Milford chronicle. [volume] (Milford, Del.) 1878-1974, 1929-03-22
In GOOD TIMES CAUSE
FAILURE TO PAY DEBTS
OF FARM TROUBLES
By Henry Tilden

One of the causes leading up t.
the situation which brought about
demands for farm relief was that
farmers, like other people," did moi
use the profits of good times to pay
their debts, says George E. Roberts
vice-president of the National City
Bank of New York, in an article in
the March number of the American
Bankers Association Journal.
Mr.. Roberts review of his sub
ject, while of unusual value as a
summary of agricultural conditions,
should be even more interesting to
the average business man and in
dividual for the reason that he re-
states some homely economic truths
which all of us are too likely to for
get when the financial skies are
clear and the sun of prosperity is
shining.
People generally go into debt in
good times and pay their debts I'M
der pressure in bad times, says Mr..
Roberts, and he presents statistics
to show that there was an enormous
increase of borrowing from the
banks in farm regions during the
prosperous year 1919, and that there
was also a great increase in the
borrowings of member banks from
the Federal Reserve. He declares
that legislation cannot prevent farm
losses, nor can legislation make
good such losses. On this point he
says:
1.-THE farm mortgage debt of Iowa
in 1910 was $204,000,000, and in 1920,
$3.50, 100000, an increase of 140 per
cent in the period of highest prices
for farm products and greatest in
crease of farm values ever known
in the history of American agricul-
ture. That increase of Indebtedness
did not signify distress at the time
any more than the increase of brok-
ers' loans in New York in the last
two years has signified distress.
Distress, however, followed later.
"Now all this simply illustrates
the well-known truth that people do
not use the profits of good times to
pay their debts. They use them as
the basis of further borrowing. The
farmers are no different in this re-
spect from other people. 1t is the
same in commodity speculation-in
wheat, cotton or sugar; in stock
speculation, as we have seen time
and again in Wall Street, and in
town lot speculation, as we have
seen in Florida.
81 am not unsympathetic for the
people, farmers and others, who
lost money by the collapse of specu-
lation and fall of prices in 1920-21.
l am not blaming or ridiculing the
farmers who became involved. l am
simply pointing to the true cause of
their misfortunes, and saying that
such losses cannot possibly be pre-
vented or made good by legislation.
In this case they are largely due to
the war, and the private losses in
all countries due to the war were
incalculable."
Mr.. Roberts was born on a farm
in Iowa, began to buy farm land in
that state when he was 81 years old,
still holds such land and takes a
keen interest in the affairs of his
native state. He lived in Iowa until
he was 40 years old Therefore his
discussion of the subject should not
be regarded merely as an expression
of opinion by a Wall Street finan-
cier, but rather it should be ac-
cepted as a calm analysis of the
problem as it is seen by farm boy
who became a banker of recognized
ability.-Philadelphia Public Led
ger.