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When U.S. Farmers Fought Foreclosures

By Philip Scranton
January 21, 2013 10:07 AM EST
Farmers gather to prevent a foreclosure auction in 1930.
Source: Library of Congress Prints and Photographs Division
Farmers gather to prevent a foreclosure auction in 1930.

Early in 1933, the Wall Street Journal announced that a "profitless year for agriculture" had at last come to a close. Commodity prices had fallen 50 percent on average from 1931 to 1932. A quarter of the population, 32 million Americans, worked in the agriculture industry, yet their share of national income was half that size.

Many farm families began to ignore mortgage payments and property taxes, and rural banks holding farm mortgages risked insolvency. As a result, foreclosures rose steadily in late 1932, despite the underfunded efforts of Federal Home Loan Banks to stem the tide.

Irate farmers descended on Washington in December, appealing to Congress for action.

"Our children are starving and developing rickets," one told the Washington Post. "Our crops rot for want of a market, and now even our farms are being taken from us through foreclosure. What are we to do?"

About 40 percent of the nation's farms had mortgages in December 1932, the U.S. Bureau of Agricultural Economics estimated. Farmers demanded a "mortgage holiday," legislation suspending foreclosures and creating a federal commission for farm refinancing, similar to the Reconstruction Finance Corporation’s aid to railways and manufacturers. But a stalemated Congress adjourned without taking action.

Farmers turned to protests. In late December, 75 Wisconsin farmers gathered to block a sale. They failed, and a bank bought the contested 40 acres for $1,900. Still, protesters pledged to prevent any attempt to evict the family.

On Jan. 2, farmers used passive resistance to block property auctions in three Iowa counties. "There aren’t going to be any bidders," one man said. And there weren't. "More than 2,000 pieces of property were to be offered for sale, but there was not a bid from the 400 to 500 persons at the courthouse," the New York Times reported.

In Plymouth County, Iowa, 800 farmers tried to prevent a foreclosure sale by overpowering the sheriff and threatening to lynch the mortgage holder's attorney, who was the only bidder, unless he raised his offer. He did, and the deal was made, but officials announced "there would be no further sales on foreclosure in the county for at least a month."

Resistance spread rapidly across the plains as groups of farmers prevented or delayed sales with increasing regularity.

A turning point came in mid-January when police with machine guns fired 300 rounds in Elkhorn, Wisconsin, scattering a crowd blocking an eviction. Governor Albert Schmedeman issued a proclamation asking state judges to refrain from enforcing mortgage-foreclosure law and promising that the legislature would work on a bill to provide a three-year moratorium on foreclosures.

Other states also responded to farmers' protests. Iowa’s superintendent of banking canceled farm-mortgage sales; Nebraska legislators sought to expedite a bill that would sharply reduce land taxes; and Kansas lawmakers began discussing a proposal to reshape foreclosure practices.

Defiance continued, nonetheless, as 1,000 Minnesotans "thronged the court house" in Willmar to prevent foreclosure of a mortgage on a farm landowner Soren Hansen had tilled for 57 years.

The U.S.'s agricultural crisis had entered a new phase, in which farmers were resisting, at times violently, the lawful but deeply unpopular seizures of property.

(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)

Read more from Echoes, Bloomberg View's economic history blog.

To contact the writer of this blog post: Philip Scranton at scranton@camden.rutgers.edu.

To contact the editor responsible for this blog post: Kirsten Salyer at ksalyer@bloomberg.net.

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