In the report for 1880, covering the seven years from 1872, the errors noted above were avoided, so that we have reliable bases for calculation in the reports for 14 years, as shown in Tables I and III. The next question is: On what principle should the estimate for the entire state be made? From inspection of the detailed statements the following facts are deduced: 1. Except in rare instances the mortgages recorded exceed the satisfactions in every county in every year. 2. The increase of mortgages is always greatest in counties whose real-estate valuation is greatest, but not in any fixed proportion. 3. The counties reporting are as a rule those in which the real-estate valuation is below the average. The important counties of Marion, Tippecanoe, Vigo and Vanderburgh do not appear at all, and other wealthy counties only occasionally. The reason of this is that the law does not compel reports and the county officials who comply with it are naturally those in whose counties the business is lightest and most easily summarized.

From these facts it is evident that an estimate by real-estate valuation would be too high, and also that an estimate by the number of counties included, averaging each the same, would be too low. The difference in the results obtained by the two methods is much greater than might be expected. For example, the thirty-eight counties reported in 1880 represent only $153,809,208 out of a total real-estate valuation of $575,441,053, according to the appraisement of the state board of equalization. That is to say, the report shows the returns for forty-one per cent of the counties, but only twenty-six per cent of the realestate valuation. As it is desirable to keep within the limits of certainty, I have used the more conservative method, and the estimates for the entire state given in Table I present the results of a computation by proportion of the counties reporting to the whole number of counties. Possibly, too, this is the fairer method; because, as is frequently objected to statistics of this character, there are some satisfactions of mortgages, and more partial payments, that do not appear of record. This objection, however, is not so serious as it might seem at first thought; for the proportion of such cases is small, and on account of fore

closures, new loans, etc. there is a constant "clearing up" of titles, in which mortgages really satisfied in past years are made to appear as satisfied in current ones. The average therefore is fairly accurate.

On this basis the increase of mortgages in the first period of seven years (Table I) for the entire state was $60,379,232; and during the second period of seven years (Table III), $46,476,652; or a total in fourteen years of $106,855,884; and this amount is an absolutely safe minimum. What relation it bears to the total existing volume of real-estate mortgages can only be conjectured. Perhaps it is one-half-in my opinion less but possibly more. There are no available means by which the question can be determined. It is certain that this much exists and that, at the rate of seven per cent, the people of Indiana are annually paying $7,480,000 of interest on this indebtedness.

To reach an appreciation of the significance of this growth of mortgage indebtedness another factor must be taken into consideration, and it is one to which statisticians have paid very little attention. It is scarcely more important to know what proportion of mortgages were satisfied than it is to know how they were satisfied; because under the laws a mortgage is satisfied by foreclosure and sale of the property as well as by the payment of the debt. Of course the volume of debt is reduced in both cases; but the extent of the reduction by payment is proportional to the prosperity of the country, and the extent of the reduction by foreclosure is proportional to its financial embarrassment. Payment means that enough wealth has been added by the production of the land or from external sources to extinguish the debt. Foreclosure means that the margin of value in the land above the debt has been swallowed up by the debt and that the debtor is so much the less able to meet his unsecured liabilities. Beyond this influence towards general embarrassment in business, there is perhaps no serious detriment to the state if the mortgagee be a resident; but, considering the total volume of foreclosure, where the mortgagees are non-residents it is apparent that the money brought in by

loans has in some way disappeared, and that the financial parasite which before sucked the blood is now swallowing the flesh. Unquestionably the payment of all the mortgage indebtedness of the state would be a public benefit, and the foreclosure of all existing mortgages would be an immeasurable calamity.

