Farm-mortgage debt reduced 952 million dollars, 1940-44

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Title:
Farm-mortgage debt reduced 952 million dollars, 1940-44
Physical Description:
6 p. : ;
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English
Creator:
United States -- Bureau of Agricultural Economics
United States -- Bureau of Agricultural Economics
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s.n.
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Washington
Publication Date:

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Subjects / Keywords:
Farm mortgages -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
non-fiction   ( marcgt )

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University of Florida
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All applicable rights reserved by the source institution and holding location.
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aleph - 028449492
oclc - 653257049
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AA00017384:00001


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UNITED STATES f PAT)T 0f AtRIOULMN
Bureau of Agricultural Iconoidos
Washington 25, D. 0.


July 1944


MUTOAG DT RZEDUCoD 952 MILLION DOLLARS, 19o40-44


Total farm-mortgage debt outstanding on January 1, 19144 is estimated
at $5,634.,772,000. which is a reduction of $952,000,000 from the total out-
standing 4 years earlier. Almost $550,000,000 of this reduction occurred
in 1942 and 1943. The reduction of 13 percent in these 2 years of greatly
Iaoreased farm income compares with rednutions of 15 percent in the period
1932-33 anA 8 percent in 1923-24 when debt liquidation as greatly accel-
e-rated by foreclosures and related distress transfers of mortgaged farms.
On January 1, 1944 the farm-mortgage debt was almost 8 percent below that
for a year earlier, 14.4 percent below the total for January 1, 1940, and
almost 48 percent below the peak-year total for 1923. At the beginning of
'1918, roughly 4 years after the outbreak of World War I, mortgage debt was
$6,536,860,000, or almost one-sixth larger than at the beginning of 1944.


PERCENTAGE CHANGE IN OUTSTANDING FARM-MORTGAGE
DEBT. JAN. 1. 1940-JAN. 1. 1944




-I?.? / /.? -25A -5.s *0 .4
-17.7.-19.
-248 .. .7.
-5.2".6.0

3 -6 -PERCENT
DECREASE
i24.0 and over
516.0-23.9

8.0- .5.9
UNITED STATES 00- 7.9
-14.4 PERCENT W4 -7
INCREASE
M0.8 and over


U. S. DEPARTMENT OF AGRICULTURE.




*. ** 1. -
IV. D -OITR



S"Ij S DEPOSITORY


NEG 43768 BUREAU OF AGRICULTURAL ECONOMICS


Figure I


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gone I.- ftsim084 fum-maltmaim dot, vy states. MW jimmarr 1. 104, for mel*0444 you of
'Norld *m I a* Urld Ow. 11, AM for the Peak Fear 1923


Farm-mosigmige dot, parcentNte I Para-martgage Asibt
state change
and
"VISION
l9ho 1.943 1944 44 1.914 1.93A 19,23
--T.-ow --T.-ow --I. -0m
dellars dollar@ dollars Percent peresit dollars dollars dallard Percent

Was. 24o75T 20,051 17,159 -14-6 -30: T 14 Q 19.125, 2T
6 r -950 3
11.22D 11:5 1.0 1 6 5.062 9,320
2 22-394 L,4.-;
2T 4T5 912 6.2 -q 428 25-233 31. 5-37
Massachusetts 1.945 43. 43:677 -5 :10 9566 AM 34,263 .13-0 1,
am" Island .121 I= 3, 693 2.9 2: W'S 2 -
dOmmastiont 36.A2 32,999 L".). -12.1t 846 24.110 'S6. 5.5
EW mofflant 150,499 139,093 1.5 9.0 up).'405 2042
INS Tork 786 169 271 *6.65l 6.9 :196:3 20 191.647 242.511 .1
mm Jersey T91 4B:540 45-80 5-5 a la.-4 25.729 49,01 6
himmaylvania 131,579 125.101 1213.443 1.8 6.2 n6. 126 106 IT2. 2W AL
vialim Atlantic 372,155 8 -12.4 337.5 .341a4a 463,332
ado 239 9 242.6s6 231.446 4.6 e 144,2& l"An m.m 31.3
In"Ons, . 4,5 129 203-10 -11-3 .0 146 740 179,406 293,4M gel
Illinois 9TO 373,981 325 -12.9 -22.2 335:369 413,224 .705,644 W:3
Michigan 174:308 i6i, 231 150:413, 6 -13-7 156.711 207,232 m, 664 P.?
'VISDOOSIR .. J56 936 313.933 5: Tol-9. 4 11 k*. 372 WA.946 37A Aq:
mast North Central 9.3 -15.9 5 2,092,693 ?2.1
Minnesota 3T5.990 395-623 J64:T69
6 5.4 3.0 261-315 426 6D6 it 4.4
Iavm . 705.599 T10-995 52 90 g.2 7.5 659,soi 9S603 1,535:9 3
Missouri 2".377 21$ 962 20T.32T 268 0 352 31-6"
North Dakota 141,230 i22:633L 105-647 :,Z:31 215: 1 16D: 219:31 .3'1'2'9'7'0 36-"G 4*4
South Dakota 127 706 114,740 205-042 9:5 :11:7 151 J63 230 451,291 51.9, 96
ftbrasks ... :926 261,153 232,991 -11 0 2 8 1.95: 30 3 1i 691,732 62.K 117.g
KRA&" ;2.248 227.900 195.139 24
= 3 -31.1 111 577 M. W %7.3q? 55.4
Ifest North Central 1.8b3,150 5 5 3 2,970,562 =2 7 W

