In response to worsening conditions in the rural economy, Congress passed the Capper-Volstead Act in 1922 to aid agricultural cooperatives. The agricultural depression that followed World War I had a devastating impact on American farmers. As farm prices dropped, farm organizations once again sought relief from the economic crisis. For some farmers, nothing short of government price supports for farm commodities would do. Others wanted Congress to maintain and even raise tariffs on agricultural goods. For the American Farm Bureau and its congressional allies, however, the surest way to protect American agriculture was to protect the growing number of farm cooperatives against the power of corporate agribusiness. Specifically, the Farm Bureau wanted to exempt farm cooperatives from the Sherman Antitrust Act of 1890. Agricultural corporations had used the Sherman Act as the legal basis for court challenges to agricultural cooperatives.
In Congress, the politicians who supported farm relief and liberal agricultural subsidies came to be known as the Farm Bloc. Organized by lobbyist Gray Silver of the American Farm Bureau, the Farm Bloc was made up of 25 senators and 100 representatives pledged to aid American farmers. It included such Republican progressives as Senators Hiram Warren Johnson of California, George Norris of Nebraska, and Arthur Capper of Kansas. Seeking to bolster the farm economy, the Farm Bloc developed legislation to address the problems in agriculture. There was no clear majority for government price supports to return agricultural commodities to parity, or, more specifically, the prices that matched the 1914 economy. Instead, the Bloc opted for more modest means of improving the farmers’ lot. They were able to find common ground under the administration of Warren G. Harding and worked with the Department of Agriculture on a legislative agenda.
The first result of the Farm Bloc’s efforts was the Cap-per-Volstead Act. According to Senator Arthur Capper, the bill was designed “to give to the farmer the same right to bargain collectively that is already enjoyed by corporations.” A solid majority of Congress passed the bill, which exempted farm cooperatives from antitrust laws in order to cooperatively produce, market, handle, and price their products. Earlier, Congress granted general antitrust protection to farm cooperatives and labor unions in the Clayton Antitrust Act of 1914. Because the law remained vague, however, the Clayton Act was no more effective in protecting farm cooperatives from antitrust suits than it had been in protecting unions from labor injunctions. The Capper-Volstead Act specifically empowered farm cooperatives by clarifying the activities covered by the antitrust exemption and extending the protection from antitrust laws to a broad class of agricultural cooperatives. While it fell short in addressing the farm crisis, the Capper-Volstead Act signaled the sustained power of farmers’ political interests and organizations at a time when the nation was becoming increasingly urban and industrial. It serves today as the major legal protection for agricultural cooperatives from antitrust prosecutions.
Further reading: Robert K. Murray, The Harding Era: Warren G. Harding and His Administration (Minneapolis: University of Minnesota Press, 1969); Theodore Salou-tos and John Hicks, Agricultural Discontent in the Middle West, 1900-1930 (Madison: University of Wisconsin Press, 1951).
World History
