AGRICULTURAL FINANCE 7 



price on the land and buildings when they inherited the farm. Therefore the 

 change in net worth in land and buildings is given in Table 6 for purchased farms 

 only, to show what success farmers have had in building up their capital and how 

 long they have been operating. 



Table 6. — Frequency Distribution of Purchased Farms to Show Change in Net 



Worth of Land and Buildings while Present Operator lias been on the Farm, 



177 Massachusetts Farms, 1940. 



The range in change in net worth over the last 30 years (since 1911) is great. 

 The decreases in net worth were greatest for those farmers who acquired a farm 

 11 to 25 years ago (1916 to 1930). A possible explanation of this may be the 

 high price paid for farms during this period. However, some of the farmers who 

 acquired farms during this same period have been among the leaders in increasing 

 net worth. About 15 percent of the purchased farms show a decrease in net 

 worth, most of which has' been due to a lowering of the price of the land and 

 buildings, although mortgages have also increased. The greatest increase in net 

 worth, in most cases, has been in the price of land and buildings. Paying off 

 mortgage indebtedness has been a relatively unimportant method of increasing 

 net worth in land and buildings. 



There are two ways of changing net worth: paying off the debt or increasing 

 the asset. Table 7 shows the change in net worth on the basis of the way in which 

 the change was made. The average annual change for each farm has been used. 



There were 68 percent of the farmers who indicated that the price of the farm 

 had increased during the period he had operated it. Practically all of these had 

 an increase in net worth. On 19 percent of the farms the price of the land and 

 buildings was indicated as decreasing. Two-thirds of these farms showed a 

 decrease in net worth. 



About half of the farmers had paid off something on mortgages. The others 

 are divided about 30 percent and 20 percent between increasing the mortgage 

 and no change. The proportion of farms which decreased in net worth in the 

 three mortgage-change groups was about the same. However, the tendency was 

 for net worth to increase more if payment had been made on the mortgage. 



