Taking place within the span of 12 months, these events made 1936 a year of remarkable activity for farmers cooperating with their Government.

The number of farmers taking part in the Agricultural Adjustment Administration program was at least equal to that in previous years and probably greater. Nearly 3 million applications were made for grants under the 1936 soil program. These represented around 4 million farms.

The upward trend in farm income which began in 1933 continued in 1936. Cash farm income was around $8,100,000,000, or nearly double what it was in 1932. Gross farm income, including the value of products consumed on the farm, totaled around 91⁄2 billion dollars.

The pages that follow contain a short summary of the legislative provisions under which the Agricultural Adjustment Administration operated in 1936, and a discussion of the farmers' program as it continues to evolve.

II. LEGISLATIVE PROVISIONS FOR ADJUSTMENT

The various programs carried on by the Agricultural Adjustment Administration are authorized in a number of related and complementary measures enacted by Congress.

The Agricultural Adjustment Act (Public, No. 10, 73d Cong.), approved May 12, 1933, provided along with other things for making benefit payments directly to producers of specified agricultural commodities, such payments being conditioned upon the agreement of these producers to adjust their production of the commodities concerned, and their fulfillment of these agreements. Benefit payments were financed from the proceeds of excise taxes levied upon the first domestic processing of the commodities.

When the United States Supreme Court, in the Hoosac Mills case, held the benefit-payment and processing-tax provisions of the Agricultural Adjustment Act to be unconstitutional, immediate steps were taken by the Agricultural Adjustment Administration to liquidate the production-adjustment programs that were in operation under the invalidated provisions of the act.

1. PROVISIONS NOT AFFECTED BY HOOSAC MILLS DECISION

Certain provisions of the Agricultural Adjustment Act were not affected by the decision of the Supreme Court, and the activities for which they provided have been continued under these and related legislative provisions.

growers.

The Agricultural Adjustment Act as amended authorizes the Secretary of Agriculture to enter into marketing agreements with producers, processors, and handlers of agricultural products. These agreements are designed to stabilize the economic conditions surrounding the marketing of the products specified in them and to improve returns to Amendments enacted in 1935 specify conditions and commodities with regard to which the Secretary is empowered to issue marketing orders supplementing and enforcing marketing programs whether embodied in marketing agreements or not. These provisions were not included in the Supreme Court decision of January 6, 1936. The Jones-Costigan amendments to the Agricultural Adjustment Act, approved May 9, 1934, authorizing the establishment of quotas

for importation and interstate shipments of sugar, likewise were not affected by the decision of the Supreme Court. On June 19, 1936, the quotas that had been established by the Secretary of Agriculture under these measures were ratified by Congress. (Public, Resolution No. 109, 74th Cong.)

Under section 32 of the act (Public, No. 320, 74th Cong.) "To Amend the Agricultural Adjustment Act and for other purposes" approved August 24, 1935, and amended February 29, 1936, there was appropriated for each fiscal year for the use of the Secretary of Agriculture an amount equal to 30 percent of the gross receipts from duties collected under the customs laws during the preceding calendar year, and the Secretary was authorized to use this sum: (1) To encourage the exportation of agricultural commodities and their products either by paying benefits in connection with such exportation or indemnities for losses incurred in such exportation or by making payments in connection with the production of that portion of a commodity required for domestic consumption; and (2) to reestablish farmers' purchasing power by making payments for the normal production of any agricultural commodity for domestic consumption.

2. REMOVAL OF PRICE-DEPRESSING SURPLUSES

This section and related legislation subsequently enacted provide money and authority for programs designed to remove price-depressing surpluses of agricultural products from the normal channels of trade. The surplus products may be distributed through relief agencies or diverted into new outlets and uses, either domestic or export. It was under this section that funds were provided for carrying out the cotton price-adjustment payment plan.

