Final answer:
Farmers faced severe financial difficulties due to high-interest debt and taxation issues, leading to loss of land and defaults on loans, while the manufacturing sector, despite layoffs and wage cuts, was in a relatively better financial state. The government's failure to support farm prices worsened the situation, ultimately impacting the broader economy.
Step-by-step explanation:
The financial state of farmers during the time period in question was considerably precarious in comparison to that of those involved in manufacturing. Farmers faced a vicious cycle of debt, due in part to borrowing seed grain at high interest rates for planting, leading to the loss of their lands to wealthier neighbors, who could more easily avoid taxes. This erosion of the fiscal base meant weaker financial support from the state, as fewer taxes were paid.
In contrast, despite challenges, the manufacturing sector was often better positioned, even when factories had to cut wages or fire employees due to reduced demand from the struggling farmers. The banks, primarily those located in urban areas that invested in farming, were able to foreclose on farms that defaulted on loans, although this left them with assets they could not easily liquidate due to the fallen value of agricultural land.
Government attempts to alleviate the financial hardships of farmers, such as federal price supports, were vetoed, leading to continued struggles for farmers and subsequent failures of rural banks. In essence, the agricultural sector's decline greatly exacerbated the economic troubles of the era, highlighting the contradiction between agriculture and business contributing to the economic bust at the decade's end.