The German latarchaften are a notable type of semi-public institution. There are 23 of these in Germany, and some very loose adapta tions of them in Sweden, Denmark, Austria: Hungary and Russia. Formed under special laws enacted at widely different times, they vary greatly in organization and operation. But an outline of the Silesian landschaft (created in 1769 and so the oldest of all' land-credit tutions) will give a fair idea of the others. A landschaft is a district managed by an adminis tration whose chief officers are appointed by government upon nomination of resident owners • enrolled as members. The district in chides only lands lying outside the towns and cities and is divided into lesser areas, each with a local administration subordinated to the one just above it. The central organization con sists of a president, two vice-presidents, a secretary and a treasurer. The local ' trations have a similar organization, except the lowest subdivisions where the sole exetu tive officer is a superintendent.
The organization is associational without capital stock or shares. The voting strength of each member is determined by the number and amount of his mortgages. The voting is done in circles, as the lowest subdivisions are called. Members elect the superintendents and also delegates to sit in convention for selecting the nominees for the other offices. Beyond this members have no voice in the management. They cannot dissolve the landschaft nor alter its structure or purpose since it is not formed under articles of agreement, but was established by legislative act. Acceptance of office is obligatory upon election. Members are bound when duly called upon to perform such duties as caretakers, cultivators or receivers of mort gaged farms taken over upon default of loans. Compensation may or may not be allowed them. All members are borrowers, since nobody joins except applicants for loans, and membership ceases upon repayment of the loan. Any qualified landowner is entitled to admission. If his application be refused by the local offi cers, he may appeal to the central administra tion, which in all cases must make the final decision.
The loans of the landschaft must be secured by first mortgage on land worth 50 or 40 per cent more than the loan and stocked with enough equipment and domestic animals to assure a production at least equal to annual dues and taxes. The loans are without any other restriction as to amount, use or purpose. They are always long term and repayable by amortization on the sinking-fund plan. A
feature, however, that distinguishes the land schaft from other land-credit institutions is that the loans are made, not in cash, but by an exchange of the borrower's note and mortgage for the landschaft's own debentures. The law prescribes $1,000 to $20 as the denominations, and 5 to 3 per cent per annum as the interest rate of these debentures, and gives the bor rower the right to select the kind he wants. The annuity consists of the interest on the de bentures he selects, plus one-half of 1 per cent of their face; and so the loan and the debentures exactly correspond in amount and interest rate. The borrower undertakes to pay the annuity until his debt is completely extin guished. To this may be added a small charge for expenses during the first 10 or 15 years. Besides the obligatory annuities, the borrower may make voluntary payments as often as he pleases, and tender debentures at par in lieu of cash for all his dues. Defaults are never al lowed for longer than six months, since the only money the landschaft has for meeting its obligations on the debentures comes from the loan they represent.
The annuities and other payments by bor rowers are placed in the sinking fund as soon as they are received. When the borrower's ac count therein, after entries of his proportional share of any profit or loss have been made, equals the original amount of his loan, his mortgage is canceled and his membership ceases. This may happen sooner or later than expected. So the period of the loan is some what indefinite. No debentures are issued ex cept upon the making of a loan. But the landschaft maintains a bureau for selling them for the borrowers. The sale may be below or above par, and so the interest the borrower actually pays depends upon the market quota tion. With the view of protecting investors, the interest date of the loan is set a few months ahead of the interest date of the debentures, while the membership agreement gives the landschaft a right to instant possession of the mortgaged property in the event of default, or even if it deems its claims in jeopardy. Every six months the landschaft must by lot retire debentures up to the amount of cash on hand in the sinking fund, so as to preserve an exact balance between the outstanding amounts of the loans and debentures. For this reason the debentures are made without any fixed matu rity, but are recallable at par at the lanschaft's will.