Authority and funds for a program of eradicating diseased cattle from beef and dairy herds were contained in the Jones-Connally Cattle Act, approved April 7, 1934. The appropriation for this program was contained in Public, Resolution No. 27, Seventy-third Congress, approved May 25, 1934. Additional appropriation for this work was contained in section 37 of Public, No. 320, Seventy-fourth Congress. When the Supreme Court decision held the processing-tax provisions of the Agricultural Adjustment Act invalid, collection of these taxes was terminated. On February 11, 1936, there was approved the Supplemental Appropriation Act, fiscal year 1936 (Public, No. 440, 74th Cong.), which appropriated, for use by the Secretary of Agriculture, $296,185,000 to meet obligations and commitments that had been incurred under the Agricultural Adjustment Act, including those to producers who had made adjustments in their production or planted acreage in anticipation of benefit payments under the abandoned. adjustment-contract programs for the 1936 crop year. This appropriation also provided for payments to farmers who had made at least partial compliance with the terms of contracts entered into before January 6, 1936. Of this sum, $30,000,000 was later transferred to be used in carrying out the 1936 agricultural conservation programs under the Soil Conservation and Domestic Allotment Act.

3. EXISTING LEGISLATION SUPPLEMENTED

Thus the Congress provided for carrying on activities under those provisions of the Agricultural Adjustment Act which had not been affected by the decisions of the Supreme Court.

By amending and supplementing the Soil Erosion Act of 1935, Congress provided for the new agricultural conservation programs. The new act was named the Soil Conservation and Domestic Allotment Act, and was approved February 29, 1936.

The act authorizes and directs the Secretary of Agriculture to designate the Agricultural Adjustment Administration to execute such powers conferred upon him by the amendments approved in 1936, as he deems it may appropriately execute. It also authorizes the appropriation of not more than $500,000,000 annually, to carry out the provisions of the Agricultural Conservation programs launched under sections 7 or 8 of the act.

The Soil Erosion Act as approved April 27, 1935 (Public, No. 46, 74th Cong.), expressed the policy of Congress "to provide for the protection of land resources against soil erosion, and for other purposes." The amendments, approved February 29, 1936 (Public, No. 461, 74th Cong.), added the expression of the policy of Congress "to promote the conservation and profitable use of agricultural land re

sources.

Specifically, the amendments state that the policy and purposes of the act are: (1) Preservation and improvement of soil fertility; (2) promotion of the economic use and conservation of land; (3) diminution of exploitation and wasteful and unscientific use of national soil resources; (4) protection of rivers and harbors against the results of soil erosion in aid of maintaining the navigability of waters and water courses and in aid of flood control; and (5) reestablishment, at as rapid a rate as the Secretary of Agriculture deems practicable and in the general public interest, of the ratio between the purchasing power of net income per person on farms and that of the net income per person not on farms, that prevailed during the 5-year period August 1909July 1914, and the maintenance of this ratio.

4. EFFECTIVE DATE OF PART OF LEGISLATION IS

DEFERRED

The Secretary of Agriculture is authorized, in order to effectuate the first four of the purposes listed, to make payments or grants directly to producers who voluntarily take measures designed to further these purposes. Amounts and rates of the grants are determined by: (1) Producers' treatment or use of their land for soil restoration or conservation or prevention of soil erosion; (2) changes in the use of their land; (3) that proportion of their normal production of designated agricultural commodities normally required for domestic consumption; and (4) by any combination of these factors.

The Soil Conservation and Domestic Allotment Act provides that grants of Federal funds or aid direct to producers shall be made only until January 1, 1938, and that thereafter grants in aid shall be made to States which adopt programs effectuating the five declared purposes of the act and set up agencies for administering these programs, the Secretary having approved the programs and the agencies.

Early in the first session of the Seventy-fifth Congress, there was introduced a joint resolution postponing the date for making grants through the States, from January 1, 1938, to January 1, 1942.

The act as it stands does not authorize direct grants for the purpose. of reestablishing or maintaining the pre-war ratio of the purchasing power of farm and nonfarm incomes, the fifth purpose listed in the

legislation. Section 12, however, does authorize the Secretary of Agriculture to use money appropriated under the act for expanding domestic and foreign markets, seeking new or additional markets, or removing or disposing of surpluses of agricultural commodities or their products, whenever such measures tend to reestablish or maintain the pre-war ratio between the purchasing power of farm and of nonfarm

income.

Under the authorization contained in the Soil Conservation and Domestic Allotment Act, the Independent Offices Appropriation Act, 1937 (Public, No. 479, 74th Cong.), approved March 19, 1936, appropriated $440,000,000 to carry out the purposes of the Soil Conservation and Domestic Allotment Act for the first year. An additional sum of $30,000,000 was made available for that purpose out of the $296,185,000 appropriated to liquidate the adjustmentcontract programs.

