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proved May 12, 1933, is the means of effectuating the policy of Congress to restore the purchasing power of American farmers to the level which it occupied in the 5-year period immediately preceding the World War, during which period the national income was equitably balanced as between agriculture and other industry.

Since the World War agricultural production has not been contracted as effective export and domestic demand for farm goods has contracted; oversupply of agricultural commodities has resulted and has reduced farm prices; and agricultural purchasing power has fallen far below parity with the purchasing power of other industries.

The Agricultural Adjustment Act, therefore, in order to remedy these conditions, empowers the President, through the Secretary of Agriculture and the Agricultural Adjustment Administration set up within the Department of Agriculture, to assist farmers in adjusting their production of certain basic commodities to meet effective demand without sacrificing income and to put into effect marketing agreements on agricultural commodities, designed to insure fair prices to producers, efficient and equitable distribution of the products, and protection for consumers of the finished goods.



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As passed by Congress and approved by the President on May 12, 1933, the Agricultural Adjustment Act, properly titled "An Act to Relieve the Existing National Economic Emergency by Increasing Agricultural Purchasing Power", contains three distinct parts.

One part empowers the President, through the Secretary of Agriculture to take measures to increase agricultural purchasing power by raising farm income; another empowers the Farm Credit Administration to take measures to lighten the load of farm mortgages; the third grants to the President certain powers in regard to the national currency and credit.

Only one of these parts, the first, is under the jurisdiction of the Department of Agriculture, and the Agricultural Adjustment Administration has been especially created to accomplish this task. The farm-mortgage section of the Act is administered by the Farm Credit Administration, created on May 12 by executive order of the President. Information on its provisions and working should be obtained from Federal land banks and from county extension agents. The currency and credit powers in the third portion of the Act are granted to the President himself.

The Act declares that it is the policy of Congress to raise the purchasing power of American farmers to the level which it occupied in the “ base period ", the five years 1909 to 1914, when agricultural and industrial production and prices were well balanced and the national income was equitably distributed

This policy of increasing agricultural purchasing power is necessary because of the sharp and inequitable decline of that purchasing power since the World War and more especially during the four years beginning with 1929, when farm incomes decreased more rapidy and to a greater degree than did the incomes of other industries.

Reasons for this decline in farm income and buying power were numerous. Production of farm goods in the United States was greatly increased during the war period when European nations were unable to produce their own foods and fabrics and depended upon the United States for those commodities. More than 50 million acres of land in this country were thrown into agricultural production during those years, under the stimulus of heavy demand and high prices.

Shortly after the World War ended European nations began to return to their pre-war production levels and to cease to need American products in anything like such volume as they had required during the war.

The foreign demand for American farm products shrank steadily in the last decade; domestic demand also declined; the wide use of


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