NEW DEAL: FIRST PHASES 



The dairy industry was in a bad way. Curtailed milk consumption had 

 forced conversion of big surpluses into butter, and prices had fallen to the 

 lowest levels in years. This forced the A.A.A. to deal with the butter 

 problem in the manner of the deceased Farm Board. Butter had dropped 

 to fifteen cents by mid-December, when Wallace finally disclosed that 

 46,000,000 pounds had been purchased and bids were in for 15,000,000 

 more by December 28. At the same time, the dairy interests continued 

 their protests against the competitive products particularly coconut oil, 

 and other vegetable, animal, and marine oils which were coming in 

 duty free and were "hogging the market." They said that it was futile 

 "to reduce butter production by the various proposed schemes when the 

 American consumer can readily turn to a cheap and adequate substitute." 

 This created a difficult position for Wallace, who believed in a low tariff 

 so that foreign nations could be put into a position to pay for our agri- 

 cultural products, for here he ran squarely into the opposition of the 

 butter interests, who favored not only the retention but also the extension 

 of the protective system. 35 



In March, 1934, the governors of Wisconsin, Iowa, and Minnesota at- 

 tended another farm-relief conference held in Des Moines. Inspired by 

 the Farmers' Union and the Farm Holiday Association, they repeated 

 that the A.A.A. program was a failure and that a more realistic approach 

 to the farm problem was necessary. Again, "cost of production" was 

 asked for all commodities, and compulsory production controls were 

 demanded for all as soon as a majority of the farmers had signed agree- 

 ments. Governor Olson of Minnesota was designated to present the de- 

 mands of the conference to the administration. 36 



Early in the spring of 1934, before the drought began, sharp differences 

 developed over the administration's plan to remove unprofitable lands 

 from cultivation. This move was in effect a criticism of past practices 

 which had encouraged people to farm submarginal lands. It seems that 

 the government was beginning to put into operation what the Indians 

 had known many years earlier: "where nature had eliminated the tall 

 grasses very little profitable farming could be done." This was the begin- 

 ning of a program to transplant farmers from submarginal, or unprofit- 



35. Business Wee\ (December 23, 1933), p. 18. 



36. Pioneer Press, March 12, 1934; Minneapolis Journal, March 12, 1934. 



