Kankakee Valley Post, Volume 14, Number 29, DeMotte, Jasper County, 2 June 1944 — Why a Farmer Should Buy and Keep War Bonds [ARTICLE+ILLUSTRATION]

Why a Farmer Should Buy and Keep War Bonds

by O. G. Lloyd

Head , Dept, of Agricultural Economics Purdue University

FOR more than 16 months farmers have enjoyed the most favorable exchange of farm dollars for Bond dollars in more than a quarter of a century. Based upon 1935-39 as 100, farmers have sold farm products at the average ratio of $l4O for every SIOO paid, including interest and taxes. This ratio compares most favorably with the decade 1920-29 with a ratio of 105 and especially with the decade 1930-39 when the ratio fell to 89 or an sll loss compared to the base period of 100 in 1935-39. Granting that the post war period price level will not fall lower than the level of 1935-39 for a long period of time, the advantage of exchanging war inflated farm dollars for War Bond dollars is obvious. Ordinary business transactions are made on a margin of less than 10 percent compared to this extraordinary exchange of 40 percent. To obtain the 40 percent advantage of inflationary farm dollars, it is necessary to keep the War Bonds until prices are deflated to the 1935-39 level. In the meantime the interest paid on the investment will increase the value of the bond percent or a War Bond costing $75 will be redeemed by the Government at SIOO. During periods of stationary and of falling prices of farm products, which are probable during the next decade, farming will have urgent demands for liquid capital which can be readily turned into cash for equipment and improvements. Such expenditures wisely made pay big dividends through more economical production whicty meets current demand. At such periods the wise farmer is not handicapped for operating capital if he owns War Bonds. Backed by the credit qt the Government, War Bonds are so secure and so readily convertible into purchasing power that they excel the land

itself as a means of providing ready cash. The discipline of following a budget which requires savings for investment promotes prudent spending of time and money. When the amount for spending is reduced in order to invest for private and public benefit, an increased satisfaction is gained by a new evaluation of current needs in terms of making the investment goals possible. It is little wonder then that such War Bond purchasers marvel that current needs are met about as fully as before and the Bond seems to be more of a gift than of a sacrifice of present wants. Savings for buying War Bonds are obtained, therefore, with the least friction of daily living when accompanied by judicious spending. Farming is an occupation which offers an excellent example of the American principle of free enterprise. Farmers should buy War Bondj and keep them because their Industry and efficiency have given them the highest production per man of farmers in any country. Without high production per man, there cannot be much to spend on current needs, much to save for purchase of War Bonds and much to give to any worthy cause. Now that high purchasing power of farm products is accompanied by high physical production of farm products per man, the income of farmers has been increased correspondingly and farmers are able and willing to buy War Bonds. Such purchases are not only a smart investment for high economic and patriotic returns, but farmers can avail themselves of the opportunity today because they do have the money to make the purchase of the War Bonds and should keep them in order to obtain the highest returns on the investment. U. S. Treasury Department