The Waterbury Democrat., 1933-03-03

Washington-The vast burden of debt now worries us, individually and nationally and congressionally more than any other aspect of the depression.
 Some of us have been engulfed in this great sea of liabilities. Oth- CTS are going down for the third time or are in up to the neck. Many of us have only wet feet.
 Farmers, revolting in grim ear- nest against seizure of their farms for debt, have dramatized the great national dilemma. But the $9,00O,- 0O0,000 of farm mortgages is only a small part of the commonly esti- mated $20O,O00, ,00O,00 of individual. corporate and public debt
 Every man, woman and child Is involved. Anyone who supposes that he doesn't owe money is re- l spectfully reminded of his share in the $35,00O,000,000 or more of na- | tional, state and local debt. Each l adults average share is nearly $500 and, although payment won't be suddenly demanded, each of us is paying interest on public debt in | billions of dollars through visible or invisible taxation.
 l Whereas all of us are debtors. millions of us are also creditors. l Anyone who owns a bond, a stock, a bank deposit or an insurance pol icy is a creditor. Creditors profit when they collect interest and prin- cipaI in dollars worth $1.65 as com- pared with 1929, but many have suffered through defaults and col lapses of property, security and other values.
 "NatiOnal Insolvency"
 | The big, bad, stark fact about our debts is that they were largely contracted in days of high prices and high incomes. Now the debts remain and both the national wealth on which they were based and the income with which they were to be paid have so fallen that a large proportion of the debt and it's charges simply can't be met. We hear of national insolvency" and Senator Borah says the national in- come, measured against the de- mands of taxes and interest, is | practically zero.
 About 100000 property fore closures have been made within three years and in the last six years one farmer in every 10 has lost his farm. Railroads are at the crisis. Pressure on nearly all types of debts has been intensified.
 With action demanded. congress is paving the way to speed meas ures for debtor relief. A bipartisan agreement on unprecedented legis- lation has been reached in a des- perate effort to get action in the present short session.
 | Governors and legislatures are acting. Moratorium talk is in the air. The federal government con- siders converting billions of bonds to lower interest. Big life insur- ance companies, holding $2,0O0,- O00,00O in farm mortgages, prom ise to postpone foreclosures in western states. In New York, where there is $8,50O,O0O,OO in Mortgages, a strong movement be- gins to cut real estate mortgage in- | terest to per cent.
 The fact that all debtors are | in more or less the same type of boat is shown when you examine some of the chief types of debt. | A Look at the Books
 First, there's the general total of debt, which has been estimated both below and above the loosely accepted sum of $2OO, 900 .0O0,O 900. or about $1600 per capita. The debt had increased about 40 per cent in the prosperity period, but it didn't seem so menacing before the national wealth dropped from s329, ,Ooo, COG, ,ooO in 1880 to an es- timated S26O,000, 100000, or $1964 | ,NtA Ao 3,, 1000 nts hnfnrn Inc SS5.OOO,OOO,O0O national income of 1929 had fallen to an estimated S37,O0O, 100000 last year. or $296 per capita. Taxes run about $15,- GOO, ,OOO,O ,O06 a year, and interest an estimated $1O,OOO, 100000 for a combined per capita of about s200 which would be two-thirds of the average per capita income.
 Farmers are hardest hit as q group because the prices they re- ceive have gone down far beyond 1, other price levels. He piled UT most of his debt when farm prices were two to five times as high as now. Rural taxes meanwhile have risen 2S6 per cent. Farm income has declined by $9.000. 900, ,000 since 1919. Farm values have declined 25 to 30 per cent during the de. pression.
 But haras assed, mortgaged farm CT perhaps is as well off as the city dweller with mortgage payments and taxes to meet who has lost his job. Banks, which had about $37.- 900, 100000 out in loans in 1929 have been just as hard on the city borrower. in their anxiety to raise cash. as on the farmer.
 Railroads owe some $13.000, ,000.- 900 of an estimated $75.000. 100000 of corporation debt. Their earn ings fell from $1.275, 100000 in 1929 to s$324. 900, 900 in 1882. Only