20 



BULLETI]Sr 968, U. S. DEPAETMEIJT OF AGRICULTURE. 



loan were made on considerations of credit alone. In the second 

 place, it is probable that legal restrictions on interest rates exert an 

 important influence on normal interest rates for second mortgages, 

 as well as in the case of first mortgages. In various ways additional 

 charges probably are employed to supplement the normal interest 

 rate. In general, this seems to be another indication of the fact that 

 lending on second mortgages has not been widely developed on a 

 commercial basis. 



SUMMARY AND CONCLUSIONS. 



The Federal farm-loan system has been employed to a considerable 

 and an increasing extent to enable men to buy land. The proportion 

 of loans for this purpose has probably not yet reached a maximum. 



/ "■■( -i,o 





AVERAGE INTEREST RATE 



FOR 



FARM MORTGAGE LOANS 



0.4 



0.9 y 



)IN ADDITIOnY-/ 







; y'.0-.„ '■■ V J 



'\l \ ^\J- 



DERIVED FROM INFORMATION FURNISHED BY C.W THOMPSON \ ^ 



TO THEJOINT COMMITTEE ON RURAL CREDITS IN THE \ "? _A^-AVERAGE INTEREST 



IVSESSION OFTHE6.4"CONGRESS(NOV, 15 AND 17, 1915) \-J S-AVERAGE YEARLY COMMISSION PAI 



Fig. 6. — Average interest rates for farm mortgage lonas, by Federal land-bank districts. 



In addition to the loans made directly for this purpose, it is probable 

 that loans made for refunding indebtedness and for other purposes 

 improve the financial position of the farmer, to such an extent as to 

 enable him to invest in additional land. 



To a large extent the use of the system for acquiring farm land has 

 been by those already owning farm land, about two-thirds of those 

 who borrowed to buy land belonging to this class. Of the landless 

 borrowers, about two-thirds were operating as tenants at the time of 

 borrowing. 



While it is apparent, therefore, that landless persons desiring aid 

 in acquiring the ownership of farm land have not resorted extensively 

 to the farm land banks, an examination of the methods employed by 



