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UNITED STATES DEPARTMENT OF AGRICULTURE
US, AGRICULTURAL ADJUSTMENT ADMINISTRATION

AGRICULTURAL ADJUSTMENT

1937-38

A Report of the Activities Carried on by the
Agricultural Adjustment Administration

Under the Provisions of the Agricultural Adjustment
Act of 1938, the Soil Conservation and Domestic
Allotment Act, the Marketing Agreement Act of 1937,
the Sugar Act of 1937, and Related Legislation, from
January 1, 1937, through June 30, 1938

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الا باوند

LETTER OF TRANSMITTAL

UNITED STATES DEPARTMENT OF AGRICULTURE,
AGRICULTURAL ADJUSTMENT ADMINISTRATION,
Washington, D. C., November 26, 1938.

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-

MENT

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
greater cash income-Granger and Populist movements
reflect agricultural maladjustment.

II. SOURCES OF AGRICULTURAL DISADVANTAGE_

Irregular supplies conflict with inelastic domestic de-

mand-Adjustment required by decline in foreign demand—
Industrial tariffs shift excessive burden on agriculture.

III. EARLY MEASURES OF AGRICULTURAL ASSISTANCE__.

Free-land policies were first aid to agriculture-Aid in

improvement of crops, livestock, and soils marked post-
Civil War period-Turn of century brings protection
against unfair trade practices-Antitrust legislation seeks
to enforce fair competition-Extension service brings ad-
vantages of research.

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,
and Federal Intermediate Credit Act of 1923-Need for
group action recognized in farm cooperative movement—
Need for better balance with industry recognized in search
for farmers' tariff and for stabilized marketing.

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
through excise tax on processing-Act broadened in 1934—
Act qualified as a result of Supreme Court decision in
1935-Processing-tax collections terminated by Supreme
Court decision early in 1936.

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.

III. THE SUGAR ACT OF 1937--.

Act provides for regulation of sugar marketings through

imposition of quotas-Payments conditioned on observ-
ance of labor standards-Excise tax placed on manufac-
ture and importation of sugar.

IV. THE MARKETING AGREEMENT ACT OF 1937_

Act provides for marketing programs based on agree-

ments and orders-Orders limited to specified commodities

and products.

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

producers voting in referendum-Four new regional labora-

tories authorized.

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