The Manawatu Daily Times U.S. Farmer's Difficulties

Manawatu Times, Volume LVI, Issue 7071, 2 February 1933, Page 6

The Manawatu Daily Times U.S. F arme r' s Difficulties

*»•**£ ‘SSHSikt’ite only 4 p-n* cent, before the war, while interest on mortgage payments absorbed about 8 per cent, compared with 3 pel cent. The trouble in regard to taxes concerns the impositions of the states not the Federal Government. In most states the General property tax is still the backbone of the revenue system. The worst of such an impost is that it has no dnec relation to income. As farmers are men of property, but nowadays not of income, their complaint about the inequality that arises under this tax is understandable. It may be argued that while farm incomes have gone down, so has the value of property. But reductions m assessments are hard to obtain, and even when applications are successful the states in times of falling incomes have to increase the rates, leaving the farmer no better off than he was before. Some of the mortgage trouble undoubtedly lies at the farmer’s own door. The urge to expand on borrowed money was in part a carry-over from pioneer days when the entire continent lay open to development, and in part an impulse encouraged during the war by the crying demands for foodstuffs. But the load the farmer has assumed, heavy as it is, would probably have been bearable if incomes had kept up. When these go down, the mortgage.bill does not stand still, as it seems to do ; since it can be paid only out of income, it actually advances. Secretary Hyde minces no words in advancing solutions. The mere fapt that he treats these problems at all in a report that is generally confined to a review of the year’s happenings is an indication of how strongly lie feels about them. He thinks that in the interest of the nation and in the long run of the creditors, the pressure on the debtors for mortgage payments should be relaxed. About this there can be no doubt. So much mortgage indebtedness exists that if the creditors do not look upon their legal rights with a social rather than a creditor eye, the United States will some day be confronted with all the problems of absentee landlordism arising out of foreclosures. The national implications of the problem are pushing themselves into general recognition. In lowa a plan has oecu evolved whereby councils composed of representative members of the community have been established under the aegis of a state agricultural council, at which the mortgage difficulties of the farmers will be heard. Those debtors whom the council members feel are reliable and worthy are promised help so that they will not have to give up their farms. Here is co-opera-tion worthy of emulation in other states. The tax situation is more complicated. Mr. Hyde thinks that the states should put greater reliance upon income and excise taxes, but the states, faced with swollen budgets, are already trenching upon this field, which happens also to be occupied by the Federal Government. Overlapping has caused tax authorities to plead for some agreement between federal and state agencies for a fresh demarcation of tax function. The need for ironing out the tax inequality of the farmer adds point to this agitation.