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Penny auctions during the great depression to save farms
Posted on 7/27/22 at 9:08 am
Posted on 7/27/22 at 9:08 am
Fascinating how people banded together vs how society is now.
Also, now days you can just sell your farm to China or Bill Gates instead of losing it
Penny Auctions Fight Foreclosures during the Depression
Also, now days you can just sell your farm to China or Bill Gates instead of losing it
quote:
Penny auction at foreclosed Michigan farm (1936)
At penny auctions farmers would conspire to offer low bids, resulting in a low return to the creditor. The final buyer would then return the property to the destitute farmer
Hangman nooses served as a warning to squirrely bidders
Penny Auctions Fight Foreclosures during the Depression
quote:
As the pace of foreclosure auctions increased between 1930 and 1932, more and more farmers became desperate. Activists demanded that state legislators halt foreclosure sales. Angry farmers marched on the capitol buildings in several states, including Nebraska.
Some farmers in Madison County, Nebraska, took matters into their own hands. In 1931, about 150 farmers showed up at a foreclosure auction at the Von Bonn family farm. The bank was selling the land and equipment because the family couldn't repay a loan. The bank expected to make hundreds, if not thousands of dollars.
As those who were there remember it, the auctioneer began with a piece of equipment. The first bid was 5-cents. When someone else tried to raise that bid, he was requested not to do so – forcibly. Item after item got only one or two bids. All were ridiculously low. The proceeds for that first "Penny Auction" were $5.35, which the bank was supposed to accept to pay off the loan.
The idea caught on. Harvey Pickrel remembers going to a Penny Auction where "some of the farmers wouldn't bid on anything at all – because they were trying to help the man that was being sold out." At auctions across the Midwest, farmers showed up as a group and physically prevented any real bidders from placing bids. But the banks figured out ways to get around these illegal Penny Auctions.
Farm groups and activists turned their attention to the political arena demanding a stop to foreclosure sales. Eventually, several Midwestern states, including Nebraska, enacted moratoriums on farm foreclosures. Generally the moratoriums lasted a year. The theory was that the Depression couldn't last that much longer, and then farmers would have the income to make their payments. But the Depression continued, the moratoriums ran out and farmers continued to lose their farms.
11
Posted on 7/27/22 at 9:11 am to stout
Back when people actually cared about their neighbors.
Posted on 7/27/22 at 9:12 am to Styxion
More like back when people knew their neighbors. And before companies starting buying up homes to flip or rent out.
Posted on 7/27/22 at 9:14 am to stout
quote:
But the banks figured out ways to get around these illegal Penny Auctions.
I wonder what was illegal about them?
Posted on 7/27/22 at 9:15 am to stout
quote:
Fascinating how people banded together vs how society is now.
Even if it could be done today it is illegal.
Posted on 7/27/22 at 9:15 am to Meauxjeaux
quote:
I wonder what was illegal about them?
hanging people for higher bidding?
Posted on 7/27/22 at 9:15 am to stout
So a bank buys a farm, sells it to you on credit, and when you can't pay, they become the big bad for wanting their money back. Interesting.
I remember when people were angered by a foreclosure moratorium.
I remember when people were angered by a foreclosure moratorium.
This post was edited on 7/27/22 at 9:17 am
Posted on 7/27/22 at 9:17 am to SlimTigerSlap
quote:
So a bank buys a farm, sells it to you on credit, and when you can't pay, they become the big bad for wanting their money back. Interesting.
This was during the great depression. Things were a bit different but I do agree with what you are saying.
quote:
I remember when people were angered by a foreclosure moratorium.
Then you don't remember correctly. People were mad about the Government shutting down some businesses while letting others function which caused many to lose their jobs leading to the need for a foreclosure and eviction moratorium
This post was edited on 7/27/22 at 9:19 am
Posted on 7/27/22 at 9:19 am to stout
Posted on 7/27/22 at 9:20 am to stout
People love credit when they want to buy something. People get pissy when credit wants its money back. A lot of these small time banks have thin margins and it doesn't take much to go under.
