Historic Events for Students: The Great Depression. Editor: Richard C Hanes & Sharon M Hanes. Volume 1. Detroit: Gale, 2002.
Perhaps more than anyone else in the United States, farmers experienced the greatest swings between prosperity and poverty through the first half of the twentieth century. Just before and during World War I (1914-1918), farmers enjoyed prosperity at levels never seen before in rural America. Unexpectedly, good times suddenly turned bad as worldwide demand for U.S. produce sharply dropped following the war. Farmers suffered through economically lean times during the 1920s, while other parts of the U.S. economy prospered. Surpluses of key crops mounted as produce prices plummeted. In addition, the increased mechanization of arms made the typical small family farm far less competitive than the increasingly larger commercial operations. And just when farmers believed the farm economy could not get worse, it did. The 1929 stock market crash and resulting Great Depression added to the problems of an economically struggling rural America.
Through the lean times of the 1920s, farmers became frustrated over the policies of Republican presidents Calvin Coolidge (served 1923-1929) and Herbert Hoover (served 1929-1933). Coolidge and Hoover believed it was not the government’s role to provide direct relief. Franklin Delano Roosevelt’s (served 1933-1945) presidency brought a new perspective. Roosevelt’s administration immediately placed a high priority on federal assistance to the farmer as part of his New Deal programs, but calm on the farm proved elusive. Complex farming problems resulted in complex New Deal agricultural relief programs. Uncommon problems led to uncommon solutions, such as government payments for not planting, that farmers might have not accepted in less desperate times.
Critics of these programs came from all directions. Some charged that the newly created federal programs favored large commercial operations and ignored those hurt most by the Depression—the small-scale farmer. Others believed the federal government had overreached its legal authority to enter the private farm marketplace. The public, however, seemed generally pleased with Roosevelt’s New Deal programs. He was handily reelected in 1936.
Not only did new government farm programs appear in the 1930s, it was also a period of major social and technological change in America’s hinterland. New machines allowed for the planting and harvesting of larger acreages. Such technological advancements encouraged small farms to combine into larger farms (consolidation). This trend resulted in fewer but larger, more efficient farms. Small farmers were often at a disadvantage. Even as the farmer population declined, production increased. Many farm families moved to cities to escape the bleakness of a depressed agricultural economy, spurring the continued transition of the United States from a largely rural society to an urban one.
It would take another global war, World War II (1939-1945), to finally end the farmland plight. The New Deal programs did make economic survival possible for many farmers who were able to keep their land during hard times. The decade of the 1930s was indeed a unique period in American rural life.
Prosperity in the Farm Belt
Throughout U.S. history farming has been very important to the nation’s economy. Most Americans have viewed farming as a distinctive and superior way of life. These beliefs are based on Jeffersonian ideals. These ideals bestow great respect on those nobly working the soil to gain economic self-sufficiency and independence.
As late as 1900, 60 percent of the U.S. population lived in rural areas. Horsepower and manpower remained the key means of performing farm work. Kerosene lamps, wood and coal stoves, and outhouses were typical of farm life. Few rural homes had electricity. Those that did have electricity received it from a steam engine, windmill, or water wheel that was used to generate it.
The distinctive agricultural character of the various regions in the country had become well established. Dairy and poultry farms were dominate in the Northeast, cotton and tobacco farms in the South, corn and hog production in the Midwest, wheat farms in the Great Plains and Northwest, open grassland livestock grazing in the West, and vegetable fields, cotton, and orchards in California. Sharecroppers and tenant farmers were commonly found in the South, and migrant farmers in the West.
Prior to 1900 Congress had come to the assistance of farmers on occasion. In 1862 alone three laws were passed making cheap land available through the Homestead Act, establishing agricultural colleges through land grants to states, and creating the U.S. Department of Agriculture. Typically for this period, none of the laws passed were designed to provide direct monetary assistance to U.S. farmers or to raise their economic status in society. For example, the 1862 Morrill Act was important to future agricultural development in the United States. The act granted certain amounts of federal lands to each state. The states were to sell the lands to raise funds for establishing colleges to teach agriculture and engineering. This was designed to help meet the needs of a rapidly industrializing nation.
During the first two decades of the twentieth century, American farmers enjoyed considerable economic growth and prosperity. In fact, the period from 1909 to 1914 has been called the golden age of agriculture in the United States. Increased prices for farm products and increased farmland values raised the purchasing power of farmers above that of many other U.S. workers. This period created the expectation that farmers should enjoy incomes and a standard of living equal to workers in other parts of the national economy.
Good Times Turn Hard
The conclusion of World War I in 1918 brought a rapid decline in the demand for farm products. The decline led to large surpluses and falling prices as farmers kept producing at their World War I levels, trying to cover expenses. Years of angry debate focused on federal agricultural policies. As a result, the 1920s proved a harsh period for American farmers. Times were only to get harder, however, with the 1929 stock market crash.
President Herbert Hoover took office in early 1929 when the nation’s economy appeared healthy and growing, except in the area of agriculture. In 1929 one-fourth of all workers in the United States were farmers. Though having a reputation as a humanitarian, Hoover, like Coolidge before him, firmly believed government should not take an active role in social and economic reform. Under pressure from agricultural interests, however, Hoover established the Federal Farm Board. The board was to help farmers sell their produce through farm organizations known as cooperatives, and to increase farm prices. Hoover believed voluntary production controls and modest support for farm cooperatives would help. Farmers, still trying to cover costs, continued to keep overall production high, however, and as a result prices remained low.
Following the stock market crash in October 1929, Congress took action again. It passed the Hawley-Smoot Tariff Act in 1930 to help both farmers and manufacturers. The act established the highest tax on imports, known as a protective tariff, in U.S. history. The tariff would shield agricultural products from foreign competition. The effects of the act, however, backfired by greatly reducing foreign trade and farm exports. Other countries did not have the cash to buy U.S. products since they could not easily sell their own products in the United States. Foreign countries also retaliated by raising their tariffs on U.S. goods. These tariffs soon decreased world trade by 40 percent. Th export of farming products had previously provided one fourth of all farm income. To make matters even worse for U.S. farmers, European and Russian farm production increases created a greater worldwide glut in produce, further reducing prices. Farming income was devastated.
