Farmers, Banks, and Debt

Norway introduced the gold standard and a banking system, which had a negative effect on many farmers.

"Now people who had money were to put it in the bank. Before, they would loan it out to farmers for a year with either a mortgage as security or sometimes only a promissory note. The farmer then had to borrow from the bank with interest and a certain amount of the principal had to be paid twice a year. If it wasn't paid on the exact date, there was compound interest to pay.

It was customary for the farmers to store their produce and sell during the winter with perhaps a few cattle spring and fall, and therefore they did not have the necessary cash to meet these obligations from the bank. They then began to sell their produce a little at a time, but then they had to go through the middleman, and he, too, had to have his profit. So the farmer was on the losing end either way. Many farmers went bankrupt during this time."

--excerpt from Tosten's autobiography, written in 1917