What's a Penny Auction?
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The Great Depression plus harsh drought conditions were hard on farmers in the 1920s and early 1930s. Many could not make enough money to pay the mortgage. As a result, banks would foreclose on the property. They would then sell the farms at public auctions.
Farmers resented the foreclosures. When they would hear about an upcoming auction, they would gather on the day of the auction and make it clear to officials and potential bidders that bids from outside the farm community were not welcome.
"When the bidding commenced, someone in the crowd would start it off at fifteen cents or so, and it rarely got beyond a few dollars before the bidding stopped and the auctioneer would close the sale. If anyone in the farmyard might be so ignorant of what was going on as to put in a serious bid, a suitably burly man would be likely to step up and put a hand on his shoulder with the words, 'That bid's a little high, ain't it?'"
Source: T. H. Watkins, The Great Depression: America in the 1930s, Boston, MA: Back Bay Books (Little, Brown and Company), 1993.