Export Debenture Plan
The farm crisis of the 1920s continued into the Herbert Hoover administration. The president sided with his predecessor, Calvin Coolidge, by opposing “socialistic” solutions to the farmers’ ills and insisted that the government play only a very limited role in tinkering with the nation’s economy for the farmers’ benefit.
An increasingly powerful farm bloc in Congress thought otherwise. They were concerned that for many farmers the cost of growing some crops was more than what they received at market. Earlier efforts in 1926 and 1928 to enact an export debenture proposal had failed, but the Senate tried again in 1929.
The plan received enthusiastic backing from the Grange and called for the following:
- The federal government would pay farmers a “bounty” on the exportation of certain commodities, including cattle, tobacco, wheat, rice and corn.
- These bounties were to paid to the farmers on top of the prevailing world price for a commodity.
- The amount of the bounty was set at one half of the existing tariff on any given commodity.
- Payments to the farmers would not be in cash, but instead in the form of debentures issued by the government and funded by U.S. import duties.
The Senate passed a measure containing these provisions. It was considered three times by the House in the spring of 1929 and was voted down each time. Hoover played a role in the demise of the plan as well, publicly stating that he would veto the bill if it passed. The president had his own idea of how to deal with the farm crisis.
See other aspects of Hoover's domestic policy