BULLETIN 968, TJ. S. DEPAETMENT OF AGEICULTUEE. 



work is likely to result in a rapid increase of tenancy unless it is 

 readily possible for landless farmers to buy the lands previously 

 operated by these retiring owners. It is true this transition to owner- 

 ship is partly effected through inheritance, marriage, or gift, but 

 this is the case only to a limited extent. To a great extent farm 

 ownership among the new generation of farmers must result from 

 purchase. 



When the Federal farm loan system was under consideration it 

 was widely believed that it would be an important instrument in re- 

 ducing the percentage of tenant farmers. Those best acquainted with 

 its provisions realized, however, that, while the act would prove 

 serviceable in this regard, the credit permissible under its somewhat 



PERCENTAGE OF ALL FARMS 

 FEDERAL LAND BANK LOANS HAVE BEEN MADE 



Fig. 1. 



conservative provisions was made too small to effect a marked reduc- 

 tion in tenancy. 



Since the Federal farm loan system has been in operation for about 

 four years, it is important to determine the extent to which it facili- 

 tates the acquisition of farms by landless farmers, especially by those 

 having little capital. 



From this point of view the present study was undertaken to de- 

 termine (1) what proportion of those borrowing under the Federal 

 farm loan system for the purpose of buying land belong to the 

 class just mentioned — ^that is, landless farmers with limited capital ; 

 (2) what methods such persons have employed to supplement the 

 funds obtained from the Federal land banks ; and (3) what have been 

 the costs of Federal farm loans to the borrowers. 



The point should be emphasized that the present study is not under- 

 taken with the view of criticizing the farm loan sj^stem, its officials. 



