INFLATION

Bay of Plenty Beacon, Volume 5, Issue 9, 28 January 1942, Page 3

INFLATION

• RESULT OF THE WAR EFFECT ON FARMERS "If the war results, as the last one did, in an inflation of the currency, the owners of the land will have sometliing that will retain its value, [f they raise part of the purchase price by mortgaging the land, then so much the better in this event, as the}* . will be able to pay oil' the mortgage easily in depreciated money. Then they anticipate that the diminution in import of foreign foodstuffs will raise the price of agricultural products and so lead to an increase in agricultural profits and therefore an increase in rent. "This is also what happened in the last war, stimulated by the assistance given by the Government under the Corn Production Act. Many farmers were induced, and indeed jDractically compelled, to buy their farms at these speculative values, and when agricultural prices fell to a normal level they were left in a position of great difficulty. "It is this which lies at the root of the efforts made by successive governments since then to raise the price of agricultural products by tariffs, quotas and marketing schemes in addition to subsidies to the farmers. This policy has had the effect of keeping up the price of farm lands and has tended to perpetuate the evil."—Mr A. W. Madsen, B.Sc., Editor of "Land and Liberty," in his book, "Why the German Republic Fell."