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76th Congress, 3d Session-House Document No. 695
UNITED STATES DEPARTMENT OF AGRICULTURE
UNITED STATES GOVERNMENT PRINTING OFFICE
~"eALDO STATE COLtEGE OF A. M. A
FOP CO-L INS COLORAOC
FOR SALE BY THE
SUPERINTENDENT OF DOCUMENTS
WASHINGTON, D. C. t
C c -h j
THIS YEARBOOK on economic and social conditions in agriculture in
the United States today was prepared under the direction of the
former Secretary of Agriculture, Henry A. Wallace, and there is
little that I can add to his Foreword, which follows and which was
written before the book went to press.
So swiftly have events moved in recent months that some of the
book will undoubtedly be "dated" before it is published. The whole
question of foreign trade, for example, is in a state of flux, and the
country is now plunged in a vast preparedness program that will
affect employment and wages, and therefore the farmer's domestic
Underneath even these great changes, however, there are con-
tinuing agricultural problems, some of which have been building
up for decades. In a deeper sense, indeed, modern wars result from
some of the very causes back of farm distress.
In the main, then, these studies of present-day agricultural prob-
lems are underlined rather than outdated by recent events.
CLAUDE R. WICKARD, Secretary of Agriculture.
September 15, 1940.
TO BUILD an economic democracy that will match our political
democracy, our people must have the facts.
Few agencies have been as persistent in digging out facts as the
Department of Agriculture. Its scientists have a long and honorable
record in this never-ending quest, and they have added much to human
knowledge in fields that are vital to every one of us.
In our recent agricultural Yearbooks on genetics, on soils, on nutri-
tion we have tried to sum up what the scientists have discovered
and at the same time to show how imperfect our knowledge is-what
great frontiers are still to be explored.
The investigations of the Department of Agriculture are not confined
to the natural sciences. Under the necessities of modern life-many
of them arising out of the revolutionary discoveries of science-the
Department has had to pay more and more attention to economic
and social problems as well. It has been building up a notable body
of knowledge in these fields.
This book tries to deal with these problems as the previous Year-
books dealt with some of the great problems in the natural sciences-
to sum up needs, methods, results, and at the same time indicate
Of course, people are not so ready to agree on the meaning of eco-
nomic and social facts as on the meaning of facts in the natural sciences.
And even when they agree on the facts, they are not so ready to agree
on what should be done about them. True, the human element is
never entirely absent in any science, but it is far more important
here, where it sometimes takes extreme forms of passion and prejudice.
That does not relieve any of us of the duty of trying to discover the
facts in the scientific spirit and to deal with them wisely. It makes
the duty all the more urgent. One of the great solvents of passion and
prejudice, which between them have pushed civilization dangerously
close to the brink of disaster, is the scientific spirit.
I believe that on the whole this book has been written in that spirit.
It is a sincere effort to contribute to economic democracy in these
United States. But I would also be the first to acknowledge that it
has human shortcomings.
I should like to think it is a step, even if a halting one, toward that
marriage of the social and the natural sciences which I believe can
be one of the great contributions of democracy to civilization.
HENRY A. WALLACE, Secretary of Agriculture.
June 15, 1940.
Claude R. Wickard, Henry A. Wallace
1940 YEARBOOK COMMITTEE XI
FARMERS IN A CHANGING WORLD-A SUMMARY 1
Part 1. The Farmer's Changing World
THE FARMER'S CHANGING WORLD 103
F. F. Elliott
OLD IDEALS VERSUS NEW IDEAS IN FARM LIFE. 111
Paul H. Johnstone
AMERICAN AGRICULTURE-THE FIRST 300 YEARS 171
Everett E. Edwards
AGRICULTURE IN THE WORLD WAR PERIOD 277
A. B. Genung
THE DEVELOPMENT OF AGRICULTURAL POLICY SINCE THE
END OF THE WORLD WAR 297
Chester C. Davis
Part 2. Agriculture and the National Welfare
AGRICULTURAL SURPLUSES AND NUTRITIONAL DEFICITS 329
J. P. Cavin, Hazel K. Stiebeling, Marius Farioletti
THE FARMER'S STAKE IN GREATER INDUSTRIAL PRODUCTION 342
Louis H. Bean
THE CITY MAN'S STAKE IN THE LAND 366
Arthur P. Chew
Part 3. The Farmer's Problems Today and the Efforts
to Solve Them
AGRICULTURE TODAY: AN APPRAISAL OF THE AGRICULTURAL
0. V. Wells
OUR MAJOR AGRICULTURAL LAND USE PROBLEMS AND SUG-
GESTED LINES OF ACTION 398
L. C. Gray
THE CHALLENGE OF CONSERVATION 416
Bushrod W. Allin, Ellery A. Foster
OUR SOIL CAN BE SAVED 429
H. H. Bennett
THE NEW RANGE OUTLOOK 441
W. R. Chapline, F. G. Renner, Raymond Price
FOREST-RESOURCE CONSERVATION 458
R. E. Marsh, William H. Gibbons
FARM-MANAGEMENT PROBLEMS IN AN ERA OF CHANGE 489
Sherman E. Johnson
THE INFLUENCE OF TECHNICAL PROGRESS ON AGRICULTURAL
R. S. Kifer, B. H. Hurt, Albert Thornbrough
THE PLACE OF FORESTS IN THE FARM ECONOMY 533
Burt P. Kirkland
ACREAGE ALLOTMENTS, MARKETING QUOTAS, AND COMMODITY
LOANS AS MEANS OF AGRICULTURAL ADJUSTMENT 551
J. B. Hutson
THE MEANING OF FOREIGN TRADE FOR AGRICULTURE 566
Arthur P. Chew
RECIPROCAL TRADE AGREEMENTS-A NEW METHOD OF TARIFF
L. A. Wheeler
METHODS OF INCREASING AGRICULTURAL EXPORTS 596
H. B. Boyd
THE INDUSTRIAL MARKET FOR FARM PRODUCTS 606
W. B. Van Arsdel
REDUCING THE COSTS OF FOOD DISTRIBUTION 627
A. C. Hoffman, F. V. Waugh
MARKETING-AGREEMENT PROGRAMS AS A MEANS OF AGRI-
CULTURAL ADJUSTMENT. 638
B. A. Holt, D. M. Rubcl
THIRTY MILLION CUSTOMERS FOR THE SURPLUS 650
BARRIERS TO INTERNAL TRADE IN FARM PRODUCTS 656
E. L. Burtis, F. V. Waugh
STANDARDIZATION AND INSPECTION OF FARM PRODUCTS 667
C. W. Kitchen
COOPERATIVE MARKETING BY FARMERS. 684
E. A. Stokdyk
THE GROWTH OF FARM-CITY COOPERATIVE ASSOCIATIONS. 706
Sidney N. Gubin
THE TRANSPORTATION PROBLEM OF AGRICULTURE 720
Ralph L. Dewey, James C. Nelson
AGRICULTURAL CREDIT 740
E. C. Johnson
CROP INSURANCE 755
William H. Rowe, Leroy K. Smith
RURAL TAXATION 771
RURAL ELECTRIFICATION. 790
Robert T. Beall
NEW CONDITIONS DEMAND NEW OPPORTUNITIES 810
Raymond C. Smith
THE RURAL PEOPLE. 827
0. E. Baker, Conrad Taeuber
PATTERNS OF LIVING OF FARM FAMILIES 848
OVERCROWDED FARMS 870
W. W. Alexander
FARM TENANCY 887
Paul V. Maris
FARM LABOR IN AN ERA OF CHANGE 907
William T. Ham
BEYOND ECONOMICS 922
M. L. Wilson
Part 4. Farm Organizations
TRENDS IN NATIONAL FARM ORGANIZATIONS 941
DeWitt C. Wing
Part 5. What Some Social Scientists Have to Say
CULTURAL ANTHROPOLOGY AND MODERN AGRICULTURE 983
Robert Redfield, W. Lloyd Warner
DEMOCRACY IN AGRICULTURE-WHY AND HOW? 994
THE CULTURAL SETTING OF AMERICAN AGRICULTURAL PROB-
EDUCATION FOR RURAL LIFE 1033
Edwin R. Embree
THE CONTRIBUTION OF SOCIOLOGY TO -AGRICULTURE 1042
Carl C. Taylor
A PHILOSOPHY OF LIFE FOR THE AMERICAN FARMER (AND
William Ernest Hocking
Part 6. Democracy and Agricultural Policy
PUBLIC INFORMATION AND THE PRESERVATION OF DEMOCRACY 1075
Alfred D. Stedman
SCIENCE AND AGRICULTURAL POLICY 1081
T. Swann Harding
SCHOOLS OF PHILOSOPHY FOR FARMERS 1111
OLD AND NEW IN AGRICULTURAL ORGANIZATION 1125
Milton Eisenhower, Roy I. Kimmel
COOPERATIVE LAND USE PLANNING-A NEW DEVELOPMENT
IN DEMOCRACY 1138
Ellery A. Foster, Harold A. Vogel
Part 7. Essentials of Agricultural Policy
SOME ESSENTIALS OF A GOOD AGRICULTURAL POLICY 1159
H. R. Tolley
A BRIEF CHRONOLOGY OF AMERICAN AGRICULTURAL HISTORY 1184
Dorothy C. Goodwin, Paul H. Johnstone
1940 Yearbook Committee
M. L. WILSON, Extension Service, Chairman
HOWARD R. TOLLEY, Bureau of Agricultural Economics
GOVE HAMBIDGE, Office of Information
The advice and assistance of many specialists were freely sought by
the committee in planning the book. In particular, thanks are due
to L. C. Gray, F. F. Elliott, John R. Fleming, O. V. Wells, Carl C.
Taylor, Bushrod W. Allin, O. E. Baker, and Paul H. Johnstone.
Editor of the Yearbook-GovE HAMBIDGE
Assistant Editor-MARION JULIA DROWN
A NECESSARY POSTSCRIPT
SINCE the preparation during 1939 of most of the material in this
book, the international situation has changed swiftly and tragically.
The thoughts and lives of people all over the world have had to be
reoriented to these changes. Unquestionably the turn of world events
will profoundly affect the problems of agriculture in the United States
in ways not entirely predictable. The reader should keep this in
mind in everything that follows.
Yet the underlying theme of the book-the necessity in the modern
world for constant and adequate adjustment to change-is power-
fully emphasized by these recent events. The lesson should be well
learned by a generation that has seen within half a lifetime the two
greatest wars and the greatest depression as well as many of the
greatest scientific advances and political upheavals in all history.
Furthermore, the fundamental problems of our agriculture are not
likely to be lessened by the changing international situation. They
are more likely to be intensified, and there will be more need than
ever to meet them with courage and intelligence in order that we
may strengthen our country to the utmost.
Organization of the
United States Department of Agriculture
CLAUDE R. WICKARD, Secretary of Agriculture
PAUL H. APPLEBY, Under Secretary
GROVER B. HILL, Assistant Secretary
Director of Information,
M. S. EISENHOWER.
Director of Extension Work,
M. L. WILSON.
Director of Finance,
W. A. JuMP.
Director of Personnel,
ROY F. HENDRICKSON.
Director of Research,
JAMES T. JARDINE.
Director of Marketing,
MILO R. PERKINS.
MASTIN G. WHITE.
Land Use Coordinator,
M. S. EISENHOWER.
Office of Plant and Operations,
ARTHUR B. THATCHER, Chief.
Office of C. C. C. Activities,
FRED W. MORRELL, Chief.
Offce of Experiment Stations,
JAMES T. JARDINE, Chief.
Offce of Foreign Agricultural Relations,
LESLIE A. WHEELER, Director.
Agricultural Adjustment Administra-
R. M. EVANS, Administrator.
Bureau of Agricultural Chemistry and
HENRY G. KNIGHT, Chief.
Bureau of Agricultural Economics,
H. R. TOLLEY, Chief.
Agricultural Marketing Service,
C. W. KITCHEN, Chief.
Bureau of Animal Industry,
JOHN R. MOHLER, Chief.
Commodity Credit Corporation,
CARL B. ROBBINS, President.
Commodity Exchange Administration,
JOSEPH M. MEHL, Chief.
Bureau of Dairy Industry,
O. E. REED, Chief.
Bureau of Entomology and Plant
LEE A. STRONG, Chief.
Farm Credit Administration,
A. G. BLACK, Governor.
Farm Security Administration,
C. B. BALDWIN, Administrator.
Federal Crop Insurance Corporation,
LEROY K. SMITH, Manager.
EARLE H. CLAPP, Acting Chief.
Bureau of Home Economics,
LOUISE STANLEY, Chief.
CLARIBEL R. BARNETT, Librarian.
Bureau of Plant Industry,
E. C. AUCHTER, Chief.
Rural Electrification Administration.
HARRY SLATTERY, Administrator.
Soil Conservation Service,
H. H. BENNETT, Chief.
Surplus Marketing Administration,
MILO R. PERKINS, Administrator,
Farmers in a Changing World-
by GOVE HAMBIDGE1
THERE was a small band of men and women on a little ship, journey-
ing toward an unknown future-an unknown land, in fact, where they
dreamed of building a new, freer life. The ship was small and frail;
it hardly crawled along the interminable sea; it wallowed in calms and
was nearly smashed by storms. To the courageous little band the pos-
sibility of ever reaching the new land must sometimes have seemed
remote. Often they must have thought longingly of the familiar, com-
fortable things they had left behind. The future must at times have
seemed dark, and the days through which they were living bitter with
uncertainty and hardship.
They did not give up. They did not turn the ship back. They did
reach the new land. Their descendants conquered a continent and
built a civilization.
This was more than 300 years ago, and the circumstances are differ-
ent today. Yet we, who inherit what these people won, are also on a
journey toward an unknown future. We also often look back long-
ingly to the old familiar ways. To us too the future sometimes seems
dark, and the days through which we are living filled with uncertainty
and hardship. We too have dreams which at times we think we shall
Men have been through such experiences uncounted times in human
history. It is true that today the circumstances are different. The
circumstances are always different.
But the human beings who must deal with new circumstances are
not essentially different. Courage, toughness of mind and body, fear
of change and of the unknown, and a certain indomitable idealism that
in the end conquers fear-these are still the heritage with which human
beings face new conditions and problems. And the ends we strive for
are not so essentially different. We no longer have the frontiers of a
continent to conquer; that much has been done by the men and women
of courage who were our forebears. But who will say there is not
work for every man and woman on the frontiers of a better civiliza-
This volume may be considered as a log book of a journey toward a
future that must always remain inscrutable to human beings. Like
its predecessors in the present series of Yearbooks of Agriculture, it is
essentially a record of exploration.
The Yearbooks for 1936 and 1937, both entitled "Better Plants and
Animals," told what scientists are doing to create improved forms of
life for human use. "Soils and Men" (1938) told what is being dis-
covered about soils and what these findings mean in human terms.
"Food and Life" (1939) was a record of explorations in human and ani-
mal nutrition, where many new trails have been blazed in recent years.
1 Gove Hambidge is Principal Research Writer, Office of Information.
2 Yearbook of Agriculture, 1940
"Farmers in a Changing World" records explorations along the social
and economic frontiers of agriculture.
The year 1940 marks the end of a decade that has seen more swift
and far-reaching changes in agricultural viewpoints and policy than
perhaps any other decade in the history of the United States. Yet
this decade does not stand alone as something cut off from the past.
It simply felt the cumulative effect of the longer period of change, begin-
ning near the turn of the century, during which agriculture has been
virtually revolutionized by modern science.
That agricultural policy had to keep step with new needs resulting
from profound disturbances throughout the world everyone will agree.
Everyone will also agree that the needs have not been fully met. This
is reason enough why the situation in agriculture should be summed up
and reexamined as a whole at the close of so eventful a decade. From
such a summing up and reexamination it is possible that we may be
able to detect certain mistakes, discern trends and forces a little more
clearly, see a few steps along the road ahead of us, and gain a little more
wisdom. And more wisdom is the most fundamental need.
Most though not all of the 54 articles in the book were prepared by
workers in the Department of Agriculture whose job it is to conduct
research in agricultural problems and to carry out laws relating to
agriculture passed by the Congress of the United States. There is a
sprinkling of articles by writers who are not in the Department-
mostly specialists in various branches of social science.
A certain unity of viewpoint will be evident throughout most of the
book, but there are also a good many differences. The book does not
represent official policy; it makes no claim to final wisdom; it simply
explores agricultural problems, and the reader will sometimes find
official policies treated with skepticism, controversial viewpoints de-
fended, and things discussed that do not enter into any policy. It
would have been possible to avoid such differences. But the great merit
of democracy, we Americans believe, is that it not only permits but
encourages the expression of different viewpoints. We think this is
essential if social and economic problems are to be dealt with intelli-
gently. The Yearbook might well have gone further in that direction
than it has, but it would take more than one volume to give all the
facts and viewpoints on such a wide variety of subjects.
Keeping these conditions in mind, the reader should discount or
disagree with whatever he wishes in the book and bring his own think-
ing to bear on the points at issue. If there were complete under-
standing and agreement on all the problems in modern agriculture
there would be no need for books about them; and if this were an au-
tocracy instead of a democracy, there would be no need for discussion-
problems would be settled by decree. In fact, there are few other
countries left in the world where such a book as this could now be pub-
SOME FUNDAMENTAL TRENDS,
It goes without saying- that such a book reflects the conditions of
our time. A historian mulling over it in the future will no doubt
think some of the material as quaint as beaver hats and tight breeches
seem to us. He will smile at some of the'problems his ancestors took
Farmers in a Changing World-A Summary 3
so seriously. But this will be only because, in his day, those problems
will have given place to others that are crucial in their turn.
Whether or not any specific policy developed during the past 10
years will continue during the next 10, certain trends or viewpoints
have emerged during this decade that will almost certainly continue
to influence policy. Different people would see these-trends differently.
To the editor who has had to view as a whole the large amount of
material in this book a few viewpoints seem particularly fundamental.
(1) Most important of all, of course, is a remarkably widespread
recognition of the fact that we do face profound changes and that
we must do something to adjust ourselves to them. The symptoms
of these changes are discussed again and again in the pages of this
book. Among them are mechanization, vast dislocations caused by
war, disruption of foreign markets, change from debtor to creditor
status as a nation, soil damage on a large scale, the end of the frontier
of free land. It is clear that the world we live in is far less "safe and
sane" than the world of our fathers and grandfathers. Many things
they took for granted we cannot take for granted. Agriculture is
not in a mood to shirk the need for strengthening our economy to meet
this less safe and less sane world, and this feeling of urgency has had
a powerful effect on policy making in recent times.
(2) There is a sharpened recognition of the interrelationships in
the modern world. This shows up in a great many ways-perhaps
most notably in widespread reiteration of the fact that the agricul-
tural problem is only part of a more inclusive national economic
problem. More and more people realize, for example, that the well-
being of agriculture depends to a large extent on the amount and the
steadiness of employment in industry; that city and country are linked
together in a thousand ways; that events on the other side of the earth
profoundly affect farmers in the United States.
One of the powerful practical results of this recognition of inter-
relationships is a trend toward broader planning in the solution of
economic problems. It rests on some such basis as this: What seem
like separate problems are often found to be only parts of some larger
problem; you cannot solve the parts by themselves; you have to work
toward solution of the whole problem; and this cannot be done without
comprehensive planning. This kind of reasoning is back of the effort
to work out procedures for soil conservation that begin with the indi-
vidual farmer and go on up through the community, the county, the
State, the region, to the Nation as a whole.
The reader of this book will note a fundamental conflict in agricul-
tural thought which cannot be resolved until we reach sufficient matur-
ity in our thinking to consider agriculture and industry as a single
unit. The conflict can be simply put: On the one hand we push
forward agricultural efficiency, with the inevitable consequence that
fewer people are needed for production; on the other, we advocate
inefficiency, or at any rate tolerate it, by an extension of subsistence
farming as the only way to take care of those who are displaced by
improved techniques. M. L. Wilson frankly recognizes this dilemma
in his article, Beyond Economics. To the extent that it is unresolved,
we can only acknowledge that men are the slaves rather than the
masters of their own machines.
4 Yearbook of Agriculture, 1940
(3) There is an increased awareness of what might be called the
human aspect of agricultural problems. This too shows up in many
ways, but most strikingly in the attention given to the so-called disad-
vantaged groups among our farmers.
Hitherto the problems of commercial farmers have almost completely
dominated agricultural thinking and policy. These problems still
bulk very large, as they should, but they no longer tell the whole
story. In the last few years Americans have become aware of a
rather startling fact: A third to a half of the farm families in the
United States contribute little to our commercial supply of food and
raw materials. They have little to sell; they are unable to compete
in the commercial market; they live for the most part in great poverty;
many of them are homeless migrants. They seem to have little eco-
nomic function. But they produce relatively more children than
any other group, and as a consequence an increasing percentage of the
American citizens of the future will be exposed to a' childhood back-
ground that is in many cases appalling.
The analogy of this growth of functionless human beings in society
with the growth of functionless cells in the human body produced by
cancer is inescapable, and we have been forced to give attention to it
for much the same reason that medicine has been forced to give atten-
tion to cancer. But these are not cells that can be cut out with a
knife or killed with lethal rays. They are men and women and
children-individuals and families with the same needs, longings,
and possibilities as the rest of us. Together, they are the reverse
side of the picture of wonderful technological progress that has
enabled fewer and fewer farmers in the modern world to do the
necessary work of production.
(4) There is a marked tendency to enlarge the meaning of science
by bringing it to bear upon social as well as physical or biological
problems. Time was when the Department of Agriculture was mainly
a conglomeration of bureaus engaged in research in engineering,
chemistry, genetics, microbiology, and the application of these
"natural" sciences to farming. The result was a steady, sometimes
an amazing, increase in efficiency. But this achievement, notable
as it has been, did not serve to keep agriculture out of trouble. It
became glaringly evident that science, in the sense in which the term
has been commonly used, is not sufficient to insure a sound agriculture.
Economics entered the picture long ago in response to the imperative
need for orderly economic information. Now sociology, anthro-
pology, psychology, political science are all beginning to come in.
What does this mean? It means a recognition that our idea of
science was much too narrow. All of our attention was concentrated
on the science of material things. But the greatest discoveries about
gasoline, steel, rubber, fertilizers, bacteria, insects, however much they
contribute to better production, tell us little about how to live wisely.
In fact, they often complicate living enormously-individual living
and social living. Seeing the effects of this complication, we have come
to realize that there are other great areas about which we are badly in
need of scientific knowledge. We need to know a great deal more
about such vital problems as what kind of environment human beings
need for their best development; how to create such an environment;
Farmers in a Changing World-A Summary 5
why we human beings so often make a mess of our affairs in spite of
all our great achievements; how to stop making a mess of them. The
scientific viewpoint, with its insistence on facts and on discovering
the true causes of effects rather than relying on authority, opinion,
prejudice, superstition, and brute force, has been the most powerful
problem-solving tool man ever had, and it remains the most hopeful.
Can we apply it to a much wider range of problems? 1 Can we use
it to learn about human life and human relationships, as well as
about things? If we can, our present civilization is only a crude
beginning of what is possible.
(5) There is a tendency to put a new, conscious emphasis on all
that is denoted by the word "democracy." This is the result of
the impact of world events on American thinking. Democracy is fast
disappearing in many parts of the world; we are the more determined
to cling to it ourselves. It is being bitterly attacked from many
quarters; we are the more determined to make it something worth
defending. We ourselves seem to be faced by certain urgent neces-
sities-for broader planning, for more effective administration-which
elsewhere seem to have hastened the downfall of democracy. We
believe democracy can meet the challenge without being weakened in
its fundamental tenets.
In agriculture, this tendency is evident in an increased effort to
root policies and programs in the soil of our own native traditions and
ways. Americans are reexamining their origins and looking into the
meaning of democracy more intensively than at any time since the
Republic was founded.
SUMMARY OF THE YEARBOOK
As in the case of previous volumes in the series, the Yearbook will
be summarized in the pages that follow.
The book is divided into 7 parts. Part 1, The Farmer's Changing
World, is a history of agriculture in the United States from the colonial
period through 1939, with special emphasis on changing needs and
conditions that have shaped national policies during these centuries.
Part 2, Agriculture and the National Welfare, deals with relation-
ships between producers and consumers, agriculture and industry,
farm people and city people. Part 3,' The Farmer's Problems Today
and the Efforts to Solve Them, is a comprehensive survey of current
agricultural problems and current efforts to solve them. These
problems fall into several different groups-soil conservation and land
use; farm management; foreign and domestic markets; credit, insur-
ance, and taxation; rural standards of living; tenancy and labor.
Part 4, Farm Organizations, reports the viewpoints and recommenda-
An illuminating point may be noted here. The physical and biological scientist rejects opinion, preju-
dice, superstition, and brute force out of hand. He would dismiss as sheer superstition, for example, the
idea that you must carry a rabbit's foot in your pocket to come out well in your undertakings. The social
scientist considers opinion, prejudice, superstition, and brute force as facts which we have to study and with
which we must deal, since they have enormous effects on individuals and society. He would say: "Certain
people believe in the necessity of carrying a rabbit's foot. How many people? Where did the belief come
from? Why do they hold to it? What effect does it have on their behavior and attitudes? Does the belief
make it difficult for them to understand important facts? Should it be changed? How can it be changed?
What will be the effect on their behavior and attitudes if it is changed?" The example given is trivial, but
there are many similar situations that are overwhelmingly important. The social scientist has the same
attitude toward these situations that a physicist would have toward a problem in physics.
6 Yearbook of Agriculture, 1940
tions of three national organizations of farmers in the United States-
viewpoints that are sometimes opposed to, sometimes in favor of,
specific policies. In Part 5, What Some Social Scientists Have to
Say, a few representatives of different social sciences view agriculture
as a whole from their particular angles. Part 6, Democracy and
Agricultural Policy, deals with the relationship of policy making to
democratic processes. Part 7, Essentials of Agricultural Policy, is
an attempt to sum up what has gone before in terms of today's and
Part 1. The Farmer's Changing World
How simple the farmer's problem would be, Elliott points out in
the first article in this section, if there were no such thing as change
in the world-no changes in soils, cultural practices, markets, popu-
lation, birth rates, and a thousand other things.
But the principal fact the farmer faces is that all these things do
change. There have been enormous changes in a comparatively few
years, and he has had to adjust himself to them.
For instance, in 1920 farmers had to feed a total population of 105
million people (excluding exports for populations abroad); now the
same number of farmers feed 132 million here. Around 1920, people
used 27 pounds of citrus fruits a year per capital; now their habits
have changed and they use 47 pounds. In 1919 farm income was
16.9 billion dollars; in 1932 it was 5.3 billion. In 1919 farmers received
4 billion dollars for exports; in 1932, they got 590 million. Twenty
years ago there were 26 million horses and mules to be fed on farms;
now there are fewer than 16 million. Since 1900 machinery has
greatly reduced the need for human labor in production. In the same
period of time, farmers have come to demand a better standard of
living in many ways, and this has meant a need for more cash.
Such changes have brought crucial problems-how to get greater
stability and security within agriculture, how to adjust agriculture
to the rest of our economy, how to conserve our soil resources, what
to do about the large numbers who have succumbed in the economic
struggle. Whatever approach we take toward these problems, we
run some risk. But "neither policy making by explosion," Elliott
says, "such as occurs when the orderly processes of government fail,
nor policy making by executive action, such as occurs when the experts
and administrators make decisions without the citizen's participation,
is likely to occur in a society where democratic practice is reasonably
in accord with democratic theory. .If we are to preserve
the democratic process, it is absolutely necessary that the farmer
play an important part and have a direct voice in the formulation
of farm policy as well as in its execution."
The main question is whether the farmer shall try to meet modern
problems entirely by himself, as an individual, or whether he shall
get together with others so that all may act as a group for certain
desired objectives. Farmers have insisted during recent years on
group action. The legislation they won is a sharp departure from
previous policy in the United States. It raises issues that need to
Farmers in a Changing World-A Summary 7
Old Ideals Versus New Ideas in Farm Life
Johnstone's primary interest as a historian is to trace out people's
ways of living and their attitudes and institutions, and to discover
why they lived and thought as they did. This is folk history. It
helps us to understand ourselves. He digs into many sources to
find out about such things.
There have been vast changes in the 150 years of United States
history-from the sickle to the combine, the ox to the tractor, 4
million people to 132 million, a rural civilization to an industrial
civilization, free land to scarce, high-priced land. These changes,
Johnstone points out, "have profoundly influenced the very essence
and character of rural living. Even the philosophies, the ideas of
right and wrong, have in some cases taken on a wholly new shape and
The Republic was born ip what has come to be known as the Age
of Reason or the Age of Enlightenment. In the earlier feudal period,
traditional ways of doing things were hardly ever questioned; they were
eternally right and natural and could not be improved. In the Age
of Enlightenment, intelligent people believed that reason could show
us better ways. There was an aggressive search for these better
ways. In agriculture, new methods of cultivation were developed.
Washington and Jefferson were among those who put aside traditional
prejudices and tackled agricultural problems scientifically.
Agricultural societies, based upon this spirit, soon sprang up in the
new country, along with agricultural fairs and agricultural journals.
Such things were new in the world; they were the beginning of a cease-
less agitation for progress and scientific improvement. Over against
them was the natural inertia of tradition, which resists novelties. In
75 years after the Revolution, agricultural technology was improved
more than it had been in the previous 2,000 years. Farmers accepted
new mechanical devices readily; they were much slower to adopt
scientific methods, which for a long time were labeled "book farming";
but by the time of the present generation, attitudes had so changed
that most practical applications of science are readily accepted by
all farmers in a position to profit from them.
