e and mobility of capital, which are in turn essential to the
economic prosperity of any country. On the other hand, investors
undoubtedly need and deserve the protection of the state against
misrepresentation and fraud. It is practically impossible for them in
many, perhaps in most, cases to obtain the information necessary for
self-protection. The matters and conditions to be dealt with in such
legislation are so complex and subject to such frequent change that
laws are apt to be imperfect, inefficient, or obstructive. It seems
probable that those which do not attempt to be specific and detailed,
but give wide powers and discretion to administrative boards or
commissions, are most likely to be successful.

_4. Land Banks_

In Europe an important group of institutions has developed for the
supplying of agriculture and the building industries with the capital
needed in their operations. The greatest number and variety of these
are in Germany, in which their development has been continuous since
the days of Frederick the Great.

In order to assist in the recuperation of his kingdom from the
devastation caused by the Seven Years' War, Frederick caused the land
owners of certain provinces to be organized into associations called
Landschaften, which were authorized to issue mortgage bonds on the
joint security of the lands of all the members of the association in
exchange for mortgages on the lands of individual members who needed
funds for the improvement of their estates. These mortgages were made
payable to the association in the form of small annuities, to which
were added the interest paid on the bonds and an increment for the
payment of the expenses of the association.

These associations were governed by the members through a general
assembly, representative boards, and elected officers, and were
supervised by the state and carefully regulated by law. Regulations
were carefully worked out pertaining to the ratio that the loan should
bear to the value of the estate mortgaged, methods of valuation, ways
and means of maintaining an equilibrium between the bonds issued and
the mortgages held, the treatment of defaulting members, etc., etc.
Machinery for the sale of the mortgage bonds delivered to members was
also created, and in some cases later on these sales were made
directly by the associations themselves, and cash paid to the maker of
the mortgages.

Five of these original Landschaften have continued to the