[…] The… oil-fueled boom that energized the suburban expansion of the 1920s brought turmoil and trouble to the farm economy. Thirty percent of the U.S. population still lived on farms in the 1920s. U.S. farmers had done well during World War I, exporting grain to a Europe that had become a shell-blasted battlefield. By the early 1920s, though, Europeans were able to feed themselves again. Meanwhile, the introduction of the tractor and the mechanization of farming in the United States led quickly to [the] massive overproduction of grain. Unable any longer to pawn off the surplus on Europe, America suffered a crash in grain prices. The farm depression, which preceded the financial depression by half a decade, was a self-reinforcing feedback loop. As the market prices of corn and wheat plunged, farmers desperately tried to make up for low prices by producing more, which the domestic markets could not absorb, leading to even greater surpluses and more depressed prices.

No one, I think, can deny that the depression of the agricultural interest is excessive. Though I can recall periods of suffering, none of them have ever equalled the present in its instances... [N]or is it open to doubt that foreign competition has exercised a most injurious influence on the agricultural interests of the country. The country, however, was perfectly warned that if we made a great revolution in our industrial system, that was one of the consequences that would accrue. I may mention that the great result of the returns we possess is this, that the immense importations of foreign agricultural produce have been vastly in excess of what the increased demands of our population actually require, and that is why the low prices are maintained... That is to a great degree the cause of this depression.

The adverse economic events following the First World War turned me toward economics... I learned during my youth how hard it was for farm families to stay solvent. Farm product prices fell abruptly by more than half. Banks went bankrupt and many farmers suffered foreclosures. Was politics or economics to blame? I opted for economics.

I was studying agriculture, how to produce better chickens, better cattle, better horses — horses in those days — better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself.

Why should the cotton growers suffer if there is shortage of wheat?

We had just finished the world’s greatest depression and there were many bankrupt companies. But a war causes a demand for almost every product, so during a war almost every company will prosper again.

I say, then, assuming, as I have given you reason to assume, that the price of wheat, when this system is established, ranges in England at 35s. per quarter, and other grain in proportion, this is not a question of rent, but it is a question of displacing the labour of England that produces corn, in order, on an extensive and even universal scale, to permit the entrance into this country of foreign corn produced by foreign labour. Will that displaced labour find new employment? ... But what are the resources of this kind of industry to employ and support the people, supposing the great depression in agricultural produce occur which is feared—that this great revolution, as it has appropriately been called, takes place—that we cease to be an agricultural people—what are the resources that would furnish employment to two-thirds of the subverted agricultural population—in fact, from 3,500,000 to 4,000,000 of people? Assume that the workshop of the world principle is carried into effect—assume that the attempt is made to maintain your system, both financial and domestic, on the resources of the cotton trade—assume that, in spite of hostile tariffs, that already gigantic industry is doubled...you would only find increased employment for 300,000 of your population...What must be the consequence? I think we have pretty good grounds for anticipating social misery and political disaster.

Railways. The railways during the past year have made still further progress in recuperation from the war, with large rains in efficiency and ability expeditiously to handle the traffic of the country. We have now passed through several periods of peak traffic without the car shortages which so frequently in the past have brought havoc to our agriculture and industries. The condition of many of our great freight terminals is still one of difficulty and results in imposing, large costs on the public for inward-bound freight, and on the railways for outward-bound freight. Owing to the growth of our large cities and the great increase in the volume of traffic, particularly in perishables, the problem is not only difficult of solution, but in some cases not wholly solvable by railway action alone.

Of all the calamities that have struck the rural Negro people in the South in recent decades—soil erosion, the infiltration of white tenants into plantation areas, the ravages of the boll weevil, the southwestern shift in cotton cultivation—none has had such grave consequences, or threatens to have such lasting effect, as the combination of world agricultural trends and federal agricultural policies initiated during the thirties.

Ever since the population of this little island grew large, trade has been its livelihood. We imported food and raw materials and paid for them by exports of coal and manufactures, by earnings from shipping and other services, and by interest on foreign investments. The first world war injured our position seriously, the second had far worse effects. When we stood alone in the second world war we threw all that we had into the battle... We sold our foreign assets. We reduced our production of civilian goods to a minimum. We lost nearly all our export trade and much of our shipping... We have, therefore, to face now before we have recovered from the effects of the war, and before our long-term plans have taken effect, the necessity of relying entirely on our own resources. This is a situation as serious as any that has faced us in our long history.

The country is alive now as it has never been before to the essential value of agriculture to the community, and whatever befalls it will never again be neglected by any Government. The War, at any rate, has taught us one lesson—that the preservation of our essential industries is as important a part of the national defences as the maintenance of our Army or our Navy. So much will I say about food production.

Manner and morals have improved, improved wages and world travel during the war have had effect, and the farm labourer now is an intelligent, self respecting workman, on a level at least with the town artisan. The village rustic of the past no longer exists outside of the comic papers.

It was on account of past depression, and in spite of present more encouraging conditions, that I have assembled an Agricultural Conference made up of those who are representative of this great industry in both its operating and economic sides. Everyone knows that the great need of the farmers is markets. The country is not suffering on the side of production. Almost the entire difficulty is on the side of distribution. This reaches back, of course, to unit costs and diversification, and many allied subjects. It is exceedingly intricate, for our domestic and foreign trade, transportation and banking, and in fact our entire economic system, are closely related to it. In time for action at this session, I hope to report to the Congress such legislative remedies as the conference may recommend. An appropriation should be made to defray their necessary expenses.

The destruction of the old bonds between employers and workmen was not peculiar to manufactures; it came to pass in agriculture also. An agrarian as well as an industrial revolution had taken place. Scientific methods of cultivation had been substituted for unscientific; vast enclosures had been made; traces of the old three-field system of apportioning the land were fast disappearing; small farms were giving way to large. A new race of farmers, corresponding to the new race of manufacturers, had sprung into existence, who, enriched by the high prices which prevailed during the great war, changed their habits of life. The labourer ceased to be a member of the farmer's household, and, to use Cobbett's words, was thrust out of the farm-house into a hovel.