Along with this spirit of progress, there was in the early days a
strong belief that "those who labor in the earth are the chosen people
of God," as Jefferson wrote, and that the cities were corrupt and
decadent. Farmers alone were free and independent; farming was
man's fundamental pursuit; it was the natural and good life. There
was a dislike and disdain of the cities and all their institutions-
including trade and banking. Partly this was because so many
farm people came from a working-class or peasant background in
Europe, whereas the dominant element in the cities came from the
European upper classes. Thus the struggling American farmer also
tended to link himself with the city laborer and artisan, who worked
with his hands. These tendencies, and the conditions of frontier
life, helped to develop a robust democratic spirit and a pride in the
virtues of labor, industry, and thrift as settlement moved westward.
Right and justice were "always on the side of the poor and humble."
Out of the general belief in the idea of progress, which the successes
8 Yearbook of Agriculture, 1940
achieved by a vigorous, colonizing people seemed to make a reality,
came a strong belief that America was truly the land of opportunity.
This attitude was strengthened by the sensational rise in land values
along the frontier. It was not entirely fortunate that a boomer spirit
developed as one aspect of this optimism. Frequently men took up
land, not to farm it permanently, but to clean up on the rising market
and go on to the next stopping-off place. The tendency of everyone
to expect land values to rise indefinitely contributed to the heavy debt
load that agriculture was later to bear, for farms were capitalized on
the basis of expectations that did not always pan out.
Another element in the early background of rural America was a
vigorous movement for self-education as a means of enriching life.
During and after the Civil War this developed further, and local
farmers' clubs and discussion groups sprang up in great numbers.
Then came the Patrons of Husbandry and the Granger movement on
a national scale. At the same time there was a growing agitation for
more public schools, and finally for special schools and colleges to
teach agricultural science. Education was a political issue in rural
communities for a generation or more, until the Morrill Act of 1862
established the agricultural colleges. Education by then had become
more than a means of attaining culture. It was considered the road
to social and economic advancement. A "success philosophy" had
begun to take root in this country.
During the past century, three forces, which Johnstone calls com-
mercialization, urbanization, and technological advance, have been at
work to change the character of rural life and along with it some of
the most fundamental of the earlier habits, customs, and ideas.
Industrial development in the cities gradually took away the
farmer's self-sufficient independence. As the cities grew in size, he
had to produce food for increasing numbers of industrial workers-
and he did it successfully. He also had to produce agricultural
products to be sent to Europe to pay for the European goods and the
capital needed for industrial development-and he did this success-
fully. But in the process he became more deeply involved in a com-
mercial, specialized economy, more closely tied to markets and large-
scale industry-which meant to cities. At the same time, his own
demands grew; he wanted more of the conveniences industry pro-
duced-such things as a sewing machine, kerosene oil, a telephone.
Instead of making almost everything for himself, he bought more and
more things made in factories. He had to produce more cash products
to buy these conveniences.
Thus farming came to be considered increasingly as a commercial
pursuit rather than primarily as a way of living-which it was in the
old view. Agricultural journals, schools, colleges urged the farmer to
take the businessman as his model. There was a widespread drive
to introduce bookkeeping and cost accounting in agriculture. The
farmer was advised to charge a certain amount against his business
as "salary," a certain amount as "interest on investment," just as
businessmen did. As this viewpoint was more widely accepted, the
whole picture of the farm enterprise changed. A farmer might suc-
ceed very well in maintaining himself, but he was not commercially
successful unless he made a profit in business terms. By operating on
Farmers in a Changing World-A Summary 9
a business basis, he greatly increased his cash income-but also his
These developments inevitably brought other changes in attitudes.
For one thing, farmers were no longer so inclined to identify them-
selves with those city people who worked with their hands; they
became more conscious of their status as employers and commercial
proprietors. The growing gap between the farmer and the city
worker was widened by labor's agitation for shorter hours and higher
pay, which offended some of the deepest convictions of the farmer,
who had to work long hours on his own enterprise and whose economic
return was more closely related than the average urban worker's to
the amount of effort he put in. The farmer found himself faced with
the business problems of the modern commercial world, and was
forced to accept the methods of that world even though the frequent
inequalities under which agriculture was practiced placed him at a
disadvantage. He was usually in debt, and did not feel that he got
a fair share of the national income as compared with the great, rich
monopolies and trusts in industry. But in spite of this disadvantage,
he had to become a businessman, and when he did, he became con-
scious of a "labor problem."
Agricultural education fostered the philosophy of commercial
success. Although there was a group of educators, among them
Kenyon L. Butterfield and Liberty Hyde Bailey, who emphasized
cultural values in rural living, on the whole the educational drive was
strongly directed toward economic advancement, based on scientific
and technical progress. Farmers increasingly sought and applied
the advice of technical experts, many of whom were not themselves
dirt farmers. Meanwhile, the use of farm machinery increased
rapidly, especially after the tractor came in to displace horses; by
1930, farmers were using some $3,300,000,000 worth of agricultural
machines. Technical progress in other fields kept pace with these
In brief, ideas and ideals that had become dominant in the United
States through commerce and industry inevitably spread to the farmer.
He also took more and more kindly to urban standards of living and
urban tastes. The mail-order catalogs, the farm magazines with
their urban stories and advertisements, and the Hollywood movies
have been powerful forces in this development.
Thus a single century brought an almost complete reversal of many
old customs and attitudes-highly commercialized farming in place
of the old self-sufficient production; emphasis on cash crops in place
of the products needed at home; dependence on world economic
conditions in place of almost complete independence; acceptance of
the desirability of commercial success in place of the older pride in
thrift and hard work as the primary virtues; acceptance of urban
standards in place of the earlier disdain for them.
None of these changes took place universally and all at once, or
without conflict. Indeed, the outstanding fact, Johnstone points
out, is that change has meant conflict and struggle. The older genera-
tion clings to tradition; old ways are deeply rooted in moral attitudes
and ideas of right and wrong; adaptations to new needs and new
conditions are made with great difficulty, and they are accompanied
10 Yearbook of Agriculture, 1940
by a sense of uncertainty and fear. Because we have been unable to
adapt ourselves readily enough and wisely enough to changed condi-
tions, we now have a sharp division between commercial farming and
a large noncommercial group that barely subsists; and commercial
farmers themselves have great difficulty in meeting the cost of modern
living plus the cost of production by modern methods.
But though the lag between old ways and new needs is the chief
cause of social maladjustments, the same persistence of the old that
brings conflict with the new is also, Johnstone says, the great safe-
guard of society. For the most enduring of all are the ideals and
desires based on fundamental human needs. And these ideals and
desires outlast the particular forms and institutions that give them
expression and effectiveness in any particular age. Thus, although
in times of stress we tend for a time to confuse the temporary form
with the essence, and although this loyalty to older forms causes
maladjustments, it is in essence a loyalty to basic ideals that may be
depended upon to survive changes in outward forms and institutions.
American Agriculture-The First 300 Years
In writing a history of agriculture in this country from the colonial
period to the World War, Edwards traces the changing conditions
and policies that most affected farmers.
The colonial period, he notes, covered almost two centuries, and
its influence lasted much longer. It strongly stamped American
habits and institutions. Two characteristics of this period were
especially notable. (1) The colonies were predominantly agricultural,
and the attitudes of the small farmer characterized the people as a
whole. (2) Life was fluid because it was continually beginning over
again on the frontier. Frontier isolation tended to make people
narrow, but primitive conditions made them resourceful, self-
reliant, practical, hard-working. These have been typical American
Englishmen predominated in the 13 Colonies. They came mostly
from a rural background where agriculture was not yet highly
developed. Their farming methods were not suited to the wilderness,
and at first they almost starved in spite of an abundance of wilderness
food. Not until they had learned new ways from the Indians did
they make a success of the new life. Agriculture in this country
became a blend of European and Indian practices and has remained
so ever since.
Since landownership was the key to individual success in England,
it became equally important in the Colonies. Three ways of acquiring
land were especially significant. (1) Under the manorial system,
large tracts were granted to individuals, who were practically feudal
overlords and collected quitrents from settlers. With such an
abundance of land in America, this system was hard to enforce.
Eventually manors became plantations and the owners made a profit
from slave labor rather than land. (2) Under the New England
system, a trading company took title to the land. Settlers were
granted rights-usually to an area the size of a townslip-as a group,
not as individuals. Through town meetings, the group acted as a
corporation in dividing the land fairly among individuals, and some
Farmers in a Changing World-A Summary 11
of it was held in common. This system, designed to be like the
Biblical commonwealth, developed group action, compact social
communities, democratic institutions. (3) Under the headright
system of Virginia and other southern Colonies, any settler had a
right to 50 acres of land-equivalent to a dividend on a share of
company stock. This system became highly corrupt and was
eventually replaced by "treasury rights"-the sale of 50-acre tracts
to individuals by the Commonwealth.
Agricultural tools and implements in the Colonies were extremely
crude. Labor was scarce, since four freemen out of five were inde-
pendent farmers. This led to various systems of unfree labor.
Many people sold themselves as voluntary indentured servants for
5 to 7 years in order to get to America. Others were involuntary
indentured servants for 7 to 10 years-paupers, vagrants, debtors,
petty criminals "condemned" to the Colonies, or innocent persons
shanghaied by professional kidnapers. Many of these "redemp-
tioners," though poor, came of good stock, accumulated a stake for
themselves, became independent and often prosperous. The trade in
indentured servants was checked about 1700, and the importation of
slaves from Africa then began in earnest. By 1760, slaves made up
two-fifths of the population of the southern Colonies; in South Caro-
lina they outnumbered the whites 2 to 1.
At first the colonists grew their crops in the clearings they found;
then they began making clearings, using the Indian method of gir-
dling and burning trees. Indian corn became the major crop because
of its many advantages, but the European grains were also grown-
wheat, rye, barley, oats, buckwheat, peas. Livestock was scarce; all
animals had to be imported, and none but the better-financed settle-
ments could afford an adequate supply. As the number of livestock
increased, native annual grasses in the clearings proved inadequate
for forage, and this led to the importation of timothy, bluegrass,
Almost from the beginning, Edwards points out, there were laws
regulating production and marketing, passed either in England or by
the Colonies themselves. Some were successful, some visionary.
Tobacco production was restricted again and again to prevent glutting
the market and to insure the growing of food crops. There were
price-fixing agreements for tobacco, official grading, destruction of
surpluses. Rice growing was encouraged, and there were laws to fix
the exchange value of the product, standardize quality, prevent deceit-
ful packing. The growing of indigo was stimulated by premiums.
Bounties were paid for hemp and flax, and growers were subsidized by
various Colonies. There were likewise bounties for the production of
naval stores, as well as official standardization. Extraordinary efforts,
never very successful, were made to encourage silk production, includ-
ing not only bounties but compulsory planting of mulberry trees.
Cotton, sugar, spices, wine, and subtriopical fruits were also subject
to stimulative or regulative legislation.
Most of the colonial trade was overseas, but a sizable amount devel-
oped between the Colonies. New England quickly became a commer-
cial and shipping center, trading especially with the West Indies and
along the coast. The middle Colonies became a fur-trading and
12 Yearbook of Agriculture, 1940
grain-exporting region. The South contributed more than any other
region to overseas trade, the chief product being tobacco. Several
factors interfered seriously with the trade of the Colonies, including
a long series of navigation acts, designed to assist in creating a self-
sufficient economic empire, which prohibited the shipping of most
products anywhere except to England, in English or colonial ships.
Small farmers, backwoodsmen, city laborers, mechanics were the
driving force back of the Revolutionary War. In effect, they were
revolting against the large landed and commercial interests that
represented England in the government of the Colonies. They wanted
more liberal land policies; paper money to pay off their debts; an end
of absentee landlordism, property qualifications for voting, taxation
without representation, expensive justice.
After the war the last vestiges of feudalism were abolished by "fron-
tier 'radicals' like Jefferson." Thereafter land could be held in fee
simple. Probably the most important development relating to land
was the formation of policies for disposing of the vast western area won
from England. Fortunately the States with claims to western land
ceded them to the Confederation and this enabled the country to de-
velop as a federation of equal States instead of a system of provinces
dependent on the older States. In 1785 and 1787 ordinances were
passed that laid down the principles and procedure later followed in the
disposition of public land. There were two divergent views from the
beginning, one group favoring a cautious and the other a liberal land
policy. Gradually the second viewpoint won.
Land policy came to center around three specific issues. (1) Grad-
uation. The best land was settled first, leaving islands of poor land
unsold. In 1854 prices were graduated downward on the unsold land.
(2) Preemption. At first efforts were made to drive off squatters.
Frontier farmers banded together, finally forced enactment of the pre-
emption law in 1841. Settlers could then take up (preempt) land
before it was surveyed and placed on sale. (3) Homestead. Con-
servative leaders as well as eastern landowners and manufacturers
opposed a too liberal land policy. Pioneer farmers and land specu-
lators joined forces with labor to have land distributed free to actual
settlers; one of their slogans was "Vote yourself a farm." Under-
neath the political struggle, says Edwards, "lay the conviction that
equality of economic power was essential if genuine freedom and de-
mocracy were to thrive in America." The bill for free homesteads
was passed by the House in 1852, but it became part of the slavery
issue and was not finally enacted until 1862.
The opening of new lands and the westward expansion between 1790
and 1850 was marked by one of the greatest migrations in the history
of the world. In 1790 there were 4,000,000 people in the United
States, of whom 94 percent were in the 13 original States; within 60
years there were 23,000,000 people and 32 States. "Land was the
great magnet available almost for the asking an irresistible
temptation." The first great trek was into the Old Northwest
(bounded by the Ohio, the Great Lakes, and the Mississippi) opened
up by the Ordinances of 1785 and 1787. Settlers rushed in even before
the surveys were completed. The same wave of migration settled
western New York. After 1815, the migration increased, stimulated
Farmers in a Changing World-A Summary 13
by depression in Europe and our own Eastern States, the increasingly
liberal land policies of the Federal Government, victories over the
Indians, the use of steamboats on western rivers, the Louisiana and
East Florida purchases. Ohio, Indiana, Illinois, Michigan were soon
admitted to the Union.
The immense demand for cotton following the invention of the cot-
ton gin in 1793 pushed planters westward into the Old Southwest,
where a plantation aristocracy developed. In 1834 Alabama for the
first time took the lead in cotton production away from Georgia, and
in 1839 Mississippi led for the first time. The acquisition of the Lou-
isiana Territory in 1803 increased the area of the United States by 140
percent. The westward tide moved into Texas in 1830, bringing
annexation and war with Mexico. Before 1850 the Oregon Territory
was acquired from England, and Mexico ceded California. Then came
the gold rush to the Pacific coast.
The opening of fertile western lands caused a depression in eastern
agriculture, made possible the development of industries and cities,
had a liberalizing influence on American politics, and above all af-
fected American psychology because of the feeling that the individual
always had a chance to start life over again by taking up new land.
The virgin soil of the Old Northwest grew wheat well, and during
the 1850's wheat production shifted westward to Illinois, Indiana, and
Wisconsin. Corn, marketed in the form of whiskey and hogs, also did
well in the new country.
Eastern agriculture went through two major changes by 1860. (1)
Prior to 1810, methods were backward except in a few progressive
areas, and production for home use was the rule-perhaps mainly
because there was no large urban market. Then the growth of cities
stimulated production for sale. As a result, better tools and more
scientific methods were used, production became more specialized,
land values rose, farmers began buying instead of making home and
farm equipment. At the same time, young people began leaving the
farm for the city. (2) Western competition also forced eastern farm-
ers to specialize. By 1850 there were 7,000 miles of railroads, and
shortly thereafter Western States were pouring wool, wheat, pork,
beef into eastern markets. Eastern farmers perforce turned to the
production of potatoes and other vegetables, orchard fruits, fluid milk,
cheese, butter, hay.
Meanwhile, southern agriculture also underwent changes. The
application of power to textile manufacturing in England and later
in New England resulted in an enormous demand for cotton, and the
invention of the cotton gin enabled American producers to meet this
demand. More and more the South specialized in cotton, which
became the largest export crop of the United States. This expansion
revived slavery, which had been on the wane. As soil resources were
used up in the eastern areas, growers moved westward, finally reaching
the prairie regions of Texas. The Southeast had little to compensate
for this loss, and its story, Edwards notes, would have been different
had western migration been better regulated.
Of vital importance to farmers was the development of the trans-
portation system, prior to 1860. The Colonies were tardy in road and
bridge building. The completion of the Philadelphia-Lancaster Turn-
14 Yearbook of Agriculture, 1940
pike in 1792 started a boom in turnpike building by private companies,
which charged heavy tolls-$12 a ton per hundred miles, on the average.
Even with some State aid, however, this did not provide an adequate
road system, and in 1808 Jefferson's Secretary of the Treasury, Albert
Gallatin, advocated public expenditure for a Nation-wide system of
canals, turnpikes, and river improvements. The Cumberland Road
(834 miles-$7,000,000) was the major result.
In 1815 a steamboat ascended the Mississippi and Ohio Rivers from
New Orleans to Louisville in 25 days. This inaugurated a tremendous
expansion. The Northeast and Southwest were bound together by
river trade, and the favored cities-particularly New Orleans-grew
rapidly. For a long time steamboats were the chief means of travel
in settling the West. Coastwise traffic, however, became more impor-
tant in the long run; by 1860 the value of commodities carried by
coastwise vessels was six times that of exports abroad.
Canal building was begun partly to bring inland products to seaports
for the steamship traffic. First big project was the Erie Canal, com-
pleted in 1825. Before the canal, it had cost $100 to ship a ton of
farm products from Buffalo to New York in 20 days; now it cost $15
and the trip was completed in 8 days. Farm prices and land values
went up; new cities were born; New York became the biggest American
seaport. Other States began canal building, and a series of feeder
canals was constructed in the Old Northwest. Thewhole development
greatly stimulated western agriculture, but the cost of the internal
improvements was enormous, more than the States could bear. After
the panic of 1837, "it became part of the American credo that a public
utility could not be built and operated successfully except by private
Then came railroads, to challenge the supremacy of canals and
eventually win. Western railroad building did not get a good start
until 1850, but by 1860 Illinois was the greatest corn State as a re-
sult of the opening of the prairies by railroads, and the flour-milling
and stock-raising centers inevitably moved westward.
Edwards argues that after 1862, when the Homestead Act was
signed, there were many major mistakes in United States land policy.
In the first place, the act itself did not and could not do what its
supporters had in mind. It offered 160 acres of land free to the settler.
This was enough for a farm in the East and Middle West, including
even eastern Kansas, Nebraska, and the Dakotas. But by 1862 these
areas were largely settled. Homestead lands lay mostly west of the
100th meridian, in areas of low rainfall, where eastern farming methods
did not apply; it was obvious to anyone who knew the West that 160
acres was too little for dry-farming or grazing, too much for irrigation.
Moreover, there were two competing systems of land disposal in effect.
The better lands often were purchased in huge blocks by speculative
syndicates, which gouged the farmer. The administration of the land
laws was also full of abuses, and fraud and graft were common.
Some of the subsequent land laws also had the effect of encouraging
overexploitation of resources by large corporations and other interests.
A movement toward conservation began in 1891, when the Timber
Cutting Act and the Preemption Act were repealed, the policy of
selling the public domain (except special lands) was abandoned, and
Farmers in a Changing World-A Summary 15
forest reserves were authorized. The old Forestry Office became
a bureau of the Department of Agriculture in 1897. The Carey Act
of 1894 provided for irrigation under State auspices; the Reclamation
Act of 1902 put the Federal Government into irrigation. Laws passed
between 1906 and 1920 reserved all mineral rights for the Government,
permitted only carefully regulated leasing. Meanwhile 148,000,000
acres was added to the timberland reservation and Gifford Pinchot
inaugurated an active forest conservation policy. Between 1904 and
1916 efforts were made to improve the Homestead Act by granting
larger tracts on the inferior western lands that remained undistributed.
If settlement had been better managed as a public policy, says
Edwards, there might now be more farm owners, fewer tenants, and
far better conservation of national resources. But most people were
not then thinking in those terms. The object, natural enough at the
time, was to settle and develop the wilderness as rapidly as possible.
Edwards traces the main developments in farm machinery as a
major influence shaping the history of American agriculture. Many
machines, developed between 1830 and 1860, were being used by
farmers before the Civil War-the mechanical reaper (most significant
single invention), mechanical raker and binder attachments, the steel
plow, the grain drill, the corn drill, the threshing machine. The
Civil War was a turning point in mechanization A million farmers
were withdrawn from production to fill the biggest army the world
had ever seen, and machinery had to be used on a large scale if those
left on the farms were to do their job effectively. Thus between 1860
and 1910 there was a general displacement of man labor by horse
labor, and additional machines were invented to be run.by horses.
After 1910 another great period began, marked by the substitution
of mechanical power for horses. In this development too, war (the
World War) was a turning point because it demanded greater pro-
duction by fewer hands (though the farm depression of the 1920's
perhaps stimulated mechanization even more through the need to
cut production costs to the bone).
By no means all of the increased efficiency of agriculture is due to
machines, but they have been a major force in bringing more land under
cultivation, making it possible to produce up to and beyond the market
demand, enlarging farms, shifting production to level lands, reducing
labor requirements, lightening farm toil.
Developments in transportation after 1860 were as important to
farmers as those in machinery. When settlement on a large scale
was to be undertaken the Federal Government was called on to further
it; the same thing happened in the case of railroad expansion. By
1914 "the railroad mileage of the United States exceeded that
of all Europe and represented more than a third of the world's total";
it increased eight times while the population was increasing three
times. This expansion would not have been possible without Govern-
ment aid. After 1850 the Government gave more than 159,000,000
acres of land to the railroads and granted two railroads $16,000-$48,000
for each mile of line they constructed. State and local subsidies
were extensive and varied. Altogether, perhaps three-fourths of the
cost of railway construction was borne by public authorities.
Farmers favored this aid and in addition mortgaged their land to
16 Yearbook of Agriculture, 1940
buy railroad bonds, because the railroads promised to bring them
unbelievable prosperity. When the extravagant hopes were not
realized, the failure was attributed to grasping railroad barons. In
fact, many serious charges could rightfully be made against the rail-
roads. To correct the evils, farmers banded together, started the
Grange, organized State and local tickets, forced railroad reforms and
rate regulation by States and later by the Federal Government. In
1887 the Interstate Commerce Act was passed, in 1903 the Elkins
Act, in 1906 the Hepburn Act, in 1910 the Mann-Elkins Act.
From the 1870's to the World War there was a progressive decline
in rates. Competition doubtless was more of a factor in the east-
west traffic rate reduction. The result was a rapid development of
the West. Colonization was actively promoted by the railways.
The Northwest and North Central States became the grain kingdom;
meat packing was stimulated by the invention of the refrigerator
car, which also spread dairy and poultry production westward.
After the Civil War, agriculture went through a long period of
revolutionary change and growth, stimulated by mechanical improve-
ments, transportation, the homestead policy, but above all by the
expansion of domestic and foreign markets, which in turn resulted
from industrialization and the growth of great cities whose workers
had to be fed and whose factories demanded raw materials. Cereals
were by far the most important commercial crop, making up half
the total value of all crops in 1899. Corn production rose from
800,000,000 bushels in 1859 to a peak of over 3,000,000,000 in 1906,
wheat from 200,000,000 to over 1,000,000,000 in 1915. Great milling
and shipping centers developed near the heart of the grain country.
Livestock production was stimulated likewise, and this brought the
big livestock trading and packing centers. Butter and cheese making
shifted from the farm to the factory to supply the immense demand
as the dairy industry moved westward. Incubators and cold storage
enabled farmers to meet the urban need for poultry products. The
cotton regions, which were in a desperate plight after the Civil War,
soon caught up with their 1860 production of 3,841,000 bales, and
by 1910 were producing 11,609,000. By 1899 a third of the cotton
crop was being used in domestic mills, and in 1909 more cotton was con-
sumed in southern mills than in the northern. Wool production for
the domestic market increased in importance. The first eastward
shipment of'fruit from California was made in 1867; by 1899 the total
was 193,000,000 pounds of fresh deciduous fruit a year. The Southern
States began sending fruits and vegetables north. Tobacco produc-
Foreign as well as domestic trade in farm products rose sharply
after the Civil War. Though city workers here and abroad benefited
from the cheap food supply, many European farmers were ruined
by American competition and immense numbers migrated to this
The peak of food exports came about 1900; after that there was a
rapid decline caused by more effective competition in Europe, the
development of new agricultural regions, and tariff and other policies
of foreign governments. But the domestic market in the United
States was then expanding and the American farmer was able to
Farmers in a Changing World-A Summary 17
adjust his production by a gradual shift toward an increased output
of sugar, dairy products, fruits, and vegetables. Cotton and tobacco
exports also increased. The period 1900-1914 was relatively pros-
perous for agriculture, since production was fairly well balanced with
The vast expansion in agriculture after the Civil War was entirely
in the direction of commercial farming, and this brought a train of
new and complex problems. Farmers were thrown into competition
with one another; they had to produce at the lowest possible cost;
they had to have money for machines and other needs; they found
commodity prices set by the new cotton and grain exchanges and the
speculators in futures; they were squeezed by high freight rates, by
monopolies, by loan sharks, by commission men. The only way
they could fight their battles was by organization. So they organized,
first in the Granger movement. One major outcome was a rapid
growth of cooperative buying, selling, and even manufacturing. These
early efforts of the farmer "to perform the function of middleman,
manufacturer, capitalist, and banker through cooperative enterprise
met with only short-lived success," because of lack of capital, inex-
perience, fair and unfair competition; but it paved the way for the
cooperative movement of later years. In the 1880's came the North-
western and the Southern Alliances, which started many cooperative
enterprises; in 1895 another expansion in cooperative activity began;
in 1902 the Farmers' Union was formed, and it developed plans that
forecast certain aspects of present-day agricultural thinking. In 1914
the Clayton Act recognized the need for farmer cooperatives, and
they have had legal protection ever since.
The post-Civil War period of rapid agricultural expansion also saw
the development of a Federal Department of Agriculture. Founded
in 1862, it was actually the result of almost a hundred years of pre-
liminary steps. In 1776 there was a tentative proposal for Congress
to set up a standing committee to assist agricultural societies. Two
decades later Washington proposed a board of agriculture, and a
similar proposal was made in 1817. Meanwhile consuls and naval
officers abroad were sending back seeds and improved breeds of live-
stock. In 1836 Henry L. Ellsworth, Commissioner of Patents, under-
took to distribute these seeds to farmers. In 1839 Congress appro-
priated $1,000 for the work, as well as for statistical and other investi-
gations. An Agricultural Division was inaugurated in the Patent
Office, and regular appropriations were made after 1847. In 1854
a chemist, a botanist, and an entomologist were employed.
When an independent Department was established in 1862, Isaac
Newton, who headed the agricultural work in the Patent Office,
became Commissioner and laid the foundations for a broad policy
of research and education. Almost from the beginning, therefore,
"the Department made notable contributions to the field of scientific
agriculture," partly because "men of outstanding ability served as
division chiefs and research workers." The Department gradually
added divisions, beginning with chemistry, statistics, entomology, in
response to need and demand. In 1884 it took on regulatory work in
addition to fact-finding and education when the Bureau of Animal
Industry was organized to clean up cattle diseases.
18 Yearbook of Agriculture, 1940
The year 1862 also saw the founding of the land-grant colleges
under the Morrill Act, and in 1887, under the Hatch Act, Congress
authorized a national system of State agricultural experiment sta-
tions-several had been started by the States, beginning with Con-
necticut in 1875-which served as a link between the colleges and the
Federal Department. Finally in 1889 the Department was given
Cabinet status, and its appropriations were increased, its functions
widened. Highly trained explorers went to far countries and brought
back valuable crop plants; extensive breeding work got under way;
protection of the national forests was undertaken; enforcement of the
Food and Drugs Act was given to the Department. After 1900
county demonstration work began, and in 1914, under the Smith-
Lever Act, Congress gave financial aid to extension divisions in the
State colleges, which were to cooperate with the Federal agency.
Meanwhile marketing problems were receiving increased emphasis,
and an Office of Markets was created in 1913. Weather reporting
and road construction had also become Department functions.
Meanwhile agricultural education also went through a period of
early growth until the Land Grant College Act of 1862 granted large
amounts of land to the States to be sold for funds to create and main-
tain agricultural and mechanical colleges. A system of direct Federal
subsidies was created by legislation in 1890 and 1907. The colleges
had a difficult time at first because of lack of funds, lack of qualified
teachers, lack of a sufficient body of agricultural knowledge, and
political interference, but they gradually proved their economic and
scientific value. They in turn sponsored agricultural courses in the
grade schools, beginning with Wisconsin in 1905. Meanwhile agri-
cultural high schools had been started, and eventually (1917) this led
to the Smith-Hughes Act, granting Federal funds to the States for
agricultural education in the secondary schools.
The development of specialized schools and colleges has had pro-
found effects on agriculture, scientifically, economically, and socially.
It is significant, Edwards notes, that at critical points in this develop-
ment there was always a demand for Federal aid and cooperation.
At the end of his article Edwards sums up the influence of agri-
culture on governmental policy in the United States.
The Civil War may be considered as a dividing line. Until that
time agricultural production was dominant in this country. Events
that showed the powerful influence of farmers before the war included
the formation of the Democratic-Republican Party in opposition to
traders, bankers, speculators; purchase of the Louisiana Territory;
the War of 1812, "begun and carried through by ardent expansion-
ists"; abandonment of property qualifications for voting and office
holding; public education; destructiori of the National Bank, greatest
monopoly of its day; the policy of moving Indians beyond the Missis-
sippi; the preemption, graduation, and homestead acts.