In the utter absence of ordinary statistical information on the subject, it is impossible to determine conclusively the proportion of satisfactions by foreclosure to those by payment, but the following facts will aid in attaining a correct conception of it. Prior to 1879 a very considerable part of the foreclosing in Indiana by non-resident mortgagees was done in the United States courts, because it was in some respects more convenient, and because those courts were believed to be less subject to local bias on controverted points, if any arose. I have had made a full abstract of the foreclosure decrees on the judgment dockets of those courts, taken by thirteen foreign companies engaged in the loan business during the years 1878, 1879, 1880, to ascertain the actual amount of foreclosure by them. The result is as follows:

The decrease of foreclosure in 1879 and 1880 here shown was not an absolute decrease, but was due to the transfer of this

class of litigation to the state courts. The forcing of residents of outside counties to come to Indianapolis to defend foreclosure suits became so oppressive that a law was passed by the state legislature (approved March 15, 1879) requiring foreign companies to foreclose in the counties where the mortgaged land was located, on penalty of forfeiting the right to transact business in the state. No new suits were brought thereafter in the United States courts, and the figures for 1879 and 1880 represent only the results of cases theretofore pending. As nearly as I can estimate from the opinions of attorneys representing these companies, less than one-half of their foreclosure on the average was done in the United States courts, the amount varying with different companies. Many attorneys preferred the state courts because the pleadings were less voluminous, the disposal of the cases was more expeditious, and the expense was less. The last-named was the most important consideration, because the mortgagee usually bought in the property for the full amount of judgment and costs and thereby paid the expense of the foreclosure. The thirteen companies named were probably foreclosing at the rate of $1,500,000 per annum at that time; and in my opinion, as well as in that of several attorneys with whom I have consulted, the total volume of foreclosure in the state was at least one-half the total volume of satisfactions, which in that period was about ten millions a year.

A similar conclusion will be reached from another line of facts. On account of the legislation mentioned and on account of losses on foreclosures (which will be explained hereafter), several of these companies have discontinued loaning in this state and have closed up existing business. From the president of one of these, the Phoenix Mutual, I learn that it "loaned a little over a million dollars in Indiana and foreclosed on fifty-three per cent of it." The business of George P. Bissell, Trustee, presents much the same result. Out of 290 loans made, of which only seven are now living, there were 124 foreclosures, that is to say, forty-three per cent of the whole number of mortgages. This, however, does not show the full extent of foreclosure; because in many instances these mortgages were paid by securing new

loans of other companies and remortgaging the same property, so that while the old debt was virtually continued, the foreclosure that ultimately came in part of them does not appear in the preceding statement. I know that the business of these companies was managed as prudently as the average; and I feel safe in asserting that on the average, during the time these two companies were operating in Indiana, at least one-half of all realestate mortgages made were foreclosed. Of course it must be remembered that the period referred to was one of financial depression, and that in normal years the proportion of foreclosure is much less.

If the people of any Western state may be considered thrifty and judicious, the people of Michigan may, and by the official records their condition appears to be as bad as that of their neighbors in Indiana. In 1887 an attempt was made by the bureau of statistics to ascertain the mortgage debt of the state through personal declarations of the owners of land. This is the best method of ascertaining the amount of existing debt; the only flaw in it being that some persons, considering that the public has no interest in their affairs, refuse to give the information. In consequence the returns are less than the reality; but in the desire to keep within the truth, we accept them as accurate. They show (report of 1888) that the real-estate mortgages of the state amount to $129,229,553, with an annual interest payment of $9,451,851, on a total realty valuation of $686,614,741. Of this amount $64,392,580 is on farms, and the annual interest charge is $4,636,265. The farms mortgaged are 47.4 per cent of all the farms in the state, and the mortgage debt is 46.8 per cent of the assessed value of the farms mortgaged. The number of foreclosures made during the year was 1667, and in only 131 cases were redemptions made, leaving a net loss of 1536 pieces of property by foreclosure in one year. The situation apparently justifies the statement of Commissioner Heath that "a very large proportion of the people seem to be in a financial rut, and are unable to extricate themselves."

In 1888 the Illinois bureau of statistics made an attempt to ascertain the mortgage debt of that state by another method.