by Adam Cohen
CHAPTER FIVE
“Good Lord! This Is a Revolution!”
After Roosevelt gave Wallace and Tugwell the green light to draw up a farm bill, they hurried back to the Agriculture Department. Wallace immediately began calling farm leaders, inviting them to attend a conference two days later. He called representatives of the three main farm groups: the Farm Bureau, an establishment organization centered in the Midwest and South; the National Grange, which represented many farmers in the Northeast and New England; and the National Farmers’ Union, whose membership was made up of the poorest and most radical farmers. Wallace announced an ambitious schedule. He wanted to have a bill passed by Congress and signed into law by March 15, so it could affect the spring planting.1
Wallace continued to support domestic allotment, but he had reservations. As a lover of plants, he did not like the idea of growing less. As a humanitarian, he was troubled by the idea of reducing production when people were hungry. On March 9, Russell Lord, a journalist and sometime Agriculture Department employee who would later write a book on the Wallace family, had lunch with Wallace and Tugwell. Wallace was “downright in his hatred of reduced production,” Lord found, but also “glumly and completely determined” that “it must be done.” The main reason he favored it was that the alternatives seemed worse. The McNary-Haugenites were still pushing to dump surplus crops overseas, but Wallace thought it was unrealistic to think that Europeans, who now had surpluses of their own, would want to buy American crops. The Farmers’ Union was still promoting cost of production, which called for the federal government to fix prices based on what it cost farmers to produce their crops, including a salary for the farmer and a fixed rate of return on the land. Cost of production appealed to farmers, who liked the idea of a guaranteed income, but its champions never bothered to explain the details, and Wallace and Tugwell considered the whole concept “mythical.” Wallace insisted that even if it could be achieved, “cost of production” would hurt farmers in the long run, by in effect turning farming into a regulated utility.2
Although it was his own preferred plan, Wallace did not want the farm leaders to back domestic allotment exclusively. He hoped instead that they would endorse the sort of broad delegation of authority to the president that the Emergency Banking Act and the Economy Act contained. That would help get the bill through Congress, because all of the farm groups would rally around it. Once it became law, a broad delegation would let Roosevelt and Wallace try a variety of approaches and adapt to changed circumstances. Wallace knew from the December farm leaders’ conference that there would be strong support for domestic allotment, but he also knew there would be influential forces on hand trying to block it. George Peek would promote McNary-Haugenism, and there would be radicals pushing cost of production. In his calls inviting people to the conference, Wallace began making the case for a farm bill that gave the president broad authority and he got a good response. A group of farmer leaders held a late-night conference on the train to Washington and agreed among themselves to support a broad delegation of power. “Before the last of the farmers went to bed that night,” Clifford Gregory of the Prairie Farmer said, “the plan of the new relief had taken definite shape.”3
On March 10, Tugwell welcomed the farm leaders to the Department of Agriculture. Wallace largely stayed away. The farm leadership respected him and appreciated that he was not a “Pennsylvania Avenue farmer,” a Washington farm politician with few ties to the land. But Wallace knew that there were “tremendous jealousies among the farm organizations,” and since he had been active in some but not others, he thought it best to remain in the background. While the leaders were meeting, Wallace spoke to the American people. At the end of the first day, he delivered his first national radio address, in which he began to make the case for an agricultural relief bill. “Emergency action is imperative,” Wallace declared, and the proper course of action was to “adjust downward our surplus supplies.” He took direct aim at the business interests that were already lining up against domestic allotment, and emphasized the need to move quickly. “We can’t legislate next June,” he cautioned, “for a crop that was planted in April.”4
