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From Prosperity to the Depression Part 3: 1919-1939 The 1920s


From Prosperity to the Depression Part 3: 1919-1939 The 1920s

 Wild celebrations broke out on November 18, 1918 as news of the Armistice reached Iowa cities and small towns. Bonfires on city squares lit up the night sky as revelry continued well into the early morning hours.  The formal speeches came the next day as the orators tried to put the meaning of the fighting into context and to extend hope for America’s future. That future, however, was not the “return to normalcy” that Presidential candidate Warren G. Harding was promising in his 1920 campaign.  Events of the post-war world could not sustain the idealism that had fueled  Iowa’s enthusiastic support for the “war to end all wars”.

 Nor could Iowa’s post-war economy could meet the expectations and demands the wartime growth had fostered.  While many history text books point to 1929 and the collapse of the New York Stock Market as the onset of the Depression, in the Midwest, hard times emerged in 1920, not 1929, and continued through the decade.  In the Great Depression, things got worse.

 Iowa farmers had responded enthusiastically to President Wilson’s call to boost agricultural output to feed our troops and the armies and civilian populations of our Allies.  And Iowa had met that challenge.  With improved technology and the guarantee of government price supports, Greene County farmers in west central Iowa, increased corn production from 4.5M bushels in pre-war 1915 to 6.5M in post-war 1920.  Pork and beef production also increased.  With farm profits at record levels, there was extensive speculation in land purchases sending the prices soaring.  Again using Greene County as a focus, an acre of land worth $194 in January of 1920 rose to $233 by May. 

 The bubble was about to end.  In May, 1920, the Federal government announced that it would no longer support farm products at wartime levels and cut back on purchases.  European farmers were getting back on their feet, and neither the U.S. government nor the Allies were placing purchases for such huge quantities of American meat and grain.  Unfortunately, farmers who had responded to government incentives, both patriotic and economic, to increase production could not sell back their improved equipment or farm buildings.  The inconvenient truth was the American farmers could now produce more than the markets demanded.  With mounting production but shrinking demand, surpluses began to depress the markets even more.  Two decades of rising farm incomes came to an end very suddenly.  Hard times were ahead.

 The land boom ended abruptly, and those who had borrowed heavily to pay top dollars were caught.  As prices for grain and livestock fell, many farm families were unable to pay their tax bills and bank debts for new equipment.  Sometimes even the entire net income from their corn crop was not enough to cover the cost of their loans.  Farm bankruptcies mounted, and with them, failures of the rural banks that had loaned them the money.  Even when the banks foreclosed on the farm and took title, the farm was worth less than they had loaned on it.  In 1920, 167 banks had to close their doors because they could no longer cover the deposits of their account holders.  In 1921, the number rose to 505 and remained over 500 for several years in the 1920s. Small town merchants that depended on farmers’ purchasing also felt the pinch.

Rival farm groups emerged with competing plans to boost farm income.  The Farm Bureau was the larger and better funded.  Having had its roots in county committees created to disseminate vital information to farmers during WWI, it advocated for scientific research, better farming practices, and improved marketing practices.  The Farm Bureau promoted government support for research to improve farming methods, marketing, and farm management and for improvements in rural life.  The Farmers Union, on the other hand, advocated for continued government price supports to insure that market prices reflect the cost of production and guarantee a profit.  Farm discontent expressed itself in the election of Smith Brookhart to the U.S. Senate, a Republican who distanced himself from party leaders in many ways.

 The farm states in Congress introduced bills to assist the struggling farm economy.  The most famous proposal of the decade was the McNary-Haugen bill, sponsored in part by Iowa U.S. Representative Gilbert Haugen from Worth County.  It committed the U.S. government to buy the entire domestic product of a crop at a guaranteed price, sell what it could to the domestic market, and then sell the remainder at a reduced price abroad.  The domestic market would be protected by a restrictive tariff to keep out foreign produce.  The difference between income from local sales and foreign sales would be made up by a tax on U.S. processors.  While the concept was supported by Henry C. Wallace, the Iowan who served Presidents Harding and Coolidge as Secretary of Agriculture, President Coolidge vetoed the McNary-Haugen bill twice. 

 What made the situation seem even more unfair to the rural Midwest was that, while farm interests suffered, manufacturing, financial institutions, and labor unions were experiencing relative prosperity.  Coolidge vetoed legislation designed to aid farmers but signed bills imposing tariffs on imported products that protected American manufacturing, thus raising prices on what farmers purchased.  While Midwestern Republicans may have chafed under the dominance of the Eastern wing of the party, Iowa never abandoned the GOP at the national level.  In 1928, the party nominated Iowa-born Herbert Hoover.  His opponent was the Irish Catholic governor of New York, Al Smith, and Iowans supported one of their own by a substantial majority.

 Beyond the economics of farm prices and government policy, Iowa agriculture was changing.  Faced with manpower shortages during WWI, farmers began investing in tractors and other machinery that changed the tempo of farm life.  Stiff competition among farm implement manufactures brought the price of tractors down to affordable levels.  Also research into hybrid corn varieties was laying the foundation for double and then triple yields over the next half century.  Henry A. Wallace, the son of Henry C. and editor of Wallaces’ Farmer Magazine, was publishing the results of research into hybrid varieties.  In 1926, he helped create Pioneer Seed Corn which over the next several decades became the leading supplier of hybrid corn.

Iowa State University (then Iowa State College) expanded the Cooperative Extension Service to provide an Extension agent and home economist in every county.   They promoted disseminated college research findings and promoted the best practices in farming and in the health, nutrition, safety and quality of life for the farm family.  4-H, a program originally for farm boys and girls, became a popular arm of the Extension Service and a pillar of the Iowa State Fair.

