Agricultural Adjustment Act
The creators of the New Deal believed that raising the income of farmers would help raise the national economy. They thought that with the money the farmers made they would go out and spend it on other goods therefore raising the economy as a whole. This is why the Agriculture Adjustment Act was passed on May 12, 1933 by President Franklin D. Roosevelt. Its purpose was to reduce crop surplus in order to raise the value of crops. This act was carried out by the Agriculture Adjustment Administration. The Administration was responsible for regulating agriculture production of seven different crops. Farmers received subsidies for cooperating with the administration and limiting the amount of crops they produced. The money for these subsidies was generated through a tax that was imposed on companies which processed farm products.
Negative Effects
Most farmers did as the administration ordered in order to receive their payment because they couldn't afford not to take the government payments. Many farmers had already planted their crops by the time the administration was put into effect. Farmers decided to get rid of their crops. While millions of Americans went to bed hungry, farmers slaughtered millions of cattle, hogs, sheep, and other livestock and destroyed millions of acres of crops in order to qualify for their allotment payments.[7] This had a negative effect on sharecroppers and tenants that worked on the land that was no longer going to be used. They were out of work and forced to leave the land they lived on. This also increased the percentage of unemployed workers in the nation. Many sharecroppers that still worked on the land did not receive the benefits of the allotment programs because the landlords would keep the money for themselves instead of fairly distributing it.
Positive Effects
Although the AAA had a negative effect on some people, it did help raise farm prices. Cotton, wheat, and corn prices doubled in three years.[8] Many farmers were satisfied with the program because they began making more money. The employees of the Agriculture Adjustment Administration did not see the negative effects that occurred because of the program. In an article in the New York Times, the Administrator of the Agricultural Adjustment Act named this the most amazing period in agriculture.[9]
AAA Unconstitutional
On January 6, 1936, the Supreme Court ruled the AAA unconstitutional in the case U.S. vs Butler because of the tax that was used to give subsidies to farmers. In return the new administrator of the AAA, Chester C. Davis, said that Congress could enact new legislation to carry on the New Deal farm program in conformity with the holdings of the court.[10] The Soil Conservation and Allotment Act was passed that same year. This act gave subsidies to farmers who protected soil and water resources. The funds given by this act were collected from a tax pool that was constitutional. The AAA was rebuilt using the Soil Conservation and Allotment Act making it constitutional. Although the prices of crops were raised and farmers were making more money, the AAA did not do enough to undo the effects of the Great Depression. It wasn’t until World War II that the country started to get out the depression. Farmers today are still given subsidies by the government in order to produce a certain amount of crops. Giving farmers subsidies is a way to control prices in the market and it also controls the amount of food that is produced.
[7] James L. Roark, Michael P. Johnson, Patricia Cline Cohen, Sarah Stage, Alan Lawson, Susan M. Hartman, The American Promise A Compact History Fourth Edition 1863-1989 (Boston-New York, Bedford/St. Martin’s, 2012)
[8] Independence Hall Association. “The Farming Problem.” Last Modified 2013. Accessed November 13, 2013. http://www.ushistory.org/us/49c.asp.
[9] George N. Peek, Administrator of Agriculture Adjustment Act. 1933. “The Most Amazing Period in Agriculture” New York Times (1923-current file), Sep 17, 1933. http://search.proquest.com/docview/100801448?accountid=10351.
[10] "AAA HERE TO STAY, FARMERS ARE TOLD." New York Times (1923-Current File), Dec 11, 1935. http://search.proquest.com/docview/101268017?accountid=10351.
Most farmers did as the administration ordered in order to receive their payment because they couldn't afford not to take the government payments. Many farmers had already planted their crops by the time the administration was put into effect. Farmers decided to get rid of their crops. While millions of Americans went to bed hungry, farmers slaughtered millions of cattle, hogs, sheep, and other livestock and destroyed millions of acres of crops in order to qualify for their allotment payments.[7] This had a negative effect on sharecroppers and tenants that worked on the land that was no longer going to be used. They were out of work and forced to leave the land they lived on. This also increased the percentage of unemployed workers in the nation. Many sharecroppers that still worked on the land did not receive the benefits of the allotment programs because the landlords would keep the money for themselves instead of fairly distributing it.
Positive Effects
Although the AAA had a negative effect on some people, it did help raise farm prices. Cotton, wheat, and corn prices doubled in three years.[8] Many farmers were satisfied with the program because they began making more money. The employees of the Agriculture Adjustment Administration did not see the negative effects that occurred because of the program. In an article in the New York Times, the Administrator of the Agricultural Adjustment Act named this the most amazing period in agriculture.[9]
AAA Unconstitutional
On January 6, 1936, the Supreme Court ruled the AAA unconstitutional in the case U.S. vs Butler because of the tax that was used to give subsidies to farmers. In return the new administrator of the AAA, Chester C. Davis, said that Congress could enact new legislation to carry on the New Deal farm program in conformity with the holdings of the court.[10] The Soil Conservation and Allotment Act was passed that same year. This act gave subsidies to farmers who protected soil and water resources. The funds given by this act were collected from a tax pool that was constitutional. The AAA was rebuilt using the Soil Conservation and Allotment Act making it constitutional. Although the prices of crops were raised and farmers were making more money, the AAA did not do enough to undo the effects of the Great Depression. It wasn’t until World War II that the country started to get out the depression. Farmers today are still given subsidies by the government in order to produce a certain amount of crops. Giving farmers subsidies is a way to control prices in the market and it also controls the amount of food that is produced.
[7] James L. Roark, Michael P. Johnson, Patricia Cline Cohen, Sarah Stage, Alan Lawson, Susan M. Hartman, The American Promise A Compact History Fourth Edition 1863-1989 (Boston-New York, Bedford/St. Martin’s, 2012)
[8] Independence Hall Association. “The Farming Problem.” Last Modified 2013. Accessed November 13, 2013. http://www.ushistory.org/us/49c.asp.
[9] George N. Peek, Administrator of Agriculture Adjustment Act. 1933. “The Most Amazing Period in Agriculture” New York Times (1923-current file), Sep 17, 1933. http://search.proquest.com/docview/100801448?accountid=10351.
[10] "AAA HERE TO STAY, FARMERS ARE TOLD." New York Times (1923-Current File), Dec 11, 1935. http://search.proquest.com/docview/101268017?accountid=10351.