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Show SOUTH CACHE COURIER Boom in Farm Prices and Rapid Turnover Prompts Fears Collapse Will Follow Peace Memory of Bust After .World War I Still Is considered fairly representative, it is estimated that farm land prices have risen about 17 per cent between April, 1943, and April, 1944. From the beginning of the year until April 1, the advance has been about 2 per cent The increases have been largest in Indiana, Illinois and Iowa, in which states the per cent of purchases by city investors was largest, being 30 to 37 per cent of all sales. It is true that farmers have been using much of their larger incomes to buy bonds and to pay off debts. The steadily decreasing volume of farm mortgage debt is evidence of this trend. But now reports Indicate that heavier debts are frequently being assumed when farms are bought. This is especially true of tenants who are buying on contract or with relatively small down payments. All Sorts of Buyers. Surveys by county banks indicate that all types of farm buyers are now in the market. Tenants are acquiring their own farms. Owners are expanding their present units or are taking on additional acreage, perhaps for sons now in the service. Even large commercial farms in some instances are changing hands at increasing prices. Local busi-- . ness and professional people and city investors bent on hedging against inflation or higher income taxes are buying land. War plant workers, too, are making purchases, expecting to turn to farming when their munitions jobs are ended. All these conditions are reminiscent of what occurred in World War I, for that too, was a story of agricultural upsurge. Farm income rose from 6 billions in 1914 to 14 Where Counter-Attack- Spawn as Allies s Advance proposed In the future before endorsing them. .The land boom of the first World war and its awful consequences throughout 20 years have been credited by some to unwise land ownerhe declared. Upship policies, When GI Joe comes back to swings of prices with the second World war have engendered the his farm home from the war fear that another boom was in the he may find a lot of new faces making and that its consequences around the neighborhood. And would be the same as the first. he may miss a lot of the old "Buyers, have been warned refamiliar ones. The family up peatedly. Still, reports of advancthe road may have moved ing prices multiply. Some belief holds that voluntary action would bag and baggage to Oregon. be ineffective. So legislated remeA new owner may be tilling dies are proposed. the bottom lands on the back Most drastic proposal is the pereighty. mit system advocated by William G. Rural America is on the move. Murray of Iowa and others. It would Farmers, like their city cousins, require a prospective purchaser to have been shifting their base of opappear before a board and show temerations at an reason why he should be allowed to po in the months since Pearl Hara farm.x. buy bor. More farms are changing hands If the board found him an unfit this year than at any time in the person to own land, or didnt like past generation. They are changing his attitude, it apparently could turn for scores of reasons, but back of him down. No permit would be almost every sale is the chance to awarded before the land had been As the Allied invasion moves Inland to become the battle of Normandy the beachheads grow in depth u strike pay dirt to realize a profit appraised. coast. Constant threat of violent counterattack by the enemj on the old homestead. new thousands are landed on Limited Loans. becomes closer and louder. Shown here are two counterattack hnbs of the Nazis. In the west the Allied thrust Many farm folks are frankly conAnother proposal is credit control. from landing zones has resulted in the capture of Bayeux and a drive to the south toward Caen. cerned over this trend. They are First provision is that no loans troubled not so much about the mishould exceed 50 per cent of the gration as they are about the steady value of the land. Presumably valincrease in farm real estate transacue would be established by appraistions. They fear that the long threatal. Such a regulation might be ened land inflation is under way. And they are asking themselves: legislated, and it might stick. PreWill the old cycle of boom and sumably, also, lending agencies would establish a policy of refusing bust be repeated? to lend to men who paid long prices. Every previous war has brought An approach to this is already in its own land boom that left a wreckeffect The land banks, mortgage, age of deflation behind. The coltrust and insurance companies have lapse of the speculative era followbeen discouraging borrowers both ing World War I is painfully fresh from paying too much and from borIn the memory of many a farmer. rowing too much of the purchase price. But they dont have any con18 trol over folks who are prepared to pay cash, or the private money lender who is willing to take a long chance for a high interest rate, or the owner who can finance his own sale. Mildest of these proposals is to impose a stiff federal capital gains tax. Such a bill was placed before congress by Senator Gillette of Iowa. It is directed at speculators by providing a tax amounting to 90 per cent of th6 profits if the land is resold before the end of two years. Each year thereafter the tax would be decreased until the end of six years, when none would be levied. There is no doubt as to the class of transactions which the legislation is intended to curb. But would a farmer who was obliged to sell within, the limits specified be subject to Oct. Jan. April 1, 1943 July April I, ) 944 the tax? American army and navy chiefs pay their first visit to France since the invasion. L. to R.: Gen. All the schemes thus far advanced Henry H. Arnold, Admiral Ernest J. King, Gen. D. D. Eisenhower and Gen. George C. Marshall. Left, insert: 1919. a and billions in High prices Symptoms are already evident suggesting that history could repeat it- ready market for agricultural prod- seem to be pointed toward keeping Gen. Eisenhower, supreme Allied commander (left) and Gen. Sir Bernard L. Montgomery, commander ef Allied forces, enroute to the beachhead area in France where all armed leaders surveyed the campaign. self in World War II, unless brakes ucts, plus easy credit facilities, en- the buyer from making a fool of himsale must upare applied to the couraged farmers to bid up land self, but of course every have two parties. So -- the man who surge in farm land buying. prices. risFor instance, land values have France Farms were bought on specula- wants to quit farming; the man who en 38 per cent above their 1935-3- 9 tion