Chapter 3: From the "Golden Age" to the Great Depression: 1900-1929

The period 1900 to the great stock market crash of 1929, was one of dramatic change in American society in general, agriculture in particular, and the Senate Agriculture Committee specifically. During this period, the Wright Brothers demonstrated their new flying machine at Kitty Hawk, North Carolina, America opened the Panama Canal, a World War was fought and won, and Congress began restricting the huge number of immigrants flooding into the United States. With the admission of Utah as our 45th State in 1896, the country, it was thought, could now be considered complete. (Frederick Jackson Turner, "The Significance of the Frontier in American History," American Historical Association, Annual Report for the year 1893, Washington, D.C., pp. 199-227.)

At the same time, America's rural beginnings were changing. It was undergoing rapid urbanization and industrialization during the first decades of the 20th century. Agriculture's paradigm changed from widespread subsistence farming to a system of farms providing food for the newly urbanized areas. In 1890, roughly four of five Americans lived in rural areas. By 1915, only 65 percent were living outside cities of 30,000 or more. Although immigrants represented about 14 percent of the country's total population, in the cities that number rose to 26 percent. That increasing urban base was causing problems for farmers. From 1860 to 1900 the average size of American farms had declined from 199 acres to 147 acres and the percentage of farmers in the labor force declined from 58 to 38 percent. Increasingly, they were turning to the Congress and the President for help.

In the Senate, Redfield Proctor, a Republican Senator from Vermont, had been at the helm of the Agriculture Committee since 1895. The Agriculture Committee from 1825 until 1879 consisted of five Senators. In that year the number was increased to six, to seven in 1881, and to nine in 1894. In 1895, the Committee consisted of nine Senators (four Republicans, four Democrats, and 1 Populist). By 1900, the ratio of Senators had changed to five Republicans, two Democrats, and two Populists. Senator Proctor served as chairman of the committee for 12 years until 1907 when the committee was enlarged to 11 Senators.

After the relative stability of Senator Proctor's tenure as chair, some seven Senators served as Chairman of the Committee in quick succession from 1907 to 1925, including Senators Henry Hansbrough of North Dakota, Johnathon Dolliver of Iowa, Francis Warren of Wyoming (who served only one Session from December 1914 to March 1915), Henry Burnham of New Hampshire, Thomas Gore of Oklahoma, Asle Gronna of North Dakota, and George Norris of Nebraska, before Senator Charles McNary of Oregon completed an 8-year term as Chairman at the end of the period. All of these Senators, with the exception of Senator Burnham of New Hampshire, represented states located west of the Mississippi River.

Responding to these new western Senators' interests in building an infrastructure in the west to encourage rapid settlement during Senator Proctor's chairmanship, the Congress debated and enacted a Reclamation Act, which was signed into law June 17, 1902. The Act provided important assistance in bringing needed water to the fertile but dry lands of the West.

In the autumn of 1907, near the beginning of the 20th century, a financial panic swept the United States. Although the cause of the panic for farmers was one of oversupply, many blamed the reform activities of President Theodore Roosevelt. Farmers especially believed that too few eastern banks had too much influence over credit and the money supply. Roosevelt, in his messages to Congress in 1907 and 1908, called for federal regulation of interstate business, federal regulation of the stock market and personal income and inheritance taxes.

This was the Progressive Era, personified by Roosevelt, who was President from 1901 to 1909. Roosevelt and later Woodrow Wilson would leave their indelible stamps on the first decades of the 20th Century in America. As President, Roosevelt moved aggressively forward, developing policies to change the way most Americans viewed a number of important issues such as credit. Having spent time in the West during his youth, Roosevelt put conservation first on his agenda. In 1905 he saw to it that federal Forest Reserves were transferred from the Department of the Interior to the Department of Agriculture. To accommodate the addition, the Bureau of Forestry became the Forest Service. President Roosevelt added additional acres to the system both in 1906 and 1907, more than doubling the initial size of the Reserves.

In addition, in 1911, Congress passed the Weeks Act giving new direction to the new national Forest System. Named for Congressman John W. Weeks, a Republican of Massachusetts, the act allowed the federal government to purchase forest lands to protect the flow of water in navigable streams anywhere in the country. Most of the 28 million acres of national forests located east of the western Great Plains have been acquired under this and other acts amending it. The act also assisted Federal cooperation with States by providing forest fire protection on State and private lands in the watersheds of navigable rivers.

