on loans secured on estates in fee-simple and country freeholds was reduced
from 6 to 5 %. In 1756, there was a further decrease to 4 %, irrespective of
the nature of the taxation to which the estate was subject. This decreased rate
has become fixed. The limit of the loans was one-half or two-thirds, and, in
some cases, three-quarters of the value of the estate. From 1770 to 1815, no
loans were granted on agricultural property, the Bank having no funds available
for the purpose.
The difficulties which arose for the Bank of Sweden from having its
funds locked up in agricultural loans of long standing gave rise to
the establishment of the Mortgage S o c ie tie s (Hypoteksforeningar). The
Mortgage Society of Skane was founded in 1836. Then came that of
Ostcrgotland in 1845, of Smaland in 1846, of the Malarprovinserna in
1847, of Örebro Lan in 1849, of Varmland in 1850, of Alvsborg and
other Lans in 1851, and of Gottland in 1853. Those of Gavle—Dala and
of Norrland followed later on.
The Mortgage Societies were, to begin with, private institutions independent
of each other, which, by the sale of their bonds, chiefly aimed
at obtaining amortization loans for their members on the security of first
mortgages on real property. Mutual rivalry on the bond market, however,
proving mischievous in its consequences, the General Mortgage
Bank o f 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 rural property, 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 i s administered by a Board of.- five members, of whom
the president is appointed by the Government, the vice-president by the Commissioners
of the National Debt Board, and the remaining three by deputies
from the Mortgage Societies. Of the five auditors, one is elected by the Na
tional 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, too, are administered according to statutes sanctioned
by the Government. They. are allowed to grant loans against security in land
only, the value of which is' estimated according to the appraised value, based
on the assement value or on a special estimate 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 assement value or the value
estimated in this way.
The present conditions for new loans-are: a) 4 % interest and I / 2 % amortization;
6) 4 % interest and 2 % amortization; and c) 4 % interest without amortization.
In each case the borrower has the right to give notice of repayment
after . ten years. With a) and h) loans can be granted up to half the value of
T able 29. The General Mortgage Hank bond loans on the
31 December 1913.
B o n d 1 0 a n s Am ortization R ig h t to in crease
am o rti- P re sen t
z a tio n -ra te , or Bonds in c irc u la t
io n 31/12 1913,
k ronor
r a te of
I Date
Original
r a te of
Currency u n it in
wb ich issued and Began
in
E nds, in
ord in ary
repay balance
of loan, from
in te res t,
%
interest, % orig in al am o u n t course year.
1877 5 Kr. 50 000 000 1888 1927 8 644 400-00 5
1880 4*/s Kr. 75 000000 1882 1956 / 1907
\ 1907
38 480 8ÜO-00
14 646 600-00
43
s/i
1883 4>/s •Kr. 50 000000 1885 1959 / 23 784 800-00 4
V- 1907 • 15 446 000-00 33A
1878 4 Kr. 120000 000 1884 1959 /
\
1 101 625 066-67 <V i4 y t-
(M. 135 000000)'
1879 4 Kr. 36 000 000
(Frs 50000 000)
1880 1939 — 20 874 600-00 4
1908 4 Kr. 10 800 000 1909 1968 1918 10 557 000-00 4
(Frs 15 000 000
1909 4 Kr. 10 800 000 1911 1970 1919 8 461440 00 4
(Frs 15 000000)
1910 4 Kr. 15 000 000 1912 1976 1920 6 995 OOO'OO 4
1886 , • Kr. 64000 000
(M. 72 000 000)
1888' 1962 1901 32 968 266-67 37a
1889 K r., 75 000 000 1890 1959 1898 17 653 800-00 37a 1
Total 800137 773-34
Hem. The foreign values are given in kronor at par.
the-estimate; with c) only to one third. According to the position of the bond
market, loans are granted against capital-discount (Disagio). Nowadays this capital
discount is deducted on advancing the loan.
The members of each society (i. e. th e . 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.
The Bank’s annual report gives a survey from which the following extract
is made of the bond loans raised by the Mortgage Bank, which; at the close of
1913, were not fully amortized;
The amounts of the loans advanced to the Societies from year to year are
shown by the following extract from a table drawn up by the auditors respecting
the loans obtained by the Mortgage Societies from the Swedish General Mortgage
Bank, from 1861 to 1913. •
Year
1861 .
1862 .
1863 .
1864 .
1865 .
1866-
1867 .
1868 .
1869 .
1870 .
1871 .
1872 •
1873.
Kronor
16 053-755-54
22 294 28700
8 611197-52
1 231 286-57
3 163 580-62
2 008 606-73
8161 713.71
9 219954-63
16 937 158 37
13 374 200-60
12 591081-89
15 634167-20
8 496 388-16
Year
1874 .
1875 .
1876 .
1877 .
1878 .
1879 .
1880 .
1881 .
1882 .
1883 .
1884 .
1885 .
1886 .
Kronor
12 519 174-76
11 794 536-86
11312 389-40
6 606 45180
17 880 686-35
28 542 331-16
21817 038-01
18804155-96
13 015479-08
10 256 427-30
10 297 188-07
10 480 523-36
8099 598-61
Year
1887 .
1888 .
1889 .
1890 .
1891 !
1892 .
1893 .
1894 .
1895 .
1896 .
1897 .
1898 .
1899 .
Kronor
6 304331-41
2 562 694-13
1640 865-59
8 868 673-87
24 822 265-60
13 325198-68
11 884 702-67
8 543 687-62
7 265 088-92
6 610295 34
10 048 945-76
11369 601-67
20 006 534-89