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--- OlflAIIOMA . ABR/ClJlTURAL & MECHMUCAL co, LEGE LI BRAR y • JUL 3 1952 THE EVOLUTION OF "AGRICULTURAL PARITY" Dean, Division of Commerce ember, Advisory Committee Professor of Agricultural Economics Member, Advisory Committee ii THE EVOLU'l'ION 01 "AORICOL'l'ORAL PARI'l'Y" ROBERT LEI TON'n I( Master ot Science Iowa State College .Ames, Iowa 1941 S.bmittec! to the :raeul\J ot the Graduate School of the Oklaholla .Agrlaal,ural and Maohanloal Collegie 1n Panial 1ultill.aftt of the RequlNMnt• tor the Degree of OOC'l'OR o:r PBIU>SOPBY *1, 19e2 PREFACE Although many agricultural economists apparently assume that the evolution of "agricultural parity" is a twentieth century phenomenon, actually its roots go deep into the past. The derivation and the development of the hypothesis that "agricultural parity" had a long- time evolution antedating the twentieth century constitute the subject of this study. The objective of this thesis is to submit a more complete explanation or the evolution of "agricultural parity" than has hitherto been available. It aims to provide additional infor­ mation for determining the economic feasibility of direct price- support policies by supplying a record of the application ot such efforts under different economic conditions. This study uses information rangi ng from the accounts of the ancient viorld through the first half of the twentieth century. The presentation of the material fal ls naturally under three major parts. Part I presents the setting. Part II analyzes and discusses the "disparities. " Part III is devoted primarily to a brief review of the "disparity" price remedies. The review since 1850 is restricted to the United States. Although direct price remedies are of major significance, they represent but one typo of the many "disparity" remedies for a ttaining the broad goal of "equality for agriculture. " The hypothesis of this study as conceived and developed in large part at the Oklahoma A. & M. College during the years 1947- 1952 . Prior to this time , i nitial stimuli were provided in contacts by the author with Professor Peter Nelson of Oklahoma A. & . College and Professors E. D. Ross and L. B. Schmidt of I o a State College. iii I am deeply grateful to the various individuals who assisted in the pro­ gress of this study. I wish to express special gratitude to Professor Peter Nelson, Head of the Department of Agricultural Economics and Chairman of the Advisory Committee, for his most helpful and encouraging assistance. To Professor Raymond D. Thomas, Dean of the Division of Commerce, I gratefully acknowledge the ve-ry useful criticism and liberal encouragement given me during the study. I extend sincere, thanks to Professor F. E. J ewett, Head of the Department of Business Administration, tor his beneficial assistance in expe­ diting the progress of the work. I am also indebted to Professor A. L. Larson for his helpful suggestions for improving the manuscript. Special thanks are due Professor R. T. Klemme , Vice-President of .Oklahoma A. & M. College, Pro­ fessor E. D. Ross of Iowa State College. Professor G. o. Fite of the University of Oklahoma , and E. E. Edwards of the United States Department of Agriculture tor their considerate assistance on the study. I also wish to acknowledge indebtedness to Professors F. L. Underwood, John D. Campbell, L. A. Parcher, o. A. Hilton, and Leroy H. Fischer ot Oklahoma A. & M. College for their help­ ful suggestions. I am profoundly grateful to the Library Staff of Oklahoma A. & M. College for .nnking available materials for the study and for securing additional references. In addition, I wish to thank Messrs. Bernard • Baruch, E. W. Ross, J . W. Coverdale, James R. Howard , Burton F. Peek, Edward A. O'Neal, Henry A. Wallace, and Chester C. Davis for supplying first hand informtion on various phases of the farm relief struggle. Finally, I am grateful to Carol Ealy tor her stenographic aid in preparing the manuscript tor presentation, to my wife, Hazel, tor her assistance and encouragement, and to our infant son, John, tor helpfully stimulating an earlier than usual work day. iv TAB " OF CONTENTS Page PREFACE . • iii LIST OF FIGURES AND TABLES . vii PART I: THE STII'TING l Chapter I. VIEWPOINTS ON THJi~ EVOLUTI ON OF "AGRICULTURAL PARITY" 2 Twentieth Century Phenomenon. 2 The Long struggle for Agricultural Equality. 3 II. MEANING OF "AGRICULTURAL PARITY" • Usages of the Term "Parity" • 6 Agricultural Parity Acts. 16 Agricultural Parity. • 24 PART II. THE "DISPARITIES" 26 III. "DISPARITY" PRICES. 27 Usages of the Term. "Disparity" • .. 27 How "Di sparity" Prices Develop • 28 Spanish Farm and Non-Farm Wholesale Prices, 1351- 1800 29 American Farm and Non-Farn Wholesale Prices , 1798- 1950 . 