A drop in agricultural production in the mid-1920s

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With heavy debts to pay and improved farming practices and equipment making it easier to work more land, farmers found it hard to reduce production. The resulting large surpluses caused farm prices to plummet. From 1919 to 1920, corn tumbled from $1.30 per bushel to forty-seven cents, a drop of more than 63 percent.

With heavy debts to pay and improved farming practices and equipment making it easier to work more land, farmers found it hard to reduce production. The resulting large surpluses caused farm prices to plummet. From 1919 to 1920, corn tumbled from $1.30 per bushel to forty-seven cents, a drop of more than 63 percent.Jan 5, 2018

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How did mass production affect farmers in the 1920s?

Video Clip: American Farmers in the 1920’s Farmers were also badly affected by the introduction of mass production. As farmers produced more produce using their new machines the price of their crops dropped. This was caused by producing more food than was needed by the population.

Why were grain prices so low in the 1920s?

Even though grain prices were low because of world over-production, American farmers had to keep planting large acreages in the hope of getting enough cash to pay off debts. Wheat prices bobbed along at a few cents over a dollar for most of the 1920s.

How did farmers benefit from the agricultural depression of the 1910s?

Starving farm family that appealed for aid during an agricultural depression, Hollandale, Freeborn County, 1929. Minnesota farmers enjoyed a period of prosperity in the 1910s that continued through World War I. Encouraged by the US government to increase production, farmers took out loans to buy more land and invest in new equipment.

What happened to farm mortgages in the 1920s?

Farm mortgages doubled between 1910 and 1920, from $3.3 billion to $6.7 billion ($74.4 billion today). Then after the war, as a recovering Europe and Russia began to feed themselves (and, in the case of Russia, even finding grain to export), the bottom dropped out.

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Why did agricultural production decline in the 1920s?

As Food Demand Drops, Farm Prices Collapse In 1920, with the war over and the demand for farm goods decreasing, the U.S. government with little warning announced that it was ending price supports. The farmers, however, continued to produce at near record levels creating surplus commodities that sent prices plummeting.


What happened to agriculture in the 1920s?

While most Americans enjoyed relative prosperity for most of the 1920s, the Great Depression for the American farmer really began after World War I. Much of the Roaring ’20s was a continual cycle of debt for the American farmer, stemming from falling farm prices and the need to purchase expensive machinery.


What problems did farmers face in the 1920s?

What problems did farmers face in the 1920s? The demand for food dropped, so farmers’ incomes went down. They could not afford payments on their farms, so they lost their land.


How did the drop in demand impact farmers?

In the early 1930s prices dropped so low that many farmers went bankrupt and lost their farms. In some cases, the price of a bushel of corn fell to just eight or ten cents. Some farm families began burning corn rather than coal in their stoves because corn was cheaper.


What farming practice weakened the economy in the 1920’s?

Overproduction and underconsumption were affecting most sectors of the economy. Old industries were in decline. Farm income fell from $22 billion in 1919 to $13 billion in 1929. Farmers’ debts increased to $2 billion.


What were negative changes in the 1920s?

Immigration, race, alcohol, evolution, gender politics, and sexual morality all became major cultural battlefields during the 1920s. Wets battled drys, religious modernists battled religious fundamentalists, and urban ethnics battled the Ku Klux Klan. The 1920s was a decade of profound social changes.


How did overproduction affect farmers in the 1920s?

How did overproduction affect farmers in the 1920s? Farmers produced fewer goods. Farmers used new technology. Farmers could not pay their debts.


What caused overproduction in 1920s?

As farmers produced more produce using their new machines the price of their crops dropped. This was caused by producing more food than was needed by the population. This surplus of food was called ‘overproduction’.


How did farmers affect the 1920s?

Video Clip: American Farmers in the 1920’s. Farmers were also badly affected by the introduction of mass production. As farmers produced more produce using their new machines the price of their crops dropped. This was caused by producing more food than was needed by the population.


Why was the price of wheat so low in 1929?

Prohibition, the banning of the production and drinking of alcohol, prevented them from doing this. In 1929, the price of wheat and barely hit an all time low. It was cheaper to burn the wheat as fuel than pay to transport it to market!


What was the impact of the introduction of the Hire Purchase?

This led to an increase in unemployment and a drop in wages for farm labourers. Farming areas such as the South and the Mid West were badly affected.


