The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1925-07-14
Los ANGELES
LAND VALUES
EMPTY FRAUD
Method of Initiation
Crude and Risky

| LOS ANGELES, July 12-Boosters
assert that Southern California orange
land now commands $4,000 an acre as
compared with s40O a generation ago.
But they say nothing about the fact
that the growers are in more precar-
ious state financially than they were
formerly. Certainly the $500 ap-
probation does not go to them. To
whom does it go? The answer is
simple and yet it will be sensational
news to 80 out Of every 100 readers.
Process of Imitation.
The leading Boosters are J. F. sar.
tori, most enterprising banker, and
George J. Cochran, foremost insur-
ance promoter and leader Of million
dollar advertising campaign. That is
the key to the answer.
A generation ago the banks lent
growers $500 on the $4OO-acres secur-
ity. Interest at per cent amounted
to S12 per year With oranges SELL
! ing at S120 per box, it took 10 boxes
to pay fhe interest. Producing $50
boxes to the acre, growers advanced
their prices to s125 per box. The
burden was simply passed on to the
consumers
Life insurance became interested.
Growers were convinced that they
should carry enough insurance to
cover mortgages so that in event of
their deaths their families could save
the groves They paid IS per year to
cover the $500 insurance. Again they
raised the price of oranges and passed
/ the burden on to the consumers. With
the price 81 the product raised SIS
per acre, for the benefit of banks,an
insurance companies, it naturallyf fol
lowed that the growers valued the
land to correspond, increasing the
price $3.50 per acre. This suited banks
as it gave them a larger margin Of
safety on loans.
On the $3.50 valuation operations
were repeated Banks lent 1928 on
the acre at 500 year interest. In
surers issued policies at S14 per year.
Growers raised prices Is cents a box
to meet interest and insurance
charges. With values of products in
creased $34 per acre per annum the
land value was inflated $34O, to $3.50
per acre.
Only three more operations were
/ necessary 70 bring the land values up
to $4,000 an acre, $500 short Of where
they are now said to be.
Banks and lnsarance supresss4--
A few years ago banks charged
growers 8, 10 and IL per cent inter
est, clinching their control of the or
present is per cent. II they lend
$4,000 on a S4.O00-acre valuation grow
ers must pay $40 per year interest
to them. With oranges at $3.50 per
box this is the equivalent of 40 boxes.
| On the present basis of $50 per
| 81 900 for life insurance annual prem
ium, growers pay the insurers $50 per
year on the acre. or the equivalent Of
IL boxes Banks and insurers share
of the $50 boxes per year is 81 boxes,
worth $780, But the growers charge
that up to the consumers. So, on
practically every box of California or
L
anges the consumers pay tribute of
So cents to the banks and % cents to
the insurers.
The Bubble Must Break.
Growers sell the fruit to wholesal-
ers at $3.50 per box, wholesalers to
jobbers at $500 to $500, jobbers to
retailers at $1,000 to $500 and re-
tailers to consumers 10 cents apiece.
But the imitation is all due to the
banks. Productivity Of orange land is
the same as It was 80 years ago. The
$4,000 increased value per acre is fc-
titious, a creation of and for the banks.
If consumers stop eating oranges,
the banks will foreclose on the grow
ers; if they do not stop. the price of
orange land will mount. But every
bubble must eventually break and
California orange land value is bub-
BILE.
When Fasteners cease coming to
/ California OF buy land at fabulous
prices the bubble will break. That is
why bankers and insurers boost
Southern California with million-doi-
lar advertising funds.-Frapiesa