580 • IOWA DEPARTMENT OF AGRICULTURE 



A study of the terms of the loans indicates that on the whole they 

 are not more liberal than was the practice before the recent advance in 

 the price of land. 



Practically 78 per cent of the cases involved cash payment of about 

 half the purchase price. The average mortgage indebtedness incurred is 

 64 per cent of the sale price. Most of the mortgage indebtedness is con- 

 tracted at rates of interest amounting to S^/^ per cent with commissions, 

 etc., of at least i/4 per cent additional, whereas the ordinary rate employed 

 in calculating labor income is 5 per cent. 



(C) Persons engaged in buying and selling. 



Farmers were more active as buyers than as sellers of farms. They 

 comprise 65 per cent of the buying class and only 57 per cent of the sell- 

 ing class. On the other hand, retired farmers were very much more 

 active as sellers than as buyers. The same tendency was true of real 

 estate men. Bankers, merchants, and stock buyers purchased more ex- 

 tensively than they sold. Eighty-three per cent of the sales were made 

 by three classes — farmers, retired farmers and real estate men — while 

 nearly 80 per cent of the purchases were made by these classes. 



Of the total of 988 cases in which the intentions of purchasers were 

 indicated, practically two-thirds had purchased without intention of re- 

 selling, while a little more than one-fourth bought with the definite in- 

 tention of reselling. About 10 per cent bought with the intention of 

 reselling if possible, but with the expectation of operating or renting the 

 farms in case they could not sell favorably. 



Back of the immediate motive of selling at a good price there are 

 special reasons for selling. Out of 919 cases, 30 per cent gave the desire 

 to realize a speculative profit as the primary motive for selling. Twenty- 

 one per cent assigned as the principal motive the desire to buy other 

 farm property that suited them better than the farms they already owned. 

 Nearly 5 per cent expressed the desire to reduce the holdings of farm 

 land, but in a considerable number of cases it was the desire to take 

 advantage of the high prices. 



More than 27 per cent desired to retire from farming. The large 

 increase in the price of land no doubt facilitated the tendency toward 

 retirement from farming. Nearly 9 per cent of the sales were made for 

 the purpose of settling or dividing estates or partnerships. There is also 

 a small group of sales classed under financial difficulties. 



II. Causes and effects of increase in price of farm lands. 



(A) Probable changes in tenure of farm operators. 



Of a total of 974 farms sold, 46 per cent were operated by owners, 

 leaving 54 per cent to be operated by renters. This represents an in- 

 crease of 13 per cent since 1915, when the state census was taken and 

 the amount of tenancy was given as a little more than 41 per cent. 

 This is probably true, however, that farms owned by retired farmers, 

 real estate and other city dwellers, and therefore operated by tenants, 

 were relatively more actively bought and sold than the farms occupied 

 by their owners. 