One of the most famous depictions of rural life in the United States came from this time period. Grant Wood’s 1930 painting American Gothic shows two stern-faced people, a father and daughter, standing stiffly in front of their farmhouse with the father holding a pitchfork.
The Farmer’s Revolt
In 1932, aside from black Americans, farmers were the hardest hit by the economic turmoil. In 1932 farmers’ income was less than one-third of what it was in 1929. Farm prices had bottomed out at half of what they were only a few years earlier. That meant the farmer, with his money made from wheat, corn, hogs, and cotton, could only purchase half as many goods as before. As a result, many farmers were going broke. Between 1929 and 1932 approximately 400,000 farms were lost through foreclosure. A foreclosure is where a bank that holds a mortgage on a farm seeks to take possession of the farm when the farmer could not meet his mortgage payments. Many who lost their land turned to tenant farming, an arrangement in which the farmer pays a landowner for use of the land to farm.
With the nation’s economy worsening, anger over Hoover’s limited efforts in raising low crop prices led to farmer protests. Rural poverty was leading to despair and desperate action. Farmers burned their corn and wheat and dumped their milk on highways rather than sell for a loss. In May 1932 farmers met in a national convention organized by the Iowan Farmers’ Union to decide what they could do to pressure for change. They created the Farmers Holiday Association, with well-known farmer advocate Milo Reno as president. The association aimed to organize a strike, or “farmers’ holiday,” in which farmers would refuse to sell their produce for several weeks. The farmers hoped that by reducing the supply of farm produce to markets that prices would increase. The action became so popular among farmers that it lasted more than a month. Roads were often blocked, preventing food from reaching market. On August 25, 1,200 pickets blocked five highways leading to a large produce market in Omaha, Nebraska. Occasional violence broke out, including a gun battle that erupted near Sioux City, Iowa. The onset of winter weather in late 1932 brought a break in these actions.
During the winter efforts turned to blocking farm foreclosures. “Penny auctions” occurred in which farmers would pack the auction sale and bid only pennies for the foreclosed farm, equipment, and livestock. They would then give it back to the owner after the auction. In February 1933 Iowa passed a law reducing the number of foreclosures. Other Midwest and Plains states followed. Force was also used to stop authorities from foreclosing on farms. In early 1933 farmers took over a Nebraska sheriff’s office until they were driven out by tear gas. Others faced off with authorities in an Iowan courthouse.
A New Deal for Farmers: Relief Takes Shape
With the nation’s economy steadily in decline following the 1929 stock market crash, Franklin D. Roosevelt ran on the 1932 Democratic presidential ticket promising a “new deal” for the American citizen. Roosevelt handily defeated the unpopular Hoover in the November 1932 elections, and an overwhelming majority of Democrats won seats in Congress. Roosevelt believed Hoover’s policies were clearly insufficient for solving the farm crisis. Revolutionary changes in federal farm policies to aid the farmer were soon to appear.
Given the urgency of the agricultural situation, Roosevelt believed he could not wait until he moved into the White House in March 1933 to begin action. While Hoover was serving out the remainder of his term, Roosevelt identified new agricultural legislation as a priority. He wanted to take action before the spring planting began. Meetings were held in December 1932 between farm representatives and Roosevelt’s key advisors, including Henry Morgenthau, Jr., and Rexford Tugwell. Soon, Roosevelt nominated Henry Wallace, a highly knowledgeable Iowan, as his secretary of agriculture and Tugwell as the assistant secretary of agriculture. Wallace was dedicated to restoring the farmer as a key part of the U.S. economy and to bring back “parity” for farm goods. Parity meant that farm goods would have the same value relative to manufactured goods as they did during the golden years of the 1910s. This would mean farmers would have the same purchasing power to buy goods as they did during the period of 1909 to 1914.
Roosevelt and his advisors realized that to have any chance of success, new government programs would have to first gain farmer acceptance. Supporters for agricultural assistance stressed to Roosevelt that programs would have to be locally operated, rather than by federal bureaucrats in Washington, DC. Therefore, on March 16, 1933, shortly after Roosevelt’s inauguration, Wallace gathered farm leaders again in Washington at Roosevelt’s invitation to draft a revolutionary farm bill. Their goal was an “agricultural adjustment” of farmer income. These leaders came up with highly inventive solutions that clearly went beyond the traditional limits of governmental action known at that time.
Four types of actions were proposed in early 1933: (1) enticing farmers to reduce the amount of crops they grew; (2) reducing the amount of farm debt; (3) increasing the prices for crops; and (4) developing new foreign trade agreements to expand markets for American farm produce.
Decreasing farm production was a priority. Those crops being produced in greatest surplus included wheat, hogs, cotton, and corn. The desire was to establish a voluntary production control system. If a farmer agreed to control his crop production according to an established government plan, he would receive government payments. Those farmers not participating would still benefit from the anticipated higher market prices, but not as much as those who volunteered to participate. To raise the funds to pay farmers for reducing the acreage they were farming, a tax would be placed on companies processing farm products. Processors included flour mills, textile mills, and meat packing houses. This strategy of production control became the heart of the adjustment bill. The proposed legislation took two critical months during spring planting season before finally passing in the U.S. Senate by a vote of 64 to 20. On May 12, 1933, President Roosevelt signed the Agricultural Adjustment Act into law. The act created the Agricultural Adjustment Administration (AAA), which would pay farmers to limit their crop production. The AAA was Roosevelt’s first New Deal economic recovery program.
Reducing farm debt was another key concern identified in March 1933. To make loans more available to farmers, Roosevelt issued an executive order reorganizing existing federal credit agencies and forming the Farm Credit Administration (FCA). The FCA replaced Hoover’s Federal Farm Board. Roosevelt appointed Henry Morgenthau Jr. to its head. Congress provided funding for the agency by first passing the Emergency Farm Mortgage Act in April, followed by the Farm Credit Act in June. The FCA began moving quickly to provide financial assistance to farmers in danger of losing their farms. The FCA also established a banking system to support farming cooperatives in marketing their crops and purchasing supplies.
The FCA issued considerably more loans than Hoover’s Federal Farm Board. In 1932 the board made 7,800 loans for $28 million. The FCA in its first twelve-month period approved 541,000 loans for $1.4 billion. To give an example of its high activity, in one day the FCA once approved 3,174 loans for $8.3 million.