After the Civil War, agriculture was on the defensive and business
enterprise in the ascendancy. Industrialization got under way in
earnest. By 1889, for the first time, the income derived from manu-
facturing was greater than that from agriculture; since 1910, the income
from manufacturing has exceeded that from agriculture in every year,
and the United States has ranked first among industrial countries.
Farmers in a Changing World-A Summary 19
Agriculture expanded also and controlled the European market, but
farmers never did reap the benefits to anything like the same extent
as businessmen. Farmers could not combine to fix prices or control
output. As prices fell, their fixed charges rose. Mortgages and
tenancy steadily increased. Credit facilities for farmers were lacking,
and they suffered from contracted currency. As a result of these and
other conditions, frequent farm revolts have characterized the entire
period since shortly after the Civil War.
Railroad reform and regulation, won by the Grange, was the first
great post-war victory of organized farmers. Even though many of
the Granger laws were not enforced and were soon repealed, the
battle taught farmers much, brought them into united action, started
a far-reaching cooperative movement. An outstanding result of
Granger activity, says Edwards, "was the firm establishment of the
principle that a State government has power to regulate businesses
clothed with a public interest." The Interstate Commerce Act also
"marked the entrance of the Federal Government into the sphere of
Currency reform-"the same money for the bondholder as for the
plowholder"-was another great objective of farmers resulting from
the monetary situation after the war. In 1874 a farm group united
with labor to form the Independent National Party, which became
the Greenback Labor Party in 1878, when it polled a million votes,
and in 1888 was absorbed into the Union Labor Party. Meanwhile
State Alliances organized in the South in the 1870's eventually united
(1888) as the National Farmers' Alliance and Industrial Union. A
similar organization, the Northwestern Alliance, was formed in 1880.
Both advocated free silver, paper money, tax reform. In 1892 a
combination of the Western Alliance and Knights of Labor became
the Populist Party, which in 1894 elected seven Congressmen and six
Senators. Though the party fought for a considerable list of agrarian
measures, it concentrated on free silver in the campaign of 1896 and
supported Bryan, who polled 6,500,000 votes. Bryan's defeat marked
the end of the Populists as an effective organization.
Though farmers had a measure of prosperity in the early 1900's
the agrarian reform movement did not die out but broadened and
deepened. Several organizations were formed and two headquarters
were established in Washington. The Nonpartisan League even-
tually became "a force to be reckoned with in the national political
arena." Achievements between 1912 and 1920 that resulted from
long-standing farm demands included the Federal Reserve Act, the
county agent extension system, a Federal Farm Loan Board and 12
regional banks for long-term credit, and subsidies by the Federal
Government for vocational agriculture in the public schools.
Agriculture in the World War Period
American agriculture was in the midst of a long period of quiet
adjustment to the lack of any more virgin land, and to the new order
of machines and commercialization, says Genung, when the war came
overnight and forced it into a new pattern. A half-dozen years
brought changes that would normally have been spread over genera-
tions. "Under the stimulus of price and patriotism-finally of out-
20 Yearbook of Agriculture, 1940
right inflation-the farm business labored and expanded and provided
the sinews" of war. "Then, in the aftermath, it was left high
The objective of all official policy was to stimulate production, but
some semiluxury foods were actually depressed because of the impera-
tive need for bread, heavy meats, fats, sugar, wool. One of the early
effects of the war was to change the United States from a debtor to a
creditor nation. In September 1914 we owed Europe about
$500,000,000. A year later Europe owed us $15,000,000, and 3
months after that, $132,000,000. And this was only the beginning.
The effects of the war on production can best be visualized by
considering what happened to different commodities.
Allied bidding for American wheat began as soon as the Russian
supply was cut off. The year 1915 saw a billion-bushel crop-the
largest before or since. Early in 1915 farmers were getting $1.25 a
bushel; by the spring of 1917 they were getting over $2.40. The
United States entered the war that year, and the drastic Food and
Fuel Control Act went into effect. Thereafter most growers realized
$2 a bushel or better. Acreage rose more than half during the war-
from 47,000,000 acres in 1909-13 to 74,000,000 in 1919-and pro-
duction 38 percent (from 690,000,000 bushels to 952,000,000).
During the early years of the war cotton was hurt rather than
stimulated, and the total effect was to reduce world consumption of
American cotton about 12 percent compared with the years imme-
diately preceding the war. For 3 years beginning in 1917, however,
growers averaged over 25 cents a pound, and in 1919, with the price
at 35 cents, they had a $2,000,000,000 cotton crop, never equaled
before or since. This was largely the result of domestic business
activity, inflation, and moderately small crops.
"It was not until toward the close of the war that tobacco exports,
prices, and production all soared to comparatively high levels."
Hog production felt the greatest stimulus among the livestock
industries. In 1914 prices were about $8 a hundredweight at the
farm. In November 1917 the price was pegged by the Food Admin-
istration at about $15.50. In the summer of 1919 it was over $19.
At the beginning of 1914 there were 53,000,000 head of swine on
farms and at the beginning of 1919, 64,000,000. The hog situation
raised the price of corn, but the acreage increased very little.
Farm prices for beef cattle rose from $6.24 in 1914 to $9.56 in 1919.
Exports went up from 150,000,000 pounds in 1914 to 954,000,000 in
1918. The number of cattle, other than milk cows, on farms increased
from 40,000,000 head early in 1914 to 51,000,000 four years later.
Through 1917-18 the price of dairy products rose about 70 percent
above pre-war prices. Concentrated milks felt the greatest war
stimulus; exports rose from 17,500,000 pounds in the pre-war period
to 853,000,000 in 1919.
Sheep production declined somewhat during the war, but prices
more than doubled. The poultry industry was depressed, partly
because of the high price of feed grains.
The total number of animal units increased by 16 percent during
the war, the production of all meat by 23 percent, and the acreage in
crops by 13 percent, or about 40,000,000 acres.
Farmers in a Changing World-A Summary 21
The rise in commodity prices was partly the result of world-wide
inflation, and this left farmers vulnerable to the shock of deflation
after the war. Farm prices ultimately were more than double the
pre-war figure, but they fell further and faster than the prices of
commodities in general. The gross income of agriculture rose from
$7,000,000,000 in 1914 to nearly $17,000,000,000 in 1919. By 1920
it was down to $13,500,000,000.
Meanwhile land values soared during the war and all production
costs increased. The bill for hired help more than doubled; the
fertilizer bill nearly doubled; the farm-implement bill more than
tripled; the bill for livestock feeds more than doubled; taxes doubled,
and then kept on going up after 1921; interest paid on farm mort-
gages more than doubled between 1914 and 1921; freight rates
increased; the cost of living went up. In other words, the picture
was not all rosy for farmers. They had three profitable years during
the war, but neither prices nor profits were high compared with
those in industry.
Along with economic changes there were social changes-chiefly a
greatly increased exodus of workers from the farm to high-paying
industries and to the Army. After the war, young men flowed back
to the farms, bought land at peak prices, went into debt, and were
caught by deflation a little later.
Huge credits were granted to Europe after the war. When this
process stopped, foreign buying fell off and prices crashed. Europe
could not pay us in goods because of our tariff policy. Then European
countries went nationalist and further throttled trade. The loss of the
European market for wheat, pork, and cotton hit our agriculture vi-
tally and suddenly. Meanwhile, the war had also stimulated produc-
tion in other agricultural countries-Canada, Argentina, Australia,
New Zealand-some of which had cheaper land and labor than the
The war proved to be a turning point that compelled a reorientation
of our entire farm economy. "The world of abundance and of rela-
tively free exchange," Genung writes, "had turned into one of low
buying power, with international trade balked by a barricade of re-
strictions and political designs."
The Development of Agricultural Policy Since the End of the
"The collapse of agricultural prices [in 1920]," Davis writes, "pro-
duced vehement protest from farmers everywhere. Existing farm
organizations increased their membership and new ones sprang into
being. They exerted a pressure on lawmakers and administrators
which, continuing through the years, has been primarily responsible
for the unparalleled sweep of farm legislation from the early 1920's
through 1938 and has carried the Federal Government into fields of
farm aid undreamed of when the crisis of 1920 broke."
Davis sees this process as a continuous development in which legisla-
tion at any given time grew out of previous proposals and efforts that
sometimes had a long history.
As a result of ferment throughout the country, Congress created a
Joint Committee of Agricultural Inquiry early in 1921. The inquiry
22 Yearbook of Agriculture, 1940
was broad, but the committee's recommendations were too limited to
cope with conditions effectively. Overproduction or overmarketing
was not considered to be a cause of the price decline. A "farm bloc"
was also organized in Congress about this time, and early in 1922 Sec-
retary Henry C. Wallace called a National Agricultural Conference,
which was attended by nearly 400 representatives of agriculture and
related industries. "Practically all of the notes that have been struck
in subsequent agricultural policy were sounded in one way or another
in that conference." For example, at the insistence of George N.
Peek, a paragraph was included in the conference report urging that
Congress and the President "should take such steps as will immediately
reestablish a fair exchange value for all farm products with that of all
other commodities." Crop insurance and the whole question of
Government guaranty of agricultural prices were recommended for
Prior to this report, in December 1921, Peek and Hugh S. Johnson,
using the slogan "Equality for Agriculture," had proposed a plan for
surplus disposal. This plan was studied by cabinet members, officials,
economists, and industrial and financial leaders, and later became the
basis for the McNary-Haugen bills, which were before Congress in
varying forms from 1924 through 1928. Though they were twice
vetoed by the President after being passed by Congress, these bills
accomplished much in organizing farm support and focusing national
attention on the farm problem. The substitutes adopted also added
valuable elements to experience.
Against aggressive Government action for farm relief in the period
from 1923 to 1926, or indifferent to the issue, were the cooperative
marketing associations, the South, the East and the industrial centers,
the agricultural colleges, and most of official Washington. Support
came from Congress, a small group close to the Secretary of Agricul-
ture, certain individuals and special groups, and finally the national
farm organizations. There were lively debates on whether there
actually was any surplus of farm products. Both sides failed to rec-
ognize three major factors in the situation-the importance of foreign
loans in maintaining the export market, the change from debtor to
creditor status, and the final closing of the frontier, which had for so
long acted as a shock absorber.
Agitation for farm relief got its start in the Northwest, where wheat
growers were the first to be hit. Late in 1923, Secretary Wallace pub-
licly proposed an export corporation to dispose of surplus wheat, and
growers in the Northwest pressed for action. In the following year,
active agitation for farm relief began in the Corn Belt. A long struggle
for "equality for agriculture" and "a fair share of the national income"
followed. The McNary-Haugen bills, around which most of the strug-
gle centered, embodied two essential ideas: "(1) That the centralizing
power of the Federal Government should be used to assist farmers to
dispose of the surplus abroad and raise prices to the desired level in the
domestic market, and (2) that the loss on the segregated exports was
to be paid by the farmers themselves by means of an equalization fee,"
charged on the first sale or first processing of the commodity.
A number of organizations were started between 1924 and 1928 in
connection with the drive for a clearly defined national agricultural
Farmers in a Changins World-A Summary 23
policy-among them the aggressive American Council of Agriculture,
the Executive Committee of Twenty-two, and the Corn Belt Com-
mittee of Farm Organizations. In November 1924 President Coolidge
called an agricultural conference, which attacked the surplus-export
plan and failed to develop any other program acceptable to farm
forces. In 1926 the South for the first time joined the West in agitat-
ing for an effective farm-relief program, and southern cooperatives
A debenture plan to enable exporters to pay a higher price for farm
products reached Congress in 1926, and in 1927 there were several
proposals for a Federal farm board, one of which had Administration
support and was endorsed by the Business Men's Commission-a
product of the National Industrial Conference Board and the United
States Chamber of Commerce. A land-grant college committee also
came out, somewhat vaguely, for "favorable and sound" farm legisla-
tion. After the President had vetoed the McNary-Haugen bill for
the second time, a threatened farm revolt failed to materialize in 1928,
largely because the farmers had been promised a general agricultural
bill. They got this in the form of the Agricultural Marketing Act of
1929, which created the Federal Farm Board.
The Federal Farm Board attempted to stabilize prices by storing
surplus wheat and cotton and withholding them from the market.
These operations resulted in heavy losses, and the Board soon began
to insist that production must be held in line with actual market de-
mand. Meanwhile the depression struck with full force. The income
and capital values of farmers tumbled; banks closed. Additional
farm legislation was imperative, and various proposals were made,
which culminated in the Agricultural Adjustment Act of 1933.
In effect, this legislation summed up the experience of the previous
decade. One of its main features was taken from the domestic allot-
ment plan proposed by M. L. Wilson and John D. Black during the
Farm Board period. Their proposal was to let the export surplus
take care of itself but to increase returns to farmers on the portion of
their crop consumed in this country. This was to be accomplished
by issuing certificates to farmers which would be bought by processors
at the time they paid for the farm products; but the certificates would
cover only products for the domestic market.
Under the Agricultural Adjustment Act, "millions of farmers entered
into contracts to reduce acreage in specified surplus crops in return
for benefit payments, financed chiefly by processing taxes." Addi-
tional legislation setting up marketing quotas for cotton and tobacco
was soon incorporated in the Bankhead Cotton Act and the Kerr-
Smith Act. In January 1936 the adjustment program was halted by
the Supreme Court decision in the Hoosac Mills case, declaring that
the power to regulate and control production resided in the States,
not in Congress. The result of this decision was a shift to the Soil
Conservation and Domestic Allotment Act of 1936. Late in 1937 the
need for acreage control again became apparent and resulted in the
enactment of the Agricultural Adjustment Act of 1938.
The existing legislation embodies five main features: (1) Provisions
for soil conservation, good farm management, and balanced output,
the aim being "to keep the total acreage allotments at a level that will
24 Yearbook of Agriculture, 1940
insure a normal supply of food and fiber for domestic consumption
and export." The work of the Soil Conservation Service complements
the work of the Agricultural Adjustment Administration. (2) Loans,
marketing quotas, and parity payments. Storage loans are author-
ized for producers of corn, wheat, cotton, tobacco, and rice. Market-
ing quotas may be applied, after a favorable vote of producers, in
years of excessive supply. Parity payments are authorized under
certain conditions to raise the income of producers. (3) Marketing
agreements. These are designed to enable farmers and distributors
to "establish permanent and rational marketing systems." (4) The
diversion of surplus products into domestic and foreign channels, and
the development of new uses for agricultural products. This includes
the activities of the Federal Surplus Commodities Corporation and
the work of four regional laboratories conducting research in new uses.
(5) Crop insurance. The Federal Crop Insurance Corporation is
authorized to write insurance against loss in wheat yields.
Davis traces the lineage of practically all of these provisions back
to proposals and legislation of the previous decade or so, and in some
cases further back.
Certain other problems that have come to the front in recent years
are being dealt with more or less experimentally in the current farm
program. One of them is tenancy. The Bankhead-Jones Farm
Tenant Act of 1937 authorized loans for the purchase of small farms
on a long-term mortgage basis; in addition, efforts are being made in
several States to create better tenancy conditions. Another problem
has to do with the large number of rural families who are on the fringe
of commercial production or entirely outside it, many of whom are in
distress and must be helped to earn a subsistence, at least until further
opportunities are open in industrial employment. Work in this field
is being carried on by the Farm Security Administration. A third
problem is related to the domestic consumption of farm surpluses.
Here the food-stamp plan is being used to increase the purchasing
power of low-income consumers without going outside regular channels
of commercial distribution.
The full story, Davis points out, is not told in these direct measures
to aid agriculture, varied as they are. Attitudes and laws regarding
taxation, tariffs, international trade, labor, money, credit, banking,
and many other things all have a bearing on agricultural problems.
Agricultural policy itself is never finally fixed and complete, and it
cannot be, because conditions change. It cannot be said that the
present laws have solved the problems of agriculture, and presumably
they too will be subject to change and displacement. But "a contin-
uous thread runs through the evolution of an agricultural policy,
notwithstanding the manifest inconsistencies and contradictions that
appear in it."
Part 2. Agriculture and the National Welfare
Agricultural Surpluses and Nutritional Deficits
Cavin starts out by defining what the economists mean by a sur-
plus-the amount by which supplies of a commodity depress the
income of producers below the level usual in periods of average
Farmers in a Changing World-A Summary 25
prosperity when the different parts of the economy are in balance
with one another. Three conditions can cause such a surplus, and
each requires a different remedy. (1) Unusually good growing con-
ditions, improved production methods, or some other factor may
result in a larger than average crop. The obvious remedy is to with-
hold some of the crop from the market. But if the surplus becomes
chronic, acreage and output must be reduced. (2) Changes in
consumption habits may decrease the demand for a product compared
with that for competing products. Unless new uses can be found for
the product, the only possible remedy is to decrease production and
substitute production of products for which there is an increasing
demand. (3) A decline in general buying power-as in a depression-
or the loss of a foreign market may result in a surplus. In the latter
case, reduced production, accompanied by shifts to other types of
production, is required. In the case of a depression, however,
reduced production is no permanent remedy. It is necessary to
restore general business activity.
The amount of a surplus of one or more farm products can be
measured, Cavin points out, through the establishment of normal
requirements for domestic use, exports, and reserve stocks. These
are based on averages for some past period with adjustment for evident
Stiebeling considers surpluses from a different viewpoint-that of
the nutritionist. She points out that in the case of certain protective
foods-dairy products; leafy, green, and yellow vegetables; foods rich
in vitamin C-there may be a market surplus but at the same time
a deficit compared with what people need. These deficits exist
among low-income groups in all industrialized countries, including
the United States.
How much more of these products do we need to make up the
nutritional deficits? That depends on what we consider the desirable
goal. The answers vary from 10 to 100 percent more for dairy prod-
ucts; 10 to 70 percent for tomatoes and citrus fruits; 80 to 100 per-
cent for certain vegetables. If the nutritional deficits were made
up, we could wipe out such scourges as pellagra, beriberi, scurvy;
have a population with greater average physical efficiency and longer
average life; significantly increase the demand for some important
agricultural products. The job is partly one of education, and many
agencies, including the Bureau of Home Economics, are busy in spread-
ing knowledge of good nutrition. But education alone is not enough.
Incomes and prices are large factors.
Cavin estimates that to raise the nutritional level as Stiebeling
suggests would require between 8,000,000 and 40,000,000 additional
acres for production, depending on the goal desired. There is no
question but that this would largely eliminate agriculture's surplus
problem. Farmers could and would do the job, but they could not
do it if it meant an additional burden without a fair return.
Farioletti tackles the problem from the standpoint of income.
He points out that farmers can no longer depend on population growth
to create an expanding market; by 1960 the population may be stable.
The market can expand, however, if we can manage to increase
consumer purchasing power. One way to do this is to increase the
26 Yearbook of Agriculture, 1940
total national income. A national income of $90,000,000,000-
$100,000,000,000 (as compared with $69,000,000,000 in 1939) would
put everyone to work and greatly increase food consumption. So
great a rise in national income, however, cannot be expected to occur
quickly, nor would it settle the deficit problem Stiebeling discusses;
there would still be large groups with inadequate incomes, unable
to purchase all the protective foods they need. For the most dynamic
effect on the agricultural market, what is required is enough increase
in the incomes of the lowest groups (about 42 percent of all families
had incomes under $1,000 in 1935-36) to enable them to reach the
dietary level of the next higher group. From the standpoint of
agricultural surpluses, a program for consumption adjustment is
fully as important as one for production adjustment.
But even increasing the incomes of these lower groups is a long-time
business, says Cavin. Aren't there consumption adjustments that
can be made in the meanwhile? Yes, we can subsidize consumption
(as Stiebeling and Farioletti also suggest) where the need is greatest
by two methods-keeping prices low for certain income groups, and
distributing some foods free. There are numerous possibilities within
this range. In the 4 years 1935-39, nearly 3,000,000,000 pounds of
surplus foods were distributed free. Recently, the food-stamp plan
was adopted experimentally as an efficient plan for meeting the needs
of families on Work Projects Administration jobs or eligible for other
public assistance. This plan permits personal choice, reduces waste,
and makes use of existing trade channels. It proved to be so successful
that it has now been greatly expanded.
One solution or partial solution of the surplus problem does not
shut out others. But the problem cannot be settled, Cavin warns,
by a simple exercise in arithmetic. The causes are deep-rooted and
complex. Nothing less than a national policy involving long-con-
tinued effort and probably large expenditures will be needed to solve it.
The Farmer's Stake in Greater Industrial Production
Bean makes a rather close analysis, using numerous figures, of the
dependence of agriculture on industrial activity. His point is that
"farmers have a vital interest in any program or policy that will help
to bring about full employment of the working population in the cities."
At the end of 1939 there were 42 to 44 million available nonagricul-
tural workers in the United States, of whom 35,000,000 were employed,
leaving 7 to 9 million unemployed. Since this is about one-fourth
of the number employed, it may be said that in order to bring full
employment, industrial production should have been about 25 percent
greater than it was at the end of 1939.
What, Bean asks, would this 25 percent greater production mean to
farmers? He discusses four aspects of this question.
(1) It would relieve the pressure of an excess farm population on
the land. Heavy industrial unemployment inevitably takes the form
of a back-to-the-land movement. Much of the farm problem is due
to the fact that there are too many people sharing the agricultural
income. Between 1930 and 1940 the proportion of the population
engaged in agriculture failed to decline for the first time in over a
hundred years. If previous trends had continued, 16 percent of the
Farmers in a Changing World-A Summary 27
population should have been on the land in 1940; actually, the propor-
tion was 21 percent. On the basis of long-time trends, there should
have been 26,000,000 persons living on farms instead of 32,000,000.
The excess 6,000,000 (about 20 percent of the total) would under nor-
mal conditions have been living in towns and cities. Since this 20
percent is for the most part a low-income group not contributing a
great deal to commercial production, transferring them to the cities-
that is, giving them industrial employment-would not proportion-
ately raise the incomes of the remaining farmers. What it would do,
however, would be to increase the proportion of consumers of farm
products in the total population as compared with the proportion of
producers of farm products. The total population is 132,000,000.
Shifting 6,000,000 out of farming would make the total consuming
population four times as large as the farm population, instead of three
times as at present.
(2) Full industrial activity would create a larger national income,
which would expand domestic consumer expenditures for farm prod-
ucts. An increase of 25 percent in industrial production would raise
the national income from $70,000,000,000 (1939) to more than
$90,000,000,000. Retail expenditures for food closely parallel the ups
and downs of consumer incomes; they average about 20 percent of the
income of nonfarm consumers. Thus the increase in national income
suggested would mean that about $4,000,000,000 more would be spent
for food. About 40 percent of this, or $1,500,000,000, would go to
farmers, the remainder to those engaged in distribution. For nonfood
products, farmers would probably receive another $500,000,000 with
the suggested increase in national income.
(3) Full employment and increased national income would also
improve the farmer's foreign market. Imports go up and down with
domestic industrial activity. On the basis of past trends, they would
increase by about $1,000,000,000 if the national income increased by
$20,000,000,000. This would increase foreign buying power for Amer-
ican goods-that is, it would increase exports. Probably about one-
fourth of the increased exports would be farm products.
(4) Bean notes that there are certain large if's in these assumptions.
Full employment and increased national income would not automat-
ically bring the results outlined for farmers. For instance, the declin-
ing foreign market and the declining demand for feed crops for work
animals have upset past relationships in the market for farm products,
and this has changed the proportion of farm income to national income.
Increases in distribution and production costs have operated in the
same way. The net result was that in 1939 farm income was short
by $2,400,000,000 of being on a par with nonfarm income. About
one-third of the shortage ($807,000,000) was made up by Government
payments. In other words, there is a price problem involved as well
as a problem of improving markets.
Practically all schools of economic thinking today agree that, to
some extent at least, new methods are necessary to stimulate recovery,
and that these methods involve some governmental action. Groups
disagree on the amount and the kind of action required. Leaving
out of account extreme views such as those involved in socialism and
fascism, Bean distinguishes three main approaches.
28 Yearbook of Agriculture, 1940
(1) Some people argue that in order to increase industrial produc-
tion, consumer buying power must first be increased. As an example
of this approach in its more extreme form, he takes old-age pension
plans involving large regular payments to individuals and traces some
of their possible results.
(2) A second group believes that production must be stimulated
first; increased employment and consumer buying power will then
follow. If this were to be fully effective, it would admittedly require
widespread economic planning and organized cooperation between
many industries as well as between industry, labor, and consumers.
Proponents argue that full economic planning could be developed
(3) A third group takes a middle-of-the-road position, arguing that
our economy is too complex for any one approach. They would rely
on stimulating the flow of private investment, especially into large-
scale industries; increasing public investment, especially in self-
liquidating projects and conservation; expanding consumption by such
measures as liberalized old-age benefits, in order particularly to in-
crease the purchasing power of low-income groups; reducing mal-
adjustments in prices, labor relations, trade barriers, and other factors.
Changes in the tax structure and in the method of handling govern-
mental budgets are corollaries to some of these proposals. The degree
of public action required would depend on the extent of cooperation
for recovery by industry and labor.
It is unlikely, Bean believes, that the United States will adopt
any single program during the next decade. There will be a com-
bination of various approaches. The future is obscure because of
developments in Europe, but he holds that we are entitled to have
great confidence in our ability to cope with our major economic
problems provided we pay special attention to developing domestic
markets never yet fully utilized.
The City Man's Stake in the Land
When almost anyone could go into farming, the city man had a
direct personal interest in the land. That period ended with the
closing of the frontier. Today the city man is aware that the soil
means something to him only when he is aroused by dramatic dust-
storms or floods. Sometimes these happenings, however, are the
effects rather than the causes of maladjustments in agriculture.
Actually, the city man's stake in the welfare of agriculture is greater
now than it used to be. Chew tells why he thinks this is so.
Pressure of population on the land supply, coupled with farm
depression and soil wastage, drives large numbers of country people
into city jobs or bread lines, and this inevitably burdens relief rolls
in the towns, depresses wage rates, creates problems, of housing and
sanitation, complicates the task of school authorities, necessitates
increased taxation, and causes ill feeling between migrants and
For a long time-even in depressions-there has been a net migra-
tion of farm people to the city. Between 1920 and 1930, 4 out of
every 10 new workers in the cities came from farms. If these people
Farmers in a Changing World-A Summary 29
come out of rural areas marked by poor health, poor housing, and
poor education, they will not be adequately fitted for city life; most
of them will be unsuited for any job except common labor, and many
will become public charges. The city man, then, has a direct interest
in rural living standards because large numbers of rural people are
going to be his neighbors.
On the other hand, suppose great numbers are held on the farms
because they can find no opportunities elsewhere. Something has to
be done to help them; 600,000 farm families have been assisted by the
Farm Security Administration, for example, and as many more need
assistance. Who pays for this necessary rescue work? City people,
in the long run. It would be cheaper for them to create conditions
that eliminate the need for such wholesale salvaging of human beings
by supporting fundamental improvements in agriculture.
Too much tenancy and bad tenancy conditions are one of the signs
of agricultural maladjustment. How do they affect the city man?
They force many farmers to become wage hands, and this heightens
job competition in country and city. They also tend to bring about
a shift of farm ownership to city people through failures and fore-
closures. The resulting absentee farm management may be inefficient
and costly. It may be better for the city man to own the mortgage
than the farm because "rent is harder to collect than interest."
Foreclosing mortgages is generally a losing business for everyone.
Farm prosperity, on the other hand, means that payments to city
creditors can be maintained.
Tenancy reform, Chew argues, will mean less competition for farm
ownership but better chances for those who want to become owners,
and this will benefit both farm and city people.
The country, Chew points out, serves as a double shock-absorber
in depressions; it accepts low prices for the necessities of life, and
it holds people on the land who cannot find other employment. But
there is a heavy penalty for the city man if this shock-absorbing
power is abused. Much of the burden of farm relief is due to the
fact that such immense numbers of people have been held back on
the land. Because of that, agricultural adjustment has to move in
two conflicting directions at'the same time. It has to adjust pro-
duction to improve the incomes of commercial farmers, and it has to
help great numbers of marginal farmers to make a living-which
inevitably means more production even though it is only a small
amount in any individual case. These costly contradictory efforts
are unavoidable under the circumstances.
There is a way to avoid them, but it lies in the hands of the cities.
That way is to provide industrial employment and thus absorb the
army of the rural landless. No other solution could compare with this
in efficiency. Agricultural adjustment would then be more nearly
confined to commercial production and conservation, and it would
be comparatively simple and inexpensive.
These are the more fundamental ties between the city man and the
land. There are others perhaps less fundamental but more obvious.
For example, the poorer the land and the farmers, the less city
people can sell in the way of agricultural supplies such as fertilizers
and farm machinery. And the more failures there are among farmers,
30 Yearbook of Agriculture, 1940
the greater the tax delinquency and the greater the tax burden on
The upshot of Chew's argument is that there is no separate agri-
cultural problem which the city man can tackle or leave alone as he
chooses. There is a single national economic problem rooted in the
use we make of the land, and it is everyone's concern.
Part 3. The Farmer's Problems Today and the Efforts
To Solve Them
Agriculture Today: An Appraisal of the Agricultural Problem
In introducing this section of the Yearbook, Wells attempts to give
a brief picture of the agricultural situation and the main lines of
economic reform that have resulted from it.
He illustrates the economic status of agriculture with four sets of
facts and figures.
(1) In the depressions of 1920 and 1929 farm prices fell sooner and
further and stayed down longer than nonagricultural prices-a sign
of weakness that led to increased organization among farmers and
demands for Government aid. (2) The income and the living stand-
ards of the farm population are at relatively low levels. About 40
percent of all farm families have incomes under $750 a year-an
amount that will barely supply minimum physical and other require-
ments. Various criteria show what this means in practical terms.
