AGRICULTURE: Money to the Grass Roots!

“Money to the Grass Roots!”

(See front cover)

For the third time in two years, John Farmer was supposed to go on strike last week. And in many a bleak Midwestern county he did so, with right goodwill. In spite of announcement by the strike’s fomenter, wild-haired, bespectacled Milo Reno, that “instructions were issued that there was not to be any picketing,” John Farmer went out on the highways to turn back city-bound shipments of foodstuffs. Iowa, seat of the Farmers Holiday Association, was the scene of widespread picketing. A man driving a truckload of cattle into Sioux City was badly beaten. Governor Herring called out militiamen to help patrol highways in the western part of his State. Veterans of last spring’s milk war in Wisconsin outdid their lowan colleagues in violence. Ten thousand pounds of milk were dumped from the vats of a Milan cheese factory; more than 100 other cheese factories and creameries closed voluntarily throughout the state. Near Marshfield a farmer trying to sell a load of wood was brutally clubbed. A picketer near Madison was shot and killed by a truck driver running a blockade.

Sleepless for 36 hours at a stretch, indefatigable Milo Reno popped up within six days at Minneapolis, St. Paul, Omaha, Des Moines, Chicago and Kankakee to recruit strikers and sympathy. He requested the NRA’s approval of his banner: a green eagle clutching a pitchfork with FHA above and “We Are A Part” below. After listening to the President’s radio talk to the country, promising higher commodity prices (TIME, Oct. 30) Milo Reno declared:

“The address contained no ray of hope that there will be changes in the policies which so far have proved absolutely ineffective. The Farmers Holiday Association has demanded recognition of the right of the farmer of production cost, which is fundamental. The President en tirely ignored this and failed to mention it. . . .”

That Milo Reno’s cause was just, that U. S. farmers have suffered sorely, nobody could deny. Last year the Department of Agriculture significantly reported: “For 1931 income fell short by over $1,000, 000,000 of rewarding farm operators and members of their families for their labor, even if they had received only the reduced wage rates now paid to hired hands, leaving nothing available for capital and man agement.” In 1932. farm income had dropped another $1,700,000,000. According to Milo Reno, a farmer would have to receive the following prices if he was to make the bare costs of production: wheat. $1.35 a bu.; corn, 92¢; oats, 49¢; hogs, $11.25 a cwt.; chickens 24¢ a Ib. Last week’s Chicago prices: wheat, 85¢; corn, 45¢; oats, 35¢; hogs, $4.60; chickens, 10¢. These being Chicago prices, farmers’ receipts were lower by the amounts of transportation, storage and brokerage fees.*

The Reno program is for John Farmer to withhold his products from market until scarcity raises farm prices; to buy nothing unnecessary, to pay no debts or taxes, to fight evictions. Because the Federal farm program—based on 1909-14 price parities between industrial and farm products— has not provided prices as high as his, because farmers are still losing their homes in spite of the Farm Credit Administration, at Shenandoah, Iowa Milo Reno was enthusiastically cheered when he described the Agricultural Adjustment Act as “diabolical.” He demanded the resignation of Secretary of Agriculture Henry Agard Wallace. “Wallace’s education and association with Wall Street have made him what he is today. Wallace would make a second-rate county agent if he knew a little more.” Shenandoah’s farmers paraded through the streets of the little country town, in solemn protest. At the fair grounds a dummy marked HENRY WALLACE was soundly spanked by three stout rustics with barrel staves.

Milo Reno’s 1932 farm strike, also marked by rural scuffling and vituperative speechmaking, bedeviled the last days of President Hoover. His strike of last spring in Iowa was thrown out of stride in the general enthusiasm over the New Deal. But last week’s agrarian trouble had the Administration worried. Sensing a discontent which smoldered deep, President Roosevelt looked about for means of starting a vigorous backfire.

Backfire. Even Calvin Coolidge called conferences on behalf of depressed farmers. Herbert Hoover spent three-quarters of a billion dollars out of the Federal treasury trying to peg wheat and cotton, spent more millions helping farmers’ co-operatives through the Farm Board in an effort to pass on to the farmers themselves the problem of marketing surpluses, raising prices, reducing acreage. Last week the oldest co-operative of all, Farmers’ National Grain Dealers Association, split in two over policy, and the nation had on hand a 500,000,000 bu. surplus of corn, a 150,000,000 bu. surplus of wheat, a 500,000,000 Ib. surplus of hogs.

