Financing farm machinery and equipment purchases, 1947

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Title:
Financing farm machinery and equipment purchases, 1947
Physical Description:
Unknown
Creator:
United States -- Bureau of Agricultural Economics
Schmitt, Richard G
United States -- Dept. of Agriculture
United States -- Bureau of Agricultural Economics
Publisher:
U.S. Dept. of Agriculture, Bureau of Agricultural Economics ( Washington )
Publication Date:

Record Information

Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 028444874
oclc - 05947593
System ID:
AA00017386:00001


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0# djAlar TQlume. of new Whih '::b*i)LghV1`by
bL d"h:. dr trad&4-11 aAcordiig to antat:OX4
-al EC6n#)Aqg! The r%Wudet
is to ha)fe. been, d vid,6& aawat GCIU411v,
V jor tlvdiab-u)
me
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804tiono 1*6t jum in,
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lowatt'' VAI Oachinlax7f'. it lwo&. it) a =h
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a 1,
o44, Ltb",, t unt-
ad 04.10:
xwedit us aPount
miuxq7 ar qApxpnt This Va

qozdzit Vie oomon ai-Tpobitiou that:
w M coh,"fti tradowill :far lo%-p.rice4 items
the: cases:inwhidh =ediv:
IT This was pa,

kA
iff er.Onees w$:th regard tehd
6A slovn I t
I'V*', 300
its,
An

ICA" 1"*.o
1,qugh, .1;Sbd vi6chil;,q the 't
r--6pera-toil f&r*&. -u#ed lea.4 q q
a- 06- t&-m did. faijail: twor ot er,
th6 6 OV edit

49=1 1Y., 1:07' 1048 1 iwluded. 06Axt 12,000,.,
aaqple designed td obtain eL;itu
jor geographical divisions.: Result
r, ep Ort etd, b ifi6 interviewe&
f 0 j
ab o ut of th-
zo than, peraent arf
41* pwoft no 'Pover Ltok.


44-

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of various sources of credit by type of, faring. is showt inta ,tr.
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Credit Ararigements ..
V .. ...
The bulk of the credit used to buy farm .iiah e "a" W"S.
survey was extended on single-payment notes.- The re.s.:q..ie i:
sented by installment notes or contracts end charge a6lMmt *W!i
"other arrangements." The term "other arrangements11 is.B)iZi;&a
to cover cases in which the farmer obtained credit frot6ff.u0 W!I
different arrangements as well. as cases that were not VO.c = ,
also Includes cases in which money was borrowed,. or ina i iB R.....
persoam other than dealers on the basis of verbal promises td.
though involving open accounts, were not classified- as finaitw :
counts. The main difference in credit arranembnrts for puraql%
used machines was that installment contracts and charge a.eewi ,
greater for the new machinery while'other' 'arrangemenWtes"9*rov& %
for used machines. Those differences are probably 'due -to'(l i lt
volume of new machines sold by retail dealers- atd (2) the wiit.
,ers who sold to other farmers to accept verb4a promi'see 6f Pk


The single-payneht note was.. the principal creditr*-.sat
except small purchases of new achineryi Vi.re charge asgt.t.nitai
(table 6). "Other arrangements' were nearly as isrtmat, 64'. IwIiq
:notes for the very few large purohnses pf'.used mpchir'Wa qOCt
sample The installment contract was of substant' igportne a
purchases of all sizes. .
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H k *^ Retail dealer

Individual
Farmers Home
Fin.once Compc
> S '''^ Manufacturer

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CREDIT ARRANGE
(Bs iaud on. dollar amount o
^HHmrL: '*lSingle payment
BMi:^ '*f Installmpent con
lS ^" Charge account

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ENTS
f credit)
t hate. 2z

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NEH 47297-X BUREAU OF AGRICULTURAL ECONOUICS-. "

