12 BULLETIN 968, IT. S. DEPARTMENT OF AGRICULTURE. 
As one would expect, those finding it necessary to borrow on 
second-mortgage security obtained a larger ayerage per cent of the 
purchase price on first mortgage than did those who did not em- 
ploy second mortgages. 
The 177 buyers giying no second mortgage gaye first mortgages to 
the Federal land banks that ayeraged 41 per cent of the cost of the 
farms purchased. The remainder of the purchase price was paid in 
cash or by trading other property. The 531 buyers giying a second 
mortgage additional to the first held by the Federal land banks, 
which ayeraged 13.3 per cent of the cost of farms purchased, obtained 
31.1 per cent of the cost of the farm on the second mortgage. The 
amount put in by this group in cash or trade ayeraged 21.1 per cent 
of the cost of the farm. 
INFLUENCE OF PERSONAL RELATIONSHIPS ON THE TERMS OF SECOND 
MORTGAGES. 
The better terms on which farms are bought by men who are able to 
get relatiyes to accept second mortgages, whether buying from such 
relatiyes or from others, are reflected by the ayerages for the group of 
13 buyers who bought, giying second mortgages to their relatiyes. The 
second mortgage held by relatiyes of the buyer ayeraged 39.7 per cent 
of the cost of the farm and bore interest at the ayerage rate of only 
5.8 per cent per annum, little more than the total annual cost of the 
first mortgage. The amount put in by this group in cash or trade 
amounted to only 17.3 per cent of the cost of the ayerage farm. These 
men bought farms ayeraging $12,807 in value, this amount ayeraging 
higher than the farms in any other group. That the price paid was 
reasonable in most cases is indicated by the fact that 13.9 per cent of 
the purchase price was accepted as mortgage by the Federal land 
banks. 
When sellers of land, eyen when not related to the buyers, accept 
a second mortgage in part payment, they are frequently willing to 
give fayorable terms of credit because they are anxious to effect a 
sale. This tendency is reflected in the terms of second mortgages 
giyen to former owners (Tables V and VI). It appears that in this 
group the second mortgages ayeraged 37.1 per cent of the purchase 
prices of the farms. This is slightly less than the percentage for 
mortgages giyen to relatiyes who were sellers, but much higher than 
the proportion of the purchase price (22.8 per cent) represented by 
mortgages giyen to persons who were not sellers. The tendency 
toward fayorable terms in mortgages held by sellers of farm land 
who are not related to the buyers is shown by the average interest 
rate of 6.6 per cent, as compared with an average of 7.2 per cent on 
mortgages held by persons other than sellers. 
