For farmers, a glut of misery
The White House was hearing threats of a million-farmer march on Washington. With prices of wheat, corn, and cotton still abysmally low, agrarian leaders were demanding a cheaper dollar in hopes of increasing exports and lifting farmers out of debt. But bankers and economists kept warning that inflated money would invite further ruin.
Franklin D. Roosevelt sided with the farmers. "I wish," the president said, "our banking and economist friends would realize the seriousness of the situation from the point of view of the debtor classes--90 percent of the human beings in this country--and think less from the point of view of the 10 percent who constitute the creditor classes." Agricultural prices, he said, "must go up."
The gold fix. There thus ensued in October of 1933 what Stanford University historian David Kennedy calls "one of the most bizarre episodes in the history of American finance." Daily for several weeks, over a dish of soft-boiled eggs in his bedroom, FDR fixed each day's price of government-bought gold. Breakfast after breakfast, he jacked up the price, hoping to ease the Great Depression with a dose of inflation. One November morning, after a string of smaller increases, he hiked the price 21 cents an ounce. Why 21? "It's a lucky number," he explained, "because it's three times seven."
But luck was elusive. By the time FDR shed his gold-buying habit in January, the glut of farm products had barely changed. Yet farmers seemed grateful he had tried something. If he had delayed his gold-buying binge by just a week, he later said, "we would have had an agrarian revolution."
In truth, few farmers stood ready to overthrow the government. But millions craved change. For much of rural America, the Depression had begun not in 1929, after Wall Street crashed, but in the early 1920s, in the wake of World War I. To meet wartime needs, farmers had swelled their croplands by 40 million acres. Their global market soon withered, however, even though they kept producing for it. By 1933, surpluses were staggering: fruit rotting in California, corn burned in Iowa, cotton unpicked in Mississippi--and thousands of banks padlocked.
In May, Congress gave FDR's Agricultural Adjustment Administration the power to pay farmers for not producing. But with seeds already sprouting and livestock reproducing, only chaotic destruction could curb the 1933 excess. The subsidized slaughter of 6 million little pigs sparked urban outrage. And when the AAA ordered 10 million acres of cotton plowed up, even mules balked. Traditionally beaten for stepping on growing cotton, they suddenly were whacked for not trampling it. Cotton farmers, meanwhile, cultivated their surviving rows--and their yield came in even higher than in '32.
For subsequent seasons, farmers agreed to produce less. By 1939, net farm income had doubled, enabling millions to keep farming. But millions more were hurt more than helped. Landowners tended to replace workers with tractors bought with AAA money. The evicted said they were "tractored off."
On Nov. 11, 1933, the first of the decade's great dust storms swept across South Dakota before darkening Chicago and then Albany, N.Y. For three years, "black blizzards" peeled away millions of tons of soil. One farmer, sitting at his window, said he was counting the Kansas farms as they flew east. No one, however, could count the farmers the Dust Bowl sent westward. These streams of humanity from the impoverished countryside endured into World War II.
This story appears in the November 3, 2003 print edition of U.S. News & World Report.
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