Sounds a bit high, but this is a dealer. I don't know how many JS3 Ind Diesels were built. Is the dealer selling it as a collector piece or a work machine? 1960s backhoes generally sell for $1500-$4500 here in PA where I live. The Backhoes from that era are rather small, slow and weak by todays standards. The 206 diesel was not the best engine MM ever built, but OK if main bearings, rod bearings and wrist pin bushings were replaced regularly. Of the MM engines I've seen with rods out the side of the block, more have been 206 diesels than any other model. A fellow posted and sold a gas JS3 Ind with a Case loader on YT photo ads just before Christmas, 2002. He was asking $2400, don't know what price he received. If it were my money, I'd try to get this tractor for less--$6000 seems like plenty--and that's only because it is a "collector piece". In the construction equipment market, old pieces rarely bring more than a few cents on the dollar of their original price.
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