06 9.564 2.0
Delaware 7 957 9,347 .8 095 3-0 7 4T
0:9951 1:TS9
X0271and 46:675 43,384 42:994 1.1 8:1 L7 396. UP. 24T 5.6 (615,
Virginia .. 72.299 69.406 65 124 Ita 9.9 30-89T .1" $3,374 42.s sq.
West VArgials: 21.969, 20-193 17,986 -10.9 1 15.1 9 73T 8,820 26-322 9A 199,4
North Carolina 90,071 U1645 so 929 9.9 -10 3 22:36T 36.92E, 81.366 65. L IM
South Carolina 45-948 45-950 42:9 6.6 6:6 23. 363 31.050 96, 154 .9 216.1
Georgia 32.037 99.916 85,79 4.6 4-5 37. ja6 53.053 IM.879 9.2 J
Florida 38-101 33,1?L 33. W4 1.3 -12.6 3*2 4'.,: '4
South Atlantic 405,051 376,904 5.4 -.=-?.O a 129.6'
F4MtU*kY 109 25 los,6s? 1029915 5-3 39, 3 115,793 J6.0 U,
Tommem" 92:614 77,036 To 9.0 -2t.3 33o 54:651 33,091 1.4 52.0
Alabama . 31-959 99.0563 W: 8.7 1.5 31,766 26.5" -67,569 -10.1 i36.4-
mimsissippi 100.36s 99.9 9- 9.6 9.9 40.6% umm 232-942. k.? ma
Amet South Central 394,094 373,744 343,727 19.0 =ja 145,66T 117, A7 W6,395 29.5 AM,$
Arkansas 72,513 79,405 TT 519 1.1 6.9 34',364 50 737 117, 4T.6 132.,l
Louisiana 55,098 5 54-132 5-1 1.9 30P 311311t 5T, 3 3.3 934
Oklahoma 153.6y? 151'5 14: ." 0 6.4 7.7 10 p 180,2p 260
Tex NO . 431.74b 386'271 34t. 22 -10.5 -19.9 27 A4 rj%. 7s6
West South Central 713,03b b73.259 143 W-0 Q15,b90-
Nontans . 66.119 4a.i43 39,876' -IT.2 -39-7 60, IL" 116. 226 192,02 96 4 fig's
US . T9 763
4 70,790 62,Q9 -11-5 -2D-5 35,477 75.68T 19-T37 113 3 1"'.1
3 :009 25.624 22.3T4 -12.1 -34-2 4 1
C101cra"go. 61,06 54.235 -21- -2T-7 45':9"' 56N: 07 2'093: 91-1 1
Im Mexico 24 19 24, So 2.8 9.5 is, U.,2
Arizona .. 23 A 26: 2,951 22. U? n TL7 93-1,
9 -5-2 -13 7 38T 7:6'
36.650, 2T.977 22-113 -10-9 -38:0 10, 71 -22:154 52,095 in
Nerfs da . 10.213 8.204 7,071 -13.8 -30.9 1,949 9,Z70 25.053 14
mountain 35T. 190 -7292,681 g5g.752 -11. 191, 8?2 115-OM
vashingtom .. io6,9 7 83,028 9-5 -22-3 92-356 94,755 152,920 1 1 .6164
Oregon 90.31 94, P, $1, IZ3 3*7 -10-2 51@305 69"092 1 93-2
347 m 1 R13-368
California 056.594 .3 1 2.6 -14.9 .4m 339.28D 1 .0 -S-3.5- 30.4
Paelf Ic -8-T 32, 559 511,524 4.0 44.9
-45.4 --rn
MIM 920M 6686- 399 iji?,16s a-634,772 7-9 -44-4 4.707,358 6.536,36D 10PT55.621 39.9 656

Includes District of qplufbj&
Ll Include@ loans call*& for foreclosure by the Federal land banks and lrodairal.rarm Mortgage Cor"ration of 3& thall are not
distributed by states.




