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No. 64 "Potato Control: An Analysis of a ridiculous law making a travesty of constitutional liberties and proposing to inflict upon the American people a bureaucratic despotism, including a new army of Federal snoopers to be paid for through increased living costs for the entire population," September 16, 1935.
No. 64 "Potato Control: An Analysis of a ridiculous law making a travesty of constitutional liberties and proposing to inflict upon the American people a bureaucratic despotism, including a new army of Federal snoopers to be paid for through increased living costs for the entire population," September 16, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_64 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 64 "Potato Control: An Analysis of a ridiculous law making a travesty of constitutional liberties and proposing to inflict upon the American people a bureaucratic despotism, including a new army of Federal snoopers to be paid for through increased living costs for the entire population," September 16, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Pamphlets Available â˜… Copies of the following pamphlets and other League literature may be obtained upon application to the League's national headquarters: Statement of Principles and Purposes American Liberty League Its Platform An Analysis of the President's Budget Message Economic Security Inflation The Thirty Hour Week The Pending Banking Bill The Holding Company Bill Price Control The Labor Relations Bill The Bituminous Coal Bill Extension of the NRA The Farmers' Home BUI The TVA Amendments The New Deal, Its Unsound Theories and Irreconcilable Policies Speech by Ralph M. Shaw How to Meet the Issue Speech by William E. Borah The Supreme Court and the New Deal The Duty of the Church to the Social Order Speech by S. Wells Vtley An Open Letter to the President, By Dr. Neil Carothers The Revised AAA Amendments The Return to Democracy Speech by Jouett Shouse The President's Tax Program The American Bar The Trustee of American Institutions Speech by Albert C. Ritchie Two Amazing Years Speech by Nicholas Roosevelt Fabian Socialism in the New Deal Speech by Demarest Lloyd The People's Money Speech by Dr. Walter E. Spahr The Principles of Constitutional Democracy and the New Deal Speech by R. E. Desvernine Which Road to Take? Speech by J. Howard Pew The Blessings of Stability Speech by James W. Wadsworth Legislation By Coercion or Constitution Speech by Jouett Shouse Recovery by Statute Speech by Dr. Neil Carothers Expanding Bureaucracy The Imperilment of Democracy Speech by Fitzgerald Hall. Lawmaking by Executive Order The Test of Citizenship Speech by Dean Carl W. Ackerman Today's Lessons for Tomorrow Speech by Captain William H. Stayton New Deal Laws in Federal Courts â˜… AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. POTATO CONTROL â˜… â˜… â˜… An analysis of a ridiculous lawmaking a travesty of constitutional liberties and proposing to inflict upon the American people a bureaucratic despotism, including a new army of Federal snoopers to be paid for through increased living costs for the entire population AMERICAN LIBERTY LEAGUE 7lational Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. Document No. 64 September, 1935 Potato Control â˜… Regimentation of agriculture has reached the high point of absurdity in the "Potato Act of 1935" incorporated in amendments to the Agricultural Adjustment Act enacted in the recent session of the Congress and approved by the President on August 24, 1935. Nothing so fantastic has emerged from the "economic planning" of the past two and one-half years. The act makes a travesty of constitutional liberties. A serious attempt to enforce it will necessarily involve fines and jail sentences for citizens exercising rights enjoyed without question throughout the almost 150 years of the American Constitution. This ridiculous law, demanded by large potato growers whose markets have been demoralized by excessive production on land diverted from other uses by AAA regulations, illustrates strikingly how one step in control leads to another. In turn, its operation, if effective, will necessitate further steps tending toward complete Socialism. The Potato Act of 1935 is of doubtful constitutionality and is arbitrary, unreasonable and uneconomic for these reasons: 1. The act attempts to control production of potatoes through a punitive tax of questionable validity. 2. It is intended to benefit large commercial growers of potatoes but will harass several million small growers and burden the entire consuming population. 3. To present excessive costs of many articles of food will be added higher prices for a staple commodity upon which the poorer classes are absolutely dependent. 4. Regimentation of farmers who produce potatoes is compulsory rather than voluntary. 5. Even a small garden patch maintained by a housewife and producing only a few bushels for sale is subject to control. 6. Regulations which will annoy both producers and consumers include requirements that all potatoes must be packed in closed and stamped containers of special design. 7. Provision is made for an army of snoopers through severe penalties imposed on persons who fail to tell of violations by their neighbors. 8. Bootlegging will be unavoidable despite fines up to $1,000 and jail sentences up to one year. 3 9. Buyers of bootleg potatoes are made equally guilty with sellers. 