Speech

'Z-229 LIBRARY THE .FLAGS 01" FARCERS, ECONOMISTS AND ADMIN1STRATOHS IN DEVELOPING AGRICULTURAL POLICY Address of Chester C. Davis Member Board of Governors of the Federal Reserve System Before a luncheon meeting of the American Farm Economic Association Adelphia Hotel Philadelphia, Pennsylvania Friday, December 29, 1939 'Z-229 THE PLAGE 01'' FARMERS, ECONOMISTS AND ADMINISTRATORS IN DEVELOPING AGRICULTURAL POLICY This field has been plowed and harrowed and planted and topped so often that 110 harvest of mine can hope to equal earlier yields even though I were to apply liberal quantities of fertilizer. ^ is a broad field, and I shall have to be on guard against the temptation to wander about in reminiscences of men we have all known, the part they have played in the stirring events of the past two ^Qcades of unfolding agricultural policy. Please bear with me while I survey the field in a few pre- liminary observations. Each man must tell of the world as he sees t from his own doorstep. Obviously what he describes does not coin- 0ide exactly with what another sees. It is not wilful misrepresenta- tion, therefore, if what I have seen does not agree with what each you has seen. Agricultural policy is not summed up in one law or set of Ws that directly affect agricultural production and marketing. It expressed in a complex system of laws, administrative acts and at- ^Udo3 that cover not farming alone, but other and wider ranges of ^eriiational trade, taxation, monetary and credit policy, as well as fecial laws and policies with respect to non-agricultural industry *** labor. It is possible to attempt a general classification of the ^spective parts the farmer, the economist, and the administrator .2- Z-229 in shaping legislation that enters into agricultural policy, important person needs to be added to the title list to round it out, That, of course, is the legislator. The farmer1s reaction to the pressure of economic condi- tions is the source and inspiration of such interest and action as been developed in this field. He has developed important na- tional and State farm organizations that represent him in councils away from home. Individuals who are frequently professional economists We their attention drawn to special problems and needs by the spot- lighting of farmer interest. They suggest lines of action which are ^eVe.loped and matured in the give and take of discussion with farm leaders, administrative officials and legislators. Administrators are forced to apply the test of workability all programs or plans, and to strive for their amendment nnd im- provement once they are under way. If a program requires legislative sanction, the legisla- tors say what shall and shall not be done. They are generally re- aPonsive to expressions of farmer opinion if convinced they are 8e*uine, In other words, farmer interest and concern build up pres- like the mountainous weight of a pent-up flood; individuals, xequently economists, trace out in shallow flitches the new lines along which the flow will move; while the administrator's chief .3- Z-229 c°ncern is to keep the water moving once the flow starts, and to en- and straighten the channels* The legislator must sanction the ^tails and their subsequent change ana improvement. These categories are not mutually exclusive. A farmer or a -^gislator, as well as an economist or a business executive may be ^he original idea man; the economist or the farmer may become the ad- ministrator. But these elements are generally present in the genesis the continuous evolution of any phase of national agricultural Policy, i am not able to say of our own policy that in its evolution ^he p -t piyd by the economist has been of greater or lesser impor- ur a e than that of the farmer, the administrator, or the legislator, bp °ause all have been essential. When I refer to the work the agricultural economists have ^ e, ;[ talking about individuals, and not- a group or class. They am ^Ve not thought or acted as a class. The trail-blazing economists have made their marks on the policies of this generation broke ^ith the general tradition of their profession to do it. On the whole, the present-day farm economist has become much 1,i0t*e man of action and much less the ivory-tower critic than his pred- a e°eSsop was. The change has not come about in smooth and regular Most of it came in two definite spurts. Henry C. Wallace °ught on the first when he asked the professional men who had been v^Udyig f problems to show him what could be done about them. The n arm Se°ond came with the New Deal when nearly every farm economist of .4- Z-229 standing in the country was given a chance to advise and help shape programs, or to help administer them in AAA, FCA, FSA, FSCC, CCC, anci the rest of the alphabetical permutations. Most of the farm economists sat through the yeasty decade 0,11 1921 on like Buddhas contemplating their respective navels. For years after the post-war crisis had shaken the American farmer's world, th 6 groat land grant colleges and their economic staffs remained stodgi- ^ unconcerned. The exceptions, however, were important and brilliant, f°nc ithey made history. To paint the full panorama of the making of agricultural since the war, assigning to each