ments specially authorized for this class of business. The system of chattel mortgages does not exist; money is advanced on personal property only after the borrower deposits such property with the lender of the money. The usual rate of interest on mortgages is about 6 per cent., and banks or savings institutions usually pay 4 per cent. on deposits-the present rate.

BUSINESS LOSSES AND BANKRUPTCY.

12-14. I find it more practical to answer these questions together. Bankruptcy or insolvency is becoming less frequent of late, owing, it is thought, to the new bankruptcy and collection laws, which act quick, prevent the favoring of some creditors, and are specially severe on such failures as are caused by fraud, or where criminal or even common carelessness in business can be proven; it is treated as a crime or offense, and punished as such, even to imprisonment, for a merchant to carry on business after his books show him to be insolvent. All merchants doing a certain amount of business are by law compelled to be registered, and all such merchants must keep their accounts in books whose leaves are arranged by an official seal in such a manner that they cannot be tampered with without discovery. Unless a merchant can compromise with his creditors he cannot be relieved of his debts in any manner, or, for instance, by such a bankruptcy law as existed lately in the United States. However, if he can pay at least 40 per cent. of his debts, and two-thirds of his creditors accept such a settlement, the law compels the other creditors to also accept this compromise, always provided that the insolvency was not brought about by fraud or criminal carelessness. Like everywhere else, that fine point of commercial honor has passed which formerly disgraced a man for life and ruined his credit at least for years in consequence of bankruptcy. Resumption, therefore, meets with no particular obstacles, the leading question now being simply whether a man who has failed possesses the means to entitle him to renewed credit. "Tout comme chez nous." Com pared with the United States, I think that here there are fewer failures among wholesale or large retail houses. Business is not pushed to such unhealthy extremes; there is not so much of that rivalry for speculation alone which exists to some extent in the United States, and which ambition, no doubt, often causes a business house to die before its time. The principle of "big sales and small profits" is not known here, but in this I think they are at the wrong extreme of conservatism; trade could be largely expanded without any strain; a reasonable amount of Yankee enterprise, alloyed with the rich soil and other resources of Hungary, would, in my opinion, greatly benefit the country and develop it to such an extent as would astonish the natives themselves. Progress in this direction will be slow in a land where, with few exceptions, the wealthy and intelligent classes keep aloof from business and other enterprises for fear of losing caste. Then, also, it is only a short time since the country has thrown off its purely agricultural character; the people in general are therefore not up to the present requirements of commerce. In consequence, business is greatly in the hands of Jews, who are business men by inheritance, for up to within a very short time this was about the only sphere of life open to them. They possess the necessary tact, ability, and perseverance which alone lead to success. And though not strictly belonging to the subject, I must express my conviction that the present persecution of the race here is mainly due to their success in a sphere where others either will not try or for which

they are not competent. The saying that "Success begets success should be amended, for it also "begets envy." The saying "Let the best man win" is not appreciated here. At the same time it would be a great mistake to believe that the Jews here are all business men or successful; the vast majority are not only poor, but very poor. Many of them are in the professions and some in the army; they are farmers or renters of those large estates whose proprietors are either incapable or otherwise unable to profitably manage their estates, and such estates now realize a profit usually for the owner or renter where they formerly did not; many of them are engaged in the trades and in the most severe common labor; indeed, they even possess their full share of the characteristics of the general people here pointed at in my Nos. 2 and 6.

In connection with these questions I shall now mention several items having relation to them.

When suit is entered for debt or other cause, the court always decrees that in addition to the regular court expenses, the loser of a suit must also pay to the gainer a reasonable amount of his expense for counsel, who has for this purpose to present an itemized bill for his services, which the court allows as far as found reasonable. I think this item might be reflected upon profitably by the people of the United States with a view to having a similar law passed, which would undoubtedly do away with many frivolous lawsuits, and reduce the possibility of the gainer of a suit becoming an actual loser thereby.

A homestead or exemption law does not exist. I think, however, that Parliament will soon attempt to create such a law, with a special view of benefiting the petty farmers. Some time ago a few Hungarian statesmen visited the United States to study laws there for the above purpose.