Medical and hospital facilities in rural areas compare unfavorably
with those in cities. With 31 percent of all the children of school
age, farm families receive about 9 percent of the national income;
they cannot support schools as good as those city people have. Rural
housing conditions, judged by such criteria as sanitary plumbing,
running water, electricity, are definitely inferior to those among city
populations. Rural dietary standards are low in wide areas. (3)
There is a considerable population pressure in many rural areas; for
example, over 2,000,000 young people who would normally go else-
where are now backed up on farms. (4) "The pressure of excess
population and exploitive methods of production are
taking their toll from the land itself" through erosion, overcropping,
What causes this situation? Wells suggests that there is no single
cause but rather several causes. The export market has declined,
restricted immigration and a declining birth rate have slowed down
population growth in the United States, and the industrial situation
since 1929 has been such as to result in widespread unemployment.
Over against the resulting reduced demand are forces that have been
actively working toward increased production. These include the
nature of the agricultural enterprise itself, the increasing efficiency of
agricultural processes, the displacement of work animals by machines,
and the damming up of an increasing number of rural young people
as a result of industrial unemployment; and, finally, a marketing
structure which throws the greater part of the burden of falling prices
on the producer and the increasing demand of farm people for a better
standard of living are factors that further accentuate the underlying
Farmers in a Changing World-A Summary 31
Efforts to meet this situation follow three general lines: (1) Activi-
ties designed to increase incomes for commercial farmers-including
all the various methods used under the Agricultural Adjustment Act
and the marketing agreements, as well as efforts to improve grading
and standardization, reduce interstate trade barriers, reorganize
terminal market facilities, reduce freight rates, regulate commodity
speculation, encourage cooperative marketing, increase market
demand (both domestic and foreign), and improve the agricultural
credit system. (2) Activities designed to increase incomes or improve
living standards among such groups as migrant laborers, sharecroppers,
subsistence farmers, and victims of drought and flood-including the
rural rehabilitation program, emergency loans and grants, farm debt
adjustments, the tenant-purchase program, medical and community
service cooperatives, the financing of water facilities in drought areas,
camps for migrant farm workers, feed and seed loans, drought relief,
subsistence homesteads, and the rural electrification program. (3)
Activities designed to encourage better land use and more efficient
farm management-including research and extension work, the acqui-
sition of forest and submarginal lands by public agencies, soil
conservation, and forest conservation.
Our Major Agricultural Land Use Problems
and Suggested Lines of Action
"However acute the economic problems of our agriculture," says
Gray, "we are really one of the most fortunate nations of the world
in the opulent relationship of present and prospective population to
available agricultural land." For "we are agriculturally self-con-
tained, except for certain tropical products," and it appears likely
that our population will become stable at a density of not more than
50 persons to the square mile. In France there are 4 times as many
persons to the square mile, in Germany 8 times, in Belgium 14 times.
But most of our abundant production comes from a comparatively
small proportion of our farms. Various rural areas are decidedly
overpopulated in the sense that there are more people in these areas
than there are opportunities for making a living.
The nature of our land policy, Gray points out, is fundamentally
determined by two things: (1) This Nation believes in promoting the
welfare of its citizens as individuals rather than enhancing the power
of the state, and it has always emphasized private enterprise and
private ownership with a minimum of governmental interference.
The object of land policy, then, must be to retain private ownership
but to correct its faults. (2) We operate within the framework of a
Constitution that limits the powers of Government and is not very
explicit in defining what the latter may do to correct faults. Thus
it is always necessary in this country to convince legislatures and
courts that in particular situations the social welfare is so paramount
that individual rights may be justifiably subordinated.
Most of our present-day problems of land use and tenure are due to
the fact that the doctrine of individual rights was carried to extremes
in the past. Historically, this was probably inevitable. The original
idea was that public lands should be put into private hands as rapidly
as possible to hasten settlement. Owners then had almost unlimited
32 Yearbook of Agriculture, 1940
freedom to dispose of their property as they saw fit, on the theory that
"the majority of individuals will act continuously in their own interest,
and that individual interest coincides with the social or public interest."
That theory often failed to work out well in practice. Much land got
into the hands of speculators, who took a generous rake-off before
finally passing it on to farmers. Not that the speculator was the big
bad wolf of agriculture; farmers often "cleaned up" on rising land
values also. Fluctuating land prices go down as well as up, however,
as farmers discovered after the World War, when many were caught
with excessive capitalization and heavy mortgage debts. Then much
farm land passed into the hands of creditors. That is the trouble with
speculating in land, which constitutes five-sixths of the farmer's
Using farm land as a source of profit has also made for unstable
tenancy. The owner who expects to sell when a good opportunity
comes along does not feel like arranging long-time leases or making a
program for soil improvement. About three farms out of seven are
now rented or sharecropped by those who operate them. Largely
because of transitory ownership-through inheritance, speculation,
foreclosure-"the types of farm tenancy prevailing in the United States
are probably the worst in the civilized world," though in many cases,
of course, the owner-tenant relationship is wholesome.
The tenancy problem, then, is important in land policy. Steps
toward its solution include a credit system suited to the needs of those
who are capable of responsible ownership; measures to prevent exces-
sive speculation, which so often causes owners to become tenants;
measures to improve the relationships between owners and tenants.
One real gap in present land policy is "the lack of an adequate small-
holdings program, such as has been developed in a number of other
Other land problems included in Gray's survey are:
The range. Two of the biggest forward steps here are the Taylor
Grazing Act and the forming of cooperative grazing districts by
Size of holdings. In the Great Plains, homesteads of 320 or 640
acres are too small. Much of the land is held for speculation by
absentee owners. Efforts are being made to arrange leases for oper-
ators who need more land, but long leases on suitable rental terms are
difficult to obtain. In the South, small holdings often make it diffi-
cult to change over from cotton to other types of farming.
Submarginal land. It is estimated that half a million farm families
"are on land so poor that it will not maintain a decent standard of
living," some because of original mistakes, others because of subse-
quent soil deterioration and timber cutting. In many of these areas
the solution will probably have to be an improved self-sufficing econ-
omy. Where soil resources are hopelessly insufficient, public pur-
chase of the land and eventual resettlement of families will be involved.
As yet there has been no adequate resettlement program.
Tax delinquency. This is especially bad in areas with poor resources
and small holdings. Because of tax delinquency, "local governments
are seriously embarrassed financially, large areas remain unused or
underused, and land titles fall into confusion. .More realistic
Farmers in a Changing World-A Summary 33
[tax] procedures, based on adequate land classification, are needed to
distinguish the areas adapted to private utilization from those where
public administration would be in the public interest."
Undesirable settlement. Settlers have been persuaded to take up
land with little regard to the prospects for success. Blue-sky laws,
zoning laws, and suitable credit policies can prevent much of this, but
"merely restrictive measures are likely to prove less effective than a
positive public program for guiding land settlement." The character
of such a program, however, would depend fundamentally on the
possibilities for absorbing the rural unemployed in industry.
Reclamation. Further reclamation would hardly be needed if agri-
culture was to be largely commercial. It would be justified under
some conditions for self-sufficient farming. Irrigation of small units
on existing farms is very worth while and is now going forward with
Soil conservation. Much worth-while work is being done through
public agencies and conservation districts. Some of the most serious
obstacles are economic, especially systems of tenure and size of holdings
unfavorable to conservation. Subsidies are being used to meet this
difficulty in part.
Flood control. The large-scale engineering work of the War Depart-
ment is now being supplemented by the "upstream engineering" of
the Department of Agriculture on tributary streams.
Farm forestry. "The Cooperative Farm Forestry Act passed in 1937
is aimed at providing a comprehensive program of assistance to farmers
in making more effective use of their woodlands and conserving their
Major tasks of the immediate future in land policy, Gray believes,
are to carry forward the advances already made, modify details where
necessary, improve administration, amplify some measures, fill in some
serious gaps such as the lack of an adequate small-holdings program
for low-income farmers, and integrate the various elements into a real
The Challenge of Conservation
Allin and Foster try to show the real meaning of conservation and
its place in American life.
Throughout its early history, the United States was interested in
building up certain values, which involved freedom of opportunity on
the frontier, the creation of great industries, the peopling of a con-
tinent. Our citizens hated European restraints-among them
restraints on individual freedom to exploit resources. We went ahead
and exploited with unprecedented speed and efficiency. One result
was a spectacular wasting of forests and soils.
In recent times, other forces, such as mortgages, tenancy, absentee
ownership, the demands of war, and drastically reduced prices, have
driven farmers to compel the land to produce more, irrespective of
the effects on the land itself.
Over against these developments there has been a slowly growing
realization of the need to conserve basic resources. Landmarks in
this movement were the establishment in 1871 of a Federal office
concerned with fisheries; the beginning in 1873 of demands that
34 Yearbook of Agriculture, 1940
ultimately led to the establishment of the Forest Service; creation in
1886 of the forerunner of the Bureau of Biological Survey; the setting
up of forest reserves in 1891 and of "national forests" in 1905; the
beginning of the Soil Survey in 1899; an Alaskan fisheries act in 1906;
establishment of the Inland Waterways Commission and of an office
of mining technology in 1907; organization of the National Conser-
vation Commission in 1908.
During the next 20 years, facts were assembled that finally had a
powerful effect on the thinking and attitudes of the public. Then came
spectacular evidence of the effects of waste in great duststorms and
floods, and in the misery of stranded lumbering communities and
migrating farmers. In addition, there has been an increased interest
in preserving great areas as places where we can get outdoors and find
health and recreation.
The intensified drive for conservation during the 1930's resulted in
the work of the Soil Conservation Service, the Taylor Grazing Act for
better management of the range, the Civilian Conservation Corps.
Agricultural-soil, forest, and range-conservation, Allin and Foster
point out, is no negative thing. It is not like withdrawing your money
from circulation and burying it in a hole in the ground. Its primary
concern is not simply to ration the use of resources between present
and future generations. Rather it strives for a better living both
today and tomorrow. It seeks these goals by reducing waste and by
using farming, forestry, and range practices that maintain and build
up long-time productivity.
The authors hold that conservation in this sense can be called a new
frontier for American activity. It means looking on our land as a
place in which to settle down and live-to develop in new ways the
old American dream of freedom and abundance-to invest idle money
and idle labor in the truest kind of production and defense.
They list several problems of conservation that together constitute
a difficult challenge-but no greater than those we have met in the
past. The farmer, they point out, is a key figure in this movement
because of his position on the land. "In fact the farmer has such a
large share of the conservation job that it is only fair for the rest of
the people to help him do it."
Our Soil Can Be Saved
Bennett gives some impressive figures on soil waste and argues that
this kind of waste is unnecessary. It has been proved that "soil
conservation is practical for the United States and that this Nation
need not see its land and rural people impoverished."
Soil conservation is now a major goal of American agriculture be-
cause farmers have awakened to the need and are themselves taking
the initiative in the work. The early demonstration projects of the
Soil Conservation Service brought widespread understanding of the
value of conservation. Today farmers are rapidly organizing their
own soil conservation districts under State laws. These districts at
present include more than 150,000,000 acres, and an equal amount is
in process of organization. Aside from range lands and public lands,
however, only some 22,000,000 of the 300,000,000 cropland acres
affected by erosion are as yet covered by intensive conservation work.
Farmers in a Changing World-A Summary 35
The kind of work being done is perhaps more significant than its
Farmers now signed up under cooperative agreements revise their
systems of land use on the basis of thorough surveys. "Gradually
these areas are being blanketed with complete protection against ero-
sion and with improved farming methods that protect the permanent
productivity of the soil." There is a growing collaboration of neigh-
bors and communities in adopting realistic, practical measures even
when they go counter to old habits. "Slowly the patterns of land use
are changing in accordance with the dictates of conservation."
Careful fitting together of various public programs is responsible for
much of the gain made. The agricultural adjustment program, the
water facilities program (Pope-Jones Act), the farm-forestry program
(Norris-Doxey Act), the rehabilitation loans of the Farm Security
Administration, all have helped conservation to move forward. Some
of the worst submarginal land (about 11,000,000 acres so far) has been
purchased by the Federal Government and turned into pastures,
ranges, forests, wildlife preserves, and public recreation areas.
Soil conservation efforts face several major difficulties. (1) It is
impossible to bring expert advice and assistance to all the individual
farmers who are eager for it. (2) Many farmers think that the use of
conservation methods will lower their income-though the evidence
indicates that it at least maintains and sometimes increases income.
(3) Natural conservatism prevents many farmers from adopting new
methods. (4) There has not been sufficient research as yet to show
what the best methods are in all cases. (5) Economic factors militate
against the adoption of conservation practices. For example, tenants
who move to a new place every year or so have little or no incentive
to preserve and protect their temporary farms.
The New Range Outlook
Forty percent of the land of the United States, say Chapline,
Renner, and Price, consists of prairie, plain, desert, forest, and moun-
tain range land in the West. The 728,000,000 acres comprise four-
fifths of the important water-producing area of the West. In this
range area as a whole there is a complicated pattern of ownership by
individuals, counties, States, and the Federal Government. Crop
farming and livestock farming are intermingled, and both have been
made increasingly difficult by deterioration of the native forage, which
in turn brought widespread erosion. The vegetation is about half as
thick as it used to be. It takes 4 acres on the average to graze a cow
for a month where it used to take 2. Abandoned cultivated lands have
blown. Floods that spread over and ruin good lands are now common.
Attempts at dry-farming have failed on at least 15,000,000 acres, and
this has led to many social and economic ills. Much land that is
valuable to the public for watershed protection is in the hands of
private owners who cannot afford restoration measures.
Mostly because of sheer necessity, the people concerned are awaken-
ing to the seriousness of the situation. A new outlook is developing,
and many concerted measures are being taken to undo the results of
drought, overuse, and lack of understanding. It will be years, how-
ever, before this new approach will have its full effects.
36 Yearbook of Agriculture, 1940
The authors describe the present corrective measures under five
(1) Research is the key to better range management, which alone
can restore forage and soil. Federal and State agencies are now en-
gaged in a broad research program covering climate, soils, vegetation,
animal life, range and watershed management, values and uses of
plants, artificial revegetation, introduction of new foreign and native
species of plants, selection and breeding of improved strains, mass
production of seed, erosion control, livestock husbandry. Valuable
practices and principles are being worked out as a result of this work.
Example: A long-time experiment in the Southwest by the Forest
Service has proved that stocking at a rate that would at no time use
more than 80 percent of average forage production doubled the grazing
capacity of the range, increased the calf crop 50 percent, cut death
losses two-thirds or more, and increased the returns per cow. Other
principles of management include stocking with the right kinds of
livestock, grazing during the proper season, distributing livestock
evenly, deferred and rotation grazing, suspended grazing and arti-
ficial revegetation on badly deteriorated areas, fence building, develop-
ment of watering places, eradication of poisonous plants. Wide-
spread success has resulted from using the knowledge developed by
experiment and research, but the quest for information has only
(2) A program of disseminating information is being carried out by
county agents and State extension specialists. They deal with such
practical matters as hay production, herd improvement, care of sick
animals, feeding practices, the use of better sires. Yet the prin-
ciples of better range management are still not widely known.
(3) The Soil Conservation Service has been active in the range area.
It has purchased land not suited to cultivation and developed it for
better use by the community, allocating or leasing it on the basis of
the grazing needs of individuals and associations. In cooperation
with the Farm Security Administration, individuals are also helped
to enlarge their holdings when they have farms that are too small for
successful operation, and to use conservation practices on the new
holdings. Complete soil-conservation demonstrations have been
carried out on some ranches.
(4) The Agricultural Adjustment Administration has assisted pro-
ducers to establish and maintain good stands of forage plants and to
arrest soil erosion. For example, in 3 years under this program
19,500,000 acres were naturally reseeded by deferred grazing; 258,000
acres were artificially reseeded; over 23,000 springs or seeps were
developed and more than 3,800 wells dug; 130,442 acres were contour-
listed, furrowed, or subsoiled. Some 14,000 ranchers participated in
the program in 1 year.
(5) The Forest Service for 35 years has had charge of 80,000,000
acres of range land within the national forests and has also carried on
studies concerning range-land use. Grazing privileges on the national
forests are allocated in such a way as to insure conservation and wise
use of the land. Some 750 livestock associations as well as com-
munity, city, county, and State organizations participate in making
plans for the use of this land. In addition to being used by 7,000,000
Farmers in a Changing World-A Summary 37
head of cattle, horses, sheep, and goats, the national-forest range
furnishes food for 1,841,000 big-game animals and countless numbers
of small-game animals and birds. Conservative practices have
brought marked improvement over the national-forest area as a whole.
(6) Some 134,000,000 acres of unreserved and unappropriated pub-
lic domain are incorporated into 52 grazing districts administered
under the Taylor Grazing Act of 1934 and 1936 by the Grazing Service
of the Department of the Interior. A cooperative program has been
developed, with stockmen and governmental agencies participating,
for surveys, classification, range improvement, controlled use through
licenses and permits, and consolidation of ownership.
The complex problems of the range, say the authors, can be solved
only by a vigorous, coordinated attack with farmers and stockmen
participating. The prospects now look hopeful.
Marsh and Gibbons summarize the forest situation from several
angles and suggest a broad outline of needs. They hold that forest-
resource conservation is one important means of achieving a balanced
rural economy. Permanent forest industries would help to support
A third of our land area, or 630,000,000 acres, is forest land. This
is half again as much as the total cropland. More than half the total
land area in the Northeast and the South is forest. Forestry manage-
ment can make this land an asset rather than a liability.
Forest land serves at least five major purposes: Timber production,
watershed protection, recreation, support of wildlife, forage produc-
tion. In most cases it can be used for two or more purposes simul-
taneously; in some cases for all five. For example, of the 630,000,000
acres, nearly three-fourths (462,000,000) can be used for commercial
timber crops; nearly three-fourths has watershed value; more than
half (about 342,000,000 acres) is grazed by domestic livestock; prac-
tically all is suitable for wildlife; a very large percentage can be used
for recreation. The five uses will be taken up in order.
(1) Timber use. The United States now uses about a third of the
lumber, more than half the paper, and nearly 40 percent of the wood
in all forms consumed in the world. Wood is the basis of an enormous
number and variety of industries, and the full possibilities have not
been touched. The South leads in commercial timberland, with
203,000,000 of the 462,000,000 acres. Timberlands have not in gen-
eral been well managed, and depletion, followed by wrecked com-
munities, has been the usual practice. This could be reversed.
(2) Watershed services. Probably of more value than the timber
crop is the "water crop" and the soil protection assured by forests.
Forests reduce the destructiveness of floods, prevent erosion, help to
maintain a supply of pure water for domestic use, and are the sources
of water for irrigation agriculture. Large areas of forest land are not
managed well enough to furnish their maximum watershed services.
(3) Recreational use. Forest lands furnish perhaps the most com-
pletely rounded outdoor recreation, from picnicking to camping,
hunting, and fishing. About 11,000,000 acres are now used exclusively
for recreation. The amount could be doubled or trebled; but for
38 Yearbook of Agriculture, 1940
maximum accessibility to communities, much other forest land can
be opened up for recreation.
(4) Wildlife production. The existing wildlife population in most
areas is far below what the forests could support in balance with
(5) Forage production. About half the total value of western range
livestock is produced on forest and woodland range, and a large pro-
portion of the 12,000,000 cattle and 11,000,000 hogs in the South
graze at least part of the time on forest range. Good management is
essential for the best returns in both regions.
The ownership of the 630,000,000 acres of forest lands is distributed
as follows: Farmers, 185,500,000 (over 29 percent); other private
owners, 248,300,000; national forests, 122,000,000; State and com-
munity forests, 26,800,000; public domain, 24,000,000; Indian reserva-
tions, 12,000,000; national parks and monuments, 6,500,000; other
Federal ownership, 5,000,000; total in private ownership, 433,800,000
(70 percent); total in public ownership, 196,300,000 (30 percent).
The most critical problems from the standpoint of sustained yield
and multiple use are in the privately owned areas, which furnish 95
percent of the commercial timber cut and include perhaps 90 percent
of the potential timber-growing capacity of the country.
(1) Farm woodlands. Nearly a third of the commercial (not the
total) forest land is in farms, mostly in small tracts. Ownership is
fairly stable, costs of management relatively small. The income-
producing possibilities of farm woodlands are seldom appreciated,
but some headway has been made in recent years. About 41,000,000
acres have now been put under some form of forest management;
20,000,000 acres need to be restocked; perhaps 75,000,000 acres need
to be rehabilitated, of which 45,000,000 are without organized fire
(2) Industrial and other nonfarm ownership. Over 40 percent of
the commercial forest land is under this ownership, and 80 percent of
it lies east of the Plains. About one-third is in comparatively large
holdings. In general, the policy has been to liquidate rather than
sustain the timber resources, though in recent years there has been a
striking change for the better. Much submarginal and tax-delin-
quent land has its source in cut-over forests. Many owners cannot
afford the expense of good forestry management. Probably 29,000,000
acres is now under some form of management and 85 percent without it.
(3) Community forests. These include some 8,000,000 acres.
There could be a considerable expansion in this type of ownership with
advantage to many communities.
(4) State forests and parks. These total about 19,000,000 acres.
Practically the entire area is protected against fire and trespass, and
much of it has been developed for recreation. The possibilities have
hardly been scratched. The South, with two-thirds of the forest land,
has only 3 percent of the State forests.
(5) Public domain, Indian forests, national parks. The two latter
have been given up-to-date forest management. Much remains to be
done on the forest lands in the public domain.
(6) National forests. These spread over 40 States, Alaska, and
Puerto Rico, though mostly concentrated in the Rocky Mountain and
Farmers in a Changing World-A Summary 39
Pacific coast regions. They "represent the first large-scale trial in
the United States of public ownership and administration of a great
natural resource," and they "are being built up through intensive,
carefully planned protection, by planting, and by timber-stand im-
provement. All cutting is controlled." Dependent communities are
stable. Watershed services have been improved (most rivers in the
West, and most of the important eastern rivers, head in the national
forests). Big game has increased 150 percent since 1924. Recrea-
tional facilities could be increased; some 32,000,000 people visited the
national forests in a recent year.
Marsh and Gibbons consider in some detail the present and poten-
tial timber resources of the United States. Saw timber, both softwood
and hardwood, is the most important class. It is "the oldest timber of
highest quality-the cream of the forest"-and any sound program of
forest management must aim to achieve long rotations of saw timber.
Public agencies now own or control 42 percent of the supply, but much
of this is in inaccessible locations in the West and only 4 percent is in
the East. There is need and opportunity for greater public invest-
ment in this resource in the East. Farmers own 13 percent of the
saw timber. Other private owners hold 45 percent but supply two-
thirds of the present cut. These figures refer to actual resources.
Only about two-thirds of the supply of saw timber could be cut
profitably under present conditions.
There is an enormous amount of timber that would yield satisfactory
pulp, but since much of it is less readily available than foreign supplies,
we import half of what we use. Technical progress and sound forestry
could greatly increase the domestic cut.
On a national scale, current annual growth of timber is now 11,287,-
000,000 cubic feet and annual drain (from logging and destructive
agencies), 13,463,000,000. The drain, however, is still concentrated
in local areas, so that forest industries continue to cut out and close
down. The saw-timber stands in the East have only about two-thirds
of the volume needed to meet the annual drain.
It is impossible, these authors point out, to estimate future needs
accurately. They hold, however, that there is likelihood of increased
utilization through technical developments and argue that under
favorable price conditions we could play a larger part in supplying
world markets. They estimate that the total annual drain perhaps 50
years from now may well be figured conservatively at 21,400,000,000
cubic feet- including a margin of 5,800,000,000 cubic feet for new
uses, exports, a safety factor, and losses by fire, insects, and disease.
A substantial advance in forestry would be required to achieve and
sustain such a yield. They suggest that 100,000,000 acres (yielding
8,400,000,000 cubic feet) would have to be under intensive manage-
ment; 311,700,000 acres (yielding 13,000,000,000 cubic feet) under
extensive management, including adequate fire protection; and
50,000,000 acres (economically unavailable for commercial use) pro-
tected without special management. The growing stock in the East
would have to be built up to twice the present available stand.
Such a plan would envisage the building up of many forest activities
and industries that would serve as the foundation for self-sustaining
40 Yearbook of Agriculture, 1940
Practical steps required would be:
For private forests: (1) Public cooperation including protection
against fire, insects, and diseases; forest and forest-products research,
which few private owners can afford; forestry extension work, includ-
ing demonstrations of good management; extension work in marketing
and utilizing forest products; benefit payments to farmers under a
conservation program; Federal aid for forest planting; development
of cooperatives; large-volume credits where needed; forest fire insur-
ance; some improvements in taxation procedure. (2) Public regula-
tion to the extent of enforcing minimum requirements for keeping
private lands fairly productive and stopping destruction of forests.
(3) Public acquisition "where private forestry will not pay, or where
private owners cannot or will not function in the conservation of the
For public forests: "All public lands now held or hereafter acquired
should be made outstanding examples of good management and
Farm-Management Problems in an Era of Change
After briefly summarizing the main causes of the present situation
in agriculture, Johnson considers the possible adjustments a farmer
might make to meet his problems. The most difficult, and in a depres-
sion period the most common situation is that of the farmer who has
to make readjustments not merely to increase his income but to meet
pressing obligations and stay in business at all. By ordinary standards
his costs of production include: (1) Fixed costs-(a) rent, (b) interest
on investment, (c) obsolescence and depreciation, (d) insurance,
(e) taxes, (f) wages for himself and family; (2) variable costs-
(a) current supplies, (b) hired labor, (c) repairs and replacements.
Studies show that when farm prices do not meet these costs of produc-
tion, the farmer has to neglect his fixed costs. He compromises with
landlord and creditor on rent and interest payments, postpones depre-
ciation replacements, drops insurance, lets taxes go delinquent, and
takes a minimum living as his only wage. He thus gets down to vari-
able costs as his only expense. But in the end, if the tight situation
continues, some of the neglected or postponed fixed costs catch up
with him. He cannot, for instance, indefinitely fail to maintain his
land, buildings, and equipment, or to meet rent or mortgage payments.
Some of the steps the individual is forced to take under these cir-
cumstances are contrary to the long-time interests of agriculture and
a menace to the Nation. This is the main reason why public assistance
to individuals is justified. Two major factors in which the public has
sufficient interest to assist individuals are soil conservation and tech-
nological change. Technical progress is socially desirable, but in the
transition period it may create great individual hardship through dis-
placement of labor and lowering of prices.
Farm management problems differ region by region, and Johnson
dicussses them from this standpoint.
(1) North Atlantic region. As a whole, the region shows consider-
able stability in farm prices and income owing to large nearby markets
and a favorable climate. Many farm groups face severe competition
from other areas; some have been forced to exist on a self-sufficing
Farmers in a Changing World-A Summary 41
basis. Production is now mostly specialized-dairy products, poultry,
fruits, vegetables. Increased production of hay and pasture should
reduce feed costs of dairymen, but they may have greater competition
from the Lake States. Poultry production is likely to face higher
feed costs; it will need to keep up to date with technical developments
and adopt the most efficient practices. Vegetable growers will prob-
ably meet increased competition from frozen products; they will
have to adapt their production closely to local market needs, and in-
creased mechanization may be necessary. Conditions in the apple
industry have been changing rapidly, and some orchardmen may
find it necessary to add other enterprises. Forestry possibilities
should be studied in this region.
(2) Lake States. A large part of farm returns come from manu-
factured dairy products. There are few alternatives, and local mar-
kets are not enough to stabilize income. Heavier expenditures for
fertilizer will probably be necessary in many areas. Greatest threat
is increased competition from other regions. Expenses may be
reduced by using more high-quality roughage, less concentrates.
More production for home use is highly desirable. Forestry possibil-
ities should be explored.
(3) Corn Belt. Production consists mainly of corn, hogs, and beef
cattle, and is highly commercialized, requiring a large investment.
Land values are high. Heavy fixed costs make farming especially
vulnerable in depressions. Many farms are now in the hands of
former creditors and are run by tenants who deal with local representa-
tives of absentee owners. Since much of the land is held for resale,
long-time adjustments are often difficult. Major influences are
technological-hybrid seed corn, rubber-tired tractors, new-type corn
pickers-and their effects cannot be entirely foreseen, but there is
need for measures to prevent undue hardship for those who cannot
readily meet the demands of change.
(4) The South. Cotton dominates the farm situation. The out-
standing problem is the low average farm income ($162 gross a person
a year, 1924-37, as comparedwith $381 in the rest of the United States).
Because of the high proportion of land in cotton and in corn for mule
feed, soil erosion has become increasingly serious. Adjustments are
difficult because of the small size of farms (30 acres per farm in the
eastern cotton States in 1934) and the extreme pressure for cash in-
come. Greater production for home use is a major need. Labor dis-
placement is encouraged by increased mechanization and by reducing
tilled crops for soil conservation. The ultimate solution probably
lies in employment outside agriculture for large numbers of people,
perhaps in combination with part-time farming. Forestry possi-
bilities should be thoroughly explored.
(5) Great Plains. The main problem comes from combined drought
and depression. The areas of higher risk should probably be shifted
back to grazing, under public control. In the better areas, long-time
rotations with perennial grasses (wheat-and-grass farming) may be
necessary to maintain organic matter in the soil. The problem of
feed supplies for livestock in dry years would then have to be met.
Crop insurance should help to stabilize income from wheat and might
be used for feed crops. Supplemental irrigation is a useful measure.
42 Yearbook of Agriculture, 1940
Public assistance is especially necessary in this region because natural
forces are so powerful.
