BUYING FARMS WITH LAND-BANK LOANS. 
9 
$82.74 for the 1ST 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 
j:>er 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 information on the cost of 
loans from Federal land banks, based on answers by 1,765 borrowers. 
(See also fig. 3.) 
SIZE AND COST 
OF 
SECURING FEDERAL FARM LOANS 
FIGURE IN CIRCLE SHOWS.FOR LOANS STUDIED 
THE AVERAGE SIZE OF FEDERAL FARM LOANS 
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 
Fig. 3. — Size and cost of Federal farm loans, by land-bank districts. 
Table III. — Costs- incurred in obtaining Federal farm loans. (Analysis and 
averages of 1,765 reports. 1 ) 
Size of average loan $3,541.00 
Average cost of securing the Federal farm 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, 75.8 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, especially in the First Land Bank District, comprising the New England States, 
New York, and New Jersey, where as many reported expense for lawyer fees as reported abstract expense 
and where the amount reported as lawyer fees exceeded that reported as abstract expense. Expenses 
itemized under the expression "application," "application fee," "association fee," "secretary fee," and 
"land bank fee" are probably not strictly correct in many instances, but if the total amount paid on all 
of these items is used that total amount may be 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 their total expense for such items is probably cor- 
rect. 
48625°— 21 2 
