32 



MASS. EXPERIMENT STATION BULLETIN 405 



hardware, and seed were the main items purchased on open accounts. Many of 

 the large accounts were owed by poultrymen and represented bills which accum- 

 ulated during a low-income period. 



About a fifth of the farms had unpaid taxes on March 1, 1941. From other 

 studies of taxes it appeared that most farmers use unpaid taxes as a source of 

 credit for a short time. 



Mortgage interest and/or principal payments were past due on about a tenth 

 of the mortgaged farms. On about half of these farms the past-due amounts 

 could be considered a source of credit which might help in enabling them to get 

 through a poor financial period. 



About a tenth of those who had life insurance had borrowed on their policy. 

 These loans as well as unpaid taxes and mortgage payments were minor as far 

 as total credit used on all farms was concerned. 



ADEQUACY OF PRESENT CREDIT FACILITIES 



With few exceptions, the consensus of opinion is that there is an adequate 

 supply of credit available to farmers. Both private and government-sponsored 

 agencies are anxious to do business with farmers. Even the less desirable risks 

 can obtain necessary loans through the Farm Security Administration. Not 

 only is the volume of credit sufiticient, but the rates of payment need be no more 

 than 6 percent. 



When farmers were aske'd, "Do you need more capital than you have or have 

 been able to get?'" a common answer was, "I could use more and get it, but I 

 don't know how it could be paid back." In 82 percent of the cases the farmers 

 said that they borrowed all the money that they wanted. The remaining 18 

 percent have been studied in an attempt to see whether or not there was any 

 deficiency in the credit institutions. As might be expected, all of the farmers who 

 expressed a need for more credit were already borrowing (Tables 37 and 38). 



Table 37. — Frequency Distribution of 

 Total Debt on Farms Needing More 

 Credit, 272 Massachusetts Farms, 

 1941. 



Table 38. — Frequency Distribution oj 

 Net Worth in Total Assets on Farms 



Needing More Credit, 

 272 Massachusetts Fartns, 1941. 



There was a tendency for the proportion expressing need for more credit to be 

 higher among those who had a large debt or a low percentage of net worth. This 

 was natural if the credit institutions were supplying funds adequately, for if a 

 farmer has no debt or only a small proportional debt he would be a good financial 

 risk. Therefore, he would not experience any restraint if he wanted new credit. 



Since the farmers who expressed a need for more credit all had debt, the next 

 question is how many were good risks. On the basis of all the knowledge about 

 the farm and the farmer, 30 of the 49 appeared to be satisfactory risks. Of the 



