The McNary-Haugen Farm Relief Act
, which never became law, was a highly controversial plan in the 1920s to subsidize American agriculture by raising the domestic prices of farm products. The plan was for the government to buy the wheat, and either store it or export it at a loss. It was co-authored by Charles L. McNary
(R-Oregon) and Gilbert N. Haugen
(R-Iowa). Despite attempts in 1924, 1926, 1927, and 1928 to pass the bill — it was vetoed by President Calvin Coolidge
, and never approved. It was supported by then-Secretary of Agriculture Henry C. Wallace
According to the bill, a federal agency would be created to support and protect domestic farm prices by attempting to maintain price levels that existed before the First World War
. By purchasing surpluses and selling them overseas, the federal government would take losses that would be paid for through fees against farm producers.
World War I had created an atmosphere of high prices for agricultural products as European nations demand for exports surged. Farmers had enjoyed a period of prosperity as U.S. farm production expanded rapidly to fill the gap left as European belligerents found themselves unable to produce enough food. When the war ended, supply increased rapidly as Europe's agricultural market rebounded. Overproduction led to plummeting prices which led to stagnant market conditions and living standards for farmers in the 1920s. Worse, hundreds of thousands of farmers had taken out mortgages and... Read More