37^ AGRICULTURAL DISCONTENT 



American Farm Bureau Federation. The principal ideas in this pamphlet 

 soon captured the imagination of many farmers, their spokesmen in Con- 

 gress, rural business groups, and vocal elements of the rural press, and 

 one result was a "knock 'em down, drag 'em out fight" between the farm- 

 ers and the administration in Washington. Nowhere did their proposal 

 gain more adherents than in the western Middle West. 



The proposal of Peek and Johnson was based on the assumption that 

 agriculture as well as industry had to receive a "fair exchange value" for 

 its products if it was to survive. The fair exchange value of a particular 

 commodity was defined as one which bore "the same ratio to the current 

 general price index as a ten year, pre-war average crop price bears to the 

 average general price index, for the same period." Such a fair exchange 

 value was to be reached not only by keeping the high tariff walls intact 

 but also by implementing them with a mechanism that would enable the 

 farmers to dispose of their surplus at world prices. What losses there 

 were suffered by selling on the world market would be recouped through 

 an equalization fee that would be assessed on those who sold for a higher 

 price on the domestic market. In other words, this called for a two-price 

 system a domestic and a world price, the first of which was expected 

 to be the higher one but with the added effect of raising general price 

 levels. Assessments on those who sold on the domestic market would be 

 made by giving to them partial payment for their crop in the form of a 

 "scrip," the value of which would be determined after operation costs and 

 losses had been determined. Theoretically, at least, those who lost by selling 

 on the world market would be paid back part of their loss by those who 

 sold on the domestic market. 15 



George Peek was one of the men who had been invited to attend Presi- 

 dent Harding's agricultural conference in 1922. One recommendation 

 made by the conference was that the President and Congress should "take 

 steps immediately to re-establish a fair exchange value for all farm prod- 

 ucts with that of other commodities. . . ." But for Peek the passing of 

 a resolution was not enough. According to Russell Lord, "Peek grumbled 

 that a big, sedate affair had not been his idea of a real conference," and 

 for weeks he "kept coming to Wallace and his economists for a discussion 



15. John D. Black, "The McNary-Haugen Movement," American Economic 

 Review, XVIII (September, 1928), pp. 406-9. 



