UNITED STATES DEPARTMENT OF AGRICULTURE AGRICULTURAL ADJUSTMENT 1937-38 A Report of the Activities Carried on by the Under the Provisions of the Agricultural Adjustment LETTER OF TRANSMITTAL UNITED STATES DEPARTMENT OF AGRICULTURE, Hon. HENRY A. WALLACE, Secretary of Agriculture. DEAR MR. SECRETARY: Herewith is transmitted the fifth report of the farm programs that have been carried on for the benefit of agriculture and in the public interest through the Agricultural Adjustment Acts, the Soil Conservation and Domestic Allotment Act, the Marketing Agreement Act of 1937, the Sugar Act of 1937, and related legislation. An especial effort has been made to prepare a report sufficiently comprehensive and objective to be of the greatest value to yourself as Secretary of Agriculture, to Members of the Congress, and to others of the general public who are particularly interested in present and future problems of American agriculture. For their valuable help toward this end, particular credit is due to Harold B. Rowe, of Brookings Institution, who during a temporary appointment to the Agricultural Adjustment Administration outlined and assembled the economic analyses on which many of the conclusions of the report are based, and to Alfred D. Stedman, Assistant Administrator, who helped in shaping and editing the entire report. The report is submitted with a recommendation that it be printed. Sincerely yours, A. R. Jolley Administrator. III CONTENTS CHAPTER 1. THE BACKGROUND OF AGRICULTURAL ADJUST- I. EVIDENCES OF THE NEED FOR AGRICULTURAL ADJUSTMENT_. Rural incomes low in comparison with city incomes- Large soil losses brought about by attempts to achieve II. SOURCES OF AGRICULTURAL DISADVANTAGE_ Irregular supplies conflict with inelastic domestic de- mand-Adjustment required by decline in foreign demand— III. EARLY MEASURES OF AGRICULTURAL ASSISTANCE__. Free-land policies were first aid to agriculture-Aid in improvement of crops, livestock, and soils marked post- IV. RECOGNITION OF THE NEED FOR ADJUSTMENT__. Need for greater agricultural credit recognized in Fed- eral Reserve Act of 1913, Federal Farm Loan Act of 1916, CHAPTER 2. SUMMARY OF RECENT ADJUSTMENT LEGISLATION_ I. THE AGRICULTURAL ADJUSTMENT ACT OF 1933__ Acreage or production adjustments provided through agreements or other voluntary measures-Funds provided II. THE SOIL CONSERVATION AND DOMESTIC ALLOTMENT ACT____ Emphasis shifted from production adjustment to con- servation of soil resources-Payments authorized for ad- justment in land and farming practices-Total payments limited to $500,000,000 annually. Act provides for regulation of sugar marketings through imposition of quotas-Payments conditioned on observ- IV. THE MARKETING AGREEMENT ACT OF 1937_ Act provides for marketing programs based on agree- ments and orders-Orders limited to specified commodities V. THE AGRICULTURAL ADJUSTMENT ACT OF 1938. New act provides basis for an all-weather ever-normal granary program-Surplus control substituted for produc- tion or acreage control-Soil Conservation and Domestic Allotment Act significantly amended-Acreage allotments authorized for certain crops-Storage provisions make loans available on agricultural commodities-Marketing quotas authorized for certain crops under specified con- ditions of surplus and after approval by two-thirds of |