01 76712 0.02 35616 216 0.59178 0.00 69178 0.01 18356 0.01 77534 0.02 36712 217 59452 0.00 59452 0.01 18904 0.01 78356 0.02 37808 218 0.59726 0.00 59726 0.01 19152 0.01 79178 0.02 38904 219 0.60000 0.00 60000 0.01 20000 0.01 80000 0.02 40000 220 0.60274 0.00 60274 0.01 20548 0.01 80822 0.02 41096 221 0.60^.48 0.00 60643 0.01 21096 0.01 81644 0.02 42192 222 0.6 'i?? 0.00 60822 0.01 21644 0.01 82406 0.02 43288 223 - 0.61096 0.00 61096 0.01 22192 0.01 83288 0.02 44.384 224 0.61370 0.00 61370 0.01 22740 0.01 84110 0.02 45480 225 0.61644 0.00 61644 0.01 23288 0.01 84932 0.02 46576 226 0.61918 0.00 61918 0.01 23S36 O.Ol 857.V4 0.02 47072 227 0.C2192 0.00 62192 0.01 21384 001 86670 0.02 48768 228 0.62466 0.00 62466 0.01 24932 0.01 87398 0.02 49864 229 0.02740 0.00 62740 0.01 254S0 0.01 88220 0.02 50960 230 0.63014 0.00 63014 0.01 26028 O'Ol 89042 0.02 52066 231 0.63288 0.00 63288 0.01 20576 0.01 89864 0.02 63152 232 0.63562 0.00 63562 0.01 27124 0.01 90686 0.02 54248 233 0.63836 0.00 63836 0.01 27672 0-01 91608 0.02 65344 234 0.64110 0.00 64110 0.01 28220 0.01 92330 0.02 55440 235 0.64384 0.00 64384 0.01 28763 001 93152 0.02 57536 236 0.64658 0.90 64658 0.01 29316 . 001 93974 0.02 58632 237 0.64932 0.00 64932 0.01 29864 0.01 94796 0.02 59728 238 0.6520i 0.00 66205 0.01 30410 O-Ol 95615 0.02 60820 239 0.65479 0.00 65479 0.01 30958 0.01 96437 0.02 61916 240 065753 0.00 65753 0.01 31506 0.01 97259 0.02 63012 241 0.66027 0.00 66027 0.01 32054 0.01 98081 0.02 64108 242 0.66301 0.00 66301 0.01 32602 0.01 98903 0.02 65204 243 0.66575 0.00 66575 0.01 33150 0.01 99725 0.02 66300 244 0.66849 0.00 66849 0.01 33698 0.02 00547 0.02 67395 245 0.67123 0.00 67123 0.01 34246 0.02 01369 0.02 68492 346 0.67397 0.00 67397 0.01 34794 0.02 02101 0.02 69588 247 0.67671 0.00 67671 0.01 36342 0.02 03013 0.02 70684 248 0.67945 0.00 67945 0.01 35890 0.02 03835 0.02 71780 249 0.68219 0.00 68219 0.01 36438 0.02 04667 0.02 72876 250 0.68493 0.00 68493 0.01 36986 0.02 05479 0.02 73972 251 0.68767 0.00 08767 0.01 37534 0.02 06301 0.02 75068 252 0.69041 0.00 69041 0.01 38082 0.02 07123 0.02 76164 353 0.69315 0.00 69315 0.01 38630 0.02 07945 0.02 77260 254 0.69589 0.00 69689 0.01 39178 0.02 08767 0.02 78356 255 0.69863 0.00 69863 0.01 39726 0.02 09689 0.02 79452 256 0.70137 0.00 70137 0.01 40274 0.02 10411 0.02 80548 :?57 0.70411 0.00 70411 0.01 40822 0.02 11233 0.02 81644 356 0.70685 0.00 70685 0.01 41370 0.02 12065 0.02 82740 369 0.70959 0.00 70969 0.01 41918 0.02 12877 0.02 8383S 319 0.71233 0.00 7)235 .0.01 42460 0.02 13699 0.02 84933 m 66 OD $1. — {Continued.) ' "i Days. 195 196 197 193 199 200 201 202 203 204 205 20(5 207 208 209 210 211 212 21;! 214 215 210 217 218 219 220 221 222 223 224 225 22G 227 228 229 230 231 232 233 234 235 330 237 238 239 240 341 242 213 214 215 24(5 247 248 249 250 251 252 253 254 25f 256 257 258 259 260 5 per % 10.02 0.02 0-02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.08 0.03 0.03 0.03 9.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 003 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0-03 07125 08495 09865 71235 72605 73975 75340 76710 78080 79450 80820 82190 83500 84930 86300 87070 89040 90410 91780 93150 94520 95890 97260 99630 00000 01370 02740 04110 05 180 00850 08220 09590 10960 12330 13700 15070 10440 17810 IftlSO 20550 21920 23290 24600 25025 27395 28765 30135 Sl.-iOS 32875 3 1245 35615 36985 38355 .39725 41095 42465 48835 45205 46575 47945 49315 50685 52055 63425 54705 &«16» per <4 0.02 46.70 0.03 2870S 301 0.82400 0,00 82466 0.01 04932 0.02 47398 0.03 29864 302 0.82740 0,00 82740 0.01 65480 0.02 4S220 O.03 30960 303 0.83014 0.00 83014 O.OI 60028 0.02 49012 O.03 32050 301 0,83288 0.00 83288 n.oi 60570 0.02 49891 0.03 33152 3U5 0.83562 0,00 83662 01 07124 0.02 50080 0.03 34248 300 0.83836 0.00 83830 0,01 07072 9.02 M5(IS 0.03 35344 307 0.84110 0.00 84110 0,01 C.S220 (1.02 523:;(i 0.03 30440 308 0.84384 o.oo 84384 0,01 08708 0.02 53 1. -.2 0.02 37536 .<(Otf 0.84058 0.00 81058 0,01 09316 0.02 ,')3971 0.03 38032 310 0.84932 00 84932 0,01 69864 0.02 51790 o.o;! 39728 311 0.85205 0.00 85205 0.01 70410 il.02 55015 0.03 40820 312 0,8547l> 0,00 86479 0.01 7095.S (1.02 50137 0.03 41910 313 0.85753 0,00 85753 0.01 71500 0-02 57 259 0.03 43012 314 0.80027 0.00 86027 O.OI 72054 0.02 5S0'il 0.03 44108 310 O.80301 0.00 88301 0.01 72602 0.(12 5SII0;! 0.03 45204 310 0.80575 0,00 80575 0.01 73150 0.02 59725 0.03 40300 317 0.80849 0.00 80849 0,01 73698 0.02 0(1517 0.03 47396 31 H 0.87123 0.00 87 123 0.01 74240 0.02 0!:<09 0,03 48492 Sly 0.87397 0,00 87397 0,01 71794 (1.02 02191 0.03 49588 320 0.87071 0.00 87071 0,01 75342 0.02 03013 0.03 00684 321 0.87946 0.00 87946 0.01 75890 (1.02 03835 0.03 61780 31'2 0.88219 0.00 88219 0,01 70438 0,02 64067 0,03 62870 323 0.88493 0.00 88493 001 70980 0.02 05470 0,03 63972 834 0,88767 0.00 88707 O.OI 77534 0.02 66301 0.03 55068 325 0,89041 0.00 8Q041 O.OI 78082 0.02 67123 0.03 60164 m 0.8931} 0.00 8031!* 001 78630 0.02 07V4ft 003 ii &72tO on $1. — (Contiimcd.) 67 Days. 2fil 202 2C>'i 2fil 205 2C() 207 20S 209 2ro 271 272 27;? 271 275 270 277 278 279 2S0 281 282 28:f 284 285 280 287 288 289 290 291 292 29:< 291 295 290 297 298 299 ;iuo :i01 :(02 :i(ii :ioii .107 :i08 :!09 •Ml .'tl2 .'I I :i 111 5 :iii'> ;ii7 :!I8 :U9 ;i2o :)2i :i22 y2;) ;t2i 325 326 5 per % $0.0.} o.o;j 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.(13 0.03 0.03 0.03 0.03 0.03 O.Ot 0.01 O.Ol 0.01 0.04 O.Ot 0.01 0.01 0.01 0.01 0.01 0.01 0.01 O'OI 0.01 0.01 0.01 (MM 0.01 0.01 0.01 O.IM 0.01 0.01 0.01 0.04 0.04 0.04 0.04 0.01 0.04 0.01 0.0 I 0.04 O.Oi 57635 58905 60275 01045 C3015 04 385 05755 C7125 68495 69865 71235 72605 73975 75340 70710 78080 79450 80820 82190 83500 84930 80300 87070 }!9040 90110 91780 93150 94520 958>.)0 97200 98630 00(100 01370 02740 OHIO 05480 00850 08220 09.590 10900 12330 13700 1507(1 16140 17810 19181) 205.-.0 21920 23290 21060 26025 27395 28765 30135 31505 32875 34245 35615 30985 38355 39725 41095 42165 438;!5 45205 40576 C per % 7 per % 8 per % 9 per % $80.04 0.04 0.04 0.04 0.04 0.04 0.04 0-04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 04 0.04 0.04 0-04 0.04 0.04 0,04 0.04 0.0 I 0.04 0.04 (I 04 0.01 0,04 0.0 1 0.04 0,01 0.04 0.04 0.04 0.04 0.04 0.04 01 0,01 0,05 0.05 0.05 0,05 0,05 0.05 0.05 0.05 0,05 0,05 0,05 0,05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 ((.05 0.05 0.05 29042 30086 32330 33974 35618 37262 38906 40550 42191 43838 45482 47126 48770 50408 52052 53690 55340 56984 58628 60272 01916 63560 65204 06848 68492 70136 71780 73424 75008 76712 78356 SOOOO 81()44 83288 S49:!2 86576 88220 89861 91508 93152 91796 9(i4l0 980S4 99728 01372 03016 01000 06304 07948 09592 11230 12874 I 1518 111 1 62 17806 19150 21091 22738 2 1382 26026 27070 29314 30958 32602 34246 35890 $0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0-05 0.05 0.05 0-05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 05 0.05 0.05 0.05 ((•05 0.05 0.05 0,0.'. 0,05 0,05 0,05 0,06 (1,06 0,06 0.06 0,06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 00549 02407 04385 00303 08221 10139 12057 13975 15893 17811 19729 2 KM 7 23565 25176 27394 29312 31230 33148 35060 36984 38902 40,S20 42738 44050 46574 48492 50410 52328 54246 56164 58082 60000 61918 63836 657.54 07072 09590 71508 73426 75344 77262 79180 81098 83010 84934 80852 88770 1,10688 92('>06 94524 96135 98353 00271 02IS9 01107 00025 07913 09801 117(9 13697 15615 17533 19451 21:;09 23287 25205 $0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.06 0.00 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.00 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 O'OO 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.07 0-07 0.07 0.07 0.07 0.07 0.07 72056 74248 70440 78632 80821 S3016 85208 87400 89592 91784 93976 90168 98360 00544 02736 04928 07120 09312 11504 13696 15888 18080 20372 22404 24656 26,848 2904(1 31232 33421 35616 37808 40000 42192 44384 46576 48768 50960 53152 5534 I ft753(i 59728 61920 64 1 1 2 00304 08496 7068S 72880 75072 7726 1 79456 .SllilO 838;!2 86021 88216 90408 92600 94792 96984 99 1 76 01368 03500 05752 07944 10136 12328 11620 $0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.00 0-06 0.06 0.06 0.06 0.00 0.06 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 007 0.07 0.07 0.07 0-07 0.07 0.07 0.07 0.07 0.07 0.07 0.08 0.08 43563 46029 48495 50901 53427 55893 58359 00825 03291 05757 68223 70089 73155 75612 72078 80544 8.S010 85476 87942 90408 92374 95:M0 97MI6 00272 02738 65201 07670 10136 12602 15068 17534 20000 22166 21932 27398 29861 32330 34796 37202 3972S 42194 44660 47126 49592 52058 54524 56990 .■i9456 61922 61388 66845 693 1 1 71777 71213 70709 79175 8 KM I 81.107 S6573 si,l039 91505 93971 96137 98!103 01309 03835 10 per % $0.07 0'07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 O.OS O.OS O.O.S 0.08 0.08 O.OS O.OS O.OS 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 1507 1781 2055 2329 2603 2877 3151 3425 36'''9 3973 4247 4521 4795 .^063 5342 5616 5890 61 (!4 6438 6712 6980 7260 7534 7808 8082 8350 8630 8904 9173 9452 9726 0000 0274 0518 0822 1096 1370 1 614 1918 2192 2166 2710 3014 3288 3562 38:i6 1110 1381 I (158 4932 5205 5179 5753 0027 O.'iO I 6575 68 H» 7 1 23 7.".97 7671 7915 8219 8193 8767 9041 V31& |:| J- i. 'Ml 4 68 Interest OQ Dayi. Decimala of days. li per % 2 per % 3 per % 4 per % 827 0.89589 $0.00 89689 $0.01 79178 $0.02 68767 $0.03 58366 828 0.89863 0.00 898*)3 0.01 79720 0.02 69589 0.03 59452 339 0.90137 0.00 90137 0.01 80274 0.02 70411 0.03 60548 330 0-90411 0.00 90411 0.01 80822 0.02 71233 0.03 61644 331 0.90685 0.00 906S5 O.Ol 81370 0.02 72065 0.03 62740 332 0.90959 0.00 90959 0.01 81918 0.02 72877 0.03 63836 333 0.912.33 0.00 91233 0.01 82466 0.02 73699 0.03 64932 334 0.91507 o.oo 91507 0.01 83014 0.02 74521 0.03 66023 335 0.91781 0.00 91781 0.01 83562 0.02 75343 0.03 67124 336 0.92055 0.00 92055 0.01 84110 0.02 76165 0.03 68220 337 0.92329 0.00 92329 0.01 84058 0.02 76987 0.03 69316 338 0.92603 0.00 92003 0.01 85206 0.02 77809 0.03 70412 33» 0.92877 0.00 92S77 0.01 85754 0.02 78631 0.03 71508 UO 0.931 -il o.uo 93151 0.01 80302 0.02 79«3 0.03 72604 v-xl. 0.93425 0.00 93425 0.0 1 80850 6.02 80275 0.03 73700 342 0.93699 0.00 93099 0.01 87398 0.02 81097 0.03 74796 343 093973 0.00 93U73 0.01 87946 0.02 81919 0.03 76892 344 0.94247 0.00 91247 0.01 88494 0.02 82741 0.03 76988 345 0.94521 0.00 91.^21 0.01 89042 0.02 83663 0.02 78084 340 0.94795 0.00 91795 0.01 89590 0.02 84385 0.03 79180 347 0.95068 0.00 oioes 0.01 90136 0.02 85204 0.03 80272 348 0.95342 0.00 95342 0.01 90684 0.02 80026 0.03 81368 349 0.9561 G 0.00 0,^010 0.01 91232 0.02 80848 0.03 82464 360 0.95890 0.00 95890 0.01 91780 0.02 87670 0.03 83560 351 0.96164 0.00 90104 0.01 92328 0.02 88492 0.03 84666 352 0.96438 0.00 90138 0.01 92870 0.02 89314 0.03 8575J 353 0.96712 0.00 90712 001 93424 0.02 90136 0.03 86848 354 0.9696S 0.00 9G9CS 0.01 93930 O.02 90U04 0.03 87872 355 C 97260 0.00 972C0 0.01 94520 0.02 91780 0.03 89040 356 0.97534 0-09 97534 0.01 95068 0.02 92002 0.03 90136 357 0.97808 0.00 97808 0.01 95016 0.02 9.U24 0.03 91232 358 0.98082 0.00 98082 0.01 90164 002 91246 03 92328 359 0.98350 0.00 98350 0.01 90712 0.02 95068 0.03 93424 360 0.9H630 0.00 98630 0.01 97260 O.ni! 95890 0.03 94520 361 0.1*8904 0.00 98904 0.01 97808 0.02 90712 0.03 96616 362 0.99178 0.00 99178 0.01 98350 0.o2 97534 0.03 96712 3C3 0.99452 000 9HI52 0.01 98904 0.02 98.356 0.03 97808 364 0.99726 0.00 99720 0.01 99452 0.02 99178 0.03 98904 365 1.00000 0.01 00000 0.02 00000 03 00000 0.04 00000 'lit od91' 69 Dayi. 5 per % 6 per ojo 7 per % 8 per cjo 9 per % 10 per % 327 $0.04 47945 $0-05 37534 $0.06 27123 $0.07 16712 $0.08 06301 $0.08 9689 328 0.04 49315 0.05 39178 0.06 29041 0.07 18904 0.08 08767 0.08 9863 329 0.04 50685 0.05 -.0822 0.06 30959 0.07 21090 0.08 11233 0.09 0137 330 0.04 52055 0.05 42466 0.06 32877 0.07 2.3283 0.08 13699 0.09 0411 331 0.04 53425 0.05 44110 0.06 34795 0.07 25480 0.08 16165 0.09 0685 332 0.04 64795 0.05 45754 0.06 36613 0.07 27672 0.08 18631 0.09 0959 383 0.04 56165 0.05 47308 0.06 38631 0.07 29864 0.08 21097 0.09 1233 334 0.04 57535 0.05 49042 0.06 40549 0.07 32056 0.08 23663 0.09 1507 335 0.04 58005 0.05 50686 0.06 42467 0.07 34248 0.08 26U29 0,09 1781 336 0.04 60275 0.05 52330 0.06 44385 0.07 36440 0.08 28495 0.09 2065 337 0.04 81645 0.05 53974 0.06 46303 0.07 38632 0.08 30961 0.09 2329 338 0.04 63015 0.05 65618 0.06 48221 0.07 40824 0.08 33427 0.09 2603 339 0.04 64385 0.05 57262 0.06 50139 0.07 4.3016 0.08 35893 0.09 2877 340 0.04 65755 0.05 68906 0.06 52067 0.07 45203 0.08 38359 0.09 3151 341 0.04 67125 0.05 60550 0.06 53975 0.07 47400 O.OS 40825 0.09 3425 312 0.04 68495 0.05 62194 0.06 55803 0.07 49592 0.08 4329 L 0.09 3699 343 0.04 69865 0.05 63838 0.06 67811 0.07 51784 0.08 45757 0.09 3973 344 0.04 70235 0.05 65482 0.06 59729 0.07 6,'}976 0.08 48223 0.09 4247 345 0.04 7260^ 0.05 67126 0.06 61647 0.07 50163 0.03 60689 0.09 4521 340 0.04 73975 0.05 68770 0.06 G3505 0.07 58300 0.03 63165 0.09 4795 347 0.04 75340 0.05 70408 0.06 65476 0.07 60544 0.08 56612 0.09 6068 348 G.04 76710 0.05 72052 0.06 67394 0.07 62736 0.03 68078 0.09 5342 349 0.04 78080 0.05 73696 0.06 69312 0.07 64928 0.03 60644 0.09 6616 360 0.04 79450 0.05 75340 0.06 71230 0.07 67120 0.08 63010 0.09 5890 351 0.04 80820 0.05 76984 0.06 73143 0.07 69312 0.08 65476 0.09 6164 352 0.04 82290 0.05 78028 0.06 75066 0.07 7 J 504 0.08 67942 0.09 6438 353 0.04 83560 O.Oi 80272 0.06 76984 0-.7 7369(5 0.03 70408 0.09 6712 354 0.04 84940 0.05 81808 0.06 78776 0.07 75744 0.08 72712 0.09 6968 355 0.04 86300 0.05 83560 0.06 80820 0.07 78080 0.08 75340 0,09 7260 356 0.04 87670 0.05 85204 0.06 82738 0.07 80272 0.08 77806 0.09 7534 357 0.04 89040 0.05 86843 0.06 84656 0.07 82164 0.08 80252 0.09 7808 358 0.04 90410 0.05 88492 0.06 86574 0.07 84656 O.OS 82738 0.09 8082 359 0.04 91780 0.05 90136 0.06 88492 0.07 80843 0,08 85204 0.09 8356 360 0.04 93150 0.05 01780 0.06 floUO 0.07 89040 0.08 87670 0.09 8630 361 0.04 04520 0.05 93424 0.06 !):i;f28 0.07 91232 0.08 90136 0.09 8904 362 0.04 95890 0.05 95068 0.06 04246 0,07 92424 0.08 92602 0.09 9178 363 0.04 97260 0.05 96712 0.06 96164 0.07 95010 0.08 95008 0.09 9452 364 0.04 98630 0.05 98356 0.06 98082 0.07 97808 08 97634 0.09 9726 365 0.05 00000 0.06 00000 0.07 00000 0.08 00000 0.09 00000 0.10 OOOO if 7« i:! TABLE Interest Months. Dccimnls. of moutlis. 1 pc r % 2 per % 3 per % 4 per % 1 o.os;i;i:i $0.00 0S333 $0.00 16000* $0.00 24!I'J1> $0M 33332 2 O.KUiOT 000 10007 0.00 33334 0.00 5000 1 0.00 60068 3 0.25000 0.00 25000 0.00 50000 0.00 75'' ■ 0.0 1 00000 4 o.aii.'tsa 0.1)0 ;!;i333 0.00 66G60 00 yjinii) 0.01 33;!32 ."i n.4i(i(i7 0.00 •11007 0.00 83334 0.01 2:":01 0.01 60008 (! O.oOllOO 0.00 f)0000 0.01 00000 0.01 .'".u lOO 0.02 00000 7 0.6.S;!33 0.00 58333 0.0 1 16606 n.oi 7i";iii 0.02 33332 8 0.l)0()C7 0.00 00007 O.Ol 33331 0.02 o;:)ol 0.02 66068 0.7.'')0H0 0.00 75000 0.01 50000 0.02 25000 0.03 00000 10 0.83333 0.00 83333 0.01 60668 0.02 499(11) 0.03 33332 11 0.yif)07 0.00 91067 0.01 83334 0.02 75001 0.03 66608 12 lOllOOll 0.0 1 00000 0.02 00000 0.03 00000 9.04 OOO'IO No on Mod I 3 3 4 6 e r 8 10 II 13 Interest TABLE Ducimal.s Ye.ira of years. 1 per f/o '2 per '/, 3 per % 4 per % 1 1.00000 $0.01 00 $0.02 00 $0.03 00 $0.04 00 2 2.00000 0.02 00 0.04 00 0.06 00 0.08 00 3 3.00000 0.03 00 O.OO 00 0.(19 00 0.12 00 4 4.00000 0.04 00 0.08 00 0.12 00 0.16 00 5 5.00000 0.05 00 n.10 00 0.15 00 0.20 00 6 C.OOOOO 0.06 00 U.12 00 0.18 00 0,24 00 7 0.000(10 0.07 00 0.14 00 0.21 00 0.28 00 s s.ooooo 0.08 0>) 0.10 00 0.21 00 0.32 00 9 9.00000 o.ou 00 0.18 00 0.27 00 0.36 00 10 lo.onouo 0.10 00 0.20 00 0.30 00 0.40 00 on li No. J Tears. 1 3 a 4 i S 7 8 » 10 It ^ ^'1 n % (UitiS 0(H)0 ionos IDIIOU i;!;!:i2 itiiit'iS )0(I00 w;!32 DOO'IO No. 2.— MONTHS. on $1. MoDtb 5 per % 6 per ffo 7 per % 8 per % 9 per % 10 0.00 pe:% 0.00 416A5 0.00 4S908 0.00 58331 0.00 66664 0.00 74997 83333 0.00 83335 0.01 00002 0.01 16669 001 33336 0.01 60003 0.01 66667 O.Ol 26000 0.0 1 50000 0.01 75000 0.02 00000 0.02 25000 0.02 50000 0.01 eOAOS 0.01 99998 0.03 33331 0.02 66664 0.02 99997 0.03 33333 0.02 08335 0.02 50003 0.03 91669 0.03 33336 0.03 75003 0.04 16667 0.02 50000 0.03 00000 0.03 50000 0.04 OCOOO 0.04 50000 0.05 00000 0.02 91665 0.03 40998 0.04 08331 0.04 66664 0.05 24997 0.05 8333S 0.03 33335 04 00003 0.04 66669 0.05 33336 0.06 00003 0.06 66667 0.03 75000 04 50000 0.05 35000 0.06 00000 0.06 75000 0.07 50000 10 0.04 16635 004 99998 0.05 83331 0.06 66664 0.07 49997 0.08 33333 11 0.04 58365 006 50003 0.06 41669 0.07 33336 0.08 35003 0.09 16667 13 O.Oi 00000 0.06 00000 o.or 00000 0.08 00000 0.09 00000 0.10 00000 Interest 'ABLE 1o 00 00 00 00 (10 no 00 00 00 00 on 19. No. 3.— YEARS. Tears. 5 per out!v weighed i.i Fiance. As the opinion is as true -sa it is important, and as upon it aion-- res. roarly ail the principles and the u)0', biiiiism of agricultural credit usel'ully organized, I .'ink it my duty to insist upon its import iiicc in this part of my work. Market commodities, of a vaiae which i:an i;c proiuptly rcalixtd, do not amount to a large sum in tin; higher grades of agr.'Julture, and are only produced ae the tardy result of a large invesimcs t of capital, the interest of which they barely represent in addition to a very small dividtind. ikal improvements are only efFeeted by an increase of provender, for which advances have been mttde during at least one year, aud the perpetuity of opera- tions and speculations in rumJ affairs so arranges it that this capital advanced one year must be again advanced the , jond, so that there may be always in the ground a prepara- tion for a crop similar to that in the barn. In this feature alone we can observe the use of a double capital. It is true that with manufactures there is no more rest than in agri- culture: there must be a capital io stock, and a capital outside; but here the analogy ceases; the article manufactured is Momediately saleable, and during the your at the latest it produces a return of funds which cun be used the etisuing; at ;iny rate, in a crisis, the article is in store m sleeping capital, and can be oflfered as security lor the notes of the manufacturer, and without requiring any new invei tment of funds. With progressive agriculture, mailers are finite tl'flereut. With the latter, the provender created, of what- ever kind it may be, cannot be sold in the market to realize the capital rcfjuind for the work of the eiisuing year, but it oughf, on the contrary to be consumed on the {arm itself, by cattle which can only he sold in 3, 4, and sometimes 7 eir 8 years, and which during that time, instead of giving cash funds to the farmer, increase his ordinary expenses con- riderably : 3y the sum invested in the purchase of cattle ; By the increase of out-houf^^< *o accommodate that cattle ; Ky increase in the cost of lab- to feed this additional stock, to convey the manure to the field, and to take in, m, suitable seasons, the increase of produce which results from these proceedings, &c. And as each fr ^sh improvement is followed by an increase of provenJer, caeh year the progressive farmer, instead of being able to pay up the capiiu! which he has burrowed, is Compelled to assist what he has, with the addition of new eapii ii. These inoontestible principles have been too often ignore i ' y us, and this neglect has been the main cause of failure in agricultural pursuit/* ; ovcis tliose who may have had a general idea of tbem have rarely calculated their practical importance. You will, therefore, I ll-p 78 ;!P! jh during pardon me if I reduce them to figures, not in the form of an exaggerated abstraction, but, on the contrary, in tl)e form of the simple result of daily observation. Let us take, for instance, one thousand francs, used in the establishment of cultivated pastures, — certainly the most simple and profitable of all agricultural improvements. From this investment wo can realize by sale of the cattle which consumed the provender, in ordinary circumstances, at least 1,100 francs, without including the value of the manure produced, which of itself would be considered a very lucrative operation. Nevertheless, while these 1,100 francs' worth of provender are consumed, the farmer has necessarily made advances to the suil to the amount of the whole of a similar crop for the ensuing year, aid fhoin:h this crop may also produce 1,100 francs, in addition to the mknure, ii\{-Tii is (.Illy in band for an advance of 2,000 francs the sum of 1,100 francs. Eacli kilo;:;ri,n of provender being worth about four "centimes," the 1,100 fraftd in liar.r? ar«^ -oprtsiiu 1 by about 27,500 kilograms of dry provender, which would suffice, Rt tue rnu of 'd ht ;.rovender to 100 kilograms of cattle, to feed 2,500 kilograms of cattle ; or, at 60 centa per kilogram, would constitute a further advance of 1,500 francs. If a progressive farmer would devote his attention to fattening cattle, and had in his possession sufficient out-buildings to use 1,000 francs in raising provender, he would only require to have at his disposal : — For /ears of production, 2,000 fr. For purchase of cattle, 1,500 Fcr care, preparation, labor, Sia., - - - 100 eglcct ban avc hnd a thcr^sfote, Total, 3,600 fr. But more frequently it is young growing cattle which the farmer will raise, and his build- ings will require an increase proportionate to the increase of his flock %nd his crops :-~^ To accommodate each head of cattle, say 300 francs, about what each head is worth, ... 1,500 fr. Then, during four years, his cattle will consun!>e, without giving any return, 1,100 francs' worth of provender, 4,400 For care, &c., &o., 400 Total, 6,300 fr. Add this sum to 1,000 franca, value of crop in the ground, and 1,000 francs of prorender in store, — in all, it will form the sum of 8,300 francs, which the farmer must advance belbre he receives a return by the sale of his cattle, or a capital 8i times greater than that which a superficial examination might have induced him to consider sufficient. If, instead of the 8,300 irancs, the farmer only had at his disposal six or seven thou- sand, he might be compelled to sell at a sacrifice, exposing himsclTto a loss of his whole profit, and perhaps a portion of his capital. This frequently happens. But it docs not follow that because the farmer has reached his fourth year without embarrassment, he can, at the expiration of that time, realize his canita! in full, to enable him to repay the whole or part of the money which he uay have borrowed ; he is then only able to take to market the produce of one year's operations and not of four years, because it is necessary for him to keep at all times upon his farm an equal number of heads of cattle. He would there- fore only scl' o'ie-fourth of his stock, and if he should realize 1,500 by the sale, he will have done well. Now, deducting from this sum 1,000 francs, to replace his investment, and 100 francs for labor and. care of cattle, ho remains with 400 francs at his disposal to pay t.ie interest of these two suras, and for interest and sinking-fund of 300 francs originally disbursed for building as well as (lurchasing cattle. Now, 400 francs may be sufficient interest on 4,100 francs, even on 8,000 francs, «nri from it we miglit take aa annuity for a b!nking-fund at long date; but it is jvldent that v.ithout some medium through which his capital may become recomposed by compound Interest, the most industrious larmer would ■le^'^r bo able, out of his farm produce, to :epay the capital which he has borrowed for improvements. If we have succeeded in showip*;, as wo think we have, that the farmer is positively r.nable to repay tho lu^.'Unt of capital invested on lauded improvements at least ts a general rule, we shall find that fresh advances ooatinae to inoreaw th»- smourtt of hii ■ 1 h i 1 '■] f 1 ill- 8 74 liability; that the debts due by hib roperty became from time to time a new incentive to effect fresh loans ; that all hope of freeing himself from debt is lost; and driven irresistibly as it were towards a fathomless abyss, the burdened proprietor could scarcely be brought to realize the benefits to be derived from an institution sufficiently powerful to prevent his ruin, althougrh he could not understand how by deferring payment that ruio could be avoided. We cannot therefore be surprised that critical observers have in Prussia severely judged this gigantic development of operations connected with landed credit; but we must be careful not to arrive at erroneous conclusions with regard to causes, and particu- larly we should not lose sight of the fact that compulsory sinking-fund would, in lesui than 40 years completely extinguish all the debts actually due. The amount of obligations issued in the countries where the sinking fund is obligatory is much smaller ; thus the obligations issued by the " Cridit Fonder" of Lunenburg only reach the figure of 1,500,- 000 Prussian half dollars, equal to about 5,625,000 francs ; about the same amount is issued by the institution of the Principalities of Galenbergh, Grubenhnger nnd Hildcs- heim ; the Duchy of Bremen about 3,750,000 francs, and the kingdom of Hanover about 14 millions francs ; amounting in all to about 29 millions franco, which form the total liability of the kingdom of Hanover. This amount will be liquidated by the sinking- fund in 36 years, and the only charge is 5 per cent. — li and 4| is the rate charged to proprietors who borrow, and the loan is for one-third of a century. * It is no doubt very satisfactory to see the wonders which can be accomplished by a " Cridit Fonder" system which would permit of the repayment and renewal three times in one century, of a capital of 150 millions of francs at the rate of 4 to 4|^ per cent, interest in a country of the limited extent of Silesia ; while upwards of half a billion of francs would be, during that time, expended in agricultual improvements; but it would interfere with the maintenance of the necessary equilibrium in international re' ' ^s if other countries did not keep pace with those which have already entered upon th ; ^tl^^ ui 'vccess and prosperity. Prussia has only as yet a start of 5 or 6 years, as her system of s. rKi it;-ru?\J fas w-stablished in 1839, but it might be dangerous for France to neglect foUovti.':^ the ^jod example. In 1851, Mr. Josseau writes : "We have perfected this combination, repnyment by a sinking-fund has been introduced, and the Credit Foncier was only in reality orgauizcd but from that moment." Without multiplying quotations, and without reproducing the opinions of all thoso who have written on the subject of a sinking-fund in agricultural loans, it is only neces- sary to reflect upon the actual produce of the soil, to be convinced that there is no more suitable manner for repayment of the debt due by the farmer. It is because tii?s system has not been adopted that so many farmers have been ruined. Many persons do not understand how by a fractional repayment each year the debt can be paid in full through the sinking-fund in such a short time ; — it is by compound interest. Thus, let us suppo&e that we pay 1 per cent, sinking-fund per annum; it would take 100 years to repay, if the annual interest v^ere not added each year, and the interest on that recalculated and added each year ; it is this interest on the interest which, as it accumulates each year, increases in ita progress the amount of the sinking-fund, which, in its turn, produces a larger interest, so that at the end of 33 years 4 months and 24 days the capital is paid up and the debt cancelled. Let us suppose that you have borrowed from the Cridit Fonder the sum of 100 dollars, at 8 dollars per annum; this would comprise six dollars for interest, one dollar for cost of management, and one dollar for sinking-fund : at the end of the year you will only owe ?99, as you have repaid one dollar. As the institution lends your dollar at interest, you will get credit for that interest, and adding that to the dollar already paid in and the dollar of the ensuing year, your debt will be reduced at the end of the second year to 197.94. Thus it will diminish in a greater ratio each year, owing to the sinking-fund and compound interest. Table No. 4, page 78, shews the progress of the sinking-fund from one per cent., calculated at the rate of six per cent, interest. By comparing it with table No. 6, page 80, 6 interest column, we find that the progress of the sinking-fund is conform- able to the former statement, if wo take pains to divide by one huadred the amounts of ubl« No. 6, as the first shews the mou»1 increase of 91 aad the other of $100. It must rs !'^ u one table form- t8 of must 100 ; 106 106 X =3 = 1.06 ftlso be borne in mind tbat the first year of one corresponds to the second year of tbe other. The higher the rate of interest and the greater the amount paid in annually as sinking-fund, the more rapid ia the accumulation of that fund, owing to compound interest. The com- putation of compound interest is a very lengthy and fatiguing process if we use figures : compound interest, after all, is nothing but the calculation of simple interest repeated with regard to the new capital constantly produced by the annual interest and added to the former capital. In arithmetical calculation, we use the following rule of proportion: — One hundred multiplied by itfelf as many times as there are years minus one, is to one hundred />/u, make these calcu'itions in their affairs, a« well as those who wish to ascertain the prcness of compound interest.' Thus, to find the amount or value of one dollar with its intc est at the end of the year, wa have : — 1 1 1.06 1.06 1.06 ; 1.06' 100 X = 1.06 X .• X = 1.06 X 100 ; t X — interest of one dollar. 100 By adding one dollar to its interest we find : 1 + ^^^5^== » To find the amount of any capital for any number of years, we use tho following pro- portions : For the 1st year, 100 : t ; ; c ; a; — — - thus mss c -i = c i 1 -i 1 ~ 100 ^100 \ ^ ^ 100 / For the 2nd year, IOC: . :c(l+ i'oo) =* = ^ (l"*"iro)' e ■ '!i '• '' I'H ( »H S f' 79 Urn m=:c (l + i^)+-^'o(^"^l^) = *' (^ + 100) (^ m) = C8> By continullig these ealoulatioos, daring as many years as we please, we sliall find (hat the exponent of s is always equal to the number of years ; thus wo have the form : m = cs" Amplication. — Let us ouppose that we wish to find the amouni or Mn'ue which 8100 bftT* reached at the end of ten years, at 6 per cent interest.- -Thu3, c => 100; a=> 10; » «9 1.06 ; and we have : msa 100 X 1.06^o = lOOx nom 10 log of 1.06 - 100 Xnom log 0.25S10 = 100 X 1.7908 = 179.08 B'Bult which I have placed in Table No. 6, page 80. With the above form, it wii'i be easy to veiify the tablQ which shews the value acquired by 1100 with eouipound intere6* at the end of a pe>'od varying from 1 to 50 years, at ihe rates of interest mentioned at. iL« top of the columns. The same table will also serve f.o shew in how many years a capital is doubled, trebled, quadrupled, L".. J5ut as the days are not marked, a rule can easily be made from the former one to suit ti.'» ca.< =5 log, d ; n log, s = log, d ; *'• us— __ log d whifih is the rule. A§>plicatum. — la what time will a capital be quadrupled at 6 per cent, interest 1 10,5 0,69897 ^T.CIC " log 1.06 0.02631 Twenty-seven years and 616 thousandths of a year. By multiplying 616 by 365, and dividing the product by 1000, we Sad 221 days and a fraotirn. Thus a capital is quin- tupled in 27 years and 225 days, a result which you will find in Tabic No. 6. A capital is dotxbled io 11 years and 322 duys, is t^-pled in 18 years and 307 days, and is quadrupled in 23 years and 284 days, &c., at 6 per cent, interest. It is important to be able to find in what time a debt is repaid through a sinking-fund in relation to the rate of sinking- fund paid in each year. Table No. 5, page 79, computed at rates cf intf -est varying from 4 to 10 per cent., will prove useful in this enquiry. The following is the rule to verify its correctness : — n=: '»g(i+-:) log s Application. — Let us suppose that we wish to find out how many jeitrs it would take to pay up an amount through a sinking-fund when the int< st is b per cent, and the>rate of sinking-fund 1 per cent. ; we have the equation : — — log V ^^ / loif 1 __ 0. 84510 __ ^ — log 1.06 — 'og 1.06 " OTOIM "" ^^-^^^ Thirtj-threo years and 389-1000 of a y sar. By referring to the deoimalh of the days Table No. 1, page , the first three decir^als of which are 389, we find 149 days. Thus 33 years and 142 days is the time found in the table. It is equally important for those who wish to lorrow from the « Credit Foncier" to know whet annuity they will have to pay to reimburse their debt through the sinking-fund in a particular time, the rate of interest and cost of maoagement b«iiig also known. For this purpose I prep Ai«d Table No. 7, page 82. t i I 77 too/ »«> . j It is computed &t the first rate of 1 per cent, for cost of manageir-1 100 X nom log 0.25310 (1.06 1 00 X nom 10 lo g o f 1.06 (1.03—1) nom 10 log of 1.06—1 1) , 100 X 1.791 X 0.06 1 X 0.791 nom log 0.25310—1 = 1 X 13.5949 = 14.5949. Or 814.69 with two decimals, amount which I have placed in Table No. 7, year 10, interesi 6. When we have paid to the sinking-fund during a certain number of years, we some- times wish to know how much we really have to our credit, so that we can pay off the balance by anticipatory payment. In order to find this amount, it must be remembered that in addition to the annual payment to the Ninking-fund, the debtor has a right to the compound interest accruing at the end of each year. Now, we have observed tiiat the amount of any capital for any number of years is m ^ c gu, and from this we conclude that the compound interest is equal to s raised to the power n which represents the number of years. With a little attention we shall see that the debtor, at the beginning of the firit year, paid in his contribution to the sinking fund ; at the beginning of tho second, he paid in another contribution, and in addition to this be has a right to the interest for one year on his first pajment. At the beginning of the third year, he has paid in a third instal- ni<>nt, and he has a right to the interest of the interest, &c., &c., which forms a series pro- gi3.3sing annually as follows: •>xasxas2xas3x a s^-l. Now, in order to find t'. o result of this progression or the amount with which the debtor should be credited xt the ond of a certain number n of years, it is but neceespry to remark that the first term is a and the ratio s. As in a geometrical progression each coosequent is equal to its antecedent multiplied by the ratio, and this gives the equation : — m — a ^ a (m — a 3n-l ) from which we conclude m — a = m8 — as^j a so — as>mfl— m; a gn — a = (s — ) J a 8 n-a m a(8n-l) and lastly m = 8-1 i-l which is the rule. Application. — To find the amount produced by one dollar paid annually during 10 years at the rate of 6 per cent, intei 3st. 1 X 1.06»o— I nom 10 log of 1.06—1 nom log 0.25310—1 msc- 1.06—1 0.06 0.06 0.791 ' 0.06 ' a3.18333 I have used Lalande's tables instead of Callet's. Thus $13.18 (limiting it to two de«i^ mats) is the amount paid off by sinking-fund in 10 years. By deducting this from the Bvn borrowed, the balance remaining due would be $86.82 if the amount borrowed were llOOv At the commencement of the year tab't. No. 4, page — , shews a balance of $86.83, because I omitted in the calculations of each year decimals in excess of two. A consideration worthy of remark is, that a borrower from the " Credit Foncier," although he pays one per cent, for cost of management in addition to the interest, in reality only pays a smaller sum than he would have had to pay in an ordinary loan at that same rate of interest, without cost of management ; but payment of capital in falli iD8(ead> of by sinking-fund. Let us t^ke, for instance, a loan of $100 from tha " Credit Poncier" Si, i ■ I lis ! 78 at 6 per cent, interest for 20 years ; the borrower would have to pay $9.72 per anovn, everything included ; see Table No. 7, page 84. At the end of 20 years he will have disbursed $194.40, and bis debt is paid in full. If, instead of borrowing from the "Credit Foncicr," he bad borrowed from an individual the sum of $100, payable in 20 years, at 6 per cent., he would have to pay 86 per annum interest, or $120 plu» the capital, in all $220, which he will have disbursed instead of $194.40 to the " Credit Fonoier. ' Let as take a loan of the same sum, at the same rate of interest, for 50 years. With the " Credit Foncier," the borrower would have to pay annually $7.34. Multiplying this sum by 50, be will have to pay $367. By borrowing from another person at the same rate, without cost of management or sinking-fund, he would have to pay $6, which, multiplied by 50, give $300 in 'rest, added to $100 capital, and the transaction will amount to $400. Bat as the borrower has, by bis payments to the " Credit Foncier," paid annually to the sinkioe fund a portion of his loan, which, in the second instance, could only be called for in 50 years, it is but right tuat he should get credit for the interest, et the same rate, on each payment to the sinking-fund. The sinking-fund on a loan of $100 for 50 years being 34c. per annum, the amount of interest will be $26.01, which, added to $367, only make $393. 01. Even by calculating interest at 7 per cent., the amount of this interest would be $30.34, making in all $397.84, instead of $400, which the borrower has paid with his loan, without cost of management and sinking-fund. If we were t j calculate the interest on the cost of management in addition to that on the sinking-fund, the total amount would show something in favor of the "Credit Foncier," which would be about the half of 1 per cent, for a loan of 20 years, and a little less than 1th per cent, for a loan of 50 years. Certainly, the " Credit Foncier" deserves credit for having produced such a lowering in the rate of interest all over the country. In order to find the amount of simple interest on sinking-fund for 50 years, or for any other number of years, the following rule can be used : S = (i + ni)°- In fact, if we observe rightly, the sinking-fand being always the same, its interest ia likewise the same. The amount of interest will go on increasing each year, according to arithmetical progression, th( first term of which is the interest of one year, which is at the same time the ratio of the progression, and the last term will be this interest multiplied by the number of years. We have already observed that the total amount of every arith- metical progression is equal to the first term pius, the last term multiplied by half the numbers of terms. Thus in the present case, the interest of 0.34c being $0.0204, we have the first term of the progression ; in multiplying it by 50 we shall have $1.0200 for the last term. By adding the first to the last term, we find $1.0401 ; in multiplying by 25 we find $26.01 the sum required. The longer the dates of maturity are extended, the greater are the advantages in lavor of the borrower, who can, if he wishes always pay up his debt by anticipatory liquidation. If we consider the most important point of all, the most disastrous to the farmer, that of the repayment of the capital borrowed in one whole sum, and even in two or three pums if the loan is not large, wo must be struck with the immense advantages which the " CrMit Foncier" can confer upon the agricultural class. The mere consideration of this would be sufficient, if we had not the experience of German example, where the peasants have been relieved from debt by the " Credit Foncier" in less than half a century, and their farms have remained in their hands free from all debts and incumbrances. The fact that 34 cents, about the third of one per cent., pay off a debt of $100 to the "Credit Foncier" in 50 years, is sufficient to shew the importance of small fractions of compound interest in the progress of accumulation, through the opera- tions of the institution. As the " Credit Foncier" loans to the agricultural class at th« same rate at which it negotiates its own paper, it is clear that the interest of the farmer IB to assist in having the latter negotiated in the best possible condition. When the '' CrMit Foncier" is compelled to negotiate its paper in another country, every fraction of interest (i) is in the interest of the country equal to all the capital borrowed at the expira- tion of fifty years. 