Umrchy 1932 



THE I. A. A. RECORD 



Page Seventeen 



Some Observations on Agriculture 



An Address Before the United States War Industries Board Association 



•^::-^^-.-v-^,^^.>-/rv^:^^-'':-.^--':-'-^ By GEO. N. PEEK, MOLINE, /LL. ^^>::^•^-^: ,v;v- -■'■■..::: ;,.- 



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THE farmer, like many others in 

 business, is suffering from too low 

 a price, too much interest, too much 

 tax. 



In order to get a correct picture of 

 his condition, it is necessary to refer to 

 figures, although I realize that it is not 

 popular to do so, particularly before an 

 industrial group which has so many 

 troubles of its own at this time. 

 ■ The gross income of agriculture in 

 1919 was $17,810,000,000 (the highest 

 of which we have record); in 1930 it 

 was $9,400,000,000, and in 1931 it is 

 estimated at between six and seven bil- 

 lion.* In May, 1928, farm commodity 

 prices were 48% above the average for 

 1909-1914, and in September, 1931, 

 they were 28% below this five-year 

 average, while the prices of supplies the 

 farmer buys, not including taxes and 

 freight, were 27% above the pre-war 

 level. It is estimated by competent 

 authorities that farm products have now 

 but 57% of their pre-war purchasing 

 power. 



Farm Debt Grows 



The farm mortgage debt in 1910 

 stood at $3,600,000,000; in 1920 at 

 $7,900,000,000 and in 1928 at $9,- 

 500,000,000. These figures do not in- 

 clude other debts, and are lower than 

 they would be had not there been so 

 many foreclosures and so much turn- 

 ing over of property in cancellation of 

 debt. Land values have returned to 

 1913 levels. 



Farm taxes in 1919 (the year of 

 highest farm income) were but 30% 

 higher than the average for 1910-1914, 

 while in 1929 they were 167% higher. 

 It has been estimated that in the state 

 of Illinois tangible property receives but 

 10% of the total income of the state 

 and pays over 96y2% of all taxes. De- 

 linquency in taxes in some of the agri- 

 cultural states runs as high as 80% in 

 some counties. The situation in the 

 cities is better known to industrial 

 groups. 



Farm Migration 



Summing up the foregoing, I may 

 say, in general, that the farm debt is 

 three times as much as it was in pre- 

 war times, and taxes much more than 

 double, while land values are no more, 

 if as much, and farm products repre- 

 sent an exchange value for industrial 



*Note: Standard Statistics Co. of New York 

 estimates the value of the 1931 agricultural in- 

 come at $6,500,000,000, the smallest with one 

 exception since 1910. 



products of little more than one-half. 

 These figures tell an eloquent story. 



Migration from the farms for the 

 ten years beginning in 1920 was about 

 2,000,000 a year. It is true that about 

 75% of this number found their way 

 back to the farms, but only after mill- 

 ing around in the cities looking for jobs 

 and meeting with continued disap- 

 pointments. I submit that their point 

 of view was not the same as when they 

 left the farms. 



The Chamber of Commerce of the 

 United States, through a special com- 

 mittee, recently suggested as one meas- 

 ure of relief from the unemployment 

 situation the sending of men from the 

 cities back to the farms, notwithstand- 

 ing the fact that during the early period 

 of this migration it was urged that the 

 movement away from the farms was a 

 natural one. The cities during the early 

 part of this period mistakenly formed 

 the impression that this influx was per- 

 manent, with the result that many new 

 buildings were built to accommodate 

 this new population, particularly office 

 buildings, hotels and apartment build- 

 ings, which now are only partially occu- 

 pied and which stand as a monument 

 to the mistaken judgment of their 

 builders. ',/;:%;:-... -• ,. 



Hole in the Bottom 



Bank failures, starting in the country 

 in 1920, have continued, and have ex- 

 tended to our largest cities, until they 

 reached such serious proportions as finally 

 to attract the attention of our national 

 administration, resulting in the organi- 

 zation of a credit corporation for their 

 relief. I think that this action was wise, 

 but I believe that it is not a cure for 

 the condition. We cannot fill a barrel 

 by pouring water in at the top when 

 there is a large hole in the bottom; and 

 so long as the sources of new wealth — 

 the mines, the oil wells, the forests and 

 the farms — are all producing at or be- 

 low cost, the condition is unhealthy, to 

 say the least. 



Unemployment Situation 



The unemployment situation has re- 

 sulted in national action. I refer to the 

 organization and activity of the so- 

 called Gifford Committee, and recently 

 Ex-President Coolidge recognized the 

 seriousness of the problem and asked us 

 all to "Give all America is worth to 

 you." 



The present situation strikes at the 

 very heart of our government — ^respect 

 for property rights and the sacredness 



of contract. We now face in a large 

 way inability to pay, which may be 

 followed, if the situation continues^ by 

 lack of desire to pay; then repudiation; 

 then chaos. 



Communism and other "isms" cannot 

 be combatted successfully with oratory, 

 but only by our providing and main- 

 taining a better system. Sacred regard 

 for the property rights of a large num- 

 ber of small property owners rather 

 than reverence for a small number of 

 large property owners, is insurance of 

 the highest type for the capitalistic or 

 individualistic system. 



The Marketing Act • 



The foregoing figures inadequately 

 reflect a condition that has developed 

 during the past 12 years, reaching its 

 worst during recent months. A general 

 demand for a national policy that would 

 place agriculture on sound footing re- 

 sulted in the passage of the Agricultural 

 Marketing Act of 1929. The remedy 

 it sought to offer differed from that 

 offered previously by the farmers 

 through their organizations. They rec- 

 ognized marketing as practical, hard- 

 headed business, involving costs and 

 risks of loss, particularly in dealing 

 with crop surpluses, and proposed that 

 such costs and losses should be dis- 

 tributed pro rata over the producers 

 benefited, by a tax or fee, call it what 

 you like. 



Another plan much discussed would 

 have provided for the issuance of treas- 

 ury debentures on exports, amounting 

 to part or all of the duty on a farm 

 product, and receivable at par in pay- 

 ment of the duty on imports. In effect, 

 this plan would draw indirectly upon 

 the treasury of the United States, since 

 it would divert to an export subsidy a 

 substantial portion of the import duties 

 that otherwise would be collected. 



The plan enacted into law was based 

 on the assumption that there would be 

 no losses, but provided that if there 

 were, they should be borne by the gov- 

 ernment. 



A Step Forward 



The Agricultural Marketing Act was 

 a step toward an agricultural policy, 

 but in failing to provide means for 

 financing its operations other than by 

 federal subsidy, it was like an auto- 

 mobile without the engine, it might 

 look like the real thing but the means 

 were lacking to make it go. 



Presumably one of the objects, not 

 only of what the farmers asked for but 



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