7
,13-

Changes in fanr-mortgage debt during the 4 years ended January 1,
1944 have varied widely by regions (fig. 1)o A decline occurred in all bat
five States Arkansas. Delaware. Georgia, Noev ampshirse, and Vermont. RBe-
daotions of more than 30 percent occurred in six States Kansas, Maine.
Montana. Nevada, Utah. and VWyoming. The largest percentage reduction for
any geographic division vas in the Mountain States (27.6 percent), and the
smallest was in the South Atlantic States (7.0 percent).

During 1943 mortgage debt decreased over $480,0,000, a reduction
of almost 8 percent as compared vith 5o7 percent in 1942 and less than
1 percent in each of the years 1940 and 1941. Percentage change during
1943 range by States from moderate increases in three States Maseachu-
setts, Nowv Mexico, and. Vermont to substantial reductions in Montana and
Utah of 17.2 and 18.8 percent respectively (table 1). By geographic divi-
sions the percentage decrease ranges from 1.5 percent for the New Rkgland
States to 11.6 percent for the Mount.in States. Reductions of more than
one-eighth occurred in eight States Illinois, Kansas, Maine0 Montana,
Nevada, North Dakota, Utah, and Wyoming.
i
Changes in mortgage holdings of principal lender groupso- Changes in
the farm-mortgage loans held. by the several lender groups have varied sub-
stantially from the over-all change in the mortgage debt (table 2). Out-
standing Federal land bank loans declined about 15 percent during 1943 as


Table 2.- Farm-mortgage debt: Total outstanding amounts held by selected lending agen-
cies. United States. January 1. 1940. 1943, and 1944
Amount outstanding : Percentage : Percentage
Lender group January I : A distribution
Lder 1940 1943 1944 :19'4- :194 : 1940 S 1943 1944

dollars : dollars dollars : Pct. : Pot. Pct. : Pct. s Pct.
S a a a a
Federal land banks /:2.009.807l.718.3l5:1.452.,933: -27.7: -15.4: 30.5; 26.1a 25.8
Land BDak ommis- 1 a
sioer ......... 713.756: 543.884: 429.721 -39-8: -21.0 10.8: 8.9: 7.6
Join toa land :
banks 2 ......... 91.726; 37,015: 10.087: -89.0: -72.7: 14: .6: .2
Pa : : : a a : :
istratio ... 38.-566: 163.681: 176,595; 357.9: 7-9: .6; 27: 3.1
Life insur e a a,1- I a
pates ..M.. 984.290:1.042.939: 986,661: .2: 5.4: 15.0: 17.0: 17.5
Insured commercial L i : 3 : i
bonks........a.a. 534.170: 476.67-: 448.433: -16.1: 5.9 8.1: 7-8: 8.o
Others ..... 5 1 48.;: .2.214.05422.13 46:2130.342: 3.8: .2: 13-; 34.9: 37.8
a a a a a *
UNITB STAES ...... :6.586.399:6.117.168:5.634.772: -14.4: 7.9: 100.0: 100.0: 100.0
jf Includes regular loans, purchase-money mortgages, sales contracts. loans in sus
pqnse, and loans called for foreclosure.
2_ Includes joint stock land banks in liquidation snd in receivership.
f/ Includes tenant-purchase loans farm-developat loans, and fam-enlargment loans
as well as real estate loans made from State Rural Rehabilitation Corporation trust
funs
SBatsed upon direct reports from life insurance companies. official reports to State
Insurance camissioners and Best's Life Insurance Reports. Includes regular loans.
prchase-money mortgages. and sales contracts.
Y1 Includes loans made by individuals and other miscellaneous lenders.
















at the beginning of 159 vete only about 10 percent of. tb0q,:* bA2A|r
th years earlier. aS .. 1 +"

Mortgage loans arii out of the program oarrie4, on by tkMe ."
Security Administration continue. to increase in 1943 a&a on January
19144 amounteda to $176,595.000 as compared with $163,681,000 a ear ecr'l ,i
and with $38,566,0o0 4 years earlier when this mortgage-lea pregrp
beens in operation for sly a short time. Loans heldW& by- i. "d a i.::i
other misoellaneoum leader. shoved. little net change t zrig .19k1&3
the beginning of 1944 iore about 3,8 percent below the tot4 pai ^9
earlier.