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Cl ■^ 1- = -* cc Cl .::-«'£ — r- Cl OS in a Ci i- i-. -t- r-^ r: -*f O •-'^ to (O -.O !>. I- Cr: CC OS OS C O 1-" Cl Cl ?^ -f ./^ to r- r^) »- oi r- ■:• -v ti v. »-( o cr; o rt >i ■* i- -i lO i'*: — ' f^ cc o ■n- ;t X 1-- Cl -r re Cl o v, o. t : — ■ -J '^ co o ci Cl cf) .r: -*« .- r- -^ »-. to -^ ta ^ QC 1- OS '*« Cl r^. -/j to '« *t" I', c. Cl >o /: •- -o i-^- ^HClC-'JtOOt'^'-'OSYDCr.O'^OStD'Tt.vi^oOfeOOCltD .--(^■ft»"-OC^'0l-OCCI--O«l-— tOOS-^CS-'-OS'* <^ -^ •*!« < -, iO u^ i.-^ to to . CTj C/D C/J Ol OS O O ^ 1 i $ cts. *C'*t*r-<©-ftCi-^C4'^V3«ttOi-J«'Oir5MV;r/l^e'SW OOMCCCCa.-^tOC^CCCIUs6»-IMWOtOi-t^l-OCt5tO •-4-^is.o7fOi-^©iOMf-JOO»o*ow^r^,-.h-.fOo i-t Cl « «f^ to 1^ OS --. e-1 M* t© ffi o i-t M- cr f-i 'wwD^f;^ OSOi-i»4M'>*iO«©|^ff}C»>Or-iClcc-*iO«h-.aDO>0 88 TABLE No. 7.— Anmiitic, to repay ^100 by a Sinking Fund. Years, Interest 4 per cent. Interest 4^ per cent. i3 2rt 27 2S 20 ;(0 ;u :vz 3:i U 3.". .■11) 37 38 39 40 41 i2 '13 41 4:. Ki 47 4.S ■HI 60 I 68 1 59 1 f)l 1 43 1 M 1 29 1 22 I 16 I 11 1 0.) I 00 IC) 91 (1 87 83 79 ( .'» 72 fi.S c;> 02 73 .Ml 40 I'fi 7 12 7 00 S9 f) 78 (, fiH fi iO fl 51 43 (5 30 ti 29 6 22 (•) l(i fi 11 6 Oj on ,'1 9.') :, 11 5 87 r. 83 f) 79 J 75 ;> 72 5 f.H 5 f.5 4 50 30 32 33 34 35 31) 37 ;!8 39 40 II 42 43 44 45 40 47 48 40 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 t 50 4 50 4 50 4 50 4 50 4 50 4 50 4 50 4 ,)0 64 54 40 1 37 I 30 I 23 I 10 1 10 1 04 98 93 89 84 80 70 V2 68 65 02 59 n 50 C. JO .■ •■ ! t .)6 60 f 54 48 6 43 6 30 fi 34 6 30 26 6 22 6 18 15 12 « 09 6 06 M i!! IN 84 TABLE No. 7. — Annuities to rcjjay ^100 by a Sinkinfr Fund. — (Continued.) Interest at C per cent. Interest at 6J per ecut. Years. Interest. Finking r-.-.na. Cost of ni.innnc- incnt. Anuuitic?. 1 Years'. Interest. .Sinking Fund. Cost of uinnagc- meut. Annuities. S S cts. $ $ cts. $ ot?. 1 S CfP. S $ cts. 1 f, lUO.OO 107.00 I 6.50 , 100.00 107.50 2 n 4R .U .')5 54 f) 6 50 48 43 55 93 3 f) 31 41 3,S 41 ;; fi 50 31 26 38 76 4 A 22 86 29 8fi 4 50 22 fi9 39 19 ,"> fi 17 74 24 74 5 fi 50 17 56 25 06 r> fi 14 34 21 34 6 50 14 16 21 66 7 fi 11 yi 13 91 7 fi 50 11 73 19 23 8 fi 10 10 17 10 S 6 50 9 92 1 17 42 9 « S "0 1 15 70 9 6 50 9 52 ) 16 02 10 r, 7 ;.9 1 ! 14 .V.) 10 fi 50 7 41 ' 14 91 11 fi fi 68 1 y.) 6s n fi 50 6 50 14 01 12 i> J 93 1 : 12 9.T 12 !') 511 5 7« 1 13 26 13 r, 5 30 1 12 "■ 13 6 50 5 13 I 12 63 U f. 4 7''. 1 !1 70 M 6 50 4 59 1 12 09 Ij Ci 4 30 11 30 15 1) 50 4 13 1 11 63 !C f) 3 S9 10 S9 16 6 nO 3 74 1 1 11 24 17 « ;! 54 10 51 17 fi 50 3 39 1 i 10 89 IS 3 23 10 23 18 6 50 ;i 08 1 i 10 58 19 r> 2 ^C, U 96 19 6 50 2 81 1 10 31 20 C) 2 72 9 72 i 20 6 50 2 57 10 07 •2\ 6 2 .'JO 9 50 21 fi 50 2 36 1 9 86 2.i (1 2 30 9 30 9 50 2 17 9 67 23 n 2 13 9 13 23 fi 50 2 00 9 50 24 f) 1 97 8 97 24 fi 50 1 84 I 9 34 2J r> I .S2 S 82 25 fi 50 1 70 1 9 20 2rt rt 1 fi9 8 09 26 fi 50 1 57 1 9 07 27 ti 1 .^7 1 8 57 27 fi 50 1 45 1 8 95 •2ii (! 1 46 8 46 28 6 50 1 31 1 S 84 29 rt 1 36 8 3« 29 6 50 1 25 8 75 30 fi 1 2fi 8 26 30 fi 50 1 10 8 66 31 R I IS S IS 31 fi 50 1 07 8 57 32 1 10 S 10 32 6 50 I 00 8 50 ;;3 fi 1 03 8 03 33 C 50 II 93 8 43 34 li 9fi 7 90 34 C 50 SO ' .1 36 35 r, 90 7 90 35 r, 50 1) 81 8 31 3() ('. >«( 7 84 36 fi 50 75 8 25 37 tf 7S 7 78 37 50 70 1 8 20 3S fi II 73 7 73 38 6 50 05 8 15 39 fi II (iO 7 C9 39 H 50 fit 8 11 40 6 I) O.i 7 05 1 40 (\ 50 57 8 (17 41 fi 60 7 00 j 41 ^'i 50 53 8 03 42 fi :,7 7 57 1 42 50 50 1 8 00 43 fi n :,?, 7 53 4.^ 6 50 46 1 7 96 44 fi 50 7 50 44 6 5(1 II 13 7 93 4:') fi 47 7 47 45 l\ 50 II 10 7 90 415 fi n 44 7 4t 46 fi 50 (1 IIS 7 88 47 fi 41 7 41 47 50 :;:> 7 85 4,S C) II 39 7 39 48 a 511 1) .'i:! 7 83 49 fi 37 7 37 49 6 50 ;ii 7 81 50 IS .•;i 7 34 50 fi 50 29 7 79 ets. .00 y:t 7« 42 (12 ca 9 50 9 34 9 20 9 07 8 95 8 84 8 75 8 66 8 57 8 50 8 43 a 36 8 31 8 25 8 20 8 15 8 11 8 07 8 03 8 00 7 96 7 93 7 90 7 88 7 85 7 83 7 81 T 79 86 TABLE No. 7. — Annuities to repay $100 by a Sinking Fund. — (Continued.) Interest at 5 pur cent. Interest ftt 5 J per cent. Years. Intorost. Sinking Fund. Cost ot mnnago- ment. ■' ■ 1 .' 11 iuitic.<. ' Year?. Interest. Sinking Fund. Cost of manage- ment. Annuities. $ $ Ct-S. 1? $ Ct9, 1 $ Ct3. S cts. $ $ cU. 5 100.00 100.00 1 5.50 100.00 IOC. 50 5 48 78 54 78 '> 5 50 48 06 1 55 10 5 31 72 37 72 3 5 50 31 56 38 06 5 2.i 20 29 20 4 5 50 23 03 29 53 5 5 IS 10 24 10 5 5 50 17 92 24 42 5 14 70 20 70 « 5 50 14 52 ■ 21 02 7 5 12 28 1 IS 28 7 5 50 12 10 18 CO 8 I, 10 47 10 17 8 5 50 10 29 16 79 9 5 9 07 15 07 9 5 50 8 88 15 3S 10 Ti 7 9.-) 1 13 95 10 5 50 7 77 14 27 11 5 7 01 13 04 11 5 50 86 13 30 IJ 5 28 12 28 12 5 50 6 10 12 cn 13 .'•> 5 01 ]1 01 13 5 50 5 47 n 97 14 5 5 in n 10 14 5 50 4 93 11 43 15 5 4 fi.-l 10 03 15 5 50 4 46 10 96 16 5 4 23 in 23 16 5 50 4 06 10 5C 17 ■> 3 87 9 87 17 5 50 3 70 10 20 18 3 55 9 55 18 5 50 3 39 9 89 19 ;■) 3 27 9 27 19 5 50 3 11 1 9 61 I'O :> 3 02 9 02 20 5 50 2 87 ^ 9 37 '21 5 2 SI) 8 80 21 5 50 2 65 9 15 '22 5 2 CO 8 60 22 5 50 2 45 8 9J ■2~i 5 2 41 8 41 23 5 50 2 27 8 77 2.1 r> • 2 2,"i 8 25 24 5 50 2 10 8 60 !>.■) r. 2 U'.l 8 09 25 5 50 1 95 8 45 20 5 1 yC) 7 90 20 5 50 1 1 82 8 32 27 5 1 sn 7 S3 27 5 50 1 09 8 19 28 5 1 71 7 71 28 5 50 1 58 8 08 29 Ti 1 00 7 CO 29 5 50 1 48 7 98 30 ;> I 50 7 50 30 5 50 1 33 7 88 SI 5 i 41 7 41 31 5 50 1 29 7 79 32 5 1 33 7 33 32 5 50 1 21 7 71 ■M 5 1 2,> 7 25 33 5 50 1 13 7 63 34 5 1 17 ' I 7 17 34 5 60 1 OC 7 56 35 5 1 11 1 7 11 35 5 50 1 00 7 50 36 5 I 01 7 04 30 5 50 94 7 44 37 .') 9S 98 37 5 50 88 7 38 38 5 n 93 93 •.IS 5 50 83 7 33 3(1 ;') ,s.s 1 6 8S 1 39 5 50 78 7 28 Ail 83 83 40 5 50 73 7 23 41 ij 7S 78 41 5 50 09 7 19 41; ^ 71 1 6 74 42 5 50 65 7 I.J 43 5 70 1 70 43 5 50 61 7 11 4t 5 II 00 CO 44 5 50 58 7 OS 4» 5 () 03 03 45 5 ;;/ 61 7 01 40 r, (1 59 1 ' 59 1 46 6 50 61 7 01 47 J 50 56 47 5 50 48 6 9S 4H j 53 6 53 48 5 50 45 6 1*5 19 i) (1 5 II 1 6 50 49 5 50 43 6 93 50 r. 4S 1 , .IS 50 5 50 41 6 91 OMII •I* ■ 1 ™ idi V, I. 'I 80 TABLE No. 7. — Annuities to repay $100 by a Sinking Fund. — (Continued.) i'-: Years. 3 4 {, 6 7 8 9 10 11 12 13 14 15 15 17 18 19 20 21 22 23 24 25 2rt 27 28 29 ;!0 31 32 33 34 35 36 37 3S 39 40 41 42 43 44 45 46 47 48 49 60 Interest at 7 per cent. Interest. Sinking Fund. S ots. 100. 00 48 31 ai 10 22 52 17 39 13 98 11 55 9 75 8 35 7 24 t; 33 5 59 4 90 4 43 3 98 ;: 58 :: 24 2 94 2 07 2 44 2 23 2 04 1 S7 1 72 1 5S 1 40 1 .M 1 21 1 14 I no 9H 91 (I Kt 7S 72 07 02 5S (I 51 II 60 40 43 40 37 35 32 30 2S 20 24 Cost of manage- ment. Annuities. Interest at 8 per cent. 108. 50 39 30 25 21 19 17 10 (.. r.; 13 12 IJ 11 11 11 10 10 cts. .00 31 10 52 39 98 55 75 35 21 33 59 90 43 98 58 24 91 07 14 23 04 S7 72 5S 40 31 24 14 00 91 S4 7.S 72 07 02 58 54 50 40 43 41) 37 ■X) 32 ,30 2S 20 21 Years. 8 9 10 11 12 13 14 15 10 17 18 19 20 21 22 2.3 24 25 20 27 2,s 29 30 .".I 32 33 31 30 37 38 39 40 41 42 43 II 45 40 47 4H 49 .0(1 Sinking Fund. Cist of Interest. S manage- ment. Annuities $ cts. $ $ eta. 8 100-00 109. 00 .s 48 08 57 08 8 30 80 39 80 8 22 19 31 19 8 17 04 20 04 8 13 63 22 63 8 11 21 20 21 S 9 40 18 40 K 8 01 J 17 01 8 90 1 15 90 8 01 15 01 S 5 27 14 27 ,S 4 05 ) 13 65 8 4 13 1 IS 13 H 3 68 12 68 S 3 30 12 30 8 2 90 1 11 90 8 2 07 1 11 67 8 2 41 1 ;i 41 S 2 IS 11 18 8 1 9H 10 98 8 1 80 • I 10 80 ,s 1 01 10 04 8 I 50 10 50 8 1 37 1(1 37 S 1 25 10 25 S 1 11 10 14 ,>< 1 (15 1 10 05 S 90 9 90 .s 88 9 88 ,>^ 81 9 81 8 74 9 74 ,S 08 9 08 S 63 1 I 9 03 8 (» 58 ! 9 58 ."^ 53 1 9 53 8 40 1 1 9 46 .i* 45 1 9 45 S 42 1 9 42 .s 39 1 9 39 8 30 9 30 .'^ 33 1 9 33 S 30 9 30 .s 28 1 9 2S s 20 9 26 ,s 21 9 24 s 22 9 22 .H 20 It 'II C 19 li 19 8 17 U 17 87 .'!i 10 37 10 I'J 10 14 10 05 y DO 9 88 9 81 y 74 y C8 9 63 'J 58 y 53 y 46 y 45 y 4'-' y ?,'J 9 30 y 33 y 30 y 28 U 26 2-1 y 22 .1 '(l !i HI 17 TABLE No. 7. — Annuitiea to repay §100 by a Sinking Fund. — {Oontinued.) Interest at 9 per cent. Interest at 10 per cent. Yean. Interest. Sinking Fund. Cost of manage- ment. Annuities. Years. Interest. $ Sinking Fund. Cost of manage- ment. Aunaitiei. $ $ cts. $ $ cts. $ cts. $ $ cts. 1 9 100. 00 110.00 1 10 100.00 111.00 ? 9 47 85 57 85 2 10 47 62 53 62 3 9 30 60 40 50 3 10 30 21 41 21 4 21 87 31 87 4 10 21 55 32 55 5 9 16 71 26 71 5 10 16 38 27 38 e 9 13 29 23 29 6 10 12 96 23 96 7 9 10 87 20 87 7 10 10 54 21 54 8 9 9 07 1 1 19 07 8 10 8 74 19 74 9 9 7 08 17 OS 9 10 7 30 18 38 10 9 58 16 58 10 10 6 27 17 27 11 9 5 69 15 69 11 10 5 40 16 40 12 9 4 96 14 90 12 10 4 08 15 68 23 9 4 36 14 30 13 10 4 80 15 08 14 9 3 84 13 84 14 10 3 57 14 57 15 9 3 40 13 40 15 10 3 15 14 15 16 9 3 03 13 02 16 10 2 7? 13 78 17 9 2 70 12 70 17 10 2 47 13 47 IS 9 2 42 12 42 18 10 2 19 13 19 19 9 2 17 12 17 19 10 1 9j 12 95 20 9 1 95 1 11 95 20 10 1 74 12 74 21 9 1 76 1 11 76 21 10 1 56 12 SO 22 9 1 59 11 59 22 10 I 40 12 40 23 9 1 44 11 44 23 10 1 26 12 2S 24 9 1 30 11 30 24 10 1 13 12 13 25 9 1 18 11 i8 25 10 1 02 12 02 26 9 1 07 11 07 26 10 91 11 91 27 9 97 10 97 27 10 82 11 82 23 9 88 10 88 28 10 74 11 74 29 9 80 10 80 29 10 OT 11 67 30 9 73 10 73 30 10 61 11 61 31 9 67 10 07 31 10 55 11 55 32 9 01 10 01 32 10 50 11 60 33 9 56 10 56 33 10 45 '. 1 11 45 3. 9 51 10 51 1 31 10 41 11 41 35 9 40 10 46 35 10 37 11 37 36 9 42 10 42 36 10 33 11 33 37 9 39 10 39 37 10 30 11 30 38 9 35 10 35 38 10 27 11 27 39 9 32 10 32 39 10 25 11 .25 40 Q 29 10 29 40 10 22 11 22 41 9 27 10 27 41 10 20 11 20 42 9 25 10 25 42 10 18 11 18 43 9 23 10 23 43 10 17 11 17 44 9 21 10 21 44 10 15 11 15 45 9 19 10 :9 45 10 14 11 14 46 9 17 10 17 46 10 13 11 13 47 9 16 10 10 47 10 11 11 11 43 9 15 10 15 48 10 10 11 10 49 9 13 10 13 49 10 9 11 9 50 9 12 10 12 50 10 8 11 8 ' ;« i jr !■ 12 11' i J li!' i 88 CREDIT. Credit supplies the abaen.e of capital, or procures if it does not create it. Personal Credit. — The confidence wliich meu have in the solvency, probity and prudence of a person establishes his credit. What that person pays by way of interest when be becomes a borrower, is virtually the rent of the capital. As the risk is of small account in dealing with a person in good credit, the lor ler does not claim anything by way of premium or insurance. Personal credit is the measure of the confidence which the lender has in the disposition and capability of the debtor to pay bis debt. Public Credit. — " Until nearly the time of the French Ilcvolution," says J. B. Say, "governments opened loans; they made known that they required a certain sum; they gave out that they would pay a certain stipulated rate of interest thereon in advance; to this inducement they added certain advantages, from which they promised great things : lotteries, annuities, repayment. They mortgaged real estate to assure the payment of interest and principal. With all these temptations, they found a difficulty -n completing their loans, and were not always successful. Some certain method was to be found of raising the desired sums, on whatever footing the credit of the borrower might stand ; and such a method was in fact discovered." The interest which is at present stipulated to be paid to lenders is of small importance; it is indifferently 3, 4, or 5 per cent. The public are advertised, for instance, that the sum of 5f. will be paid for every sum of lOOf. inscribed in the book of the Public Funds in the name of the lender ; and this sum of lOOf. is sold for as much as it will produce — often for a sum much below that which is inscribed. It may be that the lender pays 6U, 80, 90f. ; he is stili entitled to receive the interest on the sum of lOOf. for which he is inscribed on the book of the Public Funds, and for which amount he is acknowledged to be a creditor. This is not all. Small capitalists do not like to invent modes of investment — to be guided, respecting their soundness, by their own judgment. They are 'inclined to follow and imitate the most numerous body of speculators, and particularly the wealthiest. A gavernment might well venture to throw its stock into the market at a heavy discount, individuals would hardly be found venturesome enough to take it. Accordingly, ministers of finance have generally applied to companies of contractors, who apree to undertake the whole of a loan wilh a view to resell the stock, either to an inferior order of speculators, or to private parties who wish for investments for tlieir savings. Government negociates the loan with that company which odors the most advantageous terms. Although very wealthy, financial companies would never be competent to supply the different governments of Europe with the millions which they require. The bankers, of which such companies consist, would moreover be disinclined to place their whole for- tunes in the hands of princes and ministers, however high their opinion might be of their stability. Accordingly they take measures to cffeet the payment of the first instalment to the minister, who never requires to receive the whole loan in a block, sum, and sell by retail the stock which they purchased wholesale. The sums which thoy derive i'rom these sales supply the means of making subsequent payments, for which they have taken care to stipulate for a delay of a year or eighteen months. In making tlieir bargain, the companies stipulate for other advantages, as, for insfance, to have the benefit of the interest on the whole loan paid half yearly, although the principal loam i may lie paid only by in- stalments, and the last of these may not bo called for in some instances for upwards of a year after the date of the first interest being paid. It will be asked by what means the contracting companies are able to make up the enormous sums which they thus pour out to supply the necessities of governments. It is, in truth, in this that their talen is chiefly Keen. A company of contractoia do not em- bark in an undertaking without many oorrcspondouts and oven partners in the principal cities of Europe, each of whom has clients who entrust him with their funds, or make known to him their wishes to invest their savinL'.", or simply to spoculate in the public funds. Each of these correspondents, liavioL;- a porfoct knowledge of the resources afford- ed by his place of residence, can calculate what amount of stock he can dispose of at Paris, London, Amsterdam, Frankfort, Vienna and the cities in connection with them. The next consideration is the rate at which the coutractiug company may undertake the loan: the object being cot only to sell the stock, but to make a profit. 89 and Each city has an exchange, or market where the stocks of the different States of Europe are on sale. The rate at which contracting companies undertake a loan is always lower than the current value of such stock in the different cities : conp^ianies would not undertake a loan, if they had not every chance of a rise in the martio*. ; and the moment the bargain is made, they have immense means of running up the price siill higher. For instance, they give directions to their correspondents in several places at once to make Purchases of the new stock, and to offer to buy it at a premium. This 's no loss to them; ecau.se being the sellers of what is bought, they rccei"" by the hands of one agent what they have disbursed by another. While operations of this nature are in progress, quanti- ties of the same stock are purchased by real chapmcu w ''O buy them to retain them and receive the interest which ihey yield. In th's way tho contractors, who have taken the whole loan, aro sometimes those who retain 'ast of the stock on private account ; but they reap immense profit, and have their capital in readiness to begin a similar operation with another government. It is thus that when a yearly rente of 5 francs is sold for a capital sum of 100 francs, which is only supposed to be, and is not really received, the authentic rate of interest does not appear ; and when the State undertakes to pay 5 francs interest on a prin<^ipal sum of 70 francs really received, it is borrowing money in reality at the rate of 7i per teat, interest; and it is singular enough to see governments which prohibit, betvven private parties, the lending of money at a hi^b'^. race cf interest than 5 per cent., as France and England, themselves setting the example of breaking their own laws. Governiii'^nts may thank the system of effecting loiins by subscription, i"^ cuutractors have succeeded in drawing from every corner of Europo, capital sun: of every variety of amount which could be made available for their service, and if savi!, s, the i'ruit of the most harmless occupations, as well as the gains of crime, instead of bei^^ applied to the work of fertilizing waste lands and the several branches of productive industry, have fed enterprises fatal to the peace of nations. By suoh means, powers which had beforetime no credit have succeeded in bor- rowing on terms which are not alwa^ys accorded to hypothecation of lands of the highest cla.ss: the king of Naples receives 1)4 for 100 stock; Russia, 95 J; Austria, 96; Prus- sia, 99J. Collective Cr:dit is the credit of several persons associated for financial purposes. In addition to the individual credit of each member of the association, ib the special credit of the body, increased by the skill and other administrative qualities applied particularly and exclusively to the business of the association. Landed Credit. — Landed Credit generally is based on real estate. It is equally the attribute of any association who offer as security for loans the hypothecation of real estate. Agricultiiml Credit. — Agricultural Credit is distinguished from Landed Credit, as being based on personal security given by the farmer. The tende :cy of Loih is to obtain capital for the farmer : the farmer requiring a mortgage, the latter limits i?; its require- ments to his promise and hi.? personal solvency. Hypothecary Credit. — (See p. 13.) 1 H' m f ORGANIZATION. The organization of Landed Credit Institutions depends entirely on th*" '^asison which they rest, and the manner in which the associates or parties interested are to share in it. If the institution is to constitute a borrowing body, those who favor it hold a meet- ing, and discuss and adopt regulations which they lay before the government with a view to obtain their approval and a charter. When constituted a corporate and })olitical body, they proceed to the election of a Board of Managers or Directors of the . 3ank, in due conformity to the provisions of tl.cir charter and the regulations. The regulations are termed statutes. If the institution is to be founded by eapitnlists, after the passing of a law for the purpose, they hold a meeting, subscribe and deposit the necessary capital, prepare regula- tions, and petition f'^; a charter. 00 I' 4| The charter, in any case, is necessary only when the law has made no special provision for the mode of organization. Such arc the usual modes of proceeding \u forming '-andcd Credit Associations. Every country has its own particular method of organization, which will be treated of in the course of this work. Some countries would oblige all persons to become members of borrowing associations, whether they would or not; but this is a serious inconveniener vhich has no countervail- ing advantage. Accordingly but few have adopted such a pr iple. It is more expe- dient that the farmer should become a member only in virtue > i his own act in effecting a loan. The proprietor who sells the jiroperty which is hypothecated to the bank ceases (in borrowing associations only) to be a member of tho association, and the purchaser becomes a member in his room. 9 MANAGEMENT — INSPECTION. The administrative corps in the German Landed Credit Institutions is composed of four district members (see Royer) : 1st. The representatives of the nobility or great landed proprietors. 2nd. The representatives of the borrowers. 3rd. One representative of the lenders, whose powers extend no further than the watching of the measures which may compromise the security of the creditors of the association. 4th. A Royal Commissioner armed with almost unlimited suspensory power, charged, on behalf of the public generally, with the inspection of all the transactions, debtor and creditor, of the association. 6th. A Judicial Council. A general meeting of the borrowers, who alone arc designated members of the associa- tion, is held annually, biennially or tricnnially, according to the locality, to discuss the operations of the term which lias expired, and the improvements or modifications to be adopted in future, and to elect, from among the members of the association, whether pre- sent or not, a Committee of Management generally consisting of: 1st. A Managing President, and sometimes a Vice-President. 2nd. A Secretary. 3rd. A Cashier. 4th. A Comptroller or Trustee, representing the c'f;u'tor-<. 5th. A Conservator, whose business it iii to keij. •; vfor*' of all operations. Occasionally, in addition to the above, deputy oflictip ar( named. The Committee select the members of the Judicial C'v associations, the general meeting appoint auditors (ffinscur«), whose business it is to cxaiiiine the accounts iu the minutest way, previous to each general meet- ing, to call upon the Committee of Management to rectify or explnin whatever in their opinion rcquir -orrection or explanation, and to report the result of their investigations, with critical re^ arks, to the general meeting, who decide on their validity and the conclu- sions to be deduced from them. The mere fact of having joined the Lauded ('redit Association by applying for a loan, binds every member of it, without distinction or cxceptioa, to accept all ofiit cs and func- tions belonging thereto, which may be conferred on him, without being consulted before- hand, either by the general meeting, if he is to form a part of the administrative corps, or by the Committee of Management, if he is to perform temporary duties limited to the district in which he, the said borrower so appointed, resides, such duties consisting in the valuation of property on which a loan is applied for, or the management of property which has been taken in execution for the benefit of the association, &c. Ill Wurtemhurff. — The administrative corps of the association consists : — 1. Of a committee of five members, elected at a general meeting, for three years, and re-eligible. 2. Of a Judicial Council. 3. Of a Royal Commissioner, 4. Of five deputy members. 91 The committee appoint their chairman from among their own number, or otherwise. They also sp' ■. iho Judicial Council of the association. They appoi'tt and dismiss their employees, in conformity with certain regulated formalities prcsc'hed by the by-lawf>. In Biirar.'n. — The Bank of Bavaria is managed by the forty largest stockholders. — These forty stockholders compose a Comraittcc of Management who, voting by ballot, elect seven managers from among the stockholders resident in Munich, who again elect a 'irector and sub-director from their own number. Besides these, the mauajrcrs appoint auditors from among the principal merchants of Munich and a Judicial Council. All the Bavarian stockholders are eligible as members of the committee and as managers. — Neither managers nor auditors rccci.'c any pay. Neither lenders nor borrowini^ proprietors have, in those capacitie3,any share in direct- ing the operations of the bank. This is a remarkable feature which distinguish f^^ the Bank of Bavaria from all the German landed credit associations; but as that fim < ' manage- ment is generally prevalent among us, we refer to the statutes for detail' '''''o Bavarian (Jovernracnt exercises influence in the operations of the bank, both in n 'it and in matters of finance. la management. — . iloyal Commissioner constantly superintend g of the bank, and the issue > ' billctt monnaic requires, in a particular man .trol. This Commissioner can everywhere and at all times examine, as he please is and documents belonging to the bank; and he can suspend the execution of any mcaun which appears to him of an irregular character. The bank is in direct communication with the several departments in respect of its own afiairs. In matters of Finance. — By the 24th section of the Statutes, the Government declares its adhesion to the same conditions as individuals in its dealings with the bank, to which is granted the privilege of issuing notes for a century. It would, however, probably be difficult, in a time of trial, to carry out the arrangement. The Government deposits its funds in the bank, and has, therefore, a running account with it. It is, moreover, directly interested in its operations, as it holds a certain number of shares reserved. In Austrian Gallacia the credit institution is subject to the authority of the l^rovincial Government, It is managed by a Board of Directors who sit at Lcmberg, and who represent it in all its transactions. The Board consists of a President, four Directors, a Trustee, a Secretary, a Book- keeper, a Cashier, and the necessary number of employees. The President and Vice-President are elected by the Provincial Diet at their sittings. His Majesty reserves the right of confirming the elections. The Diet likewise appoint two Directors from the State Committees, and one Sub- Director. The two other Directors and two Sub-Directors are appointed by the Diet and the members of the association, who are all members thereof, jointly, but from among the latter, without distinguishing whether they are or are not members of the State. For the purpose of these elections, the Diet holds a special meeting, at which all the members of the association are present, who do not belong to that body, being officially summoned to attend. In cases of emergency, when the absence of the Directors and Sub-Directors would prevent the managers from proceeding to business, the President of the Provincial Govern- ment would appoint temporary Directors to act until the obstacle was removed. The Directors appoint the Trustee, the Secretary, the Accountant, the Cashier and the employees in the office^ The President, the Directors and all other employees are sworn in. The Directors have alone the power to regulate and superintend the disposition of the sinking-fund and the Rest or reserve-fund, and to devise the most economical means of meeting the expenses of management. Every year, at the end of the months of Juno and December, they draw up the balance sheet of the institution, of which they transmit a detailed copy to the Comr'ittee of Inspection, to bo laid bcfore^the next general meeting. tl r.. m I i f ^, ^^^. IMAGE EVALUATION TEST TARGET (MT-3) 1.0 121 ■ 50 mm 12.2 I.I £ vs. 12.0 ly 1^ IM 11^ Photographic Sciences Corporation 23 WEST MAIN STRIET WIBSTIR.N.Y. 14SS0 (716) S72-4S03 ^£o 92 •il'f-" They are authorized, at the commencement of operations of the institution, to take upon them the negotiation of the debentures. Before authorizing a loan, the directors must verify the value of the hypothecated property. The trustee has only a deliberative voice in the meetings of the association. In case of an equality of votes on the occasion of granting a loan, the negative prevails. The President has power to suspend the execution of any measure which appears to him con- trary to the laws and statutes, and to refer it to the Committee of Inspection. In order to constitute the association, fifly proprietors who have pledged themselves for a loan of at least a million of florins must be found. The Commissioners of Superintendence consist of the States Committee, to the exclu- sion of those members who are also Directors. Their mission is to superintend the execution of the Statutes, the chest, and the issue of debentures. They have a suspensory power awaiting the decision of the general meet- ing ; but they have no power of coercing the association either to grant or refuse loans. Any modification of the Statutes requires the assent of the Diet and the sanction of His Majesty the Emperor, and it cannot have a retroactive effect. The local management is io the hands of a District Committee appointed by the States Committof?. These Commit- tees are subordinate to the General Directors. Every proprietor who belongs to the association is bound to accept the above offices, unless sufficient reasons induce the committee of the association to excuse him. A Government Commissioner is associated with the Directors and the Commissioners of Superintendence appointed by the Provincial Government. This Commissioner attends their meetings, but takes no part in the debate, having only a suspensory power whenever anything is done contrary to the Statutes. In the District Committees there is also a Royal Commissioner appointed by the District Government. The decisions of tlie District Committees are submitted to the General Committee. The salaries of the employees are subject to the approbation of the Aulic Chancery, which can alone authorise an increase over and above 500 florins. Those below that sum are regulated by the Provincial Government. In Saxony the operations of the Association are directed by — 1 . The Directors of the Association ; 2. The General Meeting ; 3. A Trustee; 4. A Delegate, with the necessary number of employees. The Directors represent the Association in all matters in dispute, active and passive, with third parties, in judicial actions, in taking oaths. Their authority is conferred on them by the mere fact of election, and docs not require any special Act. All acts and documents, books and extracts therefrom made by the Directors, agreeably to the statutes, are considered as official acts. These documents and extracts are to be certified and executed, respectively, by the President of the Directors or his deputy, and by the delegate, who may bo sworn in by the tribunal of the District of Lcipsic. The Government appoint a Royal Commissioner as Inspector of the Association, who is entitled to be present at all meetings of the Directors and General Meetings, and to examine the books, accounts and cash of the Association at all times. No mortgage of the Association can be canceled, nor any debenture issued, without his sanction. It is his business to take care that the money is applied according to the statutes in force. In, Pnusia, Electoral March, and New March, the Provincial Directors are : a Royal Commissioner, two Directors, a Trustee, and an Accountant, who reside at Berlin. This Board of Management is the centre of four branches : — 1. P'or the Province of Priegnitz, at Perleberg ; 2. For the Central March, at Berlin; 3. For the March of L'Ucher, at Prenzlow; 4. For New March, at Frankfort-on-the-Oder. There was formerly a fifth, for Old March, at Stendhal. The uuiou of that province with the kingdom of Westphalia caused it to bo abolished, until a Royal Ordinance of 15th November, 1831, re-established it as amember of the Association, subject, however, to the management of the Branch Board of the Central March. The Board of Management of each branch consists of a Trustee, an Accountant, and from two to seven Councillors, taken from among the proprietors of estates conferring titles (6ien« noblet). That of Frankfort-on-the-Oder alone has seven Councillors. 98 9n, to take pothecated oiation. In rails. The him con- themselvcfl the exolu- d the issae Qeral meet- e loans, tion of His lagcment is so Commit- >ove offices, amissioners uer attends r whenever e is also a mmittee. I Chancery, w that sum present the in judicial of election, Directors, id extracts tors or his of Lcipsic. iation, who Qgs, and to gage of the It is hi.s 0. re : a Koyal in. , at Berlin ; a-the-Oder. )vince with ncc of 15th 3vcr, to the intant, and conferring rs. Pomerania. — The Hypothecary-Crcdit Association of Pomerania is governed by a Central Board which sits at Stettin, and by four Branch District Boards at Anclam, Stargard, Treptow-on-the-Rega, and Stolpe. The Royal Commissioner, who is the President of the Association, is the Chief Presi- dent of the Province of Pomerania, (Prefect, Superior Administrator) ; the staff of the Central Board consists, besides, of a Director-General, two Councillors, a Trustee, and a Treasurer. Each branch has a Director, two Councillors, a Trustee, an Accountant, and Delegates as follows : four for Anclam, five for Stargard, six for Treptow, and five for Stolpe. Western Prussia. — The General Board of Directors of this Association sits at Marienwerder, and consists of a Director General, two Councillors, a Trustee and an Accountant. It has four Branches ; 1 at Marienwerder ; 2 at Bromberg ; 3 at Schneidemiihl ; 4 at Danzig ; each branch has a Director, three or four Councillors and several Delegates. Silesia. — The Board sits at Breslaw, and consists of: A Director-General, Three General Provincial Delegates, re-elected every three years, A Trustee, An Accountant. It is the centre of nine Provincial Boards, which have each a Director : Jauer, Breslau and Brieg; Leignitz, Wohlau and Munsterberg; Glatz (with two Directors); Glogau- kSagan, Upper Silesia, Neissc-Grottkau, Oets-Militsch, lastly Gaerlitz. Each of these particular Boards is composed of one or two Directors, one or two Trustees, an Accountant, a certain number of the notables of the country, and sometimea of Provincial Deputi3S. The new institution, created by Royal Ordinance of 8th July, 1835, inserted in the Bulletin of the Laws, pp. 103, 109, and 117, and organized on 15th October of thr.t year, is placed under the direction and superintendence of the Minister of Finance. It is under the especial direction of a Councillor of the Maritime Society (Seehandlung) of four pro- prietors of Silesia and a Trustee, Eastern Prussia. — The General Board uf Management of this Association sits at Kcenigsberg ; the President is a Royal Commissioner, who is the Superior President of the Province. The General Board of Kcenigsberg is composed of a Director, two Councillors, a Trustee, an Accountant and an agent at Berlin. It has three Branches, or District Boards : 1. Kcenigsberg, 2. Mohrungen, 8. Anger- burg for Prussia Lithuania. Each of these Boards has a Director, from three to five Councillors, a Trustee and an Accountant. Grand Duchy of Posen. — The General Board of Management of this Associa- tion, at Posen, is composed of a Director, three Councillors, a Trustee, an Accountant, a Secretary conservatcur, and an agent at Berlin. The Provincial Board of Posen is composed, moreover, of a Director, a Trustee, an Accountant, thirty Provincial Councillors,^-only six of whom meet at Posen, the others managing the affairs of the Association in the several districts. In Ilanover. — The Minister of the Interior has the superintendence of the institu- tion, and alune can alter the statutes. The institution is bound to publish an annual statement of its operations. The Minister of the Interior appoints the members of the Board of Managers and the Cashier, and fixes the salaries of the employees. The latter must have six months' notice previous to dismissal, and must give the same before retiring. The Directors are three, and, when necessary, a fourth. The Districts have branch offices. In Belgium. — The Fund of the proprietors is managed by a Board consisting of five members; and the affairs of the institution superintended by twenty Commissioners. A permanent Board examine and authenticate the securities tendered by borrowers, consisting of men specially selected, whose whole attention is directed to test the validity of mortgages, and to decide questions incidental to them. This important Board of functionaries act constantly under the eye of a Commissioner delegated for the purpose, and ^ta labors aro directed by two Managers who are lawyers. ' \:\ The chief office is at Brussels, and agencies are established in the principal cities and communes of the kingdom. The Board of Managers are particularly careful in choosing the most trustworthy agents. The Hypothecary Fund, which is different from that of the Proprietors in Belgium, is managed by a Committee consisting of a Director, who must hold forty shares, and four Managers, each holding thirty shares; by a Commit- tee [of Inspectors, consisting of fifteen Commissioners, of whom eight at least must hn residents of Brussels, and each holding at least eight shares. To the Managing Committee is attached a permanent central notary, without pay, who must hold at least thirty shares. The Managing Committee choose eight provincial agents, remo^Mble at pleasure, each the hdlder of fifteen shares. These agenta appoint, with the approbation of the Managing Committee, their Dis- trict agents, who must hold at least five shares. The Board may appoint correspondents either in localities where it may be thought expedient, or in place of agents. The shares of the members enumerated may not be transferred ; but as long as they hold place, they remain in the custody of the Society, except those of the Commissioners: The members of the Managing Committee are responsible only for the exact execu- tion of their particular functions, and do not incur, on account of their management, any personal or corporate liability, with respect to the engagementti of the Society. The execution of Acts (legal instruments) is the duty of the Directors, except those of substitution, and under the approbation of the Managing Committee, who have the right of discussion und of nominating the persons attached to the management. Judicial actions are carried on in the name of the Society, but at the instance of the Director. The guardianship of the general interests of the Society is entrusted to the Commit- tee of Inspectors, which is the independent guardian of the rights and interests of parties. Any decision of each of the committees adopted on a vote is binding only when three members of the Managing Committee and at least seven Commissioners shall have been present at the discussion. The members of the Managing Committee arc entitled to no more than a yearly as- sessment on the profits realized, not exceeding 8 per cent, 2 per cent of which is allowed to the Directors, and 1 J per cent to each of the four Managers, but the aggregiito so allow- ed is not to exceed 8,000 francs for the Directors and 6,000 francs for each of the other members of the committee, being the highest emolument attached to their office. What- ever, nevertheless, tho result of the