Birth of the Agricultural Adjustment Administration (AAA)
The key benefit of the AAA and FCA programs was that money would be placed directly into the hands of farm households. This direct aid would allow them to avoid bankruptcy, keep their land, and buy goods, thus helping other industries. Due to the desperate economic condition of farms, many farmers had little choice but to participate in the AAA production control program. For them, AAA checks became their chief source of income.
To achieve local control, the AAA’s production control program was placed in the hands of county agents from the Agricultural Extension Service and local farmer committees. The committees were often organized with the assistance of local farm bureaus that were members of the national American Farm Bureau Federation. State agricultural colleges were used for technical assistance to farmers.
With the passage of the Agricultural Adjustment Act, problems in reducing crop surplus immediately arose. With the act not passed until May, 40 million acres of cotton had already been planted for another season. To raise cotton prices as quickly as possible, the AAA offered to pay farmers to plow under more than 10 million acres of cotton in the summer of 1933. The local agents and committees recruited hundreds of thousands of farmers to participate. Over $112 million dollars in government benefits were paid. Secretary Wallace, in recognizing the historic nature of this crop reduction effort, sincerely hoped it would be the last time farmers would be asked to destroy standing crops, as the very notion was so much against that in which farmers believed.
Corn and hogs presented another surplus urgency much like cotton. Most of the corn was not sold at markets, but rather was fed to hogs which appeared at market as pork. A National Corn-Hog Committee composed of farmers from around the country was assembled in the summer of 1933 to consider solutions to the surplus of hogs. To the surprise of many, the committee recommended the government purchase and slaughter six million hogs that fall. The recommendation was adopted by Wallace and carried out in September 1933.
The AAA policy of produce destruction brought out many critics. They were angered by the destruction of farm produce while many in the nation were going hungry. In defense of the pig killing campaign, Wallace complained that the public seemed to believe that “every little pig has the right to attain before slaughter the full pigginess of his pigness. To hear them talk, you would have thought that pigs were raised for pets.” (Schlesinger, The Coming of the New Deal: The Age of Roosevelt, 1988, p. 63) Responding to the uproar, Wallace agreed to purchase some surplus agricultural produce and give it to the needy. The Federal Surplus Relief Corporation, created in October 1933, purchased over 100 million pounds of baby pork and gave it to hungry people enrolled in various relief programs.
Drought on the Plains
New Dealers on the Great Plains faced a different situation. Because of increasingly dry weather conditions, drought had largely solved wheat overproduction problems by 1933. The AAA made a three-year program available to wheat farmers. Those who agreed to reduce wheat crops in 1934 and 1935 to levels set by the government would receive government payments. The annual average of 864 million bushels of wheat produced between 1928 and 1932 fell to 567 million bushels from 1933 to 1935. Only twenty million bushels of the decrease, however, resulted from AAA programs. Most of the decrease was due to drought.
Though drought solved overproduction problems, it did create others. Soil erosion became critical as hot winds stirred up massive clouds of dry topsoil. The Dust Bowl was born. Soil conservation became an additional concern of federal farm programs. To increase federal support of farmland conservation, in 1935 the Roosevelt administration transferred the Soil Erosion Service from the Department of Interior to the Department of Agriculture and renamed it the Soil Conservation Service (SCS). The SCS provided both technical assistance and loans to farmers to promote soil conservation measures. Such measures included the new methods of terracing, contour plowing, and reseeding with native grasses. The Civilian Conservation Corps (CCC), created in 1935, assisted these conservation activities. In 1936 Roosevelt assembled the Great Plains Drought Area Committee to recommend measures for improving conditions in the region. The committee recommended taking agriculturally marginal lands out of production and reseeding them with natural grasses.
The success of the New Deal agricultural aid programs on the Great Plains was limited. Many farmers lost their farms and moved to cities. An overall improvement in farming techniques did occur, however, during this period of extraordinary drought and severe economic conditions. These methods would serve the surviving farmers well in following decades. Only federal aid allowed many of these farmers to keep their farms. In the northern and central Great Plains, between 40 and 75 percent of farmers’ incomes came from AAA and other New Deal programs. Still, approximately 500,000 people left the rural life of the Great Plains in the 1930s, seeking economic relief in the cities. Increased rainfall, as well as the increased demands of World War II, finally pulled the region out of economic hard times. The Dust Bowl left scars for decades, however. Farmers felt more vulnerable than ever to the forces of nature on the Great Plains. This traumatic period became the backdrop for one of the era’s most popular Hollywood movies. The 1939 movie The Wizard of Oz, in which actress Judy Garland starred, told a fantasy tale of a young girl’s escape from the bleak life in Kansas in the 1930s to the colorful land of Oz.
The Desert West
Conservation concerns of the New Dealers also extended further west. Ranchers had grazed livestock on open range public lands since the mid-nineteenth century without controls. Public lands consist of the millions of acres of land in the West that were never settled due to lack of water, remoteness, or other reasons. Cattle and sheep had overgrazed much of the land. Congress passed the Taylor Grazing Act in 1934, regulating the use of the range lands. Like on the Plains, the Civilian Conservation Corps built fences and made other range improvements. At the end of the New Deal era, over 11 million head of livestock grazed on 142 million public lands. Much tighter control of public land use became the policy of the federal government from that point on.
Farmers Want More
By late 1933 a comprehensive agricultural relief program had become well established in much of the nation. However, the AAA, the cornerstone of the program, was not bringing results quick enough to satisfy everyone. Some farmers continued arguing for more radical policies that would guarantee farm incomes and fix produce prices. Wallace and the Roosevelt administration resisted such proposals and stuck with the program of benefit payments and loans.
In an effort to satisfy the critics, Roosevelt created the Commodity Credit Corporation by presidential executive order in October 1933. The Commodity Credit Corporation provided loans at low interest rates to farmers who agreed to production controls. The loan rates were set so that farmers would receive somewhat more money than the market value of their crops. This measure was a price support. The program was first applied to the surplus of crops stored in 1934, such as cotton, wheat, and corn. The goal was to make sure these surpluses would not further decrease market prices. The Commodity Credit Corporation loan program served the United States well, supporting farm prices at higher levels and substantially expanding operation after World War II.