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v v V.Ci.LUw uruItLb arreifgtsauunul iuwn hfl IcUJ.W oU II.I-a-I
commercial banks were predominant for both new and used maclnen.>i
importance for new nmachines, were installment contracts at cojtoc-if
installment contracts and charge accounts at retail dealers,,, iali
contrav.cts held by individuals, and single-payment notes held b7y $.
credit associations. For used machinery the. next most inportat..a..
were singlo-paynent notes held by individuals, installment contraot*.
arrangements at banks, and single-pay-nent notes hold by production .c.l
associations. ,, .
: ..-'.:si8
As noted earlier, when credit was used in purchasing f arf La%
equipment it usually was obtained in an amount large enough to cove%24
purchase price. This was true of the credit obtained froan rbt cl"'
lenders, although finance comanies, retail dealers, and mnufact".
the practice of extending credit equal to the fLll purchse lprico
than other lenders (table 9). This probably means that the .cre0. C..
on the basis of tho farmers' entire financial situation rather thi
the basis of the machinery to be bought. ,
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Ne

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939 '07
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't ti0 0
Aliiii ,1 010 000




Tal nmmcieyade9imn ucae:Prcnaed bqtio ftenm ro
acori& oexet fcrdt 4ed ornw n T~dmchnsb sz o pueas4..nted
States -1.94
- - - -



N e ma h n r n g i m n
26-0 oecet 07 1 02!

14 8 ,1
5 1 -5iiiiii 4 5 7 2i24-3
ii 9 eret1
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t cost of.

I Xew Ma0hinery Ub ed:,machinor,,r
RnA ITAbarwAJ
t

18
:44.: 23 28
th Mral .14 33
th* QZti&i 17 30
19 22,
30 2-0
32
20 22 97
26


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90 z6
17 20
-16 16; 17
'Aild, tti7k.: 17 P-4
26 36
Ij 10 20
21 .5
.20 39
2 30




R- -06 14

16, 1.8
20 27
& 0
.30
-h.

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Tabie 4.-. Urm mac'hinery and equipment purchases: Percentage distribution b.f amo=t o f edit -used, a
to source, for n ew and used iftachinery, by size of.purchase, Tinite& States,-19 7 7"
- -- - - - --
'gi-ze-o-f -o u,-r anas e
SouTee - 0 lar
ES1 - 4- -
Tn7der 100- 250- 750 1,000- 1,500- 2,5-9
50-99
499 749 -999 1199 an&
3-P -
Percent Percent Pbrcent Pefeelit, Percent Percent P er, gont Pergent keitil

New.machinery and equil2ment op

Bank 15 18 34 42 56 55 52 53 113
-1etail dealer 64 27 4o 28- 30 15 12 15
Production
Or-p-dit Asso-
Ciation 3 12 9 17 16 11 12
-.Individual 18- 23 3 5 4 10 11 6
.2 0
Finance company 0 0 2, 0 2
Farmers Rome
Administration 0 13 9 1 0 7
Tanufacturar 0 0 3 0 0
Other _I/ .0 7 0 0 4 6
-5- -7-
Total 100 100 100 100 100 100


Us ed maghinerv and it "i t
35 51 q
'I 40 1 7Z, 5
3 (> .34 29 3o,. 7 17 43

Qreai As s
5, 12
Home
ila"tvat i On, 11 -0, 10
Pany
loam ;91
5.
4













-Newmachl EZCI g

66
-30
11 17- 12. 24 :.24


on 18 35
Ari auod, 14
-!Uawe COMPOV", 5
3

3, 6 0
0 0
7 0 0 _29

100 i0o 100 100
- -- - I - -

UpAod machingZZ aLd ogRIMI.)ent
12 65 61
53 95 36 38
Iirtdividual 9 16 -0 22 2 55'
4-77 Production