Beside expanding forest reserves during the early 1900s, the southeastern United States experienced a major outbreak of the cotton boll weevil that caught farmers unprepared, and cotton production was almost destroyed. Scientists in state agricultural experiment stations realized that the weevil could be controlled if farmers learned to follow recommended practices. On the basis of the experiment station work, the Smith-Lever Act of May 8, 1914, created the cooperative Federal-State Extension Service, the work of Senator Hoke Smith, a Democrat from Georgia, and Congressman Asbury Lever, a Democrat from South Carolina who was serving as the Chairman of the House Agriculture Committee. Congress provided special funds to finance demonstrations of boll weevil control methods to farmers. This demonstration work in the Southern States, under the leadership of USDA's Dr. Seaman Knapp, was an outstanding success and grew rapidly.

Keeping food clean and safe in processing while moving it from farm to consumers was also an issue that President Roosevelt felt needed to be addressed. Thus, the second area of President Roosevelt's focus was food safety. On June 30, 1906, he signed the Food and Drug Act. Attention to consumer food protection, of interest to the President and the Committee, can be traced to Upton Sinclair's The Jungle, an instant hit in 1906 when it was published. The novel described unsanitary conditions in meat packing plants at the turn of the century. Congress responded by passing an amendment to the 1906 Agricultural Appropriations Act that for the first time mandated the inspection of meat for human consumption. The Meat Inspection Act of 1907 made the 1906 authority permanent. Since its passage, the Meat Inspection Act has helped to assure that all meat crossing state lines is wholesome, safe and properly labeled.

As war clouds darkened Europe in 1914, farmers in this country experienced a boom in prices and demand as farmers in Europe marched off to war. This prosperity would last a decade. But when the boom ended, farmers in the United States went into a period of decline that preceded the Great Depression by a decade. The period 1910-1914 came to be the basis of comparison when computing "parity" prices in later years.

In addition to overseeing initiatives by the President and its own members, the Senate Agriculture Committee was among the first to move into the New Senate Office Building. This "New" building was later named the Russell Senate Office Building when a newer office building was built. The Committee, located in room 328 of the Russell building, has occupied its current quarters continuously since December 1918. (Congressional Staff Directory, 1918.)

At this time, the number of clerks employed by the Committee began to increase. The Agriculture Committee at the outset of the twentieth century employed just one clerk, Brainard Avery, who had been hired in 1897 and worked on the Committee until 1900. By 1930, the number of clerks had risen to five. In 1913, Senator Thomas P. Gore, using his prerogative as Chairman of the Committee, hired his daughter Dixie Gore as the Committee's first female clerk. Senator Gore, who had become blind as a child, was often seen heading to the Committee room being guided by his grandson Gore Vidal. (Robert F. Byrd, The Senate 1789-1989: Addresses on the History of the United States Senate, Volume I, Washington, D.C., Government Printing Office, 1988, p. 386.) There is, however, no record of Mr. Vidal being an employee of the Committee. Miss Gore represented the beginning of a trend, by the end of 1929, the Committee employed five clerks and messengers, all of whom were women.

As it had been in 1907, during the 1920s the availability of credit was an overriding concern to cash-strapped farmers who found that demand had slackened considerably with the end of the war in Europe. They turned to Washington for help. In response to those appeals for easier credit, Congress established the banks and associations of the current Farm Credit System between 1916 and 1933 to make loans to farmers and ranchers and their cooperatives. All Farm Credit System institutions are private credit cooperatives owned by their borrower-members, and operate at no cost to the Federal Government. Loan funds are raised by selling notes and bonds in the financial markets. The cost of raising funds is a key determinant of the interest rate charged agricultural producers and their cooperatives when loans are made. Farm Credit System institutions are supervised, regulated, and examined by the Farm Credit Administration.

The Federal Farm Loan Act enacted on July 17, 1916, answered agricultural producers' demand for credit to finance land and farm machinery purchases which had increased in the late 19th and early 20th centuries as America's agriculture became more commercialized to meet growing domestic and foreign food demand. Private lenders at the turn of the century proved increasingly inadequate to meet these needs for financing. Slowly, a consensus emerged in Congress that the Federal Government should develop facilities for providing farm mortgage credit to assist farmers and ranchers in purchasing land on affordable terms. This and related concerns about the availability of credit on reasonable terms led to legislation creating the first banks of the Cooperative Farm Credit System in 1916.

