10 



BULLETHSr 1047, U. S. DEPARTMENT OF AGRICULTURE. 



agriculture is developed, and first-mortgage farm loans are contracted 

 more generally on the long-time amortization plan, second-mortgage 

 loans will no doubt become more acceptable to banks as well as to 

 other loan agencies in all sections of the country. This would seem 

 to be a desirable tendency from the point of view of the prospective 

 land-owning farmer. Among the possible ways of making second 

 mortgages more acceptable may be mentioned a more scientific 

 appraisal system, which should tend toward conservatism and sound- 

 ness in land valuation. 



INTEREST RATES ON FARM MORTGAGE LOANS. 



The average current rates of interest reported by banks on farm 

 mortgage loans are given in Table 4. Figures are given for averages 

 of the low, high, and prevailing rates reported for each of the two 

 classes of farm mortgage loans. On first-mortgage loans, it will be 

 observed, the average prevailing rate for the United States, as ob- 

 tained from the bank questionnaire, is 7.23 per cent. The lowest 

 prevailing rates are found in the Middle Atlantic and New England 

 States, the average for the former group of States being 5.96 and for 

 the latter 5.98 per cent. The highest prevailing rates, on the other 

 hand, are found in the Mountain States, where the average for the 

 group is 9.07 per cent. By States, the lowest average prevailing 

 rate on first-mortgage loans is 5.39 per cent^ for New Hampshire, 

 and the highest 9.52 per cent, for New Mexico. These two States 

 also show, respectively, the lowest average low and the highest 

 average high. With reference to the spread between the average low 

 and the average high for any one State, it may be noticed that the 

 average in Rhode Island is 6 per cent in each case, whereas in 

 Wyoming the spread is from 8.16 per cent to 9.85 per cent, or 1.69 

 per cent. 



Table 4. — Average rates of interest on farm mortgage loans in the United States, reported 



by banks, March, 1921. 



Geographic division, 



First-mortgage farm loans, average 

 rate. 



Second-mortgage farm loans, average 

 rate. 



State, and crop 

 estimates district. 



Number 

 of banks 

 reporting. 



Low 

 (per 

 cent). 



High 



(per 



cent). 



Prevail- 

 ing (per 

 cent). 



Number 

 of banks 

 reporting. 



Low 



(per 



cent). 



High 



(per 



cent). 



Prevail- 

 ing (per 

 cent). 



United States.. 



8,134 



6.73 



7.57 



7.23 



3,717 



7.70 



8.37 



8.10 



New England 



Maine 



210 

 38 

 28 

 33 

 67 

 .5 

 39 



5.78 

 6.03 

 5.11 

 5.83 

 5.84 

 6.00 

 5.87 

 ■ ■ 



6.11 

 6.42 

 5.66 

 6.32 

 6.10 

 6.00 

 6.01 



5.98 

 6.32 

 5.39 

 6.05 

 5.98 

 6.00 

 5.99 



15 

 4 

 1 

 4 

 3 



6.07 

 6.00 

 5.00 

 6.00 

 6.67 



6.60 

 6.50 

 7.00 

 6.00 

 8.00 



6.43 

 6.50 



New Hampshire. . . 

 Vermont 



5.50 

 6.00 



Massachusetts 



Rhode Island 



7.67 



Connecticut 



3 



6.00 



6.00 



6.00 



