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Prosperity & Depression 1897 - 1933

Prosperity & Depression 1897 - 1933. “What goes up, always comes down.” 1897 - 1910 -- 13 years of unbridled growth farm prices rose successfully reduced much of the drudgery of farm work parity rate was favorable ratio between farm price and non-farm goods. Formula for the Good Life.

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Prosperity & Depression 1897 - 1933

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  1. Prosperity & Depression1897 - 1933 “What goes up, always comes down.” 1897 - 1910 -- 13 years of unbridled growth • farm prices rose • successfully reduced much of the drudgery of farm work • parity rate was favorable • ratio between farm price and non-farm goods

  2. Formula for the Good Life • Good Life = f (hard work, thrift, saving, investment, and right thinking) • Golden Age of Agriculture 1910 - 1914 base years for Parity comparisons • World War I 1914 - 1918 increased demand 1920 - farm prices doubled

  3. Doubling of farm prices • bid up land prices -- 70% increase 1913 - 1920 • 1918 War ends--agriculture enters a recession and in 1920 there was a collapse • farm prices fell by 50% • wave of farm bankruptcies • 1929--nation enters an economic depression • 1929 - 1933 durable good production fell 80% farm income declined 40%

  4. The BIG Picture 1897 - 1920 Prosperity 1920 - 1933 Depression

  5. 1897 - 1933The Beginning of Scientific Agriculture 3 Essential Components 1) The discovery of scientific relationships 2) The development of new technologies based upon these scientific relationships 3) The adoption of new technologies on farms

  6. The Ups and Downs of the Farm Economy 1865 Civil War ends 1897 1918 WWI 1920 1940-1945 WWII 1929-1932 Great Depression

  7. Conservation of Natural Resources 1891 50 million acres of timberland set aside 1901 President Theodore Roosevelt elected 1901 Bureau of Forestry (US Forest Service) established 1907 150 million acres into National Forests 1907 Became accepted principle that it was the proper function of federal government to carry out public works programs to control stream and river flows

  8. Foundation of Assistance for Agriculture 1862 Morrill Act Homestead Act USDA created

  9. Chronic problems of farmers • credit • markets • both addressed by Country Life Commission--1908 Farm Loan Act -- 1916 Capper Volstead Act -- 1922 • Farm Bloc -- major initiatives -- 1920-21 • Packers & Stockyards Act • Futures Trading Act • Emergency Agricultural Credit Acts • Farm Loan Act revisions

  10. In response to economic hardship, farmers first sought to organize • Grange Movement -- cooperatives • Secondly they turned to Congress for assistance • Farm Bloc • Joint Commission of Agricultural Inquiry • -- Henry C. Wallace • Peek-Johnson -- Equality for Agriculture • McNary-Haugen • “hunkered down”-- The Great Depression • New Deal • WW II • Technology

  11. Journal Question: #4 What conditions led to the “Golden Age of Agriculture”? Will we ever reach such a situation again?

  12. Rural Poverty

  13. Responses • Ignore/deny problem and minimize its impact • Blame is a collective character flaws • Blame the victim • Emphasize development • Community • Rural • Economic

  14. Responses • Agriculture support programs and policies • Target prices • Deficiency payments • Income payments • Welfare programs • Food stamps • Unemployment benefits • ADC • Push for improved efficiency and productivity • Drive for industrialization

  15. Poverty and Industrialization • In a response to declining or stagnate conditions agriculturalist turned to industrialism emphasizing productivity, efficiency, and outputs (Yields) • Implication of Industrialization • Increase use of purchased (off-farm) goods • Increase capital inputs • Decrease labor requirements • Increase use of Technology • Increase outputs (and therefore surpluses)

  16. Consequences of Industrialization

  17. Routes to Rural Poverty Decline in labor Technology Capital intensification Completive Losses Some farmers are ill-equipped to handle change or new complexities Unable to respond well enough to upturns in economy Discriminating policies or the residual effects of past discrimination on groups common in rural areas American Indians Blacks

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