FAiRM MORTGAGE LOANS BY BANKS, ETC. 19 



The rates by districts, as shown on the table, are of particular signifi- 

 cance for the tier of States comprising the Dakotas, Nebraska, 

 Kansas, Oklahoma, and Texas. In each of these States the variation 

 between rates in the eastern districts and the western districts is very 

 marked. The chief explanation of this variation is the increasing 

 meagerness and uncertainty of the rainfall as one proceeds westward 

 in these States. The map, besides indicating by number the various 

 districts referred to in the table, also indicates by the shading of each 

 district the approximate prevailing rate on first-mortgage loans. 



An effort was also made to obtain data on the interest charges by 

 insurance companies. The figures obtained give an average rate for 

 the United States of 5.82 per cent. The lowest average rate for any 

 geographic division was 5.5 per cent, for the New England States, 

 and the lowest for individual States was 5 per cent, for Vermont 

 and Massachusetts. The highest average rates for any geographic 

 division and State were 7.24 per cent, for the Mountain division, 

 and 8.15 per cent for Utah. These figures, however, are not com- 

 parable with the rates reported by banks, since the reports indicate 

 that the figures given were in most instances the return realized on 

 outstanding mortgages rather than the current rates. Some of 

 these mortgages have been held for as many as 5 or 10 years. The 

 mortgages held by insurance companies also represent to a much 

 greater extent selected mortgages than is the case with those held 

 by banks. In any comparison of the rates given in Table 4 with 

 those recently published by the Bureau of the Census, it should 

 again be remembered that the latter are not current rates, but the 

 rates actually being paid by farmers on their outstanding mortgages, 

 many of which represent loans negotiated several years earlier than 

 the census date. 



An effort was made to obtain also figures on commission and other 

 charges on mortgage loans. The information obtained on this 

 point, however, was insufficient to warrant detailed presentation at 

 this time. Such data as were obtained indicate that when com- 

 missions or other charges are made they amount to from one-half 

 of 1 per cent to 3 per cent of the amount of the loan, or, on an annual 

 basis, from two-tenths of 1 per cent to 1 per cent per year. 



Table 5 gives a percentage distribution of the replies received 

 from banks according to the prevailing rate reported on first-mort- 

 gage farm loans. In the New England, Middle Atlantic, and East 

 North Central States most of the loans are made at 7 per cent or 

 less, whereas in the West South Central and Mountain States a 

 majority of the banks charge more than 9 per cent. 



