Prosperity

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
1920
1918 WWI
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