(6) Mountain and Pacific regions. Drought and depression have
also been important in the Mountain States. An effective conserva-
tion program to maintain grass is essential in the ranching areas, and
this will necessarily mean less intensive use. Hard-pressed ranchers
can probably not make the required adjustments without public
assistance at times. High water costs in relation to prices of products
are the big problem on irrigation projects-especially with increased
competition from other areas for fruit and vegetable growers. More
production for home use is desirable.
For agriculture as a whole, the greatest need is for information on
the prospects for industrial recovery. If employment opportunities
outside of agriculture are to remain closed for the next decade, agri-
culture will be overcrowded and major attention will have to be given
to improving efficiency and increasing incomes on small farms.
Greater self-sufficiency and more nonfarm employment seem to offer
the best possibilities for those who are at a disadvantage in commercial
farming. Shifts in production to raise national dietary standards
might be an important factor in increasing labor needs on farms and
reducing some surpluses. In any case, there will be need for public
action to assist individual adjustments.
The Influence of Technical Progress on Agricultural Production
Everyone knows that scientific and technical progress has revolu-
tionized farming, but there has been no very comprehensive survey of
its effects in practical terms. A special committee of the Department
of Agriculture made a rather thorough study of this subject, and the
findings are summarized by Kifer, Hurt, and Thornbrough.
The results of technical development are most strikingly shown in
two facts. In 1870, half of all workers were engaged in agriculture;
in 1930, a fifth of all workers. At the same time, this lower percentage
of farmers produced almost a fourth more agricultural products per
capital of the total population. Yet known techniques and practices
are not even now fully used. Agriculture has not completely adjusted
itself to such a drastic change, and further adjustments will be neces-
sary in the future as technical progress continues.
Technical advances have been made on four main fronts: (1) Farm
power, (2) farm equipment, (3) production practices for crops, (4)
production practices for animals.
(1) It has been estimated that in 1935 tractors and trucks did work
that would have required the labor of 345,000 persons on farms.
More than 11,000,000 work animals were replaced by this form of
power between 1915 and 1939. About 1,600,000 tractors are now
being used in the United States-double the number reported in
1930-and it seems likely that the trend to less man-and-horse labor
will continue. Present trends are toward increased use of general pur-
pose tractors, small tractors for small farms, and rubber-tired tractors.
Mechanization has been most complete in the small-grain areas and
the Corn Belt, and on such specialized farms as those for dairy, truck,
and orchard products. It has lagged in the South and East.
Small tractors will undoubtedly speed the mechanization of small
Farmers in a Changing World-A Summary 43
farms. Rubber tires reduce tractor-operating costs and may make it
possible in some areas to dispense with motortrucks.
(2) In tillage and seeding equipment the trend has been toward
lighter machines for light tractors, machines especially adapted for
erosion control, and the combining of tillage, fertilizer distribution,
and seeding in one operation. Great strides have been made in har-
vesting machinery, which reduces the need for seasonal hired labor.
Combines for small grain (110,000 in use in 1939) and mechanical
pickers for corn are especially notable. Neither the cotton picker
nor the sugar-beet harvester can compete as yet with hand labor at
current wage rates.
(3) Perhaps even more significant than mechanical developments
are those in crop-production technique. In 7 years hybrid corn has
replaced open-pollinated varieties on most Corn Belt acreage and on
about one-fourth of the national acreage. In 1938 the use of hybrid
corn increased production 100,000,000 bushels over what it would have
been with older varieties. Hybrid corn increases the advantage of the
better areas and is well adapted to mechanical picking. Other notable
products of plant breeding are rust-resistant Thatcher wheat, early-
maturing grain sorghums to reduce drought risks, new flax varieties
that may increase production in the South, superior varieties of sugar
beets, soybean varieties that have permitted a rapid expansion in
acreage, longer-staple cotton varieties. In fertilizers, important
recent developments include more concentrated materials and the cor-
rection of soil deficiencies in so-called minor elements; this has con-
quered some plant diseases formerly not understood. The full effect
of more widespread conservation practices on production will probably
not be evident for another decade, but the use of cover or green-manure
crops and the concentration of production on the better land both
tend to increase yields rather quickly.
(4) "Important current developments in the field of livestock pro-
duction are progeny testing, artificial insemination, correction of
nutritional deficiencies, and disease control." Through progeny
testing-used in practice only with dairy cows and poultry so far-
high-producing ability gradually becomes more widespread. Cross-
breeding to take advantage of hybrid vigor is used with some Gulf
coast beef cattle and some range sheep, is still experimental with
swine. Artificial insemination may speed up the rate at which high-
producing ability can be spread; 17 breeding associations are now using
it with dairy animals. In animal feeding, recent developments are
largely concerned with the correction of mineral and vitamin defi-
ciencies and shifts in forage production that point toward a possible
increase in livestock numbers in the South. Death losses in livestock
should decrease and productive efficiency should increase with wider
use of measures to control diseases and parasites.
In general, technical improvements will tend to raise the volume
of farm products for sale, except as low prices and farm programs
offset the tendency. The addition of 500,000 tractors on farms would
release for cash crops (especially soybeans in the Corn Belt) much
land still used for feed for horses. Further use of green-manuring
crops could readily increase corn and cotton yields in the South. Corn
production in the Corn Belt could be further increased by 100,000,000
44 Yearbook of Agriculture, 1940
bushels a year by the use of hybrid seed. New areas for small-grain
production will probably be opened up by plant breeding. On the
whole, the primary influence of increased crop production and better
animal husbandry would probably be to increase production of live-
stock in all areas without materially changing present regional advan-
tages. In the South a considerable increase in livestock (31 percent
for milk cows, 136 for other cattle, 31 for hogs, 54 for chickens) would
be required merely to raise local dietary standards to a desirable level.
Outside the South, present trends might increase livestock products for
market by 5 percent.
The trend toward reduction in the need for workers in agriculture
"seems likely to continue for the next decade at approximately the
rate [of] the past 10 years." This would mean displacement of 350,000
to 400,000 workers. Offsetting factors might be lower wage rates,
increased production requiring more workers, or more subsistence
farming. The displacement of workers is likely to be most serious in
More mechanization and other developments may increase the total
investment required in commercial farming. If the small tractor
proves economical, the pressure toward larger farms may be lessened
and the small farmer would have a better chance to survive. Some
changes in farm organization and perhaps in regional specialization
may result from current technical trends. One important result of
mechanization is an increase in the importance of cash operating costs
in the farmer's budget. The tractor farmer has to buy gasoline no
matter how hard up he is, whereas he could feed a horse with no imme-
diate cash expense.
On the whole, according to present trends, it will become more
difficult for those at low income levels to acquire or even rent farms,
but the number wanting to get farms will increase as farm labor is
thrown out of work. Of the four possibilities open to displaced tenants
and sharecroppers (subsistence farming, part-time farming, wage
labor, or relief) the one likely to develop furthest is subsistence farming.
In other words, as part of agriculture becomes more dependent on
national economic conditions, another part is likely to draw farther
away from dependence on other economic groups.
The Place of Forests in the Farm Economy
Commercial farming, Kirkland points out, drove woodlands out of
the important place they once occupied when the farm furnished
a well-rounded subsistence for the family. It is time they came back.
Many farms have some woodland. Some farms are 60 percent wood-
land. And there are probably more than 150,000,000 acres of non-
farm forests within easy reach of farmers. These farm and nonfarm
forest lands can provide products for home use and for sale, and they
can provide work. Why, for instance, should a farmer get needed
building materials from 2,000 miles away when he could get them at
Most farm woodlands have been so badly managed that they produce
less than a third or a half of what they could produce. Yet they supply
a fourth of the sawlogs in the United States, and forest crops rank
tenth among all farm crops in value. In many cases, forest products
Farmers in a Changing World-A Summary 45
need not be shipped out of the community-which puts them in an
advantageous position in periods of economic maladjustment. Used
at home as fuel, building material, fence posts, poles, and for other
purposes, these products have a natural "parity value." With little
annual labor forest crops keep on adding to their value at a compound
interest rate of 2 to 5 percent; no form of production is carried on
so largely by nature unaided. Trees in addition conserve the soil.
A major need, if farm woodlands are to be sufficiently improved to
realize their full value, is for "personal contacts of some local forest
organization with every owner desiring help." Preferably, the
forestry man should actually go into the woods and mark the cuttings,
as is done in Sweden and Finland.
Actual "forest farms" are new in the United States, but there seems
to be an opportunity for them in some forest areas. They have
already developed in the naval stores region. On a forest farm,
forest products are the primary source of income. The farm should
consist of 500 acres or more, of which about 100 acres would be cut
annually to remove the equivalent of 5 years' growth. This proce-
dure would assure annual yield. From 5 to 20 percent of the more
fertile land should be used for pasture, grain, hay, vegetables, and
fruits to make the farm self-sustaining. The woodland part of the
farm would require about 1 day's work an acre a year, including all
cultural operations, harvesting, and hauling; and as much of this
work as possible should be done by the owner.
Many farms have little or no woodland yet need forest products.
Many farmers also need part-time employment, especially in the
winter, and this could be furnished by local nonfarm forests. Whether
privately or publicly owned, these forests should be organized to give
maximum benefits to the community.
County planning committees as well as other agencies, Federal,
State, and local, are now working on this problem and others connected
with the forests. This is a new development that has grown out of
a decade of depression. In the Chippewa National Forest in Minne-
sota, forest work is allotted to the nearby agricultural communities in
such a way as to bring the community income up to reasonable
standards. There are vast opportunities for such coordination in the
Cooperative organizations can play an important part in this devel-
opment, as elsewhere in agriculture, by purchasing and operating up-
to-date woodworking equipment, grading and otherwise improving
the forest products, marketing them locally or elsewhere, and manag-
ing the forests. Such a cooperative need not necessarily own forest
land itself; it could devise a contract that would be fair to all owners.
Several agencies in the Department of Agriculture-the Forest
Service, the Bureau of Plant Industry, the Bureau of Entomology and
Plant Quarantine, the Extension Service, the Agricultural Adjust-
ment Administration, the Soil Conservation Service, the Farm
Security Administration, the Bureau of Agricultural Economics-are
now carrying on farm-forestry work, and provisions have been made
for coordinating forestry programs and integrating them with those of
46 Yearbook of Agriculture, 1940
Acreage Allotments, Marketing Quotas, and Commodity Loans as Means
of Agricultural Adjustment
Hutson points out that there are two ways of adjusting agricultural
supplies to market demands: (1) Permit unlimited production but
limit the amount marketed; (2) limit the amount produced. Following
experiments with the first method in the 1920's (the Federal Farm
Board in the United States; rubber, coffee, sugar abroad), American
farmers resorted to the second method in the 1930's. Fundamentally,
agricultural adjustment today depends on acreage regulation. Mar-
keting adjustments are supplementary.
Under the Agricultural Conservation program acreage allotments
have been determined for cotton, corn, wheat, rice, tobacco, potatoes,
peanuts, and for all other soil-depleting crops as a group. Several
steps are involved: (1) Determine the acreage for the Nation as a
whole, allowing for an excess above normal supplies. (2) Break
this down into separate acreage allotments for the States. (3) Break
it down further for the counties. (4) Determine the allotments for
the individual farms within the counties. Formulas are provided
for these steps, including such factors as past production, type of
farming, kind of land. The judgment of farmer committees plays a
large part locally. The use of allotments is voluntary, depending
on the vote of producers, and in fact the method does not control
acreage adequately unless at least 75 percent of the producers par-
ticipate. Payments are made to those who do comply with the
allotments. If appropriations have been made, parity payments
also are provided for producers of five commodities-corn, wheat,
cotton, rice, tobacco.
Marketing quotas to supplement acreage allotments are permitted
for cotton, tobacco, wheat, corn, and rice, though they have never
been used for wheat or corn. They are easiest to apply with com-
modities that go through definite channels (cotton gins, tobacco
markets) where the marketing can be checked, but would be difficult
with products that can be fed to animals on the farm. A marketing
quota is essentially an emergency device, to be used when excessive
supplies accumulate (cotton 107 percent of normal, wheat 135, corn
and rice 110, tobacco 105), and then only if two-thirds of the producers
vote for it. Formulas are provided for allocating quotas to producers,
and there are penalties for marketing more than the amount fixed.
In practice, then, the method has served primarily to prevent pro-
ducers who do not comply with acreage allotments from throwing on
the market more than their fair share of the total production.
Commodity loans are intended to provide reserves of major food
and feed crops yet maintain fair prices. Loans are permitted on any
agricultural commodity, but specific provisions have been made only
for cotton, corn, and wheat. In each of these cases, loans can be
made only in years when the price of the commodity goes below a
certain percentage of the parity price (52 percent of parity for wheat
and cotton, 75 percent for corn), or when the crop exceeds normal
domestic and export requirements for the year. Those who have
cooperated in the agricultural conservation program get a loan at the
rate of 52-75 percent of parity price, depending on conditions; when
Farmers in a Changing World-A Summary 47
marketing quotas are in effect, loans are made available to non-
cooperators at 60 percent of the rate applicable to cooperators. To
prevent the piling up of excessive supplies with possible heavy losses
on the loans, provision must be made to bring production in line with
needs the following season or to move the current excess into relief or
byproduct channels. In the case of corn, this means that production
of substitute feed grains also must be kept in line with trade needs.
In the case of export crops, if the loan rate is above the export price,
exports will be reduced unless steps are taken to make the crops
available on the world markets at prices below the loan rates.
The Meaning of Foreign Trade for Agriculture
The key problem of American agriculture, Chew argues, is foreign
trade. If we could regain our foreign market, agriculture could readily
dispose of its surplus and would need to make only minor changes.
If we cannot, we shall be compelled either to retire a large acreage
permanently from production or to expand the domestic market to
compensate for the loss. Any of these adjustments would be
essentially a response to the foreign-trade situation.
But Chew holds that in the modern world there is no permanent
solution in trying to make the Nation prosperous through a favorable
balance of trade, such as we have had in the past; or in trying to with-
draw from the world and become self-contained; or in excessively
curtailing production, controlling prices, and subsidizing producers.
The only permanent solution is to expand the domestic market enough
to absorb much more of our own production and simultaneously to
facilitate the consumption of more products from abroad. Two things
are involved: (1) An efficient distribution of purchasing power, which
will expand the domestic market; (2) a rather large but even exchange
of imports for exports without a favorable balance on either side.
Suppose, to take an imaginary example, that you produce a billion
dollars' worth of products more than you can consume at home. You
can dispose of that billion-dollar surplus by sending it abroad. But
if you take imports in exchange you still have a billion dollars' worth
of goods to consume-the same amount of surplus, but in a different
form. The only way to get rid of that surplus without consuming it is
to have it go abroad without an equivalent amount coming back.
This is what a favorable balance of trade means, and it is what all
surplus nations have struggled to achieve. But they can achieve it
only temporarily. Unless they give away their goods, an equivalent
must some day come back. Then there is the same old surplus to
Take an extremely oversimplified example. An industrially devel-
oped nation sends its surplus abroad in exchange for agricultural
products-not an equivalent amount or it would still have a surplus
in another form. As long as this continues, it can produce more than
it consumes. But meanwhile its industry keeps on expanding. Hence
it needs a still larger favorable balance of exports. Then it sends
capital as well as goods abroad. The capital is used to build up industry
in the agricultural countries. Thus in time these countries become
competitors of the very nation they traded with. As more and more
countries become industrialized there is an inevitable return flow of
48 Yearbook of Agriculture, 1940
goods to the creditor countries, and also fewer and fewer true agri-
cultural areas are left that can freely take factory goods in exchange for
farm products. This forces the industrial nations back upon them-
selves for a food supply, or drives them toward colonial expansion.
The result is a desperate struggle among the industrial nations to
control the remaining industrally deficit areas of the world, either by
outright seizure or as spheres of influence.
Nations faced with a surplus that cannot be exported commonly
try to control it by restricting production. But this throws people out
of work; it merely changes a surplus of goods into a surplus of labor.
Is there, then, no real way out of the difficulty? Chew argues that
Essentially, the impasse is due to the tendency of modern production
to outrun consumption. The obvious remedy, then, is to make
consumption keep up with production.
The possibility is real; people need the goods produced. The
problem is one of mechanics-how to make the distribution of purchas-
ing power as efficient for consumption as modern industry is for pro-
duction. Once this is done, the surplus, or the equivalent in suitable
imports, will be absorbed. There will no longer be any need to struggle
hopelessly for a favorable balance of exports over imports. This does
not call for self-sufficiency, which would create more unnecessary
artificial restrictions. Absorbing our own production completely
would mean producing less of certain things that we can produce effi-
ciently, and more of certain things that we cannot produce efficiently.
Reciprocal foreign trade obviates this loss of comparative advantage.
Foreign trade is good, but it must not be one-sided. Suppose, for
example, that after making adjustments in agriculture to give
everyone an excellent diet, we still had more wheat than we could
consume. It would be sensible to export the surplus and consume the
equivalent in imported products. These ought to be mostly indus-
trial products, because the consumption of industrial products can
be expanded more easily than the consumption of food.
Fundamentally, the picture Chew gives is one of peaceful inter-
national trade based on shifting comparative advantages. He argues
that this is not only entirely practical but the only ultimate way out
of the modern dilemma. He points out that the United States was
never so prosperous as when its total imports as well as its exports
were at a high level. The day of the favorable trade balance is
gone; or rather, this method can now be maintained only by utter
force. The alternative is efficient purchasing poiver and high con-
sumption per capital in every surplus country, combined with a
balanced foreign trade.
Reciprocal Trade Agreements-A New Method of Tariff Making
Wheeler confines his discussion to only one aspect of the trade-
agreements program-its potential usefulness as a method of tariff
making. He argues that from the standpoint of agriculture, it has
certain advantages over the older method of making tariffs. Until
the tariff acts of 1922 and 1930, he points out, tariffs in the United
States were largely for the benefit of industry, but they affect farmers
in three ways.
Farmers in a Changing World-A Surimary 49
(1) They restrict imports and thus reduce the amount of exchange
with which foreigners can buy our agricultural products. Before the
World War this did not greatly matter. We were a debtor country,
and foreign nations had plenty of credit here in the form of interest
paid on the loans they had made to us. Since the war, the tariff has
been a greater handicap to producers of export farm products. The
war made us a creditor country, and foreigners had no exchange for
agricultural purchases except exports to us. This situation did not
become evident, however, until we quit lending money abroad.
(2) By restricting imports the tariff tends to raise the prices of
manufactured goods needed by farmers. Before the war this mat-
tered more than at present since fewer of our industries were then able
to produce as cheaply as those abroad.
(3) By restricting agricultural imports, the tariff raises prices for
farmers in the United States. This mattered very little before the
war, since agriculture was primarily on an export basis, and the
world price necessarily set the price in the United States. Since the
war there have still been relatively few farm products that could be
benefited by a tariff, but the list is longer than it was formerly.
Complete free trade is academic. The choice is between different
degrees of protection and different methods of making adjustments.
The need is for (1) duties based on as unbiased and scientific an
appraisal as possible, from the standpoint of national needs, and (2)
flexibility and adaptability, so that the United States may be able to
cope with the absolute control exercised in foreign countries.
The older method of tariff making provided neither. The tariff
was revised about every 10 years, and rates were set on particular
products by a cumbersome process of compromises, usually weighted
on the side of protected industries rather than of consumers and
exporters. When revisions were made, they were usually upward
rather than downward.
By comparison, Wheeler argues, the trade-agreements method is
far more sensitive to actual needs. Public hearings on a proposed
trade agreement are held, and information is gathered, by an inter-
departmental committee. Another interdepartmental committee
carefully reviews all the information from the hearings and elsewhere
and makes recommendations. A third interdepartmental committee
goes over these recommendations in detail. Agriculture is repre-
sented on all three committees. Only after these steps are negotia-
tions started with the country involved in the proposed agreement.
All questions arising during the negotiations are sent back to the
By this method, each individual product can be carefully considered.
Some classes of a product can be treated differently from others.
Duties on a product can be reduced during only the part of the year
when there is little or no domestic production, or reductions may be
made only on specific, limited quantities during a year or part of a
year. The interests of export industries can be taken fully into
account on the basis of a specific exchange of advantages between the
United States and the other country. Finally, there can be quick
and effective action, which increases the bargaining power of the
United States in meeting the actions of other countries.
50 Yearbook of Agriculture, 1940
Methods of Increasing Agricultural Exports
Boyd says that confining our agriculture entirely to the domestic
market, even if domestic purchasing power were considerably in-
creased, would mean not only a great loss in national income but
"untold human suffering." Our chief surpluses are still largely sur-
pluses of export products, and if our agriculture is to remain on its
traditional base some way must be found to improve foreign trade.
But there is a "very small number of alternative measures for in-
creasing exports." They may be placed in two groups: (1) Measures
for increasing foreign purchasing power for our products. This
necessarily means taking more goods or services from foreign countries.
Even if we again become a net exporter of capital, we shall have to
accept more imports. A reversal of the flow of gold into this country
would do much to improve world trade generally. But the best
permanent plan for increasing foreign purchasing power is through
the lowering of the barriers that now interfere with normal inter-
national trade. (2) Measures for making more effective use of existing
foreign purchasing power. Several such measures have been pro-
posed or tried at various times.
(1) Carefully studying foreign needs and demands and meeting
them by more efficient production and distribution-a method that
has permanent value.
(2) Eliminating internal restrictions on the free play of world
conditions on prices and maintaining satisfactory fiscal arrange-
ments. This method also has permanent value.
(3) Barter may be effective for a short period, to meet an emer-
gency, or to secure certain necessary imports; but a general policy of
barter requires highly centralized control over all foreign trade, and
as a method of increasing exports it ultimately involves financial
losses by the Government or the producers of the exported products
or the consumers of the imported products.
(4) Devaluation of currency to lower the value of export products.
The usefulness of this method is soon offset by devaluation of foreign
currency or higher domestic prices for the products exported.
(5) Lowering the value of export products by various kinds of
subsidies to producers or exporters of these products. Such devices
must be used with great caution, since they involve retaliation by
other governments if they are carried too far and require adequate
measures for production control to avoid unmanageable surpluses.
It must be remembered that the market for a given product does
have definite limits regardless of the price at which it is offered.
(6) Permitting prices of export products to find their own com-
petitive level, but supporting domestic prices at a higher level. This,
too, must be accompanied by production control and should be used
with caution to avoid interfering with the free play of world conditions.
In effect, then, Boyd says that various familiar schemes for the arti-
ficial stimulation of exports should be considered as only temporary;
and it should be recognized that, unwisely used, they may accomplish
the reverse of what is expected of them. From the long-time stand-
point, a healthy foreign trade can be maintained only by permitting
international competition to have free play in setting world price
Farmers in a Changing World-A Summary 51
levels, lowering trade barriers, eliminating internal restrictions, care-
fully studying foreign needs, and above all, being willing to accept im-
ports in exchange for exports.
The Industrial Market for Farm Products
Industry, as Van Arsdel points out, has long made extensive use of
farm products-cotton, cereal grains, packing-house byproducts, soy-
beans, wood. Some of these products, however, meet intense compe-
tition from synthetic or other raw materials, especially under the drive
of modern industrial research, which is entirely impersonal and merely
seeks the cheapest and best sources. The only way for farmers to
hold or expand the market is to engage in intensified research them-
selves. Since they are neither organized nor financed like great indus-
trial corporations, they have to call on Government to do most of the
job. The Department of Agriculture has in fact conducted this kind
of research for many years, with useful results. Recently the work
has been expanded, and a comprehensive research program has just
started, centered.in four regional laboratories at Peoria, New Orleans,
Philadelphia, and San Francisco.
Of the many classes of products for which raw materials could be
supplied by the farm, six are dealt with by Van Arsdel-rayon, casein
and soybean protein products, plastics, motor fuels, starches, vegetable
oils. He gives a brief summary of the situation for each class, based
on a survey made in 1939.
(1) Rayon. World production of 2,000,000,000 pounds (1938) has
cut into the markets for cotton, wool, silk. Total production has
about doubled every 3 years since 1920, with Japan and Germany
forging ahead of the United States since 1936 and in 1938 producing
half the world supply. About 9 percent of the textile fibers used in
this country are rayon; 9 percent are wool, 2 percent silk, and 80 per-
cent cotton (compared with 86 percent when the use of rayon was just
beginning). There are three types of rayon-one made of wood pulp,
two made of cotton linters; about 75 percent of United States rayon
production is the wood-pulp type, 25 percent the cotton-linters types.
Wood-pulp rayon has had the advantage in the low cost and high urn-
formity of the raw material. Manufacturers of the cotton-linters
types would like to use wood pulp but have not yet solved certain
chemical difficulties. The proportion of cotton-linters rayon has been
increasing rapidly in this country in recent years and will probably
continue to increase. Total rayon production will also increase, but
probably at a slower rate than in the past. Future developments are
likely to depend on research.
(2) Casein and soybean proteins. About 20,000-30,000 tons of
casein, requiring over 1,000,000,000 pounds of skim milk (1 percent of
!total milk production), is now used for glue, cold-water paints, paper
coatings, molded articles (chiefly buttons). Transparent wrappings
were made of casein some years ago, and with improvements might be
able to compete with cellulose materials for this purpose. A synthetic
textile fiber, somewhat like wool, has been made of casein, but its pos-
sibilities are not yet known. Of the United States production of soy-
bean meal, 95 percent goes for stock feed and fertilizer; less than 5
52 Yearbook of Agriculture, 1940
percent is used for plywood adhesives (largest industrial use), water-
resistant coatings, sizes, plastics, cold-water paints, leather finishing.
Some of these uses are new; none takes more than a very small percent-
age of the raw material available. Possibilities for expansion depend
on further research and are unpredictable.
(3) Plastics. There has been a remarkable growth in the use of
plastics in the past 20 years. Cheap methods for making large objects
would open up new fields. Most of the raw material is synthetic
(from coal, petroleum, limestone, sulfur, salt), but skim milk, oat hulls,
vegetable oils, and soybean meal furnish a small percentage, and wood
fiber and cotton are used in very large amounts. Synthetic products
have certain natural advantages, but research might turn the tables
in favor of agricultural raw materials.
(4) Motorfuels. Our present petroleum reserves of 17,000,000,000
barrels would be exhausted in 15 years at the present rate of use, but
meanwhile rising prices would undoubtedly force other developments,
such as the use of oil distilled from shale rock (108,000,000,000 barrels
potentially available) and of synthetic fuels from refinery gas, coal
gas, water gas, coke-oven gas, and similar abundant sources. Ethyl
alcohol is the only fuel of agricultural origin to be used extensively,
but others could probably be produced. Blends of ethyl alcohol and
gasoline are quite feasible for automobile use. If a blend containing
10 percent of alcohol were universally used in this country, and the
alcohol were made from cereal grains, it might require 25,000,000
additional acres in these grains to produce the necessary 2,000,000,000
gallons of alcohol a year. Wood waste, sugarcane bagasse, corncobs,
cornstalks, cotton stalks, and cereal straws could all be converted
to alcohol. From the supplies of such waste material available for
industrial use (135,000,000 tons a year) a maximum of 4,000,000,000
gallons of alcohol could be produced. The great difficulty with alcohol
for motor fuel is the cost. At present costs a gasoline-alcohol blend
would have to sell for 1 to 2 cents per gallon more than straight gaso-
line of equal antiknock rating. Nevertheless, research may enable
farm crops to furnish part of the huge market for concentrated fuels.
(5) Starches. Less than 1 percent of the starch available from
corn is now recovered as cornstarch for use in the laundry, rayon,
and leather industries and for making sizing, explosives, adhesives,
and coloring materials. The potato-starch industry is small and
irregular, depending on culls; there is a specialized market in the sizing
of paper and textiles. Sweetpotato starch is produced commercially
at an experimental cooperative plant in Mississippi; its uses are for
sizing textiles, making high-grade dextrin for adhesives, and blending
in various food products. A gradual growth may be expected in the
traditional uses of starch, but not enough to have a marked effect on
crop production. Tremendous quantities of starch are available at
comparatively low prices, and an increase of several times the amount
now used would not require any expansion in crop acreage. Replace-
ment of the entire quantity of imported starches by sweetpotato
starch would require only 200,000 acres.
(6) Vegetable oils. About a third of our consumption of fats and
oils is industrial-18 percent in soaps and other detergents, 7 percent
in drying oils, 8 percent in miscellaneous uses. Inedible tallow,
Farmers in a Changing World-A Summary 53
coconut oil, grease, whale oil go mostly into soaps; linseed, tung, and
perilla oils into paint, varnish, linoleum, oilcloth, printing inks.
Lines are not sharp, and there is considerable interchange and shift-
ing, depending in part on price levels. Linseed, which used to supply
95 percent of drying oils, now supplies only 60-65 percent; tung,
soybean, and perilla oils have replaced it through the development,
for example, of fast-drying and waterproof varnishes and enamels.
A new competitor in this field is castor oil. The market for drying
oils will probably continue to be highly competitive. In the manu-
facture of soaps and other detergents, animal fats and coconut oil
are the preferred materials. Here also competition is very intense.
Besides drying oils and soaps, other industrial uses for oils account for
several million pounds a year. Each field is highly specialized, and
in several fields intensive research is under way. New uses for oils
are likely to be developed.
Reducing the Costs of Food Distribution
Everyone knows that the cost of distributing foods is high. In
1938 the farmer got 40 cents of every dollar the consumer spent for
food; the other 60 cents went to processors and distributors. More-
over, this cost has been increasing. In the 1913-17 period, farmers
got 55 cents of the consumer's dollar and distributors only 45 cents.
How can this great spread be reduced to give farmers a larger share
of the retail price?
