720 AGRICULTURAL ECONOMICS 



class would not be considered an evidence of calamity, as, for instance, 

 when a parent mortgages his farm or home to give his son a liberal 

 education. The two geographical divisions embracing the Southern 

 states are the most prominent ones with respect to farm incumbrances 

 made on account of farm and family expenses. In the South Central 

 division, 18.73, an d in the South Atlantic division 18.15 P er cent f 

 these families incurred 13.35 an< ^ 11-29 P er cen t of the farm debt 

 for these expenses. By contrast, in the North Atlantic division 4 .00 

 per cent of these families incurred i . 59 per cent of this debt. The 

 average for the United States is 5 . 89 per cent of families and 2 . 83 

 per cent of incumbrance. 



The table on p. 719 sets forth these facts concerning the objects 

 of incumbrance, classified by states. 



233. FARM INDEBTEDNESS IN THE UNITED STATES 1 

 BY JESSE E. POPE 



It may be broadly stated that previous to the last quarter of the 

 nineteenth century American farmers felt little need of credit. They 

 had been given their land by the government or had bought it at 

 comparatively low prices. Since agriculture was extensive, expendi- 

 tures for improvement and equipment were inconsiderable. The 

 virgin soil needed no fertilization, and credit was seldom required 

 except for family supplies during the crop growing period. 



The western movement, which began to assume large proportions 

 about the middle of the nineteenth century, resulted in the opening 

 of vast areas of fertile land adapted to grain growing and of free graz- 

 ing land on which livestock could be raised at low cost. This resulted 

 in a tremendous surplus of agricultural products, which, owing to the 

 development of railroad and ocean transportation, was thrown on the 

 markets of the world, bringing prosperity to the farmers of America 

 and ruin to those of Europe. 



Partly as a result of this overwhelming flood of production and 

 partly on account of the speculation and inflation which followed the 

 Civil War, a great increase in land values took place. This gave 

 farmers a broader basis for borrowing and they took advantage of it 

 to make improvements and to add more land to their farms. Tempted 

 by the high rates of interest and deceived by the reported endless 



1 Adapted from the Quarterly Journal of Economics, XXVIII (August, 1914), 

 702-26. 



