Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1926-02-04
FARM ECONOMICS
Continued from Page 4,

s A
Continued from Page A.
There are twelve Federal Re
serve banks in, this country to-
falling a paid in capital of S1O3,-
10000. In two years time, from
1920 to 1921, they piled up a
surplus of 209%o The average
profit on their paid in capital in
1920 was 5000. When the de-
flation came on they had loan
ing ability of two billion more
than they used, and not only
wouldn't use it but contracted
loans by $2,005,149,00O and
Federal Reserve notes by $685.
100000. Thus in two years time
withdrawing almost three billion
in credit and currency from the
channels of trade. That is more
than twice the capital of all the
National banks in America, or
one third of the liquid wealth
of the country. When there is
more money in the channels of
trade than commerce can use,
prices of course go up along with
land values; when there is a
scarcity of money, prices go
down, and land values follow,
the recent depreciation of our
currency dropped farm values
about 500, and farm produce all
the way from 209o to 800.
Practically every farmer bor-
rowed money at time when it's
purchasing power was depleted,
or during the period of initiation,
and he had to pay the interest
and possibly part of the princi-
pal at a time of deflation, at
time he receives only 500 of the
price he figured on, orN as COM
pared to what it was when he
borrowed; consequently he would
have to work twice as hard and
produce twice as much in order
to break even, and that couldn't
be done so we had farm deflation.
Special privilege legislation, or
the power of the Federal Reserve
banks to fix their re-discount
rates needs curbing.
We read a lot of bunk about
overproduction, surplus, curbing
production, etc. and people who
ought to know better take it all
in. We all know that there is
a lot of starvation and want
among the people of this coun-
try and others, and as long as
that is the case there can never
be such a thing as overproduction
of the necessities of life. And
that is the only thing the farmer
produces. They do not deal in
luxuries. People do not starve
because there is too much of
wheat, corn or potatoes or what
ever the farmer has to sell in
the world, it is because they
lack the ability to buy, or be-
cause the farmers system of dis
tribution is at fault.
Tariffs hit the producer and
the consumer, it does not affect
capital employed in an exchange
of their commodities. Any ma
ton with which the American
exchanges commodities at a price
compatible with the American
standard of living, will nat
urally raise that nations stand
ard of living, and thus in
crease the demand. An exploited
nation like Mexico is of no
benefit to the American farmer.
1t is only when the people of
another nation have the ability
to buy, or are in a position to
exchange commodities with him
that farmer in this country can
benefit. s.
When the American farmer
through his organizations gets
in touch with the consumer in
foreign markets on a free trade
basis, he will increase the buying
power or exchange power of the
consumer. He will stop exploit
tation of both nations by the
international bankers and fellows
who like J D. Rockefeller buys,
or rather pays Mexico an indem-
nifty of Is cents a barrel for
crude oil, and then sells gas in