BUYIXG FARMS WITH LAND-BANK LOANS. 



9 



$82.74 for the 187 borrowers who gave mortgages to the Federal 

 land banks for amounts between $7,501 and $10,000, this cost repre- 

 sented only 0.9 per cent of the mortgage given. 



The borrower planning to finance the purchase of a farm through 

 the aid of a loan from a Federal land bank has not only to anticipate 

 the costs connected with getting the desired loan, but he must allow 

 for the amount withheld as his pro rata share of bank stock, or 5 

 per cent of the total amount of the mortgage given. In other words, 

 the 1,765 borrowers realized an average of $93.57 for every $100 of 

 mortgage given to the Federal land banks; borrowers giving mort- 

 gages for $1,000 or less realized approximately $90 on every $100 of 

 mortgage given; and borrowers giving mortgages for amounts run- 

 ning between $7,501 and $10,000 realized approximately $94.00 on 

 every $100 of mortgage given. 



Tables III and IV give in some detail infoiTnation on the cost of 

 loans from Federal land banks, based on answers by 1,765 borrowers. 

 (See also fig. 3.) 



FIGURE IN CIRCLE SHOWS.FOR LOANS STUDIEoA -. 

 THE AVERAGE SIZE OF FEDERAL FARM LOANS ^s^^ 

 FIGURE BENEATH CIRCLE SHOWS 

 THE AVERAGE COST OF SECURING THESE LOANS 



BOTTOM FIGURE SHOWS PER CENT WHICH THE COST OF 

 SECURING LOAN IS OF THE AMOUNT OF LOAN 



SIZE AND COST 

 OF 

 RING FEDERAL FARM LOANS 



^1 



S74.63)^ 





^^HAk 1 540.14 ^ 1 j/N 



-^ S4e.74 y \ ^^^^ 





^S 1 ^S-, j'-^T 







v^ 



Fig. 3. — Size and cost of Fcdt^ral farm loans 



by land-bank districts. 



{Audi II sift and 



Table III. — Costs incurred in obiaining Federal farm loans 

 averages of 1,765 reports.^) 



Size of average loan $3, .^1. 00 



Average cost of securing tlie Feilei'al fiirin loan 50.84 



Per cent which the average cost of securing the loan is to the loan 1. 43 



1 Of the 1,765 borrowers reporting the cost of borrowing by items, ~."i.S per cent reported expense for 

 abstracting. It is probable that part of the expense reported under lawyer fees is also on account of 

 abstract work done, espcciallv in the First Land Bank District, comprisnig the New Enjiland Statesy 

 New York, and Now Jersey, wheroasmany reported expense for lawyer fees as reported abstract expense 

 and where the amount reported as lawyer fees exceeded that reported as alistract expense. Expenses 

 itemized under the expression "appliraiion,'' "application fee,'' "association fee,'' "swrelary fee," and 

 "land bank fee'' are probalily not strictly correct in many instances, but if the total amoimt paid on all 

 of these items is used that total amount inay bo considered as being fairly correct. In other words, it is 

 thought probable that many borrowers did not correctly discriminate in entering amounts paid out to 

 or retained by the land banks or association, although tlieir total expense for such items is probably cor- 

 rect. 



48625°— 21 2 



