"I think we should register all our land as cornfields!"
After quickly connecting the dots in his mind, Niall came up with an idea—one that could possibly help Aunt Jinji get some extra living expenses.
"Why's that?" Everyone at home looked confused. Just a moment ago, they were talking about tariffs, and now suddenly corn?
Well, it's a bit of a long story. Before the Smoot-Hawley Tariff Act was enacted, economists like Paul Douglas, Irving Fisher, James TFG Wood, Frank Graham, Ernest Patterson, Henry Seeger, Frank Tawssig, and Claire Wilcox gathered together 1,028 signatures from American economists, petitioning President Hoover to veto the bill.
While economists may not always understand economics fully, they could see that the bill might lead to results completely opposite of what was expected. The U.S. was already suffering from a severe economic crisis, and this law could easily make things worse.
Auto industry tycoon Henry Ford spent an entire night at the White House trying to persuade Hoover to veto the bill, calling it "a foolish economic policy." J.P. Morgan's CEO, Thomas W. Lamont, even said he "almost knelt down, begging Herbert Hoover to veto the foolish Smoot-Hawley tariff."
Big capitalists had already realized that the domestic market had completely collapsed. Now, to save themselves, they had to rely on exports to get rid of the surplus products the U.S. was producing.
They understood that if high tariffs were imposed, other countries would retaliate with their own tariffs, making American goods uncompetitive abroad and rendering them useless.
However, President Hoover, backed by Republicans in both the Senate and House of Representatives, thought the bill could save the domestic market—or at least please the 18 million American farmers.
The bill was initiated by Republican Senator Reed Smoot from Utah and Republican Representative Willis C. Hawley from Oregon. Before that, President Herbert Hoover had already asked Congress to reduce tariff rates, but Congress did the opposite, increasing them instead.
Since Hoover couldn't go against his entire party and still hoped to maintain his support among farmers, the bill eventually passed.
Once the bill passed, countries around the world immediately retaliated with their own tariffs. U.S. imports and exports dropped by more than 60%, and the domestic market collapsed completely. The global economic crisis spread rapidly.
This was the backdrop. Now for the result: Niall clearly remembered that after Roosevelt came to power, he immediately issued a decree. Any fields that were originally planted with corn, cotton, or other crops, as long as they were left fallow and guaranteed not to be planted with these crops for the next year, would receive subsidies from the federal government.
These subsidies were even higher than what farmers would have earned from growing corn or cotton. As a result, large-scale farmers across the country stopped production. Since they couldn't sell their goods anyway, why bother planting?
The amount of agricultural products on the market dropped by more than 32% that year, and Roosevelt's actions helped stabilize the price of agricultural goods that were on the verge of collapse.
Farmers who were close to bankruptcy, including large ranchers and those growing cash crops, benefited greatly and became strong supporters of Roosevelt. In many western and southern agricultural states, Roosevelt's approval ratings surged, laying a solid foundation for his four-term presidency.
Now, Niall's idea was this: since they couldn't plant anything this year anyway, they might as well declare the land as cornfields and wait for Roosevelt's decree to come into effect. When the federal government conducted an agricultural land usage survey, Niall's land would be eligible for the fallow land subsidies.
The price of the crops produced wouldn't even cover the cost of seeds, fertilizers, machinery, water, and labor. So rather than planting, it would be better to let the land lie fallow and wait for Roosevelt's relief.
"The reason's hard to explain now, but I have a feeling!" Niall's explanation needed to wait until other countries began retaliating with tariffs on the U.S. so that it would be more convincing. It was better not to talk about it too soon.
"A feeling?" Patrick didn't quite understand.
"Alright, alright... I'll go to town tomorrow and change the land's registration," Aunt Jinji completely believed Niall's hunch. In her mind, Niall had definitely caught a hint from the new legislation.
With the economic crisis, the closure of the West Virginia National Bank, and the loss of deposits from local merchants and mine owners, she trusted Niall. She had also saved $5,000, which was secure, so she was willing to follow Niall's plan.
Moreover, the key was to report the change in land use first. Within the next two to three years, no one would come around to investigate what was actually planted on the land. The federal government relied on agricultural reports submitted from around the country. With millions of square miles of land, how could they possibly monitor what was planted on a single plot?
It was simply about exploiting a loophole in capitalism. Notably, many wealthy families in California had already gotten wind of Roosevelt's decree, and they declared their vineyards, orchards, and vegetable fields as cornfields to get the subsidies, even though they hadn't changed what they were planting. They didn't even have to leave the land fallow.
"So, I'll tell Campbell's family too," Patrick said, subconsciously agreeing with Niall's idea, since his mother and sister found it convincing.
"Sure," Niall nodded.
At that moment, Campbell's family was busy preparing everything for the wedding. Patrick had sent $100 as a dowry, and Campbell's parents weren't stingy. Besides giving the bride five cows as a dowry, they also had to provide clothes, blankets, and bedding—basically all the daily essentials.
So, Campbell's relatives were all gathered at their house, helping with the sewing and repairs. It was too extravagant to have a tailor make custom clothes, so many people made their own out of cloth their mothers or grandmothers had bought. They weren't concerned with style—after all, they were poor, and the goal was simply to have enough to eat and stay warm.
When Patrick went to tell his father-in-law to change the land registration, a crowd of curious relatives followed him. "Why are you going to the town hall to change the land registration? Is there something behind this, or is there a new law?"