actor his proper size and per- Psctive calls for a better artist than I can ever hope to become. To itiaicp even a respectable attempt in this short talk demands an ambition ^tch • ^Hng that of the fellow who conceived the re-enactment of creation side-show for tourists at the Natural Bridge. I am not that ambi- t s, At most I can point out some high lights of performance which ^ illuminate the subject I have undertaken to discuss. Since this is feting of economists, and since I cannot cover the whole field, I it will be appropriate to speak mainly of certain individuals § you and trace their contributions to the present pattern of na- ti agricultural policy. First of all, 1 want to emphasize the importance of the man shocked farm economists out of their self-complacency, and hung up * bold green light in the Department of Agriculture for venturesome 'Z-229 °°uls with a yen for crusading - Henry C. Wallace, the Secretary of Agriculture from March 4, 1921 to his death in 1924. I cannot think him and of those years without thinking also of the agricultural ec°nomist who stood at his side while the first important drive for P°st~war farm legislation was taking form - Dr. Henry C. Taylor, or- &a*Uzer and first chief of the Bureau of Agricultural Economics. Those who knew the first Secretary Wallace recall clearly baffled disappointment when he realized that, in a situation which hg cn onsidered as desperately demanding remedy, the economists had no °s^ive help to offer. He used to complain that something was wrong ^ther with the men or the system that had trained and produced them, if a£ter a lifetime of stucly of agricultural problems, economists were ^ble to respond to a crisis except by giving reasons why action c°l-d. dnot be taken. He did not ask for perfection, but for advice as -hich was best of admittedly imperfect courses - constructive ad- n Ce t and the courage to make a start. His views were published in lGss-parade language in the Journal of Farm Economics in January, "Confronted with national problems, agricultural, eco- nomic and political, of greater magnitude than ever before encountered, would that more economists might attune their tars to the Macedonian cry that comes up from the open coun- try, give up for a time their detached seats of observation from which they view domestic and world activities with cold gray eyes and make records which may enable future economists to explain what happened, and why it happened, and take an Active interest in those who struggle with the definite pur- pose of helping them work out their problems, not alone for their benefit but for the benefit of the nation." .6- Z-229 It is of great interest to me that the roster of Presidents the American Farm Economic Association contains the names of so fna^y economists who have made important contributions to our agricul- tural policy. There are 29 names on that list. More than one-third of them are indelibly associated with some definite idea that has been incorporated in national policy. It may be interesting to mention a few of those men, and note briefly how they have influenced their times, s°'ne as first advocates, others as nurses and feeders of some idea, s°me plan for farm relief. I have mentioned Dr. Taylor. He was the ninth president of association. His influence on the direction of the farm relief <Hve from 1925 to 1928 was profound. I first came in contact with hirn when he took that famous trip through the northwest in the early of 1923. Some have been so unkind as to say the purpose of that was to arouse interest in and support for the program of farm re- later embodied in the McNary-Haugen bills. If Dr. Taylor advised Advocated any particular program on that trip I never heard of it. Perhaps the art of putting an idea across by asking questions did ^ die out completely 2500 years ago. To go back to the beginning of this association: its first ^^sident, W. J. Spillman, published in 192q and 1927 a farm plan com- ^ete with farm allotments, processing taxes ana benefit payments, th °u6h all of the terms were not to be coined until 1953, when some as younger men had discussed these ideas with Spillman took a hand the formation of the Agricultural Adjustment Act. .7- Z-229 Dr. Spillman's views influenced John D. Black who was later become a president of this body. They appeared with modifications ltl the chapter on the Domestic Allotment plan in Dr. Black's book on ^icultural Reform in the United States, published in 1929. M. L. Wilson, your president in .1925, continued the study of Domestic Allotment plan as outlined by Spillman and Black, and was '^argely instrumental in enlisting farm and public interest and support, ^ter, as an administrator, he had the chance to develop the first com- &,°dity program in the Triple A, embodying many of the principles of the The second president of this body, Dr. George F. Warren, power- ful3-y influenced farm thought and public policy. He helped focus atten- ti on price ratios, and on the field of monetary action and price ^vela. ivien who sat at his feet later occupiea high places in Govern- • one who was also at one time your president, W. I. Myers, became outstanding administrator as Governor of the Farm Credit Administra- during the