NEW DEAL: FIRST PHASES 479 



of a surplus the following year. And the dairy producers had their dif- 

 ficulties. Besides the low prices for cheese and butter, the marketing 

 agreements were being challenged in the courts. The prices that they 

 were getting for milk had gone up, but so did the margins that the dis- 

 tributors received. 



The administration was beset with other troubles. At the outset it had 

 conceded that the job it was undertaking was a vast one, faced with 

 numerous obstacles, but there were those who insisted that the administra- 

 tion had promised miracles, as though solving the farm problem were 

 merely a matter of rubbing Aladdin's lamp. 10 



The prices received and paid by the farmers furnish a good barometer 

 of agrarian discontent and the difficulties which faced the administration 

 in 1933. In February of that year the general level of farm prices and their 

 exchange value had dropped to the lowest point on record, 49 per cent of 

 the prewar average. In March the new legislative program was launched. 

 Farm commodity prices improved slightly in March and substantially in 

 April and May. In July there was a sharp speculative advance followed 

 by a reaction. Speculation in wheat, cotton, and other commodities and 

 purchases by mills, consumers, and others accelerated business activity, 

 and prices rose. The sharp business recession came after the middle of 

 July. Still, from mid-March to mid-October there was a net gain of 47 

 per cent. There was, however, a gain of only 22 per cent in the exchange 

 value of farm products from March to October, somewhat less than had 

 been hoped for because the prices paid by the farmers had advanced 

 considerably. 11 



This rise in nonfarm prices caused the administration no end of trouble. 

 The increase was attributed in large measure to the National Recovery 

 Administration, which was accompanied with rising costs of production 

 for manufactured goods. In September, 1933, the farmers complained 

 that they paid more for their overalls than they did before, that flour cost 

 more, and that one of the big mail-order houses had put into effect a 

 horizontal increase of 20 per cent on farm implements. In South Dakota 

 a good portion of the crop had been laid waste by grasshoppers, and in 

 other states the crops had been cut by the drought. In Nebraska and 



10. "Farm Troubles," Business Wee\ (September 16, 1933), p. 16. 



11. U. S. Dept. Agri., Yearboof(, 1934, pp. 13, 58; Joseph S. Davis, Wheat and 

 the AAA (Washington, 1935), p. 53. 



