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FARM LAND VALUES IN IOWA. 39 
because farmers who would otherwise have purchased farms for their 
sons postponed these purchases until the boys should return from the 
army, while many farmers were investing in Liberty Bonds instead 
of in land. With the close of the war and return of the soldiers this 
source of demand for land again became effective. It is difficult to 
prove this theory, but it seems probable that it may account in part 
for the ‘‘boom,” although undoubtedly a subsidiary cause. 
The large increase in the net earnings of farmers was responsible 
for the “‘boom”’ in still another way. It increased the investable 
funds in the hands of farmers. This condition was also rendered 
still more favorable by the easy market for credit which prevailed in 
1919. Both conditions were reflected in the financial status of State 
and savings banks and trust companies. A statement of the condi- 
_ tion of 371 State banks, 926 savings banks, and 23 trust companies 
in the State of Iowa, published in the press under date of July 22, 
showed that bank deposits had increased more than $100,000,000 
during the year, or about 17 per cent, while loans and discounts had 
increased less than $40,000,000, a little over 8 per cent. 
By easy market for credit is not meant easy terms of credit. We 
have no grounds for believing that during the period of the “boom” 
there was a strong tendency to lower the standards of security ordi- 
narily required in Iowa for farm purchases financed by credit. What 
is meant is that loanable funds both for mortgage and for personal 
credit were abundant. Not only was this true of bank credit, but it 
was especially true of credit furnished by the sellers of farms. Large 
numbers of farmers who had prospered during the war desired to 
retire, and many of them were glad to avoid the responsibility of, 
and risk involved in, renting land, by converting their equities so far 
as possible into farm mortgages. 
Such were the important conditions which formed the basis of 
increased activity in buying and selling land in the sprmg and summer 
of 1919, and the accompanying increase of land values. 
This movement, however, was cumulative, increasing of its own 
momentum. As soon as it became apparent that land values were 
rising the speculative interest developed. Many people who other- 
wise would not have been interested in the land market bought for 
the purpose of selling again within a short time. The motive was 
not for investment and had little reference to the earning power of 
the land except so far as this might form a basis for judging the prob- 
ability of further increase of value. This class of buyers increased 
the volume of demand for farm land. Moreover, since most of this 
class also desired to sell again as soon as a substantial speculative 
profit could be realized, the volume of supply was considerably 
increased. From one-fourth to one-third of purchases and sales were 
made primarily for speculative motives. There were many persons, 
