Evening star., 1933-01-29
BY MARK SULLIVAN.
I F we consider the Congress now COM
ing toward a close in the broadest
way. We should look upon it in the
L light of its relation to conditions in

ing toward close in the broadest
way. We should look upon it in the
i light Of its relation to conditions in
the country. In the latter field the
phenomenon most full of meaning-the
one that springs from the most funda-
mental condition-is the appearance in
the newspapers of accounts of fore
closure sales of farms, at which neigh
boring farmers appear with the con-
certed purpose either of causing the
sale to be prevented or of bringing it
about that the prices Of the foreclosed
farm and of the farm equipment, if the
latter is sold. should be nominal, their
object being to keep the debtor in occu-
pancy of his farm. These accounts be-
gan to appear some weeks ago as dis
patches from the West; latterly they
have come to the surface from points
as far east as the rural counties out
side Philadelphia.
These episodes are, in effect, "buy-
ers' strike" or buyers boycott" The
purpose Of the strike, however, is not
primarily to bring down the price of
the thing sold nor to enable the buyers
to get goods at low prices. On the con-
trary, they are essentially a social and
political phenomenon. The purpose is
to protest against the injustice done
the farmer by attempts to collect un-
der present conditions mortgages which
were made under pre-depresSion condi-
tions. The purpose Is not merely to
protest against an isolated injustice, but
to make communities and the whole
Nation aware of this injustice. The at
tempts are effective. Holders of mort
cages attempting to collect are prevent
ed from getting the full amounts of
their debts
Effect on Creditors.
The experience has its effect upon
other holders of mortgages, especially
upon large organizations of lenders on
1arm mortgages, such as insurance COM
panies and joint stock or Federal farm
loan banks-lndeed, upon the entire
creditor class of the country.
At this point, while not germane to
thu main theme of this article, two
points should be made. One is that
there Is not any creditor class" Prac-
tlcally every man and every institution
is at one and the same time a creditor
and also debtor. Not all realize it.
Some of the very farmers who partici-
pate In these buyers boycotts are them
selves creditors and, whether consciously
or not, stand to make a sacrifice
through the principle they are under
taxing 10 establish.
Some Of the embattled farmers are
themselves. for example, holders of in
surance policies. As such, though they
may not realize it, they are in the
creditor class. At some future time.
upon death or the conclusion of an
endowment term they expect to re-
ceive the amounts of their policies in
full. But these very insurance COM
panieS are in many cases the mort
gageeS whose rights the farmers are
trying to reduce. To the extent that
any insurance company having mort
gage on farm is prevented from COL
lectlng the amount of the mortgage in
full-to that same extent the insurance
company is reduced in its ability to pay
its policyholders in full.
ct should be added that this condi-
tion. while correct and valid as state
ment of principle. is in practice not
very material. Insurance funds are in
vested over wide and varied field.
Insurance companies count upon suffer-
ing some losses. While the sum of the
losses now being endured is greater
than in normal times, there is no
faintest reason to suppose that any i'm
portant insurance company will be so
hampered in its collection of the funds
it Is owed as to be unable to pay its
policies in full as they mature. There
will be inevitably reduction in GER
tain premiums" of the nature of a
bonus. which insurance companies
habitually pay to policyholders. But
the amount will not be materially
Effect as to Taxes.
The other point to be made about
these buyers boycottS" on the part of
farmers is that some Of the strikes are
not only against foreclosure sales by
mortgages, but also against tax sales"
that is, sales by the local county or
State government on account of failure
of the owner of the farm to pay his
taxes. There is some difference in
principle. leading to some difference in
the ethical attitude, Of strikes against
the two forms of forced sale. A farmer
who has signed his name to promise
to pay Is under greater obligation to
live up to the promise than another
farmer who in an action of the Legs
lature or of the tax assessor, in which
the farmer has not participated. is put
under obligation to pay larger amount
in taxes than it is humanity possible to
pay. OF the two forms of buyers
boycott" the latter would seem to be
little farther in the direction Of juSti-
fication.
Cooperative action by the neighbors
of farmer to prevent or discourage
foreclosure sale, a buyers boycott"
arises out of the familiar fundamental
condition. One repeats it yet again for
the hundredth time because 1t IS little
understood, but it is the basic fact in
this depression. A farmer in 1929. or
during any of several years preceding,
gave q mortgage ON his farm for S10,-
600 At that time wheat was. let us
say, a dollar a bushel. With wheat at
a dollar bushel or any price approx
imately that, the farmer was able to
pay the interest on his mortgage and to
meet the principal when due, but with
wheat at less than so cents bushel the
farmer cannot pay. It is literally i'm
possible. To make the condition vivid,
we can state 1t thus: When the farmer
borrowed $4,000, he borrowed 10000
bushels of wheat. He Is now called on
to pay back twice that amount, 10000
bushels of wheat.
What is said here Of the farmer Is
true of all classes Of debtors having to
do with all classes of goods. The wheat
farmer Is used here as merely an ex-
ample.
Only Two Possibilities.
The condition of the mortgaged
farmer can be overcome in only one of
two ways TOR by both ways operating at
the same time)-either the price of
wheat must go up or the amount of
the debt must be reduced.
This Is the condition which Is at
tempted to be met by scores of measures
proposed in this session Of Congress.
This condition, in sort, underlies lit
orally almost everything Congress at