formative years during which the Production Credit ^Ss°ciut:ions and the Banks .ror Cooperatives developed as important ox farm credit machinery. Merely to mention other names of men who have headed the Am ' erican Farm Economic Associations is to call to mind ways in which cultural policy has been affected by their work. You think of ^"lor, ana Stine and Tol.ley and Wilson in connection with the Outlook p°n, and the developing concept of balanced agricultural output; of s .8- Z-229 Gray and land utilization policies that are fundamental in so many Government programs of today$ of Tolley in connection with marketing freemen ts and State and regional pro rata plans; of Elliott and °0uhty and regional planning. I think of these men as having directly influenced action. Others from your roster of presidents have contributed brilliantly in the field of knowledge and thus indirectly to policy itself. The impossibility even to mention all the economists who de- aerve mention as having influenced importantly the development of ag- ricultural policy in recent years should be apparent by now. Perhaps Was unwise to single out the few who can be referred to within our Ume limits today, because names come crowding on me with every right their place. Dr. Charles L. Stewart developed the export debenture of the twenties, which, though never enacted into law in its ^einal form, has been given another dress in one of the amendments the Agricultural Adjustment Act. The thread of influences and events that reach through from S^Wart's first export debenture proposal to Section 32 of the amended cultural Adjustment Act .illustrates clearly the persistence of til0Ught in the field of farm policy. Dr. Stewart's plan took several ^Sislative forms. Basically it would have issued to exporters of deified farm products, debentures which were to be accepted at face by the Treasury in payment of duties on imports. To the extent debentures were issued and used, the total of customs revenues c°llected by the Government would have diminished. Farm groups took up arid provided public backing for the plan. One of the leaders An Congres who became interested was Marvin Jones. In 1953 he became Chairman of House Committee on Agriculture. It was he who secured adoption of provision which sets aside '60 per cent of the annual .revenues from Gustornc, and authorizes their use to pay bounties on exports, or losses ^curred in diverting surplus farm products into new domestic uses or f°r relief distribution. It is the offspring of the export debenture Plan. The field for direct action by farm economists has been ex- pended almost infinitely in recent years. The nation has been combed y old and new Federal agencies seeking seasoned timber for adminis- ^'ntors, and promising young men for assistants in executive work and Program planning. Triple A, Farm Security, Surplus Commodities Corpo- ration, the Farm Credit Administration, and many others have brought economists into new action fields. This could go on indefinitely but it has proceeded far enough f°r purposes of illustration. It is of utmost importance to realize pi f legislation can express the whole agricultural pol- no o ne ece 0 > and even within its scope, no legislation is complete and finished. 1+ Is constantly being amended, expanded, replaced. In other words, p ^rmers, economists, legislators and administrators working together Wn»t solved the farm problem. They never will solve it. But they C Wi-U forever be trying with measurable success to improve the economic .10- Z-229 status of men and women on the farms. Theories discussed by a few today may be put to the tost tomorrow. Experience gained yester- % is the foundation of the program of today. The conservation of ideas is truly remarkable. Most of the positive thoughts that have appeared in the millions of pages and years of words devoted to dis- CuS8ion of farm problems have influenced in one way or another the Resent pattern of agricultural policy. The continuous change that is taking place in the pattern is the result of the reaction of farmers to present programs, the ^sponse of members of Congress to what they believe the farmer.re- gion in their respective States or districts to be, and the experi- of the administrators. It is in this stage that the influence of the administrator reaches its greatest importance. Again I turn to Personal illustration. A man like Jack Hutson, who combines Gc°nomic training and administrative experience with an unusual capac *ty to work out action programs to meet problems as they arise, can- 1101 fail to exert considerable influences on the direction of farm leSislation. A man whose training and experience have buen that of Present AAA Administrator, "Spike" Evans, must because of his fining and experience apply to every proposition the question: will it work out in the country?" Right at this moment the farm leaders and officials who ^ concerned with the continued success of the farm programs have a tou8h problem on their hands. The aims of the program would not be Z-229 .11- Wholly satisfied by achievement of parity of farm prices with other Prices and costs. They include the building up of reserve stocks of products, considerably larger than normal carry-over, to