Posted on 7/27/22 at 9:20 am to upgrayedd
Look at poor Bubba with his $5000 Bell and Ross watch. So opressed.
Posted on 7/27/22 at 9:22 am to Obtuse1
quote:
Even if it could be done today it is illegal.
Well, foreclosures have a writ amount anyway and creditors will send their own representative to make sure the auction at least reaches that.
This post was edited on 7/27/22 at 9:23 am
Posted on 7/27/22 at 9:22 am to SlimTigerSlap
quote:
So a bank buys a farm, sells it to you on credit, and when you can't pay, they become the big bad for wanting their money back. Interesting.
Does anyone know if this is what helped birth the commercially owned mega-farm? Did Dole, Delmonte, and others take advantage of the downturn to buy land at steep discounts because they had the capital private farmers could not muster?
Posted on 7/27/22 at 9:23 am to stout
quote:
Then you don't remember correctly. People were mad about the Government shutting down some businesses while letting others function which caused many to lose their jobs leading to the need for a foreclosure and eviction moratorium
So people were mad at everything you listed except for the bolded? I think your memory is fuzzy. If you were sitting next to a landlord right now, he'd probably slap you.
Posted on 7/27/22 at 9:24 am to stout
quote:
Fascinating how people banded together vs how society is now.
How many of you have been kicked when you are down? When the tables are eventually turned and you are in a better position....are you going to rush to take care of strangers?
Some of you will and I applaud that. But you are spot on that society today seems to be more of a dog eat dog world. Eat or be eaten. Grow or die. Invest or rot away. As a libertarian I'm okay with that on principle, even though I have moral objections to how some people take advantage of it (not just around farms).
Penny auctions are cool to read about, but I'm conflicted about them. Nooses and "soft threats" against legitimate bidders (some of which are also trying to buy affordable equipment and save their own farms) have got to be on questionable legal ground.
On the other hand, there are some corporate pricks that were there to accelerate the agricultural consolidation trend. And they didn't really stop it. My grandparents grew up on some of those smaller farms that were eventually sold to larger corporate operations. When those larger operations eventually fold and start selling off - I'll probably be there to pick the bones if I'm still alive to do it.
Posted on 7/27/22 at 9:24 am to SlimTigerSlap
quote:
So people were mad at everything you listed except for the bolded? I think your memory is fuzzy. If you were sitting next to a landlord right now, he'd probably slap you.
You are blaming the effect and forgetting the cause. No need for any moratorium if we never shut down.
Posted on 7/27/22 at 9:26 am to stout
quote:
You are blaming the effect and forgetting the cause. No need for any moratorium if we never shut down.
I'm really not though. I'm just remembering the sentiment. I haven't shared an opinion.
Posted on 7/27/22 at 9:27 am to stout
quote:
People were mad about the Government shutting down some businesses while letting others function which caused many to lose their jobs leading to the need for a foreclosure and eviction moratorium
I'm still mad about it too.
Posted on 7/27/22 at 9:28 am to BluegrassBelle
quote:
And before companies starting buying up homes to flip or rent out.
Hopefully smaller landowners and home buyers will be there to take advantage of these companies when they hit hard times.
This post was edited on 7/27/22 at 9:29 am
Posted on 7/27/22 at 9:32 am to SlimTigerSlap
I'm literally in the foreclosure business and I will tell you that all the moratorium did was delay and buy people that were going into default anyway a little more time.
On the other hand, there are many that were doing fine prior to the shutdowns but are struggling now. The fact that inventory for banks (both pre-foreclosure and REO) is on the rise and is going to be above pre-shutdown levels supports this. Reports come out monthly from Corelogic showing the trends and they are up despite the RE market being crazy for the past year.
On the other hand, there are many that were doing fine prior to the shutdowns but are struggling now. The fact that inventory for banks (both pre-foreclosure and REO) is on the rise and is going to be above pre-shutdown levels supports this. Reports come out monthly from Corelogic showing the trends and they are up despite the RE market being crazy for the past year.
This post was edited on 7/27/22 at 9:34 am
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