Agricultural Adjustment Act
The
Agricultural Adjustment Act (or
AAA) (Public law 73-10 of
May 12,
1933) restricted production during the
New Deal by paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops, thereby giving farmers relative stability again. The farmers were paid
subsidies by the federal government for leaving some of their land idle. The Act created a new agency, the
Agricultural Adjustment Administration, to oversee the distribution of the subsidies.
By the time the AAA began its operations, the agricultural season was already under way. In effect, the agency oversaw a large-scale destruction of existing crops and livestock in an attempt to reduce surpluses. For example, six million piglets and 220,000 pregnant sows were slaughtered in the AAA's effort to raise prices. Even some cotton farmers plowed under a quarter of their crop in accordance with the AAA's plans (Brinkley, 1999 "p. 879"). Due to the nature of the
Great Depression, many United States citizens saw the AAA as cruel: while they were often hungering, the federal government was destroying crops and livestock.
Adlai Stevenson and
Telford Taylor worked in the AAA.
The AAA was declared
unconstitutional by the
Supreme Court in the case
United States v. Butler et al. (297 U.S. 1,
January 6,
1936) because it taxed one group to pay another. Congress then achieved part of the original Act's goals with the
Soil Conservation and Domestic Allotment Act of
1936 until the
enactment of a second AAA (P.L. 75-430) on
February 16,
1938. This second AAA was funded from general taxation, and therefore acceptable to the Supreme Court.
The Thomas Amendment to the AAA contained several provisions concerning
coinage and
currency.
Under the Thomas Amendment to the Agricultural Adjustment Act, approved
May 12,
1933, the President was authorized for a period of five months to accept silver on war-debt account, at a maximum price of fifty cents an ounce, the total amount accepted not to exceed a value of $200 million.
Silver certificates were to be issued against the silver so received to the total value at which the silver was accepted. The law further provided that the silver so accepted should be coined into standard silver dollars and subsidiary silver coin sufficient, in the opinion of the
Secretary of the Treasury, to meet any demands for redemption of the silver certificates.
A further requirement to mint silver dollars was contained in a
Presidential Proclamation related to the purchase of newly-mined domestic silver, issued on
December 21, 1933, calling upon the Mints to coin this denomination, in payment for the silver received under the Proclamation.
The quantity of silver dollars minted under the Thomas Amendment and the Proclamation of December 21, 1933, was 7,021,528 pieces.
The impact of this amendment was to reduce the amount of silver that was being held by private citizens (presumably as a hedge against
inflation or collapse of the financial system) and increase the amount of circulating currency.
The Soviet espionage ring commonly referred to as the
Ware group recruited from many government employees in the AAA.
Alger Hiss began his government career with the AAA.
Charles Kramer was part of the AAA consumer council.
Leonora Fuller, an associate of Hiss from 1933 to 1935, stated to the
House Un-American Activities Committee that Hiss,
Lee Pressman,
Gardner Jackson,
Frank Shea and others interpreted the Agricultural Adjustment Act not in the spirit of the law but in manner which would suit their own beliefs and private purposes. Hiss and the others influenced hiring decisions in the interest of acquiring employees who would agree with (or could be made to agree with) their social and economic agenda. Fuller stated it was the definite purpose of this group to change the form of government of the United States, regardless of its democratic and constitutional underpinnings, and to use the instrumentality of the offices of the Department of Agriculture to further their purpose.
*
Mordecai Ezekiel*
Rexford Tugwell*
Henry Morgenthau, Jr.*
*
Roosevelt and Tugwell in the New Deal
