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Published online by Cambridge University Press: 07 November 2014
On September 28, 1936, Premier Patterson of Saskatchewan announced that his government had reached an agreement with the Dominion Mortgage and Investments Association under which a comprehensive scheme of agricultural debt adjustment on a voluntary basis would be established in the province. The new scheme involved partial abandonment of the principle of individual adjustment and aimed at the rapid scaling down of the debt burden by effecting what would be in essence a blanket reduction of certain classes of debts. However, since crop failures had not afflicted every part of the province with equal severity, it was decided to divide the province into three areas, the extent of each area being determined by the crop returns of the previous six years. An area comprising 158 rural municipalities and local improvement districts in the south (making up approximately one-half of the settled region of the province), and designated as the drought area, was to be given substantial reductions in relief, tax and mortgage indebtedness. A marginal area of 18 rural municipalities which had suffered less acutely was to receive special consideration and smaller adjustments to be determined by subsequent negotiation. A third area making up the balance of the province was to receive no reduction of indebtedness but was to enjoy, along with the drought and marginal areas, a reduction in the interest rate on all farm mortgages and agreements of sale of land to 6 per cent, as from January 1, 1937, together with extension of such mortgages and agreements for a period of ten years.
The relevant government documents connected with the programme take the form of mimeographed letters circulated to rural municipalities and creditors for administrative purposes together with the three statutes of 1937 cited below.
2 Statutes of Saskatchewan, 1 Geo. VI, c. 95.
3 Ibid., c. 92.
4 Ibid., c. 93.
5 See Regina, Leader-Post, 06 3, 1937.Google Scholar
6 A week later (October 10) the same journal, in a statistical analysis of mortgage principal and unpaid interest due the larger lending institutions operating in Saskatchewan, concluded that “press dispatches with regard to the scheme have led to a misconception as to the total amount being written off by the lending institutions…. The maximum amount being conceded by the lending institutions is $15,000,000, and this, it is stated, is a liberal figure.”
7 For an account of other debt adjustment legislation and machinery, provincial and federal, see my article “Saskatchewan, 1930-1935” ( Canadian Journal of Economics and Political Science, vol. II, 05, 1936, pp. 143–66)Google Scholar and my discussion of the operations under the Farmers' Creditors Arrangement Act (ibid., vol. II, Aug., 1936, pp. 402-3). Since the new Board of Review began to function in September, 1936, the reductions in indebtedness, both principal and interest, and in interest rates have been much more substantial, averaging 45.5 per cent., as against 27.7 per cent., of the original debt per farm, while the cut in annual interest charges per farm has averaged $371 as against $171.