year's operations, they are assured of a minimum of re- muneration, that is to say 4,000 francs to the Directors and 3,000 francs to each of hi colleagues. The emolument of the Secretary, who is chosen by the Managing Commitfc with the right of dismissing him, is not to exceed 4,000 francs. The duties of the Commissioners are honorary ; each is, nevertheless, allowed a token of 10 francs for his attendance at each meeting. The Directors, Managers, and Commissioners are elected by the general meeting ; their term of service is five years ; that of the members of the Committee of Inspectors is one year, but they may be re-elected at all times. In France, the Landed Credit is placed under the superintendence of the Ministers of the Interior, Agriculture and Commerce, and of tho Minister of Finance. The statute must be authorized by decree, the Council of State being understood. The choice of Directors is subject to the approbation of the Ministers of Agriculture, Commerce and Public Works Their management and their accounts arc under the two- fold superintendence of the Minister of Agriculture, Commerce and Public Works, and of the Minister of Finance. This superintendence consists: 1, in the attendance of Commissioners, specially ap- pointed at the Office of the Landed Credit ; 2, in the authentication of acta by Inspectors ; 3, in the creation of a permanent body of Commissioners, eight in number, four appoint- ed by the Minister of Finance, and four by the Ministers of Agriculture, Commerce and Public Works. The Commissioners take care that the Landed Credit keep within the limits prescribed by law for their operations, that they issue debentures to no greater amount than that of their hypothecary obligations ; that a sufficient number of debentures be canceled by lot d5 [>al cities ireful in eut from Director, Comniit- must y.pi out pay, ire, each heir Dia- I thought g as they issioners: ict execu- nent, any lept those have the Judicial ector. ) Commit- }t parties, hen three lave been yearly aa- is allowed ! so allow- the other What- lum of re- ich of h? ommitt; a a token meeting ; pectors is inisters of le statute riculture, r the two- ks, and of ecially ap- nspeotors ; r appoint- nerce and )resoribed m that of led by lot to correspond with the amount received ou account of the Sinking Fund. They examine^ at will, all books, records and other documents ; verify the cash and the assets, attend the meetings, and make all necessary remarks which they may require 4o be entered on the minutes. They affix their signature to all debentures, so that they may regulate the issue of theui. Finally they arc to make a report to the Minister once in three months. The Inspectors bavo the same duties as the Commissioners, except that of a constant attendance of the office. It is their province to take cognizance of the management and the accounts, authenticate all written documents, verify the cash and the assets, and examine all registers and books. The permanent Commissioners advise on all questions relatiag to the management and inspection of the landed credit, and every year draw up a detailed report of its opera- tions. In case of any contravention of its rights and duties by the landed credit, authority is vested in the minister to move for the immediate withdrawal of its authority. This is pronounced by a decree ; and until the publication of the decree, he can forbid any further transactions. Everything is made public for the information of the shareholders and the holders of debentures. Every six months the landed credit is bound to deliver to the Ministers of the Interior and of Finance, to the Prefects of Departments, to the Chambers of Commerce and Agriculture, and to the clerks of the different Courts, an abstract of the statement of its finances. In Russia, the Bank of credit system is managed by a Superior General Council, to which are subordinate the District Councils. The officials are elective. The general meeting of the Bank of credit system is usually held every third year, without prejudice to the extraordinary meetings which may occur on emergency. Every member has an equal right to speak and vote at these meetings, but all are bound to submit to the decisions of the majority. The Bank has a Manager's Fund in each district. Ol'ERATIONS. As soon as a Bank of Landed Credit is organized, the Board of Managers appointed, and the employees selected, notice is given in the public papers, and advertised in public places, that it is prepared to receive applications for loans. The title deeds being examined, and assurance had that there is no mortgage, or that means have been adopted for clearing it off, a correct valuation of the property being made, and a special hypothec given on the real estate, which ought to be registered, the Bank delivers to the borrower, or any duly authorised person, as in a case of substitution and conveyance, the sum borrowed. Generally the banks give specie, or debentures which the borrower negotiates at his own risk. The Bank of Bavaria gives its notes, which are a legal tender ; the issue is limited to eight millions of florins. The banks which pay specie issue debentures to the same amount as their loans, and payable within the same period of time as the hypothecary obligationH taken from the borrowers. The obligations of the borrowers are redeemuble by annual payments, which comprise the interest, the sinking fund, the expenses of , management and occasionally other expenses, as taxes, &c. The banks which pay specie negotiate thuir debentures without difficulty. These are not payable by annuities, but the bank pays a certain number annually, which are deter- :uined by|a /iVa^c au sort, corresponding in amount with that received as a sinking fund, so that in the last year, all those issued at the same date are paid up. As the bank issues its debentures only ns occasion requires, it always has money enough, and never too much. It is by the perpetual turning of hypothecary obligations into debentures, of debentures into specie, and of specie into obligations, that without great capital it can effect immense operations, which have no limits but the necessities of the borrowers. These banks, when once well established and prudently managed, possess a credit higher than that of Govern- ments themselves. This will be evident by the tables of their circulation given above. The greatest peril to which a bank of landed credit is exposed is that of lending on property the value of which is not sufficiently established. Accordingly, too much care cannot be taken in the examination of titles and the appraisement of the land. The danger is not nearly so great when the bank lends only on the condition of a compulsory sinking- fund : then the coses of want of punctuality are muoh more uncommon, and as the debtor 13 i - tap i " 111 , I I. '!l 96 A- has only a small yearly payment to make, he can generally contrive to meet it with the surplus of his harvest, and even in had years he can still manage it, by selling off a little stock. The loans, antb applications for them, arc regulated by the statutes of the bank, and differ somewhat in different countries. In France. — Of all the Landed Credit institutions in Europe, that of Franco is pro- bably the most important. Being the last founded, and that after serious examination of the institutions of the same character in the rest of Europe, it was made to contain all the good, and to remain freo from all the defects, contained in them ; being, moreover, adapted to the habits and necessities of the French people, their laws, and the state of real property among them. The scheme for establishing an institution of Landed Credit was set on foot in 1841. In 1845, M. Royer was commissioned by the Government to proceed to other countries — Germany and elsewhere — and study those institutions so universally popular. All the diplomatic agents were likewise directed to collect and transmit to the French Government all the documents and all the information which they could procure. After the revolution of February the introduction of the Lauded Credit was loudly demanded. Nearly all required the introduction of the system, including the right of issuing paper to be a legal tender, paper-money, and the mobilization of the soil. Nothing less than the famous discussion of 10th and 11th October, 1848, in which Messieurs Henri, Leon Faucher, and other eminent economists took part, could have with- stood those dangerous theories, — Jangorous when not confined within prudent limits, aa they are in Bavaria and Nassau. Commissioners were appointed of known respectability, and their reports, pregnant with information, abounding in facts, full of wholesome sug- gestions, led the way, after geven years' study and deliberation — from 1845 to 1852 — to the establishment of institutions of Landed Credit in France. These, though still in their infancy, are in vigorous and extensive operation, which is growing daily. In 1859 the hypothecary loans amounted to twenty-six millions of francs ; in 1860, to forty-eight mil- lions ; and in 1861, to eighty-seven millions : and this exclusive of loans to the Communes for drainage, for longer or shorter terms, amounting, in the aggregate — in 1859, to fifty- two millions ; in 1860, to more than one hundred and fifty-six millions ; and in 1861, to upwards of one hundred and seventy-nine millions. The decree organizing Landed Credit institutions in France was presented 28th Feb- ruary, 1852. This merely laid down the general principles on which it is based. It con- templated the organization of several institutions in the country, whether constituted by capitalists or by the borrowers. Several were organized. The multiplicity was a mistake, and it was animadverted on 'jy the commission appointed by the National Assembly. Nevertheless, the Government thought it expedient to permit each l>epartment to establish its institutions of Lauded Credit in its own way, so that it conformed to the rules and formalities required by law. No long period elapsed before the inconveniences of such a plurality made themselves felt as productive of rivalry and abounding with clangers. The decree of 18th March, 1852, is the basis of the society known ns the Landed Credit Bank of Paris, the privileges of which extended no further than the jurisdiction of the Court cf Appeals. The Joint Stock Capital was fixed at 25 millions of francs, divided into 50,000 shares of 500 francs each, placed under the superintendence of the Ministers of the Interior, Agriculture and Commerce; its purpose Mas to lend in specie for long periods, an amount wiiich was to bo repaid by a sinking-fund, to isnue debentures to the amount of the hypothecary obligations, and to call in a part of them annually to be deter- mined by lot. The decree of the 10th December, 1SG2, while it sanctioned the agreement between the Minister of Agriculture and Commerce and the Landed Credit Hank of Paris, first ex- tended the privilege of the Bank, now called the Landed Credit of France, to ail the de- partments not included in the bounds of the a.ssoeiations of Marseilles and Nevers, and then to the whole of France, the incorporation of the last named a.«sociation8 being previously effected. An aid of 10 milliocs of francs was accorded to it. Tims, by adopting one only Bank of Lauded Credit, "one only type," as M. Wolow.xki expresses it, " the whole assumed large proportions and was simplified ; it was the steam-engine doing the work of many isolated and discordant levers, and combining economy of motive power with great power of Action." ti; 97 II A plurality of Banks of Landed Credit in one country is now acknowledged in Europe to be a serious inconvenience acd an impediment to the beneficial working of the system The establishmeht of one single parent institution, with branches under its direction, answers the end, and is free from all the inconveniences entailed by a number of institu- tions. The Commissiou appointed by the National Assembly remark, in their 11 jport of 1851 : " It is no doubt desirable that there should be no more than one single establishment of Landed Credit in all France. The poorer districts or would thus more surely derive bene- fit from the superabundant resources of the more favored parts, the general rate of interest or the rent of capital would, by this means, become more fixed and uniform ; and the deben- tures made and issued in various and remote districts would acquire an immense degree of acceptability and readinessof circulation wherever there ij capital to be invested. " Your Commissioners attach great importance to this provision. It would seem very dangerous to multiply (especially at the outset) establishments of Landed Credit acting in the same sphere, and which, impelled by a spirit of rivalry and hurried on by their anxiety to monopolize clients, may be tempted to deviate from the direct path of prudence which it is so important to cause them to observe." These are the remarks of M. Josscau in his treatise, in 1853 : "In the first place, the Government, in adopting the principle of privilege (of unity), has taken a measure essentially wise. It was the price of success for the new institution. Have the results of rivalship in such a matter been fairly considered ? Have men looked steadily at the future of sevtral associations carrying on their operations in the same section of country, and lending money one against the other ? Is it not plain tliat to meet their expenses, to make profits, they must inevitably deviate from the prudential rules which are a condition of existence for such institutions? For our part, we are convinced that if oppositiitn be al- lowed to exist between two institutions of this nature ; if we furnish food for the spirit of speculation between two establishments ot public utility, we should debase their character, and condemn them to inevitable ruin." The Landed Credit began by lending for 50 years, repayable by annuities at 5 per cant., and, in order to raise the funds, issued debentures bearing 3 per cent, interest, re- deemable proportionably year by year, with lots and premiums (primes) hy a iirage au sort. The premium {prime) was a fixed sum of 200 francs on each debenture of 1000 francs; that is to say, for every sum of lOOO francs which the bank received on a deben- ture, it promised to pay 1200 francs. The lota were a certain sum of money payabh to those holders of debentures whose numbers came up first in the drawing (tirage au sort). The lotteries (tiragcs au sort) take place four times in year: on 22nd March, June, September and December. In the three first, the first number drawn gains a hundred thousand francs ; the second, fifty thousand ; the third twenty thousand; in the drawing for December, the first number gains one hundred thousand francs; the second, fifty thousand; the third, f<^rty thousand ; the fourth, thirty thousand ; the fifth, twenty ihousacd ; the sixth, ten thousand, and the eight following numbers each five thousand francs ; the aggregate being 800,000 francs oUots in the year. The Landed Credit was authorized, by decree of 10th December, 1852, to modify its loans 80 as to substitute for the annual payment of 5 per cent, a sliding scale calculated on the average market value of 3 per cent, debentures ; and to convert its 3 per cent, deben- tures carrying lots and primes, into 4 per cent, debentures carrying lot.^, but no fixed jjViwic. This conversion met with success. The decree of 6th July, 1854, entrusts to a governor and two sub-governors, appointed by the Emperor, the direction of the affairs of the Landed Credit in Franco. By that decree it was authorized to make loans for short terms, at first irrespective of a sinking^ fund, but afterwards with that provision. These were limited, however, to the amount of capital subscribed by the stockholders, and of the profits accruing. The Landed Credit then set about suppressing the lots and primc.'< in the new issue of debentures, making them bear 5 per cent, interest instead of 3 per qout., or 4 per cent, as did those of the first issue, |aut then it raised to 6 per cent, the yearly payment of the borrower. In order to increase the public confldenoo ia tho bank, tlje first idea had lieeo to give Bpeoio to the borrowing party, by wbiob it bpoawo ezposQ4 tq tbo fluQtuatioaa of tho Btook«w4fk«t in disposing of ! W M ita debentoreSy and became liable to sa£fer loss ; bat the establishment sood became con- vinoed that its safe and profitable working depended on making the borrowing party take its debentures in payment, which he was to negooiate as he best might. This is the ordi- nary practice of nearly all the Landed Credit institutions in Germany and other parts of Europe. Not, however, before the commencement of 1857 did it begin the issue of deben- tures as cash to borrowers ; and even then half was cash, the other half debentures. The end was that all loans were paid in debentures. This was its greatest success. . From that period the bank had nothing to fear ; and it was always prepared to make advances to all who could find hypothecary security. The bank became more free in ita operations ; in 1855 the loans had only reached 12,500,000 ; in 1856 no more than 8,000,000 ; but in the second half of 1857, after the change of system, it advanced 6,000,000 in debentures ; in 1858, 80,000,000; and it has still gone on increasing, as will be seen by the table to be hereailer inserted. The value of debentures also rose in the market, and the 5 per cents, generally stood at par. By decree of 11th June, 1860, the operations of the bank were extended to Algeria. By a law of 19th May, 1860, the Landed Credit of France was substituted for the National Pay Office, to control the operations of the Contractors' Fay Office. By a law of 6th July, 1860, it was authorized to loan money without hypothec, either for a long or short term, to departments, conimune», and agricultural associations. By a law of 28th July, 1860, it was authorized to found — aided by a grant and secu- rity of interest from the State — an association of " Farming Credit," that is to say, a bank to loan money to farmers on their personal security, without hypothec. Besides these various offices, the Landed Credit of France has opened a Bank of Dis- count and Deposit, where it receives cash on call, and makes advances on real security and other property of definite value. Loans for short terms, without provision for a sinking fund, are au innovation on all the principles of Landed Credit institutions, properly so termed, and accordingly we must ob- serve that the Landed Credit in France is not merely a Landed Credit institution. Mostly, these loans for short terms are made only for the purpose of building in cities. The Landed Credit is authorized by Act 2 of the Statutes to make use of deposits to loan money without hypothec to the half of their amount, and for not more than 90 days. This is the floating fund which, thus applied, makes it a Bank of Discount. The Joint Stock may also be applied to the same class of operations. The Landed Credit has established by-laws for its operations in Landed Credit, properly speaking, as also for those which it carries on with the under Pay Offices, drainage. Floating Fund, and Farming Credit. Here I shall speak only of those which apply to the Landed Credit, referring to the Statutes and Reports for those which relate to its other operations. The Landed Credit in France is an association of capitalists, being the only one of the kind which now exists by authority. The Joint Stock capital subscribed by the share- hoU'ers, even taken with the 10 millions grant, is a mere drop compared with the require- ments of the Bank. The only means of raising capital here as uiscwherc, was to issue de- bentures bearing interest payable to bearer or order within sixty years, vnd negotiable on cl.ange. This resource to procure capital being secured, nothiii„- remained but to take the u icessary precautions to make sure that the title and securities offered by the borrowers were sufficient. The loans on hypothec, with a sinking-fund, are for terms which vary from 10 to 50, and even 60 years. The Bank will lend on none but first mortgage, and to no greater amount than half the value of the property. In case of a previous mortgage existing, it causes itself to be subro- gated, or keeps on hand a sum sufficient to pay it off. When there is apprehension of un- deihand hypothecs, it exercises the right of purge. It may, nevertheless, lend money on immovable property charged with a hypothec, granted on account of a (jarantie (/'eviction, or a ground-rent, provided the amount of the loan, together with the capital inscribed, do not exceed a moiety of the worth of the real property. This is a summary of the forms prescribed by the Landed Credit in France, to be ob- served by the borrower in order to obtain a loan ; the general instructions promulgated for the authentication of titles, the drawing up of contracts, the hypothecary forms, and tho process of the purffc. te 01 ir mo coD- rty tako he ordi- parts of f debcn- 18. The om that 3ca to all lions; iD at in the ;urc8 ; in ble to be er cents. Algeria, d for the 10, either ind sccu- y, a bank ,k of Dis- urity and on all the must ob- I. Mostly, lepcsits to 1 90 days, oint Stock t, properly J, Floating le Landed terations. one of the the share- le require- a issue de- rotiablc on lO tako the borrowers 1 10 to 50, an half the 3 be subro- sion of un- I money on iCivictlon, Hcribed, do e, to be ob- ulgated fur ns, and tho 99 I. Applications for Loans. — Applications for loans must be made according to printed forms furnished by the Board of Managers, and signed by the borrower or his re- presentative. In support of his application, the borrower must produce — 1. A brief description, respectively, of each several property tendered as eecurity ; a ;ipcciiication showing every particular uf their situation and superficial extent, including the number by which each, severally, is distinguished in the cadastre. 2. Tho title deeds showing hi.^ rights and those of his predecessors, uud as far as pos- sible an authentic proof of ownership drawn up by a notary for thirty years back, with a detailed analysis of the different mutations supported by the acts of transfer or deeds of conveyance. 3. A certified copy of the mairice cadastralc. 4. The leases or statement of subordinate holdings, if any there be, showing the sub- lettings {fermagea) and rents paid in advance. N. B It might be of use to produce former leases, besides those still in force. 5. A declaration of the income and expenses. 6. The scroll (cote) of rates (^contributions) for the current year, or failing that, the scroll of tho last proceeding year. 7. Tho policy of Insurance against fire. 8. A statement of registration, or at least a simple declaration, showing the state of the property with regard to incumbrances (situalivn hi/pothicaire), 9. A statement of the feu duties, (servitudes) or other real charges to which the pro- perty is subject. 10. A declaration of the civil qualification of the borrower, whether he is or has been married, or is a tutor (tutcur,) or is entrusted with public monies. Tho borrower should possess the faculty of contracting and granting a hypothec, and should declare under what law he contracted marriage. It is necessary also to produce his marriage contract. If married without a contract, he ought, if the marriage was contracted subsequent to Ist January, 1851, to produce his marriage certificate. The Society accepts as security none but property producin;.'; a durable and certain revenue. (Statutes, Art. 55.) The following are not admitted to share the advantages of the loans accorded by the Society : 1. Theatres. 2. Mines and quarries. 3. Undivided real estate, unless the hypothec convey the whole property with the consent of the tenants in common. 4. Those estates of which the usufruct and the fee are not held by the same, sv.vc with the consent of all sharing any right, to the establishment of the hypothec. ( -utes. Art. 54.) The valuation of the property proposed to be mortgaged is made with a view to the titles, leases and other documentaiy information furnished by the borrowing proprietor. The Society reserves tho right of proceeding, in case of need, to have a valuation made by an appraiser, on an uuderstuuding with the person applying for a loan. The amount of the loan cannot exceed tho moiety of the value of the real property hypothecated. It is at most a third of the value of the vines, timber and other property of which the income is derived from plantations. The buildings of farm-yards and workshops arc valued for what they arc worth intrin- sically, independently of the industrial use to which they are applied. in no case can the annuity, the payment of which is covenanted by the borrower, exceed the entire income arising from the property. (Statutes, Art. 50.) The Society will make no loan save on a first mortgage. But loans which are to be applied to the paying off of incumbrances, previously regis- tered, arc consitlercd as secured by a first mortgage, when, by means of such a liquidation or by subrogation in favor of tho Society, the hypothec becomes tho first in order and incontestable. In such case the Society retains in its own possession value enough to secure re-pay- meut. (Statutes, Art. 52.) m « .' 100 L|.- N. B. — ^Tho Society reserves tho right of deciding whether the loan shall be secured by subrogation. If the property is burthened with a registered hypothec granted as a yarantie tCivic- tiuii or for ground rent, the loan may be allowed, provided its amount, toVere there no other result besides the salutary apprehension produced in the minds of the borrowers, this feeling, as it would impel them to a higher degree of punctuality and exactness, would effect a great good. But besides this, tiiey liave enabled the Banks to reduce the rates on which they make loans to the lowest possible limits, as they have no premium of insurance to include in order to cover losses which might result from the carelessness or tardiness with which the payments might otherwise be made. If we look at Landed Credit institutions in their true light, as a medium in which the interests of the lender and the borrower are equally cared for, as a great general agency for all proprietors of real estate who seek to borrow money, and capitalists who wish to invest theirs on mortgage, it must be granted that, in order to inspire the fullest confidence in the institution, capitalists should consider it as invested with extraordinary powers : 1. To make sure that the security offered by the property of the borrower is perfect. 2. To recover uU debts promptly ; .id punctually, in this confidence consists the credit of the institution ; it is the security of the lender, the advantage of the bor- 'I ■*;ai II 102 U rower. Tho greater the contiduncc whicli the Bank can command, the more capital it will acquire, and the more advantageous the terms on which it will be confided to it; the more it will have to lend, and the more eusy the terms and the lower the rate on which it will lend. Tho true interest of both parties, therefore, capitalists and borrowers, lies in seeing their common agent invested with the most extensive powers. Tn this both find tlieir advantage. There are three categories of privileges : — 1. Those relating to the security of the loan. 2. Those relating to the recovery of it. 3. Tho.se relating to the profits arising Ironi the operations. One ot the greatest obstacles to the popularity of loans on mortgage, which hinder many investments being made which would otherwise be freely offered, is, no doubt, tho imperfection of the hypothecary regime, and the insufficiency (besides the cost of search) of tho safeguard afibrdcd by registration. It was necessary, while awaiting improved hypothecary legislation, to find a means of getting rid of this hindrance by a simple pro- ceeding, ready at hand and not costly. This was found in the purge. Fiirgc. — The purge is not altogether a novelty in our legislation. The dicrct colon- taire was the same thing in a modified form. The judgmeut of ratification was another form in which it exijtcd. It is nothing more than a simplification of this latter, saving the costline3s,|thc delays, and the complicated forms of the proceeding. In this country the purchaser may obtain, by a judgment of ratification, a declaration of all unregistered hypo- thecs of whatever nature, under the penalty to tho claimants of losing all their privi- leges tnd hypothecs, if they fail to declare them. The purge confers the same rights on the Landed Credit, not as purchasers, but as lending money. And it is right that tho Landed Credit should be able to ascertain that there arc no secret privileges or hypothecs to rob it of its rights, which would be otherwise continually imperiled. Failing this, its loans not being perfectly secured, it would be often obliged to refuse them or to take a premium of insurance, thereby defeating its main purpose : thni of a fund for granting cheap loans. If it is desired to found an institution of Landed Credit in the country, we must, of necessity, concede to it the right of the purge. Wanting that, how can it be known whether the property ou which the bank has accepted a mortgage, be not burthened with some claims, charges or privileges, which may come to light at some future day, to rob the institution of the amount of a debt which was thought to be perfectly secured ? The foreign capitalist will be afraid to invest his capital in the debentures of an institution which he knows not to possess adequate means of avoiding the inconveniences and dangers of an hypothecary system in a state of transition, and likely to be .so for years to come. If we drive away the capitalist, we do wrong to the farmer. Looking at the question from every point of view, the purge, if granted to the Landed Credit, eflfects a great amount of good, involving no inconvenience either present or future. Having the purge, it may be objected, the Bank cannot need to care for certificates of registration ; and, then, what becomes of the security of foreign capitali-sts who may wish to invest their money on mortgage in this country ? It is for the interest of the country to attract foreign capital in search of investment on mor'gagc; to eficct this, the holders must be convinced that, when once their mortgage is rogi>tcred, it bucomes a guarantee not to be aflfected by any occurrence ; and was it not for this that the law was enacted, under which the hypothecary creditor is exempted from all obligation to fyle an opposi- tion to a SheriflP's sale in order to preserve his rights ? No doubt it is good and desirable to attract foreign capital to this country ; is it not for this express purpose that we seek to create an institution that will command full confi- dence and afford the best security ? Will not the Landed Credit be a mighty reservoir to receive capital, with which it will irrigate and fertilize our fields through a thousand channels, scattering abundance among the rural classes ? Capitalists, instead of making investments on hypothecs in small parcels, will lay out their money in debentures of the Landed Credit, as more sure and far more convenient. The law which excused hypothecary creditors, whose debts were registered, from fyling any opposition, was an excellent measure at the tiiuo to attract foreign capitalists; 108 irs to come. d full confi- bnt there is now no longer any nood of it, beoansetho Landed Credit shows a better mode of drawing it hithor. Hod. Q. E. Cartier, who was the author of that law, showed a right appreciation of tho relation which ought to exist between the lender and the borrower. Although the time has been too short to allow foreign capitalists to understand and profit by our legislative action in this behalf, and although the difficulty and the expense, arising from the defective character of our system of registration, have influenced practitioners of the law to call for its repeal, it is not the loss true that the views of the legislator were just, considering it as a purely financial measure. The main motive for requiring the repeal of this law arises from the costliness of the certificates issued by the Ilcglster Offices, which are, for the most part, useless. In fact, many registered mortgages which have boon paid off still remain on the books through the carelessness of debtors. The creditor whose claim is satisfied is, perhaps, either dead or absent. Certificates make mention of all such hypothecs, and by what means are we to avoid the consequent expense and the effect on judgments of distribution ? These are strong arguments in favor of the purge, which would at once sweep away all claims which have been satisfied, but which still remain recorded in the books of the Registrar. The purge which is prayed tor, in the interest of the Landed Credit, Will not destroy hypothecs which are not declared ; it will only prevent them from obtaining a preference over those of the Bank. The Committee, in their remarkable report to the Assembly, thus speaks of the purge : " Everybody will acknowledge that, failing to possess this necessary right, institu- tions which are original baiUeura de /ondi, or securities for debt to third parties, would be in danger of endless litigation, certain discredit, and almost inevitable ruin. " It is our opinion that without the right of the purge, no establishment of Landed Credit can exist." Mr. Josseau, in his treatise published in 1853, said : " In all countries in which Landed Credit institutions exiit, the law holds as a main and leading principle the absolute publi- city of the acts conveying property and the rights which affect real estate offered as se- curity. Priority of rank is so necessary in these societies, that in Poland, where the Code Napoleon, authorizing secret rights, is in force, it has been so modified, as to render the establishment of them|pos8ible ; and for the self-same reason, they have never been found prac- ticable, nor been organized either in France or in the German States on the left bank of the Rhine. The system of the Civil Code in the conveyance of rights to real estate, and respecting mortgages is, moreover, well understood. It prescribes publicity by means of transeription for donations and substitutions, but does not require it for other ways of con- veying real estate, nor fur substantial claims which, by becoming a charge upon it, may diminish its value. The constitution or transcription of servitudes, customary rights, habitation and anti- chresis (mortgage) are not subject to any publicity with respect to third parties. The resolutory action of the seller who has not been paid for his property may be exercised at anytime within thirty years, and even within a longer period, if any cause exists to sus- pend the prescription, and yet nothing makes known the existence of such a right to the purchaser or the lender on mortgage. There are, moreover, a host of grounds of action which may remain unknown to those parties until the very day theji are brought into court. Of these are, the action revoking a donation on account of failure to fulfil the stipulated duties, on account of ingratitude of the donee, or the birth of children (Art. 953 et seq. C. N.) ; the right of retour conven- tionnel belonging to the donor (art. 952) ; the action in reduction of donations (art. 930) ; the action of rescision of a partage d' ascendants or between co-heirs, for lesion of more than a fourth part (art. 887, 1079; ; that of the purchaser of real'estate for lesion of more than 7-12 (art. 1674) ; that of the proprietor in reversion against the life-tenant for damage during usufruct (art. 618) ; in the exercise of the right of redemption (art. 1659) ; in the exercise of the right of demanding the products in kind (art. 859) ; the action for resti- tution of a tenant in common, evicted by exchange (art. 1705) ; the action to revoke the alienation of real estate claimed as dowty (art. 1560) ; the Panlian action (art. 1167) ; the action to rescind by reason of error, misrepresentation or violence (art. 1304). In short, the legal hypothecs of wives, minors, and interdicted persons are exempt fron^ 14 104 S'^U ii !