May 16, 1947
My dear Mr. Secretary:
Recalling the distress among farmers which resulted from land inflation in the 'World War I period, I am deeply concerned about the recent rise in farm real estate prices. I understand the reports of your Department indicate that for the country as a whole farm real estate values have reached a level 92 percent above the 1935-39 average. I also understand that in 24 States real estate values are now above the inflationary peak of 1920 and that in many areas of the country farms are selling at prices which cannot be sustained by probable long-time farm earnings.
It is apparent that a united effort by all concerned is needed if we are to prevent further inflation in farm real estate prices and over-expansion of farm debts. While on the whole agriculture is in strong financial condition, the fact remains that there are a large number of farmers, including veterans, who are going heavily into debt to purchase farms at inflated prices. These farmers are likely to find themselves in difficulty when prices of farm products decline to lower levels.
I believe that the existing farm price situation presents a serious problem which should be given careful consideration by institutional lenders and others concerned. For this reason I suggest that at an early date you call a conference of representatives of the appropriate Government agencies and the general farm organizations for a consideration of the problem. Invitations to the conference should also be extended to representatives of life insurance companies currently making a large number of farm mortgage loans, the American Bankers Association and the Federal Reserve System. From this conference I hope there will develop a specific program of methods for discouraging further inflation in farm real estate prices and unwise expansion of farm debts.
Very sincerely yours,
HARRY S. TRUMAN
[The Honorable The Secretary of Agriculture, Washington, D.C.]
My dear Mr. Secretary:
Recalling the distress among farmers which resulted from land inflation in the 'World War I period, I am deeply concerned about the recent rise in farm real estate prices. I understand the reports of your Department indicate that for the country as a whole farm real estate values have reached a level 92 percent above the 1935-39 average. I also understand that in 24 States real estate values are now above the inflationary peak of 1920 and that in many areas of the country farms are selling at prices which cannot be sustained by probable long-time farm earnings.
It is apparent that a united effort by all concerned is needed if we are to prevent further inflation in farm real estate prices and over-expansion of farm debts. While on the whole agriculture is in strong financial condition, the fact remains that there are a large number of farmers, including veterans, who are going heavily into debt to purchase farms at inflated prices. These farmers are likely to find themselves in difficulty when prices of farm products decline to lower levels.
I believe that the existing farm price situation presents a serious problem which should be given careful consideration by institutional lenders and others concerned. For this reason I suggest that at an early date you call a conference of representatives of the appropriate Government agencies and the general farm organizations for a consideration of the problem. Invitations to the conference should also be extended to representatives of life insurance companies currently making a large number of farm mortgage loans, the American Bankers Association and the Federal Reserve System. From this conference I hope there will develop a specific program of methods for discouraging further inflation in farm real estate prices and unwise expansion of farm debts.
Very sincerely yours,
HARRY S. TRUMAN
[The Honorable The Secretary of Agriculture, Washington, D.C.]