Economic essays

Bibliographic data

Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The farmers' indemnity / Alvin S. Johnson

Collection:: Economics Books

222 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK His creditor, the local banker, refrains from foreclosing. He is an admirer of Charlie Dawes and the famous Plan, and generously contents himself with all there is to get. TV The simplest and most popular proposal for the relief of the overburdened farmer is the raising of prices of farm products, either through cooperative activities or through political action. Dump abroad any surplus above domestic consumption at a fair price. Let us assume away the practical obstacles to such a pro- ject. They are serious, but it is by no means certain that they could not be surmounted if the nation became convinced that they offered permanent relief. How would the raising of prices affect the situation? No one would deny that a substantial advance in the price of farm products would strengthen the position of those who now own mortgaged farms. A twenty-five per cent advance in prices would increase the farmer’s income at least a billion and a half in the average year. If it were applied chiefly to debt payments it should extinguish the farmers’ indemnity in seven or eight years. But a twenty-five per cent advance in prices, if it promised stability, would be followed straightway by a rise in land values. Farms would change hands rapidly, as they did in the boom period at the close of the war, and every change would involve an addition to the volume of farm debt. It is not in the least improb- able that at the end of ten years the farmers’ indemnity would stand at twenty billions, instead of ten. Thus, while the capacity of the farms to pay would have increased, the burden of obliga- tions would have increased considerably. At present the prices of farm products are too low to yield a fair return on the farmer’s labor together with normal interest on the capital represented by the value of his land. If much of that capital is borrowed under mortgage, the difficulty of meeting interest charges is almost insuperable. Two dollar wheat and one dollar corn, with prices of meat and dairy products correspond- ingly advanced would ease off the present situation. But if land values rose and the volume of debt increased, we should soon hear a clamorous demand for three dollar wheat and dollar and a half corn. Any plan of price control that accepts capital values as a

Access restriction

Copyright

fullscreen: Economic essays

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation