Title: The Farmer and the Nation
Date: December 7, 1925
Location: Chicago, IL
Context: Address before the annual convention of the American Farm Bureau Federation.
No one can travel across the vast area that lies between the Alleghenies and the Rockies without being thoroughly impressed with the enormous expansion of American agriculture. Other sections of our country, acre for acre, are just as important and just as productive, but it is in this region that the cultivation of the land holds its most dominant position. It is to serve the farmers of this great open country that teeming cities have arisen, great stretches of navigation have been opened, a mighty network of railways has been constructed, a fast increasing mileage of highways has been laid out, and modern inventions have stretched their lines of communication among all the various communities and into nearly every home. Agriculture holds a position in this country that it was never before able to secure anywhere else on earth.
It is the development which has taken place within this area, mostly within the last seventy-five years, which has given agriculture a new standing in the world. By bringing the tillage of the soil under a new technique it has given to the people on the farm a new relationship to commerce, industry, and society. The ownership of land has always been a mark of privilege and distinction, but in other times and places the laborious effort of farming, the hard work of cultivating the soil–which was done almost entirely by hand–the comparative isolation of rural existence, was traditionally an unattractive life assigned to the serf and the uncultured peasant. It still partakes of that nature in most countries. But in America the farm has long since ceased to be associated with a mode of life that could be called rustic. It has become a great industrial enterprise, requiring a broad knowledge in its management, a technical skill in its labor, intricate machinery in its processes, and trained merchandising in its marketings. Agriculture in America has been raised to the rank of a profession. It does not draw any artificial support from industry or from the Government. It rests squarely on a foundation of its own. It is independent.
The place which agriculture holds to-day in this country, superior to that which it ever held before in time of peace in this or any other land, is by reason of its very eminence one of increasing exactions and difficulties. It does not require much talent or any great foresight to live on an inferior scale, limited and impoverished, nor does it evoke much eulogy, but to maintain freedom and independence, to rise in the economic scale to the ownership and profitable management of a great property amid all the perils of our competitive life, requires a high degree of industry and ability. Those who achieve that position in a community will always be entitled to the highest commendation. Whatever other obstacles the American people have had to meet and overcome, of every station in life, they have never permitted themselves to be hampered by a condition of dependence. As what they have had was secured not by favor or by bounty, but by their own efforts, no one else has had any power to deprive them of it. Unencumbered by any special artificial support, they have stood secure on their own foundation. America is not without a true nobility, but it is not supported by privilege. It rests on worth.
It is our farm life that is particularly representative of this standard of American citizenship. It is made up of many different types and races; it includes many different modes of thought and living. Stretching from the North, with its months of frost, to the Gulf, with its perpetual summer, it embraces a wide variety of production. But it is all a partaker of the same high measure of achievement and character. It rises in its importance above the products of the land and puts a stamp of its own upon the quality of our people. It is not merely for a supply of food that we look to the farms, but as a never-failing source, if others become exhausted, from which we can always replenish the manhood and womanhood of the Nation. It is for this reason that our whole country entertains the greatest solicitude for the welfare of the people who make up our agricultural population. The importance of their continued success and progress can not be overestimated. It affects not only the material prosperity but reaches beyond that into the moral and spiritual life of America.
It was the people of this stamp and character who were mainly instrumental in founding American institutions. It was well on into the nineteenth century before the great industrial development of our country began. In the old days there were some professional men and there were the clergy who exercised in a high degree an inspired leadership not only in the religious and educational, but to a marked extent in the political, life of their day. But the people were of the farm. Their living came from the soil. Their sturdy industry, their determination to be free, resulted in no small part from their occupation and mode of life. Wherever there is a farm, there is the greatest opportunity for a true home. It was the loyalty and perseverance bred of the home life of the American farmer that supported Washington through seven years of conflict and provided the necessary self-restraint to translate his victory into the abiding institutions of freedom. It is the spirit of those homes that our country must forever cherish.
