The Agricultural Marketing Act of 1929 was the effort, ultimately unsuccessful, of the HooVER PRESIDENCY to solve the problem of overproduction and declining prices that had afflicted American AGRICULTURE in the 1920s.
As he had promised during his 1928 campaign for the White House, President Herbert C. Hoover made addressing the farm problem one of the priorities of his administration. He convened a special session of Congress in April 1929 and asked for a new agricultural policy, but one that would not rely on government taxes and subsidies as had the proposed McNary-Haugen bills of the 1920s. Consistent with his philosophy of government, Hoover also wanted a farm policy that rested upon private and voluntary efforts, with government providing assistance but not imposing controls.
On June 15, the Agricultural Marketing Act was signed into law. It created a Federal Farm Board, funded at $500 million, to provide technical assistance to farmers and to lend money to support existing agricultural cooperatives and establish new ones. The cooperatives could buy equipment more cheaply than individual farmers; they could coordinate voluntary production agreements among farmers; and they could manage sales to keep prices up and middlemen charges down. The cooperatives could also form crop stabilization corporations that were eligible for Farm Board loans to enable them to buy surplus crops, store them, and put them on the market in an orderly fashion that would keep prices as high as possible.
The Agricultural Marketing Act was a creative and unprecedented effort to address the problems of farmers, and one that avoided direct government intervention to curtail production or support prices. Yet it failed because it lacked adequate power over production—and also sufficient funds for the stabilization corporations to take the mounting farm surpluses off the market, despite what seemed the huge sum of $500 million. The situation was made more difficult by the fact that in such staple crops as wheat and cotton there was a glut on the world, not just the national, market. American farmers (and also those abroad) continued to produce at high levels, the onset of the Great Depression reduced consumer spending, and the Farm Board’s resources were soon overwhelmed. In 1931, the Farm Board and key stabilization corporations abandoned efforts to keep surpluses off the markets. Prices plunged still further, and the crisis in agriculture grew worse. With the defeat of Hoover in the election of 1932, it fell to the new president, Franklin D. Roosevelt, and the AGRICULTURAL Adjustment AcT of 1933 to deal with the problem of farm production and farm prices.
Further reading: David E. Hamilton, From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928-1933 (Chapel Hill: University of North Carolina Press, 1991).
World History
