New Deal Farms Public Works US Farms in
New Deal Farms & Public Works
US Farms in 1920 s • Expanded production during WWI • Increased production – New techniques & machines – Less need to grow food for horses • Flat or declining demand – Changing tastes – Slower population growth • Declining birthrate • Immigration restrictions
Farm Income
Farms’ Economic Status • Farm income: – $17 billion in 1919 – $13 billion in 1929 • Continued high debt ($9 billion) • “Parity” -- index of farm sales v purchases – 1910 -14 = 100 – 89 (1929)
Mainstream GOP Solutions • Cooperative marketing • Easier credit – Federal Intermediate Credit Banks (1922) • Higher farm tariffs • Purchase of surplus crops – Agricultural Marketing Act of 1929 – Federal Farm Board
Mc. Nary-Haugen Plan • Maintain farm prices at pre-1920 levels • Govt control of farm market – Higher tariffs – Buy domestic products – Sell surplus overseas • Most popular notion among farmers in 1920 s
Land Use Planning • • • Too much land in production More land forests End homesteading Control Federal development projects Reduce production U of Wisconsin (Richard Ely)
Domestic Allotment Plan • Plan & control production • Payments to farmers tied to prices • Producer referenda
Farm Crisis in 1933 • Farm income down 2/3 from 1929 • 1932: Parity = 55 • Farmer boycotts -- Upper midwest
Henry A Wallace • Born Iowa 1888 • Iowa State • Father: Sec of Ag, 1921 -24 • Journalist • Hybrid corn seed
Farm Credit • Emergency Farm Mortgage Act – May 1933 – Allow refinancing at lower rates • Farm Credit Act – Loans on favorable rates
Agricultural Adjustment Act of 1933 • • FDR: stakeholders must agree first Omnibus bill Gave executive several options Raise prices by restricting production Pay farmers to reduce acreage Tax food processors Cotton, wheat, tobacco, hogs, milk & rice
AAA Implementation • 1933: – Plow under 10 million acres of cotton – Slaughter 1. 8 million pounds of pork (16% of total) • Complex, time-consuming process – One million agreements with farmers – Cooperation of processors • Reduce production in 1934 & beyond
Conflicts within Agriculture • Henry A. Wallace – Focused on importance of farms • George Peek – Mc. Nary-Haugen supporter – Pro-business, tariffs, exports • “Urban Liberals” – Social & economic change – Jerome Frank & Rexford Tugwell
AAA & Farmers • Focus: crops not people • Favored larger farmers • Production controls popular with many farmers • Ignored small farmers & tenants • Reports of evicted & cheated tenants
Southern Tenant Farmers Union • • • Arkansas delta Agitated for better treatment for tenants Supported by Socialist Party Provoked conflict within Agriculture Led to 1935 purge of SFTU supporters
AAA Short Term Impact • Reduced production 1/3 for 12 key crops • (Combined with drought) raised farm prices 50% by 1936 • Created opposition to processing tax • Executive discretion invited legal challenge – Declared unconstitutional (Jan. 1936)
Soil Conservation & Domestic Allotment Act of 1936 • Response to Supreme Court decision • Paid farmers for soil conservation measures • Farmer-run soil conservation districts • Reaction to dust bowl • Did little to reduce production
Commodity Credit Corporation • • 1933 Loans to farmers Non-recourse: no liability if price lower Crops as collateral – Sell or – Leave in storage & wait for better price
Agricultural Adjustment Act of 1938 • • Ever-normal granary Sec of Agriculture to allot acreage Staple crops CCC to play major role
Farm Exports • Farm exports – 10% of total – Still important • Wallace & Cordell Hull – Multi-lateral free trade • Reciprocal trade agreements
Taylor Grazing Act of 1934 • • Federal control of rangelands Grazing districts Locally controlled district boards Leased to ranchers
Resettlement Administration • • • Emergency Relief Appropriation of 1935 Rexford Tugwell “Subsistence” communities Greenbelt towns Relocate farmers to better land Provide advice
Resettlement Administration: Impact • Relocated fewer than 1% of eligible farmers (5, 000)
Farm Security Administration • Bankhead-Jones Farm Tenancy Act (1937) • Loan to tenants – $293 million to 47, 000 farms (5%) (10 years) • Improve conditions for migrant workers • Loans to small farmers – $516 million to 870, 000 families (6 years)
Farm Security Administration Photography • RA Information Division • Positive depiction of programs • Professional photographers – Dorothea Lange – Walker Evans • Record of 1930 s on the farms
Migrant Woman
Oklahoma Farm Family
Dorothea Lange
