| Show in by walter shead correspondent washington bureau I 1 union trust building Sky rocketing land values Y of agriculture officials and leaders in the farm mortgage credit field are more than a little concerned at the present trend of rapidly increasing farm land values which are skyrocketing rocketing sky in much the same fatal pattern set during and immediately following world war I 1 not only is government alarmed over these soaring values but private industry is equally concerned to such an extent that the american bankers association is urging its ita country bank members to follow conservative lending policies and to beware of speculators who would boost prices beyond what bona fide farmers can pay As of july 1 the level of farm real estate values had risen to an index of or a rise of 53 per cent since march 1941 as compared to an index of in 1920 or a rise of 65 per cent from 1915 to 1920 but the end of this increase is not yet in sight and with guaranteed farm prices return of thousands of veterans who want farms and relaxation of rationing on farm machinery these farm values may equal or even exceed the boom values which crashed with such devastating effect in 1922 and later farmers remember crash many thousands of american farmers well remember that crash when some farms over capitalized at high per acre prices went the foreclosure and forced sale route then from 1926 when farm values started to come back until the crash year of 1929 when values again hit the toboggan more than farms were sold under the hammer of the foreclosure auctioneer and went into the portfolios of banks and insurance companies will american farmers forget the lesson learned during those years and now with pockets bulging with money bid up the prices of farm land to another crash year there are some contrasts or saving factors now which were not present resent in the last war 1 in most areas the level of values started from a point about 15 per cent below the base of world war 1 I 2 there are more sales for cash now about 55 per cent as compared corn pared to less than 50 per cent in world war 1 I 3 farm real estate debt continues to decline in spite of soaring values whereas during and after world war I 1 mortgage debt d continued to increase in four years farmers have paid off in f earm rm mortgage debt and the total debt today on farm real estate is or less than half of the all time peak of 1923 when the debt reached parity guarantee factor another favorable factor today is the fact that farm prices are guaranteed by the government at SO 90 per cent of parity for at least two years following end of the war a factor not present after world war I 1 but in spite of these favorable circumstances it is pointed out that the large number of re sales one eighth ot of all sales indicates speculation is influencing in the farm market that two tio fifths of sales during daring 1941 1944 carried a debt of 75 per cent or more of the purchase price and that in many of these sales involving credit the farm buyers have assumed a debt greater than the full market value of the land four years ago 1 that in many cases currea current sales prices are higher than can be justified on the basis of longtime earning capacity in south carolina and kentucky values are up more than double their 1935 to 1939 average largely because of tobacco prices values are up more than 90 per cent in colorado 81 per cent in indiana arkansas and wyoming 70 per cent in nine other states averages are above 1920 levels in one sixth of the states and equal or above 1919 levels in one half of the states to combat these soaring increases the USDA has named a national agricultural credit committee of governmental leaders and representatives senta tives of major lenders in the farm mortgage credit field to meet in chicago periodically to plan curbs on the inflationary rise in farm values but the question still remains up to the individual farmer agriculture as measured by the true dollar volume of its physical goods has increased from a industry to a industry during the five year period ended january 1 1945 financial assets such as currency deposits and war bonds increased from an estimated on january 1 1940 to january 1 1944 and to nearly on january 1 1945 1915 of this oas industry s teal real estate is the farmers largest single aset now valued a at more than |
