The Great War, America's Farms, and the Great Depression

American Farm Family, 1920s

By David Walbert

After the Civil War, farmers had increasingly struggled economically. The growth of cities and railroads opened new markets for farm products, and industrialists found new ways to process them into convenience foods, but little of the money from these new markets went to farmers—instead, it went to railroads, other distributors, and processors. (This trend—in which farmers get less and less of what consumers pay for food—has continued to the present day.) New technologies, meanwhile, made farmers more efficient—they could produce more with less work from the same land. But expensive machinery introduced what economists call an economy of scale: Only bigger farmers could afford the technology, so farmers had to expand—or be forced off the land, as many were. (That trend, too, would continue throughout the 20th century.)

During World War I, demand for farm products skyrocketed. In Europe, farms were being destroyed by war, while the men who worked them were drafted into armies. Suddenly, farmers in the U.S. had a market for as much as they could possibly grow and more. Americans faced food shortages and were urged to save food and plant gardens. The U.S. Government guaranteed prices for farm products to supply the army. To meet the demand, farmers increased their acreages and expanded their herds—in many cases, by borrowing money—and for a few years, they enjoyed a rare prosperity.

When Truckers Went on Strike, Farmers Sold
at "Farmer's Markets"

As quickly as the boom had begun, though, it ended. With the war's end, the government no longer guaranteed farm prices, and they fell to prewar levels. Farmers who had borrowed money to expand during the boom couldn't pay their debts. As farms became less valuable, land prices fell, too, and farms were often worth less than their owners owed to the bank. Farmers across the country lost their farms as banks foreclosed on mortgages. Farming communities suffered, too. During the boom years of the war, rural states and communities borrowed money to build new roads and schools, and now the high taxes needed to pay off those debts added to farmers' burdens. In rural areas, many banks failed, went bankrupt, and closed because they were unable to collect anything of value on loans they had made to farmers. Anyone who had money in these banks lost their savings. For farmers and farm communities, the Great Depression began in the 1920s.

Nationwide, this "agricultural depression" also helped bring about the Great Depression. Since the 1880s, industries had increasingly marketed their products to farmers, not only farm technology but also clothing, household goods, and toys. That market now dried up, and industries had fewer places to sell their goods.

The stock market crash and everything that followed—bank failures, failing businesses, unemployment—made life even harder for farmers. Farmers were still producing more food than consumers were buying, and now consumers could buy even less. Farm prices fell even further. Cotton had sold for 35 cents a pound in 1919 but only 6 cents a pound in 1931. National farm income fell from a high of $16.9 billion in 1919 to only $5.3 billion in 1932. The Agricultural Adjustment Act (AAA) of 1933 paid farmers to reduce the number of acres they planted in crops such as tobacco, peanuts, and cotton. By restricting production, the law was intended to boost prices. This was the first "farm bill" in the U.S., and it introduced a new era of government regulation of and support for agriculture. A second AAA followed in 1938.

A Dust Storm Envelopes Stratford, Texas

The AAA barely had time to work, though, before a new crisis hit. Across the South and the Midwest, a terrible drought struck. The years 1930 and 1931 had been unusually dry, but 1934 brought drought to 80 percent of the U.S., and extreme drought returned in 1936, 1939, and 1940. In the Great Plains, where farmers had plowed millions of acres of prairie, the dry, unprotected topsoil blew away in the wind, creating what came to be known as the Dust Bowl. Black clouds of dust rolled across the region, some even reaching New York and Washington, DC. Refugees from Oklahoma and northern Texas, where the drought was worst, packed up and migrated to places like California in hopes of finding work, but in the Depression, there was little work to be had, and communities resented these newcomers—the "Okies" of John Steinbeck's The Grapes of Wrath. Many of those who remained often survived on government relief programs. By 1937, 21 percent of farm families in the Great Plains received federal emergency relief.

[Only] World War II turned the tide for farmers. 

Source:  "The Depression for Farmers," North Carolina Encyclopedia