GERMAN MORTGAGES

Horowhenua Chronicle, 1 May 1916, Page 3

GERMAN MORTGAGES

Ul'limUlJ 13 UUJI I .v/ says an informative aritcle iu u ini "English lie view." The ttitiole deals exhaustively with the enormous credits given by the banks to merchants and traders, and gives some interesting facts regarding the Cooperative Credit Societies for lending in amallor sums. It says:— "There are in .ill about 32,000 societies. All of them do 11 t lend money., but at least 18,000 arc actively engaged in financing their members and have a turnover of 25 mil Hard 'marks (£1,250,000,000). Statistics 1710 societies who specially eater 'or agricultural interests show that they have granted their members credit to the extent of about 35,000,000 marks. So urgent iva.s the demand for credit a; 1 I sii ddlieu'it was the task o h ' providing this credit that in 1805 a Central (ienossciv.chatts Knssu was established. It is practically a Government. bank, andi occupies the same powtio.i in regard to small credits • ') the Reichsbank does towards large creditH. Its success has been prodigious. All the small credit societies needed, a central bank in which they could place tlieir Mirpliifi funds or at which tliny coiiM finance when neecled.

In its first j-i'ar the total transaction/; only amounted to 141,000,000 marks. In lOrf" this figure had risen to 13,281 millions (£614,000,000), and; was still vising when war broke out. There is not a village in the Empire in which the kiwi 11 trader, tho farm labourei, the peasant, proprietor cannot borrow hi" hundred marks. The system is el a' ■orate, and the value in days of peace undoubted. But in war, what guarantee is there that these small loans will ever he repaid? TTio savings of the depositors are locked up in mortgages on property whicli has depreciated, and in national loans which cannot be sold. The network of credit societies, in which one-half of the poor have put their money and the other half borrowed it, depends tor its solvency upon pence and progress. Their elaborate regulations never conceived a day when factories would be closed, members shut down, and: export trade at an end."