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Why didn’t American Farmers share in the prosperity of the
1920s boom?American agriculture 1918~1929
During the First World War American Farmers had made big
profits• Demand for American foodstuffs in Europe
had soared
• American farmers had made big profits
• However to increase their profit they had attempted to increase their levels of production
• In many cases they had borrowed money to buy new land and machinery
After the War ended
• European countries attempted to restore their own agriculture so demand for American foodstuffs dropped.
• As a result prices fell and many farmers found that they could not pay the loans they had taken out. Rent and mortgages also rose.
• In attempt to pay their debts many farmers borrowed more money using their farms as collateral for the loan.
Falling prices in the 1920s
0
20
40
60
80
100
120
140
160
180
200
Wheat Maize Cotton
products
Pri
ce p
er b
ush
el o
r p
ou
nd
1920
1932
Other factors working against American farmers
• New man-made fibres decreased the demand for cotton
• European countries could buy cheaper food from Canada, Russia and Argentina
• American trade tariffs stopped foreign countries exporting manufactured goods to the USA. Therefore they had fewer dollars with which to buy American wheat and cotton
Also
• Smaller farmers could not compete with large planting corporations who used mass production techniques
• The US population fell so there was less domestic demand for food
• Increased car ownership meant less demand for horse feed
• A wider diet meant a move away from wheat and beef
As a consequence
• Many farmers lost their land• By 1924 600,000 were bankrupt• Over 1 million farm workers had left the land.
In desperation they turned to the American Government for help
So, what did the Government do?
• The Government did not want to interfere with the ‘free market’ but they did:– Make it easier for farmers to borrow money– Tariffs were further increased on foreign
imports– Research was carried out into pests and
droughts
None of these things really helped the farmers