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Show Agricultural Prices, Farm Indebtedness, Purchase of Bonds by W. Preston Thomas Dept. of Agricultural Economics Utah. State Agricultural College, Logan, Utah IMMEDIATELY following World War I farmers bid up the price of land to a point where most of the purchasers either lost all of their farm equity or it took a lifetime to pay off the mortgage with low priced farm products. During this period of high prices will the farmers farm-ers of America bid up the price of land and obligate themselves with a heavy debt load as they did in 1918 to 1920? Will they remember the indebtedness they incurred during World War I and how they were forced to carry this burden during a period of 20 years when agricultural prices were depressed? de-pressed? High prices and a postwar post-war depression were new experiences experi-ences for the farmers during and following World War I. Most of American farmers operating today have experienced both high and low agricultural prices. Will these experiences be remembered and will they plan their economic program pro-gram more wisely during this period pe-riod of high prices than was the case from 1914 to 1920? , Economic Program for Farmers With the present outlook for continued con-tinued heavy expenditures by the federal government for war purposes pur-poses and a reduced amount of civilian goods, indications for the immediate future are for continuing continu-ing good prices. However, with the closing of the war and a reduction re-duction of government expenditures expendi-tures and an adjustment in agriculture agri-culture and industry back to production pro-duction largely for civilian use, there will most likely come a reduction re-duction in prices. The exact time or extent of the reduction can not be predicted. During the early phases of major ma-jor wars, farmers should expand production to the limit. However, there comes a time because- of uncertainties as to duration of the war and the fact that prices will fall during the post-war period, when the individual should not expand ex-pand oa long time credit which requires many years to liquidate. Now is a good time for farmers to increase production for a year at a time or shorter periods by intensive use of available resources. re-sources. It is a time which calls for caution concerning long-time commitments, especially for purchase pur-chase of high-priced land, breeding breed-ing stock, or equipment. During the period of high prices the wise farmer will pay off his indebtedness and buy United States Bonds. During the postwar post-war period there is likely to be a depreciation in land, livestock, and other farm values as well as reduced re-duced prices received for agricultural agricul-tural products. On the other hand the United States Government is guarantying the value, with interest, in-terest, on the E Series of federal Bonds. The dollar invested in Bonds now when prices are high will be returned with interest without with-out depreciation and at a time when the value of other commodities commodi-ties may be low. The value or purchasing power of the dollar invested in-vested in Bonds will be greatly increased when other prices are reduced or when an adjustment is made from a war to a peacetime economy. The farmer who is wisely wise-ly planning his war and post-war economic program will have funds for use to improve the farm, and the farm home during the postwar post-war period. Such improvements might include the home, other farm buildings, fences, irrigation and drainage facilities, and the purchase of new equipment for the home and the farm. The present economic program for farmers should be to produce to the limit, get out of debt, buy government Bonds, and make plans to improve the home and the farm for satisfactory satis-factory living and for economic production during the post-war period. pe-riod. V. S. Treasury Department |