422 REPORT OP THE COMMISSIONER OF AGRICULTURE. 



gages, large or small. These loans are held by Eastern capitalists, 

 and by banks, manufactnrers of farm machinery, and local loaners 

 of money. The rate of interest may slightly exceed an average of 7 

 per cent. The State agent says: 



With regard to the indebtedness of the farmers of the State there is a diversity of 

 opinion. It may be safely asserted, however, that their indebtedness is not very 

 general nor very heavy, and that it has gradually diminished within the last ten 

 years. Probably l^o per cent, of the farmers are in debt. Much the largest part of 

 their pecuniary obligations is for lands on which partial payments have beeix made 

 on notes drawing from G to 8 per cent, interest per annum, and secure^' by mortgage 

 on real estate. These mortgages are held mostly by Eastern capitalists, often by the 

 representatives of large insurance companies. Loans of this kind are usually made 

 for five vears on lands at from one-third to two-thirds of their cash value, and are 

 obtamed 'through loan agents in different parts of the State, who charge a commis- 

 sion, making the cost to the borrower, including interest, from 6^ to 8 per cent, per 

 annum. 



There is still a larger class of debtors, which includes farmers of smaller means 

 than those mentioned, and also renters or tenant farmers. Most of their debts are 

 to banks and merchants, cliiefly to the latter, for such supplies as are ordinarily 

 needed in families. These obligations are met, according as the parties agree, in 

 tliirty. sixty, or ninety days — in some instances running six and even twelve months. 

 This class of indebtedness is seldom allowed to go beyond the abiUty of the party 

 making the purchase to pay. Li case, however, of a failm-e to meet the payment 

 when due, a chattel mortgage, or, in case of a tenant, a lien on his part of the crop, 

 is given to the landlord, who assumes or pays the debt, or if not to the landlord, is 

 given directly to the merchant himself. Recourse is seldom had to tliis mode of 

 securing debts, as farmers as a rule so diversify their crops as to enable them to sell 

 at almost any time something from the farm to meet these recurring demands. Ad- 

 vances are sometimes made by landlords to tenants, but never, we think, at a greater 

 rate of interest than the legal rate, which is 8 per cent. 



The tax laid upon the agi'icultural industries of the State (and for which the 

 farmers themselves are most at fault) by the difference between the cash price and 

 credit price for goods purchased of the imerchants will probably equal 10 per cent. 



The number of farmers having property interest outside of then farms we would 

 not put higher than 3 per cent.; this would consist of bank stock, lands, town lots, 

 within and outside the State, and live stock on the ranges of Texas, Wyoming, and 

 Montana. 



MISSOURI. 



The State agent of the Department makes a report, which shows an 

 average condition of indebtedness, with very little of the hopeless 

 element in it and an existing tendency to improvement. _ These debts 

 are mainly borrowed capital invested in lands and buildings and va- 

 rious improvements, enhancing the possible resources of productive 

 industry. With discretion and diligence they may prove advantages. 

 He says: 



I regard the indebtedness as compared with other States or with other industries 

 as not above an average. Compared with ten years ago but little change has oc- 

 curred, but with a tendency to increase of indebtedness due to the last three years 

 of decline in values. Up to three years ago reduction of debt was going on. I 

 think that the tendency of late years has been towards the use of capital for im- 

 provements, although not to a sharp degree of change. 



About 30 per cent, of our farmers are in debt above then credits, if mere annual 

 store bills are excluded, and more if they are included. But such debts, wliile large 

 in the aggregate, do not cut a serious figure with the average farmer; by no means 

 so large as formerly and far behmd the bad store system of debts of the South. 

 Few farmers mortgage crops here to the trade, and not many trade on the credit 

 of a coming harvest in a radical degree. TVIany run store accounts, but these are 

 often offset by eggs, poultry, butter, corn, &c., from time to time delivered. 

 Our traders not infrequently run accounts a year in such a style, the balance more 

 often being against the farmer. This system enhances the cost of supplies above 

 cash trades to some extent, but to no paralyzing degi'ee. 



About 20 to 25 per cent, of our farms are mortgaged. More of this indebtedness 

 is due to other farmers than to any other class, while the balance is about equally 