meet *he accidents of drouth and pest, or of sudden abnormal demand. Or- dinarily, the existence of abnormally large stocks depress prices to tlle farmer more than proportionately. Yet it is desirable for the general welfare that they be built up and maintained. Therefore, it is essential that means be found to relieve the farmer of the full shock of stored surpluses on his prices. This cannot be done unless a general conviction is established that after the reserves have Cached certain proportions — after the ever-normal granary is filled seeding and other uses of the productive plant will be adjusted ac- c°rdingly. The public has to know that we will not continue to pile S um us on surplus until a disastrous liquidation from stored sup- Plies becomes inevitable. The necessary adjustment in the productive plant can be Assured only if farmers who cooperate in the general program have economic advantage over those who do not. This advantage can be Siven if adequate appropriations are made by Congress, or if some ^vice is offered t<s compensate tho cooperating farmer. The conferences that are now going on over the so-called Cei,tificate plan illustrate very well the preliminary stages of the ie8islative process. Incidentally, they tend to illustrate what I is an important weakness in tho mechanism through which .12- Z-229 democracy functions in the United States. The Department of Agriculture is trying to convince other tiepa rtments which are primarily concerned with questions of taxes and revenues that the certificate plan should be adopted as partial substitute for the unbudgeted appropriations that were made last yoar but which it is feared may not be regularly forthcoming. Ul- timately, the proponents of the plan hope to line up the President the United States on their side. The legislative branch of the Government does not participate in the discussions at this stage. Even if all the interested executive departments, includ- es the President, agree on a program, it still cannot be considered "the Government's plan. It cannot even be properly called, the Admin- istration's plan. Because leaders of the majority of both Houses of °°ngross who are, after all, important cogs in the Government, or in ^ho Administration, have not participated in the early stages that shaping legislative forms which sooner or later will reach Con- fess, This is not- anybody's fault. The trouble is that our own Peculiar form of democratic Government does not draw the executive aild legislative leaders together in a common responsibility in the Gnactment and the administration of laws. 'I think that, on the con- trary, the operation of our particular machinery too often tends to di'ive a wedge between the executive and legislative branches of Gov- G3?nmont. .13- Z-229 If legis3.ati.ve leaders had a continuing share and responsi- bility in the administration of laws they enact; if administrators the duty and opportunity of standing on the floor of Congress to exPlain and defend their courses; and if important legislation could >Je advanced only after the responsible legislative and executive leaders of the Government had agreed upon it, then the process of mak- in8 and carrying out laws, and amending and perfecting them as we go would, in my opinion, be vastly more orderly than it can be now. ^ long-drawn-out dissension between executive and legislative branches 0tl important questions of Government policy would be impossible. Few can doubt that the future, like the present, will be Cl>owded with issues that impose heavy responsibilities on the leaders of democracies. Problems will be constantly changing but they will "^obably not grow less. It is worthwhile to consider not whether the central Government needs more powers, but whether its forms are the bes"t that can bo devised to meet those problems by truly democratic ^°cesses as they arise. By this time I have come to recognize that the broad sub- ject Mr. Elliott assigned me so that I could -roam at will has turned to be too broad. It is impossible to get over it even inade- quately without straining your patience beyond the breaking point. In conclusion I want to point to one truth that study of ^cultural history of the past twenty years reveals. An unbroken th fead has run through all the efforts of Government to aid agriculture -14- Z-229 in our complex modern economy. Into it are woven not only what Past administrations have done, but also the lost causes for which devoted men have struggled even though their efforts at the time br°ught them only bitter disappointment. What has been true in the Past will probably be true in the future. If this only were gener- *llly recognized then it might be possible for all interested elements to approach consideration of changes in agricultural policy with 2°od humor and tolerance, above the level of bitterness engendered V partisan or class interest.

Chester C. Davis (1939, December 28). Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/speech_19391229_davis

@misc{wtfs_speech_19391229_davis,
  author = {Chester C. Davis},
  title = {Speech},
  year = {1939},
  month = {Dec},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/speech_19391229_davis},
  note = {Retrieved via When the Fed Speaks corpus}
}