FARM-MORTGAGE LOANS IN THE UNITED STATES. 13 
PRIVATE INVESTORS. 
No figures are available to show the amount of farm-mortgage 
capital supplied by private investors. It is clear, however, that in 
certain States, such as New York, Pennsylvania, Michigan, and 
Wisconsin, the amount of capital supplied by private investors is 
relatively large. 
LOANS HANDLED BY BANKS. 
Besides furnishing capital for farm-mortgage loans from their own 
funds, banks and mortgage companies act as intermediaries or mid- 
dlemen, purchasing or negotiating large amounts of farm mortgages 
for insurance companies and other outside investors. The estimated 
amount of such business handled by banks is shown in the last column 
of Table 5. In North Dakota the banks negotiate about $40,000,000 
a year in loans for other investors, whereas the amount invested in 
farm mortgages from their own funds is only one-eighth of this sum. 
Similarly, in Nebraska the amount handled by banks is more than 
three times the amount of bank capital invested in farm mortgages. 
In most of the States west of the Mississippi Kiver, the banks engage 
rather extensively in the business of handling farm mortgages for 
other investors. 
FACTORS WHICH INFLUENCE THE TERMS ON FARM-MORTGAGE LOANS. 
No faotor is given greater consideration by farm-mortgage in- 
vestors, in determining their attitude toward loans in a given area, 
than the prevailing method of farming. The careful investor in 
farm mortgages considers all the known factors affecting the income of 
the farm offered as a security. He studies the relation of the farm 
income to the price of the land to determine whether the farm value is 
on a speculative or an investment basis. He is interested in the degree 
of regularity in income from year to year, and therefore tries to ascer- 
tain what crops or products are raised and how far these are adapted 
to the given conditions. He knows the extra hazards involved in 
one-crop farming, and therefore inquires about tendencies in the di- 
rection of diversified agriculture. He even inquires into the business 
habits of the farm owners and the kind of care given to the farm 
products. It is necessary, in general, to understand the importance 
of differences along all these lines in order to explain the variation in 
the costs of farm-mortgage loans to borrowers. 
Climatic conditions are important because of their effect on the 
value of the farm security. The semiarid regions of the Western 
States do not attract capital as freely as the farming sections farther 
east, where rain is relatively abundant. Important sources of capital, 
including insurance companies and savings banks, often refuse to loan 
money on farm-mortgage security where the average rainfall is below 