Beyond the challenges of low prices, farm life suffered throughout the decade in comparison with life in Iowa cities and small towns.  Town schools had graded classes, sports, music, and social activities out of reach of country schools.  Women clubs were thriving in town, but few farm women had the opportunity to participate. An even bigger drawback was the absence of electricity in the countryside.  The cost of stringing electrical lines that would serve only a few families was too great.  While town families enjoyed electric lights and appliances, running water, and indoor plumbing, farm homes relied on wood stoves, pumps, outhouses, and kerosene lamps.  There was a growing realization on both sides of the disparity in the standard of living.  In view of the advantages of town life, many farm families contemplated the future of country life.

Other aspects of the decade reveal complex issues in post-war Iowa.  With increasing numbers of automobiles, farms students could get to school and back much more easily than earlier.  Demand for high schools grew, and township districts began consolidating, particularly with nearby small towns, to construct new buildings to accommodate the expanded classes.  Unfortunately, many building plans were undertaken with the expectation of continued prosperity brought on by the wartime economy.  Those tax burdens rose rapidly and created significant hardships on farmers who felt property tax increases most keenly.

School improvements were but one area relying on local property taxes. County and state government officials borrowed to make road improvements and other infrastructure upgrades.  As automobile travel increased, so did the demand for better primary highways linking town and major cities.  Where road taxes had once been mainly for the upkeep of roads within near to the homes of those who used them most, now highways made new demands on tax funds.  Farmers whose lands bordered on those roads were assessed for part of their construction.  For example, when the Lincoln Highway was paved across central Iowa, farmers whose lands were within a mile and a half of the road were assessed 25% of the paving costs on the theory that the highway increased the value of their property.  Local property taxes soared. Property owners had to be meet them even when the anticipated farm income to finance them disappeared.  Pressure built to remove control of local roads from township and county officers to state officials.  A gasoline tax was passed in 1920, raising the urban/rural debate on how that revenue should be divided between farm-to-market roads and primary highways.  Rural interests felt threatened by the trends toward state authority.

Another impact of the automobile was increased travel between towns and the resulting breakdown of the insularity of ethnic communities.  A good example is the Amana Colonies.  Where once there were few interactions with the outside world, in the 1920s, automobiles from Iowa City, Cedar Rapids, and other neighboring towns would take Sunday afternoon rides to visit the Amanas, exposing local residents to outside influences.  Other factors increased the trend.  Schools began engaging neighboring towns in sporting events.  Foreign language newspapers began disappearing in the aftermath of anti-foreign sentiment generated during WWI. 

 A huge factor in the social and political scene of 1920s Iowa was the issue of prohibition.  The 18th Amendment forbidding the manufacture and sale of alcohol nationwide should have ended the debate, but because there was still a strong demand for it, entrepreneurs were willing to cater to it.  Bootlegging, the illegal manufacture and distribution of alcohol, became a huge underground activity.  It flourished in part because law enforcement was still primarily a function of local government carried out by local officials.  In communities where the majority supported prohibition, police and sheriff’s office were often vigilant in enforcement.  Where the local citizens objected to the restrictions, officials were much less likely to root out the lawbreakers.  Big city bootleggers like Al Capone in Chicago even gained a something of a celebrity status.  In Iowa, Templeton in Carroll County became famous for its production of Templeton Rye, a high quality whiskey reputed to be the only Prohibition booze “that you asked for by name.”  State and Federal law enforcement officials battled local producers, but their efforts were uneven across the state.

Another social issue of the decade was an intensification of hostility by some groups of Protestants toward immigrants, Jews, blacks, and in the Midwest, especially toward Catholics.  In the face of the rising influence of Eastern cities and Chicago which seemed to be dominated by blocs of recently arrived immigrants, often from Catholic countries, and other challenges to the traditional dominance of white Protestants.  The Ku Klux Klan, once a tool in the South to intimidate newly-free blacks following the Civil War, made a resurgence across the upper Midwest, including Iowa, as local chapters (klaverns) sprang up.  Keeping membership secret, Klansmen wearing white robes and pointed caps that hid their faces paraded in cities and towns across the states.  They sometimes sponsored and their candidates sometimes won election to city councils and school boards where they promoted “100% Americanism”.  Klan membership and activity declined sharply in the latter half of the decade, but its presence testified to a strong hostility and fear of the perceived decline in an American way of life by some.

The 1920s also saw a rapid expansion of the role of national media.  WOI Radio began its broadcasts from the campus of Iowa State University (than College) with market reports, classical music, football games, home maker shows, and serialized book readings.  Commercial radio stations and movies introduced national entertainers to towns across the state.  Theaters made stars like Rudolph Valentino, Lillian Gish, and Buster Keaton household words.  “Amos and Andy” and “The Grand Old Opry” entertained Iowa families on the farm and in the city alike.  Jazz created a distinctly American genre of music and radios made it popular.  Community dances that once attracted the whole family to local venues  faded as commercial dance halls with live dance bands that catered to a younger audience who did not bring along their parents or little brothers or sisters.  Sports fans tuned in to hear the exploits of stars like Babe Ruth and boxer Jack Dempsey.   In all of these developments, Iowans were being exposed to the trends in urban culture that originated far from the cornfields of home.  The exotic worlds of New York, Chicago, or Hollywood became part of daily life in Des Moines, Davenport, Dexter, and Dallas Center.

Throughout the decade, the traditional lifestyles of pre-war Iowa were undergoing challenges on many fronts.  The automobile brought farm and town closer together and made personal travel much easier.  The farm economy struggled while urban factories and labor unions prospered.  Prohibition was the law of the land, but bootleggers became folk heroes and liquor was available for those who wanted it.  President Harding promised a “return to normalcy”, but the new normal of the 1920s looked very different than it had in pre-war Iowa.