14 BULLETIN 384, U. S. DEPARTMENT OF AGRICULTURE. 
a certain figure. It is still uncertain how far the results of dry-farming 
methods will be able to overcome the diffidence of conservative 
investors with reference to loans in semiarid territory. 
The character of the soil and the general contour of the country are 
also important. Capital does not flow as freely to southern Illinois 
as to other parts of that State, partly because of differences in soil 
conditions. Similarly, the Red River Valley, in the northern part 
of Minnesota and North Dakota, attracts capital relatively more 
freely than north-central Minnesota, largely because of differences in 
natural conditions. Illustrations of the effect of soil, contour, and 
climate on the flow of farm-mortgage capital oould also be given 
from other parts of the country. 
The distance from financial centers is an important factor. In 
studying the average interest rates for the different States, a gradual 
rise in costs is noted as one moves outward from the leading financial 
centers. 
The character of the financial agencies through which farm-mort- 
gage capital reaches the farmer is also of great importance. One 
needs to consider the part played by agencies that render local 
savings available for this purpose as well as the kind of facilities 
through which outside capital reaches the farmers of any given 
locality. Where local savings institutions have been well developed, 
as in Iowa or California, the effect on available local capital for farm- 
loan purposes is readily discerned. On the other hand, the result of a 
general lack of suitable local savings institutions, as shown especially in 
many regions of the South and West, is likewise apparent. 
THE NEED FOR IMPROVED FACILITIES. 
The practice of drawing on outside capital for farm-mortgage loans 
is found, as has been stated, both in the most highly developed 
agricultural sections of the corn belt and in the relatively less 
developed agricultural regions of the South and West. The general 
need for suitable facilities through which outside capital may reach 
the farmers in different parts of the country is therefore clear. In 
the United States it is a fairly well established practice for country 
banks or real estate firms to act as local agents or correspondents for 
outside or distant investors, either direct or through other middle- 
men. It is also the usual practice to market Jthe farmer's mortgage 
note in its original form. This makes it necessary to find a purchaser 
who wants a mortgage of a given amount, running for a given time, 
and with given terms. Obviously, paper of this character will not 
sell as readily in the open market as standardized securities. Dis- 
tant investors are not generally in a position to have first-hand 
knowledge of the farm security underlying a given mortgage note. 
