As land values increased, lenders and farmers alike mistakenly concluded the ideal conditions would become the norm. Borrowing became the order of the day and there were plenty of lenders eager to accommodate optimistic farmers.
Alan Tubbs: There was intense competition for agricultural lending at that time, a very aggressive Farm Credit System and banks were of course trying to compete with them. And even within the Farm Credit System, you had the Federal Land Bank, you had the Protection Credit Associations. And the Production Credit Associations also became very aggressive in land loans. So in a way you had, within the same system, a competition between PCAs and Federal Land Banks and then you had the institutional lenders out here trying to compete with that competition and so I think everybody got a little too laxed in their lending at that time and that also escalated land prices and contributed to the inflation that was going on particularly in land.
Money to borrow was everywhere, it seemed. Private sector lenders came on board in addition to entities created by the federal government during the last great Farm Crisis. There also was the Farmers Home Administration created in 1947, often called FMHA, the so-called "lender of last resort." Farmers of all income levels leveraged the rising value of their land as collateral to secure new loans. The benefits of upgrading or expanding a farm operation were viewed as unquestioned acts of faith. Evangelists of growth preached a powerful message.
Mark Pearson: You know, it was like you wanted to own things. You didn't want to own paper, you didn't want to have cash, you wanted to have it in something, in dirt. Successful Farming ran a cover story, "Black Gold" and that was the push.
To young, ambitious farmers, the time was ripe with possibilities their parents never could have imagined. Older generations observed with caution. Yet, they understood younger farmers faced a new world, one in which it seemed the risk of seizing the moment was as great as doing nothing at all.
Chuck Hassebrook: They had supposedly the smartest people in the country telling them, some of the smartest people in the country, ag economics and bankers and people like that, telling them that land couldn't go down and that they ought to buy it sooner rather than later and leverage themselves because it's always going to go up and they can borrow more to buy more.
Not everyone was convinced the future was fail safe.
Gary Lamb: I didn't fall into this trap like a lot of farmers did. And I can understand it. I don't blame them. They were listening to all the experts and I really can't explain what it was, I just had this feeling in the pit of my stomach.
Gary Lamb has farmed in east Central Iowa for over 60 years, raising corn, soybeans, hay, hogs and cattle on 400 acres. His ancestors helped settle the area making Lamb the fourth generation of his family to be a steward of the land.
Gary Lamb: At the time, uh, my banker came out on a Sunday night, he had never come out here before on a Sunday night to help me do chores. That was at the big silo across the road. I heard the dog barking so I opened the door and there was my banker. And he said, say, Gary, are you aware there's 280 acres right east of you for sale? And I said, yeah, I heard it is. And he said, you making arrangements to buy it? And I said, no. I said, I'm farrowing 600, 700 head of hogs and feeding out a couple hundred head of cattle and I've got 125 stock cows. I said, hell, I'm -- and I was renting another couple hundred acres of row crop ground, I said, I'm staying busy from daylight until dark now. I don't need another 280 acres. All I need is a return on what I've got. Well, he said, you have to -- he said, when you get your head straightened out, he said, I know you, I know your operation, just give us the word and we’ll buy it for you. Well, needless to say I didn't do it. But if I would have listened to my financial expert, my banker I could have not only lost that 280 acres, I could have lost everything.