BUYIXG FARMS WITH LAND-BAXK LOANS. 
11 
banks regarding the title to property; but the possibility of delay 
for other reasons, such as the impracticability of the appraiser for 
the land bank promptly viewing the land, should be foreseen, and 
the contract of sale should be made to cover a sufficient time. 
METHODS EMPLOYED TO FINANCE THE PURCHASE PRICE ABOVE 
THE AMOUNT OBTAINED FROM THE FEDERAL FARM LOAN SYS- 
TEM. 
A question of special interest in the present study is, How did 
those who borrowed from the Federal land banks for the purpose 
of buying farm land finance the remainder of the purchase price 
above the amount obtained by first mortgage? Or, more particu- 
larly, To what extent were second mortgages employed for this pur- 
pose, and what were the terms of these second mortgages ? 
EXTENT OF USE OF SECOND MORTGAGES. 
To answer these questions it is possible to use 1,008 replies in 
which a complete record of the conditions of purchase were given. 
Of this number, 477 did not involve second mortgages, while 531 did. 
Of the latter number, second mortgages were given to relatives 
who were also sellers of the land in 43 cases, and to other sellers in 
372 cases. Thus in practically 78 per cent of the cases the second 
mortgage was given to the sellers of the land — that is, to persons who 
might presumably be interested in giving specially favorable terms. 
In only 22 per cent of the cases were the mortgages given to others 
than sellers of the land. 
The terms of purchase for these 1,008 cases are summarized in 
Table V. 
Table V. — Use of the second mortgage by borrowers from the Federal land banks 
in order to complete the purchase. 
Num- 
ber 
of 
rec- 
ords. 
Averages. 
Class of case. 
Cost 
of 
farm. 
Cash I Second 
or mort- 
trade. 1 gage. 
Interest 
rate 
on 
second 
mort- 
gage. 
Per cent in- 
Fed- 
eral 
loan. 
Second 
mort- 
gage. 
Cash 
or 
trade. 1 
No second mortgage given 
477 
531 
43 
372 
$8, 294 
9,874 
12, 807 
9.162 
$4,912 
2,414 
41.0 
43.3 
43.9 
43.3 
43.1 
59. 5 
§3,363 
5, 087 
3,424 
2. 527 
6.7 
5.8 
6.6 
7.2 
34.1 24.4 
Second mortgage held by: 
A relative who is the seller 
2,209 
1,983 
3,873 
39.7 17.3 
37.4 21.6 
116 11,069 
22. 8 1 35 
1,008 9.126 
, 
42.7 
i 
1 This item includes some of the expenses incident to borrowing. 
