FARM MORTGAGE LOANS BY BANKS, ETC. 9 



FIRST AND SECOND MORTGAGE LOANS BY BANKS. 



Table 1 indicates that the banks of the country held approximately 

 17 per cent of the estimated total farm mortgage loans outstanding 

 in 1920. The figures in Table 3 show the relationship of farm mort- 

 gages to the total loans and discounts of all banks and also the relative 

 amounts of first and second farm mortgages held by banks. In brief, 

 the $1,447,482,926 of estimated farm mortgage loans held by all banks 

 represents only 4.97 per cent of their total loans and discounts. How- 

 ever, it should not be inferred that this percentage represents total 

 farm loans. It is estimated that last December the banks throughout 

 the country also held approximately $3,870,000,000 of farmers' 

 personal and collateral loans. ^ 



It may be noted that the per cent of total loans and discounts 

 composed of farm mortgages varies greatly from State to State. In 

 New Hampshire, for instance, farm mortgage loans constitute only 

 8.91 per cent of total loans and discounts, whereas in Vermont this 

 figure is 51.68 per cent. The percentage obtained for New Hampshire 

 might reasonably be expected, but 51.68 per cent for Vermont is a 

 somewhat surprising figure. Apparently farm mortgage loans have 

 been far more popular as an investment with the banks of Vermont, 

 particularly with the large savings banks, than with the banks of any 

 of the other New England or Middle Atlantic States. In Mississippi, 

 also, the percentage obtained is very high compared with those for 

 neighboring States. The explanation in this case appears to be 

 twofold. Mississippi is to a rather unusual extent a rural State, 

 having no large city to swell the total loans and discounts. Secondly, 

 the banks of this State, as indicated by the reports, hold mortgages on 

 real estate for a large percentage of their short-time farm loans. 



As in the case of farm mortgage loans by life insurance companies, 

 so in the case of similar loans by banks, Iowa leads all other States. 

 Minnesota and California come next in order. These three States to- 

 gether held 31.3 per cent of the farm mortgage loans outstanding with 

 all banks in the United States. 



On the basis of an earlier study made by the Department, it was 

 estimated that in 1914 the banks of the country held $739,500,000 

 of farm mortgage loans. The figure for farm mortgage loans by 

 banks given in this table, namely, $1,447,482,926, represents, there- 

 fore, an increase of $708,000,000, or 96 per cent in six years. 



Turning to the columns for first and second mortgage loans, 

 respectively, it will be noted that in the West South Central and 

 Mountain States the percentages of second-mortgage loans are 

 relatively high. In the New England and Middle Atlantic States, 

 on the other hand, such loans by banks are almost negligible. As 



3 Department Bulletin No. 1048. "Bank Loans to Farmers on Personal and Collateral Security." 

 79294°— 22— Bull. 1047 2 



