The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1914-05-14
DAKOTA FARMERS
PAY 7,2 PER CENT
ON THEIR LOANS
Rates Are Highest in
Western South Da-
kOta.
RATIO ON VALUES
RATIO ON VALUES
H.NF Patterson Finds That
Highest Priced Lands Get
Lowest Rates.

Aberdeen, S. D.-That scientific
farming and high priced farm lands
will secure the lowest rates of inter
est is shown in the investigation just
completed by H. F. Patterson, sup
erintendent of the South Dakota Bet
ter Farming association of Aberdeen.
Mr.. Patterson's statement follows:
"For a number of years / have
been deeply interested in farm finan-
ce and have long wanted some ac
curate information about rates in
South Dakota. Early in the season of
1913 / addressed letter to nearly
5000 farmers living in the different
parts of South Dakota. | asked these
farmers a series of questions rela-
tive to the financial condition in their
locality.
"These questions had reference to
the rate of interest paid on long time
loans secured with mortgage on
real state, collaterally secured loans;
annual commission charged on money
secured with a real estate mortgage;
interest paid on money borrowed on
personal notes; length of time for
which money is borrowed on a per-
sonal note; length of time for which
money is secured on real estate
mortgage; the average value of i'm
proved farm land; the amount bor-
rowed on a quarter section of land
and the use to which money would be
put if the farmers were able to Sc
cure a cheaper rate of interest.
Nearly 5000 farmers answered
these inquiries and their answers
have been tabulated and summarized
for the entire state and for each
county. The following shows the sum-
mary of these replies.
General Rate is 7.2.
"The farmers in South Dakota are
paying 10 per cent interest annu-
ally on money secured on real es-
tate mortgage. The interest paid on
loans divides the state into four main
divisions: First, per cent and un-
der, area. Second, per cent area
which includes the rate under per
cent and above per cent. Third, 8
per cent area which includes the To-
cality having a rate above per cent
and under per cent, and fourth, the
8 per cent and above area.
"In seven counties the rate is less
than s per cent. These counties are
located in the southeast portion of
the state. They correspond to the To-
cality that is practicing diversifi-
ed system of farming. The farmers
have livestock and are growing a
large acreage of corn and alfalfa.
Seven Per Cent Area.
"The farmers living in the Jim
River Valley are paying less than Z
per cent for the money secured on
real estate mortgage. This locality is
bounded on the east by the 6 per cent
counties and on the west by the Jim
river. When we get west of this river
the interest rates are higher. In study
ing the system of farming in this To-
cality we also find that the farmers
are practicing good system of farm
ing; are using rotation on their
land, and are feeding large percent
age of their products to livestock.
The eight per cent area is located
on the fringe of the per cent. The
farmers here have. correspondingly
smaller amount of land improved and
are also getting away from diversi-
fled farming. These people are prac-
ticing the one crop rotation and their
! fertinity is being gradually decreas-
: ed.
Above Eight Per Cent Area.
with but one exception the coun-
| ties having to pay more than 8 per
cent are located west of the Missouri
river. Further. this division might be
sub-divided into two parts; namely.
above and under per cent. In the
south half is found the lesser rate.
When we study this locality we find
that some land is irrigated and that
the farmers have a certain amount OF
live stock. In the north half of this
division there is but little irrigation
| the country is new, and the home
steaders and settlers are following a
one crop system of farming. Only a
small portion of the land is under
cultivation and because the risk is
great in this locality the interest rat
es are high.
Rates on Short Loans.
\ "When a farmer in South Dakots
borrows money secured by collater
al mortgage he pays 9.4 per cent ant
/, when he borrows money on his note
he is compelled to pay 9.s per cent
In studying the situation of the en-
tire state it was found that the rate
of interest charged on money secured
J either by note or by chattel mort
gage corresponds exactly with the in
Il terest rates on farm mortgages. Th,
|system of farm management largel.
Il influences the rate of interest. !
! there is sure system of farming
|; the rates are lower.
There is 1.S per cent annual.
paid as commission on the none.
: borrowed and secured by mortgage
Many people will believe that this i
exceedingly high but when the aver
iage for the state is considered an,