• TegiitMitioa> uid oonatitute secret claims with which nearly all real estate within oar torri< torj is barthened. la snch a state of things, how could Societies nakc loans with perfect security? What becomes of security under the empire of a law which affurds no nE>aurance to the man who lends bis money (with whatever care ho may scrutinize the validity of titles), that his debtor is really the proprietor of the property mortgaged, and that 1: e may not bo dispos- sessed of it by a third party holding a title of authentic date prior to his 1 What becomes of his security if, granting the borrower to bo the real owner of the estate, he may be dispossessed of it by a seller who institutes resolutory action after the preemptioa of his pririlege, if a third party brings into court one of the many rescissory or revocatory actions whiah keep tka definitive title of the proprietor so long undecided, or finally if certain dii- membermtnts of the property seiiously aflfecting its value should come to light ? What sararity does a ht/eur, or a person give who, having, without the knowledge of the lender oa aMyrtgage, exercised that office, is burthened with the secret and indeterminate liabilities which may one day come to light, and take preccdenec of all registered liabilities ? How can any one lend money without fear to a man who is or has been married, even in the foimer case, where there is sub-rogation in the Ugal hypothec of the wife, since the effect of that guarantee may be nnllified by a previous cession of goods which need not, under the existing law, be registered at all ? All these dangers are not imaginary ; and if they are not realized in every case ; if it is just «ven to attribute to the carclcssuess of creditors, not making the necessary investiga- tion, some part of the losses which they experiouce, wc arc bound to acknowledge thai in many casen the vices of our legislation are, even for the most careful of mankind, a cause of deception which nobody can escape. In the face of such dangers, how was tho lefrislature to set about providint; 106 Sequestration. — In case of delay on the part of the debtor, the landed credit may under a writ delivered on petition by the President of the Civil Court of PremUte iMtance and fifteen days alter protest, take possession of the real estate hypothecated, at the cost and risk of the defaulting debtor. While the sequestration continues, the landed credit receives the whole of the revenue or produce, any opposition or taisie to the contrary notwithstanding, and applies it by privilege to the liquidation of the payments due, together with the costs, having deducted therefrom the amount necessary to pay the cost of keeping the property in order, seed and labor, and the taxes. Total payment of the debt and abuse of the usefruct, on the part of the Credit Fancier are the only grounds on which the sequestration can be made to terminate. After the termination of the sequestration, a detailed account is rendered to the owner of the property. If there be any dispute, it is referred to the Court, from whose judgment an appeal will lie, if necessary. We may observe that unless in the case of large property or considerable works, there is no advantage in the sequestration of real estate. In such a case, it is more expedient to bring the property to sale, which the right of sequestration docs not prevent. Expropriation. — In case of non-payment of the annual due, and whenever, by reason of the deterioration of the property, its partial alienation, injury to the title or right of possession, concealment pi the causes of legal hypothecs created by the debtor, or damages by accident, the interests of the landed credit suffer loss or danger of loss, it may proceed to sell the estate. If the debtor content the right of selling, it can be summarily ordered by the Court holding jurisdiction in the district where it is situated. From this judgment there is no appeal. The party against whom judgment is entered must pay, within eight days, the whole sum due to the landed credit, any opposition, contestation, &c., to the con- trary notwithstanding, saving their action or repetition if there be need. Gagerie. — Landed credit associations generally have a right of pledge, saisie-gagerie, over the moveables of the debtor, his implements of agriculture and farming stock, as also over his crops, either standing or harvested, for the payment of the annuel due, to prevent fraud or pretended sales. Alienation. — No sale of the property is considered valid, in default of notice thereof being given to the landed credit. This provision is general everywhere. Taxes. — The debentures and property of the lauded credit are, in several countries* exempt from taxation ; in Franco, they pay a tax of 10 centimes per 100 francs. Postage. — Several governments accord to the landed credit the privilege of commu- nication by mail, free of postage, or take a smaller rate. Execution without Process (Voie Par^e). — The levy or execution without process is of great importance to prevent expense and useless delays, for the interest both of the borrower and of the Bank. Registration. — The landed credit is not bound to renew its registration of mortgages during the continuance of the loan, to avoid prescription, or preserve its rights. It is expedient also that no registration of a hypothec effected after that of the landed credit, should have effect until notice thereof shall have been given to the society. Several other privileges of less importance have been granted to difierent institutions of landed credit in Europe, «uch as being a bank of judicial deposits, of deposit of monies belonging to minor children, interdicted persons or c^herinoapable persons, in exchange for debentures. The safety-fund of the landed credit in France, that is to "ixy the fund destined to guarantee the fulfilment of all its engagement.^, consists of a joint stock capital of sixty millions of francs in shares. The Reserve Fund, which is a provision against unforcHcen losses, is fixed at 12 millions of francs, arising from an annual assessment made upon the profits. Cases apd forqis of liquidation are established by the decr^^ of 18th October, 1862, and by the statutes. The manager must be a holder of 100 shares, and is appointed by the Board of Managers, subject to the approbation of the Minister of the Interior. The administrators must be holders of 50 eharpi each : a certain number of them arc elected annually by the general meeting. The administrators appoint and dismiss th9 employees of the Landed Credit at the will of th« manager. ' 107 lit may Instance cost and ; receives itanding, he costs, property t Fancier d to the n whose ks, there ixpedient reason of right of damages y proceed y ordered judgment thin eight the con- ie-gagerie, ck, as also to prevent ice thereof coantries* I. of comma- rocesB is of le borrower mortgages its. It is led credit, veral other 1 credit in longing to lebentures, destined to il of sixty ixod at 12 )bor, 1862, > Board of ninistratorB tally by the he Landed Wurtemberg. — "In Wurtemberg the conditions of a loan," M.Royersays, "are neither clear nor liberal (hardies). For a nominal loan of 100 florins, the association pays out in reality no more than 96, or for the sameei: ~> demands repayment of 104. In the former case the borrower pays for 50 years, 4 f -f ,1 8-10 kreutsers ; in the second case, 4 florins 53 6-10 kreutzers. Moreover a prolong . ' >n of two years payment of the annnal due ia re- quired as a Reserve Fund or Safety Fduo', over and above the interest of 3} per cent., and the Sinking Fund ; notwithstanding it appears that the difference of i per cent, between the rate of interest paid and that received by the managers, ought to be sufficient for the Safety Fund. Again, a further contribution of 26 kreutzers (about 95 centimes) per 1000 florins (2150 francs) borrowed, is demanded to defray the cost of management and original establishment. At the outset of the undertaking this contribution of 26 kreutzers was paid throughout the whole term of creating the sinking fund agreed on, and on the whole amount of the loan, whatever the amount of the instalments paid, whether at the st&ted periods or by anticipation. Since 1838 this abuse has been reformed; the contribution is now paid only in proportion to the amount still due by the borrower, the anticipated payments on account of principal exempt the debtor from the payment of any contribution of this kind. There is here, already, a great difference between this institution and those of the North of Germany, the general intention of which is to lend on a certain class of fe^'dal lands (biens nobles) exclusively, or which require from the peasantry, when they arc borrowers, double the security exacted from the others. Property is very minutely divided in Wurtemberg. The association decided by their statutes that they would effect a first loan of six mil- lions oi florins (12,900,000 francs), but reserved the right of opening a second, when the subscription to the first was filled up. At the close of 1843, the first amounted to 5,585,630 florins 15 kreutzers, besides 746,625 florins repaid during the five years between 1839 and 1843, making in all 6,333,255 florins 15 kreutzers. Originally, the amount of interest was discussed between the lenders and the association, as a subject of bargain. For at least eight years past, loans are effected for 3 per cent, only, and it does not appear that there has ever been any deficiency of capital to meet the wants of the association ; but as the system of a sinking fund by compound interest requires that there should never be the smallest sum lying idle in the hands of the cashier, the capital tendered can be accepted only an fast as it is applied for by new borrowers. The Association lend their money only on a first hypothec, and on security worth at least double the amount of the loan. Applications for loans must contain the documents necessary to establish : 1. A detailed estimate uf the value of the property and its dependencies. 2. The permanent yearly net produce, which ought to be one-half more than the ordinary annual value on an average of fifty years. 3. That the security consists principally of arable land. 4. That the farm buildings do not form more than a fourth part of the hypothecary value. 5. Also, that the vineyards are not in value more than a fourth part of the property hypothecated. In largo cities only, dwelling houses are admitted as security for loans ; and even then the rent of them must amount to twice the interest. In factories, no other value is generally admitted beyond that of the building. Grist mills are excepted, as are also chemical laboratories, because they are, in Wurtemberg, the subject of a saleable privilege of considerable value. Mills are valued by taking a medium between the taxation of the association, and that of insurance against fire, which is obligatory in Wurtemberg, in respect of real estate in buildings, which also furnishes a convenient average estimate of their value. Forests are not admitted to hypothec, save as belonging to communes. In the hands of private persons they eannot exceed a third part of the valuation. Loans are repayable by annuities, with obligatory sinking fund. The annual payment comprises the interest at 3 per cent. ; the cost of management, now reduced to } per cent. ; and the sinking fupd, the minimum of which is 1 per cept, extinguishing the del>t in 48 years. t ! ■1 1'i ms ^1 The bank htm great privileges, and ample means of recovering its monies. As a genera! rule, the sums lent are not less than two thousand florins, with the following exceptions : 1. For communes, or when communes guarantee the regular payment of interest, the minimum is 500 florins. 2. For proprietors not having the security of the commune, but in particularly favor- able circumstances, the minimum may be 1,000 florins. The bank has great privileges and ample means of recovering its monies. Bavaria. — The hypothecary and discount Bank of Bavaria is a society of capitalists who are shareholders. The multiplicity of operations conducted by the Bank of Bavaria renders it an exception quite unique in Qermany as an institution of lauded credit. This bank supplies the place of an association of landed credit, an agency, trust and loan com- pany, life and fire assurance company, a savings bank, a pawn-broking establishment {Mont de Piite), a bank of deposit, a bank of issue and of discount ; shareholders, lenders, borrowers, and the government itself, ars directly interested in it8 operations, which at once embrace real estate, agriculture, commerce, and public credit. This may be seen by sections 13, 43, 46, &c., of the statutes. The minimum- amount of loans is 500 florins, advanced on a first hypothec, and security of twice the value. Its operations extend over all Bavaria. It exacts the crea- tion of a sinking fund. With an annual payment of 5} per centum, the borrower is released from his debt in thirty-four years and six months. It issues notes to the amount of eight millions of florins, which are a legal tender. " These notes excite no mistrust, and accordingly they are found in the hands of everybody throughout the country," says Mr. Royer, in his report. Three-fifths of the capital of the Bank are to bo loaned on mortgage. The Bank pays 3 per cent, interest on its own loans Its shares were at 50 per cent premium in 1844. The annual payment is from 4i to 6 per ceut. per annum, according as the borrower wishes to extinguish his debt in 20 or 62 years. The annual payment Cv^m- prises 3 per cent, for interest, 1 per cent, for cost of management, and the rest for li. ) ■inking fund, &e. The borrower is always free to pay his debt, cither in one sum or by instalments. The government is constitutional : the king and two Chambers, a council of state, and seven ministers. The Bank has ample privileges to recover its monies. Russia. — The Bank of Credit System was created after the war of 1815. The Emperor Alexander made the first advances to enable it to commeoce operations : these have been all paid back in full. Its intention was to enable every owner of real estate to obtain capital at a moderate rate of interest. All borrowers are joint debtors (solidatres), to the extent of three-fourths of the property mortgaged. The sinking fund is exacted. The annual payment is regulated at the time of efiecting the loan. Poland. — The civil law is the Code Napoleon, in the Grand Duchy of Warsaw, but modified so as not to allow of secret mortgages. The Bank of Landed Credit was founded in 1825. Loans do not exceed half the value of the property. The valuation is made on the net annual revenue. The sinking fund is fixed at 2 per cent., payable half-yearly. |The interest is 4 per cent. The cost of management is, first, 1 florin to pay for the issue of debentures for from 200 to 500 florins, and 2 florins for every 1000 florins' worth of de- bentures ; besides 1 Polish gros for every florin of the three monthly payment. Prussia. — Prussia possesses the greatest number of perfectly organized institutions of Landed Credit to be found in Germany. Six of the eight provinces of Prussia possess an analogous system of institutions of Landed Credit. In 1845, their circulation amounted to 400 millions of francs in debentures; and notwithstanding the importance of their operations, so simple was their mechanism and its working, that their existence was scarcely known in the cities where their offices were established. Persons who had no business to transact with them scarcely knew of their existence. But the farmers knew perfectly well where to find thcni. The Prussian institution, Mr. Royer says (j>. 266), do not borrow, neither do they lend money : they have no capital at their disposal, and do not ask for either interference or responsibility from the government. They issue no notes like those of Bavaria, but merely negotiate debentures, which are perftotly safe, cause no trouble nor law suits, and require neither 68. As a following terest, the arly fayor- capitalists )f Bavaria dit. This loan com- tblishment rs, lenders, which at be seen by lothcc, and s the crea- jorrower is the amount istrust, and ," says Mr. 1 mortgage. per cent ccording as rment com- rest for lu J 3 sum or by a council of 163. 1815. The ions : these }al estate to [solidai'res), 1 is exacted. iTarsaw, but ras founded is made on rcarly. jThe the issue of rorth of de- it. institutions stitutions of Qtures; and nism and its offices were ew of their 10 Prussian iioncy: they 3sponsibility ly negotiata uire neither 109 expensive nor numerous officers, not even the ordina,ry attendance of a body of clerks, during a great portion of the year. The Prussian associations arc not exclusively for the benefit of the great estates (bietit nohki), though they favor them, lending to them to the extent of a moiety of their value; while to the free peasantry they lend no more than a fourth of the value of their property. SUetia. — In this province the first experiment of the Landed Credit was made. It was organised on 15th July, 1770, according to the plan of Kauffman Biiring or Biihring. Like all new attempts its organization had defects which have been since amended. Thus the sinking-fund, that sheet anchor of safety for both the borrower and the bank, did not exist. Every bearer of a debenture was entitled, after six months' notice to demand repayment from the Bank. All feudal estates {biena nobles) were jointly made parties in the obligation not of choice, but by law. These inconveniences have not disappeared. Uespite these imperfections, the Cridit Fancier was productive of substantial benefit, first by causing the rate of interest on mortgages to fall from 10 per cent, to 5 per cent., then to 4J per cent, in 1770, to 4 per cent, in 1788, to 3i and 3i per cent, in 1839 by conversion. The debentures carry interest coupons for five years. The bank lends as, much as two- thirds of the value of properties, and sometimes more. It receives deposits and makes loans with a view to promote the sale of wool. It redeems a portion of the debentures annually by lot. When a half-yearly payment is in arrear, the bank charges 4 per cent, interest (iiUirit moratoire), and proceeds to a sequestration. At the beginning of 1854, the new associa- tion had issued debentures for more than two millions of thalers. The quotations of these debentures varied on the Berlin Bourse, from par to 7} per cent, premium, from 1826 to 1839. Nouvelle Marche. — Interest coupons arc given with the debentures. In 1837 there were debentures to the amount of 11,881,850 thalers in circulation. The debentures are negotiable at a premium of from 6 to 8 per cent., and even more. A conversion of these debentures from 4's to 3} per cent, caused them to full below par; but this was only momentary, as they gradually rose to U per cent, premium in the following year, and to H per cent, premium in 1844. Pomerania — The caisse hypothecaire is an association of borrowing proprietors. The debentures are payable to bearer ; they now bear 3^ per cent, interest ; the borrower pays 4 per cent, interest and \ of 1 per cent, droit de quittance. The borrowers are jointly and severally liable, loans arc made on first mortgages only, with an insurance on buildings. The debentures bore 4 per cent, interest previous to 1838, and were negotiable at 6, 7, and 8 per cent, premium. The conversion, at that period, of the old debentures into new ones bearing only 3J per cent, interest, caused them at first to fall below par, but only for a short interval, for in 1839 they were at 2 per cent. premium,;^and in 1844 at 3 per cent, premium. West Prussia. — The Credit Fonder lends only one half the assessed value of an im- moveable. The debentures bear 31 per cent, interest. The borrowers pay 41 per cent, annuity, being 3i for interest, i for sinking fund, { for cost of management, and i for the reserve fund (which amounts to 700,000 thalers). When the reserve fund shall have been completed, the amount fixed for cost of management is to be affected to the sinking fund. In 1837, the amount of debentures in circulation exceeded 10 million thalers, they were negotiable at 3^ per cent, premium. East Pirussia. — The debentures bear interest coupons; they amounted to over eleven millions thalers in 1857. They bear 3} per cent, interest. In August, 1837, they were at 31 per cent, premium. They are now sold at a premium. Grand Duchy of Posen. — This was tho first of the Prussian associations that made the sinking fund obligatory under its by-laws, in 1821. All the other ossociatiops ended by adopting this principle, but only after a painful experience had demonstrated its indis- pensable efficacy. When the debentures are at a premium, the association offers to redeem them by lot, paying 3 per cent, premium; when they are below par, it purchases them at the Bourse. The first series of debentures bore 4 per cent, interest; the new- bear 3 i, with redemption at par, by lot, at the option of the association. The borrower* ^f this ame$ pay an annuity of 5i per cent (31 for interest, U for eztinotion in 35 y«gEi, «>d i fox coit of m«Dage< ' T 110 :i I nMnt). An ordinance of 1825 introdaoed the purge. In 1837, tber debentures in oirculatioa anoanted to over 12 million of thalers ; they were at a premium of 9 per esnt. in 1842. Austria. — Gallicia " L' Institution de crtdit fancier de la Gallicie i» considered one of the most perfect of the kind in existence/' says M. Joaseau. « Its regulations exhibit s remarkable degree of perfection," says Mr. Royer ; they approximate more closely to tbo system which has now been adopted in Prussia, which' has long prevailed in Hanover, and which has quite recently been adopted in Saxony, than to those of Wurtemburg and Bavaria. It is an association of borrowing proprietors. It lends only one halt the value of an immoveable, and not less than one hundred florins ; it issues debentures, redeemable only at the option of the association, which are delivered to the borrower. The borrower becomes a member of the association by the fact of his loan ; the sale of an immoveable hypothecated renders the purchaser a member of the association, and discharges the former proprietor. The borrower, on entering, pays 3 per cent, to the reserve fund ; and, in addition to 4 per cent, interest, he pays k per cent., in advance, half yearly. The books of the association constitute legal proof against the debtor. The association enjoys great privileges, and ample means of compelling payment. See the statutes. The States of Galicia guarantee the operations of the association. Kingdom of Saxony, — This government is constitutional, consisting of a king and two chambers. At the head of the administration is a general ministry. There are in Saxony two cridit fonder institutions : — the first is I'union de cridit des provinces hiredi- taires, the second is La banque hypothicaire des Etats de la Haute Lusace. Ij union de cridit, founded more especially in behalf of the noblesse, admits neverthe- less properties belonging to peasants. This is an association of borrowing proprietors. It does not lend less than one thousand thalers (the thaler is worth about 72 cents of our money). The sinking fund is obligatory. The annuity is paid half-yearly, and always three months before the interest on the debentures falls due. The cost of management is DOW about } per cent. The association cannot compel the holder of a debenture to accept fayment, without giving six months' notice in advance. It only lends on first mortgage, t gives debentures to the borrower ; the latter vary from 25 to 500 thalers. It was enacted that, after five years of existence, the bank should redeem annually, by lot, as many debentures as the reserve and sinking funds of each series should permit. The debentures redeemed or withdrawn from circulation are publicly burned. Banque Hypothicaire de Haute Lusace. — It lends on real property as well in the towns as in the rural districts, in amounts not less than 100 thalers. It has adopted the com- pulsory aioking fund, and receives payments on account, The provincial States guarantee the debentures. The reserve fund cannot exceed ten per cent. Each year a statement of its affaire is presented. Any change in the ownership of a property hypothecated must be notified to the bank. Extracts from the books of the bank are considered as notarial acts. Deposits are received. There is no tirade au sort. The payment of the debentures cannot be enforced. The bank alone can enforce n redemption : Ist, if the rate of interest is to be lowered ; 2nd, if the bank is about to enter into liquidation. The debentures are divided into series, according to the rate of interest, and into classes according to the amount; they carry interest coupons for ten years. They may be excluded from circulation, notwithstanding that they are payable to bearer. The bank cannot refuse a loan without good and sufficient reason. It delivere debentures to borrowers ; in some cases it gives specie. The borrower must furnish, on making his application fur a loan : 1st, a certificate as to^his ability to convey ; 2nd, a certificate as to incumbrances ; 3rd, a certificate as to the payment ot all contributions and taxes. Loans are made only on first mortgage, and to one half the value ; the valuation is arrived at by multiplying the net revenue by 25. The smallest amount loaned is 100 thalers. The borrower is to make known any secret incumbrances, under penalty of fine or repayment of the whole sum. The adoption of the purge would be infinitely better. The borrower pays from one-fourth to one-half per cent., on receiving the debentures, to cover the expense incurred in issuing them. He pays, over and above the interest, one- third per cent to form a reserve fund. The rate of interest charged on arrears is five per ««Bt. The borrower may make payments on account or by anticipation. onlation 1842. ifed one ixhibit u J to fb0 ver, and »urg and m Hanover.^ — Hanover possesses a constitutional goTernment. A king and two cham bers J a eounoil of state and six ministers (heads of a like number of departments). Rural property is divided into two categories : that of the nobles and that of the peasants. There are several Cridit Fancier institutions. That of Lunenburg is exclusively for the property of the nobles. It was in Hanover, in the year 1790, that the principle of the compulsory Kinking fund was first introduced ; a principle in every way indispensable to the well-work- ing of the Cridit Fonder. La Banque de Ilanovre is, like all the rest, an intermediate institatiou, to which loans are made, in oirder to enable it, thereupon, to make loans itself It borrows at 3} per cent, on its obligations or bonds, either directly or through the medium of the banks. It lends on first mortgage an amount equal to one-half the value of a pro- perty, when the net revenue is at least 400 thalers. It avails itself of the jjar^rc in order to avoid the danger of being forestalled by other hypothecs. The annuity to be paid by the borrower is 4^ percent. It comprises: interest, 3} percent.; sinking fund, i per oent. ; cost of management, } per cent. After seven days' default, the debtor is liable to a seizare ; and in addition to the cost, a fine of one gros for each thaler of the debt. The thaler is worth three francs and seventy-five centimes, French, and the gros fifteen cen- times. No debentures are issued, payment being made in specie. The various Credit Fon- der institutions have rendered great service, by clearing off the feudal rights and dues. Their influence has been most effectual in promoting the development and improvement of agriculture. Mecklenherg. — The Credit Fancier issues debentures payable to bearer. It is an association of borrowing proprietors. They arc all jointly and severally liable. It lends only one-half the value of an immoveable, and on first mortgage. The debentures cannot be for less than 25 nor moro than 1000 thalers. The borrower's buildings must be insured. Defaulting debtors are subject to a fine of 2 per cent. After default, a notice is served upon the party in arrears ; eight days thereafter, application is made to the judge, who, after an interval of three days, issues an order for an execution. If, from any cause what- soever, the immoveable seized cannot be sold, the bank can sequestrate it. The bearer of debentures cannot enforce a redemption thereof before they fall due. The bank redeem » portion of these every six months, by lot. The numbers are made public. On entering the association the borrower must pay the cost of the deeds, and a charge of 12 schillings j>er 1000 thalers ; i per cent of the amount of the debentures before he receives them, and moreover, i per cent of the an.ount of the said debentures half-yearly. The two latter sums are intended to cover expenses of management, redemption of outstanding debts, deficits, &c. If they do not suffice, the bank can increase them by special resolution; it can also diminish them. The sinking fund is i per cent. Deposits arc received. Hamburg. — ^This town, one of the Hanscatic League, possesses a caisse de credit having for its object, moro especially, to promote the construction of houses and other buildings in the town. The members of the association are jointly and severally liable. It lends at long dates, with a compulsory sinking fund. There are three classes of persons interested : let, proprietors of lands situated within the town, who deposit their money in it as in a savingB-Dank ; 2nd, proprietors whom the bank guarantees against actiots, as far as two- third* the value of the immoveable; 3rd, parties, not being proprietors, who deposit money in the bank. The bank issues deposit certificates bearing 3 per cent, interest, and 8^ per cent, if they be over 500 marks banco ; they are payable after f^ix months' notice, and the interest is payable yearly. Bremen and Lubec/c. — These two Hanse-towns have Credit Fancier institutions, established for the purpose of making loans on town property ; they have special legisla- tive provisions, but they present no features particularly applicable to agricultural institu- tions. Denmark. — On the 20th June, 1850, a law was sanctioned organizing a Cridit Fonder Bank. The following is a summary of the law : The Minister of the Interior may encourage the formation of associations of borrowing proprietors. The capital must be at least one million of rix dollars (the rix dollar is worth 60 cents). The debentures cannot be for less than 50 rix dollars, nor exceed the amount of the hypothecs. Loans are not to exceed two-thirds of the value of a property. The auooiate* are jointly and severally liable. The sinking fund is ooQ^p^lijory. The deben- 1 ll !-■■ j' i i 1 '■( ( i 112 I:? I: tares are exempt from stamp duty. The postage expenses are rcdaoed. The bank hat^- great privileges, and prompt and ample means of enforcing payment. The Electorate of Hette. — In 1882 this government founded a Cridit Fonder Bank,, under the supervision: 1st, of the Ministers of the Interior andFinance; 2nd, of the States' Assembly, which appoints one of the three directors. It borrows at a rate which must not, exceed 8i per cent., and then lends to the borrowing proprietors. The State guarantees all the obligations of the bank. The bank lends, on Brat mort- gage, not less than 100 thalers. The rate of interest is 4} per cent, if the sum be repayable within twelve months. Other loans are made at 4i and 5 per cent, — four per cent, being for interest, and the remainder as a sinking-fund. The borrower can pay up, in whole or in part, after three months' notice : or by paying 2 per cent, for the three ensuing months if he has not given notice. In 1848, the bank liad lent over 17 millions of thalers. The debentures have always ranked above par. In 1849 they fell a little. The bank never had occasion to claim assistance from the State. '' There is but one opinion," says Mr. Josseau, " as to the beneficial effects of this bank, which has been tested by an experience of eighteen years, It has completely accomplished its object It has cleared off the incnmbranccs on land, lowered the rate of interest, rendered the conditions attaching to loans less onerous. Enjoying ample credit, it has passed through periods of crisis without suffering any excessive loss, and it has acted as a great netional savings bank." The form of government is constitutional. The Prince Elector abd two chambers ;; the State administration consists of a Council of Ministers. Iiessc Darmstadt. — The form of government is constitutional. The Grand Duke audi two chambers, a council of State and five ministers. The Credit Fonder of this duchy,, established under the name of e7a6/iM«men< de rentet, extends its operations to Khenishi Hesse. It lends 500 florins or over, on first and even on second mortgage, on property of double the value. It confers the benefit of life insurance, and serves as a tontine. The annui- ties to be paid by the borrower vary from 6 to 30 per cent, at his option, according to the period of the sinking fund ; the interest is 4f per cent. ; in case of delay the borrower pays & per cent interest, and after a month's delay, the bank ean require payment of the whole debt„ as also if the property should diminish in value one.fifth or more. Duchy oj Nastau — The government is constitutional. A credit /under bank was founded in 1850, under the guarantee and initiative of the government. It issues deben- tures varying from 100 to 1000 florins. The sinking fund is obligatory- The debentures redeemed twice a year, by lot. It lends on security of double the value. Interest, 4 per cent; sinking fund at least one per cent. It is under the surveillance of the Minister of State ; it has a director and two councillors. In recovering its claims it enjoys the same Privileges as the government. Its capital stock is three and a half millions of florins, 'he house of Rothschild furnished six-sevenths of that sum, on debentures, at 3i per cent interest, redeemable in annual portions, determined by lot. The bank enjoys ample privi- leges for the collection of its claims. It also discounts for merchants, with security or otherwise. It makes loans to the communes : for mining purposes, the redemption of the dimes, &c. It is authorized to issue paper money to the extent of one million of florins. Switzerland. — There is a Cridit Fonder institution at Berne, founded in 1840 ; in Consequence of its excessive liberality towards borrowers, it has been compelled to restrict its operations. There is another in the canton oi B&le Campagne, founded in 1840 by the agricultu- ral society. It lends on first mortgage, to the extent of one-half the value. The interest paid by the borrower is 4} per cent, together with a sinking fund rate varying from i to 5 J per cent. It recovers its claims through the ordinary courts, a course which, without in any way benefitting the debtor, is for the bank a source of delay and serious inconvenience. Btlginm.— Ln caisse des propriitaires. — This bank, formed by capitalists, in 1835, is established at Brussels. Its piipital stock is 3 millions of francs, in shares of 500 francs. The management is entrusted to five directors, who elect the President yearly, and twenty commiHsioncrs. There is a jspecial Board devoted solely to ascertaining the validity of mortgages, and matters pertaining thereto. There are two advuuutes attached to it. It lends for periods of from '5 to 50 years. It issues debentures with interest coupons, oacli )uonth, to the amount Qf jts operations. It borrpyra At 4 per cent interest, which is paid 118 ftok hac r Bank,. eStates'- DQUSt not rst mort- epayable it. being Airhole or J months ire. The nk never his bank, implished ' interent, it, it has ictedaa a ibambers ;; Duke andi lis duchy,. KheniBhi 1 property Ibe annui- » the period, pays & pet hole debt;^ bank wafr lues debon- dcbentares rest, 4 per Itlinister of s the same of florins. 3i per cent mple privi- sccurity or )tion of the of florins, n 1840; in I to restrict c agricultu- he interest rom 1 to 5} without in onvcDience. in 1835, is 500 francs. and twenty validity of ed to it. It oupona, each hich is paid yearly to the holders of d.hcutures. A borrower may pay off his indebtedness, in whole or in part, at any time. It redeems by tirade an tort, with or without a premium. It lends to the extent of three-fourths of the value of a property, on first mortgage, taking into aocount the moral character and solvency of the borrower. It receives deposits. The rate of interest on arrears is 6 per cent. Contestations are settled by the amicable inter- vention of arbitrators named by the parties. Caiue Uypothicairc. — This institution is the rival of the Caisse dea Propriitmret. An association of capitalists. Nominal capital stock, l2^millions of francs. Shares of 1000 francs. It lends at 4 per cent, and a charge of 1 per cent commission. It differs from the CaUae dea Proprietairea in that it gives no premium at the redemption ; that it makes a charge of one franc on the transfer of each share ; that its shares are all nominative. It has a tontine or caiaae dc aurvivance. It enforces a sinking fund of double the amount necessary for the liquidation of the debt in a given period ; the surplus is refunded to the borrower a year after the payment of the last annuity, when he receives a sum equal to the amount of his loan. But inasmuch as these two associations (having no provisions for loans on mortgage) did not meet the wants of the nation, the Belgian government proposed the introduction of a Cridit Fonder institution, modelled on that of Gallicia, the best probably of all those existing in Germany. That of which the principle of association between borrowing pro- prietors forms the basis. Its object is to facilitate loans on mortgago and to effect the liberation of the parties indebted. The bank issues debentures ; lends on first mortgage, to the amount of one-half the value of lands under cultivation, and one-fourth the value of houses and standing timber, the minimum for loans being 500 francs. When, on applica- tion of the borrower, the bank pays a prior creditor, it is subrogated plen yjure. If a credi- tor, after notification, cloci not claim his money, the bank makes a judicial deposit of the amount, after the lapse often days. The debentures — payable to particular persons, or to bearer — are issued in slips (coupurea) of 100, 200, 500, and 1000 francs. They bear 4 per cent interest. The redemption lasts 42 years. At the end of 42 years the borrower is entitled to his share of the profits if any there be ; and he is bound to contribute towards losses by continuing the payment of his annuity for a further term of three years. It avails itself of the tirage au aort, by means of which it red<;euis its debentures twice a year. Borrowers can acquit themselves in whole or in part, on payment of half the annuity, or six months' interest. The interest on arrears is 5 per cent. The King appoints the five ministers who compose the council of administration. The bank can expropriate in case of arrears or of the depreciation of an immoveable, unlc.« the debtor offers, in the latter case, a supple- mentary mortgage. ARBITRATORS. Many Credit Foacier institutions refer to arbitration, any contestation arising between themselves and the borrower?, or other parties. This is a right which, in many cases, seems to conciliate tho parties and to diminish costs. ANTICIPATION — INDEMNITY. In all Credit Fancier institutions, the borrower, who pays by means of a sinking-fund, has the right of acquitting himself by anticipation, in whole or in part, in consideration of ii certain" indemnity. This indemnity serves to cover any loss of interest and cost of management incurred by these institutions, during periods when they may be unable to invest the monies accruing from such anticipatory payments. Payments on account must not be for too small an amount. The indemnity varies in different countries. In France, it was fixed at 3 per cent, at first, then at 2 per cent, and finally at 1 i per cent. In ir«r-ta-(?a//tt/a,— the borrower who pays by anticipation, is obliged to pay au indemnity amounting to six months' interest, for each supple mentarv payment made. Payments on account may be made in debentures, but the interest must be paid in cash. W I *' 114 In Hanover. — Tho Cridit Fonder of Lumaburg reqatres the borrower, who wishei to aeqait himself bj anticipation, to pay an indemnity of 2 per cent, if he pays up provioM to the sixth year, and only ith por cent, from tho sixth to tlio sixteenth year. In Bclifium. — La caiisae dc$ proprUtaire» charges, by way of indemnity, 3 per cent on the capital lent, or a discount at tlio rate of 4} per cent, per annum, on the annuities unexpired, when tho borrower acquits himaelf by anticipation, either in whol<.>or in part. La caitte hypolhicaire (ihnT^Qti, in case of anticipatory payment by the borrower, ao indemni.y fixed by agreement and specified in the instrument creating the loan. Paymenta on aecount must not be too small. ADMISSION. In associations of capitalists, admission is effected by taking shares in the stock of the institution. In associations of borrowers, nicmbirship is optional so long as the proprietor does not borrow ; but it becomes obligatory by the mere fact cf his obtaining a lean. The immove- able mortgaged to the institution conferij the right to form part of the association; when the proprietor sells, he transfera his rights to the purchaser. There are certain formalities to be followed in the alienations of properties mortgaged to the Credit fancier, with a view to the protection of its rights. In Kist Prussia — an exceptional case — any proprietor of an immoveable is of right a mciubjr of ili } a'^s»ciation, whether he has borrowed or not. SOLID.