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Show 4 Why a Farmer Should L f J I Buy and Keep War Bonds by Gabriel Lundy $r'i$. '$-'- Head, Dept. of Agricultural Economics ) .' f -3 jV . f South Dakota State College s-. . T7 'V? v3 PATRIOTISM, willingness to combat harmful inflation, and a desire to build up a reserve of post-war buying power will impel the farmer to buy and keep War Bonds. Farmer loyalty will express itself it-self not only in maximum production produc-tion of necessary food and fiber for the winning of the war. Farmer Farm-er loyalty will also express itself in the equally necessary and patriotic pa-triotic duty to invest cash with which the government can purchase pur-chase both food and war equipment. equip-ment. Fortunately farmers are receiving higher prices and larger incomes. This has enabled many of them to reduce old debts to manageable amounts or to acquire surplus cash foroBond purchases. A sense of responsibility toward the need of the nation for funds with which to carry on the war will urge farmers to purchase War Bonds to the limit of their resources. re-sources. Both direct self-interest and pa-i pa-i triotism dictate the purchase of Bonds as a means to prevent Inflation. In-flation. During all our large wars we have had high war prices followed fol-lowed by very low prices and depression de-pression some years later. During World War I many farmers and others unwisely used the enlarged income to bid up the prices of farm land. As a result the farm mortgage debt was more than doubled. dou-bled. Then when post-war prices dropped very low many farmers became unable to pay, and lost their farms through foreclosure. A repetition f this calamity can be avoided by investing in War Bonds instead of buying land at inflated prices and on credit. The danger of inflation, however, is not limited to land. It is also important not to bid up the prices of other things. Price inflation and price collapse in every line are harmful. Such harm can be avoided avoid-ed by diverting surplus funds away from the markets for scarce commodities and into War Bonds. Financing the war by means of heavier taxes would be more anti-inflationary, anti-inflationary, but since Congress has decided in favor of Bonds it is our duty and privilege to invest in War Bonds. Good farm ; management and self-interest as well as patriotism will urge the farmer to buy and keep War Bonds. If prices fall after this war as they did after our other large wars, the farmer with a reserve in Bonds will ba in an ideal economic position. Farm buildings and machinery are wearing wear-ing out faster during the present war period than during normal times due to difficulties in obtaining obtain-ing needed material and labor for repairs and replacements. Farmers Farm-ers should now be putting money in Bonds to cover these costs. About 10 percent of the total machinery ma-chinery investment and about 4 percent of the total farm building investment should be saved each year to cover wear and depreciation. deprecia-tion. With lower prices, farm equipment, new buildings and new furniture and household equipment will be at the farmer's disposal for less money after the War than now. Furthermore, if he holds his Bonds until maturity, his money mon-ey will be Increased by one-fourth. one-fourth. With more money and lower prices, the Bond-Invest-" ing farmer will then have cash to make his farm work easier and more productive. His money mon-ey will also yield him more in home comforts, education for the children, or in the purchase pur-chase of a farm for the son. The danger of war-induced inflation in-flation does not end with the actual fighting. Post-war inflation is fully as threatening. Large-scale conversion con-version of Bonds into cash for the purchase of articles, commodities, etc., before industry has had time to convert fully to peace-time production, pro-duction, will be undesirable. By holding his Bonds longer, the farmer farm-er or other Bond-holder will contribute con-tribute to the elimination of both a wild "boom" and a subsequent depression. Agriculture and industry are intimately, in-timately, interrelated and interdependent. inter-dependent. The government is now industry's big customer. After the war, farmers will be big buyers of industrial products. If the accumulated accu-mulated purchasing power is released re-leased gradually, and if income is widely distributed, industry can furnish full and continuous employment. em-ployment. In turn this will give farmers a profitable market for their products. Thus, both patriotism patri-otism and far-sighted self-interest will induce farmers and others to buy and keep their War Bonds until after peace is achieved. U. S. Treasury Department |
