division where 43.83 per cent of the farm families incurred 46.32 per cent of the encumbrance.

While the Western division has the lowest percentage for the purchase of real estate, it has the highest percentage for real estate improvements. In the Western division 9.86 per cent of the farm debtor families incurred 6.36 per cent of the farm encumbrance for improvements; next for this purpose is the North Atlantic division in which 7.32 per cent of the debtor families incurred 5.20 per cent of the encumbrance; in the North Central division 6.64 per cent of the debtor families incurred 4.09 per cent of this debt for improvement purposes; in the South Atlantic division 6.26 per cent of the debtor families incurred 4.94 per cent of this debt for this object; and in the South Central division the percentage for these families is 3.95 and for this object of encumbrance 2.96.

Farm Mortgage Debts for Business Capital

As an object of farm encumbrance business induced 1.62 per cent of the farm debtor families to incur 1.95 per cent of the farm encumbrance; in the South Atlantic division, 4.13 per cent of these families and 4.73 per cent of this encumbrance; in the Western division, 3.56 per cent of these families and 3.84 per cent of this encumbrance; in the South Central division 2.43 per cent of these families and 4.84 per cent of this encumbrance; in the North Atlantic division, 1.76 per cent of these families and 1.98 per cent of this encumbrance; and in the North Central division, 1.32 per cent of these families and 1.49 per cent of this encumbrance.

Farm Mortgage Debts for Personal Property

The purchase of machines, domestic animals and other personal property accounts for the mortgages of 2.77 per cent of the farm debtor families, and 1.19 per cent of the

farm encumbrance; in the Western division 3.41 per cent of the families and 1.77 per cent of the encumbrance; in the North Central division 3.37 per cent of the families and 1.53 per cent of the encumbrance; in the South Atlantic division 1.54 per cent of the families and 0.51 per cent of the encumbrance; in the North Atlantic division 1.09 per cent of the families and 0.35 per cent of the encumbrance; in the South Central division 0.92 per cent of the families and 0.60 per cent of the encumbrance. Among the states and territories the lowest percentage for these families is 0.05 in Utah and the highest percentage for this encumbrance is 13.49 in Montana.

Mortgage Debts for Farm and Family Expenses

The Southern states are the most prominent with respect to farm encumbrance made on account of farm and family expenses. In the South Central division 18.73 per cent of the debtor families incurred 13.35 per cent of the farm debt for these purposes. In the South Atlantic division, 18.15 per cent of the families incurred 11.29 per cent of the encumbrance; in the Western division 6.82 per cent of the families incurred 3.13 per cent of the encumbrance; in the North Central division, 5.19 per cent of the families incurred 2.5 per cent of the encumbrance; and the lowest of all is the North Atlantic division with families 4 per cent and encumbrance 1.59 per cent. The total average for the United States is 5.89 per cent of the debtor families representing 2.83 per cent of the encumbrance.

Minor Combinations of Objects for Mortgage Debts

The objects of real estate purchase money, improvements, business and personal property, two or more combined (except the combination of the first two) represent 5 per cent of the debtor families and 6.15 per

cent of the farm encumbrance. The Western division stands highest among the geographical divisions being for these objects 7.14 and 10.48 per cent respectively. The objects of purchase money, improvements, business and personal property, combined with objects other than farm and family expenses, represent 0.84 per cent of the debtor families and 1.34 per cent of the farm debt. The objects of purchase money, improvements, business and personal property, combined with farm and family expenses, represent 9.83 per cent of these families and 9.52 per cent of the farm encumbrance. All other objects, miscellaneous, represent 2.64 per cent of the farm-debtor families and 2.8 per cent of the farm debt respectively.

Major Combinations and Apportionment of Minor Com

binations.

The securing of real estate purchase money and making improvements when not combined with any other object, induced 71.40 per cent of the farm-debtor families to incur 74.22 per cent of the farm debt; in the North Atlantic division, 82.02 per cent of these families and 83.93 per cent of the debt, in the North Central division 69.84 per cent of these families and 72.71 per cent of the debt, in the South Atlantic division, 64.41 per cent of these families and 65.74 per cent of the debt, in the Western division, 59.90 per cent of these families and 61.54 per cent of the debt, and in the South Central division, 59.21 per cent of these families and 53.99 per cent of the debt.

It was believed by the Census authorities that purchase and improvements combined with other objects, for the entire United States, represented 89.43 per cent instead of 74.22 per cent of the farm encumbrance.1

1 Eleventh Census of the United States, volume on Farms and Homes, p. 143.

The second class of objects including real estate purchase money, business, improvements, and personal property, not combined with any other object, represents 80.8 per cent of the farm-debtor families and 83.51 per cent of the farm encumbrance; for the North Atlantic division, 87.44 and 89.71 per cent; North Central division, 80.49 and 82.77 per cent; Western division 74.01 and 77.63 per cent; South Atlantic division, 71.67 and 74.02 per cent; and the South Central division, the lowest of all, 63.55 per cent of the debtor families and 63.52 per cent of the farm encumbrance. The share of the farm debt due to these objects in combination with other objects would represent 93.68 per cent of the farm encumbrance in the United States.

TABLE III. FAMILIES OCCUPYING OWNED AND ENCUMBERED FARMS WITH OBJECTS OF ENCUMBRANCE 1

1 Eleventh Census of the United States, volume on Farms and Homes,

p. 542.

The purposes for which loans made to farmers through the Federal land banks may be used are specifically set forth in the Federal Farm Loan Act. They are: the purchase of agricultural lands, the payment of existing mortgages on farm lands, the making of improvements, and the buying of equipments. This, of course, excludes spending for luxuries, speculation, or expenditures of any kind for other than productive purposes. Upon investigation, the Federal Farm Loan Bureau found the use that had been made of about $170,000,000 of the more than $212,000,000 in loans which had been made up to the spring of 1919. The results showed that out of every $100 borrowed through the Federal farm loan system, $62 was used for paying off old mortgages and $38 for other purposes. In the district covered by the Wichita bank, $47 out of every $100 was used for the development of the farm, through such as fencing, buildings, livestock, machinery, and the like, and $53 for paying off old mortgages.

The table on page 26 shows opposite each district the amount of the loans granted, the amount applied on old mortgages, and the percentage applied:

It can be observed readily by the study of this table that the highest percentage used for the retirement of old mortgages was in District 1, composed of New England, New York and New Jersey; and in District 11 composed of California, Nevada, Utah, and Arizona. In all of these districts $68 of each $100 was used for retiring old mortgages and $32 was used for other purposes.

These figures are adequate to indicate the purposes for which farmers need long-term credit, and the use they make of it. The most striking point, however, seems to

1 Borrowers' Bulletins June-July, 1919, vol. 1, No. 11, pp. 1 and 4.