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1932 › Franklin D. Roosevelt (Democratic) › Farm prices and agricultural surplus
Restore purchasing power to the farming half of the nation
pledge_forwarddirectional_stancecandidate_directevidence A AgricultureEconomy & Fiscal Policy⚡ The Great Depression similar solutions · similar reasoning
Solution
Make restoration of farm purchasing power an essential part of a national recovery program, on the theory that industrial employment depends on farmers being able to buy. Method left unspecified in April; developed into the Topeka farm plan in September (see 1932-fdr-topeka-farm-plan).
Rationale
Half the population lives by farming or in farm towns; farmers receive less than the cost of production, so they cannot buy industrial goods, so city workers lose jobs. "No Nation can long endure half bankrupt." Recovery must be built "from the bottom up."
Statements (2)
I cannot escape the conclusion that one of the essential parts of a national program of restoration must be to restore purchasing power to the farming half of the country. Without this the wheels of railroads and of factories will not turn.
It is because one-half of our population, over 50,000,000 people, are dependent on agriculture; and, my friends, if those 50,000,000 people have no money, no cash, to buy what is produced in the city, the city suffers to an equal or greater extent.
Follow-through
kept
The Agricultural Adjustment Act (May 12, 1933) paid farmers to cut production, financed by a processing tax; farm income rose more than fifty percent 1932–35. The mechanism — acreage reduction — was the one Roosevelt had attacked Hoover for contemplating in 1925, and benefits flowed mainly to landowners.
Mechanisms
| Date | Type | Name | Effect | Consistent? | Source |
|---|---|---|---|---|---|
| 1933-03-16 | message | Message to Congress on the Agricultural Adjustment Act | Asked for emergency farm legislation before spring planting.I tell you frankly that it is a new and untrod path, but I tell you with equal frankness that an unprecedented condition calls for the trial of new means to rescue agriculture. | yes | Message to Congress on the Agricultural Adjustment Act. |
| 1933-05-12 | statute | Agricultural Adjustment Act | Domestic allotment with benefit payments for reduced acreage; processing tax; Thomas inflation amendment. | yes | Statement on Signing the Farm Relief Bill |
| 1936-03-01 | statute | Soil Conservation and Domestic Allotment Act (after Butler struck the AAA) | Re-based payments on soil conservation after the Supreme Court voided the processing tax. | partly | Statement on Signing the Soil Conservation and Domestic Allotment Act. |
Assessments
Farm income rose more than half in three years, though large owners captured the gains and crop destruction drew ridicule.
More than three million farmers joined the AAA program in its first year, and farm income did increase by more than fifty percent between 1932 and 1935.
Other positions on this issue
- Raise staple farm prices by a tariff-equivalent benefit plus voluntary production control, at no cost to the Treasury — Franklin D. Roosevelt, 1932 specific_pledge
- Farm prices can be restored only by general recovery and markets — no production control, no subsidies; repeal Farm Board stabilization — Herbert Hoover, 1932 specific_pledge
- Cash benefits on the domestically consumed portion of export crops to make the tariff effective, limited to the family-type farm; no scarcity program, no processing tax — Alf Landon, 1936 specific_pledge
- Continue soil conservation and domestic allotment payments; end ruinous surpluses; commodity loans on seasonal surpluses — Franklin D. Roosevelt, 1936 directional_stance
1932-fdr-restore-farm-purchasing-power · created by claude-fable-5-1 · review: unreviewed