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THE FARM CRISIS

Demographic Shift

In 1920 the census showed that for the first time in history more Americans lived in urban centers than on farms. The Great Depression, however, sparked an exodus of farmers to the city, irreversibly transforming the United States from an agricultural to an industrial society. On the farm the Depression was an unalloyed catastrophe made worse by drought. It drove millions to the city. Hundreds of thousands of midwesterners made the trek to California in search of agricultural work, ultimately ending up in the defense factories of World War II. The farm crisis was thus at the center of an enormous demographic shift in American life, one that permanently reshaped the character of the nation.

Falling Prices

The farm crisis did not begin with the Great Crash of 1929. Throughout the 1920s agriculture in America was subject to severe economic stress. During World War I prosperity had been the norm as farmers in America and other areas of the world expanded acreage to fill markets formerly supplied by European farmers. When the war ended and the Europeans returned to cultivation, a worldwide collapse in agricultural prices resulted. The collapse continued and was made worse by lack of international cooperation during the 1920s. Bumper crops in Canadian wheat at the end of the decade depressed world prices. The Soviet Union, determined to gain capital for industrial development through the sale of wheat, dumped grain on world markets, depressing prices and depressing their own ability to earn capital, to which they responded by exporting more wheat—even as their own citizenry began to starve for lack of staples. Australian politicians responded to the onset of depression by undertaking a "Grow More Wheat" campaign that made a bad situation worse. American farmers did much the same. Aided by easy credit during the 1920s, farmers increased acreage and made yields more efficient via increased mechanization and the use of fertilizers. Both actions made the decline in prices worse and increased the debt burden of American farmers. By 1930 the mortgages on American farms amounted to $9.2 billion, up from $3.2 billion in 1910, and millions of farmers were tenants.

Foreclosures

The economic pressures on agriculture increased following the stock-market crash of 1929. Struggling banks began foreclosing on farms, and farmers attempted to meet their bills in the only way they knew how: by increasing acreage and yields, further driving down prices. By 1932 farm prices were only 40 percent of their already low 1929 levels. Wheat earned only 25 cents a bushel (down from $2.94 in 1920); oats brought 10 cents a bushel; sugar got 3 cents per pound; and cotton and wool garnered 5 cents a pound (down from 37 cents in 1920). By 1933 prices had sunk to 63 percent of their 1929 level. Fundamentally it became impossible for indebted farmers to earn enough to keep their farms. Farmers had to grow nine bushels of wheat to pay for a pair of shoes; in 1909, two bushels would have sufficed. The Smoot-Hawley Tariff of 1930 was supposed to offer farmers some protection, but agricultural surpluses were so huge that its impact was barely felt, and foreign retaliation dried up exports. President Hoover's Federal Farm Board was a similar failure. It purchased selected crops from farm cooperatives in order to drive up prices. The program had negligible results, losing approximately $345 million without achieving price stablization. The Hoover administration finally suggested that farmers voluntarily refrain from growing crops and thus drive up prices. Following the administration's advice, in some midwestern states farmers did declare "strikes" and curtailed production. Nothing protected such farmers from banks, under severe pressure themselves, from calling in loans and foreclosing on farms, and thus attempts at voluntary production limits failed. Although Hoover did loan some $64 million to farmers through his business-oriented Reconstruction Finance Corporation, it was not enough to prevent massive foreclosures. Farmers turned militant in their attempts to stop foreclosures, threatening to kill bank officers and police. Sedition and revolt were in the air. "Unless something is done for the American farmer," Farm Bureau Federation president Edward A. O'Neal told the Senate in January 1933, "we will have revolution in the countryside within less than twelve months."