with the expectation of a quick wants to retire on proceeds from average and are already up to 100 sale at a profit. Land values were sale , of his land; the fellow who d War I inflated from an average of $40 an wants to sell and move elsewhere; per cent of their levels. Farm sales during 1943 were acre in 1914 to $70 in 1920. Within the widow who has been hanging at a record volume, surpassing even those six years farm real estate on until she can get the family the previous high reached in 1919. rose in total value from 39 billion equity out intact; the who is sick of wrangling with tenSales in 1944 are forging ahead of dollars to 66 billions. ants and who has been longing for last years record. The sequel was a history-makin- g the time when he can get out and crash. Land prices fell from an save his shirt all these Plenty of Money Floating. welcome Three factors are believed to be average of $70 an atre to $28. More the of prices. upturn milimmediately responsible for the than a third of the nations six Now lots of farmers who have no urge to acquire additional holdings: lion farms were foreclosed by the desire to sell, who think their trouend of the depression. All farm 1 Both farmers and nonfarmers have large and increasing funds land and buildings declined in value bles are caused by folks they dont believe should" be allowed to own from 66 billion to 31 billion. available for land purchase. land, applaud these proposals. And 2 Present high income and the rosy It is natural that people today may be right, but it will be prospect of' more yet to come fear that the same thing will happen they make the purchase of farms seem all over again. As a result some well to look into them, their impliwhat else may be proposed especially attractive not only to agricultural leaders already are cations, as well. urging legislative controls. Some of in the future before endorsing them. farmers but This country can have control of 3 Long term credit at low interest these are drastic, some milder. Prorates makes it easy to acquire posals range all the way from re- land sales and purchase in two ways. First hy doing nothing; secland. g striction of privileges ond by whooping it up for the pro20 bilin some cases to credit control and Speaking of income, nearly posals. Farmers will be more vitallion dollars $19,764,550,000 to be ex- heavy federal capital gains taxes. affected than any other group. ly flowed into farmers pockets act Dangerous Remedies. If they want a Federal agency emfrom the 1943 bumper harvest. Last Lest the remedies be as fatal as powered to say who may own land, was more than four years total disease they are designed to they can have it. If they dont the low-ebb times the depression income recare, they can have it anyway. of 4 billion dollars in 1938. It was cure, however, farmers were about $3,750,000,000 in excess of the cently urged by Ray Yarnell, editor Forces sponsoring the change in of Cappers Farmer, to look careland policy will see to that. But if When operating costs, 1942 total. Gen. Charles dc Gaulle is show" fully into these proposals, their im- farmers dont want it, they may be for Noe wages taxes, interest, including as he landed in France on a and to what else may be able forestall it by protest. labor, machinery and other items plications Pr be before mandy beachhead are deducted, farmers were left with of inspect tour on lined are soldiers of shown inland ceeded in British Invasion the Wounded France, a spendable income that was alIt np, tier on tier along the walls of an LST hospital ship. These were among of allied occupied territory. last most double that of 1939. Meanbe since on initial four to the be wounded returned the the first years landings nearly following while, the cost of living had adfoot on French soiL coast of France. Censor has blacked out faces. vanced only at which farm lands are now selling in the seventh Average prices U. S. department of commerce federal reserve district as compiled from reports of 500 country bankers estimates of individual savings indiMarkers are shown in the chart. The seventh district includes Iowa, Michigan, cate an increase of 7.5 billion dolWisconsin and the northern parts of Illinois and Indiana. lars for 1940 to 36 billion dollars for A very large part of these 1943. savings is in highly liquid assets of currency and bank deposits. Whenever an industry does as well as farming has done, there is a tendency to speculate. Those already in the business seek to expand their operations. Others seek to get in on the good thing. And thus a spiraling boom can be born. In the midwestern area, comprising the Seventh Federal Reserve district, for instance, which may be Vivid to the Farmers ever-increasi- 1 f well-cleane- d Allied Army and Navy Chiefs Confer in France I in Year Midwestern Land Prices Climb 1 I 1 fast-movi- De Gaulle in Allied Wounded Return pre-Worl- rs land-ownin- Bankers Say Land Is Selling Above Normal I I i one-fourt- h. Jap Prisoners Taken get adjusted to staying put. Actually, only 30 per cent of the New York is well land in adapted to farming today, and much for the farming of today is only one of this land is in established farms that will not be for sale. Another pitfall which veterans and war workers will need help to avoid, says the 38 per cent is fair farm land. New York State Rural Policy comCounty agricultural defense committee. Others are purchase of mittees, or other groups, should be farms, at perhaps inflated values, charged with the responsibility of with a large debt; location in an helping men who wish to return to area which carries on a type of farm- the land, in order that they make ing different from their past experi- good inveitments and become proence; and too hasty purchase of land ductive and citizens, that will tie them down before they the state policy group advised. . Veterans, War Workers Who Plan to Go Back to Land When Peace Conies, Should Be Cautious, Board Warns Estimates show that about 900,000 New York state residents will be demobilized from the armed forces, and another 500,000 from war industries. If the proportion of these men interested in farming runs about the same as it does in our total state population, about 75,000 persons from the Empire state will be looking for a place on the land. Purchase of submarginal land unfit I Nazis Leave up-sta- s ' . retreated so of France ton leave a vast When U. S. forces landed at Humboldt bay during the Hollandia, Dutch New Guinea, operations these eight Japanese were captured. The second and third men from the left are officers and both have tried to bide their faces from the photographer. The group is being taken by truck to a plane. y ,the makers I V ! |