But the gratitude of America, and I think of the whole world, is due not only to “the embattled farmers” who stood at Concord bridge and “fired the shot heard round the world,” but to those tillers of the soil of the great prairie States, prophets and pioneers of freedom, who rose to power in time to make it possible for Lincoln to save the Union, and also to the informed, improved, and well-equipped agriculture of our own day, which, while giving generously of their own manhood and womanhood, put forth those stupendous efforts which provided food, cotton, wool, and other materials that turned the tide for the cause of liberty in the Great War. It is the existence of this superb power, both of resources and of people, which has its home in the great open country, that has made possible not only the independence and freedom of our own land and the extension of liberty throughout the world, but has furnished the foundation on which has been built the great expansion in the industrial and commercial life of the Nation. Our statesmanship can be dedicated to no more worthy purpose than the perpetuation of this high standard of American farm life.
All of these results would appear to lead to the inevitable conclusion that to a very large extent the underlying support to the strength and character and greatness of America has been furnished by the strength and character and greatness of its agriculture. Our country has been developed under the influence of a new spirit. In the early beginnings of organized society the main form of wealth which was plentiful consisted of land. It was almost the sole source of production. Always in theory, and usually in practice, all land belonged to the Crown. It was the custom for the ruler to bestow upon his retainers not only landed estates, but to provide in addition the serfs who were attached to the soil, in order that they might supply the necessary labor for its productivity. The workers in the field were held in servitude, while their masters usually lived many miles from the land, sometimes in their castles, sometimes in towns and cities. This was the established condition all over the Old World. The position of the country thus became stationary. It was in the cities and towns, where opportunity came for exchange of ideas and educational advancement, that there started that progress toward freedom and self-government which marked the beginning of the modern age. The importance of the cities and towns became predominant. Even after freedom was granted to the serfs, the tillers of the soil never became a great influence. Their interests were always subordinated to the stronger, more aggressive life of the industrial population and of the ruling classes.
But America never fully came under this blighting influence. It was a different type of individual that formed the great bulk of our early settlers. They gained their livelihood by cultivating the soil, but there was no large and overmastering city or industrial population. The expansion of our country down to almost as late as 1880 was an agricultural expansion. A large majority of our inhabitants were engaged in that occupation. They not only tilled the soil, but they owned it. They not only directed the Government, but they made it. The fertile lands and generous homestead laws under American institutions all worked together to produce an entirely new position of place and power for agriculture. When there was added to this the marvelous inventions of farm machinery which have come into modern life, it made it possible to establish here the first agricultural empire which did not rest upon an oppressed peasantry. This was a stupendous achievement.
Following this came the vast business growth which brought great changes. The town and industrial population for the first time began to exceed that of the farms. From the surplus of food products requiring foreign markets we began to reach something like a balance between domestic production and consumption. Before 1910, so wise a man as James J. Hill expressed the opinion that in the near future we should be importers of wheat.
Under normal conditions Mr. Hill might have been correct, but the World War intervened. The enormous demand from abroad brought the high prices which so stimulated production that it reached a new record in amount and value. Without this service, famine undoubtedly would have prevailed over wide areas. This resulted in a great inflation and in an overproduction, reaching its summit in 1919, which was followed by the inevitable deflation of 1920 and 1921. The best economic authority tells us this was inevitable. Whether it was or not, it came. It afflicted both agriculture and industry. The values of manufacturing plants and their stocks on hand went down, their orders were canceled, their operations ceased, and the buying capacity of their wage earners being greatly reduced, the consumption of food products declined, causing a fall in prices that reached back to the farm. The resulting losses have never been fully recovered either in industry or agriculture, but starting from the low point of 1920 and 1921 both have made progress and from every indication appear to be entering an era of prosperity.
It has seemed to me desirable to consider thus briefly the development of our American agriculture, in order that by a better understanding of the method of its progress and the position it now holds we may better comprehend its needs and better estimate what the future promises for it. Everyone knows that the farmer, who is often least able to bear it, went through the most drastic deflation. Considered as a whole, his position has steadily improved since 1921. I do not mean that land values or prices have reached their former level. That was not to be expected. But I do mean that, generally speaking, the present business of farming as a whole is beginning to be profitable. Of course there are exceptions to be made of localities, individuals, and crops. Some people would grow poor on a mountain of gold, while others would make a good living on a rock. We can not bend our course to meet the exceptions; we must treat agriculture as a whole, and if, as a whole, it can be placed in a prosperous condition the exceptions will tend to eliminate themselves.
There have been discussions which seem to indicate some fear· that our agriculture is becoming decadent, that it has already reached its highest point, and that, becoming unprofitable, it is likely to diminish. Nothing in the appearance of the country or of its people as I have traveled over it has seemed to indicate any deterioration, nor do I find anything in the farm census and reports that warrants this conclusion.
It is true that there is an increasing interchange of population between the city and the country. With the coming of the automobile many of the city people are moving out into the country, and with the increasing use of machinery some of those formerly employed on the farm have been released for employment in the industries. For the past fifteen years urban population has been increasing, while farm population and the number of farms have slightly decreased. This has reversed the condition that existed before that period. But this is only a part of the story.
The real question is not the numbers employed but the amount of production. If that should appear to be inadequate to meet our requirements for food and raw materials, if the morale of the farmers should be breaking down, the situation might be serious. Such does not appear to be the fact. In intelligence, in education, in the general standards of living, farm life was never so well equipped as it is today. In the past forty-five years, which roughly marks our great industrial development, the index number of production rose from 100 to 237, while that for population is estimated to be but 226. Production has outrun population, according to the statistics of the Harvard Service. While the number of farms and people engaged in farming was slightly less in 1924 than in 1910, production in 1923 and 1924 was 15 per cent greater than in 1910. Fewer people but more production means each person on the farm will receive more.
It is not only production, however, but price that is important to the farmer. The value of his produce for 1924, excluding crops fed to animals, was about $12,136,000,000. The estimates for the present year are about the same. This compares with $3,549,000,000 in 1900. According to estimates, the number of people on farms in 1924 was about 10 per cent greater than in 1900. The amount of money received was about 350 per cent greater. But as the general price level of all commodities had greatly advanced, measured in purchasing power the amount received was only about 90 per cent greater. This means that 110 per cent of people engaged in agriculture received 190 per cent more in 1924 than they did in 1900. While it is true that there was a great decline in farm prices in 1920 and 1921, and an even greater decline in the purchasing power of farm produce compared with other commodities, yet since that time farm prices have risen more rapidly than other commodities, so that the purchasing power of farm produce has risen also. The tendency appears to be to bring agriculture as a whole back to the same relative economic position that it occupied before the war. While general production, prices, and living conditions on the farm are improving, there is little ground for fear that agriculture is becoming decadent; yet some areas are still depressed; debts and taxes still remain. Although it is gratifying to know that farm conditions as a whole are encouraging, yet we ought not to cease our efforts for their constant improvement. We can not claim that they have reached perfection anywhere, and in too many instances there is still much distress. Various suggestions of artificial relief have been made. Production has been ample, but prices compared with the war era have been very much reduced, although they are now considerably improved. The proposals made have, therefore, had the purpose of increasing prices.
One of the methods by which this has been sought, though put forward chiefly as an emergency measure as I understand from its proponents, was to have corporations organized through which the Government would directly or indirectly fix prices or engage in buying and selling farm produce. This would be a dangerous undertaking, and as the emergency is not so acute, it seems at present to have lost much of its support. No matter how it is disguised, the moment the Government engages in buying and selling, by that act it is fixing prices. Moreover, it would apparently destroy cooperative associations and all other marketing machinery, for no one can compete with the Government. Ultimately it would end the independence which the farmers of this country enjoy as a result of centuries of struggle and prevent the exercise of their own judgment and control in cultivating their land and marketing their produce.
Government control can not be divorced from political control. The overwhelming interest of the consumer, not the smaller interest of the producer, would be sure to dominate in the end. I am reliably informed that the secretary of agriculture of a great foreign power has recently fixed the wages of farm labor in his country at less than $5 per week. The government price is not always a high price. Unless we fix correspoding prices for other commodities, a high fixed price for agriculture would simply stimulate overproduction that would end in complete collapse. However attractive this proposal was at first thought, careful consideration of it has led to much opposition on the part of the farmers. They realize that even the United States Government is not strong enough, either directly or indirectly, to fix prices which would constantly guarantee success. They are opposed to submitting themselves to the control of a great Government bureaucracy. They prefer the sound policy of maintaining their freedom and their own initiative as individuals, or to limit them only as they voluntarily form group associations. They do not wish to put the Government into the farming business.
Others have thought that the tariff rates were unfavorable to the farmer. If this should be a fact, it ought to be corrected. Let us examine our imports. Last year their gross value was $3,610,000,000, but $2,080,000,000, or 57 6/10 per cent, came in wholly free of duty. This free list was constructed especially to favor the farmer, and contains more than 50 articles which he purchases, like fertilizer, leather harnesses, farm machinery, coffee, binder twine, barbed wire, and gasoline. Of the $1,530,000,000 of goods paying imports, $780,000,000 was upon agricultural products, levied solely to protect the farmer, including animal and dairy products, grain, flax, wool, sugar, nuts, citrus fruits, and many others. If any farmer wants to get an accurate and full list of his products which are protected and his purchases which come in free, let him go to his public library and consult Official Document No. 33, comparing the last three tariff acts. Thus 80 per cent of our imports either come in free or pay a duty to protect the farmer. This must be further increased by $250,000,000 more of imported luxuries like diamonds, fine rugs, silks, cut glass, jewelry, and mahogany. These items can not affect the prosperity of the farmer. This brings the total of imports up to 88 per cent which are either free, or luxuries, or protected to help the farmer, and leaves only 12 per cent of our imports upon which the agricultural industry pays any part of the tariff.
But, on the other hand, our industrial and city population pays the tariff on the $780,000,000 worth of agricultural imports and also participates in the $500,000,000 worth of imports outside of luxuries. While the farmer pays part of the duties on 12 per cent of our imports which do not benefit him, industry and commerce pay part of the duty on 36 per cent of the imports which do not benefit them.
But if we take all that the farmer buys for his household and farm operation and subtract from it articles dutiable to protect the farmer, the free list, and luxuries, we should have left less than 10 per cent of his expenditures. This means that less than 10 per cent of farm purchases are at an increased cost which is adverse to the farmer. Admitting that the price of these purchases is increased by the full amount of the duty, this means that the total adverse cost to the farmer on account of the tariff is only between 2 per cent and 3 per cent of his purchases.
Many economists consider that even this calculation as to the contribution of our farmers to the tariff is overestimated. As their expenditures include many items for labor and service on which there is no duty, the proportion of total expenditure on dutiable articles outside the three lists above mentioned is not 10 per cent, but only 3 per cent or 4 per cent of his total expenditures. Thus, even assuming that the farmer pays tariff on this ratio of goods, his expenditures would only be increased by one-third of 3 per cent or 4 per cent, or not over 1 1/3 per cent.
On the other side, protection is a great benefit to agriculture as a whole. The $780,000,000 of agricultural produce imported last year had to pay $260,000,000 for the privilege of coming in to compete with our own farm production. If these were admitted free of duty, they would no doubt greatly increase in volume, reduce present farm prices, and result in much lower standards of living on our farms. We are also exporters as well as importers. Protection greatly aids diversification and so eliminates an unprofitable surplus. Under our tariff our flax acreage has increased from 1,641,000 in 1921 to 3,093,000 in 1925. Much of this would otherwise have been devoted to wheat, increasing the surplus and further demoralizing that market. The same principle holds in relation to sugar, wool, and other agricultural products.
It has been thought that protection does not help agricultural products. Any study of dairy products, flax, wool, and the many other commodities, will demonstrate that it does. Even wheat, where we are exporters, shows its effect. If we take Buffalo, to secure a point of common contact, American No. 1 Dark Northern is 25 cents to 35 cents higher than Canadian, No. 2 Dark Hard Winter is 37 cents to 42 cents higher, and No. 2 Red would be 45 cents to 46 cents higher. Contract wheat for future delivery in Chicago has been usually as high as future deliveries in Liverpool, although the difference in freight is about 20 cents a bushel, which means that our wheat is now about that much above world price levels. The question is complicated with different grades and qualities, some of which do not show the same differences.
But the largest benefits accruing to the farmer come from supplying him with home markets. What the farmer raises must either be sold at home or sent abroad. Our per capita consumption of butter, sugar, meats, eggs, milk, and tobacco is far above those of foreign countries. When the depression of 1920 came and 5,000,000 of our wage earners were unemployed, their consumption of the more expensive agricultural supplies, such as animal products, fell 18 per cent below what it had been before and what it became again when employment increased. This was more than the amount of our exports. Prosperity in our industries is of more value to the farmer than the whole export market for foodstuffs. Protection has contributed in our country to making employment plentiful with the highest wages and highest standards of living in the world, which is of inestimable benefit to both our agricultural and industrial population. General economic stability is of the utmost importance to the farmer, and a depression in industry with the attendant unemployment would do the farmer an incalculable injury.
If the price fixing and tariff revision do not seem to be helpful, there are other proposals that do promise improvements. For financing the farmer we are developing the farm loan and intermediate credit banks. These have put out about $1,200,000,000 of loans at moderate rates to about 350,000 farmers. In addition, there is the general banking system, National and State. All of these agencies need to give more informed attention to farm needs. They need more energy in administration. They should be equipped to supply not only credit but sound business advice, and the farmers to a much better extent should learn to use all these facilities.
For a more orderly marketing calculated to secure a better range of prices the cooperative movement promises the greatest success. Already they are handling $2,500,000,000 of farm produce, or nearly one-fifth of the annual production. The disposition of surplus produce has been discussed. If by this is meant the constant raising of a larger supply than is needed, it is difficult to conceive of any remedy except reduced production in any such commodity. But there are, of course, accidental surpluses due to more favorable weather conditions, which are unavoidable and which ought to be managed so that they can be spread over a year or two without depressing prices. The initiative of the farmers themselves, with such assistance as can be given them by the Government without assuming responsibility for business management, through financing and through the cooperative movement, would appear to be a wise method of solving this problem. Of course, I should be willing to approve any plan that can be devised in accordance with sound economic principles.
To have agriculture worth anything, it must rest on an independent business basis. It can not at the same time be part private business and part Government business. I believe the Government ought to give it every assistance, but it ought to leave it as the support, the benefit, and the business of the people. The interest which the National Government takes in agriculture is manifest by an appropriation of about $140,000,000 a year, which is nearly one-fifth of our total expenditure, exclusive of the Post Office, prior to the war. I do not need to recount what is being done for education and good roads, for opening up our waterways, or the enormous activities of the Department of Agriculture which reach to almost every farmer in the land.
The most important development of late years has been the cooperative movement. With the economic information furnished by the department, which was of such great value to the hog and potato industries for the last year or two, with better warehouse and storage facilities and a better credit structure, much can be done to take care of the ordinary surplus. With a production influenced by information from the department, with adequate storage, supplied with necessary credit and the orderly marketing effected through cooperative action, agriculture could be placed on a sound and independent business basis. While the Government ought not to undertake to control or direct, it should supplement and assist all efforts in this direction. The leaders in the cooperative movement, with the advice of the Department of Agriculture, have prepared what is believed to be an adequate bill embodying these principles, which will be presented to the Congress for enactment. I propose actively and energetically to assist the farmers to promote their welfare through cooperative marketing.
Under the working out of the provisions of this bill the farmers would have the active and energetic assistance of the Government in meeting the problem of surplus production. Through consultation and conference the best experts of the country would be employed as the needs require and methods of storage, credit, and marketing would be devised. The agencies created would have at their disposal the active cooperation of the great organizations of the Departments of Agriculture, Commerce, and Federal banking. Their representatives at home and abroad would be engaged in locating and supplying domestic and foreign markets. The fundamental soundness of this proposal rests on the principle that it is helping the farmer to help himself. Already the cooperative effort in raisins and other products has met with marked success by adopting this plan.
It would be a great mistake to underestimate the difficulties under which the farmers labor. They are entitled to all the sympathy and help which the Government can give them. But I feel they are also entitled to consider the encouraging features of their situation. Human nature is on their side. We are all consumers of food. The more prosperous we become, the more we consume of the higher-priced products. In the past, farm prices have always tended to get the better of industrial prices. In the period from 1820 to 1860 there was a general rise of all commodities, but farm prices increased about 50 per cent more than other commodities. After the Civil War, from the seventies to 1896, there was a decline in all commodities, but farm prices declined less, so that their purchasing power actually increased. From 1896 to 1913, according to the Bureau of Labor Statistics, the index number of farm prices rose 82 per cent while that of other prices rose but 37 per cent. It was this great increase in the price of food products which brought about the complaint and discussion of the high cost of living, which everyone will recall became acute about 1911 and remained a problem of economic adjustment unsolved when the World War began.
With the coming of the great conflict an entire transformation took place. The price of all commodities rose and the price of land rose. There was a great temptation to expand. Farmers bought more land at very high prices. Then came the terrible world depression which left many involved in great debts and everybody with shrunken land values. Farm produce decreased in price faster than other commodities. These debts and shrunken values still remain as a great burden. On top of them are the war taxes which the Nation has greatly reduced, but which the local communities still tend to increase.
It is this burden which is causing distress, but history is again showing signs of repeating itself. In 1921 the price of farm produce reached its low point. According to the Department of Agriculture, however, the end of this four-year period sees the price of farm products substantially increased. Much of the debts and taxes remain, but with the prices now received the present business of farming is very much improved.
I believe that the past history of the relative trend of prices between farm products and other commodities is of tremendous significance. The surplus lands of the country are exhausted. The industrial population is outstripping the farm population. Manufacturing is expanding. These must come to the farmers for their food and their raw materials. While we can produce more, the markets for food are increasing much faster than present farm productivity. The future of agriculture looks to be exceedingly secure.
The real wealth of our country, its productive capacity, its great manufacturing plants, its far-reaching railroad system, its mighty commerce, and its agriculture did not come into being all at once, but is the result of a vast multitude of small increments brought about by long, slow, and laborious toil. Whatever a few individuals may do, the Nation as a whole and its great subdivisions of industry, transportation, commerce, and agriculture can increase by no other method. The percentage of yearly returns upon all the property of this country is low, but in the aggregate it is a stupendous sum. Unless all past experience is to be disregarded, notwithstanding its present embarrassments, agriculture as a whole should lead industry in future prosperity.
In all our economic discussions we must remember that we can not stop with the mere acquisition of wealth. The ultimate result to be desired is not the making of money, but the making of people. Industry, thrift, and self-control are not sought because they create wealth, but because they create character. These are the prime product of the farm. We who have seen it, and lived it, we know.
It is this life that the Nation is so solicitous to maintain and improve. It dwells in the open country, among the hills and valleys and over the great plains, in the unobstructed light of the sun, and under the glimmer of the stars. It brings its inhabitants into an intimate and true relation to nature, where they can live in harmony with the Great Purpose. It has been the life of freedom and independence, of religious convictions and abiding character. In its past it has made and saved America and helped rescue the world. In its future it holds the supreme promise of human progress.
Citation: Foundations of the Republic
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