6 BULLETIN 1048, U. S. DEPAETMENT OF AGRICULTUEE. 



of outstanding debt during the last tkree months of the year was far 

 less than those fanailiar with farm financial practice would normally 

 expect. This feature of the diagram, therefore, emphasizes the fact 

 that 1920 was decidedly an abnormal year. 



For the New England States a rather unexpected curve occm's. 

 In view of the importance of dahying and truck gardening in these 

 States and the comparatively steady income from these activities, 

 one would hardly expect a variation during the year of over 40 

 points. In only two geographic divisions, namely, the South Atlantic 

 and the West South Central, was a greater variation shown. It may 

 also be noted that for New England and also for the Middle Atlantic 

 division the curves continue upward, and reach their peaks in Decem- 

 ber. This fact would lead one to believe that the banks in these two 

 sections were in a position to continue extending credit for a longer 

 tirae after the arrival of the credit stringency than was the case 

 elsewhere. 



In the East North Central, West North Central, and Pacific divi- 

 sions the amounts outstanding were remarkably uniform during the 

 entire year. This fact is no doubt accounted for, at least in part, by 

 the diversified farming which is practiced in these three sections, but 

 perhaps also by the fact that toward th3 end of the season farmers 

 found it difficult, and in some cases impossible, to obtain the credit 

 they desu'ed and needed. In the South Atlantic, East South Central, 

 and West South Central divisions the fluctuations were marked. In 

 these areas a great deal of money is borrowed for the purchase of 

 fertilizer and for food and feed during the crop-producing season. 

 The credit curves, therefore, begin to rise at once, and continue up- 

 ward until October. During October, November, and December a 

 slight decrease is shown, which, however, doubtless falls far short 

 of amounting to a normal contraction. The Mountain division has 

 what appears to be more nearly a normal curve. The peak for the 

 Mountain division came in August. During the last fom* months of 

 1920 there was a marked contraction of loans in this area, reflecting in 

 part, no doubt, a rapid marketing of live stock. 



RATES OF INTEREST. 



The average low, high, and prevailing rates of interest for short- 

 time loans to farmers as reported by the banks are sho^\^a in Table 2, 

 loans of $100 or more and loans of less than $100 being classified 

 separately. In examining these rates it should be kept in mind that 

 the reports were received mainly during March, 1921, which was ap- 

 proximately the peak for interest rates tlnroughout the United States. 

 An average prevailing rate of 7.96 per cent on short-time loans of $100 

 or m.ore is indeed high. However, as compared with the rates of 



