Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1939-03-02
Shipstead Explains
His Mortgage Bill

The measure which 1 have intro
duced, known as the Farm Mort
gagors Emergency Protection Act,
IS. j. R. 65) is designed to meet
set of injustices as far as it is felt
to be within the constitutional power
of the Congress to do so.
If this measure is approved, Fed
eral farm lending agencies will no
longer have the authority to take
deficiency judgments against dis
tressed farmer. Farmers will no
longer see their land taken away
from them by Federal agencies and
sold to some one else at subStan-
tial reduction. The benefits of this
reduction will be given to the man
who is on the land and who can
no longer meet his mortgage pay
ments. The bill provides mechan-
ism through which the distressed
farmer will be permitted to obtain
a reappraisal on his farm and get
new loan based on the judicially ar
rived at value of his land.
Everybody knows that for the last
20 years farm prices and incomes
have been such that it has been i'm
possible for the farm to produce
enough to carry the heavy mortgages
incurred during period of inflated
values. The result has been cpl
denies of foreclosures dis
possessed and pauperized for life
through deficiency judgments.
Refinancing Hasn't Helped.
Such attempts at remedy as have
been made have, for the most part,
resulted in refinancing the farmers
debt, leaving him saddled with just as
large, if not larger, total debt bur-
den. Some reductions in principal
have been made but most of the
cut in the mortgage debt has come
through the harsh method of fore
closure. Since 1884 the two Federal
lending agencies, the Federal Land
Banks and Federal Farm Mortgage
Corporation have foreclosed no less
than 10000 mortgages representing
an investment of 100000. At the
end of 1888 these two agencies still
held more than $780, 100000 in farm
lands Since 1924 these two agencies
have sold 1929 whole farms and
10,415 part farms in which they had
an investment of 1926, 100000 for
consideration which represented an
average loss of about % percent. The
original farm owner has been bled
white and then handed deficiency
judgment to cure his ills.
Glaring Injustices.
These facts should point to the
glaring injustices and hardships
which are being worked upon the
farmers. Since Federal lending agen-
cies hold less than 40 percent of the
total farm mortgage debt of the coun-
try it is safe to assume that these
injustices are widespread. only re-
greet that it is not possible to offer
general legislation of the type 1 am
proposing that would apply to all
mortgage contracts.
In my resolution the continued
power of the Federal land banks to
issue bonds is made to hinge upon
their willingness to agree to grant
certain benefits to farm mortgagors.
In the first instance they must agree
to cancel all deficiency judgments
obtained before or after enactment
of this resolution. These banks must
also agree, on the application of
distressed mortgagor, to scale down
his debt to the appraised value of
the farm. The standard of appraisal
value fixed by the resolution takes
into account the income producing
of the farm, the price real
property would be likely to bring at