The Burden of Farm Mortgage Debt

July 25, 1932

Report Outline
Change of Direction in Demand for Farm Relief
Development of Federal Farm Loan System
The Farm Loan System During the Depression
Proposals for Moratorium and Mortgage Refinancing
Special Focus

Change of Direction in Demand for Farm Relief

Failure of General Farm Relief Legislation in Congress

Prices of livestock and certain other farm products have recently recorded encouraging gains. Signs of betterment in the general agricultural situation have not yet appeared on so impressive a scale, however, as to promise a cessation of demands for further farm relief. Congress enacted legislation for the improvement of agricultural credit facilities at its last-session, but defeated bills embodying the equalization fee, the export debenture, and the domestic allotment plans of farm relief. According to O. M. Kile, an agricultural economist who formerly was a staunch advocate of these schemes, the time has passed when either the equalization fee or the export debenture plan can be expected to work out successfully. Furthermore, the declining farm vote and the depression in the cities make it now less likely than ever that these plans can be enacted into law. In consequence, many farm leaders are turning away from these and like remedies put forward in earlier years and toward measures which, through inflation of the currency or otherwise, will lighten the burden of the farmers' debts.

The first point in the agricultural plank of the 1932 Democratic platform is a declaration for “better financing of farm mortgages, through reorganized farm bank agencies, at low rates of interest on an amortization plan.” Governor Roosevelt, in his address at Chicago accepting the Democratic nomination, asserted that “rediscounting of farm mortgages under salutary restrictions must be expanded and should, in the future, be conditioned on the reduction of interest rates.”

At the last session of Congress a proposal to direct the federal land banks to grant a one-year moratorium on mortgages held by them was defeated in the House by only a small margin of votes. The farm moratorium plan was advanced in connection with the foreign debt moratorium, its sponsors arguing that American farmers merited the same consideration as this country's foreign debtors. This argument is certain to be renewed if Congress is called upon at a later date to approve an extension of the Hoover moratorium or a downward revision of the foreign debts due the United States.

ISSUE TRACKER for Related Reports
Farm Loans and Subsidies
May 17, 2002  Farm Subsidies
Apr. 11, 1986  Farm Finance
Sep. 03, 1941  Government Payments to Farmers
May 27, 1940  Government Farm Loans
Dec. 12, 1936  Government Aid to Farm Tenants
Mar. 20, 1935  Farm Tenancy in the United States
Dec. 08, 1932  Plans for Crop Surplus Control and Farm Mortgage Relief
Jul. 25, 1932  The Burden of Farm Mortgage Debt
Mar. 20, 1929  Plans of Farm Relief
Apr. 21, 1928  The Economic Position of the Farmer
Oct. 20, 1927  The Federal Farm Loan System
May 03, 1926  Congress and the Farm Problem
May 21, 1924  Agricultural Distress and Proposed Relief Measures
Economic Crises
Farm Loans, Insurance, and Subsidies