10. An expanded bureaucracy, made possible by blanket authority to the Secretary of Agriculture to appoint officials and employees without regard to Civil Service and Classification laws, will meddle in the affairs of some 3,000,000 potato growers. History of Law Potato control forms a logical development in the regimentation of agriculture. The act was not proposed by the administration which at first offered a half-hearted resistance because of insuperable administrative difficulties. Officials recognized, however, that if one commodity was to be controlled, others would have to be. They realized that the plight of the potato growers was a consequence of the curtailment of acreage of other crops. Accordingly, they cooperated in perfecting the terms of the measure and have accepted somewhat reluctantly the obligation for its enforcement. Curiously enough, the law was enacted through the insistence of members of the Congress fundamentally opposed to regimentation of agriculture or industry. These members were unwilling to leave the potato growers at the mercy of conditions caused by the mistaken theories of the AAA. The potato bill was introduced as an independent measure early in the session of the Congress. After extensive hearings it was reported favorably by the House Committee on Agriculture and also by the Senate Committee on Agriculture. Eight members of the House Committee signed a dissenting report. The two committees acted in response to petitions said to have been sponsored by large potato growers in 33 states, but there was lacking a favorable recommendation from any of the large farm organizations. When the administration bill amending the Agricultural Adjustment Act reached the floor of the Senate after previously being passed by the House, the potato bill was offered as an amendment and approved without a record vote. The House devoted an hour to debate on acceptance of the Senate Amendment, favorable action finally being taken by the narrow margin of 174 to 165. A shift of five votes would have meant its rejection. The President offered no criticism either while the bill was before the Congress or when he signed the final act. Fears of Officialdom The hesitancy with which the officials responsible for the AAA embraced the plan for potato control is indicated by a letter sent by Rexford G. Tugwell as Acting Secretary of Agriculture to the House Committee on Agriculture on May 9, 1935, in response to a request for the department's opinion. Mr. Tugwell said: "The plan involves administrative problems of major importance which have not been encountered in other programs. Among these special problems are the large number and wide distribution of potato producers, the seasonal and perishable character of the commodity, and the marketing methods used which include both regular commercial distribution and direct sale by the grower to wholesalers, retailers and consumers." On the subject of the huge cost of administration of potato control, Mr. Tugwell said: "It appears that the first year's operation of the Potato Act will entail a cost of not less than $12,000,000. This minimum estimate for effective operation covers merely the expenses of the Agricultural Adjustment Administration during the first year of the act. The cost of printing and distributing stamps, as well as the enforcement and other activities of the Bureau of Internal Revenue, have not been included in the $12,000,000." Further emphasizing the difficulties, Mr. Tugwell said: "It must be borne in mind that the operating details of the program outlined in this legislation will be more complex than in the case of any other commodity for which similar action has been taken. Because at no time between producer and consumer are potatoes changed in form, and because many producers can and do follow the practice of selling direct to retailers and consumers, the problems of enforcement should net be minimized." Status of Potato Growers Demands for price protection for potatoes have come from widely scattered areas, North Carolina, Maine, Idaho and elsewhere. In each section the large growers of potatoes, the fourth food crop in value in the United States, have a similar complaint about the effect of AAA programs for the curtailment of acreage of other crops. In the South, for example, only two crops, cotton and tobacco, were affected at first by acreage limitations. Lands thus made idle were planted in peanuts. Thereupon, Secretary of Agriculture Wallace in February, 1934, announced that it would be necessary "to take definite steps to discourage undue expansion in peanut acreage." After peanut growing came under control, potatoes were planted on the idle acres. The result was a demoralization of the market for that commodity. In other parts of the country wheat, corn or other control programs forced new acreage into potato production. Production of potatoes in 1934 totaled 385,000,000 bushels, an increase of 65,000,000 bushels over 1933. The average price received by producers for the crop was about 52 cents per bushel as compared with 82 cents in 1933. During 1935 potatoes have been sold at lower prices than in 1934. Early this year Maine potatoes from the 1934 crop were sold at 10 cents per barrel. The experience of potato growers shows that half-way measures are not possible, once the process of agricultural control is commenced. Either there must be freedom in production, natural laws operating to maintain a balance among the different commodities, or else there must be rigid regimentation all along the line. The latter is in conflict with American tradition. Regimentation cannot stop with potatoes but must go on to all sorts of vegetables and other foods. Constitutionality The Potato Control Act seeks to control the production of all potatoes offered for sale. It is frankly the purpose to regiment some 3,000,-000 farmers who grow and sell them. Obviously, a law basing control of production upon the commerce clause would be unconstitutional. The act seeks to accomplish the purpose through the power of taxation. A punitive tax of three-fourths of a cent a pound, equivalent to 45 cents a bushel, is levied on potatoes sold in excess of quotas allotted by the Secretary of