'Assaciation, 4 -o 10 0 3, 10 20
Rarmers Rom'
A&das trat i on -21 3 0
2 0 37
linance ampanyl, 4
deal'er 0 1- 5 0
01
L
8
7 102
't -100 100 '100 T o -
if 1,4 6 1 U44 0- mb i iAt- jim' 7 Distpjb.J= ba 0, than 100 ens 'a.-I.
:4-

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jTr- arm fma
It 6.. F chin)ry and aqui inelit .xchmes. ereentageAl tributA
p on- of pmo, of cr OdIt
to credit arrangement.. for-purehase of, new and used maah,Aery, siza. 8f pWchaze,
States, '1947
--- - -
-trodit Size -.of purchase,
Under ItO00- Y*00-.:
50-99 100 249 250-,499 500-749 750-999
Jg - -
Percont Percmt Percent Percent Percent Percent Percent pergmt

New machUn a and gguiRment

SimgI aymexit
note' 43 .47 53 67 58 66:.
lattallment
note or
coztract 13 35 24 -35 25 17 30
h oLrg 1.8
account 48 .3 18 12
.0- - -
'O'G
100 100, 100 lob 100 10 Z


Used _:andgaul nent
to 60, 50
53 70 .67


39"
contract.... M
ajapr gp, ao Cot,*It .18. 0 7
4-

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Ilk
Rei =a and


:62 69 51.
..29 32 8
_4 43 44 23. .35
t 8. 2 6
S
loo 100 100.
Total 100 100 TOO, 0.0


LOlvd napMnery, and a gui-on-ent

p
.49 2) A 64 69 61 8 57
tti-I t
Inen
-e 0
on -ract 43 18 2-9 20 92 2
2 2: 0.
ch;T$4&, actourit 2 6 5
Ot 0
_3

100_
p 100 .100
tzl .100 loo loa 100 100
4-
Clascified taodrding to pkincipal pi-o7duct -sold in' 1947,
In-cillades corfainiat ions' of the-above txrangenents, v e rbr t 1 pronis as, rind arrangements -no t cleay dds ai i
Is tAbi M or. 'ba e on, han, 10G., caaaa
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Bank
S Retail dealer
dividual
S Product ion Credit
SAssociation
Finance company
Farmers Home
Admninis tration
Manufacturer
Other 2/
All sources


Bank
Individual
Production Credit
Association
Farters Home
Administration
Finande Company
SRetail dealer
Other 2/
All sourcep


i/ Includes combinations
clearly described.
2/ Includes combinations


Percent I Percent 1 Percent


38
4
3


. 1
0
4
50


6

0
1


0
0
5?


of


e:x ::k' ;. :,. :A ig.,?'


9 .0
7 6 X* :
6 0 '-W

2 0- 3 3,":
1 0 0.

.3 .0 o 0. .,0:::0ii:|
"I S ......
1 0 0.
1 0
i o o '-: .o i* :
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30 .. 6 .;

'. 6*. *' 4.? '** i
Used machinery and sl :J;" |
.V
0 ------ 4 -] ..-
o :
515

44
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4 ". .

4.0,.
1 1: Q
1 *0.o.-, rs.': .-; i
23 .*2 17 .;|


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arrangements, verbal promises, -an".


of sources.-


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pvt

-P6d-uctibn A.:Farmers
Mai ll
"to. cas t tr e4it' ..,Home 1 0
0. Apt.. bn
t xw. & r turav
Or rdMA R.!aj !4 at
r n_7 Percen

... .... xew ln_kchiaea, 2gARpen-t,


0 0 3.1 1 0
2 0- 20 34 '13
92 .:6 '22
3 9
4 0
7
0 6 8 44 44
7f
1,00 loo
100 loo loo

--- -
J,
Us ed Machine= ana 2guiRmsu%

17, N, 0 0 0
.23 _8

51-75 10 10 38 32 9
76-9 8 22 9 2
loo: :: ... 25 80
IL -Al
100 loo I OLO
Toul 160 loo loo 100
- -
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UNIVERSITY OF FLORIDA


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