The Manawatu Daily Times America’s Agrarian Revolt

Manawatu Times, Volume LVI, Issue 7105, 14 March 1933, Page 6

The Manawatu Daily Times America’s Agrarian Revolt

One of the iniquitous things about a war is the number of times it has to be fought over. This has 110 re^'® 11C ® 1 t - story-tellings of veterans, nor m this instance to the chain of. contentions set up when an Alsace-Lorraine changes hands. E mwht be supposed that the plains of lowa were about as. fax removed from the World War M could be, yet in the American middle West an echo of that conflict resounds as smely as m the Polish Corridor/and incidentally shows that the farmers pro - teins are just the same in the United States as they are m New Zealand.

One who looks into the farm mortgage situation troubling the United States will immediately be impressed with the fact that two-thirds of the indebtedness which has brought agriculture to grief was incurred during and shortly after the war.

While the world was wasting its substance in slaughter the farmer was besought to produce every stalk his acres would yield Prices fsays a well-known American writer) were run up high and then guaranteed. Farmers, _ enjoying a glimpse of affluence and untaught in economic history, put their money into high-priced land and borrowed to buy more. Billions of dollars of investment capital from banks, insurance companies, the Federal Government and individual lenders encoiiraged them. Farmers with years of toil behind them retired, taking mortgages to provide incomes. Buyers of joint stock land bank securities supposed they were investing in one of the most stable forms of wealth.

But with the war over, prices fell. On farm products they literally tobogganed. In 1921, and again in 1930-32, prices dropped until now it takes four times as much farm produce to pay interest on a debt as it did in 1919.

The result is that, as Mr. Eric Englund, assistant chief of the United States Bureau of Agricultural Economics, equitably surveys the situation in the New York Times, not only thousands of farm families are struggling under what seem crushing burdens if they have not already been dispossessed, but also thousands of investors, direct or indirect, stand to lose some or all of their savings. Although probably not more than 42 per cent, of the farms of the country are under mortgage, of these mortgaged farms, the Department of Agiiculture estimates that 50 out of every 1000 are mortgaged for more t-ian 100 per cent, of their value, 157 for more than 75 per cent, and 37 for more than 50 per cent. And Mr. Englund calculates that gross farm income has fallen to a lcy/cl at which nearly all of it would be required to pay mortgage charges and taxes on farms mortgaged at more than three-fourths of full value.

Thus the burden presses upon some with intense severity). And with such serious social consequences that where farm communities have seen members caught between the millstones of the credit system and the price system they have taken the law into their own hands to prevent foreclosures. Bidders intimidated; a whole farm “bought” by neighbours for two dollars 7 cents, and leased back to the mortgagor; announcements by judges that they would hear no more foreclosures; demands of farmers’ organisations for moratoria —these have been incidents of the campaign.

Some observers declare that a farm rebellion in the United States is not>a thi’eat of the future but that it is already taking place; that the processes of law are being set aside; that insurance companies are merely making a strategic retreat in reducing interest rates, and that confiscation of creditors’ rights is being condoned to avert another kind of confiscation from the farmer. Such a situation in part explains the financial earthquake which is rocking America to its very foundations, and New Zealanders will follow with keen and sympathetic interest the efforts of President Roosevelt to save the American primary industries from complete ruin.