How did mass production affect agriculture?

Effects of Mass Production on Agriculture in America in the 1920’s. During the 1920s people who lived in the industrial cities and towns benefited from the effects of ‘Mass Production’. The use of assembly lines meant that the cost of many goods kept on falling which meant that more people could afford to buy them.


Can people in the agricultural area afford to buy new goods?

However, many people living in the agricultural (farming) areas of the USA could not afford to buy these new goods. They suffered from the effects of ‘Mass Production’.


When did agriculture enter the long depression?

When Agriculture Entered the Long Depression in the Early 1920s. The culture of Iowa agriculture hasn’t only been shaped by good times. The farm crisis that started in the 1920s, a decade before the Great Depression engulfed America, shook rural Iowa to its core.


How much did Iowa farm income drop in 1921?

Farm income fell from $17.7 billion in 1919 to $10.5 million in 1921—nearly a 41 percent drop. In Iowa, farm values that had almost tripled between 1910 and 1920 plunged during the 1920s. In Harrison County in southwest Iowa, 1930 land values of $41 million reflected a drop of more than $35 million from 1920, Dixon said.


How much did Iowa farm population lose in 1922?

Then the farm population showed net losses of 478,000 in 1922 and 234,000 in 1923. The more lucrative prospects of the city lured many of the best of the younger generations away, Dixon said. Iowa farm, 1920s Source: Library of Congress. Banding Together in Farmer Cooperatives.


Why did the Federal Reserve raise the credit rate?

The Federal Reserve raised the credit rate just when the farmer needed its help the most, so money tightened up. Banks did not renew notes, but mortgages and bills still came due. To make it worse, the railroads raised their freight rates, so it was more expensive to get the crops to market, Dixon noted.


What was the Golden Age of Agriculture?

In the post–World War I era, the Golden Age of Agriculture was over , and farmers throughout the Midwest began to suffer the effects of an increasing economic depression that culminated at the close of the 1920s with the stock market crash.


When was the first cooperative elevator in Iowa?

One of these early Iowa cooperatives was Farmers Cooperative Elevator of Marcus, which was incorporated on December 12, 1887 . The Marcus location, which is now part of First Cooperative Association based in Cherokee, remains the oldest active cooperative elevator in the nation.


When did the war end?

It was profitable, as well as patriotic, to raise crops at top capacity. But then the war ended on November 11, 1918. “Government price supports for agriculture were kept through 1920, when the guaranteed prices on wheat and other crops were terminated,” Dixon noted.


Why was the demand for rural farming and labor dropping faster than people were able or willing to move out of the countryside?

As the American economy was becoming increasingly mechanized and industrialized , there was simply not as great a need for half of the population to work on farms . But many people were attached to this way of life, economically, financially, culturally, and psychologically.


What was the margin of deflation in the 1920s?

The 1920 Census determined for the first time that more Americans lived in cities than in the countryside. The margin was narrow — 51 to 49 — but none the less it was a key turning point in our nation’s history. It is probably not a coincidence that the 1920s are the first decade …


How did the industrial class affect the women of the Roaring Twenties?

Working women were especially affected because they were concentrated in the garment and textile industries, which were in decline throughout the decade.


What did women do in the Jazz Age?

The women in these areas were not buying the latest rayon undergarments, nor were they trimming their hair and their dresses short, or enjoying the newfound glitz of the Jazz Age. They were still sewing their own clothes, patching holes in their husbands’ shirts, and making dresses stretch from one daughter to the next. They still slaughtered their own meat, grew and canned their own vegetables, and in many places bartered for what they could not produce. Survival skills took precedence over cultural sophistication.


What happened to organized labor in 1919?

Politically, organized labor lost a lot of power and influence after a series of failed strikes in 1919. The largest of these was a nationwide steelworkers strike, in which 350,000 workers struck against the US Steel Corporation. Most of them were immigrants and the press was quickly able to portray them as radicals, in sympathy with the Bolshevik Revolution in Russia. The strike was a colossal failure, as were all the other big strikes of 1919. It was during that year that a man named Calvin Coolidge made a national name for himself in opposing and defeating a police strike in Boston, while serving as Governor of Massachusetts.


What were the main exports of Europe during the Great War?