Agriculture. The method used is identical with that in the Kerr-Smith Tobacco Control Act and similar in principle to that of the Bankhead Cotton Control Act. While the act makes a pretense of raising revenue from the tax, funds thus received being appropriated for specific purposes, it is apparent that the purpose is to prevent the production of excess potatoes through a tax which is about as great as their value. The tax is intended to control production and not to raise revenue. A punitive tax in the second Child Labor Act was held unconstitutional by the Supreme Court on the ground that it was not intended as a means of raising revenue. The Potato Act by the same reasoning is of questionable validity. A decision by former United States District Judge Charles I. Dawson, holding the Kerr-Smith Tobacco Control Act to be unconstitutional, is pertinent. Judge Dawson in his ruling at Louisville, Kentucky, on April 13, 1935, said: "It is impossible for any one who has any respect for constitutional limitations to contemplate this law with complacency. It is the plainest kind of an attempt to accomplish an unconstitutional purpose by the pretended exercise of constitutional powers. The garment used to hide the naked unconstitutionality of the act was fabricated from the taxation and commerce clauses of the Constitution; but neither congressional recitations of purpose, nor the formal dress of a statute, is conclusive upon the courts." If, through the subterfuge of taxation, the Federal Government may limit or prevent the production of potatoes on a farm, then it may, by the same subterfuge, take complete control of agriculture, mining, etc., in all the states, and, in the language of Mr. Justice McReynolds "the Constitution is gone." Allotment of Quotas The Soviet Government could not have devised a more complete system of control of the activities of its subjects than is embodied in the Potato Act. Constitutional liberties of farmers who raise potatoes are made non-existent. All potatoes produced for sale after December 1, 1935, come under control, the act being mandatory for the first year and subject to a referendum of farmers in subsequent seasons. Quotas are to be determined by the Secretary of Agriculture at the beginning of each crop year for states and individual farms with a view to raising prices to a level which will give potatoes a purchasing power equal to that of the 1919-1929 period. The system of allotment, which is predicated upon production in the various states from 1927 to 1934, tends to freeze the agricultural status of that period. All potatoes sold must be packed in closed and marked containers to which shall be attached tax or tax-exemption stamps. This will mean endless annoyance as well as expense for the man or woman who produces only a few bushels from a small garden patch. Housewives as well will be annoyed as they find themselves unable to examine the potatoes they are about to purchase. Consumers Injured The 125,000,000 people of the United States are consumers of potatoes. Scarcely any article of food is so generally regarded as a necessity. Particularly is this true among the rank and file of the common people. Prices of meats and other foodstuffs already have soared to levels which have seriously burdened the poorer classes. An increase in the price of potatoes as contemplated in this act will deal another blow to these people. The plan in effect imposes a heavy tax upon a food necessity. Retail prices of potatoes paid by consumers in principal cities of the United States averaged 1.7 cents per pound on August 27, 1935, according to the Bureau of Labor Statistics. This was the same price as in May, 1933, when the Agricultural Adjustment Act became effective, although below the average of 2.7 cents prevailing in May, 1929. If the present potato control program is effective, prices to the consumer will be greatly above the present level and even higher than in 1929. The price of 1.7 cents per pound is equivalent to $1.02 per bushel. Latest figures of the Department of Agriculture show that the average price of potatoes at the farm in August, 1935, was 50.3 cents per bushel. The "parity" price, which is the goal to be achieved by the Potato Control Act, is estimated by the Department at 97.5 cents per bushel. This is 94 per cent above the August price. If retail prices were increased by 94 per cent it would mean a price of $1.98 per bushel, or 3.3 cents per pound. If only the extra 47.2 cents per bushel promised to the farmer were passed on to the consumer without the usual pyramiding in the process of distribution, the retail price would be advanced to $1.49 per bushel, or 2.5 cents per pound. The parity price represents a burden upon the consumer greater than involved in a mere restoration of prices prevailing in the 1919-1929 period which is the base used in the Potato Act. It takes account of increased costs of industrial products which the farmer buys. The 97.5 cents per bushel parity price at the farm compares with a five-year average from 1909 to 1914 of 69.7 cents. If the framers of the Potato Act had used the pre-war period, which is the base for all other commodities except tobacco, the parity price to be sought would be about 85 cents instead of 97.5 cents. The consumer will be penalized by the extra amount. Benefits Doubtful Of the 3,000,000 or more persons who grow and sell potatoes about 30,000 are large commercial growers. The act is designed to benefit them. If prices can be maintained, these large growers may find it worth while to submit to regimentation and to such regulations as those requiring closed and stamped containers. To several million small growers the red tape and extra cost of containers are likely to offset any benefits received. There is no evidence that the small potato growers want compulsory control. Originally