There can be no material reduction, as many people think, by reduc-
ing the distributor's profits. Hoffman and Waugh present figures
which indicate that "for most food products probably not over 5
percent of the retail selling price is represented by the combined
earnings to capital at all stages in the marketing process." Again,
there is no evidence that distribution is becoming less efficient-rather
the contrary. Distribution costs might be reduced considerably by
decreasing the numerous marketing services consumers now receive,
but on the other hand these services presumably add to consumer
satisfaction. It can be argued that sizable reductions in distribution
costs might be made by reducing the wage rates paid by distributors;
studies show that most of the increase in costs since 1913-17 is ac-
counted for by the fact that hourly wage rates have more than doubled
since that time. But a heavy cut in wage rates would affect the
farmer adversely by reducing the purchasing power of large groups of con-
sumers; and it would be difficult to justify from the standpoint of the
general public interest, of which agricultural interests are only a part.
Thus there is little reason to believe that food distribution costs
can be greatly reduced within the framework of the present marketing
system. This is not to say, however, that even small reductions are
not worth while, because they are. Farmers' marketing cooperatives,
for example, save money for many farmers though these savings
represent only a small part of the total costs of food distribution.
Reorganization of terminal and wholesale markets can mean real
savings, especially in the case of fresh fruits and vegetables. Savings
at the retail end of marketing are particularly important, since the
retailer commonly gets from 20 to 35 cents of the consumer's food
dollar. In this field the development of chain stores, chains of
54 Yearbook of Agriculture, 1940
independents, supermarkets, and milk depots is especially significant.
Labor is the largest item in distribution costs, but there is an
alternative to reducing wage rates-namely, to reduce the amount of
labor used in food distribution as a whole; and not only the amount of
labor but the amount of equipment and of capital to which profits
must be paid. There can be no question that there is a very large
duplication of marketing facilities. Many plants are not by any
means used to capacity. The number of retail stores increased
between 1900 and 1935 considerably out of proportion to the increase
in population. But to reduce marketing facilities to those actually
needed to supply the demands of the public would mean drastic
changes in the present marketing system. Much labor would be
thrown out of work, as it is with most technical improvements, during
the period of transition. Freedom for anyone to go into the food
distribution business would be curtailed. Monopolies might be nec-
essary, and that would mean public regulation, as in the case of public
utilities. In other words, many factors would be involved besides
increased efficiency and reduced distribution costs alone. A thorough
reorganization of the marketing system will never come unless the
public thinks a fundamental change is absolutely necessary.
Marketing-Agreement Programs as a Means oJ Agricultural Adjustment
The acreage adjustment method used with major crops is not readily
adapted to a number of farm products, including fruits, vegetables,
nuts, and milk. But supplies of these products have increased greatly
in recent times. Holt and Rubel cite the case of fresh vegetables.
There were 500,000 acres in 1919, 1,000,000 in 1926, and about
1,750,000 a year since 1936 (twice as many pounds per person as 20
years ago). Glutted markets with some of the "specialty" crops
have not been infrequent; sometimes prices were so low that it did
not pay to harvest, and parts of crops were allowed to rot. The
experience of cooperatives showed that much might be accomplished
through orderly marketing, provided a large enough percentage of the
producers would act together. The present marketing-agreement
programs simply extend the cooperative marketing principle through-
out an industry or an area. This means, however, that producers
and handlers must assume certain responsibilities and give up certain
individual rights-a difficult achievement.
The marketing-agreement programs are carried out under laws
that permit wide variations in practical details to suit local conditions
and different commodities. A program is initiated only on the
demand of the industry and is put into effect only on a favorable vote
of two-thirds of the producers, after public hearings for all interests
affected. It combines voluntary and regulatory control to govern
the handling (and therefore the handlers) of the commodity. There
are three main types of control.
(1) The volume of shipments may be controlled (a) to the entire
market for the season; (b) by diverting supplies from one outlet to
another (for example, walnuts to other than the domestic unshelled
market); (c) by regulating the rate of flow to market in order to
smooth out temporary gluts and scarcities and make prices more
Farmers in a Changing World-A Summary 55
(2) Grades and sizes may be regulated, and certain of these may
be kept off the market for a given period.
(3) The shipper may be required to post his prices and not to
quote or sell at prices different from those in his schedule. This is
not the same as price fixing, since the shipper can post new prices
after a reasonable interval.
Regulations limiting the total volume shipped over the season have
been the most effective in improving grower prices and were used
widely in the earlier years of marketing-agreement programs when
consumer purchasing power was at low levels. Regulation of grades
and sizes predominates at the present time.
Holt and Rubel point out that the short-time interest of producers-
principally increased income-is the immediate objective of marketing-
agreement programs. During recent years, however, there has been
increasing emphasis on longer-time interests through such means as
expanding outlets, developing new uses, eliminating unfair practices,
and generally improving marketing institutions and processes. On
this basis, the marketing-agreement method may be applicable to a
wider field of marketing problems.
Thirty Million Customers for the Surplus
The 30,000,000 customers Perkins has in mind in writing about the
food-stamp plan are those who earn an average of $9 a family a week
and have great unsatisfied needs for food, clothing, household goods.
Two-thirds of them receive some form of public assistance. They
spend an average of $1 a week each for food-5 cents a meal. The
stamp plan is designed to increase their food purchases by 50 percent-
to $1.50 a week, 7, cents a meal. By the end of 1940, the plan should
accomplish this for about 5 million persons in over 200 communities.
Under the plan, all food supplies are distributed through com-
mercial trade channels. Families may buy orange-colored stamps in
the same approximate amount as they formerly spent for food in cash.
These are good at any grocery store for any food. With every
dollar's worth of orange stamps bought, 50 cents in blue stamps is
given free; these also are good at any grocery store, but only for
foods designated as surplus (mostly dairy and poultry products, fruits,
vegetables, meats). The grocer buys these foods from his regular sources.
The blue stamps are ultimately redeemed by the Federal Government.
The orange stamps are sold to make sure that those who use them
will continue to buy as much food as before. Surplus foods bought
with blue stamps, therefore, represent a net increase in the amount
eaten, thus assuring farmers of a broader market and undernourished
families of better diets. Studies show that where the stamps are
used consumption of surplus farm products goes up by large amounts.
The full economic effects upon farm income will not be realized until
there is a greater national coverage.
A second plan for getting surplus products used consists in giving
free, nourishing lunches to school children from low-income families.
Nine million children are in need of such supplementary feeding.
By the end of 1940 the program should reach six million. The
Federal Government contributes the surplus foods; other foods and
services are supplied by local agencies.
56 Yearbook of Agriculture, 1940
The recently started cotton-stamp plan works like that for foods,
with $1 worth of brown stamps given free to low-income families for
each $1 worth of green stamps they purchase. Stamps are exchange-
able for cotton goods at retail dry-goods stores. However, in the
case of retail sales of cotton goods, only a relatively small part of the
consumer's dollar gets back directly to the farmer; most of it goes to
employ labor in the manufacture and distribution of cotton goods.
The black plague of the twentieth century, says Perkins, is under-
consumption. We must wipe it out if democracy is to survive. The
place to begin is with the enormous numbers of people who can afford
far too little of what we produce.
Barriers to Internal Trade in Farm Products
By 1786 almost all the Northern States had levied import duties
against each other's products. Massachusetts prohibited the impor-
tation of some 58 articles from other States. One of the main reasons
for the Federal Constitution was to do away with this strangling of
interstate trade. The Constitution did in fact make the United
States one of the largest free-trade areas in the world, enabling in-
dustry to develop mass production for a national market and agri-
culture to produce wherever conditions were most favorable. Citrus
fruits, potatoes, hogs, wheat, cotton, cattle, for instance, all have
their special production areas, but their markets are Nation-wide.
After 1929 we began going back to a condition of economic warfare
between the States, largely because the loss of foreign trade and the
pinch of depression made farmers anxious to save the local market for
themselves and shut out everyone else. Burtis and Waugh give as
major examples of this economic warfare:
Regulation of motortrucks and merchant truckers. Out-of-State
trucks may be required to buy a State license tag or to pay higher
ton-mileage taxes than in-State trucks. Kentucky and Tennessee
will allow only the lightest trucks to use their roads, thereby inter-
posing a barrier between all States north and south of them. In
most cases of high merchant-trucking fees, farmers are exempted.
This favors the farmers close to the market. Farmers farther away,
who could not afford to haul their own produce the necessary distance,
are effectively discriminated against. Railroad freight rates, inci-
dentally, may be so constructed as to discriminate against producers
in certain regions.
Regulation of the marketing of dairy products. Milk inspection
laws are necessary safeguards of health. Some localities use them
to shut out producers from other areas by refusing to inspect farms
more than a certain distance away (in one case, as short a distance as
8 miles) or charging a prohibitive fee. At the same time, inspection
certificates from other municipalities and States are not accepted.
Margarine taxes. Since Utah started the ball rolling in 1929, half
the States have taken to taxing margarine from 5 to 15 cents a pound.
Studies indicate that these taxes-which have been upheld by the
Supreme Court as revenue measures-greatly reduce sales. Cotton-
seed oil is an important ingredient in margarine, and southern farmers
have threatened to retaliate by discriminating against products of
Farmers in a Changing World-A Summary 57
the butter-producing States. Margarine taxes can be an entering
wedge for similar action in the case of many other products that com-
pete with home-State products.
Regulation of the sale of alcoholic beverages. Special sales taxes
or inspection fees on wines, liquors, or raw materials produced outside
the State are used to favor producers within the State-grape growers,
Grading, labeling, and standardization measures. Nonuniform
specifications and requirements are perhaps the most serious hin-
drance to interstate trade among State grading and standardization
measures. For instance, Oregon required certain berry-box standards
for out-of-State shipments. California made these boxes illegal. In
some cases, only eggs produced within the State can be labeled "fresh."
Deliberate discrimination against out-of-State products is also to be
found in the labeling and grading requirements of some of the States.
Plant and animal quarantines. Like milk inspection, these quaran-
tines are vital protective measures, but they are also sometimes used
for purely economic reasons.
Such State barriers can be removed, say Burtis and Waugh, by
court action in some cases, by legislative and administrative action in
the others. In most instances the latter action will have to be taken
by the States, with the Federal Government cooperating to secure
uniformity. Several organizations of State officials are now concerned
over the problem. What is required most is a widespread and keen
appreciation of the advantages and the importance of keeping our
great national market open to all American producers.
Standardization and Inspection of Farm Products
When farmers produced mainly for home consumption and trading
was by personal contact, Kitchen says, there was little need for stand-
ardization and grading. But with the commercialization of agri-
culture, when buyer and seller might be a thousand miles apart and
trading had to be done sight unseen, a common language for trading
purposes became necessary. Standards and grades furnish this
common language. At first a multitude of local standards grew up;
in 1906 there were 133 grade titles for wheat, 63 for corn, 77 for oats,
53 for barley, 10 for rye. The confusion was disastrous to seller and
buyer alike. Finally, in 1907, the need for uniform Federal standards
was recognized and research began. The Cotton Futures Act was
first passed in 1914, the Grain Standards Act and the United States
Warehouse Act in 1916, the Food Products Act in 1917, the Cotton
Standards Act in 1923, the Tobacco Stocks and Standards Act in
1929, and the Tobacco Inspection Act in 1935. "Under the authority
contained in this [and other] legislation the Department has developed
standards of quality for most of the important agricultural commodities
and has established various types of inspection and supervision to
insure their uniform application throughout the country."
All standards are based on extensive research, both on the product
itself and on conditions and practices in the trade. They must be so
formulated that they can be applied to a product no matter where it
is grown or marketed. They must also be uniformly interpreted and
applied, which necessitates a corps of carefully trained inspectors.
58 Yearbook of Agriculture, 1940
Most standards are permissive (optional), and the best proof of their
value is that they are widely used. In fact, interest in them has
broadened to such an extent that there is a growing demand for their
use outside the wholesale channels of trade. Thus in 1938 more than
85,000,000 pounds of butter and 720,000,000 pounds of meats were
sold in the retail market to consumers under grade labels. Grade
standards are also extremely important in market reporting. They
have reduced marketing risks, tended to bring production more nearly
into line with consumer demands, and greatly facilitated trading in
futures, where neither buyer nor seller has any adequate protection
unless there are standards.
The problems of standardization, nevertheless, are difficult. They
are of four general types. (1) Most important is the problem of
measuring quality. Shape, color, flavor cannot be expressed in quan-
titative terms like weight or size. Hence the need, for example, for
butter tasters: hence also the sometimes complicated descriptions of
quality. Many ingenious devices have been developed, however, to
reduce the element of human error. (2) A problem-of another type is
the attitude of the trade, which in some instances has opposed uniform
standards or has been slow to adopt them. (3) A third problem is
the lack of uniformity in the standards and grades established by
States. Ten States, for example, have standards for egg sizes, and no
two are alike. (4) Finally, there is a very difficult problem" in estab-
lishing consumer standards that will be simple, understandable, and
No set of standards can be regarded as eternal; it must be flexible
enough to be changed and refined with changing conditions. Condi-
tions do change in many ways-improvements in practices, new crops
or products, production in new areas, weather, new knowledge about
values. Thus even if the use of uniform standards were universal,
which is far from being the case, there would still be need for the
continuous, painstaking research on which they are based.
Cooperative Marketing by Farmers
Cooperative marketing of farm products is now big business-over
$2,000,000,000 worth of products sold a year, 2,000,000 farmer mem-
bers, more than 8,000 associations. Commodities handled, Stokdyk
says, include practically everything produced on our farms and
ranches. The volume of business has nearly doubled since 1933.
The movement is at least 50 years old (24 percent of all cooperatives
were over 25 years old in 1936) and has had many ups and downs,
but even the failures have added to the experience that made success
A cooperative is a nonprofit organization in the sense that its earn-
ings or savings are returned to the patrons. Control is in the hands
of the members, therefore democratic; management is by a board of
directors selected from the membership; the usual rule (holding in
86 percent of farmer cooperatives) is one vote to a member. Lower
cost, higher quality, better service are the three economic functions
of the cooperative. "No influence has been so potent in the economic
education of farmers," since a cooperative "cannot succeed without
full membership understanding." Meetings, publications, tours,
Farmers in a Changing World-A Summary 59
demonstrations, institutes, reports, statistics, special studies, and
active cooperation with Federal and State agencies are all used inten-
sively to further education.
Of the three economic objectives, improved quality is brought about
through studying market demands and paying returns to growers on
a quality basis. Lower costs and better services are brought about
by making local marketing units more efficient and thus lowering
the margin between terminal prices and local prices. Competitors
in turn are forced to narrow their margins and give better service.
In other words, the cooperative sets the competitive pace and corrects
unsatisfactory conditions. Thereafter its function is to keep condi-
tions satisfactory and to increase its own efficiency. Cooperatives
handling specialty crops (as distinct from staples) also perform other
functions--advertising to expand markets, timing sales according to
demand, distributing the supply among various markets, promoting
reasonable dealers' margins, adopting grades and packages to suit
consumer incomes. In general, however, cooperatives no longer
attempt to cope with the surplus problem, since experience shows that
it must be dealt with on an industry-wide basis.
Increasing legislative recognition has been given to cooperatives
since the first cooperative statute was enacted in Michigan in 1865.
In 1895 a California law authorized the organization of nonstock
associations. Every State now has statutes for the incorporation of
marketing cooperatives, and courts have recognized the differences
between them and general corporations. Their rights have been
expanded and safeguarded, notably by the Capper-Volstead Act of
1922, which defined cooperatives clearly and declared that they were
not combinations in restraint of trade. A body of case law is being
developed under which the rights and liabilities of cooperatives are
becoming rather well defined.
The principal types of farmer cooperatives in the United States
Dairy products. Lead all other groups in volume of sales ($380,-
000,000 in 1933-34, $686,000,000 in 1937-38) and number of members
(700,000). Market about 48 percent of all fluid milk, 39 percent of
all butter, 25 percent of all cheese.
Poultry products. Sales were $48,000,000 in 1933-34, $91,000,000
in 1937-38; 106,000 members, 194 associations. In addition, 700
other cooperatives handle poultry products as a side line.
Fruits and vegetables. More than 1,100 associations in 48 States;
164,000 members; sales $182,000,000 in 1933-34, $300,000,000 in
1937-38. About 60 percent of all citrus fruit is marketed coopera-
tively (85-90 percent in the California-Arizona area). Potatoes are
handled by cooperatives more widely than any other vegetable.
Cooperatives doing more than $1,000,000 worth of business for a
commodity are those for citrus fruits ($124,748,000), potatoes, grapes,
apples, prunes, strawberries, cranberries, peaches, lima beans, peas,
pears, celery, cherries, tomatoes, apricots, lettuce, avocados, olives
and olive oil, asparagus, green beans.
Grain. In 1937-38, 2,619 associations, 360,000 members, $475,-
000,000 worth of business ($285,000,000 in 1933-34). Coal, feed,
salt, and other supplies purchased by local elevators for farmer
60 Yearbook of Agriculture, 1940
members have greater value in many cases than the grain handled.
Livestock. Some 900 shipping and marketing associations, 600,000
members, $300,000,000 worth of business ($162,000,000 in 1933-34).
Terminal sales agencies now operate in practically all the larger
markets, many of the smaller ones, handling about one-fifth of all
livestock sold at public stockyards. In 1938, 60 large-scale agencies
handled 12,286,914 head.
Wool. In 1937-38, 130 cooperatives handled $11,300,000 worth of
wool for 50,000 producers. Most of the business is done by 25-30
Cotton. Three types of cooperatives-cotton marketing associa-
tions (1938-39, 280,000 members, 1,522,037 bales); cotton gins (400
in Texas and Oklahoma alone in 1937-38, ginning 20-25 percent of
the crop); cottonseed-oil mills (6 in operation at present). Total
business of all cotton cooperatives in 1937-38 was $110,000,000. The.
cooperative ginning movement has been growing very rapidly.
Other products. There are cooperatives handling nuts, tobacco,
hay, sugar beets, cane-sugar making, maple sirup and sugar, honey,
timber, nursery stock, pulpwood, tung oil, broomcorn, fox fur.
The Growth of Farm-City Cooperative Associations
The first rural cooperatives were for marketing farm products. As
offshoots of these came a second type, farmers' purchasing coopera-
tives for handling supplies used in farm production. Quite distinct
from both were the consumers' cooperatives-organizations located
principally in cities that purchase food, clothing, and other household
products for their members. This distinction based on types of goods
handled and on membership gradually broke down. Some farmers'
societies began to handle products for home use as well as farm
supplies. Others admitted city members. Eventually a successful
cross was made between some of the farm purchasing cooperatives
and city consumer cooperatives. The reasons for this hybrid are
simple: (1) Nearly 60 percent of the farm family's expenses are for
consumer goods. Why not save on them also through cooperative
buying? (2) The larger the membership of a cooperative, the greater
the savings. Farm and city people together make a larger member-
ship than either alone.
As Gubin points out, this is a comparatively new development.
The number of farm-city cooperatives is still relatively small; most
of the members of cooperatives are farmers; farm supplies are still a
much larger item in the total cooperative business than consumer
goods. Yet the movement is significant because it bridges the gap
between two kinds of organizations that had the same purpose-
mutual advantage through mass purchasing power--but had grown up
to be entirely separate. Many farm cooperative leaders, in fact,
have strongly advised against rural cooperatives' taking joint action
with the urban organizations. In spite of this opposition, the cross
occurred and it has shown hybrid vigor and made a healthy growth.
Gubin cites figures that show the rapid development of rural
cooperative buying in general.
In 1915 farmers' purchasing cooperatives (for farm supplies) han-
dled only 2 percent of all the cooperative business done by farmers.
Farmers in a Changing World-A Summary 61
In 1938 they handled 15 percent. In 1913 they did $6,000,000 worth
of purchasing business; in 1938-39, $320,000,000 worth. In addition
to this, marketing cooperatives handle, buy, and sell $100,000,000
worth of farm supplies a year as a side line, so that the total amount
of cooperative purchasing must now be at least $420,000,000 a year.
Meanwhile the variety of goods and services handled has notably
increased. Feed, seed, and fertilizer still are the most important items
and make up about half of the total business. But today 50 percent
of the purchasing associations sell some consumer goods-such items
as groceries, general merchandise, clothing, fuel, gasoline, and oil-and
at least 10 percent do their major business in consumer goods.
How many of the 50 percent handling consumer goods now admit
city as well as rural members is not known, but according to Gubin
the number has grown rapidly.
In line with this development a number of farmers' purchasing
cooperatives formed a Nation-wide wholesale purchasing cooperative
to which city organizations were later admitted; and in turn many
of the rural cooperatives joined a national cooperative educational
association formed originally by urban organizations. Cooperative
automobile insurance is another field in which farm and city people
have combined, and the growth here has been phenomenal. A few
farm-city cooperatives have even gone into production as well as sell-
ing-not only mixing fertilizer and preparing feed for livestock but
producing paint, bakery products, flour, grease; blending lubricating
oil; roasting coffee.
The whole movement is still on a limited scale but it has consider-
The Transportation Problem of Agriculture
Beginning with a brief historical survey, Dewey and Nelson show
that agriculture has always played a vital part in solving transporta-
tion problems. For example, "the Granger agitation led to the first
positive control over railroad rates in this country"-finally culminat-
ing in the act to regulate commerce, passed in 1887.
This action, and even the subsequent enlargement and improvement
of regulatory legislation, with control in the hands of the Interstate
Commerce Commission, proved to be no final answer to the farmers'
complaint against unjust freight rates, partly because farmers were
unable to meet the expense of bringing adequately prepared cases
before the Commission. Another farm protest in the early 1920's
resulted in the Hoch-Smith Resolution of 1925, requiring a widespread
investigation of freight rates by the Commission with special attention
to agricultural products. Here, too, the results were disappointing
largely because of the Supreme Court's interpretation of the resolu-
tion. Farm dissatisfaction with the viewpoint of the I. C. C. and the
railroads during the 1930's led to the passage in 1937 of section 201 of
the Agricultural Adjustment Act authorizing the Secretary of Agri-
culture to make complaints and present economic data to the
The failure of freight rates in recent years to decline in proportion to
the decline in the demand for and prices of farm products, combined
with the willingness of the I. C. C. to grant rate increases, has raised
62 Yearbook of Agriculture, 1940
several questions in the minds of farmers that require much study and
research-among them: Can more of the revenue of the railroads be
obtained from other sources than agricultural traffic? Can the reve-
nue requirements of the railroads be reduced by various retrenchments?
How can rail rates be made more responsive to economic conditions?
In the effort to overcome the handicap of high freight rates, the
authors point out, farmers have stampeded to motortrucks for trans-
portation. Partly as a result, the railroads apparently lost about one-
fourth of their potential agricultural tonnage between 1928 and 1938.
To meet this competition, the rails were forced to improve services and
lower rates on certain products and certain hauls. On other products
and hauls where motortrucks could not compete, however-notably
in long-haul and transcontinental shipment-rail rates remained high
or were even increased. The result has been to place producers in
areas distant from their markets at a serious disadvantage and to
force shifts in regional relationships.
The transportation problem is much broader than its agricultural
aspect. Of particular importance is its relation to economic recovery.
Railroad interests argue that we cannot have a healthy economy with-
out healthy railroads, and on this basis they frequently press for
higher rates. Farm groups argue that we cannot have healthy rail-
roads without a healthy economy, and they ask what the railroads can
contribute to the latter by better managerial methods and by support-
ing better Government policies.
The pressure to maintain or increase rates is based on the so-called
plight of the railroads. About one-third of all companies are in
receivership or trusteeship and others have been saved from bank-
ruptcy only by Government loans. Few are paying dividends. Em-
ployment has been cut in half since 1920. Depression and competi-
tion are important causes of the decline, though other factors have
contributed. These authors hold that the railroads are partly to
blame for the loss of freight and passenger traffic to competitors in
that they failed to see the trend of the times and actually invited
competition by maintaining rates. Some lines also have a record of
indefensible financial manipulation in the past, and the railroads in
general carry a large volume of indebtedness in the form of bonds on
which fixed interest charges must be paid. This debt constitutes the
largest of the fixed charges of the railroads, and places them under a
heavy disadvantage in all difficult economic periods. Other diffi-
culties are due to extravagant construction before 1900, costly ter-
minals in certain large cities, inability to submerge selfish interests
and coordinate lines and services (especially terminals).
Since rail service is indispensable to many farmers, they have an
interest in profitable railroads, but they are skeptical of the high-rate
method of securing necessary profits until everything possible has been
done to cut expenses.
When railroads cannot obtain their objectives by increasing rates,
Dewey and Nelson note, they seek public regulation of motortrucks,
water lines, and other means of transport. Formerly regulation
aimed to maintain competition in the public interest; the new kind of
regulation apparently aims to restrict competition in the railroads'
interest. Actually, these authors indicate, the railroads have much
Farmers in a Changing World-A Summary 63
more power to engage in destructive competition and rate cutting than
their small, individual rivals; this has been amply proved in the past.
Motortruck transportation, on the other hand, is essentially small-
scale and highly competitive. Hence, there is serious doubt whether
the same kind of regulation should be applied to all types of carriers.
"Failure to make proper economic distinctions only postpones
socially desirable solutions of the transportation problem." The
first effort should be to effect a rationalization of the railroad plant
to eliminate uneconomic services.
Johnson points out that whereas farming operations might on the
average have been undertaken with an investment of $3,000 in 1900,
the amount of capital required in 1930 was more than $8,000. The
resulting need of farmers for increased credit facilities was greatly
intensified by the sharp drop in farm income and land values begin-
ning in 1930, when many rural banks closed and even farmers in good
financial condition found it hard to borrow money. Total farm debt
has declined in recent years, first because of foreclosures and enforced
scaling down of debts, later because of refinancing and repayments;
total farm mortgage debts were $9,600,000,000 in 1930, $7,800,000,000
in 1935, $7,000,000,000 in 1939. Through reduced land values, how-
ever, debt now represents a larger percentage of the value of mort-
gaged farms than formerly-about 30 percent of the value of the land
and buildings of owner-operated farms in 1920, about 40 percent in
1930, about 50 percent in 1935. The majority of farms are not
mortgaged, but on a comparatively large number of those that are,
debt constitutes a heavy burden.
There are three types of financial aid to farmers: (1) Direct grants-
essentially relief rather than credit for those who have practically no
resources. (2) Loans by Government-subsidized agencies to put
farmers who are in a weak financial position on their feet. Such
loans should be accompanied by intelligent guidance toward rehabili-
tation. Assistance of this type has been largely furnished by the
Farm Security Administration. (3) Regular business loans based on
resources and earnings. It is with this ordinary business credit that
Johnson's article is concerned.
To meet the serious situation that faced farmers after 1932, several
steps were taken: (1) The Emergency Relief and Construction Act of
1932 set up a temporary regional agricultural credit corporation in
each of the Federal land bank districts. (2) The emergency farm
mortgage acts of 1933 made funds available for emergency loans and
expanded the activities of the Federal land banks (established in
1917). (3) The Farm Credit Administration was established in 1933
to bring all Federal agricultural credit agencies into one unit. (4)
The Farm Credit Act of 1933 set up production credit associations to
make short- and intermediate-term loans, as well as 12 district banks
and 1 central bank to make loans to farmers' cooperatives. (5) The
Federal Farm Mortgage Corporation Act of 1934 created a corporation
to supplement the facilities of the Federal land banks and the Land
Under the present set-up, then, the country is divided into 12 farm
64 Yearbook of Agriculture, 1940
credit districts, in each of which there are: (1) A Federal land bank
to make long-term mortgage loans; (2) a production credit corpora-
tion, to supervise production credit associations, of which there are
now about 500 in the United States making short-term loans; (3) a
Federal intermediate credit bank for financing institutions that make
short- and intermediate-term loans; (4) a bank for cooperatives,
extending credit to cooperative associations.
"Since 1934 the financial position of farmers generally, except in
areas affected by drought, has improved." Refinancing in large vol-
ume reduced debt charges; the estimated number of foreclosures per
thousand farms mortgaged January 1, 1935, declined from 27.8 in
1934 to 16.4 in 1938. Extended or defaulted Federal land bank loans
decreased from 48.8 percent in 1933 to 20.5 percent in 1939. Mean-
while other credit agencies (life-insurance companies and banks) have
again become active in agricultural lending, indicating renewed con-
fidence. Nevertheless in many regions farmers still face serious
Here are the agencies from which a farmer may seek loans or credit:
(1) His district Federal land bank, which may make amortized first
mortgages up to 50 percent of the appraised value of the land plus 20
percent of the appraised value of permanent improvements; (2) the
Land Bank Commissioner, who, from funds provided by the Federal
Farm Mortgage Corporation, may make first and second mortgages
up to 75 percent of the appraised normal value of the property; (3) a
production credit association, which makes short- and intermediate-
term loans, usually secured by a chattel mortgage; (4) the Farm
Security Administration; (5) commercial agencies-life-insurance
companies, commercial banks, merchants.
Among the problems in agricultural credit, Johnson lays major
emphasis on the credit base. "Too much attention has been paid to
the value of the collateral and insufficient attention to
analyzing the income of the farmer as an indication of his ability to
repay." Overemphasis on collateral results in excessive lending
during periods of high land values and rising prices. When values
and prices go down, the debt is a heavy burden, the farmer may be
forced to let land and buildings deteriorate in the effort to meet debt
charges, delinquencies are numerous, owners lose their farms, tenancy
increases. Attention should also be given to including provisions in
mortgage contracts for the upkeep of land and buildings.
"The greatest need," the author concludes, "is to assist farmers in
getting out of debt, not deeper into it."
