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L A. A. RECORD— January, 1934 



11 



Achieving Equality 



Remarks by GEORGE N. PEEK, Administrator, A. A. A.. 



before the American Farm Bureau Federation, 

 Vv ^ ^ V 12, 1933 ; 



GEO. N. PEEK 



I'M back home here again, in my 

 own State, among my old friends, 

 to talk over a few things — some 

 new and some old. Since I took the 

 job as Administrator of the Agricul- 

 tural Adjustment Act last spring this 

 is the first time I've left my desk to 

 do any talking except over the radio. 

 I came out here to find out how you 



feel about certain 

 things, to let you 

 know how I feel 

 about them, and 

 to tell you about 

 some of our ac- 

 tivities. Tome 

 agriculture is the 

 most important 

 industry in the 

 country. It is the 

 bed-rock upon 

 which national 

 prosperity rests. 

 It must be made more profitable for 

 the farmer. Later on I will discuss 

 the profit motive more fully, but right 

 now I want to say to you that if our 

 profit system is to remain, I believe 

 individual effort must be encouraged 

 and rewarded, just as I believe that 

 the profit system must be controlled 

 and that it can be maintained" only 

 with honesty and decency. I further 

 believe that under any system of gov- 

 ernment individual effort must be en- 

 couraged and the property rights of 

 the individual protected. 



Seven months ago yesterday the 

 Farm Act was signed by President 

 Roosevelt, and the Agricultural Ad- 

 justment Administration was organ- 

 ized. We haven't been able to do all 

 that we had hoped to in that time, 

 but we have done quite a bit. I shall 

 begin by giving you an account of 

 what we have accomplished to date, 

 and why; and then go on from there. 



Getting Action Now 



You can't hurry the sun. And you 

 can't hold it back. In the long, slow 

 swing of the seasons which governs 

 agricultural operations, seven months 

 is no time at all. Much corn that was 

 being planted when the President 

 sign">d the Farm Act is not yet in the 

 crib. We had to wait for another 

 season before we could properly get 

 at the critical economic ache here in 



our Middle West. And, in the cir- 

 cumstances prevailing, that has 

 seemed, as you know, and as some of 

 you have not hesitated to say, a long 

 time to wait. 



The Administration is getting into 

 action now out here in the agricul- 

 tural heart of the country. I believe 

 that the Middle West will be feeling 

 better soon, and that its improved 

 condition will be reflected throughout 

 the Nation. But I don't want to be 

 interpreted as saying that the doctor 

 is here at last with his little black 

 bag, and that everything is going to 

 be all right from now on. 



The situation that was dumped into 

 the laps of the present Administration 

 on March 4 of 1933 was at least 12 

 years in the making. Our present 

 farm situation is still a long way 

 from satisfactory, but if you compare 

 it with the way things were at the 

 end of last winter, it makes the spot 

 where we are now seem almost com- 

 fortable. We have hope now, and 

 reasjn for hope. And conditions a 

 year ago, whether you looked at the 

 thing as a farmer or as a city man, 

 promised soli ^.e ruin. 



For nine years, from 1920 until late 

 in 1929, our open country was drained 

 of money and of its best blood-stock 

 by an unmerciful and uneven de- 

 flation. For three years on top of 

 that, from 1929 on through 1932, the 

 open country was racked by price dis- 

 parities which widened as the depres- 

 sion deepened and spread. For nine 

 years general business in this country 

 was a soaring, pumped-up superstruc- 

 ture, which seemed not to touch agri- 

 culture, the foundation, at any point. 

 Many people used the apparent in- 

 dustrial prosperity as a sign reading, 

 "Farm buying power no longer neces- 

 sary for national prosperity." The 

 neglected foundation sagged. The en- 

 tire structure of false, unshared pros- 

 perity toppled. And it was agricul- 

 ture, the foundation, which took the 

 hardest punishment. Farming as a 

 business was all but shattered in the 

 depression that followed the general 

 crash of 1929. 



Farm Deflation 



In 1928 the prices paid to farmers 

 averaged around 50 percent above 



pre-war. By early 1933 they had 

 dropped 50 percent below pre-war. 

 The prices that farmers had to pay 

 for things they bought was, in 1933, 

 down to the pre-war level, but not 

 below it. Thus, early in the year 

 1933, farmers had only about half of 

 their pre-war unit purchasing power. 

 Gross farm income from crops pro- 

 duced in 1932 was only half the 1929 

 income. Interest and taxes had to be 

 paid at the old levels. 



Capital value in agriculture stood 

 at 79 billion dollars in 1919. By the 

 beginning of 1929 it had shrunk to 58 

 billion dollars. By the beginning of 

 1933 another 20 I illion dollars in farm 

 capital values had been drained away; 

 the total stood at only 38 billion dol- 

 lars. From a 79 billion dollar valua- 

 tion down to a 38 billion dollar valua- 

 tion, in 12 years! The fields and farm 

 homes of this Nation were bled white. 



It may be asked how a business so 

 brutally deflated managed in those 

 same years to maintain that great 

 flood of overproduction which by 1933 

 had raised the cotton carry-over in 

 this country to two and a half times 

 its normal height, and piled up a 

 wheat carry-over three times normal. 

 Curiously enough, the disparity be- 

 tween city and farm prices which we 

 have been trying to offset is a situa- 

 tion that brews its own poison, lead- 

 ing to still wider price maladjust- 

 ments, if left alone. As the President 

 has said, we were a Nation half 

 busted and half booming. The busted 

 half, paying boom prices for interest, 

 for taxes, and for all things pur- 

 chased from town, had to gfrow more 

 and more stuff for less and less 

 money. It takes twice as much 40- 

 cent wheat as 80-cent wheat to meet 

 a tax bill. It takes twice as much 

 5-cent cotton as 10-cent cotton. It 

 takes twice as many 3-cent hogs as 

 6-cent hogs. And so on, to the bitter 

 end. 



In consequence, last spring we 

 found ourselves, as a Nation, with 

 some 40 million acres more in crops 

 than were cropped before the War; 

 and this was in a changed world 

 which for the present at least had 

 shut down on the importation of our 

 products, as we had on theirs. 



Distribution High 



Disorganized overproduction was 

 only part of the trouble. Lack of 

 foreign markets was only part. Dis- 

 tribution tolls were too high. With 

 agriculture prostrate at the end of 

 1932, and with the cities sharing at 

 last in the depression, many distribu- 

 tion margins were still just as wide 

 as they had been in 1929. In the last 

 three years of the Old Deal, from 



