Senate v. Sun
(See front cover)
Spring, marching swiftly north across the land last week, found teams hitched to harrows and fields being broken, plow horses streaking the countryside with new furrows, tractors barking and chattering with lusty strength. Corn was about to go into the fat black acres of Illinois and Iowa. South Carolinians had their cotton planted; their February oats already sprouting. Seed beds for tobacco were being prepared as far north as Connecticut. Spring wheat was being sowed in Kansas now that the thaw had come & gone. Sows had littered in Iowa. John Farmer was starting his 1933 crops on the same haphazard plan of the past because
President Roosevelt's bill to control his production and get him better prices was not yet on the statute books.
From the moment he took office President Roosevelt realized that he was in a relentless race against the sun on farm relief. His purpose was to outsprint nature to planting time. In his special farm message last month he warned Congress that "if we wait for another month or six weeks the effect on the prices of this year's crops will be wholly lost." Infected with his sporting spirit, the House passed his bill with blind speed. But the Senate sets itself above sun and seasons. Its refusal to compete with nature last week threatened to wreck the whole Roosevelt farm relief plan before it could get fairly started.
Meanwhile millions of puzzled farmers felt the imperious stirrings of spring and wondered whether to let this or that field stand fallow on the chance the Government would pay them cash for reducing their crop, or to go ahead and plant their acres to the limit on the theory that the Senate's delay blotted out all hope of effective Federal aid in 1933.
Outdone by the Senate committee's dalliance, President Roosevelt summoned its entire membership to the White House for a heart-to-heart. He would consent to a few minor amendments but not to any tampering of the bill's fundamentals. He pointed to the calendar. He harped on the necessity for speedy action. He came closer to cracking the Party whip than at any time since he entered the White House. The Senators trudged glumly back to the Capitol and three days later reported the bill to the Senate. Typical of the opposition there awaiting it was Senator Reed's: "It'll be ripped to pieces! I can't permit the passage of such legislation! If the people of Pennsylvania knew what its passage would mean, they'd riot in the streets. . . ." And the sun marched on.
Most interested spectator at President Roosevelt's conference with the Senators was a lean-faced, youngish man of 44 with a mop of dark brown hair just turning grey and deep thoughtful eyes--an economic idealist. Taciturn, he sat and listened most of the time. He was Henry Agard Wallace, Secretary of Agriculture and the official upon whose none-too-husky shoulders falls the job of administering the enormous powers buried deep in the Roosevelt farm bill. In his diffident way he had already given the Senate committee his views on this measure, designed to restore farm purchasing power by artificially raising the prices of cotton, corn, wheat, tobacco, rice, hogs, sheep, cattle and dairy products to pre-War parity with industry.* Nothing short of the broadest and most flexible authority, he had testified, would suffice to solve the farm problem. After such a sweeping grant it was up to Congress and the country to trust him to use it with discretion.
Into Secretary Wallace's hands the farm bill puts a three-pronged pitchfork with instructions to try to toss farm prices high up on to the wagon of better days. No doltish hired man, the Secretary is expected to start his price-pitching slowly and easily, watching his aim, studying his effects, conserving his power. Farmers who expect to see a sharp overnight rise in commodity values are ill-informed.
Prong No. 1 of the Wallace pitchfork authorizes the Secretary to reduce production by contracting with farmers to rent the land they leave idle. What that rental will be has yet to be determined but estimates have ranged around $3 per acre. In theory the farmer who last year harvested 1,000 acres of wheat will get more by raising only 700 this year and collecting Government rent on 150. Declares Secretary Wallace: "The taking out of acreage on a wide scale is one necessary line of attack. I don't contemplate such reduction of acreage as meaning that we permanently forsake our foreign markets. . . . In reducing the production of hogs, the best method may be for the Government to pay the hog producer rent on a specified amount of his corn land, provided he retires that acreage from corn production and also restricts the tonnage of hogs marketed." The farmer who already has his 1933 acreage planted and fertilized will not be able to avail himself of the benefits of Prong No. 1.
Prong No. 2 is the Domestic Allotment Plan refurbished. It permits the Secretary to pay a farmer who reduces his 1933 crop what the law euphemistically calls a "benefit." How this crop cut is to be effected is left to the Secretary. The 1931 proposal to plow up every third row of cotton might be one method. Another might involve allowing a percentage of a crop to go unharvested. The farmer agreeing to cut his 1933 production would get a Government certificate on which he could borrow at the bank, the loan being repaid after the harvest when the Secretary is sure that he kept his reduction agreement.
Prong No. 3 was welded on to the pitchfork by South Carolina's cotton-minded Smith who devised a price-upping scheme especially for cotton planters. Under it Secretary Wallace takes control of 2,144,937 bales of stabilization cotton from the old Farm Board. John Planter, who normally raises 90 bales of cotton, steps up and promises to raise only 60 this year. Secretary Wallace gives him an option on 30 bales of Government cotton at 6-c- per lb., the current market price. When hundreds of thousands of John Planters repeat this process, cotton demand starts to exceed cotton supply and prices (in theory) spurt up to 8-c- or 10-c- or 12-c- per lb. Next autumn John Planter orders Secretary Wallace to sell his option cotton, makes a tidy profit to compensate him for the 30 bales he never raised. If the cotton market fails to rise, John Planter stands to lose nothing on his free option.
