| Printable American History Reading with Questions |
| The First New Deal: Agriculture |
| In the spring of 1933, the agricultural sector of the
economy was in a state of collapse. It thereby provided a
laboratory for the New Dealers' belief that greater regulation
would solve many of the country's problems. In 1933, Congress
passed the Agricultural Adjustment Act (AAA) to provide economic
relief to farmers. The AAA proposed to raise crop prices by
paying farmers a subsidy to compensate for voluntary cutbacks in
production. Funds for the payments would be generated by a tax
levied on industries that processed crops. By the time the act
had become law, however, the growing season was well under way,
and the AAA paid farmers to plow under their abundant crops.
Crop reduction and further subsidies through the Commodity
Credit Corporation, which purchased commodities to be kept in
storage, drove output down and farm prices up. Between 1932 and 1935, farm income increased by more than 50 percent, but only partly because of federal programs. During the same years that farmers were being encouraged to take land out of production – displacing tenants and sharecroppers – a severe drought hit the Plains states. Violent wind and dust storms during the 1930s created what became known as the "Dust Bowl." Crops were destroyed and farms ruined. By 1940, 2.5 million people had moved out of the Plains states, the largest migration in American history. Of those, 200,000 moved to California. The migrants were not only farmers, but also professionals, retailers, and others whose livelihoods were connected to the health of the farm communities. Many ended up competing for seasonal jobs picking crops at extremely low wages. The government provided aid in the form of the Soil Conservation Service, established in 1935. Farm practices that damaged the soil had intensified the impact of the drought. The service taught farmers measures to reduce erosion. In addition, almost 30,000 kilometers of trees were planted to break the force of winds. Although the AAA had been mostly successful, it was abandoned in 1936, when its tax on food processors was ruled unconstitutional by the Supreme Court. Congress quickly passed a farm-relief act, which authorized the government to make payments to farmers who took land out of production for the purpose of soil conservation. In 1938, with a pro-New Deal majority on the Supreme Court, Congress reinstated the AAA. By 1940 nearly six million farmers were receiving federal subsidies. New Deal programs also provided loans on surplus crops, insurance for wheat, and a system of planned storage to ensure a stable food supply. Economic stability for the farmer was substantially achieved, albeit at great expense and with extraordinary government oversight. |
| Directions: Read the text above, then answer the questions below. |
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| Text courtesy of the U.S. State Department, Bureau of International Information Programs, 2005 |
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