4 BULLETIX 968, U. S. DEPARTVIEXT OF AGRICULTURE. 
pages 20 to 23. Following these conclusions an attempt has been 
made to outline some constructive suggestions as to how the Federal 
farm loan system might be modified to render it more capable of 
facilitating farm ownership. 
EXTENT TO WHICH FEDERAL FARM LOANS HAVE BEEN USED IN 
PURCHASING FARM LAND. 
An analysis of 78 per cent of the total number of loans from the 
time of the organization of the Federal land banks to November 30. 
1919. indicates that only 13 per cent of the amount thus loaned was for 
the purpose of purchasing farm land. 1 It is probable, however, that 
even this small percentage represents an increase in the proportion of 
loans for this purpose. An analysis of about one-third of the loans 
made prior to November 30. 19 IS. indicates that only 8 per cent of the 
proceeds were used for buying farm land. 2 If the proportion of loans 
analyzed is representative, within a year the proportion of the total 
number of outstanding loans made for buying farm land increased 
from 8 to 13 per cent. As this year was a period of rapid growth in 
the volume of business, the total amount of loans being nearly 
doubled, this increase appears to indicate a tendency toward the 
more extensive employment of the system as an aid in buying farm 
land. The tendency appears to be confirmed by special records kept 
by the regional banks at the request of the Farm Loan Board dur- 
ing the month of October, 1919. which indicate that 16 per cent of 
the loans made during that month were for this purpose. 3 
The smaller call on the Federal land banks during the earlier 
period to aid in buying land may probably be attributed to the fact 
that the Federal farm loan system became most favorably known, 
at first, among those farm owners who had been paying high interest 
and renewal charges on existing mortgages. Undoubtedly they were 
in large part men who organized most of the farm loan associations. 
Out of S251.126.600 of the loans made from date of organization to 
November, 1919, 59 per cent was borrowed to liquidate existing 
mortgages, and an additional 9 per cent for the payment of other 
debts of borrowers. 
1 Third Annual Report of the Federal Farm Loan Board. 66th CoDgress, 2d session, 
House Document 553, p. 11. 
2 Second Annual Report. 65th Congress, 3d session, House Document 1624, p. 8. 
s A table which appears on page 58 of the hearings before the Senate Committee on 
Banking and Currency of the 66th Congress, 2d session, January 10, 12, and 13. 1920, 
indicates that a larger proportion of the loans made by the joint-stock land banks are 
made for the purpose of buying land than is the case with the Federal land bank loans. 
This table shows that of a total of $53,008,983 in loans made by 24 joint-stock land 
banks from organization to January 1, 1920, 26.5 per cent had been made to farmers 
buying their first land, 21.4 per cent to persons buying additional land, 8.3 per cent 
for the purpose of making improvements, and 43.8 per cent to pay existing indebtedness. 
In short, not far from half had been used to buy land. 
