When the depression hit the cotton states in 1930, it struck an economy already considerably weakened. The trend from 1927 through 1931 was sharply downward. Temporary, partial recovery followed until 1936. From then on the general trend again turned downward.
As in other spheres of economy, the New Deal endeavored to meet the breakdown of capitalism in agriculture by attempts to price stabilization and the granting of subsidies to replace lost profits. The efforts of the New Deal amounted, however, to an attempt to square a circle. Over a billion and a half dollars were spent and loaned to stabilize the price of cotton. It was a vain endeavor.
The year 1932 saw the price of cotton at 6.52c per pound, less than one cent above the all-time low of the previous year. The industry was in a chaotic condition, the biggest farmers threatened with ruin. Roosevelt began his rescue work.
In the first year of the A.A.A. alone, almost 11 million acres of cotton were plowed under, $178,550,000 dished out to big farmers as a bonus for destruction and an additional $120,000,000 loaned on ginned cotton withheld from the market.
When cotton crossed 10c in 1933, adjustment payments for 1934 were eased off by over 62 million. In 1934, however, when the price reached a peak of 12.3c payments were not further reduced, but raised by almost 50 million to $163,000,000. It is probable that the doctor prescribed an extra dose of dollars as the result of his own election jitters.
On the morning after of 1935 the price of cotton dipped over one cent and payments for 1936 shrunk to 135 million. Yet fortune favored the New Deal brave. By the end of 1935 exports had increased by over a million bales, so that 1936 saw a favorable price of 12.36c.
In agriculture no less than in other fields, 1936 was the last year of Roosevelt prosperity. Then cotton economy took the deep, dizzy plunge almost to the chaotic level of 1932. The years 1937 and 1938 saw cotton at 8.40c and 8.52c. Payments skyrocketed to $202,000,000 and $265,000,000.
Commenting on the situation recently, Secretary Wallace let the cat out of the bag. He announced that the government was trying to work out a cotton stabilization plan which would not leave the U.S. Treasury bankrupt. Six years of capitalist âplanningâ have âimprovedâ the cotton situation only to the extent of raising the price by 2.86c above the all-time low of 1931. Aside from conserving and rebuilding the soil in haphazard fashion, the New Deal has to its credit the fact that at least $1,539,000,000 were poured into the pockets of big and middle farmers in the form of benefits and loans. It also has to its credit the fact that it has materially assisted in making 500,000 to 1,000,000 families in the Cotton Belt homeless or dependent on the landlordâs charity.
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The year 1932 saw the price of cotton at 6.52c per pound,
What cost $6.52 in 1932 would cost $103.07 in 2010.
