The Lexington advertiser., 1932-05-05
Farmer Paying Debts
With 2-Bushel Baskets
Under Present Prices

B. NJ. Melton, of Route Z. was in Lex
ington Monday and paid The Advertiser
a pleasant renewal call While here he
reproduced an article appearing in the
Progressive Farmer Ruralist, written by
Clarence Poe, president of the publica-
ton relative to the advisability of pro-
viding stable system of money from
now on or either so increase prices OF
cotton, corn, tobacco and other commodl-
ties or so deflate the dollar that our
colossal debt burden can be paid oft
with dollars OF the same value that dol
! lars possessed when these debts were
created
Deflation has doubled farm debts and
today farmer that owes 500 for money
under years back now owes twice as
much today. There can be no economic
recovery that ignores such funda-
mental situation, and in further expla-
nation, quotes from the article:
"The fellow who is in debt and whose
debt was created when commodity values
were much higher than now has only
three ways to get out. He can repudiate
his debt because he cannot hope to pay
it when the commodity upon which he
DaS2Q Lle QeDL was lHSH SeilluS lOl 4OAA
times what it is now. For example, if
a cotton grower borrowed money on his
land when cotton was 25 cents a pound.
it now takes five bales to pay the debt
where it took only one when the debt
was created-and it is impossible for
him tc produce five bales where he pro-
duced one then. The second way out for
the farmer is for the price of the COM
modify to rise within a reasonable dis
tance of where it was when that debt
was created. The third alternative is
in some way to provide cheaper money
for him to pay his obligation. One OF
these three things is going to happen.
We are going through the reputation
stage now and have been for several
years. If that continues, it will be a
process and 1T will keep
business and finances upset. A great
many people think that is the natural,
normal way for it to adjust itself, but
personally, | do not. One of the other
ways should Be adopted, and do not
believe it will be necessary for US to go
off the gold standard to do it.
"If Congress had passed law in 1926
requiring every debtor to pay back s1.50 |
-or every 81 he had borrowed, besides
interest, we would have had revolu
ion. Yet that is what deflation has
lone. Suppose Congress had passed a
aw in 1926 doubling the size of the /
,ush.l basket or the number of pounds |
n bushel and had told US that in
Measuring out products to pay our debts, /
We must give the same number of |
ushels of grain, but measure it out in
hese new and enlarged bushel baskets.
'y failing to take action to stabilize the
alue OF money, Congress has done what
to the same thing.
Not only are we having a tragic liqui
alton of debts through foreclosures,
tc., but it is liquidation that does not
iquidate. You may pay $500 on $1,000
ebt, Only to find that you have increas-
d your Indebtedness to s1,100 in terms
f mmodities. So in spite of all that
america has paid on its debts there
as been no real liquidation since 1929.
We are now in debt more than were
hen in terms of what we have to pay
With We are told that the national
ebt has been reduced by % per cent,
ut that is an Illusion. The remainder /
aust be paid by taxes paid by the farmer !
nd factory. in commodities. Instead OF
ur debt being reduced from % billion. |
o 19 billions, it now stands at 80 bill
ions in market basket dollars-10 bill |
ions more than it was in 1924. Of
.merica's gross debt we have liquidated |
o billions of 200 billions Indebtedness, |
ut now find ourselves with a debt of
80 billions in market basket dollars.
;ome think that we working our way
,ut but we are working ourselves in"