30 r.v . "DISPARITY" I NCOMES 33 Extent of Low Farm Incomes 33 Prices Limited in Solving rtDisparity" Incomes • 35 PART III.. THE "DISPARITY" RE AEDI S 38 V. "DISPARITY" REMEDIES Il-1 THE .ANCIENT 'ORLD • 39 Egyptian Grain Storage, 1700 B. C•• 39 Chinese Price Equality Programs , 1122- 387 B.C. 40 VI . "DISPARITY" REMEDIES , FOREIGN AND 00 STIC , 1273- 1849 • 42 V Chapter Pae The Spanish Mesta, 1273-1836. 42 English Corn Laws , 1436- 1846. 43 Colonial American Tobacco Price Programs, 1619- 1774 . 46 Armed Uprisings i n Early America , 1676- 1794. • 49 Early American Tariffs and t he Cotton Holdi ng Trust, 1789- 1839 52 VII.. "DISPARITY" REMEDIES ,. UNITED S'IATES , 1850- 1899 • 54 Cotton Convention Price Reiiaf Schemes 55 Southern Grange and Alliance Cotton Programs, 1873- 1887. 57 Alliance Sub-Treasury Plan, 1889- 1892. 59 Alliance Cotton and Wheat Price Plans, 1890- 1891 • 62 Souther n Cotton Groll ers Association 63 Lubin Proposi tion for Farm Justice and Equity, 1894- 1897 63 VIII. "DISPARI TY" REMEDIES , UNITED STATES, 1900- 1952 . 66 Equity and Farmers Union Price Programs • 67 Minimum Farm Prices~ orld \'Jar I 71 Seriousness of Outlook for 1920 . 73 Price Declines Stimulate Congressi onal Inquiry in 1921 . 76 Report of t he Congressional Inquir y of 1921. 80 Other Indefinitive Price Improvement Plans . 82 National Agricultural Conference of 1922 . 83 Equalit y for Agriculture Plan of 1922. 90 The Agricultural l, rketing Act of 1929 103 Domestic Allotment Idea to Agricultural Adjustment Act of 1933 104 Sur plus Adjustments and Price-Raising for "Parity" 113 PART IV: SUMMARY AND CONCLU,,IONS 116 IX. SUMIM.RY CONCLUS!Ol·S . 117 124 APPENDIXES 135 vi LIST OF FIGURJJ:S AND 'l"ABLES Figure 1. Index Numbers of Wholesale Prices of Farm and Non ...li'ar.m. Products in the United States, 1798-1949 (Base ~ 1910-1914). • 31 2 1 'i'he Emblem of the Amer1ean Soc.iety of Equity. • • 68 '!'able. 1.. Oum.uletive Frequency Diatr1but1ons ot Non-Relief Families in Three 'l'ypes of· Community by Income Level, Uni tad States, 1935-1936 ~ • • • • , -~· JI · ~ ·• • • vii 1 2 Two 11ell-kno11n writers in gricultural econo c state toot the evolutio ot • gricultural parity" is a twentieth centUJ:'Y deT lopn.ent. In op osition to this belief and in aecordence with the idea of a lo - time evo1ut1on ot wagri- eultur l parity' er the views of promnent national lead rs who ect.iTely p.art1e- ipated in securing the passage ot the Agrieultur l arketing Ac't or 1929 and the A8J'icultural djus ent Act of 1933. Neither of these laws uses the te "parity, in its declaration of policy. Inst d, t he 1dea of parity is expres- a by the term "equality. " Upon p ssa e, ho ver, each ot thee Acta as described as a "parity" law. A entieth Century Pheno anon 1ohn • l ck asserts th8t the "parity ov ment" is rely the outward expression of a ladj st ont in th r9lation b tween agricultur and th .rest ot society which Cli!!1 t the end or th first 110rld war 111th the publication or st tistical d ta on ts prioes. l In ee ent with Black' conclusion on th& twentieth century evolution ot 1'ar parity, Geoffrey s. Shepherd places the roots ot the "pe.r1ty price concept" in the eYents ot the tir t world war nd in the depres ion e 1ately th raafter. 2 1 John D. Black, Parity Parity Par1tl (Cambridge, ssachusetts1 1942), p. 45. 2 Geot'f'rey 8 . Shepherd, Ap.:icultural Prioe control (Ames, Io a , 1945), p. 306. The Long Struggle for Agricultural quality Another agricultural economist, '1'h odore • Sehult:a, whose rice policy publics.tions are well known , does not indicate a specific date dU?"1ng whieh parity evolved but in discussing t e sev.ral roots which have supported th growth ot the parity price approach concl des th.a~ a "long struggle of tarm people and their 1 d rs as necessary to tt in equality tor griculturett and to translate th rity ff1de 1~ into leg1slat1on.1 Sen tor Arthur Capper ot Kans.as, tor y years one of th Sen te lea ers in tara rel1et legislation, concluded that the Agricultural. rketing Act ot 1929 ould achi vo ono c equ 11 y for grieultur; that 1s 1 "parity" by enabling the farmer to "wnlk elone. "2 Preaid nt Hoovel" on signing the i rket- ing Billo ~uno 15, 1929• expressed his belief that the easure s th ost signitioont Con ess had pa sed tor agriculture or any other industry nd co onted that fJ,"J y rs ot eontention" hsd pr ceded its passa & . 3 Th most specific co entary on th t e and eve ts l eading w the real- ization ot 1929 *'parity" is that g1 en by H. Tho pson, Presid nt or the rican arm Bureau ederation, who stated: "For the l st 150 year the ta er have struggled a ainst inequalities rising fr.o the tact th t other groups in our national life existed under an economic syst b sed on GoT rmnental id l Theodor olioy {Ilew York, 19 ) , p.

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