The Handle of the Wallace pitchfork is the Secretary's power to tax. To raise money to pay land rents and Domestic Allotment "benefits" he may levy on every bushel of wheat the miller turns to flour, on every pound of pork and beef the packer turns to ham and steak, on every quart of milk and cream that go into butter and cheese, on every pound of cotton the spinner makes into cloth. This processing tax, heart of the Roosevelt relief scheme, is a variable quantity which the Secretary of Agriculture adjusts to bring farm prices up to the desired level. Once they are at pre-War parity, the tax scales off and disappears. Processors pass the tax on to consumers in increased food prices. In effect, it is a sales tax on basic necessities--the kind of levy President Roosevelt and the Democratic party view with horror if formally applied to manufactured commodities. What it will cost the consumer no one who can has yet dared to estimate. Explains Secretary Wallace:
"The processing tax will not necessarily become operative with respect to all commodities. If a satisfactory price could be reached and maintained by trade agreements no tax would be imposed. . . . The chances are that the tax would start at a relatively low figure so as not to restrict retail sales and thus reduce consumption. . . . I would feel that the policy of the bill were being defeated should as a result of a 3-c- processing tax on cotton an excessive increase in price be passed on to the consumer. The cotton farmer obtains approximately 5-c- for the cotton in a shirt which costs $1 or $1.50. A 3-c- tax should not increase that cost more than another 5-c-."
Gamble. What every farmer wants to know: Can Secretary Wallace and his two bowers succeed under the Roosevelt plan in substantially raising commodity prices and thereby putting more cash in John Farmer's pocket with which to pay his galling debts? Secretary Wallace thinks he can, is ready to make a desperate try. Detached observers come to this conclusion: Success or failure of the relief plan will not turn on Secretary Wallace's personal efforts but on natural and economic factors far beyond even his dictatorial control.
The weather of 1933 will make or break the relief plan. A short cold summer with excessive rainfall or a long blistering drought can reduce crops to such a point that President Roosevelt might have an acute food shortage on his hands. On the other hand an ideal combination of sun & rain can produce such bumper crops as to wipe out all trace of acreage cuts and send prices slumping to even lower levels. One year an acre will produce 12 bu. of wheat, the next 24 bu. Such is the gamble Secretary Wallace must take.
Important though Agriculture is, it alone does not control U. S. economy. If deflation continues through 1933 and the general trend of all prices is downward, Secretary Wallace will be unable to buck the economic tide and the Roosevelt plan will go down as a failure along with the Hoover Farm Board. If all prices start to rise on a broad front, Secretary Wallace will be able to accelerate the advance of farm values, get credit for a shining success. The major factors which will decide the economic fate of the farmer, according to Pundit Walter Lippmann, are "the monetary policy of the administration and of the Federal Reserve System, by the policy of the Government in respect to tariffs and trade agreements and international debts and by a whole series of measures dealing with railroads, real estate indebtedness and banks."
When Henry Cantwell Wallace went to Washington as Harding's Secretary of Agriculture in 1921, he thought he was confronted with the worst farm crisis in U. S. history. But the agricultural outlook that year was almost rosy compared to that which now faces his son in the same job. Father Wallace, sandy-haired, squarejawed, was less conservative than his Republican colleagues in the Cabinet. He openly favored the McNary-Haugen bill as a means of dumping farm surpluses abroad and might have sold its principle to the White House, but for the persistent opposition of Secretary of Commerce Herbert Hoover. A sense of frustration clouded Secretary Wallace's last days in office. In 1924 he died of intestinal poisoning and Calvin Coolidge gave him a White House funeral.
Henry Agard Wallace got most of his farm relief ideas and a personal antipathy for Herbert Hoover from his father, whom he succeeded as editor of Wallaces' Farmer (now combined with the Iowa Homestead). In looks Son Wallace took more after his grandfather who founded that family publication. Like his father, he talks little and slowly. He has long studied the farm problem at an editorial desk. In 1928 he silently opposed Herbert Hoover; in 1932 he was red-hot for Roosevelt. Iowa Republicans were shocked by his political heresy, set it down to a family grudge dating back to the Wallace-Hoover Cabinet feud. The Secretaryship of Agriculture came to him unsolicited.
President Roosevelt wanted and got a farm relief enthusiast.
On his 400-acre farm in Polk County, Iowa, Secretary Wallace has given much time and thought to developing prize seed corn. As a boy he was impressed by the fact that judges always seemed to pick the best looking ear rather than the one that promised the biggest yield. By crossbreeding he perfected a seed corn which now sells far & wide throughout Iowa. Wrote he: "Show corn ideals deal too much with beauty and too little with utility. Whether corn has smooth or rough kernels means very little more than the presence or absence of a dimple on a pretty girl." He is the author of Corn and Corn Growing, What Is in a Corn Judge's Mind and A Mathematical Inquiry into the Effect of Weather on Corn Yields.
Because his Farmer office was always littered with samples of seed corn, that publication's new Des Moines building was made mouse-proof throughout. On its roof Henry Wallace plays badminton with Managing Editor Donald Murphy. In Washington he walks three miles to his office before 8 a. m., lunches at his desk, goes home after 6 p. m. Summers he climbs Pikes Peak in a bee line.
A chronic experimenter, he has tried cross-breeding flowers, chickens, cattle, with no definite results. He thinks, weather forecasting is on a wrong scientific basis. He bought a 6-ft. telescope, set it up on the lawn of his Des Moines home, spent nights stargazing. When he started to work out his own weather theory he was stumped on calculus.
Henry Wallace is a good Episcopalian. Through the Farmer ("Good Farming'--Clear Thinking--Right Living") runs a pious note in reverence of the God who makes things grow. He is an ardent believer in currency inflation by cutting the gold content of the dollar. He spends his happiest hours singing old-fashioned songs to his wife's piano accompaniment.
* Last week the Department of Agriculture announced that, in mid-March, farm prices were exactly 50% of the pre-War average whereas things the farmer buys were 3 1/2% above that level.
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