New Deal Farm Policies: Impact • Farm policies remained controversial • Most farm products short of parity by 1939 • Farm income $10 billion in 1939 (lower than 1929 level($13 billion) • Production increased beyond demand • Surpluses accumulated • Favored larger farms; number of farms continued to decrease • Tenants & sharecroppers pushed off land
Public Works: Key Notions • Public investment – Inspire private investment – Generate jobs • Develop West and South • Revive construction industry – Declined from $10 billion (1929) to $2. 3 billion (1932)
Public Works Administration • • • Title II of NIRA $3. 3 billion Harold Ickes in charge Public works projects Careful management
Harold Ickes • Born 1874 in Pennsylvania • Reporter, lawyer • Bull Moose Republican • Chicago politics • Curmudgeon
PWA • 11, 000 employees • Fund, plan and approve projects • Grants & Loans – Federal agencies – State & local govt’s • Private contractors
PWA Accomplishments • $1. 2 billion wages & $2. 2 billion for materials (as of 1939) • 300, 000 - 600, 000 workers employed • 35, 000 projects
PWA Accomplishments • • Key West Causeway Grand Coulee Dam Bonneville Dam Tri-borough Bridge Skyline Drive Federal Triangle… 70% of school buildings 1933 -1939
PWA & Recovery • Ickes – Strict accountability – Careful planning • Slow pace – Short term impact limited
Civilian Conservation Corps • Reforestation Relief Act (3/33) • FDR pet idea – Similar to NY program – Back to Land • Issues – $1/day – regimentation
CCC Impact • Considered success • 2. 5 million participants • Impact ?
New Deal & Public Power
California: Model? • Water (Owens Valley) • Electric power – Sierra Nevada streams – WWI consolidation – 1924: • 85% homes with electricity (US: 35%) • $1. 42/ KWH (US: $2. 17) – Boulder Canyon Project • Western construction companies – Kaiser, Bechtel…
Public Power • Reliance on water power • Cheaper rates • Willingness to expand & serve rural areas • Generation & transmission ?
Tennessee Valley Authority • Authorized 5/33 • Progressive issue – George Norris (Rep - Neb) – Federal dam at Muscle Shoals • Electric power • Fertilizer production – Opposed by • Private companies • GOP administrations
TVA Programs • Electric power – Production – Benchmark for pricing private power • • • Fertilizer production Flood control New industries Entire Tennessee Valley basin Planning & development
TVA Internal Conflicts • Arthur Morgan – Self-sufficient communities – Cooperation with private power • Harcourt Morgan – Scientific farming • David Lilienthal – Public power
David Lilienthal • Born Illinois 1899 • De. Pauw, Harvard Law • Utility lawyer • Wisc. RR Commission
TVA vs Private Power • • • Commonwealth & Southern Wendell Willkie TVA: lower rates PWA: loans to municipal utilities Fair competition? Lower rates -- greater usage & revenues
TVA Planning & Development • Land use planning – Soil reclamation • Community development • Local control • Decentralized planning
TVA Impact • A New Deal success – Electric power – Industrial development • Local control – Disproportionate benefits to large landowners • Community development – Mixed assessment
Electric Home & Farm Authority • • • NIRA (1933) $1 million, eventually $10 million Loans to buy electric equipment Lower cost appliances 4% interest; easy terms Cooperation with private utilities & appliance producers
EHFA: Impact • 1939: – 31 states – 353 utilities – 3, 203 retailers – 281 manufacturers • 1940 – 2/3 purchasers -- income >$1, 800/year
Rural Electrification Administration • Executive Order 1935 -- $100 million • Legislation 1936 -- $420 m/10 years • More loans thru RFC – Self-liquidating – Temporary • Private providers – Too slow & expensive – Limited interest • Farmer cooperatives
REA: Impact • Louisana – 1935 -- 1. 7% farms with electricity – 1939 -- 6. 8% • Colorado – 1935 -- 11% – 1940 -- 25% • Locally controlled & managed
Bonneville Power Administration: Issues • Dams on Columbia River • FDR campaign promise • Public power or pool with private companies? • Rates? • Independent or part of Interior?
Bonneville Power Administration • • • Preference for public & coop providers Federal backbone transmission system Corps of Engineers to operate BPA, within Interior, to distribute Preference for uniform rates
Seven Little TVAs • • George Norris proposal - 1937 Apparent FDR support Ran afoul of Wallace-Ickes rivalry Opposition – Private power – Western states – Public administration experts
Public Works Impact • Huge long term impact – Development of South & West – Electric Power – Infrastructure • Impact on economic recovery ?
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