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Value, debt, and ratio of debt to value of all Minnesota farms

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This estimate of the chattel mortgage debt was compiled by the statistical division of the agricultural school of the University of Minnesota.

The condition can further be shown by some tables, Senator, that are self-explanatory, and I have numbered them. Table 4 is a table of distribution by tenure of Minnesota farms.

Table 5 shows the value of mortgage debt and ratio of debt to value of mortgaged full-owner farms in Minnesota, showing a considerable increase between 1910 and 1930; the ratio of debt to value increasing from 26.4 per cent in 1910 to 44.6 per cent in 1930.

I would like to introduce them and make them a part of the record.

Senator FRAZIER. That may be done.

(Tables Nos. 4 and 5, referred to and submitted by the witness, are here printed in full as follows:)

Value mortgage debt and ratio of debt to value of mortgaged full-owner farms in Minnesota

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I desire also to introduce Table No. 6 which shows the percentage distribution of Minnesota mortgaged farms according to ratio of mortgage debt to value, January 1, 1931. It shows that 14.2 per

cent of the farms are mortgaged to a valuation of between 0.1 per cent and 25 per cent. Thirty-one and one-tenth per cent of the farms were mortgaged to a valuation of 25.1 per cent to 50 per cent. Twenty-two and eight-tenths per cent were mortgaged to a valuation of 50.1 per cent to 75 per cent. Twenty-three and six-tenths per cent, mortgaged between 75.1 per cent and 100 per cent, and 8.3 per cent are mortgaged more than 100 per cent.

I would like to insert that table also as a part of the record. (Table 6 referred to and submitted by the witness is here printed in full as follows:)

Percentage distribution of Minnesota mortgaged farms according to ratio ofi mortgage debt to value, Jan. 1, 19311

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I have here a table showing index of value per acre of farm real estate in Minnesota, according to the United States Department of Agriculture, and based upon an average of 100 for the years 1912,. 1913, and 1914. We find a top or peak in 1920, with an index figure of 213, which subsequently has been reduced until now, in 1931, it is 116, showing a decrease of approximately 100 points.

(The table referred to and submitted by the witness is here printed in full as follows:)

Index of value per acre of farm real estate in Minnesota based upon an average of 100 for the years 1912, 1913, 1914

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The tax situation in Minnesota which enters into this to some extent shows that the average tax per farm of 160 acres in all parts of the state amounted to $112.14; that the total taxes levied in Minnesota in 1929 were $134,599,863. There was a delinquency in 1929 and prior years of $28,605,536, and the percentage of 1929 taxes uncollected was 7.74 per cent.

In 1931 the Minnesota Rural Credit Bureau paid over three quarters of a million of taxes on farms owned by borrowers.

I would like to make that table also a part of the record.

(The table referred to and submitted by the witness is here printed in full as follows:)

1 Based on reports of 373 Minnesota farms.

Taxes in Minnesota, 1930

Average tax per farm of 160 acres, all parts of the State..
(Range from $23.01 per 160 acres in St. Louis County to

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$112. 14

134, 599, 863 28, 605, 536

In 1931 the Minnesota Rural Credit Bureau paid over $750,000 in taxes on its farms owned by its borrowers.

I have statistics here with regard to the valuation of farm crops in the State of Minnesota; and taking the average for 1924 to 1928 we have $346,961,000. We find that in 1929 that was decreased to slightly over $338,267,000; in 1930 to slightly over $245,454,000, and in 1931 to slightly over $142,952,000, which is a decrease of almost $200,000,000 since 1929 in the State of Minnesota alone.

The decrease in the United States was almost as much on a percentage basis. It shows a decrease from $8,000,000,000 in 1929 to slightly over $4,000,000,000 in 1931.

I would like to make that table also a part of the record.

(The table referred to and submitted by the witness is here printed in full as follows:)

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Considering the basis of the average 1909 to 1914, and using that as an index figure of 100, we find that prices in agriculture steadily decreased to 94 in January, 1931; 71 in November, 1931; 66 in December, 1931; and 63 in January, 1932.

While the prices paid for products used by the farmers, on the same basis, had increased until they reached a figure in January, 1931, of 137; in November, 1931, of 123; in December, 1931, 123; and in January, 1932, 121; which made a ratio of the prices received to the prices paid by the farmers from 100 in the average period 1910 to 1914, to 69 in January, 1931, 58 in November, 1931, 54 in December, 1931, and 52 in January, 1932.

This table also I would like to make a part of the record.

(The table referred to and submitted by the witness is here printed in full as follows:)

TABLE 9.-Average prices of farm products received by United States producers January 15, 1932, with comparisons

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The figures, as I see them, indicate that the purchasing power of the farmers has been reduced to slightly over 52 per cent of what it was in 1909 to 1914; and we believe that that is really the underlying principle of this entire depression.

There are some figures furnished by the Department of Agriculture on the bank suspensions of the various States, and we find that in the period commencing January 1, 1921, and ending November 30, 1931, the State of Minnesota had 1,515 banks, and since 1921, 523 of those banks have suspended, which is a total of 34.5 per cent, which involved in deposits $144,303.

For the entire United States the figures were 30,078 banks in 1920; 8,919 closed, which is a percentage of 29.7 involving in deposits $4,054,510.

I would like to make that table also a part of this record.

(The table referred to and submitted by the witness is here printed in full as follows:)

Bank suspensions, by States, January 1, 1921, to November 30, 1931

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Bank suspensions, by States, January 1, 1921, to November 30, 1931-Continued

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The delinquencies of the Minnesota Rural Credit Bureau have increased from 818 in 1925 to 3,581 in 1931, which would be almost 33 per cent of its total of 11,000 loans outstanding. The holdings in real estate of the bureau, due to foreclosures have increased from 125 in 1926 to 2,185 on December 31, 1931; a total of more than 700 mortgages were foreclosed in 1931 which means the bureau will own close to 3,000 farms by the end of 1932.

Statistics available convince us that this situation is true not only in Minnesota but also through the entire United States with very slight variations, and in our opinion the decrease of the purchasing value of the farmer's dollar is to a very great extent the cause of the present financial depression. We believe that if it were possible to increase the prices for the things the farmer has to sell and at the same time decrease the rate of interest which the farmer has to pay for his borrowed money secured by farm mortgages, the resultant effect would be a restoration of prosperity such as was enjoyed by the entire country when the farmers were making money. As we can see it, if the present conditions are permitted to continue, it is only a question of time till the farmers will be forced to surrender

101945-32-9

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