Economics and The Public Welfare by Benjamin Anderson

Author:Benjamin Anderson
Language: eng
Format: epub
ISBN: 978-1-61016-567-9
Publisher: D. Van Nostrand Company, Inc.
Published: 1949-08-31T16:00:00+00:00

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1 I Kings, 12.

2 W. A. Dunning, Political Theories from Rousseau to S fencer, New York, Macmillan, 1920, pp. 142-143.

3 Commercial & Financial Chronicle, Jan. 7, 1933, p. 71.

4 The full text will be found in Commercial & Financial Chronicle, Apr. 29, 1933, p. 2875.

5 For full text, see ibid., May 13, 1933, p. 3259.

6 The present writer at the time urged a plan which would make use of local banking knowledge in refunding farm mortgages, with a Federal Government guaranty, in such a way as to keep good farmers and the land together. Farm prices had fallen to such fantastically low levels that the ablest farmers were embarrassed.

In May of 1932 I had studied the farm mortgage situation at first hand in Boone County, Missouri, where in many cases I not only knew the farmers, but also had known their fathers before them. I had found the banks and other local creditors showing great forbearance to embarrassed farmers. In one case, for example, a good farmer had come in, proposing to deed his farm to the two banks to which he owed money, to save them the expense of foreclosure. He was unable to pay interest. The bankers told him that of course he could not pay interest with farm prices as they were, but that he could run the farm so much better than anybody else they knew that he should go back and run the farm. There would be no interest in 1932, and the next year the interest would be half of what the contract called for. The farmer walked out with his head high. In another case, where a farmer was incompetent, the creditors had reluctantly taken the farm over, but had told the farmer and his wife to stay in the house, and had given the farmer employment on the place.

Such discrimination was much more difficult for the great life insurance companies operating from a distance, and the writer had made a point of talking with the heads of certain life insurance companies in New York upon his return, urging closer coöperation with local bankers in dealing with defaulted loans.

In personal conversations in my office in New York with bankers from rural regions, and in correspondence with country bankers in many parts of the country, I accumulated a great deal of information as to the actual farm mortgage situation and rural bank situation. It was distressing in the extreme, and in many cases the banks themselves were under such pressure that they could not show forbearance. There was need for relief from the immediate pressure of farm indebtedness.

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