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AGRICULTURAL CREDIT ESTABLISHMENTS.
599
to the establishing of the Mortgage Societies (Hypoteksföreningar).
The Mortgage Society of Skåne was founded in 1836. Then came that
of Östergötland in 1845, of Småland in 1846, of the Mälar Provinces in
1847, of Örebro Län in 1849, of Vermland in 1850, of Elfsborg a. o.
Läns in 1851, and of Gotland in 1853. Those of Gefle-Dala and of
Norrland followed in the rear.
The Mortgage Societies were, to begin with, private institutions
independent of each other, which, by the sale of their shares, chiefly
aimed at obtaining amortization loans for their members on the security
of first mortgages on real property. Mutual rivalry on the share market,
however, proving mischievous in its consequences, the General Mortgage
Bank of Sweden was founded, agreeable to the ordinance of April 26,
1861. Its chief mission was to negotiate all the loans required to
procure the Mortgage Societies means for their loans. Moreover, a loan of
about 6 million kronor was made over by the Bank of Sweden to the
Mortgage Bank, on security of mortgage in landed property. The
Mortgage Bank obtained the monopoly of issuing bonds payable to
the holder against security of mortgage on real property in the country,
and the State handed over to it a capital-stock of 8 million kronor in
Government bonds. By the enactment of May 16, 1890, this
capital-stock contributed by the State was increased to 30 million kronor.
The Mortgage Bank is administered by a Board of five members,
amongst whom the president is constituted by the Government, the vice
president by the commissioners of the National Debt Board (see p. 204),
and the three remaining by deputies from the Mortgage Societies.
Out of the five auditors, one is elected by the National Debt Board
and the other four by the societies. In the regulations of the bank,
which are sanctioned by the Government, no alterations can be made
without the consent of the Riksdag.
The Mortgage Societies are likewise administered according to
statutes sanctioned by the Government. They are allowed to grant loans
only against security in land, and estimation is made on strict principles
and without allowance being made for the value of houses or forest.
A loan must on no condition be granted exceeding half of the value
estimated in this way.
The present conditions for new loans are: a) 4 % interest and 7» %
amortization; b) 4 % interest and 2 % amortization; and c) 4 % interest
without amortization. In each case the borrower has the right to give
notice of payment after ten years. With a) and b) loans can be granted
up to half the value of estimation, with c) only to one third of it.
The members of each society (i. e. the borrowers) are conjointly
responsible for the bonds of the society, each one in proportion to the
amount of his remaining debt to the society. The societies are
conjointly responsible for the bonds of the Mortgage Bank, each in
proportion to its remaining debt to the bank.
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