a multitude of experiments and the experience of 

 great numbers of successful farmers prove that farm 

 income can be materially increased by using com- 

 mercial fertilizer to increase our yields considerably 

 above our present level. 



Farm Financing . 



The income of large numbers of farmers will be 

 materially increased by better farm financing. The 

 total farm indebtedness in the United States is esti- 

 mated at approximately $6,000,000,000, of which a 

 little less than two-thirds is mortgage indebtedness. 

 See Chart 17. While $6,000,000,000 is a vast sum, it is 

 only 12 per cent of the value of all farm property. It is 

 estimated that the average interest rate on the total 

 farm indebtedness both mortgage and personal is 

 8 1/2 per cent. On mortgages the interest rate varies 

 from 5 per cent on farms in the most highly devel- 

 oped sections to from 15 to 20 per cent, including 

 commissions for renewals, in the West and South. On 

 personal indebtedness the interest rates, especially 

 for tenant farmers, often run far higher than this. 



Many influences are operating to reduce this in- 

 terest rate. In the past few years banks have done 

 much to develop farming, by more liberal loans, by 

 financing the purchase of high-grade stock, and by 

 offering prizes to stimulate calf, pig and corn clubs. 

 Several banks employ agricultural agents. As the 

 farmer becomes more efficient he is a better credit 

 risk. As he keeps farm accounts he is able to make a 

 financial statement and get a larger line of credit at 

 the bank. The Farm Loan Act was passed in July, 

 1916. On August 31, 1918, there were over three thou- 

 sand farm-loan associations which have placed 88,000 

 approved loans aggregating $186,000,000. On this, 

 farmers now pay 5J^ per cent interest or 6J/^ per 



[45] 