Though the AAA production control measures were largely voluntary, Congress did apply some pressure in 1934 on farmers to participate. The Bankhead Cotton Control Act, the Kerr-Smith Tobacco Control Act, and the Potato Act imposed substantial taxes on those farmers not cooperating.
The Problem of Small Farm Operators
Despite vital relief provided to many farmers, by the mid-1930s thousands of small farmers had lost their farms. Their land went to the mortgage holders, such as banks and insurance companies, and eventually became parts of large mechanized farms. Corporate agriculture was replacing the family farm.
This trend brought more criticism of New Deal programs. People complained the programs strongly favored large landowners. In an effort to answer these complaints, Roosevelt created the Resettlement Administration (RA) in 1935. The RA was designed to provide direct assistance to sharecroppers, migrant laborers, and other poor families. Sharecroppers were small farmers who did not own land, but rather rented from large landowners. The goal was to resettle impoverished farm families away from poor land and place them on more productive land. Besides providing a loan to purchase new land, the RA would provide tools and technical advice so that the resettled farmers would have a chance of economic survival. Rex Tugwell, a close adviser to Roosevelt, assumed lead of the agency.
Critics of the RA were uncomfortable with promoting small subsistence family farms. Even Tugwell had second thoughts. Many within Roosevelt’s administration firmly believed large commercial farms were the future of American agriculture. They argued federal government efforts to preserve small family farms would likely be more costly than their social value justified. They feared that creating areas of small farms would be establishing isolated pockets of lasting poverty. Most New Dealers strongly believed the application of new technological innovations to large commercial farms was the only real future for the agriculture industry.
Given these concerns, the RA soon evolved into the Farm Security Administration (FSA) in 1937. Rather than resettling poor farmers, the FSA loaned money so farm families could afford such necessities as food, clothing, feed, seed, and fertilizer. This loan system was a last resort for farmers who did not qualify for loans or credit from regular banks or other credit institutions.
The Court Strikes Down AAA
The U.S. Supreme Court played a major role in the New Deal era and agricultural issues proved no exception. Roosevelt had proclaimed in 1933 when introducing the AAA and other initial New Deal programs that the U.S. Constitution was sufficiently flexible and practical to allow new approaches during extraordinary times. The food processing companies being taxed to support the AAA’s program, however, charged the farm relief system was unfair. They went to court to challenge the AAA. As a result, in January 1936 the U.S. Supreme Court ruled in United States v. Butler that the processor tax was unconstitutional. Using a narrow definition of federal powers, the Court claimed Congress had no legal authority to control their businesses, hence striking down the AAA. That authority, according to the Court’s majority, was reserved in the Constitution for state governments.
Congress responded quickly to the Court decision with passage of the Soil Conservation and Domestic Allotment Act. The new act changed the way in which farmers were paid. Now farmers were paid for soil conservation rather than for reducing acreage of crops. They focused on planting crops that caused the least amount of soil depletion. Also, payments to farmers would come from general government revenues rather than special taxes on processors. Farmers were encouraged to decrease production through voluntary means.
Following his reelection, Roosevelt responded in early 1937 to the Butler decision and to other unfavorable Court rulings by proposing to restructure the Supreme Court. Though his proposal met with great resistance, it did serve to put pressure on the Court. New Deal programs began receiving more favorable rulings. The Court issued rulings supporting the New Deal tax plans in Steward Machine Co. v. Davis (1937) and the regulation of agriculture in Mulford v. Smith(1939) and Wickard v. Filburn (1941). The Court finally affirmed that the federal government held the power to regulate agriculture under the Constitution’s interstate commerce clause.
The problem of crop overproduction still continued through 1936 and 1937. Not enough farmers volunteered to cut back their crop production. Pressure mounted again from farmers for government financial assistance. In 1938 Congress passed a new Agricultural Adjustment Act. The new act kept the conservation measures of the Soil Conservation and Domestic Allotment Act. It also added a new method for price supports for farmers when oversupply of produce led to lower prices. The act was very broad and set up research stations and other means of aiding farmers. Unfortunately, overproduction would continue to be a major problem until World War II.
Power to the Farmer
The New Deal brought another revolutionary improvement to rural farm life—electric power. In 1933 most rural areas had no electric service. Congress created the Tennessee Valley Authority (TVA) to bring inexpensive electric service to the farm regions of Mississippi, Alabama, Georgia, and Tennessee. TVA provided hydroelectric power below private industry rates. Roosevelt also created the Electric Home and Farm Authority (EHFA). EHFA provided low-interest loans to farmers for the purchase of electric appliances. At last farmers could enjoy the benefits of refrigerators, cooking ranges, and water heaters and businesses selling such items rebounded. Sales of appliances in the Tennessee River basin tripled.
With the successes of TVA and EHFA programs, Roosevelt created the Rural Electrification Administration (REA) to bring electrical power to other rural regions. The REA provided loans to rural farming cooperatives to finance the wiring of homes, the stringing of power lines, and the purchasing or generating of electricity. Private utility companies contended the demand for electricity in rural farm areas was insufficient to make it profitable to provide power. Consequently, long-standing farming cooperatives became the primary avenue for bringing power to their areas. By 1939 more than 350 REA projects in 45 states provided electric service to nearly 1.5 million rural residents and 40 percent of U.S. farms. The REA proved one of the most successful New Deal programs. Most immediately these programs provided farmers power to operate barn machinery, irrigation water pumps, and other labor saving devices. The availability of electrical power led to later development of more mechanical and electrical equipment.
Immediate Benefits of Agricultural Relief
Despite criticisms and shortcomings, the AAA and other farm programs helped many farmers. No strong recovery resulted from the programs but the decline was halted. Gross farm income in the nation rose from a low of $6.4 billion in 1932 to $8.5 billion in 1934. Income increased 50 percent between 1932 and 1936. Prices of farm produce rose 67 percent. Benefit payments of $577 million were paid out in 1933 and 1934 to several million farmers. Farm debt decreased by $1 billion. The federal government replaced private banks and insurance companies as key creditors. The government held 40 percent of farm mortgage debt by the end of the 1930s. Human suffering was eased, and the future outlook for many improved. Some considered this rural economic recovery remarkable since the U.S. economy in general was struggling.
