1. A total of 25,993 farm mortgages were analyzed and tabulated in this study. This total represents all mortgages placed on Story County farm land from 1854 through 1931.
2. The farm mortgage debt in Story County increased in every year except 15 out of the total of 78 years of mortgage history.
3. A study of the debt changes revealed four well-defined periods characterized, from 1854 to 1879, by land settlement; from 1880 to 1910 by rising land values; from 1911 to 1920 by price inflation ; and from 1921 to 1931 by price deflation.
4. Cyclical fluctuations in financial prosperity and depression of agriculture in the county are revealed by variations in the number of land-purchase mortgages, land transactions, foreclosures and prices of farm products. Extensive land-boom activity came to a definite climax in 1875 and 1920, lesser peaks being registered in 1857, 1869, 1881, 1891 and 1902. Particularly severe depressions occurred in the years 1876-79 and 1921-31.
5. Insurance companies and private investors were chief among lenders on farm mortgage security. In the early years, private investors, together with the county school fund, formed the principal source of credit. Subsequent loan history revealed a declining percentage total to private investors and a rising proportion to insurance companies.
6. Between 1880 and 1900 local mortgage brokers, selling mortgages to private investors, were responsible for most of the assigned mortgages. Since 1920, state-wide loan companies, selling to insurance companies, have made practically all the assignments. At no time have assignments of mortgages amounted to more than 20 percent of all loans executed.
7. Throughout the history of the county, one-half of the mortgage credit obtained was extended by lenders in Story or adjoining counties.
8. From 1854 to 1880, 10 percent interest, the legal maximum, was the common rate on mortgages. In the next 20 years the rate on first mortgages dropped to a 5 percent minimum, a rate in force almost continuously from 1900 to 1931.
9. Five years was the most common term specified for mortgage loans; likewise five years was the most common duration of loans. An exception was the period prior to the Civil War when one year or less was the most common specified term and duration of loans. It must be borne in mind, however, that mortgage loans whose life was five years or less were paid in many cases from funds secured on a new mortgage.
10. At the close of 1910, a total of $5,900,000 in mortgage debt was outstanding; 10 years later land purchase activity, in the main, brought the total to $22,900,000. In consequence of the drop in prices and as a result of foreclosures, assignments and scaling down of mortgages, the total debt declined slowly and continuously after 1922 until it reached $18,000,000 at the end of 1931. Little change occurred in the amount of land mortgaged, the percentage of all land covered by debt being 45 in 1910, 58 in 1920 and 59 in 1931. The average debt per acre, on the other hand, showed wide variations, being $37 in 1910, $111 in 1920 and $86 in 1931.
11. The average debt per acre in 1931 varied in the 16 townships of the county from $70 to $102. Similarly the percentage of land mortgaged varied from 47 to 76.
12. Of the 1,651 farms with mortgage debt in 1931, 517 or 31 percent were mortgaged for $100 or more an acre Five hundred and twenty or 32 percent Tor between $75 and $99 an acre, and 614 or 37 percent for less than $75 an acre. Only 66 farms in this last group had a debt of less than $25 an acre.
Murray, William G.
"An economic analysis of farm mortgages in Story County, Iowa, 1854-1931,"
Research Bulletin (Iowa Agriculture and Home Economics Experiment Station): Vol. 12
, Article 1.
Available at: https://lib.dr.iastate.edu/researchbulletin/vol12/iss156/1