Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1933-08-24


them and creating Land Bank Com
missioner and appropriating 100000
600 for his use with which to save
farmers in distress by redeeming or
purchasing foreclosed farms and max
ing second mortgages. 1t was fine
piece of legislation and the motives
behind it were of the best, and if it
were possible to make it work so the
objective could be accomplished the
farmers of the country would again be
sitting pretty. But will it work? Let
us see.
The farmer, mentioned at the be-
ginning of this problem, needs re-
financing in the worst way. Either
he has to be re-financed or he and his
family will be compelled to go away
and take their places in the ranks of
the unemployed.
So he makes an application for
loan for an amount large enough to
pay up his present obligations and
his delinquent taxes and defaulted
interest besides few dollars to pay
for absolutely necessary repairs to
buildings and equipment. He figures
out that $1,000 is needed. The ap-
praisers come around to look over the
security offered. First they find that
the buildings have deprecated con-
siderably. To be conscientious they
cannot value them to more than
$500. Then the look over the land.
1t is all there and it is in a better
condition than it was when the orig
inal loan was made, but the income
from it is greatly reduced. So they
begin to figure out the value OF 1t
based on the income from it. The
rule is that it shall be able, under
normal conditions, to yield enough to
take care of interest, taxes and Nv
ing expenses of the family. Under
present conditions it does not yield
more than barely the living expenses,
and consequently it has no value for
loan; but the appraisers figure that
it should have some value and sc
they put it at $4,000, making a total
appraised value of the farm today
$4,000.
On this valuation a first mortgage
in the amount of $4,000 may be made
by the Federal Land Bank, and the
Land Bank Commissioner may Their
. if he so chooses, make an additional
loan of $1,000. This makes total o.
$4,000 with which to clear up a tota
indebtedness of approximately SIooo
! Maybe the answer will be that thl:
.Lo,,1J ,ro h nh and come II
an agreement with his creditors OF
terms that he could meet. What goot
, would that accomplish? The frs
= mortgage would take the farm owe
Y and the chattel mortgage holde
= would take all the personal propert
| and the rest of the creditors if any
e would get what is left which woul
e equal naught, the farmer would hav
e TO move to the unemployment column
: as he would not have any capita
t whatever with which to make neN
o start. and he would neither have an
e credit, not even from his best fr1en(
s Well, then, if that won't work,
s must try another way out. Let tn
appraisers value the farm at h1gf
j err figure. Farm values will com
e back. Granted. There can be n
e question as to that. Land is after a
e the only thing that has an 1ntrinsl
e value: from it we all get our su:
e tenance; it mothers all other indus
tries. If it some day should lose II
a fertility this world will be doome'
l. There can be no question about il
J. intrinsic value. 1t underbuilds ever
e. other value on this mundane eartl
but the prices received for its pr
ducts are insufficient to carry TT
burden of interest and taxes no
piled on it, and if more is piled on
will surely fail altogether.
u 1t seems plain that if the farmt
has been unable to meet his paymen
u. on the present Indebtedness it will
r, no good to make it larger. 1t mig
a cause him to carry on for anoth'
al year. when he again will be in nee
is of refinancing. You say, prices Il
,e his products will advance. Well th'
20 may. But looking back over past prl
tie depressions we find that the proce
e. of advancing prices is slow on
Most generally it has taken 10 yea
is to reach the peak. The old ada
al says: while the grass grows t
ed horse dies" l believe more drast
L. cure is needed, but more about tn
at later.
no -"GRATINO."
as