For taxes no class or kind of property is exempt, and families have no privileges over single men. Formerly a wife's dowry and other proven personal property were exempt in cases of bankruptcy, but the new law makes no distinction in this respect, a wife's property going with the general estate; if she has any other claims against her husband, and can prove these to the satisfaction of the administrator, she can simply share in the distribution as a common creditor. The only things exempt against common debts are the following: Necessary clothing, furniture, fuel and eatables for fifteen days' use, necessary tools, necessary mechanics' material to the amount of $20; or, if farmers, one cow or four sheep or four goats, with feed for thirty days; also a small amount of seeds. Further exempt are family pictures and relics, but not their frames. The claims of servants, doctors, to a certain limit, and a few other such, also receive preferred treatment.

A new usury law has been enacted, which limits the rate of interest to 8 per cent.; it also provides for penalties in the shape of money fines, and up to imprisonment in specially severe cases; it being treated as a crime to take advantage of another's unfortunaté position by certain practices in usury. This law, I think, was more particularly made for two classes of citizens, the ignorant poor and the enlightened, but reckless and unthrifty; of the latter there are many in this country, owing to the peculiar state of society and its demands.

MAKING AND LOSING FORTUNES.

15. In legitimate business, fortunes are neither made nor lost quickly; in this connection I will say yet that the desire to grow rich rapidly, and without hard or "degrading" work, exists so generally that speculation

"on margin" is quite commonly engaged in, also playing in lotteries, and I am sure that many unexpected failures in business can be traced to this source. In regard to the usury law I will say yet that it grants great discretion to courts in treating such cases as stated above. 16. I think this question is answered in my No. 1.

UNITED STATES CONSULATE,

Buda-Pesth, September 11, 1883.

HENRY STERNE,

Consul.

DENMARK.

REPORT BY CONSUL RYDER, OF COPENHAGEN.

In acknowledging receipt from the Department of the circular-dispatch under date of May 15, I have herewith the honor to hand a report on the system of credits which prevail and their relation to and effect on the general prosperity of the community in the districts of this consulate.

It is as well to premise that there are no sumptuary laws in existence in this country, neither do the public authorities regulate or in any way interfere in the concerns of credits, which are entirely looked upon as questions and simply as matter of arrangement between man and man.

It will next be advisable to separate these interrogatories under the headings, 1st, of the general wholesale merchants and importers; and, 2d, of the tradesmen and retail dealers; and under the first category a subdivision may be further made under the branches of (a) dealers in home products; (b) importers and dealers in colonial produce and of manufactured goods.

TRADE IN HOME PRODUCTS.

Of these the purchases and resales of all home products are, as a rule, conducted on a system of cash payments. It is at the same time not unfrequent for the merchants to make advances to the small proprietors and tenant farmers to enable them to carry on their farming operations, which loans are repaid to them by consignments of the farm produce of butter, &c., and of the cereals after the ingathering of the harvest..

TRADE IN COLONIAL PRODUCTS.

In the transactions with colonial produce and of manufactured goods credits of two to three months are accorded to the buyers, but should a settlement be then deferred, interest at the rate of 5 per cent. per annum would be charged from the day of expiration of the credit until the date of final settlement.

Cash buyers of colonial produce are granted a three months' discount, calculated at the current bank rate of discount, while those of manufactured goods receive rates of discount varying according to the description of the manufacture, and while no reliable information is to be obtained as to the extent of these credits in proportion to the volume of business, they may be presumed as in no way exceeding legitimate bounds when the small number of failures among all classes of general merchants is taken into consideration.

MAKING AND LOSING FORTUNES.

The making of rapid fortunes among members of these commercial classes is of very rare and exceptional occurrence. Their fortunes may rather be said to have accrued from their cumulative profits and savings during many years of commercial enterprise and labor.

CREDITS TO TRADESMEN.

