Prosperity & Prosperity & DepressionDepression1897 - 19331897 - 1933

““What goes up, always comes down.”What goes up, always comes down.”

1897 - 1910 -- 13 years of unbridled 1897 - 1910 -- 13 years of unbridled growthgrowth

– farm prices rosefarm prices rose–successfully reduced much of the successfully reduced much of the drudgery of farm workdrudgery of farm work

–parity rate was favorableparity rate was favorable–ratio between farm price and ratio between farm price and non-farm goodsnon-farm goods

Formula for the Good Formula for the Good LifeLife

Good Life = Good Life = f f (hard work, thrift, saving, (hard work, thrift, saving, investment, and right thinking)investment, and right thinking)

Golden Age of AgricultureGolden Age of Agriculture 1910 - 1914 1910 - 1914 basebase years for Parity comparisons years for Parity comparisons

World War IWorld War I 1914 - 1918 1914 - 1918 increased demand increased demand 1920 - farm prices doubled 1920 - farm prices doubled

Doubling of farm pricesDoubling of farm prices

– bid up land prices -- 70% increase 1913 - 1920bid up land prices -- 70% increase 1913 - 1920

1918 War ends--agriculture enters a 1918 War ends--agriculture enters a recession and in 1920 there was a collapserecession and in 1920 there was a collapse– farm prices fell by 50%farm prices fell by 50%– wave of farm bankruptcieswave of farm bankruptcies

1929--nation enters an economic depression1929--nation enters an economic depression– 1929 - 1933 durable good production fell 80%1929 - 1933 durable good production fell 80% farm income declined 40%farm income declined 40%

The BIG The BIG PicturePicture

1897 - 1920 Prosperity

1920 - 1933 Depression

1897 - 19331897 - 1933The Beginning of The Beginning of

Scientific AgricultureScientific Agriculture

3 Essential Components3 Essential Components1) The discovery of scientific relationships1) The discovery of scientific relationships

2) The development of new technologies 2) The development of new technologies based upon these scientific based upon these scientific relationshipsrelationships

3) The adoption of new technologies on 3) The adoption of new technologies on farmsfarms

1865Civil War ends

1897

1920

1918WWI

1940-1945 WWII

1929-1932 Great

Depression

The Ups and Downs The Ups and Downs of the Farm Economyof the Farm Economy

Conservation of Conservation of Natural ResourcesNatural Resources

18911891 50 million acres of timberland set aside 50 million acres of timberland set aside19011901 President Theodore Roosevelt elected President Theodore Roosevelt elected19011901 Bureau of Forestry (US Forest Service) Bureau of Forestry (US Forest Service)

established established19071907 150 million acres into National Forests 150 million acres into National Forests19071907 Became accepted principle that it was Became accepted principle that it was

the the proper function of federal government proper function of federal government to carry out public works programs to carry out public works programs

to to control stream and river flows control stream and river flows

Foundation of Foundation of Assistance for Assistance for

AgricultureAgriculture

18621862Morrill ActMorrill Act

Homestead ActHomestead Act

USDA createdUSDA created

Chronic problems of farmers• credit • markets both addressed by Country Life Commission--1908

Farm Loan Act -- 1916

Capper Volstead Act -- 1922

Farm Bloc -- major initiatives -- 1920-21•Packers & Stockyards Act

•Futures Trading Act

•Emergency Agricultural Credit Acts

•Farm Loan Act revisions

In response to economic hardship, farmers first sought to organize

•Grange Movement -- cooperativesSecondly they turned to Congress for assistance

•Farm Bloc•Joint Commission of Agricultural Inquiry -- Henry C. Wallace

•Peek-Johnson -- Equality for Agriculture•McNary-Haugen

•“hunkered down”-- The Great Depression•New Deal•WW II•Technology

Journal Question:Journal Question:

What conditions led to the What conditions led to the “Golden Age of “Golden Age of Agriculture”?Agriculture”?

Will we ever reach such a Will we ever reach such a situation again?situation again?

#4

ResponsesResponses

Ignore/deny problem and minimize its Ignore/deny problem and minimize its impactimpact

Blame is a collective character flawsBlame is a collective character flaws

Blame the victimBlame the victim Emphasize developmentEmphasize development

– CommunityCommunity– RuralRural– EconomicEconomic

ResponsesResponses

Agriculture support programs and policiesAgriculture support programs and policies– Target pricesTarget prices– Deficiency paymentsDeficiency payments– Income paymentsIncome payments

Welfare programsWelfare programs– Food stampsFood stamps– Unemployment benefitsUnemployment benefits– ADCADC

Push for improved efficiency and Push for improved efficiency and productivityproductivity– Drive for industrializationDrive for industrialization

Poverty and Poverty and IndustrializationIndustrialization

In a response to declining or stagnate In a response to declining or stagnate conditions agriculturalist turned to conditions agriculturalist turned to industrialism emphasizing productivity, industrialism emphasizing productivity, efficiency, and outputs (Yields)efficiency, and outputs (Yields)

Implication of IndustrializationImplication of Industrialization– Increase use of purchased (off-farm) goodsIncrease use of purchased (off-farm) goods– Increase capital inputsIncrease capital inputs– Decrease labor requirementsDecrease labor requirements– Increase use of TechnologyIncrease use of Technology– Increase outputs (and therefore surpluses)Increase outputs (and therefore surpluses)

Consequences of Consequences of IndustrializationIndustrialization

1.1. Decline in labor Decline in labor – TechnologyTechnology– Capital intensificationCapital intensification

2.2. Completive LossesCompletive Losses– Some farmers are ill-equipped to handle change or Some farmers are ill-equipped to handle change or

new complexitiesnew complexities– Unable to respond well enough to upturns in economyUnable to respond well enough to upturns in economy

3.3. Discriminating policies or the residual effects of Discriminating policies or the residual effects of past discrimination on groups common in rural past discrimination on groups common in rural areasareas

– American IndiansAmerican Indians– BlacksBlacks