The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. MONDAY, APRIL 10, 1933. THE AMERICAN FARMER.

Auckland Star, Volume LXIV, Issue 84, 10 April 1933, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

MONDAY, APRIL 10, 1933. THE AMERICAN FARMER.

Tfer the cause that lacks assistance, for the wrong that needs resistance, For the future in the distance, And the good that v>s can do.

An attack on the three great problems of the farmer—heavy mortgage debts, low prices and lack of export markets —is planned in the farm relief proposals of President Koosevclt. The seeds of this trouble were sown mainly during the war years. ' From 1915 to 1922 there was a great expansion in borrowing by farmers. Encouraged by high prices and eager demand for their product?, they added freely to theii debts, mainly through purchases under the instalment plan and by bank loans for machinery, motor cars, wireless sets and other necessities and luxuries. In 1921 prosperity had begun to wane, and from then until 1929 fanners were struggling to meet the demands of creditors. In eight years they were able to pay off £750,000,000 from current obligations to the banks, but their mortgage debts they could not reduce. These, amounting to more than £1,800,000,000, have fallen by one-ninth, mainly due to foreclosures, but' the burden still remaining is far beyond the capacity of the farmers to bear. The new scheme for refinancing mortgages ■will ease it, but the question immediately arises -whether the country will be able to carry this legacy of inflated values. Probably the truth is that the country can do it only if prices are inflated.

Without a substantial rise in prices a drastic writing-down of farm mortgages in America is inevitable. At present prices it requires a much larger volume of goods to pay the debts than when they were raised, but no markets exist for this larger output. On the contrary, markets have contracted, and the problem of helping the farmer to pay is bound up thus with monetary and credit policy and international trade. President Roosevelt's Administration has been using its utmost endeavours, since the very day it assumed office, to reverse the fall in domestic prices, by an expansion of purchasing power. This policy aims to reduce the value of thf dollar, and thereby enable farmers more easily to meet the obligations. And while the debts i are being attacked by refinancing and inflation it is essential that action should be taken to remove the stagnation in international trade. This requires co-operation with other Powers, and it is encouraging to note a determination in America to scale down tariffs. This linking of world interests suggests that the coming visit of Mr.-Ramsay McDonald to America may have far-reaching consequences to the fanner of Nebraska, although at the moment that heavily-burdened producer may not realise it.