LectureXIII - Lecture XIII: Optimum Debt Choice I. II....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture XIII: Optimum Debt Choice I. History of debt in U.S. Agriculture A. Pre 1900 agriculture can be summarized by little use of debt. The two most expensive inputs for agriculture (land and machinery) where governed by entirely different processes than in current times. 1. Land was available through homesteading at nominal filing fees. 2. Mechanization as we think of it today was largely non-existent. Labor was intensively used. 3. Merchant lines of credit-Inputs that had to be purchased were typically financed by vendors such as cotton gins. B. With the last land runs (Oklahoma 1896) the era of free land drew to a close. In addition, at the turn of the century mechanization began to be a driving force in agriculture. As a result, the need for agricultural credit expanded. Most of the increased credit needs were met by local banks. C. 1914-20 “the golden age of agriculture” farmer’s need for credit expanded beyond the local banks ability to meet the needs of individual borrowers. The U. S. Congress established what would become the Farm Credit System as a cooperative organization of borrowers. D. The Great Depression brought the FmHA (Farmer’s Home Administration which has become the Farm Services Agency of the USDA) and the Tennessee Valley Authority to lend to farmers and agribusinesses.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

LectureXIII - Lecture XIII: Optimum Debt Choice I. II....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online