Agricultural exports to Europe exploded during the Great War, and even this was not enough to keep up with demand. Corn, wheat, and cotton all hit very high prices, and this encouraged new tilling, new growing, and most importantly new borrowing. With a postwar price collapse came a rural financial collapse as well.


Where did the textile workers strike in 1929?

Two strikes in 1929 among the southern textile workers both ended in failure. One took place in Elizabethtown, Tennessee. The other was in Gastonia, North Carolina. Wages didn’t budge in either case.


How did the 1920s affect farmers?

However, farmers had lost ground relative the rest of the economy and also relative to their own employees. GDP per capita was 30 percent higher than before the war and agricultural wages were some 10 percent higher. This difference with their own employees may have affected the farmers’ status and self-perception more than the comparison with far-away city dwellers. These gaps were to widen during the depression—only to bounce back with the New Deal and the Agricultural Adjustment Act.


How did agriculture contribute to the Depression?

According to the “real” story, agriculture contributed both to the outbreak of the depression in 1929 and to its catastrophic worsening in the second half of 1930. In the short run, the downturn was accelerated by the poor conditions of the balance of payments of agricultural exporters such as Australia or Argentina. Vladimir Timoshenko primarily blames the poor 1929 crop, which reduced their exports, whereas William Lewis and Barry Eichengreen stress the effect of the 1928 American monetary squeeze on these heavily indebted countries. 6


How did indebtedness affect farmers during the Great Depression?

The nominal stock of debt fell somewhat from the precrisis level , but much less than gross output— so that the debt/output ratio doubled. Real interest rates soared, interests payments gobbled a growing share of income , and foreclosures (with some lag) increased to unprecedented heights. 49


What did Hamilton show about the Great Depression?

35–36. Hamilton shows how the (poor) predictions of future markets for agricultural commodities also shaped expectation about the aggregate price level.


How did farmers’ indebtedness affect the banking system?

Farmers’ indebtedness could cause a nationwide banking panic if: first, it caused a substantial number of farmers to fail; second, these failures caused banks that had financed farmers to fail; and, third, the failure of rural banks either triggered the panic (a case of strong exogeneity) or helped to propagate it (weak exogeneity). This section will discuss these three conditions, after having briefly outlined the origins of the indebtedness of American farmers in the 1920s. Consistent with the overall “monetary” story, the section will focus uniquely on the United States, although the connection between indebtedness and banking panics elsewhere in the world is worthy of research. In fact, farmers were also quite heavily indebted in other countries, such as Germany, and the occurrence of a banking panic in a country worsened its performance during the depression. 38


What were the causes of the Great Depression?

Agricultural distress in the 1920s is routinely quoted among the causes of the Great Depression. This article challenges the conventional wisdom. World agriculture was not plagued by overproduction and falling terms of trade. The indebtedness of American farmers, a legacy of the boom years 1918–1921, did jeopardize the rural banks, but the relation between their crises, the banking panic of 1930, and the Great Depression is tenuous at best.


What was the most serious drag on European economic growth?

This stylized fact is routinely repeated in general books about the economy of the interwar years: for instance, according to Patricia Clavin, “the troubled health of agriculture , especially in eastern and southern Europe, was the most serious drag on European economic growth.” 5. Clavin, Great Depression, p. 78.


Why were grain prices so low in the 1920s?

Even though grain prices were low because of world over-production, American farmers had to keep planting large acreages in the hope of getting enough cash to pay off debts. Wheat prices bobbed along at a few cents over a dollar for most of the 1920s. Some farmers survived.


How many farms were lost in the 1930s?

Finally, the farmer himself made a token bid, the auctioneer kept trying, and soon someone in the crowd said insistently, “Sell ‘er!” The rest of the machinery and livestock went the same way – no one bid except the original owner, who got all his stuff back at a very low price. Nevertheless, some 750,000 farms were lost between 1930 and 1935 through bankruptcy and foreclosure.


How much wheat was harvested in the Great War?

In 1913, U.S. farmers harvested more than 50 million acres of wheat (with an average yield of 15.2 bushels per acre), and got $0.79.9 per bushel for the crop. At the peak in 1919, 75.7 million acres were harvested with a somewhat diminished yield of 12.8 bushels per acre, but the high price of $2.14.9 per bushel.


What happened to wheat in 1921?