On the second day, Saturday, March 11, the conference ended up where Wallace had hoped it would. The farm leaders endorsed domestic allotment while also calling for a broad delegation of power to the president. In an attempt to mollify Peek, their report left open the possibility of dumping excess crops overseas. Wallace arranged for a delegation to present the recommendations to Roosevelt. “We could be excused a certain euphoria when we marshaled the leaders first in our building, then in the White House lobby,” Tugwell said later. When the delegation told Roosevelt what they had agreed on, he accepted their report enthusiastically, and asked Wallace to get to work drawing up a bill. While the supporters of domestic allotment celebrated, the agricultural processors who would be taxed to pay for it braced for a fight. The McNary-Haugenites were not placated by the conference’s tepid acceptance of crop dumping. Peek would later complain that the delegates had “muffed their big chance” and had “left the field open to the professors.” The Farmers’ Union was the most outraged of all. “They wanted to be in a position to raise hell to the limit,” Wallace said.5
For Wallace, the conference was a great success. He had “made the first significant dent in the walls of agricultural sectionalism,” The Saturday Evening Post declared. “The spectacle of those fifty agricultural lambs and lions lying down together was proof of it.” When the farm leaders left, work began on the bill. The drafting was done in Tugwell’s office “at the cost of a good deal of sleep,” Wallace would later say. The drafters were Tugwell; Peek; Mordecai Ezekiel, a respected Agriculture Department economist; Jerome Frank, a University of Chicago Law School graduate who would soon be general counsel to the agricultural agency the bill established; and Frederic Lee, former head of the Senate drafting bureau. “Occasionally,” Wallace recalled dryly, “I was suspected of having had something to do with it.”6
The Agricultural Adjustment Act that the drafters came up with was designed to bring the prices of seven basic agricultural commodities—wheat, cotton, corn, hogs, rice, tobacco, and milk and its products—up to prewar levels. It did all of the things the farm leaders recommended. It authorized the agriculture secretary to take land out of production using money from processor taxes. It included a McNary-Haugen provision allowing processor taxes to be used to pay for losses on crop dumping. And it delegated broad powers to the president—“so broad,” Time magazine said, “that few could see their limits.” The bill said domestic allotment would be temporary, ending when the president declared the agricultural emergency over. When the drafting was done, Wallace delivered the bill in person. Roosevelt was delighted with it. He liked that it included both domestic allotment and discretion to try other approaches. He especially liked that it paid for itself, so there would be little burden on the Treasury.7
While the final touches were being put on it, opposition to the bill was growing on both the left and the right. On March 12, the day after the farm leaders’ conference ended, the Farmers’ Holiday Association held a raucous 3,000-delegate convention in Des Moines. Milo Reno, who presided, called Wallace an “ignoramus” and insisted that he had never known a member of the Wallace family who was not unbalanced. The delegates demanded a more ambitious farm bill than the Agricultural Adjustment Act, advising Congress “not to go to the expense of hearings on the non-sensical domestic allotment plan.” If Congress did not provide farmers “legislative justice” by May 3, the delegates warned, there would be a nationwide farmers’ strike. Wallace had little patience with the radicals, whom he dismissed as “left wing farmers...demanding $1.50 wheat and $10 hogs inside of six weeks.”8
At the same time, business interests were lining up against the Agricultural Adjustment Act. Hugh Johnson, George Peek’s colleague, delivered an “impassioned tirade” against domestic allotment to Moley on a train ride from New York to Washingto
n, and pleaded for the administration to back McNary-Haugenism instead. When the processors realized they could not stop the bill, they tried to change the processor tax to a general sales tax, and argued for a one-year limit on the law. Roosevelt, siding with Wallace, rejected the processors on both counts. On March 14, representatives of the meatpackers, grain handlers, and millers met with Wallace to once again protest the processor tax. Wallace had no difficulty standing up to business interests. One of his colleagues recalled a high-powered lawyer coming in to lobby on behalf of a “great food-dealing concern” on a matter worth millions of dollars to the company. Wallace simply said “No.” When the lawyer persisted, Wallace raised his hand to cut the man off and said wearily, “Unless we learn to treat each other fairly this country is going to smash.” In a similar manner, the processors were turned away unsatisfied. Tugwell suspected they would simply take their complaints elsewhere. “The packers, millers, and spinners are quite adequately represented in Congress,” he lamented in his diary. Having lost his battles to derail it, Johnson declared that Wallace’s bill “breaks my heart.” Lewis Douglas was no less despondent. Government payments to farmers offended his laissez-faire sensibilities, and he was concerned that administering the act would prove too costly. James Warburg, a young scion of the famous banking family, who was close to Douglas, reported that Wallace’s bill had left Douglas “very depressed.”9
