UNITED STATES DEPARTMENT OF AGRICULTURE 



BULLETIN No. 968 



Contribution from the Office of Farm Management 

 and Farm Economics. 

 H. C. TAYLOR .Chief 



Washington, D. C. A July 29, 1921 



BUYING FARMS WITH LAND-BANK LOANS. 



A STUDY BASED ON THE EXPERIENCE OF 2,700 FARMERS WHO 

 HAVE BORROWED MONEY THROUGH FEDERAL FARM LOAN 

 BANKS. 



By L. C. Gray, agricultural economist, and Howard A. Turner, junioi'ljgr (cul- 

 tural economist. 



(Section of Land Economics, L. C. Gray, agricnltnral economist, in charge.) 



CONTENTS. 



Page. 



Purpose and methods of study 1 



Extent to which Federal farm loans have been used in purchasing farm land 4 



Extent to which landless farmers have been aided by the Federal land banks 5 



Use of the Federal farm loan system by tenants as an aid in buying farm land 6 



Use of land already owned to facilitate acquisition of new land 7 



Ratio of the Federal farm loan to the value of farm purchased 7 



Cost of obtaining a Federal farm loan 8 



Methods employed to finance the purchase price above the amount obtained from 



the Federal farm loan system 11 



Summary and conclusions 20 



Suggestions for additional credit on second-mortgage security 23 



PURPOSE AND METHOD OF STUDY. 



The increase of farm tenancy in the United States and the steady 

 migration of farmers and farm laborers to the cities have called 

 attention forcibW to the need for effective means of assisting men 

 in acquiring farms. 



Since the outbreak of the recent war there has been much agita- 

 tion for Government initiative in the opening up of undeveloped land, 

 with an accompanying tendency to ignore the importance of facili- 

 tating the acquisition of farm land in regions already developed. 

 To become a farmer in undeveloped regions involves much risk and 

 hardship, including adjustment to new methods of agricultural prac- 

 tice, and frequently separation from relatives and friends. In de- 

 veloped regions the continual retirement of farm owners from active 



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