In 1921, the price of wheat dropped to $0.92.6 per bushel, and heavily indebted farmers couldn’t make the payments on all those new acres and tractors.


What happened in 1935?

In 1935 the dust storms started. All that dusty soil rose high into the air and blew into every nook and cranny, piling up like drifted snow – except it didn’t melt away come spring. Cattle and crops and even people died; folks who had hung on finally gave up. The tragic story of the Dust Bowl is too much to tell here. For an excellent account of those folk’s suffering and fortitude, I recommend The Worst Hard Time by Timothy Egan. For much more on the Great Depression itself, read The Hungry Years by T.H. Watkins or The Great Depression – America, 1929 – 1941 by Robert S. McElvaine.


Where did farmers live during the Great Depression?

U.S. Farmers During the Great Depression. A dust storm engulfs Stratford, Texas, in April 1935. A desolate farm in Dallas, S.D., abandoned to the dust in 1936. By 1933 there was despair in many quarters, as illustrated by this ad for a company seeking door-to-door salesmen.


Who exhorted farmers to increase production?

All during the war, Food Administrator Herbert Hoover exhorted farmers in this country to increase production. As the prices realized for their products rose, farmers began to borrow money to buy more acres and new machinery, especially farm tractors since labor costs were sky high.


What was the farming revolution?

Taking root around 12,000 years ago, agriculture triggered such a change in society and the way in which people lived that its development has been dubbed the ” Neolithic Revolution.”. Traditional hunter-gatherer lifestyles, followed by humans since their evolution, were swept aside in favor of permanent settlements …


Why did people start farming?

In the Near East, for example, it’s thought that climatic changes at the end of the last ice age brought seasonal conditions that favored annual plants like wild cereals. Elsewhere, such as in East Asia, increased pressure on natural food resources may have forced people to find homegrown solutions. But whatever the reasons for its independent origins, farming sowed the seeds for the modern age.


What mutation occurred during the spread of farming into southeastern Europe?

But at some point during the spread of farming into southeastern Europe, a mutation occurred for lactose tolerance that increased in frequency through natural selection thanks to the nourishing benefits of milk.


Where did wheat come from?

The wild progenitors of crops including wheat, barley and peas are traced to the Near East region. Cereals were grown in Syria as long as 9,000 years ago, while figs were cultivated even earlier; prehistoric seedless fruits discovered in the Jordan Valley suggest fig trees were being planted some 11,300 years ago.


When did corn cobs first appear?

While maize-like plants derived from teosinte appear to have been cultivated at least 9,000 years ago, the first directly dated corn cob dates only to around 5,500 years ago . Corn later reached North America, where cultivated sunflowers also started to bloom some 5,000 years ago.


How long ago did goats come to Europe?

Dates for the domestication of these animals range from between 13,000 to 10,000 years ago. Genetic studies show that goats and other livestock accompanied the westward spread of agriculture into Europe, helping to revolutionize Stone Age society. While the extent to which farmers themselves migrated west remains a subject of debate, …


When did rice and millet farming start?

The origins of rice and millet farming date to around 6,000 B.C.E.

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Overproduction and Price Deflation

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The origins were both political and structural. Agricultural exports to Europe exploded during the Great War, and even this was not enough to keep up with demand. Corn, wheat, and cotton all hit very high prices, and this encouraged new tilling, new growing, and most importantly new borrowing. With a postwar price co…

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1919 Strikes and The Decline of Labor Unions

  • Immigrant women had lived a rough life for decades, and that did not change in the Roaring Twenties. While there was a broad increase in prosperity for the economy at large, the benefits to the industrial class were mixed. Working women were especially affected because they were concentrated in the garment and textile industries, which were in decline throughout the decade…

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Declining Wages in The Textile Mills

  • Consequently, many women of the immigrant classes remained in the center of the big cities, crammed into tenements with any number of extended relatives, boarders, and small children. While it would be a stretch to say that life got worse compared to previous decades, it was hardly improving for them at the rate that it was for many others. They were less likely to be using elect…

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Discrimination Against Black Women in The South and North

  • These were just the problems that white mill workers encountered. Black women in south could be hired at the mills, but only to do things like sweep the floors or clean the machines. They were never hired to operate machinery unless their services were needed to fill in during a strike — i.e. to serve as an example to the ungrateful women and girls who usually held those jobs. They would …

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