736 



AGRICULTURAL ECONOMICS 



property, in the great Central Northern and Northwestern sections, 

 where the farm values are highest, the difference between these two 

 classes of loans is smallest. Indeed, we found, on examining the 

 figures of individual companies loaning on all kinds of real property, 

 that a large number had secured in these sections a higher average 

 interest rate on their city and village loans than on their farm loans. 



TABLE "G" 



While we have not been able to prepare complete statistics on the 

 subject, an examination of the total mortgage loans of nine com- 

 panies, seven of which loan chiefly or wholly on farm property, com- 

 pared with nine other companies, seven of which loan wholly or 

 chiefly on city property, shows that the average size of farm loans is 

 about $2,500, while the average size of city loans is about $75,000. 

 When it is considered that the work incident to inspecting the prop- 

 erty, examining titles, preparing the papers, collecting interest, seeing 

 that taxes are paid, etc., is much the same for each loan, regardless 

 of its size, we find a very obvious economic explanation of why farm 

 loans, generally speaking, are required to pay a somewhat higher rate 

 of interest than loans upon other kinds of real property. 



It appears that life insurance companies, collectively, are very 

 much the largest owners of farm mortgages in this country, their 

 holdings exceeding by about 20 per cent the total farm loans held by 

 the 26,765 banks of this country. As to the farm loans reported by 

 the United States Census in 1910, it would appear that the life 

 insurance companies hold about 37^ per cent, the banks about 313 

 per cent, private investors, colleges and other institutions combined 

 about 31 per cent. As we have already noted, life insurance com- 

 panies have placed nearly 40 per cent of their mortgage loans on farm 



