10 
BULLETIN 1047, U. S. DEPARTMENT OF AGRICULTURE. 
agriculture is developed, and first-mortgage farm loans are contracted 
more generally on the long-time amortization plan, second-mortgage 
loans will no doubt become more acceptable to banks as well as to 
other loan agencies in all sections of the county. This would seem 
to be a desirable tendency from the point of view of the prospective 
land-owning farmer. Among the possible ways of making second 
mortgages more acceptable may be mentioned a more scientific 
appraisal system, which should tend toward conservatism and sound- 
ness in land valuation. 
INTEREST RATES ON FARM MORTGAGE LOANS. 
The average current rates of interest reported by banks on farm 
mortgage loans are given in Table 4. Figures are given for averages 
of the low, high, and prevailing rates reported for each of the two 
classes of farm mortgage loans. On first-mortgage loans, it will be 
observed, the average prevailing rate for the United States, as ob- 
tained from the bank questionnaire, is 7.23 per cent. The lowest 
prevailing rates are found in the Middle Atlantic and New England 
States, the average for the former group of States being 5.96 and for 
the latter 5.98 per cent. The highest prevailing rates, on the other 
hand, are found in the Mountain States, where the average for the 
group is 9.07 per cent. By States, the lowest average prevailing 
rate on first-mortgage loans is 5.39 per cent, for New Hampshire, 
and the highest 9.52 per cent, for New Mexico. These two States 
also show, respectively, the lowest average low and the highest 
average high. With reference to the spread between the average low 
and the average high for any one State, it may be noticed that the 
average in Rhode Island is 6 per cent in each case, whereas in 
Wyoming the spread is from 8.16 per cent to 9.85 per cent, or 1.69 
per cent. 
Table 4. — Average rates of interest on farm mortgage loans in the United States, reported 
by banks, March, 1921. 
Geographic division, 
First-mortgage farm loans, average 
rate. 
Second-mortgage farm loans, average 
rate. 
State, and crop 
estimates district. 
Number 
of banks 
reporting. 
Low 
(per 
cent). 
High 
(per 
cent). 
Prevail- 
ing (per 
cent). 
Number 
of banks 
reporting. 
Low 
(per 
cent). 
High 
(per 
cent). 
Prevail- 
ing (per 
cent). 
United States.. 
8,134 
6.73 
7.57 
7.23 
3,717 
7.70 
8.37 
8.10 
New England 
210 
38 
28 
33 
67 
5 
39 
5.78 
6.03 
5.11 
5.83 
5.84 
6.00 
5.87 
6.11 
6.42 
5.66 
6.32 
6.10 
6.00 
6.01 
5.98 
6.32 
5.39 
6.05 
5.98 
6.00 
5.99 
15 
4 
1 
4 
3 
6.07 
6.00 
5.00 
6.00 
6.67 
6.60 
6.50 
7.00 
6.00 
8.00 
6.43 
6.50 
New Hampshire. . . 
5.50 
6.00 
Massachusetts 
Rhode Island 
7.67 
Connecticut 
3 | 6.00 
6.00 
6.00 
