1927: The McNary-Haugen Bill
U.S. History Resources
1927
The McNary-Haugen Bill
The 1920's were not boom times for farmers. Surplus production of basic commodities like cotton and
corn kept prices near the low world market prices. In an attempt to meet the problem, Congress twice
passed what was known as the McNary-Haugen bill, in 1927 and 1928. It allowed the government to buy
up surplus commodities and store them, destroy them, or sell them at a loss to foreign buyers. President
Calvin Coolidge vetoed the bill both times it came to him.
SEC. 1. It is hereby declared to be the policy
of Congress to promote the orderly
marketing of basic agriculture commodities
in interstate and foreign commerce and to
that end to provide for the control and
disposition of surpluses of such
commodities, to enable producers of such
commodities to stabilize their markets
against undue and excessive fluctuations, to
preserve advantageous domestic markets for
such commodities, to minimize speculation
and waste in marketing such commodities,
and to encourage the organization of
producers of such commodities into
cooperative marketing associations.
land bank is located, to which the
convention may adjourn. Two of the
members of the nominating committee in
each district shall be elected by a majority
vote of the heads of the agriculture
departments of the several states of each
Federal land-bank district, at a meeting to be
held in the same city and at the same time of
the meeting of the convention of the bona
fide farm organizations and cooperative
associations in each district. One of the
members of the nominating committee in
each district shall be appointed by the
Secretary of Agriculture....
SEC. 6. (a) For the purposes of this act,
cotton, wheat, corn, rice, tobacco, and swine
shall be known and are referred to as "basic
agricultural commodities," except that the
board may, in its discretion, treat as a separate basic agricultural commodity one or
more of such classes or types of tobacco as
are designated in the classification of the
Department of Agriculture.
SEC. 2. (a) A Federal Farm Board is hereby
created which shall consist of the Secretary
of Agriculture, who shall be a member ex
officio, and 12 members, one from each of
the 12 Federal land-bank districts, appointed
by the President of the United States, by and
with the advice and consent of the Senate,
from lists of eligibles submitted by the
nominating committee for the district, as
hereinafter in this section provided.
(c) Whenever the board finds, first, that
there is or may be during the ensuing year
either (1) a surplus above the domestic requirements for wheat, corn, rice, tobacco, or
swine, or (2) a surplus above the requirements for the orderly marketing of cotton, or
of wheat, corn, rice, tobacco, or swine; and,
second, that both the advisory council
hereafter created for the commodity and a
substantial number of cooperative associations or other organizations representing
the producers of the commodity favor the
full cooperation of the board in the
(b) There is hereby established a nominating
committee in each of the 12 Federal landbank districts, to consist of seven members.
Four of the members of the nominating
committee in each district shall be elected
by the bona fide farm organizations and
cooperative associations in such district at a
convention of such organizations and
associations, to be held at the office of the
Federal land bank in such district, or at such
other place, in the city where such Federal
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1927: The McNary-Haugen Bill
U.S. History Resources
stabilization of the commodity, then the
board shall publicly declare its findings and
commence, upon a date to be fixed by the
board and published in such declaration, the
operations in such commodity authorized by
this act:...
commodity against undue and excessive
fluctuations in market conditions, and (4)
financing the purchase, storage, or sale or
other disposition of the commodity. The
moneys in the stabilization fund of the basic
agricultural commodity shall be available
for carrying out such agreements. In the case
of any agreement in respect of the removal
or disposal of the surplus of a basic agricultural commodity, the agreement shall provide both for the payment from the
stabilization fund for the commodity of the
amount of losses, costs, and charges, arising
out of the purchase, storage, or sale or other
disposition of the commodity or out of
contracts therefore, and for the payment into
the stabilization fund for the commodity of
profits (after deducting all costs and charges
provided for in the agreement) arising out of
such purchase, storage, or sale or other
disposition, or contracts therefore.
(d) During the continuance of such
operations in any basic agricultural
commodity, the board is authorized to enter
into agreements, for the purpose of carrying
out the policy declared in section 1, with any
cooperative association engaged in handling
the basic agricultural commodity, or with a
corporation created by one or more of such
cooperative associations, or with processors
of the basic agricultural commodity.
(e) Such agreements may provide for (1)
removing or disposing of any surplus of the
basic agricultural commodity, (2)
withholding such surplus, (3) insuring such
QUESTIONS
1.
2.
3.
Why do you think the bill included tobacco as a "basic agricultural commodity"?
What motive would a congressman who represented an urban district have for supporting the bill? For
opposing it?
With whom was the Federal Farm Board to make its arrangements, individual farmers or farm
cooperative organizations? Why?
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