Show uk boom and collapse in farm land Fo foreseen foremer reser n high incomes boom psychology are causes editorial from the chicago daily news the boom in farm lands is under way following almost precisely the pattern of the world war I 1 boom that ran from 1914 to 1920 and col lapsed with disastrous repercussions unless controls are set up to cur curb b the boom it may get out of hand at any moment in the opinion of william G murray professor of agricultural economics at iowa state college whose pamphlet land boom controls has just been published by the iowa state college press three factors are responsible according to professor murray they are 1 the record breaking incomes received by farmers since 1939 2 interest rates and loan charges at an all time low making it easy to buy on credit 3 a land boom psychology in which the same FARMERS REDUCE THEIR MORTGAGE MORTGAGES each cymbol billion mii of 1 ions inn dat avi i 1 94 au oc Z 1918 1920 booe 1939 00 1943 0 farmers have been paying off their mortgages with their increased incomes total mortgage debt outstanding is now about six and one third billion dollars while in 1939 it fas was about seven seven billions farm may be sold several times during the year each time at an advanced price A high percentage ol of sales are to absentee owners this absentee owner feature might warrant the listing of a fourth reason for the bom isiom a fear psychology coexistent with the boom psychology ch professor murray notes that many of those who are buying land for investment are doing so as a hedge against inflation to what extent this fear may figure in the national picture cannot be determined ter mined but certainly it is a considerable sid erable factor in inducing many city folk to invest in farm lands as insurance against the evils of inflation another motive is to buy a farm as a hedge against excessive income taxes surplus income that would otherwise be heavily taxed can be put into farm improvements or operations and thereby escape taxation these two aspects of hedging are sufficiently prevalent among non farmer land buyers to warrant listing fear psychology as a fourth major factor in the rush to buy farm lands to the extent that they exist the fear motives might tend to lessen the purely speculative angle of the boom and to ameliorate its evils but the danger of a runaway land boom cannot be overlooked farmers are urged to buy war bonds or pay off their mortgages with their surplus income not to purchase more land bonds are a sound investment and they can be turned to cash readily when the war is over thus providing liquid assets at a time when farmers will have most need of them the depression that has followed every war in in history always hits the farmers first and hardest |