u 



1929 through 1932, city incomes fell 

 one-third; farm prices already peril- 

 ously low, fell two-thirds; and the 

 distribution spreads stayed wide. 

 There was still good money in farm 

 crops, if you didn't happen to be 

 growing them. Of the 15 leading 

 corporations in point of earnings in 

 1932, nine dealt in food and tobacco. 



The first job of the New Deal is an 

 orderly transfusion of income; a re- 

 distribution of buying power; not so 

 much a sprinkling of money in- drib- 

 bles from the top down; but a growth 

 of spending from the grass-roots up. 

 We have been putting money into 

 overall pockets on the farm and in 

 the factory. We already have evi- 

 dence that when this is done, the 

 money moves, restoring broken cir- 

 cuits of business everywhere. And 

 we are not giving that money away, 

 either; we are getting something for 

 it, something that ought to prove a 

 force for permanent stability and 

 progress. 



We are getting a thoroughgoing re- 

 organization of both production and 

 distribution, through which to avoid, 

 in the future, the immense social 

 losses of ungoverned, cut-throat com- 

 petition. 



The Farm Act makes such a 

 groundwork reorganization of agri- 

 culture possible. It makes possible an 

 adjustment of farm production to go- 

 ing demand, at home and abroad. 

 This and other new legislation make 

 possible an effort toward adjusting 

 distribution methods and costs; and 

 provide for an adjustment of debts, 

 with an adjusted dollar, if need be. 



You can't change farm routine 

 around the way you can in a factory. 

 Changes take time. I sometimes hesi- 

 tate to call what we have done to- 

 ward correcting our national farm 

 production schedules, a "program." 

 As often as not we were in the middle 

 of the thing before we had much time 

 to choose and deliberate; we were 

 pushed on from behind. The situation 

 was desperate. The pressure of a 

 driving necessity was behind us. Many 

 of our former opponents of farm 

 legislation were in the front line in 

 this push from behind. And all the 

 time crops came along, ripening, in 

 their own good time, as always, re- 

 gardless of our wishes. 



The Cotton Deal 



Cotton was ripening in the southern 

 part of the Cotton Belt when we still 

 were setting up our organization last 

 May. We had to go into action fast. 

 We organized the cotton growers into 

 county production control associations, 

 plowed under 10% million acres of 

 cotton, a quarter of the entire crop, 



and seeded $110,000,000 of new cash 

 spending power in the cotton South. 

 The weather fought against us, it 

 fought for a surplus; but we pre- 

 vented another year of 5 -cent cotton 

 that otherwise would have been a cer- 

 tainty. ■;':;.,.; ' --'v"': ■'v''.:-',-;;.;^ J'. :'■■.; ■.,■,;'';.■■•;•.;;> 

 To protect farmers against forced 

 marketing, we are lending 10 cents a 

 pound on Middling or better cotton 

 now. And there is one interesting 

 thing about this lending program of 

 the Commodity Credit Corporation 

 that I would like to mention. As soon 

 as the Government made its lending 

 intentions known, the banks down 

 South came to life, and made like 

 loans, privately. Only about one-third 

 of the money so far loaned on cotton 

 has come from the United States 

 Treasury; the other two-thirds was 

 loaned by banks, privately. That just 

 goes to show that when there is as- 

 surance of the farmer getting a rea- 

 sonable amount for his crop, the pri- 

 vate business structure of the com- 

 munity begins to get some confidence 

 and to function again, naturally and 

 healthfully. I observe the same tend- 

 ency beginning to operate out here as 

 a result of our program of 45-cent 

 loans on corn. 



Reducing Surpluses 



The 1934 cotton program calls for 

 doing the job of reduction by taking 

 the cotton out before it is planted. 

 We are going to reduce the national 

 cotton acreage from 40 mil^on to 25 

 million acres in 1934, and make com- 

 pensating adjustment payments to 

 cotton growers that probably will 

 total 125 million dollars. 



To adjust the national wheat acre- 

 age to the diminished overseas de- 

 mands was an even bigger undertak- 

 ing, but we had more time. With 

 world accord, we have signed up about 

 four-fifths of the entire American 

 acreage for a three-year adjustment 

 downward, with a 15 percent reduc- 

 tion of acreage this year. The first 

 of $100,000,000 adjustment money has 

 gone out to the farmers. Wherever 

 that money has reached, distress and 

 tension have been relieved and hopes 

 have been renewed. 



As an auxiliary device in clearing 

 up the wheat surplus situation we ar- 

 ranged to export to the Orient Pacific 

 Northwest wheat which otherwise 

 would have been forced East to 

 burden the domestic markets heavily. 

 In this way we were able to ship 

 some of our surplus wheat off the top 

 of the pile, at the same time that we 

 were cutting in under the pile by pro- 

 duction control. 



We have used, and shall use, every 

 practical device for reducing this and 



•I. A. A. RECORD— January, 1934 



other surpluses. Efforts have recent- 

 ly been launched, for instance, to get 

 the distillers back as a market for 

 American grain. 



It seems that since prohibition, proc- 

 esses have been developed for manu- 

 facturing alcohol from blackstrap ' 

 molasses, and from a synthetic proc- 

 ess in the cracking of gas. Whether 

 or not we favored repeal, repeal is 

 here; and we think the grain-growing 

 farmer should have the benefit of that 

 market which he had in the pre- 

 Prohibition days. 



The activities of the Surplus Relief 

 Corporation in moving surpluses that 

 otherwise would be worse than 

 wasted, directly to the hungry and 

 needy within, our own borders, are de- 

 veloping into a very valuable form of 

 surplus-removal; and one which no 

 one, I am sure, will disapprove. That 

 use of surpluses is to me, personally, 

 one of the most heart-warming things 

 that has happened since our work 

 started. The Agricultural Adjustment 

 Administration does not have direct 

 responsibility for this activity. It is' 

 under the direction of Mr. Harry Hop- 

 kins; but we are certainly behind it 

 100 percent. 



Similarly, the Agricultural Adjust- 

 ment Administralion cannot claim 

 credit for the recognition of Russia 

 but the reopening of that market for 

 our products should absorb some of 

 our surpluses. The whole question of 

 further foreign trade will reward, I 

 believe, a very careful looking-into. ~ 

 There has been set up an inter-de- 

 partment Trade Commission to study 

 the entire question of possible exports 

 and imports; and on this commission 

 agriculture is represented. 



When it comes to codes and mar- 

 keting agreements, we have some out- 

 standing successes, and a number of 

 considerable steps in progress to re- 

 port. I consider the flue-cured to- 

 bacco agreement especially oustand- 

 ing. By agreement with the big 

 companies we have assured farmers a 

 price 40 percent above the price pre- 

 vailing when Governors were closing 

 markets last summer. Further agree- 

 ments, some of them coupled with a 

 production control attack, are now in 

 the works for fire-cured, air-cured, 

 and Burley tobacco growers. 



Milk Agreements 



As to milk agreements, our prog- 

 ress has been less uniform. We have 

 made, on the whole, slow progress, 

 often against the meanest sort of op- 

 position from within the industry and 

 from without. But within the past 

 month or so we have closed a number 

 of milk agreements, and have moved 

 (Continued on page 16) 





I 



f^ 



k 



?o 



'1- 



I 



I- 



i 



