The Freeman 1972 - The Ludwig von Mises Institute

410 THE FREEMAN July"bank holidays."16) Sometimes taxforeclosures would occur. In anycase, local farmers would occasionallyattend the auction, and agroup of them would surround orthreaten potential bidders, especiallyif they were outsiders to thecommunity. Violence, or the threatof violence, was used directly toreduce the price of the bids, thuslowering the particular farmer'scosts in regaining title to his farm.The true costs of operating thefarm were therefore artificially reduced,thereby lowering the owner'sburden of responsibility to thepublic, as registered on the openmarket.Agricultural LegislationThis, however, was too crude anddirect a form of violence to beused often, even when local law enforcementauthorities permitted it.Violence could be applied far moreeffectively through state legislaturesand the United States Congress.In 1934 three acts werepassed by the Federal government,adding even further interventioninto an already controlled farmmarket (e.g., the Farm Credit Actof 1933) : the Farm Mortgage RefinancingAct, involving Federallyinsured loans; the Farm MortgageForeclosure Act, extending the authorityto the Land Bank Commissionerto enable him to make loansto farmers, allowing them to redeemtheir farm properties priorto foreclosure; the Frazier-LemkeBankruptcy Act, allowing thefarmer who had lost his farmthrough foreclosure to demand a"fair and reasonable" appraisaland to repurchase his propertyover a period of six years at oneper cent interest (interest rateswere fairly low in the free marketin these years, however). Thislast act was declared unconstitutionalin 1935, but a similar act,shortening the repurchase time tothree years, was upheld in 1936.In short, the coercive monopoly oflegitimate power which belongs tocivil government was applied inorder to thwart the operation ofthe free market. Men successfullyreduced the costs of ownershipthrough collective violence or thethreat of violence. Harold UnderwoodFaulkner, no supporter ofthe free market, has commentedon the implications of these earlypolicies of New Deal agriculture:A survey of the farm legislationpassed during the five years 1933­1938 make clear certain facts. Firstof all, "economic planning" was carriedfurther with respect to argiculturethan to any other economic interest.The government took upon itselfthe responsibility of attemptingto determine both production andprices as well as maintaining soilresources and handling most of the