AMERICAN FARMERS

Wanganui Chronicle, Volume LXXXII, Issue 19437, 24 October 1925, Page 23 (Supplement)

AMERICAN FARMERS

THE WAR AND THE SLUMP. FACING A LEAN PERIOD. The American farmer to-day is facing problems extraordinarily like those of his New Zealand cousin, and is solving them along very similar lines. This was ve<y evident from facts stated in an interview by Mr. W. H. Porterfield, an American newspaper man of wide experience, who is at present in Auckland. Mr. Porterfield, who has his home in San Diego, California, is la member of the editorial board of the ScrippsHoward Newspapers, an organisation which controls 28 evening papers scattered over many States of the Union, and which also owns the United Press Association, one of the three large American press (agencies, serving 700 newspapers, and the Newspaper Enterprise Association, which provides a service of syndicated matter for nearly as many. He has spent five weeks in Australia and arrived at Auckland recently to make la three weeks’ tour of New Zealand. His visit is partly a holiday and partly to gather material for articles on things seen in this part of the World. • The development of land settlement and farming is a matter of much interest to Mr. Porterfield, who has studied the problems of the American wheatgrower for a number of years and now owns a share in a large fruitgrowing property in Southern California. Immediately after the war, said Mr. Porterfield, the wheat-farmers of North and South Dakota, lowa, Minnesota and Kansas suffered a change from great prosperity to virtual bankruptcy. In 1917, when America entered the war, the Government, in order to encourage the growing of wheat, which the world sorely needed, guaranteed the farmers 2dol. 26 cents la bushel, and undertook to,buy all they would sell. The result was an enormous inflation of land values and the farmers, believing that the good times would last indefinitely, mortgaged their farms .to the small local banks and bought more land. Droughts Alter Situation. Then a series of droughts occurred in several of the wheat States, and when things were at their worst the Government removed the price fixation and ceased to buy. The result wias that the banks, which had been financing the farmers, came to grief. About the year 1921 over 600 of them failed. A serious political upheaval followed leading to the Insurgent Party in Congress under the late Senator La Follette, the development of a legislative “bloc” in the interests of the farmers, and the genesis of the Non-parti-san Labour movement, an alliance between certain of the farmers atd Labour.

The measures taken by the Government to help the farmers over their difficulties, as described by Mr. Porterfield, showed a very general resemblance of what was done by the New Zealand Government after the slump of 1921-22. The failure of the banks, he explained, was not so serious a matter as it sounded, for they were mostly quite small concerns. The depositors did not lose much of their money, but the stockholders, who bore full legal responsibility, lost everything they had invested. The farmers were mostly left in possession of their properties, virtually ns liquidators. They did not “walk off.” Federal Farm Loan Bank. There was a general demand for assistance from the Federal Farm Loan Bank, a nationwide Government institution, which advances money to farmers on mortgage at 4| per cent., plus sinking fund, for a term of 40 years. However, as the bank lent only on approved security, and wheat land values were extremely uncertain, it was at first unwilling to do much. The banks, however, agreed to a drastic writing down, and with the help, in some cases, of loans from the Federal B&nk, the farmers were now gradually buying back their properties. They had had a hard struggle, but with the improvement of wheat prices last season they were doing better. The Federal Government, Mr. Porterfield explained, was able to-day to meet most of the requirements of farmers in the wtiy of long-term loans at a low rate of -interest. There was no shortage of funds for the purpose, as he understood there was in New Zealand. In fact, the United States Government actually had too much money at its disposal, and there was some risk of extravagance. Local land banks were scarcely called for. The accommodation which the wheat-farmer required from year to year was usually provided without difficulty in normal times by his co-operative marketing association, which made advlances against wheat in store. The latter was regarded by the Federal Reserve banks as good collateral security. The Department of the Interior was assisting by undertaking largo irrigation schemes for the development of Government lands whjch had previously been regarded as waste. Numbers of ex-soldiers were being settled on these lands, and those in difficulty were granted generous postponements of the repayment of principal moneys advanced to them. There had been much agitation for Government land banks land marketing organisations, but nothing had been done in this way. Dairy Farmers Escape.

It was notable that the dairy farmers in the wheat-growing region did not share lat all in the hard times. They had an assured market at satisfactory prices for the whole of their output. Mr. Porterfield has great faith in the co-operative movement, which has been applied with excellent results to fruitgrowing in California, and more lately, to whdat production. He considers that the aid given to farmers by the American Department of Agriculture, which has vast sums at its disposal, an army of officials, and many activities, is doing almost more for the man on lhe land titan direct ’financial help. He mentioned that in the campaign yigainst the cottonboll weevil the department actually mobilised some of the army, and sprayed insecticides over the fields from aeroplanes.