40 AGRICULTURAL DISCONTENT 



North Dakota the governors came out openly against the N.R.A. and 

 the way it operated there. Hugh S. Johnson, the administrator of N.R.A., 

 admitted that in some instances, particularly in textiles, retail prices had 

 advanced faster than had purchasing power. 12 



Facts substantiated the complaints of farmers that nonfarm prices were 

 rising faster than those for farm products. In many industries wages per 

 hour rose as much as 50 per cent. The manufacturers naturally tried to 

 pass the increase on to the consumers, which included the farmers, and 

 in most instances this is precisely what happened. Between March and 

 October the average advance was more than 17 per cent. Urban wages 

 also rose, and farm wages had to follow suit if the farmers were to com- 

 pete with city wages. Briefly, agriculture failed to make the progress 

 expected in reducing the disparity between agricultural and nonagricul- 

 tural prices. 13 



One of the widely heralded objectives of the A.A.A. was to raise com- 

 modity prices sufficiently to enable the borrowers to repay their debts "in 

 the same kind of dollar which they borrowed." Monetary reform was 

 considered an essential part of any such recovery. Judging from the 

 series of events which took place, one could have had good reason for 

 expecting this goal to be attained. The abandonment of the gold standard, 

 the prospect of a small North American wheat crop, political pressure for 

 inflation, "a confident spirit from the White House," and a mounting 

 hope on the part of the masses contributed to speed up industrial activity 

 and encourage speculation in various farm commodities, hence to raise 

 prices. But the pronounced business recession which followed after the 

 middle of July caused many to believe that the next big demand of the 

 farmers was going to be for more inflation. 



Wallace, however, made it clear that the carrying of inflation beyond 

 the point of establishing parity prices would create fresh injustices. In 

 the fall of 1933 the Secretary cautioned that to depend exclusively on a 

 monetary policy to restore farm incomes was insufficient, because deprecia- 

 tion of the dollar reacted differently on different farm products. Wallace 

 claimed that depreciation of the dollar raised the prices of the export or 



12. Milwaukee Journal, September 17, 1933; Christian Century, L (November i, 



1933)' PP- 1355-56. 



13. U. S. Dept. Agri., Yearboot^, 1934, p. 13. 



