Thursday, March 5, 2020

You owe how much!?

Reading from the County Captal newspapers
In explaining Kansas farming debt, their Senator wrote:  "crop prices had gone down while labor was costing the same and purchased items were costing more."  Continuing, he said, "if a farmer had given a mortgage for $1,000...he could have paid for it with 1,050 bushels of corn.  Ten to seventeen years later it would have taken, without interest, 2,702 bushels to have paid it."

That quote comes from a book by Walter T.K. Nugent, quoting populist Senator Peffer.  The senator was describing a theoretical mortgage given in 1870, with rising interest rates during the 1880s and 1890s. These rising interest rates, falling crop prices, and the costs of rail road shipping were front and center during the years of the Populist Movement of which Isaac Werner was a part.  Farmers had mortgaged their farms when crop prices were high and interest rates were low, but the mortgages were short term and were renewed at increasingly higher interest rates.  Kansas led the nation in the number of mortgaged acres.

Means of harvesting in Isaac's time
Does any of that sound familiar?  As I read a recent article in USA Today, I could not help thinking of Isaac.  He had double-dipped in mortgaging his farm, he had mortgages on his horses, and he owed notes to merchants.  Yet, he had avoided going into debt for about a decade, until he finally realized he needed a horse to break more sod for fields if he were ever to make his farm a success.

His debts to merchants were secured by notes.  More people today put their debts on credit cards.  

According to the USA Today article I read, the average American consumer has $6,194 in credit card debt, up from the previous year.  The average credit card interest is 14.87%, and that is actually a low figure because it does not account for interest-free loans.  If they are excluded, the assessed interest rate averages 16.88%.

When that rate is applied to Americans' average credit card debt, the average consumer is paying $1,045.55 annually.

Hand Planting
What has been so interesting to me in doing research for my manuscript about Isaac Werner and the Populist Movement, and in transcribing Isaac's 480-page journal, are the similarities of the issues in Isaac's time with the ongoing issues of today.  The anger aroused about the influence of wealthy and powerful persons on our government in Isaac's time is equally argued today.

I will close with a quote from the County Capital  in St. John to which Isaac subscribed.  In writing about the influence of wealthy railroad tycoons on politicians in Washington and state capitals, a subscriber's comment was published on March 25, 1892.  The subscriber declared:  "We would just as soon be robbed by a thief as a politician." 

1 comment:

The Blog Fodder said...

plus ça change, plus c'est la même chose
It is really sad that we seem to have learned nothing over the years.