On March 16, Roosevelt met with Wallace and Tugwell and signed off on a final draft of the bill. Roosevelt was excited enough about it that he wrote the congressional message himself, rather than asking Moley. He scrawled it on a yellow legal pad, while seated at his desk, as Moley, Wallace, and Tugwell looked on. Roosevelt explained that he had decided to extend the special session because the farm crisis was of “equal importance” to the bank crisis. The farm bill would, he said, be “a new and untrod path”—a phrase that soon had Washington wits questioning if a path was a path at all if it was “untrod.” The goal of the bill was both to help farmers, Roosevelt said, and to give a boost to the larger economy by increasing farmers’ purchasing power. He urged quick action “for the simple reason that the spring crops will soon be planted and if we wait for another month or six weeks the effect on the prices of this year’s crops will be wholly lost.”10
The Agricultural Adjustment Act was attacked as soon as it became public. For the “radicals . . . it is not enough,” Tugwell wrote in his diary; “for conservatives it is too much.” Congressional conservatives saw the bill as a radical interference with the free market and a power grab by Roosevelt and Wallace. “I can’t permit the passage of such legislation,” Republican senator David A. Reed declared. “If the people of Pennsylvania knew what its passage would mean, they’d riot in the streets.” There were also widespread objections to the cost, even though much of it would be paid for by the processor tax. The New York Times objected that the bill would in effect impose a “sales tax, resting heavily on food.” Wallace appeared on the National Farm and Home Hour radio show to try to build popular support for his bill. It was the farm leaders, he insisted, who had asked him and the president to take on “very broad powers.” Consumers would be protected, he argued, because the slight extra expense imposed on them “will be more than compensated for by the revived power of farmers to buy the goods and services the city has to sell.” The bill could have split the nation along rural and urban lines, but most big-city representatives had long accepted that higher farm prices would benefit the entire nation. “Suppose, you will say, the price of commodities increase; what will your workers in the city do?” said Representative Fiorello La Guardia, a liberal Republican from New York City. “We are prepared for that. We will demand increased wages. That is the other half of the answer.”11
In the House, the leaders were intent on pushing the Agricultural Adjustment Act through quickly. Debate was limited to four hours, and no amendments were allowed. Opponents attacked the bill as a $1 billion tax on consumers and called domestic allotment socialism. The overwhelming sentiment, however, was that Roosevelt should be given authority to deal with the crisis as he saw fit. William Lemke, a Republican congressman from North Dakota, said that normally there were not enough Democrats in his state to fill the postmasterships, but his constituents wanted him to back the president. As the bill moved forward, violence continued in rural areas. On March 21, Pennsylvania farmers attacked three sheriff ’s deputies conducting a sale, ripping the uniform off of one of them. The following day, the Agricultural Adjustment Act passed the House, 315-98.12
The bill’s path through the Senate was rockier. Wallace testified before the Senate Agriculture Committee, which questioned him energetically but then voted for the bill. “The President told the Agricultural Committee that [the new law] would take 10 years off my life,” Wallace joked in a letter to Dante Pierce, a newspaper friend back in Iowa. “Tugwell says that’s the reason the committee voted it in.” Conservative critics continued to attack the bill as socialist and dictatorial. One senator sneered that it was unduly complicated “due to its translation from the Russian.” The strongest opposition came from the processors, who were still not resigned to paying the tax. A representative of the Farmers’ National Grain Dealers Association told the Senate that the bill was “a futile attempt to legislate prosperity.” The government should cut taxes and help farmers secure overseas contracts, he said, but other than that, the people he represented wanted “to be left alone for awhile.”13
