The Wheat Price Guarantee Act was a 1919 bill passed by Congress that gave the government the power to regulate the price of wheat.

Background

At the start of the

first World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

, the US government passed the Lever oodAct (1917). This was done to conserve the food supply and increase its production in order to aid the efforts in Europe during the war. This alone helped food industries, including wheat, to take off in the United States. Sponsored by Democrat

Asbury F. Lever Asbury Francis "Frank" Lever (January 5, 1875 – April 28, 1940) was a member of the United States House of Representatives from South Carolina. Early life Frank Lever was born near Springhill, Lexington County, South Carolina on January 5 ...

, the Lever Act was very controversial because it gave the president authority to make the country limit their use of agricultural products. In July 1918, the Grain Corporation (a part of the US Food Administration) took on contracts with allied governments, promising to provide as much wheat up to 200 million bushels to the Allied powers. Soon after this, the war ended, and the

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had a decision to make if they were going to honor the wheat prices they promised to farmers before the war ended. During

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

, the wheat industry was mobilized, but following the end of it the demand started to decline, which hurt the still-mobilized agricultural industry. This resulted in the drafting of the Wheat Price Guarantee Act. Despite strong opposition from the

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, the

65th Congress The 65th United States Congress was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It met in Washington, DC from March 4, 1917, to ...

approved this and it was signed into law by

Woodrow Wilson Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was an American politician and academic who served as the 28th president of the United States from 1913 to 1921. A member of the Democratic Party, Wilson served as the president of ...

. The bill appropriated $1,000,000,000 in funds to keep wheat prices constant through the 1919-1920 crop year. Similar to the Lever Act, the passage of this act allowed the

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(specifically the president) to monitor wheat prices in order to guarantee farmers profits based on what they had expected them to be if the war had continued. The minimum price per bushel was set to $2.26, which is known as a guaranteed price scheme. The Wheat Price Guarantee Act was intended to give the agricultural industry time to adjust to the war being over. Simply put, this act was a temporary continuation of the Lever

ood The Ood are an alien species with telepathic abilities from the long-running science fiction series ''Doctor Who''. In the series' narrative, they live in the distant future (circa 42nd century). The Ood are portrayed as a slave race, natural ...

Act of 1917. The Wheat Price Guarantee Act would officially expire on June 1, 1920. After this, most farmers fell into debt and this laid some of the roots that would lead to the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

in the 1930s. Unlike the rest of the country, farmers felt the effects of the depression about 10–15 years before it would reach its peak.

Wheat Prices

The passage of the bill required the US to buy bushels of wheat for at least $2.26 each. Following the expiration of the bill in 1920, prices plummeted back to their typical range of $0.50–$1.50 per bushel. Having lost most of the business they had during the war, the wheat industry took a big hit. In 1931 during the

, it would hit a low of just $0.33 per bushel.

The Gronna Bill

Republican Senator

Asle Gronna Asle Jorgenson Gronna (December 10, 1858May 4, 1922) was an American politician who served in the House of Representatives and Senate from North Dakota, and one of the six to vote against the United States declaration of war leading to the First W ...

attempted to reverse all guarantees within this act with the Gronna Bill. Many state representatives opposed this, mostly from the

Democratic Party Democratic Party most often refers to: *Democratic Party (United States) Democratic Party and similar terms may also refer to: Active parties Africa *Botswana Democratic Party *Democratic Party of Equatorial Guinea *Gabonese Democratic Party *Demo ...

(who had a majority in the Senate), choosing to back the farmers with a 100% guarantee on their profits. The bill did not end up passing in the end.

References

*
"The Guaranteed Wheat Price"
''The Quarterly Journal of Economics'', ''Vol. 34, No. 4''
"Going against the Grain: Why Did Wheat Marketing in the United States and Canada Evolve So Differently?"
''Business And Economic History On-Line, Vol. 4 2006''
"The Gronna Bill"
''Grain And Feed Review, Volume 9''
"Memorial to the Senate Committee on the Gronna Bill"
''American Co-Operative Manager, Volume 5, Issue 1''

The New York Times Published Feb. 9, 1919
"Lever Act (Lever Food And Fuel) Preliminary National Prohibition"

"Wheat Guarantee Bill Introduced"
The New York Times Published 1919

Political Calculations May 11, 2016 {{DEFAULTSORT:Wheat Price Guarantee Act United States federal agriculture legislation 1919 in American law 65th United States Congress United States economic policy