Problems faced by the New Dealers were numerous: (1) the complexity of the problem was large with many diverse regions and crops affected; (2) the difficult challenge of convincing people to produce less product than they were capable of; and (3) dealing with a traditionally highly independent segment of U.S. society. Desperation no doubt played an important role in fostering acceptance of new proposed programs and unusual solutions. Despite these obstacles and many more, the AAA and other programs operated surprisingly smoothly for a large bureaucracy. Having a well-trained corps of specialists coming from the land-grant agricultural colleges and working in cooperation with state and county extension service agents helped. Every state has an extension service and almost every county have extension agents to help farmers. The service and agents, part of the Cooperative Extension System formed by federal, state, and county governments, provide farmers with up-to-date information on farming techniques. Above all, reliance on local grassroots guidance proved critical. Letting farmers make important decisions and using county farmer committees to oversee production control programs guided by their own elected leaders was crucial. Nearly four thousand local committees existed in 1934. Programs were largely voluntary with most pressure to participate coming from local farmers themselves. In 1935 Presidential advisor Raymond Moley, looking back at the first three years of the New Deal’s effort to improve the economy, considered the AAA one of the more successful and popular programs adopted.
Several major long-term trends leading up to 1929 contributed to the U.S. farm crisis. These factors involved overproduction, world trade, technological farm innovations, the government’s role in regulating business, and weather. The American farmer was more vulnerable to the economic hard times of the Great Depression than most other segments of U.S. society. By the time of the 1929 stock market crash, farmers had large debts, lowered incomes, and farms of reduced value.
Ironically, a major factor leading to hard times on the farm in the 1930s was farm prosperity of the 1910s. During the earlier period, an unparalleled high demand for U.S. farm produce existed. This demand resulted in higher prices the farmer could get for his crops and livestock. During World War I, the U.S. government encouraged greater farm production to make up for European shortages and help in the war effort. To meet these growing demands, farmers purchased more land, livestock, and new equipment. They often borrowed money to make these purchases, assuming the good times would continue. As a result, farm debt substantially increased as farmers rushed to take advantage of the high prices. Unexpectedly, the demand for U.S. farm produce plummeted after 1919 when European farms began producing again. Farmers were left with big bills to pay and substantially less income. Farm debt was $3.3 billion in the nation in 1910. It doubled to $6.7 billion in 1920 and increased further to $9.4 billion by 1925. American farmers were ill prepared to weather a depression.
By 1920 World War I was over. Europe began an economic recovery, including the revival of its agricultural production to feed its population. In addition, Russia, Australia, Argentina, and Canada began increasing their exports of beef and wheat. Suddenly, international competition was much stiffer for U.S. farmers. As a result, demand for U.S. products began declining. As the 1920s progressed, farmers continued producing more food than could be sold for profit. As prices fell for farm products, farmers increased production to sell more, causing even greater surpluses and consequently even lower prices. Farmers were unable to pay off loans, leading many rural banks to fail. Agriculture became perhaps the weakest part of the American economy during that decade.
Farm Modernization and Limited Government
The foundation for new commercial agriculture in the United States was laid between 1900 and 1930. Science and technology breakthroughs began to transform American agriculture. Gasoline-powered tractors first came into use in the 1890s, replacing the impractical steam-driven tractors, but they had insufficient power for everyday farm use. The first all-purpose tractors that could power a variety of farm implements appeared in the 1920s. More and more acreage could be planted and harvested by a farmer. With these technological advances, the small family farm become increasingly less cost efficient and competitive with growing commercial farms. Production costs on the newly mechanized farms were cut in half or more. This new tractor-powered machinery brought increased efficiency and productivity. It also contributed to overproduction, declining prices, and increased operating expenses. In addition, 25 million acres previously used to grow feed for horses and mules were converted to other crops, adding further to overproduction.
A continued high level of farm production in the United States through the 1920s led to a drastic decline in prices. Many farmers began losing their farms and equipment to foreclosure as they could not meet their loan payments. Meaningful government relief was not coming to the rescue. Prior to the 1930s, the federal government played a small role in the private social and economic affairs of its citizens. This political tradition was embraced by Coolidge’s Republican administrations of the 1920s.
Farm advocates began campaigning for federal farm relief. They argued that farmers were suffering the most of all Americans from postwar economic changes. In response to the clamor, Congress took action by passing the McNary-Haugen Bill calling for federal price supports. As proposed in the bill, the government would buy the surplus of key crops at guaranteed higher prices than the going open market rate. It would then sell them on the world market at normally lower prices. The government would regain the money through a tax placed on domestic food sales. In that way the cost of the proposed farm program would be passed along to the consumer. The bill never became law, however, as President Calvin Coolidge twice vetoed it. Coolidge believed farmers had always been poor and there was little the government could do about it.
Herbert Hoover was more sympathetic. He set up Farm Boards to guide farm recovery. The board nationally organized local farm associations. The number of independent local cooperative marketing associations had grown rapidly after 1915. The cooperatives were local organizations owned and operated by the farmers and others involved in processing and marketing farm produce. Over eleven thousand cooperatives existed by the mid-1920s. Hoover’s action, however, was insufficient to respond to the added effects of the stock market crash.
Dust Bowl in the Wheat Lands
Natural factors also played a role in making farmers particularly vulnerable to the economic hardships of the Great Depression. These factors were particularly evident on the wheat farms of the Great Plains. Years of ample rainfall in the 1920s and new technology enabled wheat farmers to steadily expand operations. They spread into marginal farming areas previously thought too dry for farming. With this over-expansion wheat became yet another surplus crop of the decade.
Generations of careless cultivation practices had plowed up protective ground cover, such as thick native grasses. Many farmers had plowed up and down hills, making the fields vulnerable to water erosion, rather than contour plowing horizontally across hillsides. Removal of the native ground cover also made soils susceptible to wind erosion when rows of trees were not planted along the edges of fields for wind-breaks. When the soils dried out and winds stirred up across the broad flat expanse of the region, massive dust clouds resulted.
