AMERICAN FARMERS

Stratford Evening Post, Volume II, Issue 226, 22 April 1933, Page 3

AMERICAN FARMERS

Intolerable Burdens HEAVILY IN DEBT The great fall of prices since the depression began has made the burden of debts intolerable everywhere, but nobody in America has suffered more from it than the farmers, wrote the New York correspondent of The Times last month. During the war they enlarged their production enormously and then, and for some years afterward, encouraged by the high prices ail their products brought, they ran heavily into debt, buying with borrowed money new acres at figures which would have been high for town lots.

Most of these mortgage obligations were incurred between 1915 and 1922, when the farmers added greatly to their ether debts as well, mainly through purchases on the instalment plan and with bank borrowings of farm machinery, motor-cars, wireless sets, and other necessities and luxuries. Between 1920 and 1922, however, there was a sharp drop in farm products and in farm income. Warned by this that their seven fat years had come to an end, and pressed by their mercantile creditors and the banks to pay off their borrowings, the farmers devoted whatever income they could spare in the next few years to getting rid of their most immediate obligations. They were able to reduce these current debts between 1922 and 1929 by about one-third, to a little under 3,000,000,000 dollars, but their mortgage debts they could not reduce. When the industrial crash came in 1929 the farmers' mortgage debts were at their peak. But, in addition to these debts and the unliquidated reminder of their so-called short-term borrowings, the farmers were burdened down with taxes far beyond their power to meet; for in the period of industrial boom, although farm income was declining, the rural counties as well as the urban had been carried away by a zeal for public improvements of every kind, from cement highways to new court-houses, and had been unable to resist the lure of cheap borrowing. They borrowed cheaply, but they bought dearly. The Burden of Debt Now, after three years of almost sheer decline, the average price of farm products has fallen to barely 40 per cent, of "normal" (the average of 1923-25), but the farmers still have hanging over them their taxes, their 3,000,000,000 dollars or so of bank borrowing and other current obligation.-, and about 3,250,000,000 dollars of mortgage debts. The total of mortgage debt is about. 1.000,000,000 dol-

lars less than it was three years ago, but the difference is accounted for largely by foreclosure sales, which in many instances wiped out the last dollar of equity the farmers had in their land.

In their adversity the farmers looked ! hopefully to Congress for relief; but such relief as was given them failed altogether to reach the root of their trouble—the inability of their foreign customers to buy from them any longer their surpluses of production. Neither Congress nor the farmers themselves could finance purchases of grain and cotton in this country so long as they had to remit huge sums here annually to pay instalments"on their war debts and so long as the tariff imposed an insurmountable barrier to paying for their purchases with goods. Until the major fall of prices of commodities in international trade occurred the farmers, although overburdened with debt, were not really in a desperate condition. But farm income, which even between, 1910 and 1929 fell from 16,000,000,000 dollars to 11,000,000,000 dollars, fell in the next three years to only 5,300,000,000 dollars. The foreign market that was once the outlet of America's agricultural surpluses is rapidly disappearing, and it is beyond all hope that the domestic market can absorb what the rest of the world no longer wants, or else is unable to pay for. So the farmers are desperate.

Never slow to voice their grievances, even in the best of times, at present they are sending up a clamour that can be heard all over the nation. Disregarding the distress existing everywhere .else in the country, they have started a "revolt" which is hardly the less formidable because it lacks definite organisation. Two Forms of Revolt The revolt began with concerted attempts in lowa—where, incidentally, farm mortgage debt is greater per capita than anywhere else—to force wholesalers and other distributors of livestock and dairy products to raise their prices. In attempts to bring this about groups of farmei-s belonging to an association called the Farmers' Holiday barricaded the roads and turned back from the markets all prospective sellers who would not agree to maintain the price-level they had set up. The movement met with a fair degree of success at first and farmers in some of the neghbouring States, notably in Nebraska and Kansas, copied these tactics. After some weeks, however, the police authorities of the States intervened and broke up the movement.

Then the revolt took a new form. Exasperated by foreclosure sales under mortgages, which generally resulted in the mortgage owner getting possession of farm properties for less than the amount of the mortgage, groups of farmers intimidated prospective bidders from attending the sales or drove off the county officials who attempted to carry them out. Or, by what seemed to be a common impulse, in different parts of the country as widely separated as lowa and Pennsylvania they kept away from the sales all other purchasers and themselves bid in for a few cents the properties secured by mortgage, afterward turning them over to the mortgagors as a free gift. In that way, they considered, they had extinguished the mortgagees' legal claims on their debtors. This movement, spreading sporadically, has now extended io 22 States. It has become so formidable that recently a number of large life insurance companies, owning ;vs investments more than 1,500,000,000 dollars worth of farm mortgages, have visiructc3 their agents all over the country to defer further foreclosure sales until the Legislatures of various States have had an opportunity to set up conciliation boards or other instruments for bringing about a mediation between the claims of debtors and creditors.