\UITY. In Ruttia, all members of the Cridit Fancier association, called Credit Si/ttime, are jointly and severally responsible for tho interest and capital of the debentures, for three- fourths of the value of the properties mortgaged. In Mecklenburg, the members of the Cridit Fancier are jointly and severally liable for the payment of the debentures. In Hamburg the members of the Credit Fancier are jointly and severally liable for the debts of the Cridit Fancier. This solidarity which exists in several Credit Fancier institutions, formed by borrow- ing proprietors, in Germany, has been adopted in order to give increased confidence to lenders, and to promote the circulation of the debentures ; and also to stimulate among the members mutual supervision, thereby ensuring a more reliable valuation of property. This solidarity does not exist in associations of capitalists, who, generally speaking, «ra only liable to the amount of their subscriptions. CAPITAL STOCK. The capital of the Cridit Fancier, subscribed by capitalists holding shares, is usually Tery small in proportion to the extent of its intended operations. In fact a Cridit Fonder institution is no more then a simple bank when it operates with its joint stock capital, and it becomes an intermedial institution between the lender and the borrower so soon as it issues debentures, in order to procure the necessary funds which its subscribed capital alone could never furnish. And, in fact, the capital stock is often employed solely in discounting, and as a reserve. In France, the capital stock is only 60 millions of francs, and in the course of a single year (1861) the loans amounted to over 179 millions. The borrowers' associations have, generally speaking, no funds but tho State grants and the capital produced by the sale of their debentures ; and this is sufficient. OBJECTIONS. "Many objections have been put forward against these Institutions," says M. Josseau. " It is stated, first, that they give proprietors too great a facility for contracting debts. Thus, proprietors have been known to devote the sum i borrowed to extravagant expendi- ture, to imprudent speculation, or to inconsiderate investments. " It is true that these abuses have existed, more especially at first, but modern legisls' tioB baa applid a powerful remedy by borrowing from the science of finance a happy com* 115 ishei to OTIOUI to cent on annaitiM part. ower, ao 'aymenta ck of the does not immoTe- on; when ormalitiea ith a view etor of an not. 'ititne, are for three- ■ally liable liable for by borrow- ifideooo to among the party, speaking, is usually Jit Fonder }ital, and it soon as it bed capital id solely in of a single tate grants M. Josseau. ting debts. at expendi- lern legisla* happy oom* bination. This combination consists in imposing upon the borrower, in addition to the payment of yearly interest, a gradual extinction of the loan. The sinking fund undoubtedly increases the annual payments, and may sometimes embarrass an iuTolved proprietor ; but this drawback disappears on considering the advantages presented by the combination. In fact, on the one hand, it serves to increase the confidence of capitalists, and by that very means causes a reduction of the rate of interest in behalf of the debtor. On the other hand, it makes the proprietor reflect before applying for a loan, it iaduces him to devote himself more seriously to the improvement of nis position. It tempers the spirit of enter- prise with the spirit of economy ; it meets the inconveniences resulting from the facility of obtaining loans, by the facility of tho reduction. « Another imperfection laid to the account of these institutions is, that they limit their action to large proprietors, and that the middle classes and small proprietors are excluded from deriving any benefit from them. In fact nearly all the Prussian institutions were created for the benefit of the seigniorial estates. This peculiarity was tho result of the spirit of the age in which they took their rise. It was considered that periods of crisis presented greater difficulties for the great proprietor than for the small farmer, from the simple fact that the latter finds in the work of his own hands, a resource which the former does not possess. On the other hand, the number and parcelling out of properties must have rendered the work of the association more difficult, particularly at its commencement. " These reasons were considored conclusive at the origin of these associations, and the more remote the date at which these institutions were created, the more strongly are they marked with an exclusive and aristocratic character. But the democratic laws relative to the redemption of feudal rights and dues, have introduced new principles in the history of these institutions. Thus it is that it has been, almost everywhere, sought to bring the caiase de cridit within the reach of the middle and smaller classes of proprietors. The Wurtemburg association, for instance, admits proprietors who can furnish a mortgage of the value of of 1,000 florins (2,140 fr.), on condition that the commune to which they belong shall guarantee the interest. La Banque rurale of West Prussia admits peasant lands of the value of 500 thalers (1,875 francs); that of Pomerania, lands belonging to nobles of double that value (3,750 francs.) The debentures of thc8<) two associations have always commanded a better price than those of th«^ other banquet de cridit. "This is not all : new laws have now been enacted, new measures have been proposed, reducing or tending to reduce still further the mmimum fixed for the value of properties upon which loans may be made by cridit fancier institutions. These institutions will, therefore, henceforward be enabled to extend their benefits to small farms. " Lastly, it is made a subject of reproach against these institutions, that they have the inevitable effect of consolidating and enlarging agricultural estates, by perpetuating, for the benefit of the aristocracy, the holding of large properties. It is solely with that object, say a certain party in Germ iny, that they are fostered by Governments. " This is not the place to determine how far this accusation may be based upon truth ; but any person acquainted with the state of agriculture, under the system of subdivision ad infinitum which obtains in certain parts of Germany, will find nothing alarming, in that objection, in so far as France is concerned. It would rather be a matter of congratula- tion to find in the credit institution a means of restraining a tendency so prejudicial to the improvement ot the soil. Now that the agricultural classes are praying for the enactment of a law to arrest that tendency, the attaining of their object, as the natural effect odnstitU' (ions de eridit, cannot be rightly set down as an objection to the introduction into our country oi this institution." The following are the remarks made by the Belgian Minister of Finance, in 1850, when presenting to the Chamber of Deputies his Cridit Fonder measure : " Those who object to the better organization of the credit system, on the ground of the absence of a taste for agricultural improvements, and the extreme love of possession prevailing among small holders, have also asserted that the credit system followed in Ger- many has not by any means been wholly beneficial in its results. According to these parties, if on the one hand it has lowered the rate of interest, it has often furnished propri* etors with the means of going into debt, and ruining themselves. It is important to re- mark, gentlemen, that two phases of the credit institutions of Germany are here confounded. The evils referred to, exhibited themselves daring the first period, and, according to the ■i 116 i * teitimooy of men who have made these iosUtutiona a matter of clone study, they wore due, not to tb(B credit system, bat to the absence of a sinking fund, to the power of compelling the borrower to pay up in full, and to the obligation of redeeming on tho demand of the lenders, all three being incompatible with a good Cridit Fonder system." Some persons think that loans to small proprietors will be difficult to realise, and will result in losses. If the Credit Fancier has taken care to lend to none but respectable and industrious parties, it will have nothing to fear ; for as M. Josscau repeatedly flays, what constitutes the solidity of a loan is not so much the import'iuoe of the immoveablo to which it attaches, ta the proportion between the value of the immoveable and the amount of the sum lent. In the Keport of the Commission appointed by the AasembUc XutionuU Ligitlative in France, in 1851, the following occurs : " Numerous of objections have been made, more particularly in the enquiry conducted by the Council of State, to the fundamental principle of the project. Wo shall enumerate and discuss them as rapidly as possible. " Firtt objection. — The enormity of the debt which weighs upon immoveable property is not a sufficient ground for the introduction of innovations in the system of Unded credit. In fact the very magnitude of the debt may be deemed a proof of credit, and consequently of prosperity. It may easily be answered that, no doubt the magnitude of loans is a proof of the abundance of capital and of the prosperous position of lender? ; but ia order to demonstrate, at the same time, the pro.* revolution of February. Hence an excessive cry for reforms tending to affect landed credit, which may have its dangers and which it is neces- sary to distrust. In this state of the facts and of the public mind, the authors of the ob- jections see an argument against the expediency of undertaking any reform at present; if that reform be really useful and necessary, it should, in their opiniou. bo undertaken at a period of less excitement. "It may be stated at the outset, that this objection, based upon the present straight- ened position of proprietors, is somewhat inconsistent with iiie preceding one, which sup- poses them to enjoy as good a credit as cny other class of borrowcra ; and let us hasten to add that it is, to say the least, strings that tho gravity of the evil should be made the ground for refusing even to look about ."«;- a remedy. Our own opinion is, that it is pre- cisely becatise property is now suffering ro-'- perhaps, than it has suffered at any other period, that the public authorities are ttnlf,'. ;^k..'3, -a matte of bounden duty and of com- mon prudence, to seek a practical and e:?re;?iuul vjoans of coming to its relief. AVc trust, for the sake of the autnorities then >clyefl and of Franc* . that in the inquiry they will have the courage and wisdom to avoid nr. onicflecting enthusiasm as well as an over-cau- tiouii pusilUnimity; both alike unsui^d to the present time. We exhort them^ iu fine, to Hi what pay no attention to those pliant arguments as to ezpedieney, in behalf of which at one luoiuent tho general prosperity is invoiced to show that all roform is ueelesa, and at another the difficulty of the times, to prove that reform wonir' be useless and dangerous. "Wo conclude as to ihis joint, by recalling the tact that Germany, which we may fearlessly quote, sinoo we sock to imitate its example, adapted the coarse which we would follow, not in prosperous times, but in periods of embarrusfeKent, such as we arc now passing through. Who does not know that it was in 1768, it *he midst ol' tbe all but universal ruin under which the Silesian proprietors lay exhausted, after the seven years' war, that Frederick tho Great founded, for their bcne6t, the landed oredii natitution. Other inati- tutions of the kind date from 1803, from 1811, from l,il8, that is Ui say, from the periods when the German States were more than ever exhausted by wars and the cvil^ whi^h they entail. Let us do w they have done while it is yet time, and I'^t us not wait until th<> flvil has become irremediable before seeking a remedy. " Fourth objection. — It may, it has also been stated, bo dangerous to give proprietors of immovables too great faoilifies for obtaining credit, thereby tempting them to borrow uu- ucccssarily moneys \r;', ^^ v ould, in too many instances, be squandered or lost. "To this ohj.i >r , it ■ •'v be answered: let, that if Jully carried into eflFect, it would have theabsu ' ' redn i. o^ i' udering legislation syBtematioally hostile to all credit on the se- curity of imm"veabi''s ; thai there is no intention whatever of giving proprietors the means of borrov.ing viltL ' r limit, and that the law must, on the contrary, impose wise and pru- dt'jt r«>Fi lii'Mons as to the power of lending on mortgage, to be conferred on the institations it is iittoii'^ed to crentc; that these institutions, whether as lenders or acting as a medium for loans, must nocss^irily have a discretionary power analogous to that exercised by the Bank of FraticR wlicu it consents or refuses to discoaat commereial papers, and that they shall in no way be prevented from taking into account the moral character of the borrower, the manner in which he managed his property, quite as much as the soundness of '^c material security offered for tho safety of the operatioa. Fifth objection. — The Cridit Fonder is m utter impossibility in the present stste of legislation in Fraticu. This objection would be unanswerable no doubt, if it were proposed to establish landed credit institutions without amending the laws relative to the creation of mortgagee and the transfer thereof, legal hypothecs, expropriation, priority, &c. : but important modifications have already been submitted to yon in that respect in the law respecting la riformt hypothhcuire, and the bill which we submit will, if adopted, have the effect not only of completing all guarantees that can be neoesisary for institutions of the kind, but of enabling them to operate in perfect security without awaitiog the enforcement of the law respecting la ri/orme hi/pcthdcaire, and altogether independently of that law. The objection, which has so much weight, if we leave out of sight the proposed modifications of the present law, is therefore fully met thereby. Sixth objection. — If credit institutions have succeeded in Gcrmay, Poland, &o., it is because property there is concentrated, and because small loans are never made. Accord- ing to one of the witnesses in the enquiry of the Council of State, the smallest amount lent, in Gcrmay, is 4,200 francs, an amount, in his opinion, by ihr too large for a country in which property is so greatly subdivided as it is in France. To this objection we shall answer, that no doubt crddit immobitier institutions had for their solo objer>t >rt assist great proprietors, and to preserve, more especially, feudal estates in tl . .aiilics of the nobility, und thus it was that the minimum amount fixed for loans, through the medium of these first institutions, was very high ; but that was in no sense an essential characteristic of these institutions, the true principle of which is sufficiently enforced, provided there be nn exact and safe proportion between the value of the security and the amount borrowed. And in fact cridit immobilier instituUons were established in course of time, in countries whore property is subdivided quite as much as in France, such as tho Grand Duchy of Baden, tho (rrand Duchy of Posen, &o. They are now being established in Belgium, under ciroum>tances strongly analogous to those by which we are surrounded. So far is it ffxa being an essential principle of these institutions to confine themselves to large loans on the security of extensive estates, that yarioiw governments, l»mong8t others that of Russia, have founded landed credit banks for the speeiiJ purpose of I ! { ■1: i' 118 i'f: I iii famishing agrioultaral vasflals with the means of enfranchising themselves hy redemption from the burthen of feudal dues and servitudes. In addition to the objections above enumerated to the introduction of the Cridit Fonder system, an infinity of others were put forward, which were, in every instance, victoriously refuted by the greatest and the strongest of all arguments : facts and experience. Some persons object to the length of time occupied in the redemption, and say : « What ! you want our lands to remain under mortgage for half a century ; you want us to leave the extinction of our debt to the care of the generation which is to succeed us I This would be tying a weight about the necks of two generations. No person will be willing to have his property mortgaged for so long a period. Why does not the Cridit Fancier make its loans to farmers for one year, for instance, with the x'v^xt of renewal each year, if he cannot pay V This objection, like all the rest, is more specious than solid ; the remedy which is proposed would, without doing any good, be a cause of embarrassment and of serious inconvenience to the bank. The bank, in order to obtain capital, is obliged to negotiate debentures to an amount equal to that of the obligations, and payable at the same period as the obligations them- selves. Inasmuch as the bank has no other resources for the payment of its debentures than its mortgage securities, what would be the result, if at the period when the debentures fell due, which would also be the time for the expiration of the bonds of the borrowers, the latter should be unable to meet their payments ? And the payments would be all the more difficult for the farmer that they would consist not simply of the Sinking Fund but of the capital itself, borrowers invariably deceive themselves as to their means of pay- ment, and in the majority of oases it turns out that when the day arrives they arc unable to meet their engagements. I do not speak of those who have exceptional means of procur- ing money, but more particularly of farmers who borrow pretty large amounts, and who hiive no other resources but the produce of their farms. Besides the serious and perhaps fatal embarrassment which a default in payment would cause to the bank, it would entail upon the borrower himself, the cost of a renewal, of registration, of additional deeds, besides an increase of work and consequently an increase of books and employes on the part of the bank. And all this without giving a single advantage to the borrower, which he would not enjoy under a loan at a long date with power of acquitting himself at will, in whole or in part. For instance, by borrowing at the longest date, 50 years, he pays a much smaller annuity, his annual payments are more easily met, and the bank, which has issued its debentures payable at the same time that the bonds of the borrower fall due, can have no grounds for uneasiness, because at that date it will have received, by means of the annual sinking-fund, the repayment of the capital due, in order to enable it to meet its debentures. If the borrower should at any time be enabled to pay by anticipation, the whole or part of the amount borrowed, the anticipation can in no way impede the operations of the bank. Having the money in hand, the bank can lend it without issuing fresh debentures, making the terms of the fresh loan such that it will fall due at the same period as flic debentures left in circulation, and of which the amount has been paid by anticipation. To object to the length of time for which loans are made, is not more reasonable than to object to the making of loans at all. Because time is given merely in order to give the farmer greater facility for clearing oflf his debt; the length of time is only nominal, and a simple matter of form, since the borrower can at any time at his option acquit himself by anticipation in whole or in part. Is not the constitut embodied in our legislation as well as in our usages ? And who will assert that a loan d constitut is not more favorable to the borrower than an ordinary loan? So much so that borrowers often prefer to pay a higher rate of interest in order to borrow on constitut, than to borrow otherwise. Does not a pur- chaser prefer to purchase a property charged with a constitut and to take it upon himself, retaining the principal, than to pay the whole of the purchase money? Well, what is the long-dutc loan of the cridit fonder but a constitut loan ; but a constitut which extinguishes itself without payment of the principal ? And this it is that renders it superior to the constitut itself A pa:< fy who is in no need of borrowing may object to the length of time for which a property may remain under mortgage, and in fact to all loans, whether on mortgage or otherwise } but a person in D«ed does not reason thus, Ho must borrow, in ord^r to osoap* I ( t 119 idomption he Cridit ' instanco, Kperience. and say : irant us to ccecd us ! ion will be the Credit }( renewal ban solid ; irrassment an amount ons them- debontures debentures iowcrs, the be all the Fund but ans of pay- arc unable i of procur- 1, and who nd perhaps rould entail eds, besides the part of which he at will, in ich smaller issued its ;an have no the annual debentures. e or part of ' the bank. res, making debentures onablc than to give the linal, and a himself by )n as well as able to the )ay a higher IS not a pur- pon himself, what is the sxtinguishes Brior to the for which a mortgage or \^X to CBcap* ruin, usury, seizure. It is for him that resources must be found, easy loans suited to his means of repayment. Another objection, which many persons make, is, that merchants will no longer sell on credit to farmers once they mortgage their lands to the Cridit Fonder, lu the first place it may be answered that merchants do not object to give credit to persons who arc not property holders ; in the second place, that if it were really true, that merchants would no longer give credit to farmers, it would be no lo.ss whatever, but, on the contrary, a great benefit to ftirmers and to their families. It would be a powerful means of preventing the love of display and extravagance which has penetrated into our rural districts, and which is to so great an extent the cause of the distress now witnessed. RESERVE FUND. Notwithstanding that the nature of the operations of Cridit Fonder banks places them, for the most part, beyond the reach of the catastrophes that occur in financial insti- tutions based upon personal security alone, prudence must, nevertheless, show them the necessity of a reserve fund, sufficient to guarantee them against all losses and contingencies that may arise. In cases of misfortune tiiey may sometimes be compelled to retrain from pressing an unlucky debtor; delays may occur iu recovering annuities, or else in the ne- gotiation of the debentures j the reserve may bo a matcer of absolute necessity, in some cases, though the institution may but very seldom bo obliged to have recourse to it. , LOANS AT SHORT DATES. As the reserve fund should not remain unproductive, the Credit Fonder might apply it to loans at short dates, to be eflccted upon unexceptionable guarantees, and repayable in full at the end of three mouths ; this is done by the Credit Fourier de France and some others. These three months' loans might also be renewed every three months, if the affairs of the bank permit. But it must be boruo in mind that operations of this kind, for a Credit Fon- der bank, constitute an exception to the nature o: its transactions and must be conducted with the utmost caution. Prudence cannot fail to suggest this to the directors of the in- stitution. In no case whatever should there be devoted to operations of this kind any moneys but the reserve fund and a portion only of the deposits, in order to avoid the possibility of embarrassment. The Credit Fonder de France is author.zed, under its statutes, to use no more than one half of its deposits for loans at 90 days. Peculiar systemof the dt>/ of liremru. — I cannot conclude this work without referring to a species of mobilization of real property practiced in Germany, and which I borrow from the documents arranged by M. J()s.scau: "The free city and llansc-town of lircmcn," says M. Josscau, " has a population of 72,820 inhabitants. Its government is similar to that of Hamburg; it consists of a senate and an assembly of burgesses. The admiuistration is conducted by four burgomasters, ap- pointed by the senate for four years, and two i>>/ndics who may take part in the discussions. " The mortgage system which obtains in the city of Bremen presents, iu the manner in which it is applied, certain peculiarities worth describing. " The system covers movable and immovable property. " The merchant, the proprietor of movables, sells the same on credit, and receives in return, drafts on the purchaser. These drafts, which are often cndorseJ in blank, are the ordinary mode of payment in commercial transactions. They are exchanged, one for another, are renewed when due, and thus constitute a more active and more advantageous mechanism than the plan of simply paying for merchandise at the end of a fixed period, with interest, which i.s often practised elscwiicro. " The proprietor of immovables is entitled to receive from a committee of magistrates appointed ad hoc, titrcs representing, in whole or in part, the value of such immovables, and charged thereupon. Such ttrcA or mortgage bonds arc sold daily in the same way S8 bills of exchange. They contain a statement of the amount which they represent, and of any hypothecs 'laving priority over the latter. The issue of titres sometimes exceeds the value of the immovable (the latter being occasionally liable to the depreciation resulting from a sudden fall), and tlioy are therefore received with more or less confidence in propor- tion to the value of the guarantee. " By means of this system mortgages have been rendered negotiable. 1« f 1^)1 l\\ I ;11U 120 " Thus the two-fold advantage has been secured, of increasing the facility of credit, thereby lowering the rate of interest on money, and of raising the price of immovables. The number of purchasers has increased, in consequence of the increased facility with which property is made available for the purposes of credit and circulation. " The drawback attending this system is, that it has the effect of diminishing the sta- bility of immovable securities. This species of mobilization of property is less dangerous in commercial cities, where the object is to give increased activity to commercial transac- tions ; but it could not be applied in the same proportion and with the same facility to the rural districts. Under this system every species of property is an article of commerce. Habit and experience must have moderated any tendency to over haste, excessive facility in the system ; but rural property requires other guarantees besides the habits of a com- mercial exchange." SUMMARY. We might sum up in two words all that is admirable and valuable in the credit fonder : The lettre de gage — The sinking fund. In fact the lettre de gage is the capital of the Credit Fonder; ever at hand, ever sufficient; never unproductive, because it is never created but at the moment of need. The sinking-fund is the farmer's reliance, his sheet-anchor ; it is his savings' bank in which he deposits each year a portion of his debt; that fraction, which is hardly percepti- ble by him, in the course of a few years, by means of the rapid progress of compound interest, makes up the capital he had borrowed. The sinking-fund is the safety of the Credit Fonder ; because, inasmuch as it is never compelled to demand from its debtor an amount beyond his means, it runs no risk of having its claims compromised; and besides, the amount of the latter is rapidly reduced each year. With its debentures once admitted to public favor, and loans on mortgage with a sinking-fund, any Cridit Fonder institution may proudly look forward to relieving the agricultural class, and to the improvement of agriculture in the country into which it shall have been iatroduced. It is a noble mission, and one, nevertheless, which is not imaginary, since, wherever the system has been adopted, these very results have been attained. G. B. D£B0UCH£aVILL£. I'OBTCKirX. I I ! W In concluding this work on the Credit Fonder, 1 must claim the indulgence of the reader for the manner in which I have treated the subject and classified the matter, as well as for having introduced questions neither strictly nor intimately coiuiccted with the study of these institutions, and algebraic formula with tables. I couless that the formula and tables consumed a great deal of my time, which I might have devoted to a more thorough revision of the work itself. Many persons will think that the tables and formula might have been omitted, more especially since the work has been annexed to the report of the committee appointed by the Legislative Assembly " to ciKiuiro a.s to the expediency of establishing a system of landed credit in Lower Canada." As my intention in undertaking the work was to make it a species of manual, instructive, useful, practical, and adapted for reference, I was naturally reluctant to omit matter which had cost mo so much labor and perseverance, uud which I had the weakness to consider of some utility and calculated to please. However, I would have done so had it beeu the wish ot the committee. I tliank them for having permitted the existence, however ephemeral it may prove, of that portion of my humble contribution towards the elucidation of a subject so fniught with interest for the country. Before concluding, I capnot refrain from expressing uiy rcirrot on one point, namely : that public opinion should be opposed to the creation of a lauded credit institution for Lower Canada, based upon the principle of those now existing, and operating with tn much success iu Goruany ; I moan those whioH are formed by borrowing-proprietors oi I W of credit, movables, lity with g the sta- iangeroua A transac- 'acility to iommerce. re facility of a oom- U fonder : band, ever need. rs' bank in y percept) - compound it is never k of having . each year, age with a lieving the ioh it shall imaginary, ned. 121 the agricultural class, and which are exclusively and entirely devoted to the profit and advantage of the borrowing farmers themselves. Capitalists are not to be pitied ; it was not for their benefit that I wished to establish the Credit Fancier. It is not my fault if they are destined; as shareholders, to realize other profits than would strictly suffice to induce them to invest their capital in au institution which ought to be created solely in the interest of the agricultural class. Public opinion has decided otherwise. If the capi- talists have succeeded, they certainly owe me no thanks. I have done and will do all in ray power to promote the interests of borrowers, taking into account the interests of capita- lists only so far as to insure them the most undoubted security and the repayment, with the utmost exactness and punctuality, of the interest and capital of any monies they may deem it advisable to invest in the Cridit Fonder. a. B. de B. Hi' IM ''M 2ncc of the itter, as well th the study brmula and re thorough uiula might port of the :pedicncy of undertaking adapted for labor and ;alculatcd to !C. I thank that portion yith interest iut, namely : t institution ating with (■» )ropriotors oi OFFICIAL DOCUMENTS. th 22nd February, 1862. Dicret respecting Societies of Cridit Fonder, LOUIS NAPOLEON, Preiident of the French Republic, &c. TITLE I. or SOCIETIES OF CREDIT FONCIER. Art. 1. — Societies of Cridit Fonder, having for their object the furnishing to proprie- tors of real property, who shall be desirous of borrowing upon hypothec, an opportunity of dealing themselves by means of annuities extended over along term, may be authorised by dicret of the President, with the consent of the Council of State. They then enjoy the rights and are subject to the roijjiilations fixed by the decret. Art. 2. — The authorization is granted either to aocietios of borrowers or to societies of lenders. Art. 3. — The societies are confined to territorial limits, which shall be fixed by the dicret of authorization. Art. 4. — Societies of Credit Fancier have the right of isfiuing bonds or debentures. Art. 5. — To facilitate the first operations of the societies, the State and the Departments may acquire a certain quantity of these debentures. The law of finance shall fix, each year, the maximum of the sums which the public treasury may appropriate for this purpose. The distribution thereof shall be made by the decret of authorization of each society. The same decret shall fix, moreover, the share wliich shall bo assigned to the society, of the fund of ten million^ appropriated for the establishment of institutions of Cridit Fonder by Article 7 of the dicret ot the 22nd January. TITLE 11 OF LOANS MADE BY SOCIETIES OF CREDIT FONCIER. Art. 6. — Societies of Cridit Fonder may lend upon the first hypothec only.* Loans by means of which all prior creditors arc to bo repaid principal and interest, are con- sidered as made upon the first hypothec. In this ease the society retains in its possession an amount sufficient to effect such repayment. Art. 7. — The loan may not, in any case, exceed one-half the value of the property ; the minimum of the loan shall be fixed by statute. Art. S. — No loan can be realized until after the accomplishment of the formalities prescribed by Title IV. of this dirrrt, for the purgation of : Ist, Legal hypothecs, except in the case of subrogation by the wife to such hypothec ; ** 2nd. Ai-tiomt resolutoiras ou resciaoires, and unregistered privileges, f If registration is effected during the delay caused by the purge, the conditional deed of loan is void and of no effect. *Thi8 provision lias been modified by Article .3 of the Law of lOtli June, 18r)3, in cases where the real property is cliatged witli ii.ypothecs of KnuriintPO ivgainst eviction or rentes viagires. *• thtpurge was made optional by Article 3, of tlie Law of tiie 10th June, 185.3. (See p. 18.) \ Actiont rholutoiret ou rescUoire* and unregistered privileges can no longer be purged, an ce ▲rticU 24 of tbii dicret waa repealed by Article 8 of the Law of tbe luth June, 1853. (See p. 19. 1852. to proprie- opportunity authorised iecret. to societies ixed by the ebentures. [)epartments I the public each society, e society, of •dillt Funcier Illy.* Loans 3st, are con- ko eifcct such he property ; 10 formalities thecs, except esoliitoircH oil ditional deed In cases wherp litres. (See p. 18.) e purged, snce (See p. 19. 128 Art. 9. — ^When the legal hypothec is registered, the loan cannot be realized until after main levie has been given, either by the unmarried woman in respect of her portion or by the subroge tutor of the minor or interdicted person in virtue of the resolution of a meeting of relations and friends. Art. 10. — The borrower pays his debt by annuities. He has at all times the right to clear himself by anticipation, either in whole or in part. The annuity necessarily includes : 1st. The interest agreed upon, which must not exceed 5 per cent; 2nd. The sum to be applied to the sinking-fund, which must not be more than 2 per cent nor less than 1 per cent on the amount of the loan.;]; 3rd. The cost of management as well as the taxes fixed by law. Art. 12. — In case of non-payment of the annuities, the society, independently of the right apertaining to every creditor, may proceed by execution in the manner fixed by title 4 of this decret. TITLE III. OF BONDS ISSUED BY SOCIETIES OF CK]fiDIT FONOIEE. Art. 13. — The bonds or debentures of societies of Cridit Fonder are to order or to bearer. Bonds to order are transmissible by endorsement without any guarantee except that resulting from Article 1693 of the Code Napoleon. Art. 14, — The value of the debentures must not exceed the amount of the loans. They are issued only after having been authenticated by a notary, and registered. The visa is given gratuitously by the notary with whom is deposited the memoranduoi of the deed of loan. Mention is made in the memorandum of the number and amount of the debentures authenticated. The debentures must be registered at the same time as the deed of loan.* The registration of the debentures is cfiiected at the fixed rate of ten centimes. Art. 15. — No debenture shall be issued for a less amount than 100 francs. Art. 16. — The debentures bear interest. In the course of each year their repayment is proceeded with, in proportion to the receipts to be applicable to their redemption. Art. 17. — The holders of debentures have no other action for the recovery of the capital but such as they may bring directly against the society. Art. 18. — No opposition to the payment of the capital and interest is allowed, except in the case of loss of the debenture.! TITLE IV. OF THE PRIVILEGES GRANTED TO SOCIETIES OP CREDIT FONCIER FOR THE SECURITY AND RECOVERY OF THE LOAN. CHAPTER I. OP THE PCROATION — (LAW OF IOTH JCNB, 1863.) Art. 19. — For the purgation of known legal hypothecs, the signification of an extract from the deed creating the hypothec in favor of the society of Credit Fonder must bo made : To thj wife and the husband ; To the tutor and the suhrogi tutor of the minor or interdicted person ; To the emancipated minor and his curator; JThis provision has been modified by the decrel of 28th March, 1861 (see p. 11). • The provisions of paragraphs 2, 3, 4, and 5 of Article 14 are repealed (see the dicrtt of 6th July, 1864, Art. 1, p. 20.) fSee the law of the 8th Nivoso, year vi, article 4: " In future no opposition will be received in relation to the reserved third of the public debt registered, or to be registered." See alio the law of the 22nd Floreal, year rii, article 7, ]> ! m;i J ' I'i ' ' '■ 1 ' I-; i i 124 ! V: . 