When farm prices fell sharply following World War I and failed to gain their pre-war relationship to the price of nonfarm products, Congress authorized special intermediate term agricultural credits for farmers and ranchers. This credit legislation was followed within a few years by the Capper-Volstead Act giving agricultural cooperatives special status within the framework of anti-trust legislation. The Sherman Anti-trust Act of 1890 and later the Clayton Act of 1914, named for Congressman Henry D. Clayton, a Democrat from Alabama, had accommodated cooperative associations, but left substantial uncertainty about their legal status.

The Capper-Volstead Act of February 18, 1922, hailed by some as the "Magna Carta" of agriculture. The Act explicitly authorized and sanctioned the elimination of competition among farmers through cooperative association. With this legislation by Senator Arthur Capper, a Republican from Kansas and Congressman Andrew Volstead, a Republican from Minnesota, farmers, through their cooperatives, pursued the "orderly marketing" of their crops. Efforts to establish nationwide cooperative agreements continued through the decade with the formation of the National Council of Farmer Cooperatives in 1929.

On March 6, 1922, the Senate, reversing itself from its action in 1898, reconcentrated jurisdiction over general appropriations bills within the Appropriations Committee. For the most part, this action was in response to changes in Executive Branch budgeting practices enacted by the Budget and Accounting Act of 1921. In addition, the House of Representatives in 1920 had recentralized jurisdiction over appropriations measures within its Appropriations Committee. These two actions caused the Senate to reconsider its appropriations procedures, and thus prompted the change. However, to avert renewed fears that the Appropriations Committee would gain excessive authority, the Senate amended the new rule to stipulate that authorizing committees affected by the change would be guaranteed ex officio membership on Appropriations subcommittees considering appropriations formerly within their jurisdiction. Under the rule, the Committee on Agriculture and Forestry was granted three ex officio members, with full voting privileges, during consideration of the agriculture appropriations bill, and one conferee when the measure reached the House-Senate Conference stage.

The Agricultural Credit Act of March 4, 1923 added a Federal intermediate credit bank in each district to provide funds to commercial banks and other agricultural lenders for loans to finance production costs. These banks were created as a result of the inability of commercial banks to meet farmers' production credit needs during the agricultural depression of the 1920s.

In spite of additional credit and the best efforts of farmer cooperatives, agriculture continued to lag the prosperity of the nonfarm sectors in the mid-1920s. Farm leaders therefore proposed legislation designed "to make the tariff effective" for such major agricultural export crops as wheat, cotton, and tobacco. These proposals became the McNary-Haugen bills authorizing exports at lower than domestic prices. The bills passed both Houses of Congress in 1927 and again in 1928 but were vetoed each time by President Coolidge.

When we talk of the "Coolidge prosperity" of that decade, we need to remember that not all Americans shared in that prosperity. For farmers, the 1920's were years of overproduction, debt and depression. Senator Norris and other farm state Senators asked how long the prosperity of big business could last "when the fundamental industry of all was languishing." The Coolidge administration, which epitomized laissez faire, offered no program to aid farmers, and so the initiative came entirely from Congress.

The Congressional solution was the McNary-Haugen bill, so-named for its chief sponsors, Senator Charles McNary of Oregon, and Representative Gilbert Haugen of Iowa. McNary had succeeded Norris as Chairman of the Senate Agriculture Committee in 1926. First introduced in 1924, the McNary-Haugen bill proposed a Federal Farm Board to purchase farm surpluses and either hold them off the market until prices rose or sell them overseas. In 1926, McNary-Haugen went down to defeat in both the House and Senate, but the farm bloc increased its efforts. On February 11, 1927, the Senate passed the bill on a 47 to 39 margin, and the House followed shortly afterward. But on February 25, 1927, Congress received President Calvin Coolidge's veto message. "The difficulty with this particular measure," Coolidge stated, "is that it is not framed to aid farmers as a whole, and is, furthermore, calculated to injure rather than promote the general welfare." Coolidge took special exception to the equalization fee the bill would have charged on farmers' products to offset government expenditures in purchasing their surpluses. The President saw this as pure and simple price fixing. "Government price fixing, once started, has alike, no justice and no end," Coolidge declared, "it is an economic folly from which this country has every right to be spared." Again in 1928, Congress passed and Coolidge vetoed McNary-Haugen legislation.

