30 ANNUAL REPORTS OF DEPARTMENT OF AGRICULTURE. 



COSTS OF HORKOWING. 



Rates of interest alone do not determine the cost of borrowing. 

 There are commissions, bonuses, and various costs and expenses that 

 are borne by the borrower, and these, if added to the rate of interest, 

 often considerably increase it. It was reported by 22 per cent of 

 the answering correspondents that no commissions were paid in 

 their communities; those who stated that commissions were paid 

 disagreed very considerably. The country banker stated that the 

 rate of commission, when paid, was 2 per cent. The country mer- 

 chant and persons of other occupations constituting another class 

 of correspondents reported 4 per cent, and the farmers reported 5 

 per cent. These differences seem hardly capable of reconciling. The 

 terms for which mortgages are made usually range from three to 

 five years, and consequently a commission of from 2 to 5 per cent 

 adds appreciably to the annual rate of interest. 



The correspondents were requested to report costs of abstracts, if 

 paid by the borrower, and 94 per cent of the responses reported 

 that the borrower did not pay for an abstract. It appears from the 

 answers by correspondents that in cases where the borrower paid 

 for an abstract of title, or for searching the records, the average 

 cost was $11.40, and in cases where the borrower paid the conveyancer 

 for drawing the papers the average cost was $4.70. Sometimes, too, 

 the borrower was required to pay the registration fee, and when he 

 did so the average cost was $1.50. 



COOPERATIVE ASSOCIATIONS. 



Finally, it was requested of correspondents to state what percent- 

 age, in their opinion, of the farmers known by them and to them 

 would be willing to form an association to receive their own deposits 

 for loaning to themselves, and also to borrow from the outside, on 

 the combined security of the property of all members, money to loan 

 to themselves. 



Of the correspondents, 32 per cent reported that there were "no 

 farmers who would be willing to form such an association, but the 

 remainder of the correspondents reported that about 40 per cent of 

 the farmers stood ready to organize such cooperative associations. 



The foregoing is a brief and highly condensed statement of the 

 chief results of this investigation of local conditions relating to agri- 

 cultural credit. Numerous variations from the general facts appear 

 in the nine geographical divisions of the States, and still more so 

 in the different States themselves. 