The instruments which President Roosevelt has set up to help the farmer are many. Since May the Agricultural Adjustment Administration has applied its domestic allotment plan (reduction of production compensated by the proceeds of processing taxes) to wheat, cotton, tobacco, hogs. Loans of 10¢ a lb. are planned for cotton farmers agreeing to crop reduction. In addition, for producers of rice, fruit, peanuts and milk, AAA arranged marketing agreements which were calculated to boost prices. Henry Morgenthau Jr. was authorized to direct a $2,000,000,000 refinancing program to ease the burden of farm mortgagees through Farm Credit Administration. And during the month, FCA announced that its loans for crop production and harvesting had passed the $200,000,000 mark, of which $50,000,000 had been repaid. This machinery, taxed to capacity, was now to be extended still further. Into the White House marched Secretary Wallace and Agricultural Adjustment Administrator George Nelson Peek, who is to one-half the U. S. people what NRAdministrator Johnson is to the other. When they emerged, Administrator Peek held the brand to light a mighty defensive blaze of his own.

Over the radio he told the fiery Corn Belt that the Government would now pay good money to reduce the 1934 corn acreage by 20%, the 1934 hog output by 25%. Any farmer who reduced his acreage by 20% would be paid 30¢ a bu. for the corn he did not grow. By agreeing to sell 25% less hogs than he normally did. the farmer would receive $5 a hundredweight for hogs unsold. What was more, any farmer who agreed to take part in the reduction would receive as a loan within the next few months 50¢ for every bushel of No. 2 corn he now had on hand (total: 300,,000,000 bu.). At present, only farmers of Iowa, Illinois, Minnesota, South Dakota and Kansas were eligible for loans, since the program was restricted to states having farm warehousing laws. It was expected that the Legislatures of Nebraska, Missouri, Indiana and Ohio would specially convene to set up the legal machinery necessary for sealing grain in warehouses on farms. A processing tax of 28¢ a bu. on corn was established to finance the Government’s plan.

Said big-boned Administrator Peek of Illinois:

“I want to discuss first the situation with my friends and neighbors of the Corn Belt. The discontent out there is of long standing, for the very good reason that grain and livestock prices have been more depressed in the last twelve years than those of any of the other major commodities. Drought, coupled with shamefully low prices, has made the situation in the middle of our country extremely critical. . . .

“This week we are sending forward the last of $110,000,000 in cotton adjustment checks. The crisis in the South has eased. We expect wheat checks will begin moving heavily in November. . . .

“Adjustment payments in the six main Midwest wheat producing states will amount to more than $60,000,000 this fall and next spring. The total to all farmers will be $102,000,000. . . . The $300,000,000 corn and hog program that we are now launching is the biggest we have undertaken. . . . The first adjustment checks are expected to go out to the corn-hog country early in the coming year.

“Like all other adjustment payments we are making to farmers, this money that is going out to the Midwest is not to be just a shot in the arm, to stir up new buying for a while.

“These payments will secure a reduced planting of our basic crops, and should assure in future years a more solid basis for agriculture. . . .

“The present Administration has promised no miracles. The present depression was more than twelve years in the making. We make no apologies for not having lifted the depression all at once. We know that in the push of events we have made some mistakes. Under pressure we have named goals and deadlines too close up. …

“Our program, in general, is just beginning to roll. I believe it will move faster right through the winter.

“The old idea of making the nation prosperous was to attempt to distribute money through the pyramid from the top down and trust to luck that some of it would filter through to the fellows on the ground. We are putting some money in at the top, ourselves, through banks, in surance companies, railroads, and so on; but our main idea is to get money out to the base of the pyramid, in the grass roots.”

Peek of Polo. Milo Reno, who hates Secretary Wallace as one of the fathers of the AAA, has high regard for AAA’s Administrator George Nelson Peek. “He’s the squarest shooter in the Agriculture Department,” says Mr. Reno. “Milo Reno,” Administrator Peek replies, “is a very sincere fellow. As to his objectives, we all think the same as he does, but as to his methods, I think there is room for great difference of opinion.”

