New Deal Regulation and Revolution in American Farm

New Deal Regulation and Revolution in American Farms

Sally Clarke introduces her article, "New Deal Regulation and the Revolution in American Farm Productivity," with a brief description of the generally accepted views on government regulation and its role in the American economy from 1900 to 1940. The author points out that a generally negative view is taken of regulation, as it has had many disastrous consequences. However, in the second paragraph she explains how, while there are definite concerns relating to the burden to taxpayers and commodity markets resulting from farm regulation, this same regulation in the 1930s made possible the acquisition of labor-saving machinery.

The thesis of Clarke's article relates to the reasons for which farmers who did not invest in labor-saving machinery during the 1920s did eventually do so during the 1930s. She demonstrates that the Commodity Credit Corporation and the Farm Credit Administration facilitated these investments through regulation. The thesis statement is:

argue that prior to the 1930s, financial barriers slowed the adoption of new technology. Regulation contributed directly to the revolution in farm productivity because New Deal policies mitigated these barriers.

The conclusion is three-fold. Firstly, in the case of farming it is found that regulation stimulated investments in labor-saving technology, whereas the New Deal eliminated earlier concerns and conflicts between safety and productivity. Secondly, the roles of the CCC and the FCA in the farmers' investment strategy are recognized.

Finally Clarke states that the economic impact of government regulation interfered with market forces in ways that did not always benefit the economy of the country.

Clarke makes several points to advance her argument. Firstly she points out that high sales figures for tractors starting in World War I may be misleading, as they do not focus on the farmers who might potentially have bought tractors and did not. When calculating the relative number of farmers potentially benefiting from purchasing tractors, Clarke finds that fewer farmers in the Corn Belt than expected owned tractors in 1929.

This advances the argument that economic factors led to a reluctance to invest in new technology during this time. The author further reinforces the point by citing the farmers' tendency to protect assets due to the instability of commodity markets. Later Clarke demonstrates that the CCC and FCA provided farmers with attractive loan options and thus with the means to acquire tractors.

Clarke uses as evidence historical documents such as bulletins by researchers at land grant universities, which show the cash-flow strategies used by farmers. Historical reports by life insurance firms show evidence of debt burdens, and the proportion of farmers affected by these. Furthermore statistical data is used to show not only misperceptions about the era investigated, but also contrasting evidence in support of the thesis.

The bulletins that Clarke mentions relating to the cash-flow strategies employed by farmers supports the point that economic factors served as a deterrent for buying tractors at this time. These reports showed that, rather than using a large cash outlay to invest in tractors, farmers invested smaller amounts for the sake of safety, though at the cost of efficiency.

The evidence provided by life insurance companies shows how debt was a barrier to buying large assets such as tractors during 1929. Although the debtors are in the minority, the number is still a sufficiently significant demonstrator of financial burden.

The way in which the argument is structured is of importance to the study of history. It is important to note that Clarke recognizes the logic of the popular views regarding the topic she is investigating. When she raises her own argument, it is not to discard existing views, but to supplement them. This is evident in the construction of her opening statements. Her conclusion shows that she adheres to this principle. She acknowledges the shortcomings of the New Deal regulations, but suggests that another view is possible. In this way she identifies new ways of perception and study of history and the economy.