AGRICULTURAL FINANCE 25 



finance and dealers represent largely installment credit. The personal finance 

 credit was the most expensive type, but the amount borrowed from this source 

 was small. 



The purpose of any note is to supply funds which the borrower does not have 

 at the time they are needed. Thus most borrowing takes place when some large 

 expenditure such as the purchase of fertilizer, a tractor, or several cows takes 

 place. The purpose of borrowing for notes outstanding is shown in Table 30. 



General expense, including fertilizer and feed, was the principal purpose for 

 which notes were outstanding — 30 percent of the notes and 27 percent of the 

 amount. Purchase of automotive equipment, other machinery, and livestock 

 each accounted for about 20 percent of the notes, but the amount of the loans was 

 9, 13, and 13 percent respectively. Among the remaining notes were some of the 

 largest and the smallest. These also included some for building and purchase of 

 land, which might better have been secured by mortgages. Some of the smallest 

 notes in this group were made for paying taxes. The two largest had been made 

 by fruit farmers to meet expenses which resulted from the hurricane and accounted 

 for 24 percent of the amount outstanding. 



The proportion of the notes from each source used for different purposes is 

 shown in Table 31. Banks were the only agencies which held notes for all the pur- 

 poses listed. The purposes of notes from banks were in somewhat the same pro- 

 portion as the purposes of all notes, although the banks were low in automotive 

 and other machinery financing. Automotive and machinery financing were upper- 

 most for company finance and dealers. The number of cases is so small that the 

 proportion in different purposes shown for other sources is questionable. 



Table 31. — Frequency Distribution of Notes Outstanding by Source and Purpose 

 on 106 Massachusetts Farms, March 1, 1941. 



Number of Notes by Purposes 



Source of Note ■ ■ Total 



General Tractor Other Live- Build- Hurri- Other 



Expense Truck Machinery stock ing cane 



and Car 



Bank 32 13 9 21 • 4 1 2 82 



Company Finance 15 9 » 2 1 27 



Dealers 1 3 11 5 1 21 



Production Credit 



Association 7 112 11 



Farm Security 



Administration 4 2 1 7 



Personal Finance 2 1 3 6 



Morris Plan 1 2 3 



Other 4 2 1 2 1 3 13 



Total 50 32 34 ^ 33 8 2 11 170 



Percent of Notes by Purposes 



Bank 39 16 11 26 5 1 2 100 



Company Finance 56 33 7 4 100 



Dealers 5 14 52 24 5 100 



Production Credit 



Association 64 9 9 18 100 



Farm Security 



Administration 57 29 14 



Personal Finance 33 17 



Morris Plan 33 



Other 31 15 8 15 8 



Total. 



