Disparit:^-the Nation's I\o. 1 Problem 



Excerpts from annual address before 24th Annual Meeting of Illinois 

 Agricultural Association, Chicago, Jan. 31, 1939 



^^ /OATEST figures available dis- 

 ^•r"^ close that in November of 

 -/^ — ^ last year farm prices were 94 

 per cent of the 1909-1914 level. The 

 index of prices of things farmers buy 

 was 121. Industrial wages were 207 

 per cent. Last year while farmers were 

 producing more than ever before in the 

 history of the country, more than they 

 produced in 1919 or in 1929, or in any 

 other year, industrial production was 

 reduced 35 per cent below its produc- 

 tion in 1929. Factory payrolls dropped 

 30 per cent, although the per unit of 

 hourly wages was maintained and in 

 many instances increased. Thus, we wit- 

 ness that the rigidity in the prices of 

 things farmers buy and the continued 

 wide fluctuation in the prices of com- 

 modities farmers produce, is still the 

 Number One problem of the American 

 farmer and the major cause of the seri- 

 ous unemployment situation. 



Farmers cooperating, together with 

 the assistance of Government, have at- 

 tempted to control burdensome sur- 

 Eluses in the most economical way 

 oth after production and, to the ex- 

 tent necessary, before production, in 

 an eflFort to improve and stabilize agri- 

 cultural prices and to restore in some 

 degree a fair relationship between the 

 prices of farm commodities and in- 

 dustrial commodities and wages. 



Throughout these eflForts we have 

 been forced to meet attacks from those 

 who appeared to be uninformed as to 

 the purposes of our eflForts as well as 

 those informed but who for reasons of 

 a selfish nature have attempted to 

 thwart or neutralize the success of these 

 efforts. Organized farmers have been 

 forced to meet the opposition of much 

 of the metropolitan press, millions of 

 consumers in our cities who were prej- 

 udiced, by editorials and news article 

 appeals, and in addition political influ- 

 ences of an indefensible character. 



Notwithstanding this widespread and 

 at times effective opposition, thinking 

 farmers have moved forward, prompted 

 in the belief and definite conviction 

 that a fair balance in the price level of 

 all commodities and the standard of 

 wages in the United States was neces- 

 sary for the welfare of agriculture and 

 absolutely essential to the permanent 

 prosperity of America. 



By Earl C. Smith, President 



When our last annual meeting was 

 convened two bills of different charac- 

 ter for agricultural legislation which 

 had been previously passed by the re- 

 spective Houses of Congress were be- 

 fore a conference committee of the 

 two Houses. In considerable detail 

 reports were made to that meeting as 

 to the wide difference in the respective 

 bills. Acting under the instruction of 

 the Board of Delegates assembled in 

 that meeting, representatives of your 

 organization were very active with 

 other representatives of the American 

 Farm Bureau Federation in conveying 

 to the leaders of government the very 

 definite views expressed by the organ- 

 ized farmers of this and other states 

 of the corn belt and of the Nation on 

 the principles of legislation involved. 



I have no hesitancy in saying that 

 the result of the deliberations of the 

 delegates in that meeting had a very 

 definite and far-reaching effect upon 

 the final conclusions of the conference 

 committee of the two Houses of Con- 

 gress on the provisions of the legisla- 

 tion finally reported to the Senate and 

 to the House of Representatives, later 

 passed, signed by the President and 

 now embodied in the Agricultural Ad- 

 justment Act of 1938. 



I refer particularly to the provisions 

 of this Act clearly stating the factors 

 upon which the allotments of basic 

 crops enumerated in the Act are to be 

 made to the respective counties in com- 

 modity areas and finally to the farm- 

 ers within their respective counties. I re- 

 fer also to that very important pro- 

 vision that we speak of as the manda- 

 tory corn loan section of the Act. 

 Delays Limit Participation 



I am sure that all friends of the AAA 

 of 1938 both within and without the 

 Administration and Congress regret the 

 delay in the enactment of the law, in 

 the preparation of regulations cover- 

 ing its administration, in the organiza- 

 tion of administrative bodies in every 

 county of the Nation, and in giving 

 full and proper information to the 

 farmers throughout the country. These 

 delays, coupled with many inequitable 

 farm allotments, if not injustice, to- 

 gether with price levels then existing 

 of a reasonably satisfactory character 

 to many farmers, combined to seriously 



limit participation in the program by 

 the farmers of the corn belt, the cotton 

 belt and other sections of the country. 



We have been forced to face many 

 attacks upon this statute because of our 

 participation in its preparation and our 

 support of its administration. It is in- 

 teresting to note, however, that in 

 nearly every instance where the leaders 

 of your oragnization have been called 

 upon to defend the provisions of this 

 law, those opposing the AAA of 1938 

 have admitted that their opposition was 

 prompted largely by lack of informa- 

 tion, prejudice, or propaganda and on 

 many occasions have admitted they had 

 never seen a copy of the statute. 



We are still forced to hear that the 

 fundamental purpose of this Act is to 

 restrict production. Nothing is fur- 

 ther from the truth. The objective of 

 this law is to provide farmers with the 

 opportunity of cooperatively control- 

 ling the surpluses of basic crops so as 

 to remove their otherwise bearish in- 

 fluence upon price levels, and only to 

 the extent necessary, consistent with a 

 fair price level, to restrict production . . 



Are the general practices of industry 

 today as defensible as the objectives of 

 the AAA.' Every informed person 

 would have to answer this question in 

 the negative. It is well known that 

 production of industry is confined 

 largely to the current orders for their 

 respective commodities. I am informed 

 on good authority that even the auto- 

 mobile manufacturers, which industry 

 has contributed as much toward the im- 

 provement of their products and to re- 

 ductions in price levels consistent with 

 values and service as any other in- 

 dustry of the country, are largely oper- 

 ating on a so-called hand-to-mouth ba- 

 sis. In other words, their policies re- 

 strict their production to the demands 

 of current orders. 



Need Better Understanding 



All leaders of our organization 

 should put forth greater effort to bring 

 about a better understanding on the 

 part of all farmers as to the great need 

 for, the purpose of, and the fundamen- 

 tal objectives of the AAA of 1938. 

 Regardless of the many errors of judg- 

 ment and mistakes that have been made 

 in its administration, there can be 

 little, if any, just criticism directed 



>«.. ' «M 



FEBRUARY. 1939 



