The Soil Conservation and Domestic Allotment Act
The Soil Conservation and Domestic Allotment Act took place in 1935 and 1936. This act was passed due to the dust bowl in the 1930's. The Agricultural Adjustment Act was unconstitutional so it was not passed. After this, the Soil Conservation and Domestic Allotment Act was passed. These two acts both wanted to get rid of crop surplus.
February 1937: A proposed Standard State Soil Conservation Districts Law was submitted to the Governors by President Roosevelt and that all states were encouraged to give authority to farmers and ranchers to organize Soil Conservation Districts.
This act authorized the Secretary of Agriculture to give financial assistance to agricultural producers for carrying out conservation and environmental enhancement measures. It also created a number of Great Plains conservation programs.
Also, this new act wanted to change the way the previous act did things.
This act said:
1. Landlords had to share the payment made to them with the people who were working on that land.
2. To conserve soil in the high plains.
3. Changed the way government wanted farmers to use their land without concern of what could happen next. (Farmers plowed their land in a way that made black storms happen.)
This Act helped farmers by showing them how to farm their land. Also, people planted trees and native grass to help out with the dust bowl. After this Act, 65% of erosions had stopped.
"Priming The Pump"
John Maynard Keynes is known as the "Father of modern economics." (British Economist.) He mentioned how in a normal economy, people spend money to businesses and thats how other people make money. But, people start holding onto their money due to economic problems (Stock Market Crash) and soon everyone else does because they aren't getting money now. This is a vicious cycle, a recession. So next, he wanted the Federal Reserve System to expand the money so people would start spending again. The central banks would put more bills into people's hands and then they would start spending money. That was the cure for a recession.
For depressions, no matter how much money is expanded by banks, people refused to spend money. The Keyness theory was for the government to start spending money, since people weren't. This was "Priming the Pump" of the economy. The Keynesian Theory was so successful that almost all big governments used this theory.
Causes for people hoarding their money may be a consumer loss of confidence in the economy, perhaps triggered by a visible event like a stock market crash. It may be a natural disaster, such as a drought, earthquake or hurricane. It may be a sudden loss of jobs, or a weak sector of the economy. It may be inequality of wealth, which results in the rich producing a surplus of goods, but leaving the poor too poor to buy them. It may be something intrinsic within the economy which causes it to go through a natural cycle of recessions and recoveries. Or the Federal Reserve may tighten the money supply too much, compelling people to hang on to their disappearing dollars. This last point is especially important, since many critics of activist government believe that is how the Great Depression started.
In the U.S., there are several ways to expand the money supply. The most common is for Federal Reserve banks to buy U.S. debt from commercial banks. The money that commercial banks collect from the sale of these government securities increases the amount they can lend. A second way is to loosen credit requirements, thereby increasing the amount of money generated by the banking system. A third way is to cut the prime lending rate, which is the rate the Federal Reserve loans to commercial banks. To reduce money in the economy, the Fed commits all the opposite actions.
http://www.huppi.com/kangaroo/Causes.htm
http://www.ohiohistorycentral.org/entry.php?rec=1432
http://wildlifelaw.unm.edu/fedbook/soilcons.html
http://en.wikipedia.org/wiki/Soil_Conservation_and_Domestic_Allotment_Act_of_1936
The government paid farmers to lower production. This conserved soil and prevented erosion.
Comments