Agricultural Adjustment Act

The Agricultural Adjustment Act of 1933 was an attempt to coerce reductions of agricultural products, thus driving up prices. Participation in the program was voluntary, but economic reality virtually dictated participation. The Roosevelt administration established the Agricultural Adjustment Administration (AAA) to oversee the reduction of crops and other goods. The AAA paid farmers to leave acreage unplowed and to raise fewer animals. The government also guaranteed participating farmers a minimum price for the goods they did raise, a price secured by taxing food processors and distributors. Finally, the Roosevelt administration established the Farm Credit Administration to protect farmers against creditors, offering generous loans to forestall foreclosure. Because the 1933 growing season had already begun by the time the AAA commenced operations, however, the government was forced to pay farmers to destroy their crops. Ten million acres of planted cotton were plowed under; 6 million baby pigs and 200,000 pregnant sows were destroyed. The spectacle of destroying food at a time when millions went hungry was to many almost surreal. Equally difficult was adjusting farmer's attitudes to the new subsidies. Raised to believe it was sinful to let productive ground lay fallow, many of them found it difficult to adjust to AAA directives. Nonetheless, AAA policy worked. By 1936, with 30 million acres out of cultivation, prices had recovered and farm income had doubled. The AAA had thus set a precedent for farm price supports that continues into the present.

Unions

AAA policy did not work exactly as planned. Although the AAA had specifically set up rules to protect tenant farmers and sharecroppers, in the Democratic South it was difficult to enforce these rules, and as large agricultural owners took land out of cultivation, they often threw out the tenant farmers who worked the land. So frequent were the evictions that tenant farmers organized the Southern Tenant Farmers Union in 1934 and became increasingly militant about opposing farmland owners. Tensions between the two groups were often heightened by racial tensions, as many sharecroppers were blacks. Night riders and Klansmen enforced evictions, but the tenants resisted intimidation. Eastern Arkansas, the sugar-beet fields of Colorado, lettuce farms in Arizona, and the orange groves of California were the scenes of armed battles between tenant farmers, share-croppers, migrant workers, and landowners. Such battles were documented in plays such as Erskine Caldwell's Tobacco Road, movies such as Pare Lorentz's The Plow that Broke the Plains (1937) and The River (1937), and John Steinbeck's novel The Grapes of Wrath (1939),

Dust Bowls

Compounding the misery of the Depression, a long drought in the middle of the 1930s brought hardship to millions. Farmers throughout the Midwest literally watched the fruits of their work dry up and blow away. The farmlands became nicknamed "dust bowls" because of the winds busy drawing the topsoil away. The dust storms caused by the drought were so great that soil was deposited as far east as New York and the Atlantic Ocean. As calamitous as the drought was, however, it combined with the AAA to reduce drastically the number of farmers and farm acreage in the United States, thus driving up prices and facilitating recovery.

Farm Security Administration

Aware of the hardships imposed by AAA policies and the drought visited on farm families, in 1935 the government established an agency that would ultimately be called the Farm Security Administration (FSA). The FSA provided poor farmers with financial relief, health advice, and agricultural information. If it discovered farmers were cultivating substandard land, the FSA resettled them to new, more fertile land and taught them how to farm it scientifically. Of particular importance was instruction in contour plowing, which reduced soil erosion. Entire resettled communities, such as Arthurdale, West Virginia, were established to prove that government assistance and community interest could produce energetic, productive agriculture. The program succeeded, but at such a high price that its economic value was questionable. Ultimately Congress balked at financing so expensive a project and ordered a reduction in FSA programs in 1938. Six years later the project was killed altogether.

Cancellation and Continuance

In 1936 the entire AAA program was eliminated by the Supreme Court, which ruled in United States v. Butler that Congress had no constitutional right to regulate agriculture, and invalidated the taxes raised to pay for the AAA. Conservatives were heartened by the decision, but their joy was short-lived. The AAA was successful and popular enough that Congress recreated it in a form more acceptable to the Supreme Court in 1936 with the passage of the Soil Conservation and Domestic Allotment Act. To the original AAA programs of price supports, agricultural education, and debt relief were added a system of warehouses, which held agricultural products until a good price for them existed in the marketplace—an idea that had been prominent in the farm belt since the 1880s. Thus, by 1936 the farm crisis was fundamentally over, with the number of American farmers sharply reduced (less than a quarter of the population in 1939), prices for their goods substantially raised, and the model of farm/government cooperation firmly built—a model from which subsequent governments would construct their own farm support policies.