Although the Great Depression affected most Iowans to some degree, farmers were the first to feel its distressing effects. For them, the Depression began years before the stock market crash of 1929. Early in the 1920s a volatile economy, accompanied by plunging farm prices, signaled an alteration in course, a change from our rural beginnings to the emergence of the United States as the world's most industrial nation.
When the stock market failed in 1929, what bottom was left in the farm economy simply collapsed. From 1926 to 1930, the cost of putting a crop in -- rent, seed, fuel, taxes, labor -- averaged about 35 percent more than income. By 1932 that figure had risen to 50 percent. Debts incurred when corn was 80 cents to a dollar a bushel and cattle $10 to $15 per hundredweight were being called in when corn was selling for ten cents per bushel and beef and hogs didn't bring the cost of shipping. The result was a true agriculture emergency.
In 1932 farm prices fell to all-time lows -- corn at eight cents a bushel, pork at three cents a pound, beef at five cents a pound, eggs at ten cents a dozen -- with no reduction in the farmers' tax or debt.
Even the Iowa State Fair felt the effects. Despite sharp cutbacks in expenditures, the Fair recorded its first deficits since 1914. College students found it impossible to pay tuition, even though Iowa State College only charged $75 per quarter, which was reduced to $18 for those maintaining a B average.
A statewide banking crisis left many citizens bankrupt, often overnight, as one bank after another closed its doors. The town of Iowa Falls offers a good example. After the first bank closed in June 1932, the mayor called for a ten-day business holiday on July 4. Upon reopening, banks asked their customers to sign waivers promising not to deplete accounts by more than ten percent per month. Such short-term measures didn't help long-term survival. On December 21, all three of Iowa Falls' banks closed. It was five months before a new bank opened in town.
Excerpt from "Making Do During the Great Depression", The Iowan, March/April 2004
The Depression in the 1930’s caused many Iowa farmers to lose their farms due to foreclosures by banks and insurance companies. Farm prices fell to all-time lows: corn at 8 cents a bushel, pork at three cents a pound and beef at five cents a pound. Many farmers were upset with the prices they received. The angered farmers fought for higher prices.
The presidential campaign of 1932 was chiefly a debate over the causes and possible remedies of the Great Depression. Herbert Hoover, unlucky in entering The White House only eight months before the stock market crash, had struggled tirelessly, but ineffectively, to set the wheels of industry in motion again. His Democratic opponent, Franklin D. Roosevelt, already popular as the governor of New York during the developing crisis, argued that the Depression stemmed from the U.S. economy's underlying flaws, which had been aggravated by Republican policies during the 1920s. President Hoover replied that the economy was fundamentally sound, but had been shaken by the repercussions of a worldwide depression -- whose causes could be traced back to the war. Behind this argument lay a clear implication: Hoover had to depend largely on natural processes of recovery, while Roosevelt was prepared to use the federal government's authority for bold experimental remedies.
The election resulted in a smashing victory for Roosevelt, who won 22,800,000 votes to Hoover's 15,700,000. The United States was about to enter a new era of economic and political change.
The following is an excerpt from the article, "Showdown on the Court"
in the May, 2005 issue of the Smithsonian
Election night jubilation was tempered, however, by an inescapable fear -- that the U.S. Supreme Court might undo Roosevelt's accomplishments. From the outset of his presidency, FDR had known that four of the justices -- Pierce Butler, James McReynolds, George Sutherland and Willis Van Devanter -- would vote to invalidate almost all of the New Deal. They were referred to in the press as the Four Horsemen, after the allegorical figures of the Apocalypse associated with death and destruction. In the spring of 1935, a fifth justice, Hoover-appointee Owen Roberts -- at 60 the youngest man on the Supreme Court -- began casting his swing vote with them to create a conservative majority.
During the next year, these five judges, occasionally in concert with others, especially Chief Justice Charles Evans Hughes, struck down more significant acts of Congress -- including the two foundation stones, the NRA and the AAA of Roosevelt's program.... ...In a 6 to 3 ruling, it annihilated his farm program by determining that the Agricultural Adjustment Act was unconstitutional.... ...Many farmers were incensed. On the night following Robert's opinion [striking down the farm law]... a passerby in Ames, Iowa, discovered life-size effigies of the six majority opinion justices hanged by the side of a road.
Younger and More Vigorous Blood, Roosevelt and the Supreme Court
Broadly speaking, therefore, an increase of output cannot occur unless by the operation of one or other of three factors. Individuals must be induced to spend more out of their existing incomes; or the business world must be induced, either by increased confidence in the prospects or by a lower rate of interest, to create additional current incomes in the hands of their employees, which is what happens when either the working or the fixed capital of the country is being increased; or public authority must be called in aid to create additional current incomes through the expenditure of borrowed or printed money. In bad times the first factor cannot be expected to work on a sufficient scale. The second factor will come in as the second wave of attack on the slump after the tide has been turned by the expenditures of public authority. It is, therefore, only from the third factor that we can expect the initial major impulse. (Economic advice offered to President Franklin Roosevelt)
Since they felt nothing was accomplished in the Congress, even though several Congressmen had introduced bills for more extensive farm aid, some radical farmers in Iowa and Nebraska decided to call a farmers' strike in an attempted price-support program of their own. Falling farm prices were to be combated by withholding farm produce. The leader of this Farm Holiday movement was Milo Reno, head of the Iowa Farmers Union and the Farm Holiday Association. On May 3 of 1932, a convention of 3000 Iowa farmers led by Reno voted to call a strike on July 4. Their slogan: Stay at Home - Buy Nothing, Sell Nothing, and their song:
Let's call a Farmers' Holiday
A Holiday let's hold
We'll eat our wheat and ham and eggs
And let them eat their gold.
Farm Holiday supporters built road blocks on the highways leading to the agricultural markets. They dumped milk into ditches and turned back cattle trucks, but the blockades weren't effective enough. Police eventually opened the roads.