Farmers have been able for some time to get.commercial insurance on
crops against fire and hail. Unfortunately, these are not the greatest
risks. What is needed is insurance against all production risks, and
this is what the new Federal wheat insurance program provides. The
principles involved, as Rowe and Smith point out, are the same as
those underlying any insurance. In effect, the large number of
farmers who pay premiums in any one year shoulder the loss of those
to whom indemnities must be paid; or from another angle, an individ-
ual farmer distributes the burdens of his own losses over a number of
Farmers in a Changing World-A Summary 65
years. The method, then, is that of self-help on a cooperative basis.
The farmers pay premiums to meet the losses; the Federal Government
pays administrative expenses as a contribution toward stabilizing
The program is handled by the Federal Crop Insurance Corpora-
tion-a part of the Department of Agriculture. Offices are in Wash-
ington, D. C., Kansas City, Mo., Minneapolis, Minn., Chicago, Ill.,
and Spokane, Wash. The detailed field work-writing insurance,
checking acreage, inspecting crops, adjusting losses-is administered
by the same county committees (farmers) that handle the agricultural
conservation program, with the help of community committees and
the supervision of State committees.
An insured farmer is protected against unavoidable losses to the
extent that his crop is smaller than 75 or 50 percent of his average
yield, whichever he chooses. Any part of the loss that is due to poor
farming is not indemnified. Premiums and indemnities are deter-
mined in bushels of wheat and may be paid by warehouse receipts
for wheat or by the cash equivalent of the wheat at the current market
price. To avoid losses due to price fluctuations, the Government
invests cash premiums in wheat and sells such wheat when necessary
to pay indemnities. Farmers may pay their premiums by an advance
against payments being earned under the agricultural conservation
program. Each farm has its own individual premium rate, based in
part on its own actual or appraised past record of crop losses and in
part on the record of crop losses for the county. Yields and premium
rates computed for individual farms by county committees are required
to check out in the aggregate with control figures determined for the
county from yield and loss data developed in the Department. In
some cases, yields are established for different practices on the same
farm (summer fallow versus .continuous cropping, irrigation versus
dry-land farming). A farmer must insure his whole crop, not the part
subject to the most risk, and he must insure before seeding, not after-
ward, when he may realize that loss is imminent. Landlords and
tenants have separate policies covering their separate interests.
Total losses occurring during the growing season may be settled before
harvesttime, but partial losses are not settled until final determination
after harvest of the amount of wheat produced. Losses are carefully
checked by the county committee and its adjuster.
In 1939, the first year of the program, about 165,000 policies were
issued on approximately 7,000,000 acres in 1,289 counties of 31 States.
Farmers paid premiums of about 6,700,000 bushels. Crop damage
was extensive in the Hard Winter Wheat Belt, where a large acreage
was insured, and where fall drought took a heavy toll. Indemnities
were paid on 55,800 claims, involving disbursement of 10,000,000
bushels of wheat.
The problems involved are numerous but are being solved: (1) Lack
of yield records for individual farms. This will gradually be corrected
as data accumulate. (2) Avoiding adverse selection of risks (which
would be comparable to insuring only those with heart disease in life
insurance). This will always be difficult, but "as new experience is
gained, fewer loopholes will be left for those who would take unfair
advantage of the program." (3) Desire for temporary advantage on
66 Yearbook of Agriculture, 1940
the part of individuals or communities. This will be ironed out by
increased premium rates where losses consistently exceed premiums.
(4) Adjusting losses. Not so difficult as was anticipated, since the
work is done by local people. (5) Reducing costs of operation per
policy. Wider participation and simplified procedures will help to
accomplish this. Costs will always be relatively high, however, in
minor wheat-producing areas and for small acreages.
Experience with the insurance program is still new, and various
changes have been suggested. Their merits and demerits are discussed
by the authors. The Federal Crop Insurance Act provides for research
looking toward insurance on other crops besides wheat. The possi-
bilities with cotton, corn, and citrus fruits have been under investiga-
tion so far. Each presents some new and difficult problems.
In practically every country in the world, Englund points out,
public expenditures have increased rapidly during the past 25 years,
partly because of an expansion of government services and subsidies,
partly because of the increased cost of goods and services bought
with public money. Taxes, which supply the wherewithal for these
expenditures, have increased accordingly. Farm real estate taxes have
risen steadily since 1900. In 1910 the average tax per $100 of real
estate value was 47 cents; in 1930 it was $1.30. After 1929 farm
real estate taxes declined in partial but not complete response to
The property tax accounts for the major share of State and local
revenues but does not contribute to Federal revenues; 92 percent of
all local revenues came from this tax in 1938. In recent years, how-
ever, other taxes have contributed an increasing share to State revenues.
Of the direct taxes paid by farmers in 1934, real estate accounted for
60.2 percent; personal property (livestock, equipment, crops), 10.7;
gasoline and automobile licenses, 26.2; income and sales taxes, 2.9.
Thus the property tax (real estate and personal) represents 70 percent
of the total. Improvement in the property tax is a State matter.
Three main faults are pointed out by Englund.
(1) Large farms and land of high value per acre tend to be under-
assessed for tax purposes while small farms and land of low value
tend to be overassessed. This violates the basic principle of the
property tax-that property shall be assessed uniformly in relation
to value. Many studies show that tax assessors do not accurately
determine the comparative values of different farms. Glaring inequal-
ities remain in spite of the efforts of State boards to promote more
uniformity, and they have contributed to tax delinquency in areas
where there is much land of low value.
(2) Taxes on "other forms of wealth have in large measure found
their way out from under the general property levy," leaving tangible
property (especially real estate) to bear the brunt of rising State and
local expenditures for such purposes as schools and roads. During
the early years of the depression, the limits of the ability of property
to bear taxes were apparently reached in many localities. With
high taxes and low incomes, the delinquency rate among farmers
rose alarmingly. Taxes then had to decline. Schools closed, the
Farmers in a Changing World-A Summary 67
rural educational system was weakened, other rural institutions suf-
fered. Since 1939 the States have placed greater emphasis on the
gasoline and motor registration taxes for the construction of roads.
(3) The farm property tax is rigid in relation to income. Between
1925 and 1932, farm income declined 58 percent, but the total real
estate tax declined only 11 percent, so that farmers were paying more
than twice as high a percentage of their gross income in these taxes.
Englund argues that a resort to general sales taxes to relieve the
pressure' on property does not help most farmers. An absentee
landlord will get some relief from the reduced property tax; a local
landowner or a tenant farmer bears an extra burden by paying higher
prices for the things he buys. Moreover, in the case of some farm
products, the sales tax is not shifted on to the consumer but back to
the farmer in the form of lower prices.
In the game of shifting taxes, the farmer is at a disadvantage. He
cannot shift the taxes collected from him by demanding higher prices,
but many taxes can readily be shifted onto his shoulders.
Englund does not argue that a reduction in taxes on low-value
land would necessarily lead to significantly greater efforts at soil
conservation; the inducement in many cases would not be large
enough. Nor does he think that exempting small homesteads from
taxation necessarily promotes small-farm ownership. A homestead-
exemption plan may place the farmer at a disadvantage in comparison
with the owner of a small home in the city and actually shift more
of the county taxes to rural property. In addition, other taxes im-
posed to make up for homestead exemption may hit the farmer.
Financial aid to farmers from revenues collected largely outside
of rural communities go a long way toward counterbalancing direct
rural taxes; but on a larger balance sheet the economic contribu-
tions of rural people and rural resources to the national economy as
a whole may outweigh by far the help they receive. The question
whether farm property should bear a smaller proportion of the tax
burden for the local and State services and improvements demanded
by modern communities must be judged in some such over-all frame-
work as this. The modern trend in public finance, Englund observes,
seems to be toward converting a larger part of private income into
public revenue and a distribution of public benefits without too close
questioning as to whether the benefits go to exactly the place from
which the tax money came. It is the function of public policy to see
that both costs and benefits are fairly distributed.
In view of the mechanical efficiency and the high standard of
living in the United States, it is amazing that 90 percent of our farms
did not have central-station electrical service as late as 1935. At that
time, Beall points out, practically 100 percent of the farms in Holland
had electricity, 90 to 95 percent in France, 90 percent in Germany
and Japan, 85 percent in Denmark, 65 percent in Sweden, and 60
percent in New Zealand. What was the cause of the remarkable lag
in the United States, in the face of the fact that farmers actively
desired electrical service? Simply, says Beall, that private utility
companies, who own and control over 90 percent of the industry,
68 Yearbook of Agriculture, 1940
did not need the rural market. Since it was much less profitable
than the city market, rural rates remained high and rural lines were
constructed only on conditions that were too burdensome for the
average farmer to meet. There was little or no incentive to work
out methods that would enable and encourage farmers to use electric
service. At the rate of progress of rural electrification during the
previous decade, it would have taken 50 years to bring electricity to
half the farms in the United States.
In 1934 both the Mississippi Valley Committee and the National
Resources Board urged that the only way to speed up rural electrifica-
tion was for the Federal Government to assume active leadership.
In 1935 the Rural Electrification Administration was established to
push an active program. In the 4% years from the middle of 1935
to the end of 1939, the number of farms with electric service jumped
nearly 130 percent; that is, more was accomplished in rural areas in
this short period than in all the previous decades since electricity
first began to be used. By the end of 1939, 25 percent of all farms
were electrified. The principal borrowers of R. E. A. funds have been
cooperative associations of local farmers, who organized for this
purpose and took 92 percent of the R. E. A. loans.
The Rural Electrification Administration does not itself construct,
own, or operate lines or sell equipment. It merely lends money and
furnishes technical advice and assistance. Loans are self-liquidating
within 25 years at low interest rates, and they may be made to "per-
sons, corporations, States, Territories, municipalities, people's utility
districts, and cooperative, nonprofit, or limited-dividend associations,"
for constructing lines or power plants (very few of the latter have
been necessary; in most cases, already existing sources of current are
used), wiring premises, acquiring and installing electrical and plumbing
appliances and equipment.
Economical methods developed by R. E. A. especially for rural areas
are largely responsible for the success of the program. They include:
(1) Area coverage. Every farm in an area is covered instead of a
few selected farms, as hitherto. This distributes costs, develops the
maximum load, permits mass-production methods in constructing
(2) Simplified and standardized line construction. This has cut
costs in half-from $1,500-$1,800 a mile under previous methods
down to $800 a mile today. New techniques departing from urban
practice include vertical construction with elimination of cross arms
on poles and use of half the number of poles by doubling the span.
(3) Other technical advances. There have been several of these,
including a simplified meter which can be read by farmers, thereby
greatly reducing this cost, and a new low-cost small-capacity service
unit which will bring lights and small appliances within the reach of
low-income farmers for about $1 a month. (Minimum bills for regu-
lar service range from $2.50 a month in the South to $3.50 to $4 in
In spite of the accomplishments so far and the greater public interest
in rural electrification, there is an enormous amount of work still to
be done. After all, 3 farms out of 4 in the country as a whole still
do not have electricity. Though in 9 States half or more of the farms
Farmers in a Changing World-A Summary 69
are now electrified, in 12 others the number is 1 in 10 or even less.
"Already there are over 200 separate uses for electric power on the
farm, and the list continues to grow. While many of those uses relate
primarily to household activities, a substantial number of them are
directly concerned with labor-saving, cost-reducing, and income-
producing equipment for farm operations." Others are of value to
the entire community-electricity in schools and churches, for ex-
ample, or power for cooperative local industries using farm products
as raw material.
New Conditions Demand New Opportunities
Certain aspects of the general farm situation in the United States
are not pleasant to contemplate, but as potential causes of increasing
trouble in the future they must be faced resolutely and handled intel-
ligently. Smith gives a broad survey of these problems a's an intro-
duction to several following articles that deal with them in more
detail. Essentially he lays down two propositions that challenge
(1) It is part of our national tradition that a man could start as a
farm hand, save a little money, rent a farm, save some more money,
and finally own the farm. Opportunity was open to anyone; our
people were not frozen into classes and castes such as still exist in the
Old World. Is this true today? Any candid view of present-day
agriculture shows that opportunities to climb the agricultural ladder
are far more limited than they used to be. The conditions that have
closed off opportunities for large numbers of rural people are described
in other articles. Their net result, whether we like it or not, is that
it has become increasingly difficult for a man to advance from laborer
to tenant, tenant to owner. The first challenge to agricultural leader-
ship, then, is whether we shall permit a large part of the rural popu-
lation of the United States to become permanently set in laborer,
sharecropper, and tenant classes, contrary to everything we have
(2) It has been estimated from 1930 census data that even in 1929
half of all farmers had cash incomes averaging $415 a year; more than
a fourth had cash incomes averaging $195 a year. The cash part of
the income had to meet payments on mortgage, interest, taxes, feed
and fertilizer bills, replacement of tools and work stock. The remain-
der, if any, was available for food, clothing, furniture, medical care,
education, and so on. In other words, there is beyond question a
large "poverty class" in agriculture. The second challenge is whether
we shall let this poverty become permanently fixed on these people,
who are concentrated in certain regions but are also found in every State.
Smith argues that those who are better off must give increased
attention to a vigorous search for means to release the "disadvantaged"
groups from oppressive poverty, not only for humanitarian reasons
but because (1) by increasing their purchasing power we could greatly
expand our domestic market; (2) they furnish a disproportionate
share of the Nation's children, which means that more and more
people will grow up with unhealthy bodies and poorly educated
minds; (3) democracy needs a strong backbone-and its backbone is
still the rural people.
70 Yearbook of Agriculture, 1940
That there is no simple solution of the problem he concedes readily.
He notes that all efforts to stabilize agriculture and improve the land
as well as all efforts to expand industrial production and employment
have an indirect but real effect on the disadvantaged groups. But
we cannot wait for these; we must also use more direct measures.
Among those that should contribute to improvement are:
(1) Efforts to encourage landownership and reduce tenancy through
an extension of measures such as are included in the Bankhead-Jones
Farm Tenant Act.
(2) More attention to equitable leasing arrangements between land-
lords and tenants.
(3) Rehabilitation of families who are down but not out, through
such methods as those used by the Farm Security Administration.
(4) Purchase of submarginal land by the Government and assist-
ance to the families living on it in finding new locations.
(5) Resettlement projects-purchasing good land (usually large
farms) and dividing it into family-sized farms or turning it over to
a cooperative group.
(6) Development of rural industries to furnish part-time employ-
ment for stranded families, including sustained-yield forest programs
and subsistence homesteads developed on new patterns.
(7) A rural public-works program to supplement the earnings of
low-income farmers-and also to conserve natural resources.
(8) Measures to improve the welfare of farm laborers and share-
(9) A large-scale rural housing program.
(10) Provision of better educational opportunities for rural children.
(11) Much more attention to sanitation, adequate medical and
dental care, and hospitalization in many rural areas.
(12) In a still broader field, policies for assisting farm families to
make adjustments to technological change. In the long run, the
welfare of all farm families as well as efficiency in production will
have to be considered in attempting to measure efficiency in
"The problem," Smith concludes, "seems to be to determine what
kind of agriculture and rural life we want, and then to set ourselves
to the task of bringing it about."
The Rural People
Baker and Taeuber study what is happening among whole popula-
tions-vast groups of people regionally and nationally distributed.
From this study they have picked out six major trends now occurring
in the rural population of the United States.
(1) Culturally, our people are becoming more and more alike.
Country folk, for instance, are strongly subject to city influences,
partly because at least half the people in the United States now live
within a couple of hours by automobile of a city of 100,000 or more.
Within the rural areas themselves groups that formerly had quite dis-
tinctive customs of their own are disappearing. Foreign-born groups,
for example, are being replaced by second-generation Americans.
(2) Economically, on the other hand, we are'becoming more sharply
separated. In general, the North is more prosperous agriculturally
Farmers in a Changing World-A Summary 71
than the South, yet there are some prosperous areas in the South and
many poor areas in the North. In 1929 nearly half the farms pro-
duced only about 11 percent of the products sold or traded, and two-
thirds of the less productive ones were in the South. Apparently the
number of very small farms (many of which are inadequate) is increas-
ing; so is the number of very large farms.
(3) The birth rate has been declining until now the number of
births is no longer sufficient to permanently maintain the population.
There is a surplus of 50 percent annually among farm people, however,
and a deficit of 25-30 percent annually in the larger cities. In the
future, then, cities can grow or maintain themselves only by drawing
on the country. Since about half the natural increase in the total
population now occurs in the South, the poorer sections of the country
are bound to furnish an increasing proportion of our people; the
smallest proportion will be furnished by the professional and business
classes in the large cities.
(4) The number of middle-aged and old people is increasing in
proportion to the number of young people.
(5) At least twice as many young people are maturing each year in
rural areas as would be required to maintain the number of farm opera-
tors at a stationary figure. A large number of these young people are
backing up on farms with little chance for employment either in com-
mercial agriculture or in cities. In the absence of migration to the
cities, there may be 7,500,000 more people of working age (18-65) on
farms by 1955 than there are at present. This is the reservoir from
which cities can draw their future increase.
(6) Migration from farm to city has been sharply reduced since
1930, and some cities have had a net migration to rural areas. The
tendency to remain on farms has been most marked in areas of the
fewest agricultural opportunities; in other words, the poorest areas
have been the shock absorbers for depression.
On the basis of these trends, Baker and Taeuber urge the need for
a national policy specifically related to rural-urban migration. They
point out that whenever opportunities improve, cities will again re-
ceive large numbers of rural migrants; therefore they are profoundly
concerned with the conditions from which these migrants come.
Rural communities, on the other hand, are profoundly concerned with
the cities as potential sources of employment for the increasing numbers
of rural people., The authors suggest three lines of action:
(1) "Raising the level of living in areas from which migrants will
be recruited." Rural migrants from the poorest backgrounds are
difficult to absorb into city life. Since in general their condition is
not likely to be improved by an expansion in commercial farm pro-
duction, direct means must be adopted in the form of "a subsistence
program for home production on the largest possible scale consistent
with the conservation of land resources." The program should include
rural industries, home industries, public works, and public services.
Such a program would improve health and morale as well as making
assimilation into the cities easier.
(2) Increasing educational opportunities. "Many of the children
now being reared in rural areas will ultimately live elsewhere." They
are not now being equipped with the knowledge and skills they will
72 Yearbook of Agriculture, 1940
need for effective adjustment, so that in many cases they press on the
unskilled labor market and live under slum conditions.
(3) "More effective guidance of migrants to areas of greater oppor-
tunity." Too many people at present leave home and seek work else-
where on the basis of "tips, rumors, hunches, and indefinite promises";
or they travel hundreds of miles for very temporary jobs. Many
difficulties would be eliminated by an adequate system of information.
Public efforts should also be coordinated better than they are; in some
cases they retard migration where it should be encouraged, in others
they encourage it without adequate assurance of opportunities
Patterns of Living of Farm Families
That widely used phrase, "standard of living," means little unless
it is translated into concrete, practical terms of food, housing, clothing,
and the other items for which people exchange their incomes. Monroe
attempts to give a concrete picture of "standards of living" on our
farms in these terms, drawing material from recent surveys and using
three income levels in 1935-36 as examples.
(1) The middle group would include farm families with incomes of
$1,000 to $1,250 a year, or an average of $1,127. (This included 11.7
percent of all farm families; 56.6 percent of all relief and nonrelief
farm families had incomes of less than $1,000 a year.) Of the average
income, $634 was in money; $493 was in the form of housing, food,
fuel, ice, and other items furnished by the farm. At the end of the
year one-third of these families were "in the red"; two-thirds broke
even or were ahead of the game; but deficits were larger than savings
so that the group as a whole was actually behind.
Of the total value of family living in this group, 47 percent ($537)
was represented by food; two-thirds of it was food produced on the
farm and one-third food bought for cash ($194). About 2 families
out of 3 had good or fair diets; 1 out of 3 had a deficient diet. Housing
varied a great deal in different regions, but for the country as a whole
about 1 home in 6 had less than 1 room per person. About 5 out of
every 6 families had no running water, 9 out of 10 no indoor toilet,
4 out of 5 no electric lights, 7 out of 8 no central heating system, 3 out
of 5 no refrigerator of any kind, 19 out of 20 no mechanical refrigerator,
7 out of 10 no telephone, 5 out of 10 no radio. All of these figures
are very much higher than for the comparable city group. On the
other hand, 7 out of 10 of the farm families had an automobile (as
compared with 3 out of 10 in a metropolis-Chicago), and more than
9 out of 10 did home canning, putting up an average of 200 quarts of
food. The farm families spent an average of $104 a year for clothing,
distributed somewhat like this: Wife, $16 for a winter coat, worn for
5 years; $4.50 for a good dress, worn 2 years; $1.35 for an everyday
dress, worn 1 year; $6 for 2 pairs of shoes, worn 1 year; husband, $19
for a wool suit, worn 4 years; $3 for a mackinaw, worn 3 years; $14
for an overcoat, worn many years (13 out of every 14 bought no
overcoat); $2.80 for work shoes, worn less than a year. Medical
care averaged $50 per family (about half the estimated cost of ade-
quate care on a group basis); education and reading matter, $18;
personal care (toilet articles, barber shop, etc.), $17. It might be
Farmers in a Changing World-A Summary 73
noted that rural schools spent an average of $67 per pupil, city
(2) The higher economic group might be represented by families
with incomes of $2,500 to $3,000 a year, averaging $2,716. (This
group included 2.6 percent of all farm families; 93 percent of all farm
families had incomes less than $2,500.) In this group, the money
income was three times as great ($2,028) as in the middle group;
income in the form of housing, food, etc. ($688), was two-fifths higher.
Much more was saved or put back into the farm-an average of $777
for the year compared with a deficit of $10 for the middle group. All
the families could have had good diets, though some did not. About
9 out of 10 homes had at least 1 room per person, but fewer than half
of the families had running water, and 2 out of 3 had no indoor toilet
or central heating plant. Three out of four families owned their farms.
About $190 a year was spent for clothing per family. Most of the
families (96 percent) canned food, putting up an average of 262 quarts.
(3) Two groups are selected to represent families with low incomes-
a group of farm operators with incomes of $250-$500 (average, $440),
and a group of Negro sharecroppers at the same income level.
The farm-operator group received $130 in cash during the year,
$310 in farm-furnished housing, food, and other products. Two-
thirds of the total value of living was represented by food ($293),
though the cash expenditure for food was only $49. At least 1 out
of 3 families had deficient diets. More than a third of the houses had
only 2 or 3 rooms for the entire family. One family in 100 had an
indoor toilet; 1 out of 17 did not have even an outside toilet; 1 out of
17 had running water; 9 houses out of 10 were heated by fireplaces;
none had electricity or any kind of ice box; 1 family in 17 had an
automobile; $8 in cash a year was spent for all household operating
expenses. Clothing cost $31 a year for the whole family (husband
$11, wife $9, children or other members $11), medical care $12 (includ-
ing 68 cents a family a year for the dentist), recreation $1, all other
Among the Negro sharecroppers, cash income averaged $230 a
family, income in kind $153. The food consumed had an average
value of $221 a year, or around 5 cents per person per meal; 4 families
out of 5 had deficient diets. Almost 6 houses out of 10 had less than
1 room per person. No house had an indoor toilet, running water,
or electric lights; 1 out of 6 did not have even an outdoor toilet;
about 9 houses out of 10 were heated by fireplaces.
Families with incomes under $500-that is, the group just dis-
cussed and the group below it-probably included about one-fourth
of all farm families, relief and nonrelief.
"Conservative estimates show that all told 3,000,000 farm families
are existing today on abnormally low incomes and at unwholesomely
low standards of living," Alexander writes. "Many of these families
are just as able and anxious to earn their own way as any other group
in America There is nothing fundamentally wrong with the
people. The problem is to devise a system that will enable them to
become assets instead of liabilities."
74 Yearbook of Agriculture, 1940
The Farm Security Administration is one of the agencies set up to
tackle this problem. It operates in several ways.
(1) By making loans to needy farmers who can become self-support-
ing but who cannot get a loan anywhere else. These are "character"
loans, without collateral, for productive purposes, including necessary
farm supplies, equipment, livestock. Each loan is based on a definite
plan, worked out by the farmer and his wife in cooperation with the
F. S. A. county supervisor and home supervisor. Three essentials of
such a plan: (a) A rounded program for efficient home production to
furnish a balanced diet for an entire year, including canned and stored
products and feed for livestock; (b) at least two farm enterprises that
will bring in some cash; (c) continued F. S. A. advice and assistance
in carrying out the program. By April 30, 1940, some 837,000 families
had received such loans. Many had lifted themselves out of a hope-
less situation to self-respect and a modest livelihood. More than
114,000 families had fully repaid their loans by that date. A survey
of 360,000 borrowers made in December 1939 showed that they had
increased their net worth by 26 percent and their net income by 43
percent since coming on the Farm Security Administration program.
In addition they had increased the amount of food produced for home
consumption from a total value of $54,160,567 to $89,038,910.
(2) Grants are given in emergency cases-there were many during
the drought years-for food, clothing, medical care. By April 30,
1940, 540,000 such grants had been made.
(3) When a family is hopelessly in debt, the F. S. A. assists in getting
the debts adjusted to a manageable figure.
(4) Among families in need, sickness is a common cause of failure
to get ahead. For instance, 575 people in 100 typical needy farm
families were found to have 1,300 health handicaps, including among
the most serious rickets, tuberculosis, pellagra, and suspected cancer.
To meet this problem, health programs have been developed in coop-
eration with county medical societies. Families pay $15 to $30 a year;
the money is pooled to pay private physicians for providing medical
(5) Successful efforts have been made by F. S. A. to improve tenure
conditions. Among other gains, the number of written as against oral
leases has been quadrupled among F. S. A. clients.
(6) Cooperative, purchase of relatively expensive items such as
machinery and livestock is encouraged. More thoroughgoing coop-
erative efforts, being tried experimentally, include the running of
entire farms by groups of families.
(7) Under the Bankhead-Jones Farm Tenant Act, loans are made
to tenants, on a 40-year amortizing mortgage basis, for the purchase
(8) Some work has been done to improve the condition of migrant
laborers by establishing sanitary labor camps and even more perma-
nent small homes with provisions for producing food.
Other agencies also are working in the rural relief field. The Work
Projects Administration and the Civilian Conservation Corps have
done a good deal. State and local agencies have given direct relief.
"All of these efforts are helping meet the widespread distress," says
Alexander. "But altogether, they are falling far short of the need"-
Farmers in a Changing World-A Summary 75
especially in view of the continuing mechanization of agriculture,
which pushes workers off the land. At least 500,000 families, for
example, who are in need and would be eligible for F. S. A. aid cannot
get it. "A long-range program," Alexander insists, "must be worked
out"; the only alternative is a dole on an immense scale. In such a
program he would include more rehabilitation loans looking toward
self-support; outright grants for capital equipment as well as emergen-
cies, where these seem clearly justified; perhaps more cooperative farm-
ing. Even this would leave many rural workers who could not pos-
sibly be absorbed into any kind of agricultural production. He would
set them to work building better rural homes, roads, schools, reforest-
ing, installing sanitary water supplies, and so on. "In a hundred
fields, there is ample need for the manpower that is now wasting on
In conclusion, Alexander summarizes the development of present
rural relief programs, beginning with the Federal Emergency Relief
Administration and later the Resettlement Administration.
There are, of course, tenants and tenants. Some are tenants by
choice, generally well to do, occupying good soil, preferring to invest
their capital in livestock and equipment rather than land. Again,
some half-million tenants are on farms owned by relatives. But a
large number are tenants by necessity, with low incomes and standards
of living. In one such group in the South studied by the Farm Secu-
rity Administration, the average total income was $134.71 a year;
value of household goods, $27.86; value of all worldly goods, $305.61;
debts, $220.17; average net worth, $85.44. Often such farm families
are old local residents. They farm about 20 acres. The mule is the
principal asset. Malnutrition and disease are prevalent. Among the
2,865,155 tenant farmers in the United States (42 percent of all-
farmers) are 716,000 sharecroppers who have no livestock or equip-
ment of their own.
"National strength and solidarity," says Maris, "spring from an
independent, contented, home-loving rural citizenry" such as the old
American ideal of owner-operated farms aimed to develop. We have
moved much too far away from this ideal. The situation is not likely
to get better by itself. At the present rate of natural increase, the
farm population in the poorest areas will double in 30 years.
What is being done or can be done to come to grips with the tenancy
Matis lists several existing or proposed legislative remedies in the
United States. (1) Fourteen States now have laws partially exempt-
ing homesteads from taxation, to protect owners of family-size farms.
(2) One State has a law protecting mortgagors who default because of
crop failure or some other disaster. (3) The Bankhead-Jones Farm
Tenant Act helps to set a pattern of family-size farms. (4) The
Taylor Grazing Act is "in the direction of better adjustment of users
to the land." (5) The soil conservation districts now authorized in
many States will indirectly tackle problems of population adjustment.
(6) Loans are being made by the F. S. A. in the Great Plains to create
adequate family-size farm units. (7) The Iowa Farm Tenancy Com-
76 Yearbook of Agriculture, 1940
mittee has recommended a study of differential taxation to encourage
the ownership of family-size farms, as well as a tax on capital gains
from the sale of land.
Problems of land tenure have not by any means been confined to
the United States. In recent years many other countries have been
forced to deal with them. Some examples: In England, farmers are
assisted in acquiring small holdings, which must be cultivated by the
owner and cannot be divided, sold, assigned, or rented. In Ireland,
97 percent of the farmers were tenants in 1870; land-tenure reforms
have brought the figure down to 3 percent today. The Scandinavian
countries have made marked progress in improving land tenure.
The U. S. S. R., of course, has socialized the land-a move that may
be compatible with security but not with the American ideal of
individual ownership. Mexico has regulated private property rights
and bought out large holdings at 10 percent above the assessed value,
turning them over to villages or dividing them into family-size farms.
