Debt Device

Last week Senator Huey Pierce Long could tell all the debtor-farmers of Louisiana and any others who cared to listen, that, singlehanded, he had caused to be enacted a major measure for their relief. The measure was the Farm Bankruptcy Act which President Roosevelt signed just before leaving for his holiday. In the final hours of the last session of Congress, Senator Long, filibustered this non-Administration bill to a vote, and a vote meant passage. The latest device to hoist the U. S. farmer out of his mudhole of debt provided that:

1) Every farmer unable to pay his mortgage or other obligations could be declared bankrupt, have his farm appraised and, with the consent of creditors, buy it back over six years at the new figure, with 1% interest.

2) If creditors refuse to compromise on this method, the farmer would continue in possession of his farm, pay a "reasonable" rent and at the end of six years have the option of repurchasing his, farm at an appraised value approved by the courts.

Proponents of the bill cried that it meant a new financial liberty for debt-ridden farmers. Opponents, including holders of farm mortgages, cried out that it was one step removed from debt repudiation, that at the least it would amount to a free six-year moratorium, a huge hand-out to the farmers at the expense of honest investors.

Last week the President expressed his views:

"I have sufficient faith in the honesty of the overwhelming majority of farmers to believe that they will not evade the payment of just debts. In the actual operation of the law I do not believe that losses of capital will greatly exceed, if they exceed at all, the losses that would be sustained if this measure were not signed. ... It is worth remembering that this act will stop foreclosures and prevent occasional instances of injustice to worthy borrowers. . . ."

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