| Show The e Farmer and nn War Bond on Purchases b Ly by Charles W. W Holman Tolman Secretary The National Cooperative Milk Producers Producers' Federation I A MERICAN farmers have a aC AMERICAN C great neat deal more at stake in purchasing War Var Bonds than simply simply simply sim sim- ply a patriotic urge to assist in jn financing the war so that it may maybe maybe maybe be prosecuted to an early and victorIouS victorious victorious vic vic- vic vic- conclusion Modern war demands governmental expenditures expenditures expendi expendi- tures far in excess of those which may be met by current revenue receipts This means Government borrowing If a large part of this borrowing is through commercial banks additional in inflationary la spending power is created through the expansion of credit On the theother theother other hand if the borrowing is largely from individuals much of their excess funds arc are drained off Hence the pressure on prices resulting resulting re re- suIting from unusually large funds bidding for limited amounts of goods nods and services is relieved and thus inflation retarded A tremendously increased agricultural production and some increase in average prices received above those paid aid by farmers have raised the net income of all United States farmers from the 1935 39 average of 47 billion to 63 billion in 1941 94 billion in 1942 1943 and an estimated billion in 1943 With available supplies of farm machinery re replacements replacements replacements re- re placements and building materials materials materials ma ma- limited Agriculture has hasa a fund available for either debt retirement savings readily readily readily read read- ily liquidated for future purchases purchases purchases pur pur- chases of machinery buildings buildings buildings build build- ings etc or for present investment investment investment in in- vestment in land Jand A marked decrease in farm mortgages in recent years indicates indicates indicates indi indi- cates that much of this fund has been properly applied to debt re re- re- re However activity in inland inland land sales and a very marked in increase increase increase in- in crease in I land values demon I 1 strate that farmers are probably 1 diverting a large part of this fund into land purchases From March 1 1943 to March 1 1944 average j land values per acre rose 15 per percent percent percent cent with the lar larger er part of the therise therise therise rise taking place in the last four months o of the period The increase increase in in- I crease during this month four-month period pe pee I was the highest on record being 20 per cent greater than the average monthly rate of increase for the 20 1919 boom year Average Average Average Aver Aver- age values per acre have increased more than third one-third in the past 3 I years In the 1916 19 period the therise therise therise rise was about th the same It appears that an overcapitalization of probably temporarily high farm commodity prices is in I process just as in World War Var I It h Large mortgage debts incurred now at high levels of income will prove disastrous when both total agricultural production and prices fall Land values are arc based on thenet the thenet thenet net return to land With the end of the war in sight and with the prospect that farm labor and other costs will require a relatively larger larg larg- er return leaving the return to land less t the e logical course for land values at present would appear appear appear ap ap- pear to be downward rather than upward Therefore it appears that farmers would do well veil to inest invest invest in in- vest est every available dollar beyond that needed for debt retirement in Government j Bonds These can be held against the day when necessary necessary necessary sary farm replacements will willbe willbe willbe J be available and when farm farmland farmland farmland land values will have become more stable In this way the individual farmer may assist in hastening the day dar of return of his son and also have capital capi capi- capital tal available to help finance him in ventures of his own Choice U U. S. S rem Treasury Dep Dep lm I |