the AAA program was supposed to be on a voluntary basis. The Potato Act provides for compulsory control patterned after the methods used in the Cotton and Tobacco Acts. In the first season there is no opportunity whatever for an expression of the wishes of the growers. Even in subsequent seasons a majority vote will be sufficient to bind the minority. Press dispatches indicate widespread dissatisfaction with the new law on the part of potato growers. A group of farmers in West Amwell Township, Hunterdon County, New Jersey, adopted resolutions in protest against the law, according to the New York Times of August 27, 1935. These resolutions were in part as follows: "That we protest against and declare that we will not be bound bv the 'Potato Control Law.' an unconstitutional measure recently enacted by the United States Congress. We shall produce on our own land such potatoes as we may wish to produce and will dispose of them in such manner as we may deem proper. "That as an earlier generation of Americans, not only in Boston but at Greenwich, in Salem County, N. J., resisted an arbitrary and unjust law enacted for their government by the British Parliament, so will we resist this 'Potato Control Law'" Walter Bishop of Doylestown, Pennsylvania, president of the Pennsylvania Potato Growers' Association, is quoted in the New York Times of September 8, 1935, as asserting that producers in that state "do not intend to abide by or cooperate with" the Government's program. Mr. Bishop said that the objections to quota-fixing under the new law "will be so great among thinking farmers throughout the United States that its provisions can never be carried out." Potato Bootlegging Experience of enforcement officials with potato control will rival that with prohibition laws. Bootlegging will be rampant. Administrative difficulties will be tremendous as forecast by Mr. Tugwell. The estimated cost of more than $12,000,000 for the first year gives some idea of what is involved. This is more than the average annual appropriation for the enforcement of prohibition. The law contains an unusual provision by which the Government may organize an army of snoopers to keep an eye on bootlegging of potatoes. Under regulations prescribed jointly by the Secretary of the Treasury and the .Secretary of Agriculture returns must be made, statements rendered, information supplied and records kept by "all producers, warehousemen, processors, carriers, retailers, factors, handlers, and any other person who the Commissioner has reason to believe to have information with respect to potatoes produced, or sold." This means that besides requiring producers, including even farmers' wives who sell a few bushels of potatoes, to keep all sorts of records and to disclose their private accounts, officials will be able to hold a club over the heads of neighbors who may be in a position to know what is going on next door. Inspectors will be able to terrorize rural communities. Jail Sentences for Violators The penalties imposed for violations of the law, including even failure of a person who does not produce potatoes to supply information about a neighbor who does, seem more in keeping with practices of autocracies than of a democratic government. Any person failing to file a return or give information may be fined as much as $1,000 and imprisoned for as much as a year. A potato bootlegger may be fined $1,000 and upon a second conviction may also be given a jail sentence up to one year. Furthermore, there is a most astonishing provision that buyers of potatoes which are not properly packaged and stamped are equally guilty with the sellers and subject to the same penalties. Even the Volstead Act in the prohibition era did not attempt to make buyers of bootleg liquor guilty of crime. Speculation in tax-exemption stamps, or securing stamps by fraud or coercion, is punishable by a $1,000 maximum fine or one year in prison. 10 For violations of any regulation by the Secretary of Agriculture for which there is no special penalty, a fine of $200 is provided. ExpandedfBureaucracy Little consideration was given in debates in the Congress to the organization required for the enforcement of the act. To cover the entire country it will be necessary to employ many thousands of officials, agents and inspectors. The Secretary of Agriculture is given blanket authority to build up an enforcement personnel. The law enables him to "appoint, without regard to the provisions of the Civil Service law, such officers, agents and employees and to utilize such Federal officers and employees and, with the consent of the State, such State and local officers and employees, as he may find necessary, to prescribe their authorities, duties, responsibilities, and tenure, and, without regard to the Classification Act of 1923, as amended, to fix the compensation of any officers, agents and employees so appointed." It will be the business of the bureaucracy thus built up to pry into and order the affairs of several million men and women. Steps Toward Socialism The AAA has become enmeshed in a network of its own making. The original Agricultural Adjustment Act provided for seven basic agricultural commodities. Now there are fifteen. It will be impossible to stop at this point. The Congress and enforcement officials must go on and on until every product of agriculture is brought under control. The process cannot even stop there but must extend to competitive industrial products, some of which, as in the case of paper towels and jute bags, are already under AAA regulations. The system may break down of its own weight or be wiped out by the courts. Otherwise, it is leading inevitably to methods of restriction of the private lives and business activities of our people wholly foreign to American institutions. Potato control is another step toward Socialism. 11