Unsuccessful attempt to create a system of agricultural price
supports in the mid-1920s.
To rectify the decline in farmers’ purchasing power since
1913, in 1924 Congress passed legislation sponsored by Republican Senator Charles McNary of Oregon and Republican
Representative Gilbert Haugen of Iowa. Their plan called for
the creation of a Federal Farm Board that would define an equitable price for specified staple crops and guarantee that
price to farmers. In return, farmers would pay an equalization fee to cover the costs of selling surpluses on the international market. Congress paired this system of price supports
with a protective tariff on agricultural goods. Tariff protection remained relatively easy to achieve under the FordneyMcCumber Tariff of 1922. However, the creation of price
guarantees failed to pass in the House in 1924.
Senator McNary and Representative Haugen based their
support among congressional Republicans from rural states
while encouraging the participation of Southern Democrats.
In 1927 Congress passed a version of the McNary-Haugen
Bill that would support prices for cotton, wheat, corn, rice,
tobacco, and swine. However, President Calvin Coolidge vetoed the bill. Coolidge based his opposition on his belief that
the plan would increase the surplus production of protected
crops while discouraging diversification into areas of growing
market demand such as fruit or threatening stable market
sectors such as dairy and poultry. He also expressed concern
over the appropriateness of government price fixing.
McNary and Haugen were unable to gain sufficient support to override the Coolidge veto. An adjusted version of the
bill passed Congress in 1928 but once again without sufficient support to withstand a veto.
After he assumed the presidency in 1929, Herbert Hoover
hoped to placate the supporters of McNary-Haugen legislation. He supported the successful passage of an alternative
law, the 1929 Agricultural Marketing Act, which formed a
Federal Farm Board, but the board had little authority to regulate prices.
—Karen A. J. Miller
References
Hansen, John Mark. Gaining Access: Congress and the Farm
Lobby, 1919–1981. Chicago: University of Chicago Press,
1991.