III. EVOLUTION OF THE FARMERS' PROGRAM

1. PLACE OF SOIL CONSERVATION IN LONG-TIME FARM POLICY

While the agricultural adjustment measures from their beginning in 1933 encouraged soil conservation as an important byproduct, the pressure of emergency in the 1933-35 period prevented this from being made a major aim. In 1936, however, as has been indicated above, soil conservation became a primary goal of the adjustment program; and soil conservation is now seen to be a foundation element of any sound long-time agricultural policy.

Methods practiced by American agriculture in the past have been wasteful of soil productivity. Exploitative land use has been encouraged by the periodic recurrence of excessively low farm prices, farm tenancy with short periods of tenure, and the casual attitude toward the soil held by many people of this country throughout most of its history.

PRODUCING CAPACITY OF LAND IMPAIRED

The crop-producing capacity of the Nation's farm land has already been much impaired. Continuous cropping with depleting crops and failure to replace depleted fertility have been prevalent, and average yields have been reduced. There has been much actual destruction of soil by erosion which has been hastened by the use of too great a proportion of clean-tilled and row crops and small grains.

Only about 30 percent of the land area of the United States is relatively free from erosion. The Soil Conservation Service estimates that about 50 million acres of formerly good cropland have been essentially destroyed by erosion insofar as crop production is concerned, and that at least three-fourths of the topsoil has been stripped from another 125 million acres, most of which is still in cultivation. This represents a tremendous loss of potential food and fiber supplies which were stored in the form of soil fertility. It also represents a serious impair ment of the basis for profitable yields to farmers.

The pioneer method of maintaining the Nation's supply of farm products by moving agricultural operations from worn-out lands to

virgin soil farther west was no longer possible after the western frontier closed. With all good farm land now occupied, agriculture must "stay put" and must maintain farm production by conserving and rebuilding fertility of the soil. The effects of soil exploitation can no longer be ignored.

Some of our farm land has been so badly eroded and depleted of its fertility that to farm it means only poverty. On such submarginal lands there is a tremendous waste of human resources. Farming on such niggardly soil must be continuously subsidized to bring farmers above the poverty level, and Government funds in loans, relief expenditures, and adjustment payments have only postponed a solution of this problem. Such lands must eventually be withdrawn from farm production and used in ways that are more conserving and more useful, such as for forestry, grazing, recreational areas and wildlife refuges. To make this possible, the people now living on such land must find a source of livelihood elsewhere. Projects designed to convert agriculturally unproductive land into economic assets are being developed by other agencies of the Government. They attack problems that are social as well as agricultural.

LAND STILL PRODUCTIVE IS CHIEF CONCERN OF AGRICULTURAL ADJUSTMENT ADMINISTRATION

The Agricultural Adjustment Administration is concerned chiefly, not with submarginal land, but with land above the margin, the good land on which most of our commercial farm production takes place. It is on such land that the Nation chiefly relies for a continuing source of food and fiber. Such land contributes the bulk of farm income. It is neither feasible nor desirable to withdraw supermarginal land permanently from general agricultural production. However, a utilization that is less wasteful of soil fertility should be encouraged. This involves a check upon the exploitative and too intensive methods. of farming that have characterized the use of farm land in this country. A less intensive method of cultivation means more grass and legumes which protect land from erosion and restore plant nutrients. It means a reduction in acreage of the cash crops which are soil depleting. In general and in the long run, grasses and legumes lower the cost of producing meat and milk. Over short periods of time, and for a single farmer, soil exploitation may apparently yield the largest cash returns. But it destroys the sources upon which the farmer relies for continuing profitable operation, and may also lower the income of farmers as a group by producing surpluses that reduce prices. Conservation farming which maintains the store of potential food and fiber in the soil also protects the investment in land, results in more profitable production, and entails less risk of drought losses.

FACTORS THAT ENCOURAGE EXPLOITATION

Most farmers are aware of the importance of maintaining soil productivity. However, it is necessary to offset the factors that force farmers to mine their soil. One of these factors has been the highly individualistic competition that has characterized farming. Because of their lack of any effective means of cooperating to limit the effects of competition, farmers in the past have been driven by falling prices into sacrificing everything else for sheer volume of