Germany has set up a system of "inherited freeholds"-family-size
farms which cannot be mortgaged and are passed on from generation
Among the most significant measures for encouraging ownership of
family-size farms in this country is the Bankhead-Jones Farm Tenant
Act. Under this act, first-mortgage or deed-of-trust loans are made to
carefully selected farm families for 40-year periods at 3 percent interest.
Variable payments are provided to ease farmers in years of abnormally
low income, but this privilege is withdrawn if abused. County
farmer committees pass on the eligibility of applicants and the value
of the farms. In 3 years, $75,000,000 has been appropriated for this
purpose, and there have been about 30 times as many applicants as
loans. Experience with the plan has been very favorable, and it
could probably be used advantageously to reduce tenancy from 42
.percent down to 20 percent among farmers in the United States.
Over a period of 25 years, this would require about 52,000 loans a
year. It would be vital to guard against speculative prices if any
such large-scale program of farm purchasing were put into effect.
It will be noted that this plan would not bring about the almost
complete elimination of tenancy achieved in Ireland. As a matter of
fact, a reasonable amount of tenancy has advantages, provided it is
on a sound and fair basis; in England, for example, tenants are legally
protected and they stay on their farms. In the United States,
unsatisfactory leasing customs are deep-rooted, and landlords hesitate
to make contracts with propertyless farmers. These difficulties, how-
ever, can be overcome; at least, that is the opinion that has come out
of conferences on this subject recently held in many States.
Maris suggests as essential, badly needed reforms: (1) Long-term
written leases, preferably for 5 years or more, or written annual leases
automatically renewed. (2) Compensation to the tenant for improve-
ments he leaves behind, and to the landlord for damage due to negli-
gence. (3) Compensation when either party breaks the agreement
on short notice. (4) Provision for arbitrating differences between
landlord and tenant.
Farmers in a Changing World-A Summary 77
Farm Labor in an Era of Change
It was taken for granted in the American tradition, Ham notes,
"that the man who remained a farm laborer lacked the initiative or
capacity to rise to something better"; the farm labor problem was
simply to find enough competent hands to do the work. Today
surplus rural labor is so common that many people accept it as part
of the order of nature. "Once a laborer, always a laborer" is more
and more the rule. Among the laborers are found larger numbers
than formerly of "normal farm people" as contrasted with the tramps
and drifters of earlier days.
Even the regularly employed "hired man" is not quite so well off
as he used to be; but the real problem centers on the seasonal labor
employed in large-scale specialty farming. In 1929 the average wage
bill on 999 farms out of 1,000 was $135 a year; on the other farm it
was $13,385. This tenth of 1 percent of all farms (well over a third of
them were in California) paid 11 percent of the total agricultural wages.
On these large-scale farms, labor conditions are similar to those in
factories. Hiring is often done by a labor contractor; the work is
routine and carried on by gangs under a foreman; wages are uncertain
and may be cut without notice; workers frequently have to travel
long distances for temporary jobs. Seasonal workers probably make
up half of the farm labor in the United States. "Standards of living
are incredibly low," housing is inadequate, medical and sanitary
facilities are meager, and the workers are not accepted as a real part
of any community.
In spite of the increasingly factorylike character of much farm labor,
these workers have been definitely excluded from the gains made by
industrial workers in recent years, as represented by the Wagner Labor
Relations Act, the Social Security Act, and the Fair Labor Standards
Act. In effect, this exclusion from benefits granted to others creates
a class of outcasts and stirs up class strife, which farmers may have
cause to regret in the long run. Strikes of farm labor have increased
and disputes have become bitter. Unions of city workers have begun
to take a more aggressive interest in farm labor conditions, feeling that
low farm wages are a threat to their own standards.
Possible remedies for this complex and difficult situation include:
(1) The first line of attack, of course, is to improve the farmer's
economic status. What he pays depends on what he gets himself.
(2) Equally obvious is the need for increasing employment oppor-
tunities m industry. If 2 out of every 5 farm youths can go to the
cities for work, as they used to do, there will be less deadly competition
for farm jobs.
(3) The present haphazard, inefficient distribution of seasonal
labor, with vastly more workers than are needed drawn to certain
areas by advertising, can be improved by an effective placement and
information service in which State and Federal agencies cooperate.
(4) More continuous employment can be promoted by such means
as new crop sequences and perhaps the transfer of some processing
operations to the farm.
(5) The living conditions and health of workers can be improved by
establishing many more permanent and mobile camp facilities such as
78 Yearbook of Agriculture, 1940
those set up by the Farm Security Administration, better camp inspec-
tion, more low-cost housing, more rural medical centers, and other aids.
(6) Where farm labor approaches factory conditions, workers can
be given equality under the law, with due regard for certain special
needs of agriculture. They could share in old-age and unemploy-
ment insurance privileges, suitable wage and other standards, the
right of collective bargaining.
Many of the possible improvements in farm labor conditions, Ham
points out, must be made by the States. At present, farm workers
are quite generally excluded from State labor laws. The States could
encourage joint conferences between employers and employees to
determine and stabilize wages; they could work out methods for
mediation and conciliation in labor disputes. In some areas, public
authorities and employers are becoming active in developing such
Wilson is impressed by the fact that much more is needed to solve
our agricultural problems than convincing schemes in the field of
economics. He first shows how complex these problems are. No
quick or easy scheme such as getting parity prices can simultaneously
bring agriculture an adequate income, make up for the loss of foreign
markets, reverse the trend toward loss of farm ownership, improve
tenancy conditions, lift the mortgage burden, relieve the pressure of
too many people on the land, give vitality to the poverty-stricken,
save the soil from being wasted, and enable us to use technology instead
of being driven by it. What is needed is practically a new pattern of
farm life, and such things cannot be achieved suddenly or simply.
This country faces a long period of agricultural reform. It is vital that
this reform be democratic and that it be marked by tolerance, not
bitterness or hatred.
What Wilson calls the "cultural approach" is best adapted, he feels,
to bring about this reform. Primarily, the cultural approach empha-
sizes that people's moral ideas, their habits of thinking and acting,
their notions about right and wrong, are just as important in the total
life of the country as money or machines or any other material things.
We have the machines and methods to create abundance for everyone;
we have the most pressing need to create this abundance. But we
don't do it. Why? Because habits, traditions, institutions, moral
ideas stand in the way at a thousand points. We have an emotional
attachment to old ways even when we can see, with our minds, that
they cripple us.
Unless reformers with neat blueprints for a better society-and
there are many of them-recognize this paramount fact, they are
going to get nowhere rapidly. They cannot start with a theory about
how the economic system ought to work if only people were different.
"The real genius of any feasible reform effort will reside not in its
technical competence but rather in its psychological and cultural
insight The crux of the problem is moral and psychological."
The more candidly these psychological and moral factors are recog-
nized, the more scientific is the approach to social problems.
What are the implications of this viewpoint in dealing with agri-
Farmers in a Changing World-A Summary 79
cultural problems? It means that psychological possibilities would
be considered first; that education would be especially important; that
wide discussion would be encouraged to stir people up to examine
their own attitudes and thinking, to question whether existing insti-
tutions are adequate for their needs, to explore their ideals and prefer-
Wilson is particularly interested in discussing the plight of the
surplus farm population. He attacks two extreme viewpoints.
According to one viewpoint, we should recognize the efficiency of the
Machine Age, mechanize our farming on a huge scale as fast as possible,
put surplus farm workers into industry. The trouble with that is
that there is no place for them in industry. According to the other
viewpoint, we should split agriculture up into small units, largely do
away with specialization, make every farm family practically self-
sufficient. The trouble with that is that we must have large-scale
specialization today to supply raw materials for industry and to feed
the industrial population. But why go to either extreme? Why
not do both at the same time? All agriculture does not need to be
commercial; in fact, that would probably not be efficient. Nor does
subsistence agriculture necessarily mean a return to the handcraft
age. A small subsistence farm can be as modern as you please, with
all kinds of gadgets to give it its own particular efficiency and to help
the farmer achieve a decent standard of living. The two kinds of
agriculture can exist side by side. As long as we have an agricultural
plant geared to produce more than the market will profitably pay for,
this is the only way out. It would mean vastly better living for
great numbers of people. And it would tend to reduce surpluses.
Subsistence farmers would need some cash income. The wide-
spread establishment of subsistence farming might require, for a time,
a frank and open subsidy. But this would be far better than building
up a class of under dogs, dangerous for the future of the country.
Subsistence farming and part-time farming are urged as a very
practical way to take care of the unemployed and all those who are
being driven onto relief. But such a plan would not be easy or simple.
"It means new kinds of concerns, new kinds of practice, new kinds
of knowledge ; new kinds of pleasures and satisfactions new
ideas about life's most basic values [and] a great extension of
cooperative activity." Education is the first essential.
Wilson emphasizes the satisfaction of psychic needs-"for security,
for self-respect and prestige, for intimate experience, and for a rela-
tionship with the unknown"-as being of primary importance among
social goals; and he stresses the need for tolerance. "It is insecurity
and confusion that drive men into frantic loyalty to extreme ideas
and into desperate and harsh oppression of those who disagree with
them. This is the greatest danger that confronts the
hope of social progress." The preventive is "to increase the security
of the vast number of people who are most in need of it" and "to
realize that social and economic truths are not absolutes to which
mortals have ready access." Our country needs a real social philoso-
phy of its own-not one based on creeds and doctrines that may suit
conditions abroad but do not suit those in the United States. We
have the materials for such a philosophy.
80 Yearbook of Agriculture, 1940
Part 4. Farm Organizations
Trends in National Farm Organizations
Wing presents a factual report of the growth and the policies of
three great national farm organizations-the National Grange, the
National Farmers' Educational and Cooperative Union of America
(usually called the Farmers' Union), the American Farm Bureau
Essentially, he points out, the motive back of these organizations
is to secure to farmers an increased share of the national income, or
economic equality for agriculture. They fear concentrations of power
existing in labor and business organizations and realize that "impor-
tant decisions upon which action is taken are more and more those of
bodies of men rather than of single individuals." Though farmers
are still far less than 50 percent nationally organized, there seems to
be a growing conviction among them that agricultural problems must
be dealt with on a national basis. Education and cooperation are
stressed by all the great farm organizations, and they have enlisted
the interest of many people besides farmers.
The creed of the Grange, founded in 1867, expressed the desire for
"equality and justly distributed power." By 1873 it had a
foothold in nearly every State. It aggressively and successfully
fought what farmers regarded as the abuses of the railroads. Co-
operative activities, including milling and manufacturing, were stressed.
More than 50 percent of the Grange members today live in New Eng-
land, New York, Pennsylvania, New Jersey, and Ohio. New England,
with 150,000 members, is the stronghold. There are many women
members as well as children over 14. The Grange stresses the fact
that it is "a family institution before it becomes anything else."
Wing reports an interview with Master Louis J. Taber in the autumn
of 1939 on Grange objectives. Taber emphasized the fact that the
8,000 local Granges with 800,000 members are really community centers
where public opinion-" the court of last resort in America"-is
created. He said the current Grange program has three objectives-
keep America out of war, lift farm incomes, make democracy function
more efficiently. Lifting farm income involves developing home mar-
kets, new markets, foreign markets, and also strengthening the coop-
erative movement. Government appropriations are a temporary
stopgap on the road to fair prices and a fair share of the national
income. On the question of democracy, Taber used the Grange as
an example, stressing the sense of responsibility it develops in its
members, including a great many young people.
The 1940 national legislative program of the Grange includes the
following recommendations: Economic justice for agriculture; remove
unnecessary restrictions from business; maintain family-size farm,
discourage large-scale farming; continue soil conservation program,
but divorced from crop control; continue benefit payments till prices
reach parity; regulate imports; terminate reciprocal trade agreements;
encourage cooperative marketing; remove State trade barriers; encour-
age research for new crops and new uses of farm products; develop
rural education, rural roads, rural electrification; encourage coopera-
tion between agriculture, labor, industry; restore Farm Credit Admin-
Farmers in a Changing World-A Summary 81
istration to independent status; continue low interest rates on farm
loans; adopt a comprehensive Federal forestry program and aid
extension of farm forestry; keep Forest Service in Department of
Agriculture; liberalize railroad regulation; retain short-and-long-haul
clause; no restrictions on motortruck or waterway transportation;
complete St. Lawrence seaway; balance the Federal budget; no
general sales tax, no tax-exempt securities, no processing taxes;
continue support of agricultural education; no more reclamation at
present; pass truth-in-fabrics legislation; continue development of
farm-tenancy program; give agriculture representation in mobilization
plans; clarify Wage-Hour Act and give agriculture exemptions;
modify National Labor Relations Act; continue regulation of "imita-
tion dairy products"; tax certain imported oils and starches; support
Federal action to eradicate predatory animals and more vigorous
steps to control insect pests; make interstate transport of stolen live-
stock a Federal offense; do not ratify Argentine Sanitary Pact;
increase allotments of American sugar growers; extend crop insurance;
enforce antitrust laws; no State medicine; amend Packers and Stock-
yards Act for better regulation; no block booking and blind selling
of motion pictures; enforce law against lotteries; compel aliens to
register; continue congressional committee on un-American activities;
vigorously enforce Commodities Exchange Act; prevent overcentral-
ization of government; strengthen national defense; avoid entangle-
ment in foreign wars; take profits out of war.
The Farmers' Union began in Texas in 1902. It represents 100,000
farm families (members join as families), is organized in 21 States,
has locals in 12 more, puts special emphasis on training juniors and on
cooperatives. The Farmers' Union Grain Terminal Association,
operating in the spring wheat area, is the largest; other cooperative
activities include oil stations, compounding plants, grocery ware-
houses and wholesale houses, creameries, a factory for agricultural
implements, insurance (fire, life, hospitalization), grain terminals,
feed mills, cold-storage lockers, livestock marketing and trucking
associations, cotton gins, credit unions.
In an interview with Wing early in 1940, John Vesecky, president,
emphasized that the Union is built to serve low- and middle-income
farmers. Its main objective is to safeguard farm family homes and
enable more farmers to become home owners. "Price and income
alone will not solve the farm problem"; development of cooperative
enterprise is the surest road to economic power for agriculture. Han-
dling one-third of the farm business cooperatively all the way through
to the consumer would be enough to do the job. The Union, Vesecky
said, favors more aid like that of the Farm Security Administration;
refinancing and adjusting farm debts; a tax earmarked for farm benefit
payments; no attempts at price fixing.
Current legislative and other recommendations of the Farmers'
Union include: No tax qualifications for voting; aid for cooperative
hospitals; extension of Federal Farm Mortgage Act; broader powers
for A. A. A. county committees; cost of production or parity for
farm products domestically consumed; truth-in-fabrics legislation;
homestead-tax exemption; graduated land tax; protection of civil
liberties (actions of committee on un-American activities deplored);
82 Yearbook of Agriculture, 1940
debt adjustment; a dairy bill; certificate plans for cotton, wheat,
flax, rye, barley, rice, other commodities; commodity loans at top
figure; separation of soil conservation from commodity income pro-
grams; expansion of farm credit program to take in farm tenancy,
debt adjustment, land utilization, mortgage refinancing, rehabilita-
tion, emergency relief; transfer of F. C. A. to Department of Agri-
culture; use of cooperatives for distribution, the Government to keep
out of the distribution field; expansion of food-stamp plan, rural
electrification, crop insurance; protection of family-size farm;
Federal programs to be administered as far as possible by farmers,
democratically elected; legislation to encourage and protect coopera-
tives; protection for domestic agricultural market; all taxes to be
based on ability to pay as measured by income; Congress to have
power to coin money and regulate its value; no tax-exempt bonds;
no restrictions on truck and water transportation; retention of short-
and-long-haul clause; cooperation of agriculture and labor; general
opposition to war.
Wing gives a brief history of the Farm Bureau as told by Clifford
V. Gregory. The Farm Bureau grew indirectly out of the agricul-
tural extension system, established by the Department of Agriculture
and the States just before the World War. In the beginning a few
county bureaus were organized by farmers to back up the educational
work of the county agents. Some of these bureaus federated into
State organizations. In 1919, 12 State farm bureaus got together to
form a national organization, and formal action was taken early in
1920. The Federation came along just in time to run head on into
the long farm depression of the 1920's. In these circumstances it
soon passed beyond purely educational work in better production
and plunged into the economic problems of agriculture. In 1932 the
Federation called a conference of farm organizations, and this con-
ference proposed a bill embodying price parity, production control,
and a processing tax. In 1940 the Farm Bureau has 400,000 mem-
bers, mostly in the Corn Belt.
Edward A. O'Neal, Farm Bureau president, was interviewed by
Wing early in 1940. He stressed the need, in the modern world, for
cooperative control of commodities by farmers and cited the A. A. A.
program as an effective form of cooperation. The Farm Bureau, he
said, does not now believe that the usual types of cooperatives are
enough by themselves to solve the farm problem, though in its early
days it did hold this viewpoint and started several important coopera-
tives. Today it believes more strongly than ever in production con-
trol and such devices as marketing agreements. O'Neal cited an
article by D. Howard Doane as containing ideas with which he
agreed. Doane emphasized two things: (1) All production improve-
ments in farming-use of machinery, soil management, livestock
management-must contribute to lower cost per unit of product.
(2) Production alone does not pay the farmer under present condi-
tions because he competes with individuals who do not figure produc-
tion costs. He must carry his product through some stages of
processing and distribution. Here he can make a profit because his
competitors figure costs. The large-scale operator can do this by
himself, the small-scale operator through cooperation.
Farmers in a Changing World-A Summary 83
In resolutions adopted in December 1939 the Farm Bureau Federa-
tion reiterated its position that the crux of the economic problem in
the United States is parity between agricultural and industrial prices;
that when this is achieved, it will solve the problem of unemployment;
that money spent for other methods of getting recovery will not get
results; that there must be appropriations and taxes fully adequate
to bring about a fair economic balance between farmers and other
The following recommendations were made in the resolutions: For
expansion of cooperative features of the farm credit system and
extension of certain types of loans; for coordination of all types of
farm credit and all types of commodity programs in two independent
Federal boards within or correlated with the Department of Agri-
culture; for more local coordination of agricultural programs under
the Extension Service; for modification of the trade agreements
policy; for "only reasonable regulation" of transportation so as
to "preserve the inherent advantages" of each type; for arbitration
of labor disputes-compulsory in the case of industries handling
perishable and semiperishable agricultural products; for definition and
clarification of the status of agricultural labor in labor acts; for enforce-
ment of antitrust laws for labor, industry, agriculture; against transfer
of Forest Service from Department of Agriculture; for a price-parity
policy on the part of the agricultural advisory council; for a special
Senate study of monetary problems in relation to price levels; for
extension of marketing agreements; for appropriation of adequate
funds for tobacco grading; for livestock and poultry feed control
legislation; for increased Federal and State research on marketing
and distribution problems; for extension of forest conservation with
special emphasis on farm forestry; for extension of the fertilizer pro-
gram of the Tennessee Valley Authority; for a new and thorough
study of livestock marketing by the Federation in cooperation with
other groups; for truth-in-fabrics legislation; for further sugar legis-
lation; for maintaining and strengthening relations between the Farm
Bureau and the Extension Service.
Resolutions on various other aspects of agriculture adopted in 1938
were reaffirmed by the Federation. The following recommendations
by the Associated Women of the Federation were approved: For more
discussion meetings between rural and urban groups and extension of
discussion meetings in general; for use of county Farm Bureaus as
clearing houses for farm programs; for further study of and action
on national health problems, including nutrition; for extension of
rural libraries; for keeping out of the European war; for a broader
Federation program of economic education; for continued cooperation
with the Associated Country Women of the World.
Each of the three national farm organizations, Wing points out,
maintains headquarters in Washington, studies farm legislation, sup-
ports or opposes it. Local and State bodies do not always agree
with the. national organization on objectives, but differences are de-
creasing. There seems to be a trend toward a division of territory
between the three organizations. Each publishes a national news-
paper or magazine (National Grange Monthly, National Union Far-
mer, Nation's Agriculture), and some State units have their own
84 Yearbook of Agriculture, 1940
publications. Editors of privately owned farm papers support the
farm organizations and wish to see farm organization strengthened.
Wing argues that there is a trend toward unity of viewpoint between
the three organizations; they agree on some of the basic principles,
if not on details of agricultural programs. It has been said that
agriculture presents a more united front than labor or industry. All
the national organizations are agreed on the fundamental issue of
parity for agriculture, and all encourage and practice cooperation.
Part 5. What Some Social Scientists Have to Say
Cultural Anthropology and Modern Agriculture
The word "anthropology" means literally "the science of man."
Cultural or social anthropology emphasizes the study of human soci-
eties or "cultures." As Redfield and Warner point out, the cultural
anthropologists so far have been concerned with studying primitive or
comparatively simple societies-those of American Indians, for ex-
ample, or Polynesian Islanders, or simple rural communities. From
these studies certain conclusions have been drawn that are believed
to hold true for any human social organization.
Can the anthropologists use their methods to study far more com-
plex societies such as our own? Redfield and Warner believe this
should be possible. The value such work would have is obvious.
By and large, most practical studies of modern society are economic.
Most of the solutions offered for social problems-including those in
agriculture-are strictly economic solutions. Even the most obvious
economic remedies don't always work. Why not? Perhaps because
other things besides economics are extremely important, and some of
them may balk economic efforts.
There is very little scientific understanding of these "other things."
If scientific methods can be used by anthropologists to study a complex
human society as a whole, they may contribute a good deal to man's
ability to create better conditions of living.
Redfield and Warner outline some of the main conclusions of an-
thropologists. All societies, simple or complex, they point out, have
the same general objective-the successful adjustment of men to their
environment and to each other. When the adjustment is successful,
all aspects of life tend to fit together into a harmonious whole. In
primitive communities this harmonious fitting together can be clearly
seen. There is little specialization. Most men do the same things in
the same way for the same reasons, and these reasons make up their
ideas of what is right and wrong. Work, play, religion are all unified;
even the planting of corn, for example, is likely to have a religious
significance. The community is a unit knit together by common
needs and loyalties, and above all by common understanding, shared
In a modern complex community, much of this is reversed. There is
a high degree of specialization. Men do not do the same things.
They have far less understanding of each other and share fewer com-
mon loyalties. The community is split up much more into opposing
groups with special interests to defend. Moreover, men do not under-
stand the reasons for what they do. They do many things under the
Farmers in a Changing World-A Summary 85
compulsion of remote forces, not those within the community itself.
Changes due to advances in technology are rapid. Under the cir-
cumstances, the sense of values, of what is right and wrong, becomes
confused. Life is far from being a harmonious whole, and it may lose
much of its meaning. The adjustment of men to their environment
and to each other is out of gear.
The authors do not specifically point a moral, but it seems to be
this: Some way must be found to transcend the complexity of modern
life and give it much more unity and wholeness. Some way must be
found to diffuse a common understanding through complex societies
and create common ideals and loyalties. Even the best of economic
solutions for our difficulties are only part of the story.
Democracy in Agriculture-Why and How?
Likert writes about democracy and agriculture from the standpoint
of the social psychologist. Democracy, which is the opposite of
dictatorship, he argues, is the form of social organization best cal-
culated to satisfy some of the most fundamental urges of human
But there are three essential requirements if democracy is to work.
(1) The majority of citizens must meet situations as mature individ-
uals-which means solving problems "with the brain in full control of
the emotions," and taking full responsibility. Dictatorship depends
on a certain emotional immaturity-much like the relationship of a
child to a parent. (2) Habits of solving problems through demo-
cratic processes as well as habits of maturity and self-reliance do not
develop all at once. They can be developed only by constant prac-
tice. Democracy must furnish adequate opportunities for this prac-
tice. (3) Adequate opportunities depend on having democratic ma-
chinery at every level of government (local, State, Federal) for dealing
with all kinds of problems, and especially the problems that arise
suddenly under modern conditions.
But the increased complexity of government today tends to make it
less rather than more democratic, partly because legislation must be
broad while specific decisions are left to administrators. How can
those administrators be sure they are carrying out broad legislation as
the people wish? They cannot be sure, Likert argues, except by con-
stantly obtaining an accurate expression of the felt needs and difficul-
ties of those affected by the legislation. The only way to do this
accurately, rapidly, and inexpensively is to use the "sampling" method
developed in recent years by social scientists.
Likert points out that this method is now being used by the Depart-
ment of Agriculture with valuable results. Essentially, it consists in
putting the question to which an answer is desired to a carefully
selected sample of farmers-say, 1,000. Research has proved that
the answers given by those 1,000 farmers will not vary more than 5
percent from the answers that would have been given if all farmers
had been questioned. But this will not be true unless extraordinary
precautions are observed: (1) The sample must be typical, including
the same groups in the same proportions as would be found in the
whole farm population. (2) Questions must be carefully worded so
as not in any way to suggest a certain kind of answer. (3) The
86 Yearbook of Agriculture, 1940
interviews from the field must be carefully and accurately analyzed.
With these precautions fully observed, Likert believes, this method
is a valuable contribution to democratic procedures, especially during
this period of bewildering change.
The Cultural Setting of American Agricultural Problems
As a cultural historian, Turner is interested in explaining our present
situation in terms of the development of social institutions and atti-
tudes in the United States.
In the background of any civilization, he begins, there is a funda-
mental cleavage between city and country. Cities depend on the
farm.population for their food and raw materials. But they cannot
reproduce themselves; they grow by getting people from the country.
If this growth is to continue, more and more people must be released
from agriculture, which means that agricultural efficiency must in-
crease. Now, cities are the centers of industry, learning, science, art.
The growth of all these, then, depends on increased agricultural effi-
ciency, which frees people to do other things than produce food.
Obviously such a development has occurred in the United States.
When America was colonized, the new ideas of individualism held
by the middle class were becoming dominant in Europe, and the
colonists brought these ideas with them. Individualism was strength-
ened and given a special turn in the new country because of the great
abundance of land. Land was the one great resource, available to
almost everyone. Cities were small and few.
Under these conditions, American small-scale farmers-the domi-
nant group-were poor and hard-working, but independent. The
strong individualism they developed was based on the fact that a man
made his own decisions about life and work and took full responsi-
bility for the results. Self-reliance, equal opportunity, individual re-
sponsibility-this became the American credo, born of the abundance
of land on the frontier. Democracy was real, economically and polit-
ically. Of government there was little, for it was not needed.
Meanwhile, however, the cities were growing and the "industrial
revolution" was bringing remarkable changes. "Individualism" was
the dominant idea in the cities, too. But in industry it had quite a
different meaning than it had among farmers. The farmer said, "We
shall do what we please and be responsible for the consequences."
The city man said, "We shall do what we please, but we cannot be
responsible for the consequences." This philosophy Turner calls eco-
nomic liberalism. It was enough like the frontier credo to be widely
accepted, but the results were profoundly different. Under economic
liberalism, for instance, industry could wash its hands of responsibility
for unemployment or any other consequence of its policies.
Ultimately the frontier and free land disappeared and agriculture
became more efficient, less self-sufficient. This did not matter so
long as surplus rural people could be absorbed into industry. But
gradually, industrial advances completely changed the picture of
American life. The proportion of people engaged in farming was
enormously reduced. So was the proportion of independent business-
men. On the other hand, the proportion of wage earners and salaried
workers enormously increased. Farmers did not sell their labor
Farmers in a Changing World-A Summary 87
directly like wage hands, but they sold it indirectly because they
became as completely dependent on the cities as wage hands. The
great metropolises, meantime, grew bigger and bigger and dominated
more and more of the country.
In brief, the city idea of individualism swallowed up the frontier
idea. Individualism was lost in the name of individualism. And
this produced a profound conflict. People do not change their deep-
est convictions and attitudes without conflict.
Our struggle today, Turner argues, is to preserve, in a vastly changed
world, what was valuable in our tradition of individualism and
He believes this can be done, but that we must do it in strictly
American ways, not by trying to apply foreign isms to our problems.
Two things we must accept. One is that all of us are infinitely more
dependent on each other, because of the minute subdivision of modern
industry, than we ever were in the past; and we can never get back to
the old independence. The other is that cities are bound to be the
dominant element in modern culture; it cannot be otherwise in a
civilization that is so dependent on science and technology. But it is
not true that the frontier is lost. We still have a frontier-one even
greater than that which gave rise to the American credo. The new
frontier is the productive capacity made possible by science. Science
has also given us an even greater sense of possible control over human
affairs than our forebears had.
What prevents our using this frontier as we used the old one?
Mainly, says Turner, a philosophy based almost entirely on the sale
of goods and labor in the market place, plus the notion that freedom
means not being responsible for the human consequences that result
from our acts. Both these handicaps can be got rid of by sticking to
the original ideas that made the American credo. Let the frontier of
abundance dominate the market place, not vice versa. Let the old
strong sense of individual responsibility be reborn as a strong sense of
social responsibility. On such a basis we can go ahead, put necessary
social controls into effect, use our productive capacities to wipe out the
terrible inequalities in standards of living and in opportunity that now
cripple us, and participate again in the decisions that affect our lives.
And we can do it in ways that are in accord with our own national
Under such conditions Turner sees the development of a more
unified civilization than any possible hitherto-one in which the old
country-city antagonism will gradually disappear..
In the earlier history of the United States, Turner concludes, the
existence of a great land frontier was the material element that most
influenced our American pattern of thought and behavior. That
pattern should find itself equally at home on a great frontier of
Education for Rural Life
"If education is to be of real service to farm life and to rural chil-
dren," says Embree, "we must cease to be awed by traditional subjects
and procedures and build our schools on the essential needs of the
countryside and the country child." In some ways, education in