47 AGRICULTURAL DISCONTENT 



by the Federal Farm Loan Banks of two billion dollars' worth of long- 

 term tax-exempt 4 per cent bonds. As soon as the Farm Credit Admin- 

 istration was created, new credit programs were set up to extend financial 

 aid of one type or another. 47 



By the Thomas amendment, the President could direct the Secretary of 

 the Treasury and the Federal Reserve Banks to purchase federal govern- 

 ment bonds in the open market to the extent of $3,000,000,000; the Secre- 

 tary of the Treasury could issue greenbacks up to the sum of $3,000,000,000 

 to meet federal obligations that could be retired at a 4 per cent rate of in- 

 terest; the President could devalue the gold content of the dollar by 50 

 per cent; and finally, silver could be accepted by the United States Treas- 

 ury from foreign debtors at fifty cents an ounce up to $200,000,000. Silver 

 certificates could be issued against it in equal amount. 48 



The big difference between the program finally adopted by the admin- 

 istration and the McNary-Haugen and export debenture proposals was 

 that it felt the need for production control. The allotment plan was ac- 

 cepted as "a recognition of the principle that a tariff does not benefit farm- 

 ers who produce a commodity of which there is an exportable surplus." 

 Since the United States was committed to a high tariff "and since for- 

 eign countries [had] turned to almost every conceivable form of re- 

 striction export bounties, licensing systems, import quotas, mixing regula- 

 tions, importing monopolies, etc. the domestic allotment plan [was] 

 developed to give the American farmer the benefits of protection for that 

 portion of his produce used domestically." Like the Farm Board, it was 

 nationalistic and its sponsors were willing to concede that economic 

 nationalism had victimized the farmers in the past. Still, nationalism 

 was a world-wide phenomenon and the A.A.A. was looked upon as "a 

 means for equalizing the social costs of adjusting the agricultural plant 

 of the United States to this situation." ' 



47. Congressional Digest, XII (June-July, 1933), p. 184; William G. Murray, 

 Agricultural Finance (Ames, Iowa, 1941), pp. 191-92. 



48. Broadus Mitchell, Depression Decade (New York, 1947), pp. 137-38; Federal 

 Reserve Bulletin, XIX (June, 1933), pp. 336-37; James D. Paris, Monetary Policies 

 of the United States, 1932-1938 (New York, 1938), p. 43. 



49. Theodore W. Schultz and A. G. Black, "The Voluntary Domestic Allotment 

 Plan," in Staff of the Department of Economics of Iowa State College, The Agricul- 

 tural Emergency in Iowa (Ames, 1933), p. 104. 



