Left Out of Coolidge Prosperity
Though business was booming and stock market speculators were making fortunes overnight, not everyone in the twenties went about singing "We’re in the Money." Certain segments of the population were left out of the Coolidge Prosperity, including farm families, who were familiar with the term Depression even before the thirties began.
The Farmers’ Plight
As the twenties began, the United States was still largely an agricultural nation, with one-third of the population relying on farming for its livelihood. But as the new decade began, that one-third was facing tough times.
During World War I, farmers had borrowed heavily in order to keep up their production to meet the nation’s needs and make a profit besides. They eagerly bought up land as well as tractors, electrical millers, and other new machines, going into debt in the process. At the time, the farmers didn’t worry much about being able to make payments since the prices for their goods were stable, thanks in large part to government support. But then the war ended, and the government withdrew its price supports. At the same time, the export market went into decline as European nations had less money to buy American crops. With demand down, prices fell and the farmers were left holding more debt than they could carry. Not only were the Europeans buying less, but so were Americans. Plus, synthetic fibers were replacing cotton, and prohibition devastated the market for barley and grapes, the main ingredients in beer and wine.
At the same time, advances were being made in the field of agriculture. Farmers were gaining greater control over crop and animal diseases, and better, heartier strains were being developed. New machinery was making farming much safer and more productive. In 1921, 1922, and 1923, American farmers had bumper crops, which was the last thing they needed, since huge crops created a glut on the market. Prices continued to tumble. Some farmers attempted to keep their goods off the market until they could get a decent price for them, but the banks tried to force the farmers to sell so that they could make payments on their loans.
The bottom fell out for many farm families. They packed up their Model T’s with their belongings and headed for the towns and cities. During the twenties, the total number of farms in the United States decreased for the first time in the nation’s history.
A Search for Solutions
The farmers who stayed behind became desperate for a way out of their troubles. They turned to the government for help. The American Farm Bureau Federation became a powerful lobbying force in Washington, and a group of Congressmen known as the farm bloc sought to pass laws that would offer relief to farmers. They helped enact the Farmers’ Loan Act of 1923 to ease the repayment schedules on farm loans. They pushed for a high tariff to lessen competition from foreign markets. They supported the Federal Highways Act so that farmers could get their goods to market more easily and quickly. But still, many farmers were barely making ends meet.
In 1924, two executives from a plow company proposed to the farm bloc an idea for a bill based on the idea of "Agricultural Equality." The executives were George N. Peek and Hugh S. Johnson, who said, "You can’t sell a plow to a busted customer." Under the McNary-Haugen bill, named after the Congressmen who advanced it, the government would buy the farmers’ surplus goods and dump them on foreign markets in order to help keep prices high at home. The plan was that increased profits at home would make up for the money lost during the dumping process. For the rest of the decade, the McNary-Haugen bill would be a stormy issue.
Though many farmers were enthusiastically for it, critics pointed out that the plan was based on flawed logic. By keeping prices high at home, farmers would be encouraged to keep up production, and the problem of surplus goods would never be solved. Coolidge urged patience. He, along with many others, advised the farmers to cooperate with each other and adjust their production to the needs of the market. The president was worried about what the bill would do to the federal budget, which he had been steadfastly trying to reduce. But he also worried that if the plan were carried out, foreign countries would retaliate by dumping their goods on the U.S. market and raising their tariffs, which would only add to the problems of the American farmer.
The McNary-Haugen bill was twice passed and twice vetoed by Coolidge. In his second veto message, Coolidge wrote, "There is no thoughtful man who does not fully appreciate how vital a prosperous agriculture is to this nation. It must be helped and strengthened. To saddle it with unjust, unworkable schemes of governmental control is to invite disaster worse than any that has yet befallen our farmers." Meanwhile, the stream of farm families escaping to the cities continued.