During the 62nd Congress in 1912, the Senate Agriculture Committee released a report urging cooperation with the States in providing education in agriculture, trade and industry. The report called for maintaining these efforts in state agricultural and mechanical arts colleges, as well as State normal (teaching) schools.

Out of this background, popular and congressional support developed for a nationwide system of county agents financed cooperatively by local people, the individual States and the Federal Government. The demonstration method, which had been so successful in combating the cotton boll weevil, was written into the Smith-Lever Act of 1914. This Act established the nationwide agricultural extension service. The Act defined extension work to include giving instruction and practical demonstrations in agriculture and home economics, and imparting information through field demonstrations, publications, and otherwise. Soon after the passage of this legislation, county agents were established in all important agricultural counties of the Nation.

The Cooperative Extension Service began operation as a national program in 1914, the year in which World War I began in Europe. America's entry into the war three years later brought many new duties to the county agent. A major objective of the new Cooperative Extension Service was to assist in the rapid expansion of food production to meet the needs of the United States and its allies in Europe. The successful contribution that the Extension Service made to the war effort greatly increased the prestige of the service, both in rural communities and in government.

In 1917, as war raged in Europe and Americans girded for the war at home and abroad, the Senate Agriculture Committee held a hearing exploring ways for "...increasing the production, improving the distribution, and promoting the conservation of food supplies in the U.S." Information from that hearing was printed by the Committee and distributed. By the end of the 1920's, however the situation would be reversed with hearings of the Committee focused on how to get rid of a mounting food surplus.

On August 15, 1921, the Packers and Stockyards Act was enacted to protect farmers and ranchers from unscrupulous practices by meatpacking companies, to provide them with a fair price for their livestock and poultry, and to safeguard consumers.

As the decade moved forward, the Clark-McNary Act of June 7, 1924, named for Congressman John Clarke and the Committee Chairman, Senator Charles McNary broadened the cooperative efforts to include producing and distributing tree seedlings and providing forestry assistance to farmers. These laws also gave a strong impetus to States to establish and support State forestry agencies. All 50 States now have a State forestry agency or forestry extension agency.

In some ways, the Bankhead-Jones Act was an extension of the earlier Purnell Act of February 24, 1925, championed by Congressman Fred Purnell, a Republican of Indiana, which had expanded the scope of agricultural research to include investigation of the social and economic problems associated with agriculture. The Purnell Act also expanded federal funding to further the development of the agricultural extension system.

To address the issue of forest research, Congress enacted the McSweeney-McNary Forest Research Act on May 22, 1928 to authorize a broad program of forest research by the Forest Service. Pushed by Congressman John McSweeney a Democrat from Ohio and Charles McNary the Senate Agriculture Committee Chairman. The goal of this program was "to insure adequate supplies of timber and other forest products." The Act also authorized a nationwide survey of the 648 million acres of forest land in all ownerships. The first survey, begun in 1930, was completed in 1947.

By the time the first Session of the 71st Congress ended in November 22, 1929, Chairman McNary presided over a Committee that consisted of 18 members, 10 Republicans and eight Democrats, more than double the number that were members at the beginning of the century. (Coincidentally, both the total number and partisan breakdown of the Committee in 1998 are identical to Senator McNary's count in the late 1920s.) The geographical makeup of the Members of the Committee were eight from the West, four each from the East and South, and only two from the Central United States.

At the outset of the 20th century, the focus was on issues important to a country focused on itself and supremely confident of defeating any challenge it met. The issues the Congress addressed were the management of western lands, including the Forest Reserves, the continuing development of research and education begun with the Morrill Act, and with the publication of The Jungle, a growing recognition that the food supply needed to be safe. By the end of the period, in the 1920's, the emphasis had shifted to issues of credit for agriculture, the formation of farmer cooperatives, and the role of exports as the U.S. economy became more global. What was not on the horizon was the stock market crash of Black Monday, in October 1929, and the onset of a Great Depression that would forever change the way agricultural policy was formulated in America.