Arnold Kling  

Agriculture in the 1930s

Stories of the 1930s... Political Sentiment...

Again, from Piers Brendon's The Dark Valley.

Half a million Americans moved from city to country in search of subsistence...

In Montana thousands of acres of wheat went uncut because they would not pay for the price of harvesting--sixteen bushels would earn enough to buy a four-dollar pair of shoes. In Iowa a bushel of corn was worth less than a packet of chewing gum. Apples and peaches rotted in the orchards of Oregon and California, just as cotton did in the fields of Texas and Oklahoma. Western ranchers killed their cattle and sheep because they could not pay to feed them. Yet there was hunger amid abundance. Bread lines stretched under choking grain elevators...Congressman George Huddleston [said], "I do not mean to say that they are sitting down and not getting a bite of food until they actually die, but they are living such a scrambling, precarious existence, with suffering from lack of clothing, fuel, and nourishment, until they are subject to be swept away at any time"

From the first part of the quote, it would seem that the terms of trade turned against agricultural producers. Their output could not buy much. Yet this was also the era of the Dust Bowl, which reduced supply. However, Brendon dismisses the Steinbeckian view that the Dust Bowl created the Okie migration.

Actually, the prime mover was poverty, itself the result of Depression and drought, of farm mechanisation and unemployment, of soil erosion and New Deal policies. The AAA's soil conservation and crop restriction measured fostered rural depopulation. Subsidized landlords were inclined to buy machines to do the work of men and Okies described themselves as being "tractored out" of their farms.

This is a confusing and in some ways contradictory picture. My guess is that on the whole what was going on was a transformation of American agriculture. Sharecropping and labor-intensive farming were losing out to larger farms with machinery. Land use was being reconfigured to take advantage of trucking and improved refrigeration, so that at the margin a farm near a city was less profitable and a farm located on good land farther from a city was becoming more profitable.

This transformation made food cheaper, and it greatly reduced the demand for farm labor. The displacement of farm labor broke existing patterns of specialization and trade. New patterns did not form until the 1950's. By then, more workers were urban and educated, working in distribution (including sales) rather than in primary production.

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CATEGORIES: Economic History

COMMENTS (6 to date)
Lord writes:

The big push for mechanization was in the 20s. The depression retarded it if anything. It was the difference between the indebted and debt free that skewed fortunes in the 30s, whether indebted towards land, or indebted towards machinery. The foreclosure crisis then was one of farms.

Philo writes:

You write: "The displacement of farm labor broke existing patterns of specialization and trade. New patterns did not form until the 1950's." But pattern-change is harder to quantify than you let on. Existing patterns of specialization and trade are never completely stable--they are always in flux. From time to time some particular aspect of this flux becomes a national news story, such as the Okie migration. But this does not mean that more-than-normal change in the patterns--overall in the national or worldwide economy as a whole--is taking place at such times.

Hyena writes:

Mr. Lord,

The Great Depression started in the 1920s for farm workers. There was a lot of fear about what the steady erosion of farm wages meant throughout the decade. In any case, there's actually a lot talk about machinery in the Grapes of Wrath.

It would be wrong to imagine that this was a fast process. It was actually very gradual. 19th century populism was mostly the result of railroads shifting agricultural distribution and, thus, production locations.

It even shows up powerfully in the fiction of the period. What's funny is that the underlying story of mechanization, the transformation of the US from a natural to mechanized place, is often lost on people because they concentrate intently on personal interactions between characters, the cheap gossip most fiction is formed of.

fundamentalist writes:

Hyena, exactly! My great-grandfather lost his ranch long before the Great D. During WWI Wilson encouraged farmers to expand production to feed soldiers and Europeans, but the war ended sooner than anyone expected and European agriculture rebounded quickly. As a result, American farmers had expanded too much with debt thinking high prices would last forever. But the flood of food caused prices to fall to record lows. Farmers couldn't make their loan payments any more. In addition, mechanization was increasing the flow of food.

Of course, the government's inflationary policies (without the Fed) caused massive cheap credit and credit expansion. Had the government not expanded bank credit, the high interest rate would have prevented massive expansion of credit and farming.

Behind every economic disaster is the hand of the government trying to make itself invisible while fingering the market.

Lord writes:

Yes, it did, and small towns grew considerably during the 20s as a result. In the 30s, this slowed as town people would revert to assistance from any successful relatives they still had back on the farm to eat. Those without heavy debt burdens could expand but this did take machinery to handle, but usually repossessed machinery rather than new.

Tom Grey writes:

In Iowa a bushel of corn was worth less than a packet of chewing gum.
I don't believe this for most of the 30s, tho now I am interested. Where is the graph of corn or wheat prices for each quarter from '20-'40?. The 20s are not the 30s. During the Dust Bowl, I'm pretty sure prices were reasonably high.

But the point that the GD included a huge transfer from farms to cities is very important. A semi-skilled but poorly educated farmer has almost no skills for city life, merely a manual, menial laborer.

In a similar way, skilled house builders and their suppliers, including financial suppliers, are much less skilled/ less value adding for most other occupations. This lower wage adjustment to a new job with less adding of value is personally painful.

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