1, I' ; Hi m To all unregistered creditors holding legal hypotheca. Art. 20. — The extract from the deed creating the hypothec contains, under penalty of nullity, the date of the contract, the Christian and surnamea, the profession and domicile of the borrower ', the designation of the situation of the property, as well as a statement of the amount of the loan. It contains, moreover, a notification that, to preserve, as regards the Society of Credit Fonder, the rank of their legal hypothec, it is necessary to have it registered within fifteen days from the signification, allowing the usual delays for distance. Art. 21. — The signification must be made to the wife in person, if the borrower is her husband. However, the signification may be made at the domicile of the wife, if she, under what- ever conditions the marriage may have been contracted, was present at the contracting of the loan, and if she has received from the notary the notification that, to enable it to retain, as regards the Society of Cridit Fonder ^ the rank of her legal hypothec, she is bound to have it registered within fifteen days from the signification, allowing the usual delays for distance. The deed of loan must make mention of the notification, under penalty of nullity of the purgation as respects the wife. Art. 22. — If the wife was not present at the contracting of the loan, or has not received the notification of tlio notary, and if the signification has been made only at the domicile, the formalities necesaury for the purgation of unknown legal hypothecs must also be complied with. Art. 23. — if the borrower is, at the time of contracting the loan, the tutor of a minor or of an interdicted person, the signification is made to the suhroge tutor and to the justice of the peace of the place where the tutelle was opened. Within the fifteen days next after such signification, the justice of the peace convenes the meeting of relations and friends in the presence of the subrogi tutor. The meeting deliberates on the question, whether the registration is to be effected. If it is decided in the aflSrmative, the hypothec is registered by the mhrogi tutor on his responsibility, by the relations or friends of the minor, or by the justice of the peace, within the fifteen days next after the deliberation. Art. 24. — For the purgation of unknown legal hypothecs, the extract from the deed creating the hypothec must be notified to the Frocureur Impirial at the Court of the arrondissement in which the borrower resides, and to the Frocureur Imperial at the Court of the arrondissement in which the real property is situated. Such extract, together with mention of the significations made, must be inserted in one of the journals used for the publication of the judicial advertisements of the arrondissement in which the real property is situated. The registratiou must be effected within the forty days next after such insertion. Art. 25. — The purgation is efiected by failure to register within the delay fixed by the preceding Articles. It confers on the Society of Cridit Fonder priority over the legal hypothecs. Such purgation confers no benefit on third parties, who remain subject to the formali- ties prescrihed by Articles 2193, 2194, 2195, of the Code Napoleon. CHAPTER II. OF THE RIGHTS AND MEANS OP EXECUTION OF THE SOCIETY AGAINST BORROWERS. Art. 2G. — The Judges cannot grant any delay for the puyraent of the annuities. Art. 27. — Such payment cannot be stopped by any opposition. Art. 28. — Annuities not paid when duo, bear interest in full. The Society may, moreover, proceed to the sequestration and the sale of the property hypothecated, iu the manner and under the conditions prescribed by the following Articles : — SEO. I. — OF SEQUESTRATION. Art. 29. — In case of delay on the part of the debtor, the Society may, in virtue of an order granted on petition by the President' of the Civil Court de premiire initance. i'i 125 of and fifteen days after a mise en demeure, take possession of tho real property hypothecated, at the cost and risk of the debtor iu delay. Art. 30. — During the contiuuaoce of the sequestration the Society collects, notwith- staudiag any opposition or seizure, tho amount of the revenue or crops, and applies it by privilege to the payment of the iiunuities in arrear and the costs. This privilege ranks immediately after those which are attached to costs incurred for the preservation of the property, to tlie expenses of ploughing and sowing, and to the rights of the public treasury for the recovery of the tax. Art. 31. — In case of contestation in respect of the sequestration, the matter is decided upon by the Court in a summary manner. SEC. II. — OP EXPROPRIATION AND SALE. Art. 32. — In the same case of non-payment of an annuity, and every time that, in consequence of deterioration of the real property, or for any other reason indicated by the statutes, the principal has become exigible, the sale of the real property may be proceeded to. If there is contestation, it is decided by the Court of the place in which the real property is situated, in a summary manner. There is no appeal from the judgment. Art. 33. — To eflFect the sale of the real property hypothecated, the Society of Credit Fonder causes to be served on the debtor an order in the form prescribed by Art. 673 of the Code of Civil Procedure. Such order is registered at the Registry OflBce of the place in which the real property is situated. In default of payment within the fifteen days next following, six insertions are made within the six weeks following the registration of the said order, iu one of the journals indicated by articles lli of the Code of Commerce,* and placards are posted up at two separate times at an interval of fifteen days. The placards shall be posted up : In the Audience Chamber of the Court of the place in which the sale is to be eft'ected. At the door of the oflSce of the Mayor of the place in which the property is situated, and on the property when it consists of a building. The first posting is announced within the eight days following to the debtor and the registered creditors, at the domicile selected by them in the registration, with a summons to take communication of the roll of charges. Fifteen days after the accomplishment of these formalities, the sale is proceeded to by auction in the presence of the debtor, or after he has been duly called, before the Court of the place in which the property or the greater part of the property is situated. The Court, however, on petition presented by the Society before the first insertion, may order that the sale shall take place either before another Court or at the office of a notary of the ca7i}'ocis- icrhaux of the posting up of the placards, the summons to take communication of the roll of charges and to be present at the sale, are attached i4t\^G procha-vcrbal of adjudication. Art. 36. — The allegations and observations must be entered upon the roll of charges at least eight days before that fixed for the sale. They contain app.jintmcnt of an attorney at whose office domicile is elected, the whole under penalty of nullity. Tho contestation is brought before the Court by pleadings between attorneys. The Court decides summarily and fiaally, without its being possible for any delay of adjudica- tion to result therefrom. Art. 37. — If, at tho time of the registration of the order, there exists a previous seizure eflFected at tho instance of another creditor, tho Society of Credit Fonder may, as fat * The number of these insertions has boea reduced to three, piustbo at least tea days, Law of lOtb June, article 6. The interval between each insertion ^* si 11 ':: 126 as the depositing of the list of bids (caAier (2'encAdre«), and after a simple notification to the prosecuting attorney, proceed to the sale in the manner indicated in the preceding articles. If the registration of the order is not required by the society until after the deposit- ing of the list of bids, the society has then only the right to cause itself to be subrogated in the suit of the seizing creditor, in conformity with Article 772 of the Code of Civil Procedure. No postponement of the adjudication is granted, if it is opposed by the society. Art. 38. — Within eight days after the sale, the purchaser is bound to pay into the treasury of the society, as a provisional payment, the amount of annuities due. After the delays of surtnchire, the balance of the purchase money must be paid into the said treasury, until it reaches the amount due thereto, notwithstanding any opposition, contestations and registrations of the creditors of the borrower, saving however their action en ripitition, if the society had been unduly paid to their prejudice.* Art. 39. — If the sale is eflFected by lots, or there arc several purchasers not co- interested, each of them is only bound, even by hypothec, towards the society, up to the amount of his price. Art. 40. — The surenchire is conducted in conformity with the 708th and following articles of the Code of Civil Procedure. In the cose of sale before a notary, it must be done at the office of the clerk of the Court of the arrondmement in which the adjudication has been pronounced. Art. 41. — When/o/fe enchire occurs, it is proceeded upon in the manner indicated by articles 33, 34, 35, 36 and 37 of the d6cret. Art. 42. All the rights enumerated in this chapter mny be exercised against tiers ditcntcurs after notification of the order made to the debtor. The prosecution commenced against the debtor is validly continued against him until the third parties to whom he has alienated the hypothecated real property, have made them selves known to the society. In this case the prosecution is continued against the tier* detenteurs throughout the latter proceedings, fifteen days after the mise en demeure.'\ IE ai ai ti d a e r t r TITLE V. ' GENERAIi PROVISIONS. Art. 43. — Societies of Cridit Fancier are placed under the supervision of the Minister of the Interior, Agriculture and Commerce, and of the Minister of Finance. J The choice ot the directors is subject to the approval of the Minister of the Interior, Agriculture and Commerce. || Art. 44. — Societies of Cridit Fonder are forbidden to enter upon any operations other than those prescribed by this dicret. Art. 45. — They are permitted to deposit their unemployed funds in the public treasury on conditions fixed by the Government. Art. 40. — The funds of persons incapable of managing their afitiirs and of couimunet may be applied to the purchase of debentures. The same is the case with the disposable capital belonging to institutions of a public character, or of public utility, in all cases where these institutions arc authorized to convert their capital into State rentes. Art. 47. — The registration of hypothecs effected for the benefit of societies of Cridit Fonder is exempted, during the whole duration of the loan, from the decennial renewal pro- scribed by article 2154 of the Civil Code. • These provigions are made applicable to every purchaser, cither on voluntary alienation, or by «0Mi< immobiliire, by article 7 of the law of 18th June. t Societies of Credit Foneier may use their rights ond these means of execution agninst the bor- rower, even for the recovery of sums which they have paid to a registered creditor in order to bo sub- rogated to his hypothec. L. of 10th June, 1863, art. 6. X Sec ihedicret of 28 June, 1854, which places the Cr)>0 cf the Code Na|)ulcon. It must be observed that the provisions of the estimate law of 23rd June, 18,'>7, which subjects the cession of the shares of these same companies to a trunsler duty, do noi apply to tiie obligatiuni f'oncieres XTbe other articles of this agreement hare been repealed bj f/^cr«tt dated 21st December, 1853 and 6th July, 1854. * "I ul ul al 181 icd by 10th June, 1853. Law modi/i/inij the dicret o/2Bth February, 1852. Art. 1.— Chapter 1 of title IV of the -lecret of 28th February, 1852, is modified as follows : Art. 2. — The purgation made obligatory for societies of cridit fonder by Article 8 of the dicret of 28th February, 1852, ia henceforth facultative. Art. 3. — If the real property is charged with registered hypothecs, entered into in consideration of guarantees against eviction, or in consideration of rentes vinghrvs, the Soificty of Credit Fancier may neverthcl 'ss loan, provided the amount of the loan, joined to the capital registered, does not excet:>l one-half the value of the real property, iu con- formity with Article 7 of the dicrrt of 28th February, 1852. Art. 4. — The hypothec entered into for the benefit of the Society of Cridit Foncicr by the conditional deed of loan, ranks from the day of regi.stration, although the value may be puid over at a later period. Art. 5. — Societies of Credit Fancier may use against the borrower the vight.s and modes of execution which are allowed them by the dirt-tt of 28th February, 1852, and also this law, even for the recovery of sums which they pay to a registered creditor, in order to be subrogated to his hypothec. Art. 6. — The number of insertions required by Article 33 of the decret of 28th Feb- ruary, 1852, ia reduced to three. The interval of time between each insertion must bo at least ten days. Article 7. — The provisions of Article 38 of the siiiiie ddcret are applicable to every purchaser, either by voluntary alienation or by saisie immahiliire. Art. 8. — Article 24 of the dicret of 28th February, 1852, is repealed. 6th July, 1854. Decret respecting tJie new organization o/ the Credit Fonder in France. NAPOLEON, &c. In view of the dicrets of 28th February, 28th March, 18th October, and 2l8t Decem- ber, 1852, respecting Societies of Credit Fancier ; In view of the dicrets of 28th March and 10th December, 1852, and 21st December, 1853, which instituted the Society of the Credit Foncieu de France. In view of the decrcts of the 30th July, 1853, and 22nd March, 1853, by which the by-hiws of that society were approved ; In view of the proceeding, dated 26th June, 1854, of the Council of Management of the Society, acting in virtue of the powers delegated to it by a general meeting of the shareholders ; With the consent of our Council of State, Have decreed and do decree aa follows : — TITLE I. OF THE GENERAL MANAGEMENT OF THE CREDIT FONOIER DE FRANCE. Art I. — The affairs of the Credit Foncier DE France are managed by a Governor. The Crovernor appoints and dismisses the agents ; he presides over the Council of Management and the general meeting of the shareholders ; he sanctions the debenturues ; no proceeding can be executed unless it is approved by him and authenticated by his sig- nature. Art. 2.— Two Sub-Governors perform the functions delegated to them by the Governor, iinrl, ill the order of their appointment, perform the duties of Governor, in case of vacancy, iibsenco, iir illness. Art. 3. — The Governor and the two Sub-Governors are appointed by the Emperor. Art. 4 — Before assuming office, the Governor must qualify in the amount of 200 shares of the Cridit Foncier de France, and each of the Sub-Governors in the amount of 100 shares. I: I* V 182 is ,y.. :.M ■,l ir Art. 5. — The Governor receives from the Society of the Credit Fonder cfe France an annual salary of 40,000 francs; the two Sub-Governors receive a salary of 20,000 francs. Art. 6. — Three members of the Council of Management are selected from among the receveurs-geniraux des finances. TITLE 11. OP THE CONDITIONS OF tiOANS. Art. 7. — The maxima fixed by the ddcrets of 10th December, 1852, and 21st Decem- ber, 1853, respecting the rates of annuities to be paid by the borrowers, are suspended ; the conditions of loans to be made by the Society are those prescribed by the d6crets of 28th February and 28th March, 1852, respecting Societies of Oredit Fonder. The rates of the costs of management shall be fixed at the time of the revision of the by-laws. Art. 8. — Independently of loans repayable by annuities, the Society is authorised to devote to hypothecary loans, for short terms and without sinking-fund, the capital resulting from the realization of its capital stock and its profits. TITLE III. GENERAL PROVISIONS. Art. 9. — Special decrets promulgated at the instance of the Council of Management, and in the form of rhjlements de V administration puhlique, order the establishment or suppression of branches the powers of which are fixed by the by-laws. Art. 10. — The provisions of previous dicrets, in so far as respects the society of the Cridit Fonder de France, contrary to this dicret, are annulled. Art. 11. — The by-laws of the Credit Fancier de France shall be modified in accord- ance with the provisions of this dicrtt. Art. 12.— Our Minister of State, &c. 19th June, 1857. Law respecting Advances on Deposit of Obligations Fonciires by the Society of the Cridi) Fonder de France. Art. 1. — Articles 2074, 2075 and 2078 of the Code Napoleon are not applicable t^ advances on deposit of obligations foncibres, which the Society of the Cridit Fonder d*^ France is authorized to make by Article 2 of its by-laws. Art. 2. — The privilege of the Society of Cr6dit Fonder on a bond given as security, results from the engagement subscribed by the borrower in the form prescribed by Articles 3 and 5 of the Royal Ordinance of 15th June, 1834, respecting advances made on public property by the Banque de France. Art. 3. — In default of repayment on the day after the falling due, the Society of Credit Fonder may, without any mise en demeure being necessary, through the agency of abr-^ker, cause the sale of the security to be proceeded with, in conformity with the provi- sions of the same Article 5 ot the above-cited ordinance.* I i STATUTES. aisT AuousT, 1859. Before Messiro Philibert-Louis-R<5n6 TURQUET and his colleague, undersigned notaries, at Paris. Appeared : M. Louis FREMY, Councillor of State on extraordinary service, officer of the Legion of Honor, Governor of the Credit Fonder de France: a sod6t6 anonyme duly sanctioned, the office of which is at Paris, rue Neuve-des-Capucines, 49 ; residing at the corporate office ; • The provisions of Ibis law are applicable to deposits of rentes serving as a guarantee for advances made by the Cridit Foncitr, in virtue of Articles 1 and 2 of the Law of 12th February, 1862. 188 France an )0 francs, among the 1st Decem- juspended ; e lUcrets of ision of the tlioiiscd to al resulting anagement, ishment or iety of the 1 in accord- ;, 1857. f the Cr6di) ppiicablc t*' Fancier dfi as security, 1 by Articles Ic on public s Society of le agency of h the provi- >, 1859. undersigned 5cer of the onyme duly iditig at the guarantee for ibruary, 1862. M. Auguste-Rodolphe DARBLAY, senior, ancim deputi, officer of the Legion of Honor, residing at Paris, rue de Lille, No. 74 ; And M. Louis WOLOWSKI, member of the Institut, ancien reprisentant, officer of the Legion of Honor, residing at Paris, rue de la Victoire, No. 14; The last two acting as members of the Council of Management of the Cridit Fonder de France. The above-named persons, acting under the authority of a Resolution of the Council of Management of the Cridit Fonder de France, dated this day, the 31st August, and in conformity with the powers confericsd upon the Council or its delegates by the general meeting of shareholders, in a Resolution dated the 27th April, 1859. Extracts from the said Resolutions, delivered by M. Fr6my in his said quality of Governor of the Cridit Fonder de France, on paper, bearing a stamp of 35c., not yet registered, but to be submitted to that formality with this document, have been hereto attached after mention of such attachment had been thereon endorsed by the undersigned notaries. Who deposed and said as follows : — In execution of a decret of 28th March, 1852, a sociiti anonyme has been formed under the denomination of the Banque Fondhre de Paris, having a capital of 25,000,000 francs, of which 10,000,000 were immediately subscribed. This Society had the exclusive right, in the District of the Court of Paris, and for a term of twenty-tive years after the homologation of the by-laws, to maice hypothecary loans and to issue obligations fonciires, or debentures, on conditions fixed by the dicret of 28th February, 1852. It could likewise, with the sanction of the Government, apply any other system having for its object to promote the liberation of borrowers upon hypothec. The by-laws of this Society, to which the persons benefited by the dicrct of 28th March, 1852, gave the sanction which they were authorized to give, were approved by the dicrct of 30th July following. On the lOth December in the same year, a new dicret was promulgated, which, homologating an agreement entered into on the 18th November previous, between the Minister of the Interior and the representatives of the Banque Fonciire dc Paris, extended the privilege of this Society, under certain conditions, to all the Departments in which no Society of Cridit Fonder existed j authorized it, under the control of the Government, to incorporate with it Societies already incorporated, and made to it a grant of 10,000,000 francs, which was to be paid in proportion to the importance of the loans efiiected. In conformity with the same agreement, the Society took the name of the Cridit Fonder de France; its capital stock was raised to 60,000,000 .francs, divided into 120,000 shares of 500 francs each. In the by-laws, modified in consequence of the Acts above set forth and approved by the dicret of 22nd 3Iarch, 1853, it was explained (^Art. 9) that, besides the 20,000 shares already issued, 30,000 shares, amounting to 15,000,000, should be immediately subscribed; tha^ 10,000 shares more, amounting to 5,000,000, might be issued by decision of the Council of Management in the course of one year, and the remainder when the transactions of the Society should have attained a total of 600,000,000, in such way as that the amount of shares issued should be maintained in the proportion of 5,000,000 for each 100,000,000 of bonds. n 1 T. Since that period the law of 10th June, 1853, and the dicret of 21st December following, having rendered further modifications of the by-laws necessary, a draft containing these modifications and additional provisions was submitted to the general meeting of the shareholders, and adopted by it at its session of 29th December, 1853. By the same Resolution the meeting conferred on the Council of Management, or its delegates, the necessary powers to enable them to arrange any other modifications on which they might agree with the Government to introduce into those which had been adopted, the changes which might be required, and to sign the acts destined to authenticate the modifications definitely agreed upon. _ n „o i t In virtue of this order the Council of Management, by its resolution ot 2bth June, 1854, accepted the basis of the dicret published on the 6th July, following, which contains the last modification made to the organization of the Cridit Fonder de France. This ! III 111 i' ifr ']. I* ifii 184 dicret was communicated to the general isactiug. At its session of 5th August, 1854, the meeting approved the use which the Council had made of the powers coniorrcd upon them on the lIQth December, 1853, and continued to the Council or its delegates the same powers for the purpose of arranging with the government the modifications of the by-laws which would be rendered necessary by the application of the ddcrcf of 6th July, 1854. These modifications were confirmed by act received by the said Mire. Turguet, one of the undersigned notaries, on the 'i5th and 26th June, 1856, and approved by decret of the 28th of the same month. In the accomplishment of this task the Council of Management bad to impress upon themselves the pregnant consideration so well set forth by the Minister of Finance in the report which precedes that decrrt, aa idea which coincided with that of Uis Majesty, and which has made of the Cridit Fourier de France a great institution, the p:ivilc(je of which ijicludes the whoLe territory of the Empire, and imposes on it a double task: that of furnish- ing to agncxilturc the funds which it requires to improve its cultivation ai.d increase its products, and of procurinff for property charged with hypothecary debts a reduction of its burthen and the means of ultimate liberation. It was thts same idea which inspired the agreement entered into on the 28th April, 1858, between their Excellencies the Minister ot Finance and the Minister of the Interior, Agriculture and Commerce, and the Society of the Cridit Foncicr de France, an agreement the object of which was to charge the CMdit Fonder de France with loans to be made for drainage, and which, after receiving the approval of the general meeting of shareholders, was confirmed by the law of 28th May, 1858. Since then, further modifications voted by the general meeting of shareholders have been submitted for the approval of the government. These modifications relate to the authorisation to make loans for short terms, even with sinking fund, in bonds and on the other conditions of loans for long terms ; to the manner of applying the capital which the society is authorised to receive ou deposit, and to the repeal of the provision which limits the maximum of the loans to one and the same bor- rower to one million. These modifications having been approved by a decret of IGth August, 1859, the persons appearing have, in conformity with that decret, agreed as follows on the by-laws by whi«h, for the future, the said society is to be governed. TITLE I. DENOMINATION OF THE SOCIETT- ITS OBJECT — ITS DURATION — ITS SEAT OP OPERATIONS Art. 1. — The society assumes the name of the Credit Fonder de France, Its object is : 1 . To lend upon liypothec, to proprietors of real property, sums repayable either in a long term by means of annuities, or in a short term, with or without sinking fund. 2. To create and negociate obligations foncihres or debentures to a value which must not exceed the total of the sums owing by its borrowers.* • Ti.e Cridit Fonder de France is moreover authoiised : 1. To make loans as set forth by Art. 1 of tlie law of I7tli July, 185G, respecting drainage on tho conditioi\s fixed by that law, (L. 28th May, 1858, Art, 1). 2. To contract, with the (Jovernment guarantee, successive loans in :'ie form of bonds, called drainage bonds, which may be issued ereu below par. (Agreement of 28th April, IB.'iS, between the Minister of Finance and tho Minister of the laierior, of Agriculture, of Commerce, and of Public Works, and the Cridit Fonder de France). 3' To 'and, on the conditions fixed by tho law of 6th July, !8G0, to Departments, to eommunet and to ti-ust-i (assudations tyndicales), with or without hypothecary security, the sums which tiiey shall have received authority to borrow. (L. Cth July, 1860, Art. 1). 4. To create and negociate bonds in ropiesenlatioii of these loans, conforming to thi! rules estab- lished Ijy title 5 of these by-laws. ^u. Oiu July, 1860, Art. 5). 5. T<) lend, under similar conditions, to asylums and public institutions, and to make similar loans to duly authorised religious and benevolent institutions, and to all other institutions of ncknow- ledged (luiilic utility, when such loans are contracted for the discharge of the balance {soulte) stipu- lated fur on behalf of tho Public Treasury, by the law of 12 th February, 1862. The Cridit Fonder is subititat«d for the Camptoir d'Etcompte of Paris, for all transactioas which 1854, the red upon igates the ns of the Gth July, rguct, one y decret of )ress upon ncc in the jesty, and e nf which of fiirnhh- ncrease its ti'on of its 8th April, 10 Interior, France, an th loans to meeting of olders have i, even with the manner and to the same bor- , 1859, the the by-laws PERATIONS )le either in fund, which muHt 'ainago on tho bonds, called I, between the ivnd of Public communen and lich they sball tie rules estab- I make similar )n3 of ncknow- (souUe) stipu- aulions which 135 It may, with the sanctiqn of thp (government, ap ly any other system having for its object the facilitating of loans on real property, the improvement of the soil, the promotion of agriculture, and the extinction of the landed debt. The society may treat with French or foreigp insurance companies to favor the liber- ation of the borrower. Art. 2. — The Society is authorized to receive capital ou deposit, with or without interest.* These sums may be employed to the extent of one half their amount, and for a terra which shall not exceed 90 days, cither in making, according to the conditions resolved upon by the council of managenient, advances on the bonds issued by the society or any other shares which would be received at the Bank of France as security for advances, or in the purchase of treasury bonds. The entire surplus shall be paid into the public treasury, in account current, at rates of interest which shall be fixed by the Minister of Finance. The sums which the society may so receive on deposit shall not exceed the total fixed by the Minister. Art. 3. — The duration of the society is ninety-nine years from tho 30th July, 1852. Its seat of operations and its domicilQ are established at Paris. J; TITLE II. CORPORATE STOCK — SHARES — INSTALMENTS. Ark* 4> — The corporate stock is fi^ed at sixty millions of francs. It is devoted to the security Qf the corporate engagements and specially of the obligations fonciircs or deben- tures^ It is divided into 120,000 shares of 500 francs each, 60,000 are at present issued, f The remaining 60,000 shall be issued in whole or in part on the decision of the coun- cil of management, f The total amount of shares issued must be maintained in the proportion of at least one-twentieth of the bonds in circulation. The new shares shall not be issued below par. Art. 5. — The holders of shares previously issued have a right of preference, in pro« portion to the amount held by them, to subscribe at par for the shares to be issued. Those of them who do not hold a sufficient number of shares to obtain at least one in the now issue, may unite to exercise their right. The oouncil of management fixes the time and form in which the benefit of the fore- going provisions may be claimed. Art. 6. — The amount of the shares is payable at Paris, on terms whioh arc fixed by the council of management. the Comptoir d'Etcompte has been authorised to carry on with the Sous-Comptoir of contractors by the dicrett of 24th March and 4th July, 1848, and to that end enjoys the privileges and guaruntees granted to the Comptoir d'Etcompte by the dicrels of the IMh March, 4th July, and 23rd August, '.848, and by the law of the Sth July, 1857, (L. 19th May, 1850, Art. 1 and i.) In consequcnc, the Credit Fonder is called upon, Ist, to furnish, within the limits fixed by tho agreement made with the l^ous- Comptoir, fundi to the persons accredited by the Sou*- Comptoir ; 2nd, to receive as a guarantee deposit three- fourths of its realized corporate stock. (Agreement of the lOth March ; (/^crc< of 4th June, 1860). Lastly, the operations of the Credit Fonder de France, nre extended to tho territory of Algeria, in conformity with the dicret of 11th January, 1800, and the provisiocs of this dierd. * In execution of this article the Cridit Fonder de France receives capital on deposit with interest. The deposit may bo made either in coin, ia coupons or arrears of rentes on the stale, railway shares, and bonds, or any other securities negotiable at the Dourso and payable at Paris. The depositois receive at their own selection, a bon on the treasury to order or a bank booL with a running account. The holders of accounts current dispose of the sums which stand to their credit, either by chocques or receipts payable to bearer, or else by orders of transfer {bunt de viriment) to other holders of bank books. i The representntives of the Cridit Fonder de France in tho departments ore tho receveurt gint' raux et particulitri dea finances, f The isauo of the 60,000 shares which had Jbeen reserved was decided upon by .the council of management on the Gth March, 18G2. The proceeding, which is at present in course] of execution raiiei the number of shares issued to 120,OoO, the amount fixed by the by-Iawe. 18 11 i il ]s m f !■; ( !• H'l « 186 m ft/ ■:i- After payment of ono-half, a nominative title is delivered to the subscriber, bearing a consecutive number, and on which subsequent payments are registered. The 50 per cent, remaining due on the shares issued is called in, in whole or in part, according to the requirements of the society, by advertisements inserted one month in id- yanco in two of the Paris journals appointed to be used for the legal publication of the proceedings of the society. Art. 7. — Any sum, the payment of which is delayed, bears interest in full in favor of the society at the rate of five per cent, per annum from the day of falling due, without suit. Art. 8. — In default of payment at the time of falling due, the numbers of the shares in arrears are published in the journals designated in article 6. Fifteen days after such publication the society has the right to cause the sale of the shares to be proceeded with at the Paris Bourse, through the agency of a broker, on account of and at the risk of the person in arrear. Such sale may be made in bulk or in detail, either on the same day or at successive periods, without mise en demeure or any judicial formality. The provisional titles totheshares so sold become entirely null, and new titles, bearing the same numbers, are delivered to the purchaser. Any title which does not bear regular mention of the instalments exigible ceases to be negotiable. This condition is mentioned on the provisional titles. The proceedings authorized by this article present no obstacle to a simultaneous exer- cise, by the society, of the ordinary process at law. Art. 9. — The proceeds of the sale, after deduction made of tho costs, belong to the society, and are applied, according to law, to what is due to it by the expropriated share- holder, who remains liable for the deficit, if any there be, but who profits by the excess, if any. Art. 10. — The society may make its titles to shares either nominative, or to bearer. These titles are extracts from a counterfoil register, numbered and authenticated by the signature of the Governor and of a manager. They bear the stamp of the society. Art. 11. — Nominative titles are negociated by a transfer drawn up in duplicate, of which one is signed by the person ceding, and the other by the person receiving the title. These transfers are delivered to the society, and mention thereof is endorsed on the back of the title by the Governor. The society may require that the signature and capacity of the parties should be certified to by a broker, and, in such case, it is not responsible for the validity of the transfer. Titles to bearer are transferred by simple transmission. Art. 12. — Any shareholder may deposit his titles in the corporate treasury, and de- mand in exchange a nominative receipt. The council of management fixes the conditions, the manner of delivery, the costs of the receipt and of the exchange of titles. Art. 13. — Each share entitles the holder to a share in tho property of the corporate asseU and in tho division of profits, proportioned to the number of shares issued. Tho divi- dends on each share, whether such share is nominative or to bearer, are legally paid to the holder of the title. Art. 14. — The shareholders are only liable to the full amount of the capital of each share; beyond that all calls upon the stock are forbidden. Art. 15. — Every share is indivisible ; the society only recognizes one proprietor of each share. Art. 16. — ^The rights and obligations attached to the share follow the title into what- ever hands it passes. The possession of a share entails entire observance of the by-laws of the society and the decisions of the genera) assembly. Art. 17. — The heirs or creditors of a shareholder may not, under any pretext whni- ever, demand the affixing of the seals to the property and goods of tlic society, require the division or licitation thereof, nor mix themselves up in any way with its management. They must, for the exercise of their rights, havo recourse to the corporate inventories and the resolutions of the general assembly. 187 TITLE in. DIRECTION AND MANAGEMENT OF THE SOOIETT. ail d de- SECTION I. — or THE OOVEBNOU AND SOB-GOVERNORS. Art. 18.— In conformity with the Jecret of 6th July, 1854, the aflFairs of the society are managed by a governor. Two sub-governors perform the duties delegated to them by the governor and, in the order of their appointment those of the governor, in case of absence, vacancy, or illness. Art. 19. — Before assuming oflSce the governor must qualify in the amount of 200 shares of the Credit Fonder de /ranee, and each of the sub-governors in 100 shares. These shares remain, b^ privilege, as security lor their management. They are inalienable during their continuance in office. Art. 20.— ^The governor receives from the society an annual salary of 40,000 francs. The two sub-governors receive a salary of 20,000 francs. Art. 21. — The governor appoints and dismisses agents, and provides for the organiza- tion of the duties at Paris and in the departments. Ho signs the correspondence, recovers sums due to the society, signs all discharges, with or withottt main levie, endorsements and discharge of securities, orders on the treasury, the bank, the caisse dcs consignations , and all other caisses in which the moneys of the society are deposited. He puts into execution all the resolutions set forth in'article 34, and alone signs the acts which result therefrom. He institutes all actes conservatoires, represents the society to third parties, and in all legal proceedings, either as plaintiff or defendant. He signs the share titles, and authenticates the bonds or debentures. Art. 22. — The governor may exercise all the powers which are delegated to him for one or more fixed purposes. SEC. II. — OF THE OOUNOIL OF MANAGEMENT. Art. 28. — The council of management is composed of the governor, the sub-governors, the managers and the censors. Art. 24. — The managers are twenty in number. They are appointed at the general meeting of shareholders ; three of them must be selected from among the receveurs-giniraux des finances. One*fiflh of them are renewed each year. The outgoing members are selected by lot for the first four years, and subsequently by seniority. They may always be re-elected. Art. 25. — The managers who form part of the present council and who have been appointed, some by the original by-laws and by derogation from the preceding article, and others by the general assembly, in conformity with articles 24 and 25, are : Messrs. Ban^s, ancien directeur de la compagnie du chemin de fer d'0rl6ans ; F, Bartholony, president de la compagnie du chemin de fer d'Orl^ans ; "Vicomte Benoist d'Azy, ancien repr^sentant j Gomte Xavier Branicki ; Adolnhe Dailly, mattre do poste de Paris ; Darblay atnd, ancien d6put6 ; Dumas, sdnateur, membrc dc I'lnetitut, ancien ministre do I'agrioulture et du com- merce ; Firino, ancien recoveur-g6nh the debt inturcs.* » only, nage of lots, i>n or through Art. 52. — The society lends to proprietors of real estate on the first hypothec only, except in the cases provided for in the by-law3, the laws and existing ifecrets.f Loans, by means of which claims already registered arc to be repaid, are considered as made upon the first hypothec, whenever by such repayment or by the subrogation effected to the profit of the society, its hypothec becomes first and incontestable. J: In this case the society retains in its possessi > a sufficient amount to effect such re- payment. Art. 53. — When the society considers it necessary tf. xcSl the formalities of purgation, it is proceeded to in conformity with article 1 of the law of 10th June, 1853. || Art. 54. — The following are not admitted to the benefit of loans from the society : 1. Theatres. 2. Mines and quarries. 3. Real property held jointly, unless the hypothec is charged on the whole of the pro perty with the consent of all the co-proprietors. 