By the 1930s the combination of large wheat crops, exposed topsoil, prolonged drought, declining world demand for U.S. crops, increased foreign competition, the Great Depression, and too little government assistance brought economic disaster to the region. In the following several years, a five-state area of the southern Great Plains became known as the Dust Bowl. Wheat prices plummeted as the changing climate and poor farming practices added further economic misery to the effects of the Great Depression.
At the local level, reception of the New Deal’s agricultural programs was largely positive. This approval by the rural populace no doubt contributed to Roosevelt’s major victory in his 1936 reelection.
Farmers were traditionally very independent persons. They commonly strove to be free of government control. Not surprisingly, resistance was strong to initial suggestions for the government production control measures during the 1920s. By late 1932 desperation was finally leading farmers to be more receptive.
Still, farmers were suspicious of plans to cut back production. They wanted something more immediately concrete. Farm advocates wanted the government to guarantee that farmers would recover the costs of production. They also wanted increased farm prices but believed Roosevelt’s proposed New Deal farm bill was too weak in that regard.
By late April 1933, the sweeping farm bill was still bogged down in Congress with considerable debate over its elements. With financial relief not coming quickly, farmers in the rural regions began taking action on their own. They interrupted eviction sales, intimidated bank and insurance agents, and combated foreclosures.
One of the more dramatic local actions by farmers took place in Le Mars, Iowa, on April 27, 1933. Over five hundred farmers angrily crowded into a courtroom to request that Judge Charles C. Bradley suspend further farm foreclosure hearings. They wanted the courts to hold off further hearings until proposed state laws could be passed helping the farmers. When Bradley refused, the crowd forcibly took him out of the courtroom blindfolded and placed him in the back of a truck in which he was driven out of town. The crowd threw a rope over a telephone pole, placing one end around the judge’s neck. Grease was poured over his head, and his trousers were torn off and tossed in a nearby ditch. Bradley was left alive but badly shaken.
A few days later, another crowd of farmers attacked agents and deputies trying to enforce a fore-closure on a farm. Iowa governor Clyde L. Herring, alarmed by the rise in violence, called in the Iowan National Guard and declared martial law in several counties. Nearly 150 men were arrested and detained in a fenced enclosure. While watching trucks filled with soldiers dressed in khaki and holding rifles pass, one Iowan farmer likened the scene to something in Russia with the oppressive communist government there.
In California agricultural workers sought improved working and living conditions. Efforts by migrant workers to organize and fight for better working conditions met with militant reaction by the growers and others. Large farms replaced the earlier small-scale operations. Corporations gained tighter control over the food production and processing industry. The Associated Farmers of California, an organization of large-scale growers supported by investment corporations and large packing, transportation, and utility companies, wielded considerable influence. With few other options available, as early as 1931 workers began joining the newly established communist-controlled union of United Cannery, Agricultural, Packing and Allied Workers of America. Workers made some gains in improving conditions. Perhaps their biggest gain was raising public awareness of their plight.
Passage of the Agricultural Adjustment Act in May 1933 still did not bring local tranquility. Many charged the crop reduction program favored large-scale farmers who had plenty of land to set aside. Smaller-scale farmers did not have enough land to set aside to qualify for financial aid. Without access to financial aid, many small farmers were essentially run out of business. Large land companies would purchase these small farms. The small farms were combined, the fences removed, and mechanized equipment such as tractors purchased. This trend contributed to the decline of small family farms, an integral part of early U.S. economic history. The larger farms, however, proved more competitive in the increasingly mechanized agricultural era of the 1930s. Sharecroppers and tenant farmers suffered as well. With southern landowners paid to farm fewer acres, they simply took AAA checks and let sharecroppers go.
The New Deal programs led to a revolutionary change in how American farmlands were used. In 1935 approximately three million blacks and over five million whites worked as tenants and sharecroppers. By 1940, 30 percent of sharecroppers and 12 percent of tenants had left farming in the thirteen cotton states. Many, however, stayed on the land they had previously farmed because they had no place else to go.
Considerable disagreement existed even among those in Roosevelt’s administration about how to solve the complex agriculture problems. Since the American Civil War (1861-1865), the dramatic growth of U.S. business and industry pushed agriculture into the economic background. The farming tradition of independence clashed with the national trend toward a more centralized economy.
Roosevelt recruited many people with a broad range of backgrounds to help in the nation’s recovery. Addressing farm issues were rural traditionalists who believed in farmer independence and maintaining local control of agricultural activities, and urban liberals who believed in a strong government role. In the past agriculture was addressed separately from the rest of the U.S. economy. Some now argued for a new approach, however, insisting agriculture should be treated as an integrated part of the U.S. economy. They advocated that farming reform go beyond the farm to the companies that purchased farm products and processed them into food.
Because the Agricultural Adjustment Act was proposed in early 1933 included a tax on food processors, the lobbyists for the processors sprang quickly to action to oppose it. After the act’s passage, the processors soon challenged it in the courts. Eventually they were successful. The U.S. Supreme Court made a ruling in their favor in early 1936.
Many in Congress thought the AAA offered too little help to farmers as foreclosures continued. The AAA loans proved a massive bailout of large commercial farms, but they offered little for farmers without capital. Sharecroppers and tenant farmers of the South, debt-ridden farmers of the Midwest and Great Plains, and migrant farm workers in the West did not enjoy the prosperity of large landowners.
The plight of the small farmer during the Great Depression was the subject of major literary works of the period. Three novels of famed author John Steinbeck deal with the topic. In Dubious Battle (1936) concerns an agricultural strike by laborers. Of Mice and Men (1937) is a story of two migrant workers in California dreaming of better days. Grapes of Wrath (1939) is about a tenant farmer and his family who migrate from Oklahoma to California. It won the 1939 Pulitzer Prize in fiction and raised widespread sympathy for the plight of migratory farm workers. The following year Hollywood released a movie of the same name. John Ford won the Academy Award for Best Director and Jane Darwell for Best Actress. Henry Fonda was nominated for Best Actor, and the movie was nominated for Best Picture. Steinbeck received the Nobel Prize for Literature in 1962 based largely on his work of the 1930s which endured through the following decades, reflecting on the difficult plight of the laborer in U.S. society. Noted American writer James Agee and photographer Walker Evans produced the 1941 book about Alabama sharecroppers titled Let Us Now Praise Famous Men. The book resulted from their experiences living with sharecroppers for about six weeks in 1936. Written originally for Fortune magazine, it did not appear in publication until released as a book in 1941. The book is still considered one of the best collaborations between writer and photographer and an excellent record of sharecropper life during the Great Depression.