Farm radicals also came out in opposition. John Simpson, president of the National Farmers’ Union, took direct aim at domestic allotment. Farmers “are not producing too much,” he told the Senate Agriculture Committee. “What we have overproduction of is empty stomachs.” Simpson painted a dark picture of where things were headed in the Farm Belt. The Farmers’ Holiday Association had “the spirit of 1776,” he warned. Its members had “thrown ropes around the necks of attorneys that brought the foreclosure proceedings,” he said, “until they begged for mercy and made settlements according to the terms of the farmers.” Simpson’s impassioned account of militant farmers on the march led the committee chairman to ask, to laughter from the galleries, if there were any signs “that they are moving toward Washington.”14
Wallace worked around the clock trying to get the bill passed. “We are skating over the thin ice so fast that it doesn’t break through,” he wrote Dante Pierce. The last major obstacle was the chairman of the Senate Agriculture Committee, Ellison “Cotton Ed” Smith of South Carolina, a man Tugwell described in his diary as “a dodo and filled with big business propaganda.” Smith was aligned with the processors, and he wanted to substitute his own version of the farm bill. When Wallace told Roosevelt that Smith was the holdup, Roosevelt wrote out a statement asking him to let the bill through. Because time was short, Wallace read the statement to Smith over the phone. It made the agriculture chairman “perfectly furious,” Wallace later recalled.15
While the Senate was considering the farm bill, Roosevelt made an important addition. Wallace’s draft had not addressed foreclosures, the issue roiling the Farm Belt. To placate Farm Belt radicals, and members of Congress from farm states, on March 27 Roosevelt issued an executive order creating the Farm Credit Administration. The new agency, which he appointed his old friend Henry Morgenthau to head, would use $1 billion in new bonds to lower the principal on farmers’ loans; cap interest rates at 4.5 percent; and postpone mortgage payments for up to fifteen years. The new program would put an end, Roosevelt told Congress, “to the threatened loss of home and productive capacity now faced by hundreds of thousands of American farm families.” The plan appealed not only to farmers, but to mortgage lenders, insurance companies, and other holders of farm debt, which were losing hope of ever seeing some of their loans repaid.16
Roosevelt also reached out to conservatives with a key personnel choice. On April 5, he asked George Peek to head the Agricultural Adjustment Administration, the agency that would be created by the new law. The
appointment of Peek, with his plow-manufacturer background and ties to Bernard Baruch, would help to reassure the processors, and other business interests, that the new agriculture program would not go off in a radical direction. Peek resisted at first, insisting that Baruch would be a better choice, but he soon accepted. Wallace and Tugwell were concerned that Peek, who had never abandoned his support for McNary-Haugenism, would try to use the position to resist domestic allotment. “He may run away with the show since he is older and wealthier than H.A. or I, and since he is close to a crowd of powerful people,” Tugwell wrote in his diary, “but we shall have to make out as best we can.” Wallace understood Roosevelt’s reasons for favoring Peek, and he was willing to hope for the best. “George is difficult in some ways as you know,” he wrote to Dante Pierce, “but I believe I can learn how to handle him.”17
Supporters of cost of production scored a surprising win on April 13, when the Senate yielded to pressure from Western progressives and added it to the bill, by a 47-41 vote. The amendment was Roosevelt’s first major congressional loss, and it was a significant one. The administration had made clear that it would not accept a cost of production amendment, which left the Agricultural Adjustment Act in limbo. Wallace had originally hoped the bill would be signed into law within two weeks of its introduction so it could have an impact on the 1933-34 growing season, but that deadline had now come and gone. By the second week of April, South Carolina’s farmers had already planted their cotton, Iowans were about to plant corn, and Kansas was sowing spring wheat. With the bill still in limbo, “John Farmer was starting his 1933 crops,” Time magazine reported, “on the same haphazard plan of the past.”18