4. Real property in which the usufruct and the bare property are not conjoined, unless with consent of all concerned to the creation of the hypothec. Art. 55. — The society accepts as security only such property as possesses a lastingand certain revenue. Art. 56. — The amount of the loan must not exceed one-half the value of the real pro- perty hypothecated. It is moreover fixed at one-third of the value for vineyards, woods and other property the revenue of which results from plantations. Factories and workshops are estimated only as to their value, independent of their industrial application. Art. 57. — In any case the annuity, to pay which the proprietor binds himself, must not be greater than the whole revenue of the property. Art. 58. — The rate of interest on the sums loaned is fixed by the council of man- agement; it must not exceed the legal rate. Art. 59. — The tinnuity is payable in coin. It comprises : 1. The interest ; 2. The sinking fund fixed by the rate of interest and the duration of the loan ; 3. An annual allowance for commission and cost of management, which must not ex- ceed 60 centimes per cent, except in virtue of an Imperial decret passed in Council of State and on the requisition of the council of management. Art. 60. — The annuities are payable half-yearly at periods fixed by the council of Management. * Art. 61. — In conformity with article 28 of the ilecret of 28th February, 1852, each half-yearly payment not made at the time of its falling due, bears its interest legally and without mise en demeurc to the profit of the society, at the rate of 5 per cent, per annum. The same is the case with the paid or taxed costs incurred by the society in order to recover their claims, and this from the day when they were advanced. Art. 62. — Default in the payment of a half-yearly annuity, moreover, renders the whole of the debt exigible one month after the mise en demeurc. f If the real property id chaiged with registered hypothecs entered into as a guarantee against evictions or rentes viagircs, tlie loan may be effected, provided that the amount of such loan, togetiier with the principal regialered, does not exceed the half or the third, as the case may be, of the value of such real property. (L. 10th, June 1853, art. 3.] X 'I he Criilit Fonder may employ against a, borrower the privileges and means of execution as- signed to it by tbadScrets of 28th February. 1852, and the law of the 10th June, 1853, even for the re- covery of sumj which it has repaid to a registered creditor, in order to be subrogated to his hypothec. (L. 10th June, 1853, Art. 4.) II This purgation, which was made, by article 8 of the dfcret of 28th February, 1852, an indis- pensable condition of the loan, was made entirely optional by the lav of 10th June, 1853, Art. 2. When the legal hypothec is registered, the loan can only be after maiti'levSe given either by the un- married woman in respect of her portion or by the subrogi tutor of the minor or interdicted person in virtue of the resolution of a meeting of relations and friends. [Decret of 2Sth February, 1862, Art 9.] * The periods for the payment of the annuities are the Slit January and the 3l8t July, of •ftcb jtar. f' (( 142 m m; ( H tr Art. 63. — The debtors have the right of freeing themselvea by anticipation, in whole or in part. Anticipatory repayments are made, at the choice of the debtors, either in coin or in obligation* Joncihres or debentures belonging to the issue indicated by the deed of luau. These bonds or debentures arc received at par, whatever their current value may be. Anticipatory repayments entail, to the profit of the society, an indemnity which must not exceed 3 per cent on the principal repaid by anticipation, f The funds resulting from anticipatory repayments, made in coin, shall bo employed either in redeeming or buying up ohligaliam /onciircs or debentures, or in efiecting new loans. Art. 64. — The borrower is bound to notify the society within one month of any total or partial alienation? ho may have effected. In default of such notice within such period, the society may require of him pay- ment in full. It is entitled, however, to the indemnity fixed by the last paragraph but one of article 63. Art. 65. — The borrower must also, under penalty of paying the same indemnity in case of exigibility, notify the society, within the period above stated, of any deteriorations to which the real property hypothecated may have been subjected, and of all circumstaooes of a nature either to diminish the value thereof or to disturb hia possession, or to raise a question as to his right of ownership. In default of notification, or in all cases if the above circumstances affect the interests of the society, it may, in conformity with article 32 of the dicret of 28th February, 1852, demand repayment. Art. 66. — The debt becomes likewise exigible, and the indemnity fixed by the last paragraph but one of article 63 accrues to the society, in case of concealment, on the part of the borrower, of any grounds of legal hypothecs, or cancellation or nullification which might independently encumber the property hypothecated to the society. Art. 67. — Property liable to be destroyed by fire must be insured against burning, at the cost of the borrower, unless the society has for security for its claim, together with the {»roperty liable to be destroyed by fire, other property of double the value of the amount oaned, and which is not liable to be destroyed by fire. The deed of loan contains transfer of the indemnity, in case of disaster. The insurance must be maintained during the whole continuance of the loan. The society may require the insurance to be made in its name, and the amount of the annual charges to be paid through its agency. In this case, the amount of the annuities is increased in proportion. Art. 68. — In case of disaster, possession of the indemnity is assumed directly by the society. The debtor has the right, within one year from the settlement for the disaster, to re- place the property in its former condition. During that time the society retains the indemnity as security, up to the amount of its claims, calculated to the end of the year. After the reconstruction of the real property, it returns the indemnity to the debtor, deducting what is exigible. If, at the end of the year, the debtor has not availed himself of his ri^ht to reconstruct the burned property, and if before that period he has notified his intention not to avail himself of it, the indemnity is definitely acquired by the society, and is applied to the set- tlement of its claim as a payment made by anticipation. Art. 69. — Anticipatory repayments, rc.>f luau. le rnay be. rhich must employed beting new >f any total f him pay- ragraph but demnity in itoriorationa rcumstances >r to raise a the interests ruary, 1852, by tbe last on the part cation which t burning, at ther with the f the amount loan, imount of the ireotly by the lisaster, to re- lic amount of to the debtor, to reconstruct 1 not to avail led to the set- lubject to the tquence of the [ by the titlesi, ' the loan, lerts. 1C8 or i per cent 143 la all cases, the estimation is made upon the double basis of the net revenue and the selling price. Art. 71. — When the property is found to be regular and the security sufficient, the council of management fix the amount of the loan to be made, and the signature of the provisional contract ia proceeded to.* Art. 72. — 'After the delivery oi the supplementary statement of registration, including that of the society, if there is no occasion for legal purgation, or after the accomplishment of the formalities of purgation, a deed establishes the nullification of the conditional con- tractf or its definite realization, according as a registration or legal claim, charged upon the real property hypothecated, has or has not been revealed. In the first case, tho deed may be signed by the governor only ; it contains mainlevie of the registration efi't ted for the benefit of the society. In the second case, the deed is signed by the governor and the borrower j it sets forth the acoompHshment of the formalities, the delivery of the assets forming the amount of the loan, and the time of the commencement of the interest. Art. 73. — All expenses and disbursements entailed by the application for a loan are at the cost of tho proprietor applying for such loan, even in case the loan is not effected.^ TITLE V. OF " 0BLI0ATI0N8 FONClilRES," OR DZBENTUBIS. Art. 74. — The debentures (^obligations foncihres) created by the society are nominative or to bearer. || * A3 it is important to oseertaia positively, before paying over the funda, that no registration pre- cedes that of the Cridit Foncttr, tbe law requires, before the execution of the deed effecting the loan, the execution of a conditional contract, ttiat is to aaj, an agreement of loan, subject to the result of the hypothecary formalities, and the purgation, should the latier be necessary. This contract is only subject to a fixed duty of registration of 2 francs. The proportional duty is collected only at the time of effec.'ng the loan. ' t Dicret of 28th February, 186 !, Art. 4. t These expenses comprise those entailed by the estimation of the security, and, if the loan ia authorized, the coits of purgation, those of tbe deeds relating to the realization of the loan, and tho costs of registration. II Tbe bonds issued by the Cridit Fancier de France constitute the equivalent of its loans. They haye for guarantee : 1st, the real property hypothecated, which always represents a value at least double that of the bonds in circulation ; 2nd, the corporate stock of tbe company; 3rd, the reserve fund. No opposition to the payment of the principal and intereat of obligationt fonciire* is allowed, ex- cept in case of loss of title. (Dicret of 28lh February, 1852, Art. 3.) They may be used for the investment of the property of persons incapable of managing their own affairs, and oi eommunee, as well as the disposable capital belonging to public institutions, in all cases in which such institutions are authorised to convert it into State rentes. (Same iecrel Art. 46. They are admitted to the benefit of advances on deposit, allowed by the Bank of France at Paris or its branches, (Law ot June, 1856), and of those made by the Credit Fonder itself. They are exempt from the duty to which the shares and bonds of financial and industrial compa- nies arc subjected by the law of 25th June, 1857 The registration of tb'se debentures is effected at the fixed rate of ten centimes. Lastly, the stamp daty — to which they are subject in virtue of the law of 5th June June, 1858— has been reduced to an annual commutation duty of two centimes per lOOU francs. (Law of 8th July, 1852.) Apart from the obligations fonciiret, the society is authorized to create bonds in representation of the loans made by it to the departments, communes and municipal associations, up to an equal amount, conforming to tbe rules established by Title V. of their by-laws. These bonds enjoy all the rights attached to the obligations foncieres, or debitaturei, by the laws and dierets respecting the Cridit Foncier. (Law of 6th July, I860, Art. 5.) The claims arising from loans to commitnes, departments and trusts (associations sgndieaks) are ap. plied, by privilege, to tbe payment of tho bonds created in representation of such loans. The claims arising from hypotliecary loans are applied by privilege to the payment of tho bonds created In repre- sentation of such loans. (Art. 6.) The Credit Foncier is moreover authorized, in order to enable it to provide for loans which it makes for drainage purposes, to contract successive loans, with the Oorernment guarantee, in tbe form of bonds denominated " drainage bonds," which may even be issued below par. (Agreement of 28th April, 1858, between the Ministers of Finance, Agriculture, Commerce and Public Works, and the Credit Foncier de France, approved by the decret of 27th September following.) 19 tl'I 144 *< ■^- -^ Art. 75. — The nominative debentares nrc transmiraible either by endorMVMBt, without any other guarantee than that which results from Article 1793 of the Code Napokoa, «r i» any other manner which may be fixed by the council of management. The society is legally exonerated by payment made to a third holder. It is ia bo mm responsible for the regularity of the eudorseueiitn. Debentures to bearer are transmissible by simple transfer. Art. 76.— The debentures must not exceed the amount for which the borrowan-tfo bound. Art. 77. — No debenture shall be issued lor less than 100 francs. Art. 78. — The holders of debentures hare no other action for the recovery of tb« pria. oipal and interest due than that which they may exercise directly against the Meiety. Art. 79. —The debentures bear interest, the rate and the time and manner of paywMt of which are fixed by the council of management. The interval between the payment of the annuities by the borrowers and the paymeat of interest to the holders of debentures is at least three months. Whatever may be the form of the debenture, the interest is legally paid to the holder of the title. Art. 80. — The debentures are represented by titles taken from a counterfoil register. These titles are signed by a manager, bear the stamp of the society, and are aatiienti- cated by the governor. Art. 81. — The council of management may authorize the depositing and preserving of the titles in the corporate chest. They are replaced, until retired, by a nominative certificate of deposit. The council of management fixes the conditions, the manner of delivery, and the ooets of certificates and of exchange of titles. Art. 82. — The debentures are issed without any term being fixed at which the priaei- pal shall be exigible. They are called in for repayment by lot. Each repayment includes the number of debentures necessary to effect redeinption to such an extent that the debentures remaining in circulation shall never ezceea the principal remaining due on the hypothecary loans. Art. 83. — Prikes and premiums payable at the time of redemptien may, with ^e sanction of the Government, be attached to the debentures. The council of management fixes the importance and distribution of these. Art. 84. — The drawing by lot of the debentures which are to be called ia for redeinp* tion is effected by the council of management in presence of the censors. Art. 85. — Within eight days after the drawing, the numbers drawn are posted up in the office of the society, and inserted in two of the journals designated to be used for the publication of the proceedings of the society. Art. 86. — The debentures indicated in the drawing nre redeemed on the day Mt forth in the notice published. From that day, the interest on the redeemable debentures entirely oeases. Art. 87, — Debentures redeemed in consequence of a drawing by lot are at oneestampad with a stamp of nullification. They are destroyed in the presence of the governor, a member of the ooiiocU aa4 a ceasor. Minutes of this proceeding are prepared. Debentures returned to the society in consequence of anticipatory repayments, are its- mediately stamped with a special stamp, and cannot be again put into circulation without a fresh authentication by the governor. In all cases they participate in the drawing by lot. TITLE Vr. INVCNTORT A5D ANNUAL ACCOUNTS. Art, 88.— The corporate year begins on the 1st January and ends on the 81il ]>s- cember. IM It, without ))eoa,«ri» ia BO MM rrow«i»«re At the end of eaoh corporate yoar aa iayentoryof the liabilities and asseta is prepared oodor (ho sHyerintondenoe of the governor. TJMtj MTe qnhnitted to the general assembly of shareholders, who approve or reject th«ti^ tM As (h* dividend after having heard the report of the governor and tho observa- tions of the censors. If the aeconnts are not approved during the meeting, the assembly may appoint com- miisionen charged to examine them and report npon them at the next meeting. f th«pfiB- teiety. Df pajwMt lepayMMt the holder ail register, e antiienti- reserving of nd the costs I theprusei- TITLB VII. DiviBioN or PROriTS. Art. 89. — ^Fr«m the net profits realized, the following deductions are made : 1. 5 per cent, on the capital paid in on the shares, to be divided among all the share- boiucrs. 2. A wun which must not exceed 20 per cent, of the remainder, applied to the reserve fund .IB tihe proportion fixed by the council of management. '^kat remains composes the dividend to be divided among all the shares issued. Th^ payment of dividends takes place annually at a period fixed by the council of manaKM9«tt. The eonniril, may, however, at the expiration of each vear, authorise tho proviaktt^l ^ttribtttiou of 2 francs 50 centimes for each 100 francs of the amount paid up oneiehAare. j^. 90. — Every dividend which remains unclaimed for five years after the tune of its IhHtagllue, is forfeited for the benefit of the society. ill; i !i I I ii redemption exceed the J, with the for redemp- posted up in used for tb« day set forth onee stamped uuncU aad a lents, are itB- ion without a tha Slit 9«- TITLE VIII. RE SERVE FUND j^ft 9X. ^xhe reserve fund is composed of the uocumulation of tho sums resulting {i*oa the anautl deduction from the profits, in pursuancfl of Article 89. , . -v j When tho i«serve fund attains one-half the uuiuuut of the corporate stock subscribed, the deduction applied to its creation ceas' to profit it. It is resumed if the reserve is «B«rea«hed upon. ...» The reserve fund is intended to provi.ie for unforeseen emergencies. la^aM th« results of one year do not «affioe to furnish a dividend of 5 per cent, on eaeh«h«re, the difterenoc maybe drawn from the reserve fund. w j k„ n.- tfce ^mpleymeat of the capital belonging to the reserve fund is regulated by the eml)k«B'4r4i«tag«aMDt. TITLE IX. MODIFICATION OF THK BY-LAWS. Art 92.— The General assembly may, at the instance of the governor and subject to the approval of the Government, make to the by-laws modifications resolved upon by the It may especially authorise : 1. The increase of the corporate stock. 2. The extension of the operations of the Society, 3. The prolongation of its continuanee. ^r^u^ «vu«» In these several cases the convocation must contain a summary mention ot the object of the meeting. Ii It' I Ifi i .fn' I 146 f s The resolntion is not legal unless carried b^ two-tbirds of tbe votes. '^^ "- ' "- In Tirtao of sucb resolution tbe eovernor is fully authorised to apply to the Govern- ment for its approval of the modifications adopted, to arrange, together with tbe council, the changes wmeh maybe required, and to execute the deeds necessary to give them force. :'. J'; TITLE X. ii I'M :> (11 ■:<4 ., ;« ; DISgOLUTION— LIQUIDATION. Art. 98.— In case of loss of half tbe corporate stock subscribed, tbe dissolution of tbe society may be decided upon before the expiration of the term fixed for duration, by a vote of the general assembly. The council of management, in the case of the loss above anticipated, is bound to sub- mit to the general assembly the question whether there is occasion to decide upon tbe dis- solution. Tbe manner of convocation and of resolution set forth by Article 92 for modifications of the by-laws is applicable to this case. Art. 94.— Upon the expiration of tbe society, or in case of anticipated dissolution, the general assembly, at the instance of the governor, regulates the manner of liquidation, and appoints one or more liquidators, with power to sell, by auction or at private sale, the mov- able and real property ox the society. The manner of liquidation, and the selection of liquidators is submitted for the ap- proval of the Minister of Finance. The general assembly is of necessity convoked to settle tbe manner of liquidation, to make selection of liquidators, and to fix their powers. In default by it of having, on tbe day fixed tor its meeting, or at a second meeting called in tbe case provided for by Article 43, decided upon these measures, or if, its resolution not having been approved by the min- aistcr, a new meeting does not modify it as required by the (jrovernment, the manner of liquidation and the selection of liquidators are decided upon in conformity with the provi- sions of the rigletnent de Padminutration puhliuqe of 18th October, 1862. The liquidators, in virtue of a resolution of the General Assembly, approved bv the Minister of Finance, may transfer to another society the rights and engagements or the society. During the liquidation the power of tbe general assembly continues, as during the ex- istence of the society. Art. 95. — All contestations which may arise among the persons associated, respecting the execution of these by-laws, are submitted to the jurisdiction of the courts of Paris. Contestations respecting tbe general and collective interests of tbe society cannot be deducted cither against the council of management or one of its members, or against the governor, except in the name of the whole body of ehnroholders, and in virtue of a resslu- tion of the general assembly. Any shareholder who is desirous of inducing a contestation of this nature, must make it, at least fifteen days before the next meeting of the general assembly, the subject of a communication to the governor, who is bound to place the proposition on the orders of the day of such meeting. If the proposition is rejected by tbe meeting, no shareholder can bring it before a court of justice in his private capacity ; if it is received, the general assembly appoint one or more oommissionera to follow up tbe contestation. Th« notifieations to which the proceedings give rise are addressed to the commissioners only. No ipdiyid^al potifipi^iop nn be made to the shareholders. . ♦-••»,•» (Jovern- ooanoil, m foroe. .1 on of the by a vote d to Bub- 1 the dis- lifioatioDS utionj the fttioD, kod ,ihemoT- )r the ap- idatioD, to ig, on the by Article y the min- manner of the provi- red bvthe bts'ol the ing the ex< respecting r Paris. ' cannot be igainst the fa resolu- must make ibject of a dersof the Ebro a court )int one or ' 147 TITLE XI. publication! Art. 96. — For the publication of these by-laws, all powers are conferred upon the holder of a copy. APPINDIX. Hereto is appended, after mention, a duplicate of the dScret above cited, of the 16th August instant, Dont acte ; Done and passed at Paris, at the office of the Society, rue Neuve-des-Capucines, No. 10, in the year one thoasand eight hundred and fifty-nine, on the thirty-first day of August. ■ M ! ' ' I II ': 1^ ' r h lit amissioners 4 " ■ ».t EXTHACTS FROM THE REPORT OF THE CREDIT FONCIER. SS font 6|f. be (gtmins. 1855. Jl tii The iiiflues of the society date from December, 1852. At that period 200,000 shares of 1000 fr. 3 per cent, were created under the denomi- nation of prome$«et cCohUgationtfonciires. The 200,000 numbers of thtsse 200,000 shares, on a very large number of which, 200 francs had been at once paid up, were enclosed in a wheel which was opened four times per annum, and which will continue so to be opened for fifty years, dating from the 2Znd March, 1853. It is proposed that lotteries (tirages au tori) should be effected by means of this pro* eeeding. At each tirage the first numbers drawn gain prize lots which, on tiraget already effected, amount to 2,670,000 fr. The following are what have been, and will be, the quar- terly prise lots for 1855, and for the ensuing years : At the tiraget of the Ist, 2nd and 3rd quar- ters, 22nd Marchf 22nd June and 22nd September. The first No. gained and will gaiQ.100,000 fr The second 50,000 The third 20,000 And so on for each of the three first quarters 170,000 Total of the three quarters 510,000 At the tirage oi the 4th quarter, 22nd December. The first No. will gain 100,000 flr. The second 50,000 The third 40,000 The fourth 30,000 The fifth 20,000 The sixth 10,000 And the eight following numbers each, 5,000 fr • 40,000 Total of the prize lots peranuum 800,000 Two of these tiraget, that of the 22nd March and that of the 22nd September, des- tined more especially for the repayment of the obligations, include the number of obliga- tions requisite t« secure the redemption of the obligations, within the period fixed for tiie complete repayment of the capital loaned. * * In oiber words, as wo lend the money received by ns ; as the contracts of loan are the RMorityof our shares ; as wc ought not to hare and do not have in oircalation, in debentures, ft d«bt exceeding in amount our hypotheoary olaimp, so, as by means of the sinking fund our oImAis aro extinguished, to the same extent our obligations are repaid. Such is the mechnnism of our credit. We believe we may, with justice, assert that ■one more simple or more secure eviatq. The diversity of our existing share capital is •qually inteHigiblo. The BOOiety, tirb Ich, at the outset, was only to issue shares of 1000 franca at 3 per cent. has been induced to subdivide them and issue them at various rates of interest. The first have been allowed to continue at the rate of 3 per cent. ; others have been iMucd at 4 per cent. ; coupures of 500 francs and 100 francs, at 3 per cent., have been created, and also coupures of 500 and 100 francs at 4 per cent. Each of these coupures, in respect of the number it bears, being only a fraction of the original share, has retained Um number of the share of which it is a fraction, so that as regards the chance of gaining ptiies, and of beins repaid with or without premiums, they have — to the extent of one-half wliMi they are for 500 francs, and to the extent of one-tenth when they are for 100 fVancs — -tke same chance as the promesses of 1,000 francs which they represent. There are still in circulation a fevr promesse$ of 1,000 francs at 8. per oent, wholly paid ap) ud some on which only 200 francs have been paid. The stock list of the Bourse, as prepared in accordance with the requisition of the Ohamhre Syndtcale, includes : fPromesscs of 1,000 francs, 200 francs paid up ; Coupures of 500 francs, wholly paid up j Coupures of 100 francs, do. 4 per cent. \ ^,<^P''^'<> ^^ ^JJ fra°«s, wholly paid up : •^ • f-oupures or 100 francs, do. The promesses ot , ' . francs, with 200 francs paid up, produce 6 per cent annual interest, and form pai - ; . srics, are the object of lotteries whenever the administration hars increased by 10,'JUu,000 the amount of their loans ; those which are drawn in the lottary have to be at once paid up. Does this circumstance depreciate their value ? It might be supposed that it would, and yt^t, independent of the 6 francs annual interest paid by the administration, thev have a chance of gaining a prize of 100,000 francs, and when, •t the time of the qua rly lottery, they are drawn from the wheel, the administration ^ys them off at par. Those which are wholly paid up are no longer quoted on the Bourse ; the adminis- tration has given to their holders the option of substituting for them two obligations of 580 flmnos, entirely paid up. In the case of these two obligations of 500 francs, coupures of the obligation of 1,000 fmncs being held by one and the same person, they may also each win 50,000 francs, or together, 100,000 francs ; if they aro not held by the same proprietor, the prise of 100,000 ftranus is divided. The obligations ot 500 francs, 3 per cent., are repaid with a premium of 20 per cent., or with a sum of 600 trancs. As regards the coupures of 100 francs, 3 per cent., the tenth parts of the obligation of 1,000, or fifth parts of obligations of 500 francs, they are entitled to an annual interest of 8 francs ; they may win a prize of 10,000 francs, and are repayable with a premium of 20 per cent., or 120 francs. The obligations of 600 francs, wholly paid up, 4 per cent., are repayable without premium, aro entitled to the half of the prize of 100,000 francs : two bearing the same number may thus gain 100,000 francs. The obligation 100 francs, 4 per cent., is entitled to one-tenth of a prise ; it obtains no preriium on repayment. If ihere is any security in the world, of undoubted value, it is the obligation of the Cfidit Fonder de France : its value rises and falls in the market only in accordance with ikib comparison between its value and that of money in other terms, 1 firano of revenue in tibhgttHonM fonciires cannot and ought not be worth less than 1 firanc of revenue in any «(hsr property. The security which is answerable for it enables us to assert that this fVanc of r4T«nue ought to rank on the markot in the vei^ first rank of similar soonrities. :!!l^ ^ ■li: \ I . I ' i. .. 160 If, by the permanebt character of the distribution, the number of Ha shares is increased, not only do they never exceed in auouut the value of the security which serves to guarantee them, but this security is itself developed and enlarged in proportion as the amount of the shares increases. We ought, perhaps, to explain the difference between the quotations of small coupons of 100 francs and those of 500 francs and 1,000 francs, by the difference between wholesale and retail, and from the fact that there are more small stock markets than large ones. It is possible, also, that the vendor at any prico of .a vesy small number of obligations, may cause a decline in the quotations. But on the whole, for those who wish to make permanent investments, it is not on the market that a just appre- ciation of our securities can be obtained, bn' by an examination of their intrinsic value so exempt, both as regards returns and o .tal, from deterioration by the most adverse circumstances. We have arrived at tho conclusion, that to enable our institution to work successfully, two elements are indispensable : unity in its direction, unity in its credit; that its contracts of loan should be of uniform regularity, securing obligations issued by one sole society, and all enjoying in consequence the same credit. It would not be possible that tho power which brings together capital should not have the most direct influence on the purpose to which it is applied, that is to say, on the contracts of loan. Our temporary connection with two societies to which we supplied capital to be employed in loans, has demonstrated to us how illogical any other result would be, and how dangerous it ^culd be to guarantee obligations and t'> be responsible for their credit when we h&ve not been allowed to judge for ourselves of the value of the security given for them. And again what good would result from a distribution of the powers of a machinery so simple as ours. We have already, on a previous occasion, defined the system of loans effected by tho Cridit Fonder : permit me to repeat this definition. Under the auspices of the special legislation which controls it, the Cridit Fonder dc France offers to borrowers conditions which they cannot obtain elsewhere. The principal advantage of loans for a long term of years and repayable by annuities, which constitute the system which they have the privilege of putting into operation, is the relief of the borrower from the obligation of repayment in one entire sum, and at a certain fixed period. By the annuity which £& pays, and which barely exceeds the ordinary interest of aioney:) the borrower, by means of the sinking fund and the efficacy of compound interest, rtpay, every half year a fraction of the capital and insensibly liberates himself in a period of from twenty to fifty years, at his own option, retaining always the right to hasten his complete discharge by anticipatory and even partial payments. Can there be found a theory that can be more easily reduced to practice ; one more secure in i^s opei^tions ; one that would be more universally beneficial under the guidance of a central power!' Give us credit, gentlemen, plenty of credit: that is the whole secret of the Credit Fonder]; for the business of loaning judiciously has its difficulties, but then we have privileges and means of execution, which, centred in one power, leave us no anxiety whatever on that ground. As to the money, it will come if it be ascertained that the loans are carefully consi- dered. Now, who can discharge these duties independently? In our opinion — and experience shews that we are correct — this can only be done by a central society. If there are any doubts on this point, we will remove them, by a glance at our documents, tho.se of the old Caitae Hypothicaire, and by the most ample information at our disposal : they will make apparent how compromising to the interests in question arc the tainerfairc and laitter patter of local influences. It will be urged that we are harsh ; but we deem it a point of duty and honor to be so, for perils of all kinds sirround us; over estimates and defects of titles. On all these points we ought to be constantly on guard ; we can und we ought to defend ourselves. A district society would not enjoy this power ; it would be useless to investigate the causes. Any one who knows the tendencies of human nature knows the general disposition to extend indulgence in the hope of obtaining similar treatment, should the occasion present itself. We are frequently urged to be more lenient as regards titles ; but what would this tend to ? perhaps to our eviction ; for it is quite possible, that having been induced to speak too highly of a security, wo might be compelled to prove that the person who gave us the security was not the owner of it. This has been proved. If I mis- take not, it was by so doing that the Caitie Il^pothicaire lost 17 milliona. i t tdl Lares ia h serves m as tho between •ancs, by ore small of .a ve*y rhole, for ist appre- sic value t adverse cessfuUy, contracts liety, and ,ho power )urpoBe to ounection lonstrated guarantee 1 to judge luld result Iready, on permit mc Fonder de e principal constitute ief of the ced period, of moneys •est, rt.pay, , period of hasten his one more lie guidance ilo secret of »ut then wo no anxiety fully consi- experienco ere are any 1 of tho old will make and lais$er t a point of id defects of re ought to le useless to 1 knows the uent, should [Tarda titlos ; that havinj,' ove that tho I. If I mis- I There onnnot be two ways of working the Cridit Fonder. In order to lend money on land, capitalists must be conviuced, not only of the value of the security, but that a uniform system is followed in effecting the loans. District societies would offer no securer "guarantee in this respect than independent agencies. What is required is a control and sole con- trolling power, and a corresponding power in each department, for tho transaction of busi- ness, and enabling us to apply to it an unvarying theory. EXTEACT PROM THE REPORT OP THE CREDIT FONCIER DE FRANCE^ Balance sheet on 31st December, 1855 : ASSETS. Stockholders Money in the chest Securities, Troacary Bonds, Bills Reuoivablu, Ac Bills nut yet due Jientea our V Elat Trinnr Hereeeura Oiiidiutx I/Etat. Subsidy Suci£t£ do Credit funcier de Mar- I seille I do do do Nevcrs. I Holders of obligations I Obligations to be realized ; Obligations redeemed, sums cm- ] ployed in the redemption of loans 4,803,600 00 Funds arising from the redemption of loans, not yet dis- posed of 381,018 35 On obligations drawn in the tirnget, amount not paid up Loans realized Annuities of loans, 1855 to 1006 Divers Company's ODice Furniture Costd of establishment Provisional interest, at 6 per com to stoukholdurs LIABILITIES. Fr., 16,827,750 00 478,786 52 4,843.423 71 41,553 67 2t)i,125 00 8»8,884 57 3,381,225 30 297,470 00 1,156,136 73 1,650,062 00 11,627,700 00 134,988,200 00 4,684,618 35 577,000 00 66,90.3,550 00 1 160,355,362 60, 1.319,572 30 1,626,175 57 70,754 92, 1,406,058 85 058,612 60 Capital stock Reserve fund Fonda de P)icoi/ance Obligations, 3 per cent, 4 per cent Obligations to be redeemed Repayments on loans Loans deferred Dividends payable Interest payable oi> "I'Hsations..,. Obligations repayable aftoi 'iraye Prcmiuma payable Prize lots payable Redemption of loans, 1855 to 1906. Interest do do Costs of administration, do Provision for difference of sale of interest or obligations -113,426,022 57 30,000,000 00 113,121 60 1,280,594 98 1 200,000,000 00 11,744,750 00 381,018 35 4,684,618 35 1,495,766 39 795,951 55 364,255 75 393.235 00 16,S:)0 00 1,300 00 70,000 00 62,218,931 05 82,303,257 38 16,133,175 67 23.960 00 Amount at credit of prutit and loss account Fr. 412,059,702 82 1,366,319 75 413,426,022 57! Of all these items we will only recall two to your remembrauce : the Reserve Fund and Fonda de Frivoi/ance, ■ • -• The first, tho Fonds de Reserve, originated in a statutory euactment. It is termed by an annual payment not exceeding 20 per cent, made out of the profits of the society, if any there gations, and this manner v...„ „ , -..,_r r .■ ,., . ■ , , , ,« be increa.sed to-day, and will increase in each successive year until it amounts to one-halt the capital stock subscribed, destined as it ia to meet eventualities no.v uutorseen, and in the event of the profits of the year not being sufficient to pay a dividend ot five per cent to make up the deficieaoyi 20 il payment not exceeding 20 per cent, made out ot the prouts oi tne society, I are, after payment of the costs of administration, and of the interest ou obii- payment of their capital, premium and prizes, when proscribed by lot. In this account, which, up to theprescnt time, amounts to 143,121 ,<50fr., will again ■' I;- If ft III if ' ^) 152 1 f The Fondt de Privrn/ance has Dot the same origin. On the 25th April, 1854, you decided that you would impose on the future some of the charges of the \ resent, and that you would can- V to an account to be called Frais de premier itablUtement, which should be opened in 1857, a certain proportion of the general charges of the years 1852, 1858,1854, 1855 and iS56, with the view of providing for their redemption in twenty yean. Four-6'ths for 1852 and 1852, Three-fifths for 1854, Two-fifths for 1855, Oaa-fifth for 1856. At the same time you instituted theFondi de privoyance, which you credited, in 1854 and 1865, with sums corresponding to those whioh you carried to the account of Frai$ d$ premier itallissiPment. As the first results of thindecision, c iV oi de privoyanee amounted, on the Slat Dovember, vo l,289,594fr. 98o. But the sum carried to " Genera! Management " being only l,126,268fr. 73c. The difference 163,326fr. 78o. Cons^titutes with the 143,121fr. 60e. Carried to the Fonds de Riseroe, independently of the amount arising out of the profits of 1855, a saving of 306,447fr. 85o. Every prudent society likes to know that a saving of this nature is ready to meet any crisis in its affairs . Your finanoial condition is good, very good ; you are enable, to perceive, from a very rapid audit of the acoounts, that it leaves nothing to be desired. EZTEACT FBOM THE REPORT OF 185S, BT MR. L. TREMI, QOVYERNXUR. Gentlemen, — Five years have elapsed since you inaugurated in France a system of Credit which has been for yoars in successful operation in neighboring countries. During these five yoars in which such great events have occurred, duririi; which, in both hemis- pheres, financial crimes have overwLelmed the oldest and most solid estiblishments.your society, then hardly formed, has not escaped the difiiculties which all institutions of crodit have to encounter. Accused of rashness by those whose principles it set at naught, whoue theories it clashed with, and whose interests it interfered with — it was at an early period accused of waut of power by those whose wants it had not met, and whose expectations had not been realized in a single day; and by turns sought for and then abandoned by capitalists, its conditions have traried, and its proceedings have appeared uncertain. These vicissitudes and struggles during which the constant favor of the government has followed and sustained your efforts, may have retarded ♦ho development, but they have not compromised the existence of the Cridit Fonder. This is due to the fact that the vitality ot an institution of credit depends less on the rapid transaction of its business than on the security of its operations, and the permanency of the interests to meet whose wants it has been formed . Now, in both tucsc respects, the Cridit Fonder is superior to tiny other institution. VVe may assert that it has no comparison to fear. What operation offers better security than a loan or hypothec, as we grant it, subject to conditions and enjoying the privileges conferred by special legislation? What interests present that character of pcrmaucnce in the same degree as those in real estate'/ - Territorial credit undoubtedly existed before your institution was founded, and the sum of 8 milliarda of debts proves sufficiently that the land participated in the advantages enjoyed by the State for its loans, aud by commerce for its transactions. But that credit which does not facilitate the means of ultimate payment, only leads to ruin the individual who obtains it without offering any security to the person who grants it. This is the history of ordinary loans on hypothec, with their burthensome renewals, and not unfre- quent expropriations. Short credit may in effect suffice for commerce, which, by its numerous transactions, constantly renews its^capital. Such is not the condition of real property. The operations which it admits of are effected for a lengthened term ; they L854, you and that should be 58,1854, 1854 and Fraiath 80. 