10 MASS. EXPERIMENT STATION BULLETIN 405 



2, Low income from farming operations was an important problem, but was 

 not related to large debts. 



3. The proportion of farmers who did not maintain or build up net worth 

 while on the farm was not over 20 per cent. 



Table 10. — Frequency Distribution of 177 Purchased Farms by Three 

 Measures of Financial Standing, 1941. 



Average 



Number Percent 



Measures of Financial Standing of of Annual Percent* Net 



Farms Farms Change Net Worth Cash 



in Net (in total Receipts 



Worth assets) (Dollars) 

 (Dollars) 



Net worth increased 



Net worth 50 percent or more 



Net cash receipts $501 or over. .. . 73 41 320 79 2,136 



Net cash receipts $500 or less 47 27 260 75 -407 



Net worth 49 percent or less 



Net cash receipts $501 or over. .. . 9 5 138 43 1,457 



Net cash receipts $500 or less 10 6 852 37 -260 



Net worth unchanged or decreased 

 Net worth 50 percent or more 



Net cash receipts $501 or over. .. . 11 6 -28 67 1,549 



Net cash receipts $500 or less 13 7 -150 71 -372 



Net worth 49 percent or less 



Net cash receipts $501 or over. .. . 5 3 -107 19 2,138 



Net cash receipts $500 or less 9 5 -155 22 -410 



Total or average 177 100 $233 68 $941 



♦Unweighted 



CREDIT USED BY FARMERS 



As was mentioned in the introduction, the amount of credit being used was 

 determined by an inventory of credit outstanding March 1, 1941. For purposes 

 of analysis the following types of credit were recognized: (1) mortgages on real 

 estate, (2) notes (may or may not be written in conjunction with a chattel mort- 

 gage), (3) merchant open accounts, (4) taxes past due, (5) mortgage interest 

 and/or principal payments past due, and (6) loans from life insurance companies 

 secured by life insurance policies. 



The credit which was being used on the farms in this study will be presented 

 in the following ways: the proportion of farmers using each type; the amount 

 used per farmer; the sources supplying the credit; the purposes for which the 

 farmer borrowed the money; a cross classification of sources and reasons for 

 borrowing; the length of time the credit has been outstanding; and any other 

 information which seems pertinent to the particular type of credit. 



Real estate mortgages accounted for 78 percent of the debt on these farms 

 (Table 11). The remainder of the debts was accounted for primarily by notes 

 and open accounts. Taxes past due, interest and payments on the mortgage 

 unpaid, and life insurance loans together amounted to only 3 percent of the 

 total debt. 



The total debt averaged $3,271 for all farms. This was equivalent to 25 percent 

 of the assets, leaving a net worth in assets of 75 percent. The average mortgage 

 debt for all farms, $2,545, was 27 percent of the owner's estimates of the price 

 of his land and buildings. Thus net worth in land and buildings was 73 percent. 