Trends in agriculture worldwide were similar to those in the United States. Industrial production following World War I declined with the drop in demand for arms, and unemployment increased. Influenced, however, by increased mechanization and the use of newly developed chemical fertilizers, agricultural production soared. With mechanization and fertilizers, agricultural labor was no longer needed at previous levels. As in the United States, crop overproduction in various western countries led to demands for protection from foreign competition. Germany placed a high protective tariff on imported farm produce, including imports from the United States. These high tariffs continued into the 1930s. Continued overproduction of wheat came at a high cost to taxpayers. They were required to pay price supports to German farmers for storage of surplus wheat. In other words, the consumer was paying artificially high prices.
Many looked to the United States, with its newly gained international prominence following World War I, to provide world leadership. The world in general was dismayed by the United States’ turn inward toward isolationism, represented by passage of the Hawley-Smoot Act. The act raised taxes on foreign goods, making it more difficult for other nations to gain much-needed income by selling their products in the United States. Roosevelt’s New Deal continued this uncooperative spirit towards the worldwide economic problems. As foreign countries retaliated against the high U.S. tariffs, the Great Depression only deepened.
The rest of the world was not as quickly affected by the stock market crash in the United States. When the economic depression did spread, countries responded in different ways to help farmers. Australia was heavily in debt to British banks. The government instructed wheat farmers to boost production to raise money through exports. It became known as the “Grow More Wheat” program. With the world over-supplied in wheat, however, farmers found themselves selling their new bumper crops at prices below what it cost to grow them. To provide financial support, the Australian government passed the Wheat Advances Act, but banks did not have funds to provide the loans. Devaluation of Australian currency in 1931 bailed out the farmers by increasing farm exports, because Australian products then cost less in foreign countries.
Canada was another nation whose economy heavily depended on the export of grain and raw materials. Canadian exporters and farmers suffered huge losses as the United States and other countries entered into tariff wars, which resulted in fewer goods exported. Canadian unemployment rose from 3 percent in 1929 to 23 percent in 1933.
The U.S. economic farming crisis began in the early 1920s and became a major factor in the Great Depression of the 1930s. The combination of technological advances, the growth of science applications, and a greater government role in regulating farm production brought dramatic changes to rural America.
During the 1930s farming continued a shift from the earlier labor-intensive but simpler rural life to a capital-intensive major industry. New Deal programs greatly encouraged increased mechanization and the use of newly developed fertilizers, insecticides, and herbicides. By World War II farming had become big business, requiring special skills and sufficient capital to purchase modern equipment. The “horse age” of farming had drawn to a close, replaced by gasoline tractors. New machines, such as the grain combine harvester and the mechanical cotton picker, steadily decreased the need for field laborers. By the 1990s about 500,000 of the total 2.3 million farms in America produced over 80 percent of farm income. The commercial farms required increasing amounts of investment in equipment and supplies. In 1990 about 67 percent of small farm operators gained income from other jobs away from the farm.
As a result of New Deal policies and technological change, the social landscape of rural life also dramatically changed. For the first time, the U.S. census taken in 1920 indicated more people lived in cities than in rural areas. With the New Deal emphasis on larger farm operations, that trend continued. By 1930 some 30 million Americans lived on farms—25 percent of the U.S. population. A half-century later, in the 1980s, that number had further declined to 5.7 million, or less than 3 percent. Yet the amount of farmland remained about the same through that time period at about one billion acres.
The New Deal farm programs greatly altered the fundamental relationship between the federal government and farmers. The programs provided many benefits to farmers that were never before available. The 1938 Agricultural Adjustment Act provided the foundation for future U.S. agricultural policy. A lasting relationship between the government and farmers grew with government aid, available through loans and price supports. Importantly, farmer expectations of assistance during difficult times in the 1930s continued throughout the remainder of the twentieth century. Since the 1930s government has played a major role in agriculture, setting minimum farm prices, deciding on quality standards for farm products, and inspecting food and livestock feed.
The REA program demonstrated that the government could successfully provide cheap electrical power and increase the quality of life in rural areas. This success led to more government-sponsored power programs in the following decades.
Rural poverty of the Great Depression largely came to an end with World War II. The high demand for farm products and increased prices helped those still on the farm. Urban industrial jobs and military service helped those who were no longer needed in the increasingly mechanized farm operations.
Mordecai Ezekiel (1899-1974)
Holding a graduate degree from the University of Minnesota, Ezekiel began work in the Bureau of Agricultural Economics in the U.S. Department of Agriculture in 1922. He became one of the leading proponents for production control measures, in which farm prices might be increased by limiting the acreage being farmed. In 1932 Ezekiel wrote speeches on agriculture for presidential candidate Franklin Roosevelt. Following Roosevelt’s election, Ezekiel became the Secretary of Agriculture Henry Wallace’s chief economic advisor. He was one of the lead authors of the 1933 Agricultural Adjustment Act. Through the 1930s Ezekiel became an outspoken supporter of national economic planning programs.
Jerome N. Frank (1889-1957)
President Roosevelt selected Jerome Frank to be the lead attorney, general counsel, of the Agricultural Adjustment Association. After graduating from the University of Chicago law school, Frank became a corporate lawyer in New York City and Chicago before joining the Roosevelt administration in 1933. Frank selected a number of young upcoming lawyers as assistants. These included future U.S. Supreme Court justice Abe Fortas, future presidential candidate Adlai Stevenson, and future secretary-general of the United Nations Alger Hiss. Frank and his associates became leading proponents among the New Dealers for liberal reform. Roosevelt, however, dismissed Frank in 1935, to relieve tensions with others who favored more conservative measures. He was later to return in 1937 as commissioner of the Securities and Exchange Commission, eventually becoming its chairman. He was later appointed judge to the U.S. Court of Appeals for the Second Circuit.