The system of credits given by the tradesmen's class is perhaps of a more dangerous and extended nature. Credits of open accounts with many of their customers, and running from month to month and year to year, are not unusual, and would doubtless lead to more fatal results to this class of dealers if they did not recoup themselves in a great measure by the high prices charged to these customers as compared with those for cash buyers. These credits are given to all classes of the community, to mechanics, the laboring classes, as well as those composing the upper and lower middle circles. The evil effects of this system are doubtless most conspicuous in the two last-named classes, tending, as it does, to a too great indulgence in luxuries and extravagance, from the baneful effects of which they and their families too often ultimately become grievous sufferers.

CREDITS OF RECORD.

The system of mortgage loans on landed and house property in this country is carried to a great extent. With the exception of the large baronial and other great landed estates, the greatest part of the landed property, as also houses in the towns, are mortgaged to an extent varying from one-third to two-thirds of their estimated value. These mortgages, in the event of a forced sale, would take precedence for repayment of the loans, according to the date of priority; thus, for instance, while the first and second priorities might be fully secured by the proceeds of the sale, the holder of the third might have to submit to a partial or even total loss. The first priorities being looked upon as perfectly secure investments for trustee funds, money's of public societies, banks, &c., can be obtained at the rate of 4 per cent. annual interest; whereas those of second and third priority, being of more risk and more in the hands of private individuals, are fre quently charged with an interest of 5 and sometimes even of 6 per cent. The losses sustained on those advances are, however, very inconsiderable, and these mortgages are of undoubted advantage to the small capitalists, who can thus become, with a moderate outlay of money, owners of their own farms or of their dwelling houses in the towns, and it has at the same time tended to enhance the value of all such properties by thus enabling those with comparatively small means to compete with the more wealthy classes in purchases of these descriptions.

BANKRUPTCY.

As there are unfortunately no published statistical returns relating to bankrupts, and the aggregate amount of their estates, it is only through information to be obtained from private sources that one is in any way in a position to say that in this country they appear to be comparatively trifling in proportion to the volume of business transacted. For instance, in the past year there were only twenty-five cases of bankruptcy carried into the maritime and commercial court of this

capital. It must not, however, hereby be understood that these have constituted anything like the total list of bankruptcies occurring here during that year. On the contrary the far greater number of bankruptcy cases may be said to have been settled out of court by mutual arrangement between debtors and creditors. Whenever a majority of the creditors representing a fixed quotient of the claims against the estate have agreed upon the terms of arrangement with the debtor, the minority is thereby controlled, and they are compelled to abide by the same terms of agreement. This agreement must be one and the same for all, and any preference ascertained to have been shown by the debtor in favor of one or more of his creditors would render him liable to criminal prosecution in the courts of law.

The debtor cannot resume business before he has completed the payments of such quota of his liabilities as may have been compounded for at the public meeting of creditors.

GENERAL EFFECTS OF CREDIT.

In conclusion, I think it may with entire safety be said that here, as elsewhere, when credits are employed as a medium to increase capital for the purpose of extending sound and legitimate commercial undertakings, they tend to stimulate trade, and thereby contribute to the production and accumulation of wealth, and that they are only of inju rious nature when used for the bolstering up of firms engaged in reckless trade or wild speculations; and from the general state of prosperity and soundness of all commercial classes in this country, as well as from their freedom from the shocks of financial and commercial crises which have too frequently of late years visited the exchanges of other states, it must be fairly assumed that these classes have conducted their operations with all prudence, and that they have not allowed their system of credits to exceed safe and legitimate results.

UNITED STATES CONSULATE,

Copenhagen, August 18, 1883.

HENRY B. RYDER,

Consul.

SWEDEN.

REPORT BY CONSUL ELFWING, OF STOCKHOLM.

In reply to your circular of May 15, requesting a report on the sys tems of credit which prevail in and their relation to and effect on the general prosperity of this country, I do not think I can do better than give the contents of a letter which I received in answer to my inquiries on the subject.

The letter-writer is Mr. A. O. Wallenberg, the founder of the present banking system of Sweden, managing director of the "Stockholm Enskilda Bank," for thirty years a member of the Swedish Parliament for the city of Stockholm, and altogether the most experienced economist in all Sweden:

SWEDISH BANKING SYSTEM.

I cannot return your questions, shortly answered by me, without giving my opinion about the Swedish banking system, which I consider as the most prominent and efficient moving force in the credit of the country.

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