With both Reno and Wallace, George Peek has much in common. He and Reno served on the Committee of 22 in 1926-28. Reno was an ardent supporter of the McNary-Haugen bill, which Peek instigated and lobbied through Congress from Vice President Dawes’s anteroom only to have Calvin Coolidge veto it twice. Both Peek and Wallace used to be Republicans. Wallace shifted parties after his father, Henry Cantwell Wallace, President Harding’s Secretary of Agriculture, died in 1924, his last days clouded by Secretary of Commerce Hoover’s frustration of his plans for farm aid. Peek changed political horses in 1928 when the G. O. Presidential nomination went to Herbert Hoover instead of to his friend Frank Lowden or his friend Charles Dawes..

“The Republican Party turned its back on the farmers at Kansas City,” he charged, switching his allegiance to the Brown Derby, “and added insult to injury by nominating the arch-enemy of a square deal for American agriculture!”

Even when he was a regular Republican, he heckled Calvin Coolidge, blaming “deliberate national policies for the existing farm crisis.”

When the U. S. entered the War, Peek was abroad helping the French Government amass military materials, a job for which his 23 years with Deere & Co., manufacturers of agricultural machinery, prepared him. Alexander Legge of International Harvester called his competitor home to sit on the War Industries Board. Grosvenor B. Clarkson, director of the Council of National Defense and the Board’s biographer, has described Peek as “impetuous, impatient, impulsive, explosive, restless, driving … a photographic observer. . . . For Peek the world was a sharp black-&-white drawing. His decisions were as clear-cut as Legge’s, but they somewhat offended; and all the more because they were right. . . . You resented the sting of Peek’s commanding dictum . . . but he put you on your mettle.”

In 1919 Willys-Overland Co. took over Moline Plow Co., made George Peek president at $100,000 a year. President Peek made Hugh Johnson, whom he had met with Bernard Baruch on the War Industries Board, his chief counsel. When New York and Chicago bankers took over the liquidation of the concern, Mr. Peek was asked to resign. He did so but later sued for future salary under his contract and recovered several hundred thousand dollars. General Johnson stayed behind, while Peek, now independently wealthy, went into a cornstalk processing concern which left him more time for his life hobby, farm relief.

George Peek was born 59 years ago at Polo, Ill. His sympathy for farmers was not acquired wholly as result of his experience in the plow business, where he found that “you can’t make a nickel off of a busted customer.” Still clear in his mind is the picture of his family’s eviction from their farm at Polo when the mortgage was foreclosed. In 1922, year before he left the Moline Plow Co., he and Hugh Johnson wrote a pamphlet called Equality for Agriculture which, like the later McNary-Haugen bill, permitted the farmer to grow all he could, setting up a Federal agency to dump surpluses abroad. That was his debut as an agrarian agitator. In 1926 Mr.. Peek became chairman of the Committee of 22 of the North Central States Agricultural Conference. As a mem ber of this body he buttonholed Congressmen for two years, trying to pound home his ideas on farm relief. Early on the Roosevelt bandwagon, he now works just as hard to put into effect the Roosevelt domestic allotment as he did for his own equalization fee. and doubtless gets wry satisfaction when delegations of lobbyists wait on him. He is now inside the glass house he used to throw stones at, and apparently enjoys glass-housekeeping.

Breather. By the end of last week there was evidence that the AAA’s quick action had somewhat pacified John Farmer and George Peek had a breather. Holiday members in 14 states stalled, failed to vote for the strike. Northeastern Colorado and Western Nebraska farmers went further, resolved at their meetings “to follow the leadership of President Roosevelt.” Tempered editorials appeared, like that of the Cedar Rapids Gazette, which concluded: “The Government’s proposition is part cash and part gamble; Reno’s proposition is all gamble.” Even such a hot-head as grizzled old Governor William Henry (“Alfalfa Bill”) Murray of Oklahoma counseled farmer¢s to be patient with the Administration’s farm policy, pleading: “Give the Congress and President an opportunity. If they fail, then you may talk about other methods.” The Green Eagle began to look poorly when Governor Clyde Herring of Iowa, after a telephone call to the White House, invited ten Midwestern Governors and representative farm leaders to meet with him in Des Moines this week. Under their leadership it was expected that the farm strike could be called off with credit for all, humiliation for none.

*Agricultural production costs are highly controversial, vary radically in different sections, widely between adjacent farms. According to the Department of Agriculture, average cost of production of wheat is 75¢ a bu., of corn 49¢, of oats 36¢.