AGRICULTURAL CREDIT IN THE UNITED STATES 949 



proportions. For example, the Ohio Building and Loan Associa- 

 tions have outstanding at the present time five thousand loans, 

 amounting to over $ 1 1 ,000,000. The loans run from one to six- 

 teen years. The associations have shown themselves capable of 

 adaptation to the peculiar needs of farmers, and there is every 

 reason to believe that they will become a fruitful source of 

 farm loans. 



In a country so extensive and of such widely varying condi- 

 tions it is impossible to determine the average rate the farmer 

 is paying. On the basis of similarity in mortgage conditions 

 the country may be divided into three regions the older sec- 

 tions of the North Atlantic and Middle West, the South, and 

 the newer sections of the West and Northwest. But it should 

 be borne in mind that even within these regions rates vary 

 greatly between communities, and even between farmers of the 

 same community. 



In the most favored sections of the North the rate is about 

 5.5 per cent plus a 2 per cent commission distributed over five 

 years, which makes the cost of the loan about 5.9 per cent. The 

 commission covers all expenses save the registration fee. In the 

 less-favored sections the rate is I per cent to | per cent higher, 

 that is, it varies from about 6.4 per cent to about 6.65 per cent. 

 The North Atlantic and Middle West bear about 60 per cent of 

 the entire farm-mortgage indebtedness of the country. 



In the South the majority of the borrowers pay 6.5 per cent 

 plus a 2 per cent annual commission, or 8.5 per cent. This sec- 

 tion bears about 20 per cent of the total mortgage indebtedness 

 of the country. 



In the West and Northwest the rate is about the same as in 

 the South. This section bears about 20 per cent of the mortgage 

 debt of the country. 



But there are numerous exceptions to these statements of rates. 

 Many farmers are able to borrow money at from 4 to 5 per cent, 

 while in the South and in the newer sections of the United 

 States loans not infrequently pay 10 per cent interest, with the 

 addition of a 3 to 5 per cent annual commission. 



