The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-07-10
Legal Moratorium


is not surprising because. In = way
it Is direct thrust at their capacity
to make an adjustment in the Ameri-
can financial scene which Is sorely
needed.
Both politicians and non-political
economists agree that one Of the
great problems confronting. not only
America and the American farmer
but the world. Is the adjustment OF
the debt structure. A good many
people owe more than they possibly
can pay unless economic conditions
take turn for the better In excess
of even optimistic hopes.
As q result, one OF the chief en-
deavors of the Roosevelt administra-
ton has been to adjust the debt situ-
alton so that those who owe will have
q better chance to pay. It was this
which dictated the money manipula-
ton and the adjustment Of tho gold
standard. Il lies in the background
Of the federal farm moratorium oct.
FOR the obvious purpose Of this en-
actn1ent is to force q compromise be-
tween debtor and creditor that bills
may be scaled down to point where
payment can Be made-or at least
legitimately expected.
The social background Of the stat
ute lies in the fact that wholesale
reputation, accompanied by whole
sale bankruptcy, appeared the only
other way out Of situation which
weighs heavily on the national con-
sciousness and prevents the resump-
ton Of business on normal scale.
In many instances the farmer has
assumed too heavy q burden. The
moratorium bill asks that those who
erred In extending him too much
credit share this burden with him
and clear the decks for q new re-
sumption OF activity. The process Is
to be one Of judicial determination
Of how much he can pay and provi-
sion to help him pay 1t In connection
with the federal credit agencies al
ready in operation.
In this connection 1t Is interesting
TO note the difference between the
situation Of the farm debtor and that
Of incorporated institutions which
have suffered experiences similar to
his.
OF equal interest is the position Of
the farm creditor and that Of the
man who invested in industrial Sc
curities.
When a corporation owes more
than it can pay. and there have been
untold thousands Of such cases In
the last few years, it goes into q re-
ceivership and possibly into bank
ruptcy. Either its assets are liqui-
dated and distributed among the
creditors or the receiver tries to re-
store it to solvency, creditors with
holding demands for payment In the
meantime.
In many cases the main creditors
have been stockholders who pur-
chased securities listed on exchanges.
From day to day they have been able
TO tell what their investments were
worth by means Of published quota
tions. Thus, in the case Of insult
and many other stocks, they were
eventually appeised that their hold
lngs were worthless, Or nearly 50
There was nothing they could dc
about It. The collapse Of their IN
Sestment was something out Of Their
hands. The affair was an impersona
Dne, though many personal trasedie.
resulted from this vanishing Of
values.
Farm credit, however. Is . persona
matter. The average farm is not a.
incorporated venture. The farmer
enjoys none Of the privileges Of o.
artificial person known as . corpora.
ton. No stock exchange = big enough
% list the financial standings Of tn
Frank Smiths and John Browns o.
agricultural America. The only mar
ket for his securities was that which
he obtained when he negotiated tn
loan and the face value Of his mort.
gage 70 n ins unchanged despite
changes In the economic dtuation-
~ result farm mortgages have
pn the whole. hst far leas than thosl
Who put their money into commercial
1ecuritiek How much they have lost
II anything. cannot b determines
until m effort = naads 70 eolleet.
The only way to force collection II
3he past has been to foFeclose and
sake over III property under mart.
bass. tim put \ q ~ ma1het "a
what + wilf brlng.
To Basnlt = many sases w1oge
fhis has boon trisd. has been . -.