N.C. Farm Debt Adjustment Commission to Help Farmers, 1935

“Are You In Debt?” by J.W. Lamberson in the July, 1935, issue of the Carolina Co-Operator

If you are a farmer distressed by heavy debt, tell your troubles to the North Carolina Farm Debt Adjustment Commission and more than likely it can help you solve your problem.

A little over a year ago, June 12, 1934, to be exact, Governor J.C.B. Ehringhaus, keeping in step with a nationwide program of refinancing agriculture inaugurated by President F.D. Roosevelt, was appointed the North Carolina Farm Debt Adjustment Commission, composed of nine public-spritied North Carolinians.

The members of this Commission are Lionel Weil of Goldsboro, Chairman;  R.A. Doughton, Sparta, Vice-Chairman; Dr. G.W. Forster, Raleigh, Executive Secretary; J.L. Skinner, Littleton; Millard F. Jones, Rocky Mount, H.A. Millis, High Point; Julian Price, Greensboro; M.O. Blount, Bethel; and J. Allen Taylor, Wilmington.

County Committees

To facilitate this worthwhile program, the Commission secured the names of many outstanding and also public-spirited citizens in each of our counties.

From these lists Governor Ehringhaus appointed from five to seven members to serve on each of the County Committees of the North Carolina Farm Adjustment Commission.

Today there are 93 County Committees serving in the interest of financially distressed North Carolina farmers.

Nationwide Program

In 42 states there are similar Farm Debt Adjustment Commissions which are closely associated with the National Farm Credit Administration.

This new governmental credit agency has a more liberal policy for the financing and refinancing of the farmer than that followed either by the Federal Land Banks or the Joint Stock Land Banks. It provides for the customary loans through the Federal Land Banks p to 50 per cent of the appraised value of the property and 20 per cent of the appraised value of the improvements, in addition to the loans made by the Land Bank Commissioner. The Commissioner’s loan together with the customary loan of the Federal Land Bank can be as much as 75 per cent of the total appraised value of the farmer’s property.

When the maximum loan is insufficient to liquidate the outstanding indebtedness of the farmer, the local County Farm Debt Adjustment Committees attempt through voluntary adjustments to prevent the farmer from being disposed of his farm and to also aid the creditor in collecting as much of the original loan as possible.

To assist these County Committeemen, who serve without compensation, the State Commission named Harry F. Watkins of Durham, State Representative; and Joseph P. Greenleaf, Elizabeth City; Dr. J.E. Kirbye, Raleigh; and D.W. McPherson, Graham, assistant representatives.

These representatives attend as many of the County Committee meetings as possible each week and assist the members in their various Farm Debt Adjustment activities.

Mrs. Thomas O’Berry, State Emergency Relief Administrator, has cooperated and greatly assisted the Farm Debt Commission in North Carolina with the appropriation of funds for supplies and office personnel.

The County Farm Agents, County relief administrators, Rural Rehabilitation Directors, Case Workers, and other agencies have materially assisted in the voluntary Farm Debt Adjustment program in North Carolina.

First Anniversary

Dr. G.W. Forster, Executive Secretary, announced on June 12, 1935, the first anniversary of the North Carolina Farm Debt Adjustment Commission, that through agreements with creditors and in cooperation with other farm agencies, farm debts on 2,544 cases involving a total indebtedness of $7,816,535.88 had been adjusted to $5,948,825.55, saving the farmers of North Carolina $1,867,683.33, reduction of 23.89 per cent below the original amount. He also pointed out that although the creditor usually agreed to reduce the amount of the debts, most of them actually gained, since these adjustments are making possible the collection of debts which might not otherwise be collected. In addition it materially aided thousands of North Carolina farmers, who, overburdened by debt, could not conduct their farming operations successfully and be normal purchasers in their communities.

Despite this comparatively easy process to save one’s farm or refinance burdensome debts, Dr. Forster estimates that there is a larger number of North Carolina farmers today who are having their farms foreclosed on them or labor under heavy financial difficulties through ignorance of this free and convenient method of solving their financial difficulties.

A Typical Case

Now to make this article much simpler let’s take a typical case of a distressed farmer who was assisted by the Farm Debt Adjustment Commission.

Joe Doe lives on a 55-acre farm, 35 of which he uses to grow corn, tobacco, and cotton. When prices were high some six years ago, he borrowed $4,000 of his farm to make some improvements. He is unable to meet the payments on this mortgage at present and still owes the mortgage holder, the local bank, $3,350. Taxes for $89 for two years are due and several small bills mounting to around $125 are also past due.

Joe is about to lose his farm and as farming is his only occupation he can see himself serving as somebody’s tenant. By accident Joe hears of the Farm Debt Adjustment Commission and approaches his County Agent, who promptly directs him to a member of his local county committee. This committeeman listens carefully to his case and directs him to the acting secretary who files his application. His creditors are notified to meet with him before the committee at the next meeting and he is advised to have his land appraised for a loan by the Federal Land Bank.

The Federal Land Bank maximum loan on Joe’s farm is $3,200. At the meeting, the committeemen point out to his creditors that Joe is a worthy farmer trying to do the best he can. They also point out that Joe’s farm under the hammer would hardly bring this much, and urge them to make an adjustment of his debts so his loan will be sufficient to settle them all, rather than to foreclose on him or try to collect over a period of years. This is finally agreed to and $89 is set aside for taxes. The small creditor agrees to accept $90 and after careful consideration, the bank agrees to accept $3,000 in cash.

Joe has a clean slate, $21, and 20 years to meet this $3,200 loan from the Federal Land Bank at only 4 per cent interest and by easy yearly payments.

In finding a solution to a debtor’s difficulties, it may be a matter of reconstructing farm mortgages, reducing the interest rates, or providing for the debtor to make definite yearly or monthly payments. Regardless of the method employed, over 75 per cent of the cases brought before the committees have been successfully settled, and in addition a great many cases have been settled simply by the advice of committeemen.

Distressed farmers are urged to bring their cases before the committees immediately as the program is of any emergency nature and may be terminated at an early date.