FARM MORTGAGE LOANS BY BANKS, ETC. 17 
On second-mortgage loans the Middle Atlantic and New England 
divisions have the lowest prevailing rate, while the Mountain division 
has the highest. Considered by States, the lowest prevailing rate, 
as before, is for New Hampshire, namely, 5.5 per cent, and the 
highest for New Mexico, 10 per cent. In several Middle Atlantic and 
New England States the average low and average high rates will be 
found to be the same, whereas for the West North Central States, 
which together furnished one-half of the reports on second-mortgage 
rates, an average spread of 0.87 per cent is shown. 
Comparing the prevailing rates on first and second mortgage loans, 
it appears that second mortgages bear a rate of interest eighty-seven 
one-hundred ths of 1 per cent higher than those borne on first mort- 
gages for the United States as a whole. In three States, namely, 
Vermont, Virginia, and Nevada, the reports show an average rate 
0.05 per cent, 0.01 per cent, and 0.12 per cent higher, respectively, 
on first-mortgage than on second-mortgage loans. The reasons for 
this irregularity in Vermont seem to be the small number of reports 
received on second-mortgage rates as compared with those on first- 
mortgage rates, and the fact as pointed out previously that the 
banks of Vermont hold a large amount of first mortgages in the West 
where the rates of interest are higher. The second-mortgage loans 
are presumably more generally on local farms; hence the rates 
charged are more nearly the local rate. For Virginia and Nevada 
the explanation seems to be that a relatively small number of banks 
reported rates on second-mortgage loans, and that the rates reported 
were not from the banks reporting the highest rates on first-mortgage 
loans. The same explanation will hold true for the various subdivi- 
sions of States or districts where the average rates reported for first 
mortgages exceed those for second mortgages. 
A comparison of the interest rates shown in Table 4 with the rates 
determined by a study made by the department in 1915 indicates 
that although the current rates on farm mortgage loans are uniformly 
higher than those for the earlier date, owing, no doubt, to the in- 
creased demand for capital occasioned by war expenditures, there is 
a slight tendency toward equalization in rates as between different 
sections of the country. In other words, although the rates for all 
sections have increased, this increase is less marked in the States 
whose rates in 1915 were disproportionately high. It seems probable 
that the loan operations of the Federal land banks, with their uniform 
rates for all parts of the country, have been a leading factor in this 
tendency toward equalization. 
The districts referred to in the table are those established by the 
Department in connection with the gathering of data on crop condi- 
tions. These district are indicated by number on the map, figure 1. 
