Evening star., 1938-10-15

ture difficulty the arrangements for
Government rescue party are already
in existence. The lending power of
the Federal Farm Mortgage Corp.
lasts until the beginning of 1910, and
over $500 100000 of its power to issue
bonds is unexhausted; while the bond
issuing power of the land banks is
not limited either as to time or
amount. The farmer-if not the tax
payer-may congratulate himself on
a very comfortable solution of the
farm debt problem"
Bad Sectors Pointed Out.
The study goes ahead to make GER
tain reservations about the future OF
the city home mortgage problem, how
ever, pointing out some bad sectors
due to low rents, higher maintenance
costs and continued tax rate levels.
The owners of mortgaged homes are
not yet out of the woods. Unless
there is a very marked rise of prices
carrying rents upWard-Within the
next few years, many of these debtors
must eventually lose heavily. More
over, the continued existence of the
moratorium laws, which saved so
many properties during the depression,
has accentuated mortgage difficulties
by making it unnecessary to reflnance,
70 that removal of moratoria would
swamp the market with loans i'm
mediately due and payable"
Nevertheless. the study finds "nu-
merous signs of Improvement in the
mortgages which represent over
whelmingly the most important debts
Of farmers and average city home
owners.
The mortgage problem was studied
as part of a three-year investigation
Of the entire debt situation, public
and private, by research specialists
reporting to the committee, which will
bring recommendations on public
policy in an effort to strengthen the
Nations economic structure and
cushion the shocks of business de-
clines
The widespread changes in the mort
gage debt parallel several other major
developments of the postwar era:
% Collapse of farm product prices
and rise of unemployment and busi-
ness reverses among home owners
resulting in foreclosure, bankruptcy
and tax sales; 90 the huge Federal
refinancing and lending campaign, and
other governmental aids, such as State
moratoria; 80 wide redistribution of
the mortgage debt, with the Federal
Government becoming a large owner,
while the holdings of credit institu-
tions declined: (4) scaling down of
farm and urban home mortgage debt
principal and interest by Federal
credit agencies; 60 scientific amortiza-
ton practices instituted by the Gov-
ernment.
Mortgage Debt In Default.
Much of the mortgage debt fell
into default-in 1888 the proportion
was between one-third and one-half." ;"
the report says Despite Government
srefinancing of $5,O00,O00,0O0 of dis
tressed farm and home mortgages,
another $500O,00O,000 seem to have
been foreclosed by creditors. These
IOItClOSultS are Illc Ciile1 ehplalldIloii
of the fall of mortgage debt between
1929 and 1886 from $4,000, ,000000
70 s35, 900 100000 (both totals includ-
ing mortgage debts of commercial
properties). The condition of the re-
manning mortgages showed decided i'm
provement in 1867"
At its peak in 1923 the farm part
of the mortgage debt totaled about
$500, 100000 which fell to 81 $50 ,000,-
600 by 1885, the shrinkage continuing
through 1886 1t is estimated that
foreclosure and other forced sales
caused change of ownership of about
I.87 per cent of all farms in the