20 MASS. EXPERIMENT STATION BULLETIN 405 



the same amount of mortgage at both times. The experience of these farmers 

 indicated that — 



1. Of the farms which were mortgaged when acquired, 40 percent were debt- 

 free after more than 30 years of operation by one operator; but there was only a 

 28 percent decrease in the proportion of farms mortgaged. 



2. A relatively sm'all proportion of farmers paid off more than $3,000 on the 

 principal of the mortgage. 



3. Half of the farmers who had mortgage experience as indicated by this 

 study either paid nothing on or increased the principal of the mortgage. 



4. For all farms as a group, regardless of time of purchase, the total amount of 

 mortgage was just about the same when acquired and when the survey was taken. 



Summary of Mortgages 



1. Proportion of farms mortgaged. The safest answer and the one which has 

 most popular acceptance based upon statistics shown is that slightly over 50 

 percent of all farms in Massachusetts were mortgaged in 1940. This survey, 

 however, indicates that about 65 percent of the commercial farms in Massachu- 

 setts were mortgaged in 1940. 



2. Amount of mortgage per farm. The amount outstanding varied from $100 

 to $44,000. Fifty-nine percent of the farms had mortgages of $3,000 or less. 

 The average amount per farm was $3,696 which is about 50 percent higher than 

 that reported b}^ the census or Bureau of Agricultural Economics. 



3. Sources of mortgage credit. In this study 40 percent of the amount of mort- 

 gage outstanding was held by banks, 27 percent by the Federal Land Bank, 9 

 percent by Land Bank Commissioner, 17 percent by individuals, and 7 percent 

 by other agencies. State reports showed 19.2 percent held by Federal Land Bank 

 and Land Bank Commissioner on January' 1, 1941. 



4. Purpose of mortgage credit. Sixty-six percent of the mortgages were for 

 purchase of real estate, 21 percent for refinancing mortgages, 6 percent for finan- 

 cing other debts, 5 percent for building and building repair, and 2 percent un- 

 known. 



5. Purpose of mortgages by sources. Banks and individuals made most of 

 their loans for purchase of real estate. Federal Land Bank and Land Bank Com- 

 missioner loans were made primarily to refinance other mortgages. 



6. Age of mortgage contracts. Seventy-two percent of the mortgages were 

 less than 16 years old. This does not indicate the proportion of farms that have 

 been mortgaged for this length of time, however. 



7. Payments on the principal of mortgages. These have not been large. Less 

 than half the farms operated by the same operator for 30 years have become 

 mortgage free. 



OTHER CREDIT 



In the discussion of real estate mortgages the number of farms was restricted 

 to the 257 owner-operated farms, since mortgages did not concern the operators 

 of rented farms. In discussing other credit the 15 rented farms will be included, 

 making a total of 272 farms. 



The primary interest in short-term credit on the part of those who are extend- 

 ing this credit is the number of farms using it and the amount used per farm. 

 Surveys such as this one have been made for this purpose, the results published, 

 and many of the studies declared good. 