3c. 80. Oo. 5o. meet any rom a YCry are generally works oocupying a lengthened period of time for their execution, which, adding a certain valuo to the soil, do not admit of the capital engaged being rapidly liberated. It is only by dej^rees and as it produces, year by year, that land can repay the advances it has received. What it requires is time. Credit for a long term of years which diminishes the burthen of repayment by dLstributing it over a great number of years, adapting as it were to the annual productions of the real property, the annual price to be paid by the proprietor to obtain its freedom from incumbrance. Credit for a term of years and repayment by annuities form the basis of the system inaugurated under your auspices. Such is the benefit conferred by you on landed estate. Your system, if it be advantageous as regards property, is not the less profitable to prudent capitalists who prefer the security of the soil to the risk of speculation. For a condition of solvency often but little known or appreciated, and for the limited responsi- bility of an individual, your society substitutes the collective guarantee of an institution which undertakes at its own risk to estimate the value of the real property offere 1 as security, fixes the amount of credit that will attach to such property, and retains in its bands the security ; the contract of loan delivers to the borrower the sign of that security, the lettre de gage, the negociation of which will provide him with the capitnl he teeks for. Thus this institution unites in itself the double character of creditor and debtor, collecting the annuities on the property pledged, securing the regular payment of the interest, and unchangeable as the contract which it holds, immoveable as the soil which serves as its security, it effects, by a double operation, the redemption, the force of which ii centralizes, and the regularity of which it only can secure. These advantages are now well understood, and no one now disputes its roality and its importance, as regards the interests of real property and capital, which its object ha* been to conciliate by affording equal advantages to both. \ II CUB. a system of IS. During both hemis- ments,your as of credit ight, whose early period 'zpectatioDS mdoned by •tain. government t, but they he fact that its business ntercsts to idit Fonder son to fear. t, subject to lat interests «? • ed, and the advantages , that credit e individual This is the 1 not unfre- hich, by its tion of real term J they !• } m. to M M H M 1-1 PQ ^:- QO pq Pi E£| H OQ fH CO 55 O < Em Ee* <5 Cm O O DQ O o a> o cToT a» O O CO o n a o o O CO C3 06 ^ O orrr* NM «* 1 1-; o^ 1-^ *o -^ "-^ o^ ci^ in r* o^ 3» »irc^c^casi>--^ot'C^cocc-vcce^ o« in ''^^■^^'^^ '^ c^ -^ 1- in irTt^ o w » in i-( ^v-T H M CO CO i-'««'<*iincot»ooo»o«e«eO'<*in H 2; o o «?! CO CO O »^ Q <1 PC4 O PW , « — ; ^5 c to « : t4 00 0» - x s n e « ■«(• QO W 00 m CO '<' C4 e o o 4! . .S K .2=c B S •O o o » £ o w d %>m BO * ^ T3 >"■ a B a c 2 ■» S a g £ £ g I f- e^j cc •* . 00 tC ■** "^ « Ci ff^ '«*' o 00 « tA o» e'S -^ "^ *- C c^ — ;, *o ^. *^ to eo"i— lO 00 t- *A 00 ^^ CO 1 00 IM 1 CO ^^ •rs ■^ ■«*• a> « 1 CO •a M CC rl (A a B 2 *> It « .to a OS g- O *» S"o? B to e o I s 1 •- « > u o Uf< s 00 CO ei EXTRACT FROM THE OB8BRVATI0NS OFFERED IN THE NAME OF THE CENSORS, BY M. PARAVEY, onb of them, 1859. OsNTliBMBN, — The poBition of our affairs, and the explanations which you have just heard, render it necessary that we should offer but a few brief observations. A position which presents as the results of last year's transactions, 30,041,200 francs of loans paid up, shewing an increase of more than 21.000,000 francs over the results of the two last years, and which has naturally produced a proportionate increase in the amount of the government subvention. 34,460,400 franes received on obligations, instead of 11,127,700 francs the receipts of last year, making for the year an inorease of more than 23,000,000, on the amount of obli- gations in circulation. 111,956,076 fr 78o. paid during the year into the caisse de service, and reduced by successive drafts to a balance, on 31st December of 38,937,454 fr. 61c., instead of 36,158,892 fr. 52c. paid in 1857 and leaving on 31st December of that year, a balance of 8,031,584 fr 28c.; 7,594,514 fr. 38o. advanced on deposits of obligations, instead of 1,258,191 fi. 65c. in 1857. General cash circulation, 241,385,504 fr. 24c., instead of 73,254,053 fr. 26c. in 1857. And lastly as a consequence of these operations, to the most important of which only we now refer, an account of profits and losses which enables you to add one per cent to the amount of the dividend of last year, that is to say, to raise to 9 per cent on the amount of capital paid up, the dividend on the year's profits, after having increased by 310,966 fr. 25c. the amount of the statutory reserve fund, which now amounts to 794,242 fr. 75c., and by 649,685 tr. 07c. the amount of the fonds de preooyance and dr. provision, the oigect and importance of which have been explained in the reports of previous years, and which have now attained the sum of 3,014,831 fr. 12c. Such a position of affairs, gentlemen, speaks for itself and requires no comment. We have examined it with care, we may say with severity. The importance of the results made it incumbent upon us to assure ourselves of their reality. Wc are convinced that there is no deception in the figures which exhibit it, that suitable, indeed; liberal pro- vision ha» been made for events in the future, by the appropriations to which we have just referred for the/bnc?« de riserve and de privoyance, and *hat you may safely concur in the proposition n«ir sabmitted to you, to fix at 22 fr. 50o per share the total dividend for 1858; 166 VM ' I CREDIT FONOIER No. 1— POSITION ON ASSETS. Stockholders Cash and Securities.. Treasury Advancee on litrrt Jieeeveiin Otii(raux Holders at ohlijationt libtrtei partly paid up Bolder* of obtigation$ eommunalei partly paid up V hypothecary for a term of years 263,810,115fr. 20c. hypothecary for a short time 3,115,000 00 to the co!nmt4»e« 48,778,265 74 I drainage works 333,703 10 Borrower's loans paid up. Loans to be realized Half year's annuities due. Offices of the Company.... Furniture Claims disputed Premiums to be redeemed of the communal loan, 3 per cent. , Discounts renewed Miscellaneous FK 0. 15,000,000 00 80,085,342 28 28,368,920 39 22,774,057 95 2,626,^64 68 5,715,600 00 10,383,450 00 306,035,084 04 4,127,269 90 477,660 00 2,720,003 29 1S1,78S 26 62,381 73 9,773,773 49 3,445,880 86 2,954,097 07 449,328,032 89 Dr. No. 2— EXTRACT FROM THE ACCOUNTS Expenses of Management.. I Personal ' Printing and Miscellaneous.. Payment of /.'eceveur* Otntraux Interest, Premiums, and Prises on obligations in circulation. Bank Commissiops, ko Registration and Stamps Caro of real Property, payments for Furniture, Ao Grant of the Society to the Caiu* de retraUti Ket Profit , n. 0. 673,154 fift 329,935 74 88,000 00 11,487,502 90 384,311 70 38,338 73 66,199 74 19,949 15 13,065,393 60 8,049,904 76 16,116,397 38 157 DE FBANOE. 8lBT DECEMBER; 1861. LIABILITIES. Capital itook. {Paid up > 19,000,000fr. OOo. To be paid up 15,000,000 00 Statutory Reierre Rturvt immobiliirt Fond* d« prtvoj/anet and proviaion for tlie payment of obligationi Obligationi /oneiirtt in oironlation Oili^altoiM eommuna{«« in circulation 35|833,&77 51 Premiama of the oommunal loan, 3 per cent 9,773,772 49 Titru partially paid up Loana deferred Fanda depoaited Sou*-Oomptoir dt$ Entrtprtneur* Crtdit AgrieoU Obligationa drawn in the tii-agei to be repaid lotereat, premiums, prixea, and dividends to be paid Miioellantoua Izoeas of Assets over Liabilities . rR. c. 30,0C0,000 00 1,821,811 fll 2,383,587 49 1,954,962 21 259,148,200 00 45,607,350 00 16,099,050 00 23,086,744 48 67,001,275 70 3,767,906 63 465,273 74 765,100 00 2,040,896 25 2,071,459 52 446,278,117 63 3,049,904 76 449,328,022 39 1 OF PROFITS AND LOSSES FOR 1861. 4,311 70 8,338 7S 6,199 74 9,949 IS 5.392 60 9,004 70 Cb. Interest on loans realised Grant for expenses of management Miscellaneous Interest on capital stock and reserve funds • Profits on deposits of funds Subvention from the State (balance) Coat of original Establishment repaid by the Crfdit AgrieoU 50,000fr. 00c. Subscription by Cridit AgrieoU for management fo« eleven months 96,999 85 FR. c. 11,688,776 52 1,296,893 26 623,223 7-1 987,096 39 771,204 00 601,103 50 146,999 85 16,115,297 26 I les GENERAL STATEMENT OF THE OPBlUrOONft- Or TBI CBUBIT FONOIER DB FRANCE IN 1859, 1860, and 1861. ' I'f No. 8.--L0ANS, ADVANCES, OR CREDITS. r"» NATURB OF THB OPERATIONS. HypotiiMMT loaai for Umi of yn. Hypothecary loans for ihort Unni Iioaix for drainage worki HyiMtheeary loani ia Algeria Communal Loans Adranoes on obligation* foneiirti Adran •" "^ obligation* communal Advances on Tarious secarities , Crt'liti du £'otui-Com/)rotr r on hypothec d** Entrepreneur* ap- 1 proved ly the Crtdit' Foneier d* France [oB other seooritiM, Total. 18S9. 7,651,000 30,000 8,164,408 10,327,700 62,406,474 9. 00 00 00 40 26 71 1860. 4«,064,8«0 1,866,000 181,800 19,178,146 11,111,666 62,666,778 12,680,168 664,749 156,123 696 0. 06 00 00 64 00 00 34 1861. VS. 8r,i«r,»64 2,600,000 172,950 994,800 24,892,986 32,227,011 4,944,370 7,789,620 16,186,200 4,056,508 179,367,929 0. 00 00 00 00 12 38 26 77 00 00 47 II n 159 r^l '.4 II. «1. ,000 \,m ' 00 0. 00 00 1,800 00 l,9ii 13 r,oii 3R 4,370 26 9,520 11 5,200 00 6,608 57,929 00 47 • ' • •• No. 1. STATEMENT OF THE MONTHLY LOANS OF TIIR rREPIT KONOIKll J)K I'llANCE IN 1859, 1860 and 1861. MONXII. 1850. ISCO. llypotho- cary 1 TiOanK. I Loanj Jiinuary... February Murcli April Muy June. Hypothe- cary. July August .Septombcr.- Ootobor .... Novombor., ])eccnibcr,, Totiil Fr. 'Jl.^SOO 4,503,700 2,521,500 1,-191,000 2,0U0,J00 3,a30,.M0 1,730,500 2,102,000 2,150,500 1,703,800 ijin.-'^oo 2,008,000 Fr. 2,S2t5,500 2,51S,500 •1,160,000 .^,C95,000 3,107,000 .'1,079.000 4,01S,000 3,005,000 7,0l!<,300 3,5fi0,00() 2,747,000 4,710,000 Communal. Fr. TOTAL. Fr. 2,82r),o00 2,548,500 4,150,000 3,005,000 3,107,000 5,979,000 4,04.Sfl00 3,065,000 7,01S..300 .3,560,000 18,648,6451 21,395,015 18«1. 1 Loans. Hypothe- cary. 529,500 5,269,500 Fr. 20,189,884 3,885,400 5,009,000 6,469,000 3,93.3,500 6,179,000 7,407,200 7,844,600 5,440,100 9,300,900 6,794,700 6,146,100 TOTAL. CommuDal. ' Fr. 1,521,788 2,403,000 1,650,000 251,375 2,173,375 15,835,306 1,007,946 33,000 4,700 12,500 20,380,300 4S,05 1,300 19,178,145 67,232,445 87,599,384 24,89r,9ga Fr. 21,711,867 6,288,400 5,009,000 £,'19,000 4,184,8. 8,352,;' '5 2,'?,242,506 7,844,800 6,448,048 9,333,(:ii0 6,799,400 5,153,600 a 12,492,369 1 m n 160 CLASSIFICATION OF No. 5.— ACCORDING TO YEAUS. Above 1,000,000. 500,000 to 1,000,000. 100,000 to 500,000. .SU.MDER. 2 1 2 3 AMOUNT. NDHBER. AMOUNT. NUMBER. auoi'ht. 1853 to lSoi< Fr. 12,400,000 3,600,000 5,600,000 20,000,000 20 1 8 Fr. 17,990,000 600,000 4,002,000 5,970,000 263 71 99 162 Fr. 47,193,000 13,706,000 20,909,000 32,784,000 j 1859 ; i8()0 1861 Total 8 41,500,000 41 28,562,000 595 114,592,000 _ No. 6.— ACCORDING TO YEARS. 10 to 19 years. 20 years. 21 to 30 years. NUMBER. AMOINT. NUMBER. Ifij 14 33 47 259 amount. NUMBER. AMOUNT. i 1853 to 1858 ,1 Fr. Fr. 0,739,780 429,000 659,043 l,254,2no 75 10 32 71 188 Fr. 2,^98,050 317,000 1,804,000 2,250,500 l,S5y g oao nnn 1860 39 57 l,4i)l,500 1,401,100 .3,184,0110 18(11 1 , Total 105 9,082,823 0,869,650 1 1 No. 7.— ACCORDING TO THE YEAll.^. 1 Dei'ARTMBNT OF TBB Seine. NUMBKR. AMOUNT. 1 1853 to 1858 835 233 510 S26 2,404 Fr. 76,062,800 :),415,400 35,437,000 69,380,700 1 1859 ISOO 1 ' ISfil. 1 j Total 201,295,900 t-- - ^ OF NG TO ,000, PUT. Fr, 93,000 06,000 909,000 784,000 592,000 .DING TO years. mouNT. Fr. 2,498,050 317,000 1,804,000 2,250,600 6,869,560 G TO THE BNT or THB NE. 1 AMOUNT. I Fr. 76,062,800 21,415,400 \ 35,437,000 69,380,700 1 201,295,900 \i 161 HYPOTHECAEY LOANS. THEIR IMPORTANCE. 50,000 to 100,000. 10,000 to 50,000. Above 10,000. TOTAL. NUIIBIB, AHOURT. NUMBER. ASfOUST. NUMBER. AMOUNT. NUMBER. AMOUNT. 264 Fr. 17,085,850 713 Fr. 16,726,480 403 Fr. 2,142,000 1,731 Fr. 113,537,330 56 4,241,000 158 3,965,900 50 273,400 843 2(1,380,300 ' 111 8,517,000 314 8,121,500 177 1,004,800 709 48,054,300 1 168 13,827,384 472 13,037,700 345 1,080,300 1,15.> 87,599,384 ! 599 43,671,234 1,657 41,851,580 1,041 5,400,500 3,941 275,577,314 THEIR DURATION, 31 to 40 years. 40 to 49 years. 50 years. 60 years. TOTAL. No. 29 9 16 20 74 AMOUNT, No. AMOUNT, Fr, 35,161,424 25,050,300 24,848,341 25,373,884 No. 1,179 37 537 AMOUNT. No. AMOUNT. No. AMOUNT. Fb, 2,463,600 295,000 270,000 1,111,600 283 300 552 426 Fr. 00,674,470 ii,008,4l6 56.208,200 1 Fr. 0,000 ... 6,000 1,731 343 700 1,158 Fr. 113,537,330 20,386,300 48,054,300 87,599,384 4,140,100 1,561 120,403,949 1,753 131,801,092 1 3,941 275,577,314 SITUATION OF THE HEAL ESTATES. Other Depaatmkmtb. TOTAL. MDMBER. AMODNT, NUMBER, AMOUNT, 806 110 190 332 Fr, 37,474,530 5,970,000 12,617,300 18,218,684 1,731 343 709 1,158 Fr, 113,537,330 20,386,300 48,054,300 87,609,384 1,637 74,381,414 3,941 275,577,314 it 1 ,j n 162 11 H OQ OQ H iz; W g it*'*' 1*^ OQ o > O n M 2 CO H 1 00 d r— — — tj M w o r^ >* t- ** ' at J- i« >- mS -f o CC CO ■«1 irT c-^ CD* 1 ^ 1 o> 0> r- 1 ® o^ e^ oo 1 H 1 eo >o O 1 eo i-( c^ 1 K *1 'T r-1 1 O "» "O f •o to , M • tc u h ^ -)i :•: 1 o o -<> •* "* p ■« OV CO -^ • 5 CO 1-1 : CQ ». e-f r-^ ; f»; ^~' o j Pk o eS t-" o o -< o 1 o c >0 M 1 ■* CO , C3 <« 1 H — ■ tci u C^ Oi H -J -t O M ' H a r-i r-t b »■ lO CO U) h5 o ei o _^ »^ e-j^ Ki a " cf o' C ^ cr H 5 a. «■ __ rH^ CO ^ C "^ co" cT ' M <;: i- 1- H rH CJ O C3 t3 « CIO « H ii CO iO ^ C« k _^ -fl^ o_ CQ u e^r o* 8 c CO m 1 t— ' 1- M O Cs «J ■^ ^ri CI ■« 1, CO C e^ M CO |i fa? O c rH -^ U ec O T- u ! " CO" co~ ' ^ 1-H 1.-5 • u O f-l pq M 1 1 «J f "^ 'f «0 c 1 1 .' "^ CO t- i ev CO CO , »r " i-T oj <= -H U1 1 le •=^ t 1 rH f-< I •s UY3;i o C i ^ SSI ■KSSESSS _„ « .x || CO < H CO &2 O - I o ! ,; o o o o o o rS O O O o o »0 *- CO lOTfcKT i^Mo" II CO CO -f t-.f~ rH I 1 E- eo CO f-* o ^ t- '1 O Ci eo oi CO ^ lO ^ c^ ^^ 1^ c^ rl 1-1 C) ', V >; o o o e o o 1 z •2 C^ O O II * O r- .« ao ^ e i« .c t-T eo eo >n 1 S ^^^ lO •- ■>»l Cl CO ir 1 1 «■ 1 it '■1 1, T, f I-l l-H II o I-( 1— 1 F-< ^ 1 ^ . o o o o <^ o faggS o o o i c-i »ri t^ eo rf -t C- " C J 05 cT 1- Vj Ci co o -* ci: j-M e- ^■4 d CI j o cf tf eo 1 <=> i 1— 1 ^ o o <= r*" O o = .-= = o V.C. o e o M* O <0 O iC M O tfC -^ 1 a lO 1— t^ »-. C C-I 1 CI 1.0 -71 CC O M 1 ,1^ C-t .C ro rH ,-, II ! ^ U-t c«e^ CI ■ II o • O o i.-S w ,• C O C3 o o o ' ^ J- r"" o o -o cs o o W CI CO CO c^ -^ t^ v^ o CO eo CI Cf. CCJ Ci 1 X -r o ^t 1^ o eo Oi^CJ -t •'^ i^ H .*-" t-^ c" -r. I («-• r- CI f- *"1 w- .• = <=<= o o o ^- .'-ceo ooc= II E^ ro >c c^ c -r 'O II ff^ ^—^ r, ... * 1 cs CI — tf^ 1- w . o "^ CI ct CI cr or CI 1 X_ T- ..-5 1- ■(■- r- II K r > •. 11 ,u cT — 1-- ,- r^ (M w. u-^ ec CO II o 'O s* o c c O C O ^^ £S§? :^.s;i? II f/-' c:* -f rc: a ' ■ "> - o o ■^ Jr eo -r i^ c-i^ « u ci ti -f p^ V-. o o l.-^ 1 1 o M •«-< '« VJ t— • f^ C^ e^ •. rf fl ■^ o ^ f o ■c n fc "^ 1 - *t eu i. .e capital of each share of 500 florins, or for six months 7i florins is sut apart. Three-fourths of the balance of profits, after deducting all t:>i>L'"'^»H, losses and doubtful debts, constitute the dividend to be distributed in the pro rata of the shares. The result of the half-yearly balance is made public, and after its publication, the dividend is payable in exchange for the coupons. 41. The one-fourth remaining of the property constitutes a reserve fund, vrhieh must be raised to the amount of one-tenth of the capital. This fund must alway.s be kept at that amount, without ever exceeding it. So soon as the reserve K'nd reaches the amount indicated, the fourth part of the profits is to be added to the dividcnu -divided. 42. The reserve fund shall be the subject of a separate account; It shall be invested by the corporation in public securities or in private obligations, so as to produce interest. This interest will be entered as receipts in tho December balance-sheet, and will be added to the dividend. CHAPTER VI. SKO. I. — OF THE OPERATIONS OF THE BANK IN GENERAL. 43. — Throe-fifths of the capital of the I3ank will be employed in hypothecary loans* and two-fifths only for the other operations of the society. 44. — In case the Bank shall not receive a sufficient number of satisfactory applications for the investment of the three-fifths of its capital, it may employ tho funds at its disposiil for its other operations, but subject to tho express condition that they are to be loaned at short dates only, so that they always be in a position to restore the thrt'c-fifths to their original destination. 45. — The Dank shall never speculate on it.s own accuunt, cithoi' generally or on special oooaaions ,in the securities of foreign powers. 46. — The business of the Bank includes tho follomug operations: lat. Hypothecary loans. 2Bd. Discount tnoMctioos. i of tha aad an dors. e coDfir> i of Jun i them as led to the capital of osaes &nd hares, mtiou, the hich must be kept at he aniouDt le invested iG interest. I be added cary loans « ipplieationst its disposal >e loaned at ba to their If on special 169 A. Simple discount. B- The discounting of bills of exchange which do not oflfer the securities indicated in § 62, No. 2. 3. Loans on paper securities. 4. The operation d'endossement. 5. Deposits. 6. Life assurances, life rents, nnd other analagouj operations. 7. Receiving deposits of moneys both by the State and individuals, and paying a ntipvlatcd interest. 47. — Of the operations referred to in the preceding paragraph, those of simple dis- count are to be specially favored by the administration. BEC. 11. — or THE PARTICULAR BRANCHES OF THE OPERATIONS OF TUB BANK. 1«^ — 0/ Hj/pothecari/ Loam. 48. — The Bank only lends one-half of the estimated value of the property hypothe eatcd, and generally only on first hypothec — that is to say : 1st. On all real estate situated in liavaria. 2nd. On the houses in the towns or boroughs which produce a certain revenue, ex- cepting chateaux and buildings which cannot be leased, in so far as the latter aro to be reckoned as security without the addition of other property. In the matter of fiefs or trusts, the bank reserves to itself the right of making special conditions for its own Kecurity. Bavarian subjects may obtain loans on all their property situated within the States of the Confederation, when the laws of the country in which th'^y lie afford adequate certainty of ensuiing prompt and summary proceedings and execution. In conformity witli title 7 o( the law respecting Banks, of 1st July, 1J334, the subjects of the other States of the Confederation can only obtain loans out of the two fifths of the capital reserved for discount transactions. 49. — Loans of this description are eftected in ca.sh only, in round sums of not less than five hundred florins. The legal and all other costs arc payable by the borrower. 50. — Applicat.*.s fi)r loans may address the bank verbally < c in writing, either directly or hy proxy, or by sworn brokers. They shall annex to their application a description of the real estate security, an estimate of its value in accordance with see. 60, and a legal extract from the register of hypothecs, and a declaration of auijuiescence in the statutes. 51. — The borrower shall submit to the Bavarian Ilypotheciry Bank a writing contain- ing all the conditions stipulated by the bank, for guaranteeing the loan and the payment of the stipulated interest, and moreover a declaration in the I'orm oi procis-verhal : 1st. That he recognises and acknowledges the statutes of the Link as the rules by which he is bound exclusively for the decision •■i''. interpretation of b < agreement of loan with the bank. 2Dd. That in case payment shall not ha. c been made within the 14 days next follow- ing the day fixed therefor, A. He submits himself to the decision of the competent tribunal, in which the bank shall take proceedings based on the hypothec, or on an authentic extract from the register of hypothecs, and that he will not offer any exception or other proceeding prior to the liquidation of the arrears. B. That he extends to the bank the choice of property to be seized, without compel- ling the bank to follow the order prescribed by the provisions of the Ordnance, chapter 18, eeo. 3. C. That he will make no opposition which cannot be proved on the spot, by authentic documents, to the mode of sakie employed against him. D. That he renounfp:^ to all dilatory proceedings at law, and to all the hinifices de droit, righmvnts d'ind\dijr,hi\ cC-c,, compitcnce, cession dc biens and luspension provisoire (mr»'<': num.) Jrii. That in case of the deterioration in value of any one of the Bnbjecta of the hy- poth«c, wdioh ma^ endanger the security of tbo Jcbt, the bank may not qqI^ proceed to a ITO ,t" '• new valaation, bat also, ia exceptional cases, to demand the repayment of the loan after six months' notice, and without regard to the conditions entered into as regards annuities. 4th. That in case the debtor shall subsequently apply for another loan, he binds him- self to permit the inscription, for arrears of interest and costs, of the tenth part of the capital loaned, as a second hypothec, producing no interest. 5th. That he will pay all the costs and damages resulting from the non-fulfilment of hka engagements. This declaration is to be inscribed on the margir /' the deed of hypothec and of the register of hypothecs, in the form of an obscr^atio... 52. The redemption of a hypothecary debt shall only be cfected by annuities. The debtor, however, may always free himself by voluntary payments on account, or by com- plete repayment. Each of the payments on acconni siiall not be less than the amount of an annuity. 53. The ordinary amount of an annuity ic f> iicd ttt one per cent. Amortissementa tn/i rieurs at J per cent, or supirieurs at one per ceut are the subjects of express amercements previously e^ Ujred into by the borrower. The annuities are payable half yearly, at periods fixed by the Bank. 54. Debtors who pay vSeir annuities wittiout interruption redeem the whole of their debt, in conformity with table. 1 to 4, on payment of 4J per cent, .^f the pciount borrowed, in 61i years. 5 do uo do 43 do 5i do d<> do 84) do 6 do io do 20 do For those who are desirous of maiung larger yearly payments, separate calculations are made, in which the annual costs of management are entered as though the loan had been contracted for forty-three years. Bv.t when the debtor makes payments in ac; mnt, or pays off the entire debt, the costs of management to be paid by him are calculated in proportion to the annuities paid by him for the years during which he was in partial possession of the capital. 55. On the application of the debtor, the account for tho gradual repayment of the debt may not only be stopped by deducting the payments already made, but the balance remaining due may be consider«d as a new loan. 56. In certain cases funded securities, offering an adequate guarantee, may be transferred to the Bank. In such case the Bank gives the debtor a receipt which acknow- ledges his right to the security upon puyuient of the loan for which they are deposited, at the expiration of forty-three years, provided, however, that the half-yearly interest has been regularly paid. If the possessor or his successor offer repayment, he is allowed the annuities already paid in deduction of the capital amount due, in accordance with sec. 54. In case of irre- gularity in the payment, the ordinary proceedings upon funded securities are employed against the proprietor, and after the sale by auction, the purchaser enjoys all the rights and advantages of the former debtor. 57. Upon complete payment of tho debt the debtor receives the obligation discharged, and upon presenting it at the registry office, ho obtains the cancellation of the hypothec in the register. 58. The Bank accepts only its own discharge in proof of payment. 59. The administration of the Bank, aflcr previous enquiry into the ciroumstanoes and the state of affairs of any proprietor who has suffered unexpected losses, may grant him a long or short delay for tho payment of his annuities, and also a new loan upon such f erms of payment as are suited to his case. The pn)prietor who de- ' os to obtain this favor must prove his losses to the satisfaction of the Bank, within fourteon days at most after their occurrence. 60. Valuation shall be made with a due regard to all tho circumstances tending ta establish the real value of the property hyporhecated, all the rules prescribed by law being observed, and, 1st. Ground rents shall be dcd\ioted at tho ra'>; :)i 4} per cent when they are per- petual and at the rate of 5 pet ^^rff.. when they are only temporary. 2nd. Buildings ereotea on \l^e property shall oqly be included undei- the following oiroumstances : ■j-i!i after uities. him- of the 171 A. When they add to the value of the property, or have a money value which can be easily realized. Ji. Chateaux ia the country parts, with other prop n- ties, are only to be estimated at their value as residences. Ornamental buildings are not to be included in the valuation. C. The total value of the buildings necessary for the agricultural or manufacturing processes is to be taken into consideration. D. All buildings must be insured against fire. 8rd. Buildings in cities and towns must be worth at least double the amount of the loans, the production of a fixed and certain rent being authentically established. 4th, Eficlosed forests are to be valued by sworn foresters, regard being had to the amouiitjof the contributions and the permanent revenue, according to the rules of forestry and capitalizing at ili per cent, the net amount ascertained. For the valuation of other rural property, the assessed value shall serve as the basis ; the proprietor, however, is at liberty to prove a higher value, and the Bank reserves the right of re-valuation, if they have reason to fear that a loan based on the assessed value exposes it to loss. 61, The administration of the Bank may also ascribe a higher value to the property hypothecated, upon conforming with the laws. ir. DISCOUNT FEES 02 TO 70. 70. Public funds are discounted by the bank at 80 per cent of their current value on change. III. OPERATIONS ON PAPER OR MONEY. 71. The bank lends 90 per cent of their current value on change of the public securities of the country and of its own shares. 74. Loans on deposits are only granted for ninety days at furthest. IV v., VI. UKl ATIVE TO THE INDUSTRIAL OPERATIONS OF THE BANK, VII. DISSOLUTION OF THE UANK. Hi. The dissolution can only take place before the expiration of the privileges of the Bank (sec. 2), upon the requisition of three fourths of the stockholders, holding not less than three-fourths of the stock. In Bucli ease ten members elected in the committee are added to the administration of the Bank, to proceed conjointly to the liquidation of, and also to deliberate upon and discharge all the engagements of the establishment. 82. Any modification of these statutes must, before becoming executory, be sanctioned by the government. ■^ 6th January, 1850. STATUTES OP THE OXlESlDXa? r-OKTOIEIIl. OF aA.LLICIA CHAPTER 1. . OaOANIZATION OF TUB KBTAUI.ISIIMEXT. The institution of credit is a free association of proprietors, under the {guarantee of the States of Gallicia. AH properties registered as independent, and on wliich at least 1000 florins may bo loaned by agreement in conformity with Section 36, may be admitted into the association. The property of the State, of comnv nes, and of corporations under the control of the government, are excluded from the association so long as they retain this quality. Property forming part of an undivided estate is also excluded, but several independent parcels of one and the same domain may be united to form one joint property, on which the miniiniim amount of 1000 florins may be loaned. u. Loans may be effected at all times of the year. 4. The association may be joined in the following manner : A. IJy contracting a loan. B. By becoming proprietor of land on which a loan exists, and declaring the desire ot continuing it. If the new proprietor takes no formal proceeding after having received the autorisation d'accessiuit, the latter takes place tacitly. In case he refuses within that period, he must repay the amount as provided by Seo. 19. 5. Withdrawal from the association is effected by the repayment of the debt, or by the sals of the property registered. \ CHAPTER II. OF THE "LETTRES DE GAGE." The association effects its loans by the issue of leltrcs de r/ar/e. 7. The hllrei de yage are public acts securing to their holder the regular payment of interest and the repayment of their nominal value, at the will of the association, six months after notice to that effect; the holders not being entitled to demand payment. 8. The Icttrcs dc gage shall be drawn up in conformity with the form annexed hereto. They shall only be issued of the amounts of 100, 500, 1000, 5000 and 10,000 florins, at 4 per cent, interest, payable half-yearly. They are made payable to order or to bearer, at the will of the borrower. Their repayment is governed either by timge au tort or the will of the asBociatiou, ITS 9. Obligations payable to order alono require any formal transfer. 10. Obligations payable to bearer may bo made payable to order; tbo.so of a large amount may bo excban;,'ed for others of smaller value, aud those which have been damaged may be replaced. 11. With each obligation, twenty coupons for the half-yearly interest are delivered. These coupons are always paid, even though the kttra de gage have been redeemed or repaid before thoy become due. On presentation of the talon the coupons ure re- newed in the tenth year, the obligations are not extinguished by repayment. If the owner of the lettres dc gage does not bring back tho coupons, the amount of the coupons in oiroulatioD is withheld from him when repayment is made. Interest may only be prescribed after thirty years. OIIAPTEU III. OBLIGATION OF THE PROPRIETOE. 12. Any proprietor who desires to contract a loan is bound to execute an obligation containing a statement of tho amount of tho loan, a detailed description of the property hypothecated, a statement of the payments to be made annually to the association, and an undertaking : 1st,, to conform to the statutes j 2nd, to pay three per cent, in addition to the amount of the loan, to provide for the requirements of section G4; 3rd, to pay all the other costs of proceedings, iSce. This obligation must be signed by the debtor and two witnesses. 13. The debt must bo inscribed in the registers of hypothecs before the lettres dc gage are issued, 14. Before the lettres dc gage, are issued, they are submitted to tho Board of Super- vision, who authorize their issue after indicating on each the number and total value of all those which have been issued. 10. Payment mu.st be made into tho treiusury of the administration, — of A, the interest j B, the contribution to tho sinking fund, the first half-yearly payment to be made in ad- vance on receiving the lettrc dc guije ; C, the costs of management. CHAPTER IV. at the OP THE REDEMPTION. 17. The redemption is effected by means of an annual payment of one per cent, of tho capital of the loan, 18, The association can only enact repayment in full in the cases provided for in sec- tion 63, but the debtor is always at liberty to make payments on account or to pay off the entire loan. In the case of final payment, the whole amount which he has previously re- deemed is placed to his credit, but he must pay one-half year's interest on his debt, on the occasion of each payment on account. 20, Payments on account may be made in lettres dc gage or in money, but the inter- est must always be paid in specie. 21. The sinking fund, and the payments on account, are appropriated to the redenip- tiqu of the lettres de gage designated by the tirage au sort. 24. All the profits of the association arc added to the sinking fund. 25. The drawing of the lettres de gage to be redeemed, takes place twice a year ; in June and in December ; the numbers drawn are published in the Gazettes of Vienna and Leni- berg. They are redeemed six months after the tirage ; no more interest is allowed on them after that period, and after 30 years, if they are not presented, their value is added to the reserve fund. The association may discount lettres de gage repayable within six months. 27. Whenever a debtor redeems 100 florins of his debt, he may demand the radiation ot* that amount on the registers of hypothecs, but round sums of 100 florins only, or their multiples may be radiated, and the interest payable after eaoh radiation always remains the Mm«. •;,.^ ., t. ff"*. \ i 174 28. When a proprietor has repaid at leiist one-fourth of hia debt, he may also demand that the three-fourtha remaining due shall only b« redeemed within the period of ycara stipulated for the extinction of the entire debt, to ba computed from the day of the pay- ment of the first fourth. In the case of several loans being made on one and the same property, the paymeiitii on account of any one of these loans may not be imputed to the others. i~ ' CHAPTER V. or THE IITPOTHEC. 29. The association only lends the first half of the value of the property, so that taxes etc., alone rank prior to its hypothec. 30. It may, however, grant a loan on property already hypothecated, but on condition that the registered creditors yield their right of priority. 33. The association decides as to the expediency of loans on lands already hypothe- -mted for less than one-twentieth part of their value, in eases where the i)iiviloge of first hypothec is not yielded. 35. The borrower must prove that he has paid all arrears of taxes. If the amount of axes in arrears docs not exceed one-twentieth of the value of the property, the half of that value is loaned, but the amount due is withheld in /f//>vs dr ^a;/r, nnd thcpo being sold the arrears are paid with tlie proceeds. CHAPTER VI. t: RIGHTS OF THE ASSOCIATION AOAINST ITS DKUTORS, 37. The association, before the courts of justice, enjoys all the privileges appertaining to inscription en premih'C hypothlquc. 38. It has the right of satisfying its claims out of the real estate of the debtor iu its possession, in accordance with Art. 43 of the Code, de Commerce, and the privileges granted to the Mont dc Fiete of Lemberg. 40. The books of the association are sufficient Jegal evidence against the members of the association, and even against subsequent holders of the lettres d>- gagi'. 41. The Comite des Etats has a right of arbitration. 43. Appeals against its decisions are made first to the Court of Appeal of Lemberg, and thence to the Supreme Court of Justice at Vienna. 43. All these tribunals may order provieional execution of their judgments, notwith- standing the appeal. 44. The director of the association has the right of choosing for the rccnviMy of the rights, between execution par vote administrative or par vnie jndiciairv. 47. At the adjudication if no one will agree to the upset price, the sale takes place at the highest bid below. 48. When the officers of the association urc eonipelled to resort to scriuestraMon, they may reserve the whole or ary part of the revenues of the immovable sequestrated. 50. The proprietor is allowed 14 days within which to make oppjiosition and defend himself against the judgment ordering the sequestration of Ins propeity. 51. Every member of the association is bound to discharge the fiinctioii.^ of coninii.s- sioner of the association in case of sequestration, or in the ease of seizure of property lying within the limits of his cerclc. 52. Out of the proceeds of a sequestration, the amount of t^ixes due is first reserved, then the amouut due to the association, and the surplus, if any there be, is deposited with the judge. 54. Any contestation respecting the correctness of the accounts of any such course be- tween the administntion aad the debtor is submitted to the decision of arbitrators. 175 \ emand ' years e pay- rmeiitii 61. In cases of insolTency of the debtor, the association is compelled to ank in its order with other creditors, but after two biddings, without a sale, the association may de- mand a third auction without any reserve, and to bo the first paid out of the proceeds. 63. The demand for repayment- of the loan by the association can only be made in th« following cases : 1st. When the proprietor neglects his property to such an extent as to endanger the safety of the debt. 2nd. When within a period of two years the debtor has been thrice threatened with seizure. iJrd. When the seizure of the property is authorized for a private debt, and the proprietor neglects to pay regularly his half-yearly rentes. In these three cases only the asijociation may exact complete repayment six months after a sequestration made therefor, and after three successive advertisements in the Gazette do Lemberg. The interest on the debt is payable in cash. The capital may be repaid in lettres de ijage or in money. 64. Whenever a payment is in arrcnr, the debtor is bound to pay six months interest on the sum in arrears. 65. The members of the association shall also pay an extraordinary contribution to cover the cost resulting from delays ot paymecti:-, the association being sometimes obliged to borrow montj at a higher rate tu cover the amount. Debtor?, moreover, pay all the other expenses occasioned by them. CHAPTER VII. RIOIITS OP HOLDERS OF " LETTRKS DE OAOE." 68. The association offers to its creditors as guarantee for the fulfilment of its engage- ments : 1st. The vigor with which they can cause execution to issue against their own debtors. 2nd. The resources placed at its disposal by the sinking fund. 3rd. The rigid punctuality with which they always exact their payments. 69. In the event of the association not fulfilling, with all desirable punctuality, its obligations to a holder of a lettrc de