On January 1, 19114 life insurance companies held a larger pnporttep I
of the total farm-wmortgage debt than they held 4 years earlier. On t.i:.!
later date insurance companies held 1VT.5 percent as compared wIth 15 pflw2 1
cent for January 1, 1940 (table 2). Individuals and. oters hell 37. pe-.- i
cent for 1944 and only 33.6 percent for 19140. Insured commercial bam,.
held about the sam proportion of tho debt on Janawy 1, 19414 as thqy dSA. "..
on Janummary 1, 1940o. ar Security loas were only 0.6 percent of te to tal
debt on January 1, 1940 bat hae since increased to 3.1 percent. this is
the only lender which shovel a significant increase in. loasme held. driwd. I
the 4 years. .
.*::.... ,.:
the loans held by the federal land banks, the Land lank Ooamissioner,
and joint stock land banks are, for each of the agencies, a salier per-. i
ceontage df the total farm-mortgage debt on January i 1 944I than they wverae .
on January 1.9140. The proportion of Federal land bank loans hbU deoliened .
from 30o5 percent to 25.8 percent, Land Bank Oommissioner lolass decliint
from 10.8 percent to 7.6 percent ad the Joint stoak lad beak loans fell
from 1.4 percent to only 0.2 percent. :

Debt trends in World War I and World War I oomre&.- Se trea 'd. ...
mortgage debt so far during World War II has been in hahsp contrast to.
that of World War I. arinig the I4 years ended January 1, 1918 sortgape.i.'
debt rose from 1$4707,000,000 to $6.537.000,000. an increase of almost 39
... :': .:#:: ,,. "Ji+






-5-


rooent (table 1). This compares with a reduction of 14.4 percent in the
Years ended Janary 1, 1944. The increase daring the period 1919-23,
however, was much greater than that for the period 1914-17. The average
annual increase for the period 1914-17 was $457,376,000 as compared with
$658,010,000 for the period. 1918-23. In three geographic divisions South
Atlantic, Zast South Central, and. Mountain mortgage debt more than
doubled in the 5 years ended January 1., 1923.

The volume of farm mortgages recorded during 1917 was $2,017,000,000
as compared with $1,403,000,000 in 1914, an increase of almost 44 percent.
According to estimates by the Farm Credit Administration, mortgage record-
ibgs during World War II rose from $772.500,000 in 1940 to $915,800,000 in
1943, an increase of less than 19 percent. The average size of mortgages
recorded in 1943, however, was over $3,000 as compared with $2,640 for
1917. In 1920, the volume of mortgage recordings amounted to more than
$3,600,000,000 and the average size of mortgages recorded reached a peak
of $4,270.

When comparing the absolute amount of farm-mortgage recordings in
the two war periods, account must be taken of the longer average terms off
mortgages recorded, in recent years than in the World War I period. When
the period of years for which loans are made is long, only a small propor-
tion of the outstanding loans come due and must be paid off or refinanced
each year. With a larger proportion of the loan contracts now providing
for annual repaments, more of the debt liquidation takes the form of gra-
ual reduction of loans rather than refinancing the amount that cannot be
repaid at maturity.

The ratio of mortgage debt to the value of all farm real estate rose
from 11.9 to 13.1 percent from 1914 to 1918, whereas it declined sharply
from 19.6 to 12.4 percent from 1940 to 1944.o A major part of the decline
in the ratio after 1940 is accounted for by the sharp rise in real estate
values. Both mortgage debt and land values rose during 1918 and. 1919, but
with the fall of land values in the early 1920 's and the continued rise of
Mortgage debt the ratio of mortgage debt to value reached 20 percent in
1923. the ratio neeatinued at that level up into the early 1930's.o From a
high point of almst 28 percent reached in 1933 the ratio declined to below
20 percent in 1940 and. has since fallen below the 1918 level.

In 1918 all of the southeastern States had. debt-to-value ratios sub-
stantially below the national average, whereas in 1944 Mississippi and
Alabama were above the average and. most of the other southeastern States
had a higher ratio of debt to value than in 1918 (fig. 2). Several of the
Mountain States, however, had much lower debt-to-value ratios in 1944 than
in 1918. Two areas had relatively high debt-to-value ratios in both years.
These are: (1) Iowa, Minnesota, North Dakota, and Wisconsin and (2) New
York and a number of the New hngland States.













flier S APERCEAO
". 6ALL'FARMS, JANUARY. i.r t Alt
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UNITED STATES
VALUE 45,592,000,000 DOLLARS
DEBT 5,634,772.000 DOLLARS*
PERCENT 12.4


AM: M :r :1


1018


; -.


.". : : -


UNITED STATES
VALUE 49,979.664.000 DOLLARS
DEBT 6,536,860,000 DOLLARS
PERCENT 13.1


PERCENT


.u~nder 9.5 M 4952-!U4 gll.5-13.4 6 13.5.!l.4 :H
"A ...... ( OF 8 0 DOL AR M. b s i, ,a",
*: :; .: -. F

t....ANS CALLED FOR FORECLOSURE OF 94,000 DOLLARS MOT hIS fSaFA


OF AGRICULTURE.


rEO. 4311 1
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