Herbert Hoover (1874-1964)
Having gained personal wealth as a mining engineer and businessman, Hoover served as U.S. food administer under President Woodrow Wilson and then secretary of commerce under Warren Harding and Calvin Coolidge. Hoover became president of the United States from 1929 to 1933. Unlike President Calvin Coolidge before him, Hoover sought to relieve agricultural economic problems. He called Congress into a special session in early 1929 to pass the Agricultural Marketing Act. The act created the Federal Farm Board to organize a national system of farm cooperatives. Hoover called it a “new day in agriculture.” But with no direct financial aid and the onslaught of the Great Depression, the remedy proved unsuccessful. Hoover became a leading critic of the New Deal by the mid-1930s and continued to fight the New Deal’s influence into the 1950s.
Harry Leland Mitchell (1906-1989)
The operator of a dry cleaning business in northeastern Arkansas, Mitchell helped found and became executive secretary of the Southern Tenant Farmers’ Union in the 1930s. Mitchell was a socialist involved in political organizational work in the region. He sympathized with the plight of sharecroppers and tenant farmers. Mitchell gave inspirational leadership to the union, which grew to over 25,000 members in several states. He was subject to many threats, however, and labeled a communist. Boycotts eventually ruined his business. Mitchell fled across the Mississippi River to Memphis, Tennessee, as did other union leaders.
George Peek (1873-1943)
President Roosevelt selected George Peek to head the Agricultural Adjustment Administration in 1933. He was of an older generation than most New Dealers. Peek went to work for Deere and Company selling farm equipment in 1893 and became an executive for the company by 1911. He had served as an industrial representative on the War Industries Board during World War I. Following the war, Peek was president of the Moline Plow Company of Illinois and lobbied for agricultural legislation in the 1920s. Peek believed the solution to agriculture’s economic problems lay with tariffs, international marketing agreements, and government export programs. Peek was known for his tough and combative personality. He had gained considerable respect in Washington, drawing the attention of Roosevelt’s administration. Never comfortable with the AAA’s production control measures, Peek resigned after only seven months. He became sharply critical of New Deal farm policies and lobbied against them. He succeeded in raising the visibility of agricultural issues, and his ideas were later adopted in U.S. farm policy after World War II.
Milo Reno (1866-1936)
Reno was a noted farm activist fighting for government relief. After joining the National Farmers’ Union in 1918, he became president of the militant Iowa branch in 1921. Reno was a popular country preacher who promoted nineteenth-century populist ideals. He urged farmers to organize and take action against the U.S. corporate structure of banks and insurance companies, as well as against law authorities to save their farms. Described as tireless and obsessed, he spoke for government policies that would guarantee farmer incomes to cover production costs and provide a reasonable profit. In May 1932 he was elected leader of the National Farmers’ Holiday Association. The association sought to keep produce from reaching markets until favorable government policies were established. The protests caused widespread disruption of farm produce being delivered to markets in five states and led to some violence as well. Frustrated with New Deal programs that did not provide the relief Reno was seeking, he continued to crusade for farmers until his death in 1936.
Franklin D. Roosevelt (1882-1945)
Roosevelt was the leading architect of New Deal programs in the 1930s while he was serving as president of the United States. Born into a wealthy New York family, Roosevelt earned a law degree from Columbia University. He won a New York legislature seat in 1911 and became assistant secretary of the navy under Woodrow Wilson from 1913 through 1920. After battling polio in the 1920s, he was elected governor of New York in 1928 and again in 1930. He won the presidential election of 1932 over Herbert Hoover.
To attack the complex economic problems of the Great Depression, he oversaw passage of numerous new laws and programs in 1933, including the Agricultural Adjustment Act. Roosevelt’s popularity skyrocketed, but as the Great Depression continued into the mid-1930s, the popularity of his programs slipped. Roosevelt decided to support the everyday worker, including farmers. This new tactic brought him a resounding victory in the 1936 presidential elections. With the beginning of World War II, emphasis switched from domestic to foreign issues. Roosevelt served as president until his death in 1945. He is the only president to be elected to four consecutive terms of office, though not completing the fourth.
Rexford Tugwell (1891-1979)
Having earned a Ph.D. in agricultural economics from the University of Pennsylvania, Rexford Tugwell became a professor at Harvard University. He was an advocate for government regulation of private enterprise and national farm programs. In 1933 Roosevelt recruited him to be assistant secretary of agriculture under Henry Wallace, as well as economic adviser to Roosevelt himself. Tugwell was eager to use the New Deal to guide economic and social change in the United States. He played a major role in writing the Agricultural Adjustment Act.
In 1935 Roosevelt appointed Tugwell to be head of the controversial Resettlement Administration to assist poor farmers in relocating to better lands. The agency became part of another agency in 1937, and Tugwell resigned. He was appointed governor of Puerto Rico, serving through World War II, before returning to an academic post at the University of Chicago. He died in 1979.
Observations on the Plight of the Farmer
Historian Arthur Schlesinger, Jr., provided a collection of first-hand observations regarding pleas for farm relief and growing farmer rebellion in rural America in The Coming of the New Deal: The Age of Roosevelt (1988). In a letter to Roosevelt advisor Harry Hopkins, (p. 376), a Georgia farmer wrote,
I have Bin [sic] farming all my life. But the man I live with Has turned me loose taking my mule all my feed …I have 7 in family. I ploud [sic] up cotton last yeare I can rent 9 acres and plant 14 in cotton But I haven’t got a mule no feed … I want to farm I have Bin [sic] on this farm 5 years. I can’t get a Job So Some one said Rite [sic] you.
The plight of the small farmer, including tenant farmers and sharecroppers, was a constant issue. The New Deal farm programs were primarily aimed at larger, commercial farms that were already economically competitive. Most effort by the New Dealers was to save the productive farms. They believed helping the small family farms that were no longer competitive in the new age of farm mechanization was too costly to be worthwhile. Obviously, the policy was hard for the farming community to accept as they saw their friends and neighbors lose their farms and live on a day-to-day basis without a home.
Suggested Research Topics
- Identify what programs the local agricultural extension service might offer and how many of the programs result from New Deal policies.
- When and why did the U.S. government begin to pay farmers to not grow certain crops?
- What were the major differences in U.S. farming before 1930 and after 1940?
- What are special crop growing methods to conserve soil, such as plowing techniques and crop rotation strategies?
- What role have migrant farm workers played in the United States and what special problems have they faced?