FARM-MORTGAGE LOANS IN THE UNITED STATES. 



9 



draw on outside capital for considerable amounts; and that, on the 

 other hand,, in States where local capital is in the main sufficient for 

 farm-mortgage loans, a large proportion of the loans are made with- 

 out the payment of any commission. 



SOURCES OF CAPITAL FOR FARM-MORTGAGE LOANS. 



BANKS. 



The sources of capital available for farm-mortgage loans in the 

 various States have been studied carefully. Banks appear to furnish 

 from their own funds approximately $740,000,000, or more than 

 one-fifth of the total amount invested in farm mortgages in the 

 United States. Table 5 and Diagram D show the relative importance 

 of the farm mortgages held by banks in each State. In California 

 the farm mortgages held by banks represent 45 per cent of the 

 estimated total farm-mortgage debt; in Louisiana, 45 per cent; in 

 Indiana and Michigan, nearly 40 per cent; and in Mississippi and 

 South Carolina, more than 36 per cent. 



So far as the bank funds in any State invested in farm mortgages 

 represent local capital, there is the advantage of first-hand contact 

 with borrowers, enabling the investor to see that the security is 

 properly cared for during the term of the loan. In certain sections, 

 such as the New England and the Middle Atlantic States, where 

 it is customary for banks to place loans in other States, the banks 

 do not have this advantage, but must operate through other agencies 

 in placing their loans. 



Table 5.— Quantitative data relative to farm-mortgage loaiis. 

 [Figures for amounts represent thousands of dollars.] 





Estimated 

 total farm- 

 mortgage 

 debt.i 



Farm mortgages held 



by life insurance 



companies. 2 



Farm mortgages held 

 by banks. 3 



Farm 

 mortgages 



GeograpMc division and State. 



Amount. 



Per cent 

 of esti- 

 mated 

 total. 



Amoimt. 



Per cent 

 of esti- 

 mated 

 total. 



"han- 

 dled" by 

 banks.* 





3,598,985 



693,940 



19.3 



739,500 



20.6 



486, 580 







Geographic divisions: 



80,544 

 313, 150 

 944, 436 

 1,375,903 

 153, 155 

 127, 135 

 299,614 

 101,285 

 203, 757 



106 

 556 

 121, 075 

 426,960 

 22,930 

 22,871 

 72,685 

 12,532 

 14,225 



0.1 



.2 

 12.8 

 31.0 

 15.0 

 18.0 

 24.3 

 12.4 

 7.0 



84,900 

 30,900 

 220, 000 

 216, 400 

 40,800 

 33, 600 

 27,900 

 19,800 

 65,200 



105.4 

 9.9 

 23.3 

 15.7 

 26.6 

 26.4 

 9.3 

 19.5 

 32.0 



10 





2,040 



East North Central 



123,360 

 282, 710 



West North Central 



South Atlantic 



19 920 



East South Central 



4,710 



West South Central 



18, 750 



Mountain 



17,300 

 17, 780 



Pacific 



1 Estimate based on Thirteenth Census figures, assuming that the ratio between the mortgage debt on farms 

 operated by their owners and the total value of all such farms holds good for tenant farms also. It is pos- 

 sible that this ratio may be too high for the tenant farms in some of the States, in which csise the estimates 

 ■wiU be too large; but even if this is the case, the figures presented have considerable value as representing 

 the maximum amount of farm mortgages probably outstanding in the census- year. 



2 Based on reports received (in October, 1915) from 220 insurance companies, comprising five-sixths of 

 the total number in the United States and having more than 99 per cent of the total admitted assets. 



3 Estimate based on reports received from banks in the spring of 1914. 



^ Farm mortgages negotiated by banks or bank officials as agents or correspondents for other investors. 

 Estimates based on reports received from banks in the spring of 1914. 



