The American Pageant (12th Edition)

Chapter 34 – Page 788

Our Critique

788 “The AAA [Agricultural Adjustment Administration] would eliminate price-depressing surpluses by paying growers to reduce their crop acreage. The millions of dollars needed for these payments were to be raised by taxing processors of farm products, such as flour millers, who in turn would shift the burden to consumers.”

Here Bailey is upfront and tells students exactly what the AAA did. It paid farmers not to produce. By being paid not to produce, the farmers earned more money—which helped FDR win enough votes to carry every farm state in the Midwest in 1936. Consumers picked up the tab with higher prices they had to pay to put food on their dinner tables during the Great Depression.

At one level the AAA was an outrage—how do you feed millions of starving people, or reduce unemployment, by making food prices higher? At another level, the AAA led to huge bureaucratic increases because government had to expand to hire people to fix the prices of crops (through a complicated parity scheme), measure the farmers’ land, come back to make sure farmers were not planting on land they were being paid not to produce on, and so on. Taxpayers had to support an enlarged Department of Agriculture that was in charge of the gigantic AAA.

H. V. Kaltenborn, a national radio commentator—and friend of FDR—visited the Department of Agriculture and reported its operations: “The amount of regulatory machinery essential to administer AAA was a fearsome thing to behold for anyone who believed in the American farmer as master of his own domain. Thousands of inspectors had to be sent into the fields. Thousands of accountants had to keep track of what each inspector reported about, what each farmer was growing, and what benefits every grower or nongrower was entitled to receive. As soon as the AAA helped one group of farmers, other groups were affected and called for similar benefits and protective regulations… . Farmers were paid millions of dollars not to produce crops while President Roosevelt was telling us that one third of our people were ill fed. For every problem that was solved two or three new problems were created.”

When the Supreme Court declared the AAA unconstitutional, FDR was annoyed—his hold on the farm vote was weakened. But he was able to enact a second AAA, and it survived scrutiny because by late in FDR’s second term he had appointed enough justices that his New Deal programs were validated.