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Agricultural Adjustment Act: Difference between revisions
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Attached as Title III to the Act, the Thomas Amendment became the 'third horse' in the New Deal's farm relief bill. Drafted by Senator [[Elmer Thomas]] of [[Oklahoma]], the amendment blended [[populism|populist]] easy-money views with the theories of the New Economics. Thomas wanted a stabilized "honest dollar," one that would be fair to debtor and creditor alike.<ref name="Webb, RuralOklahoma">David Webb, "The Thomas Amendment: A Rural Oklahoma Response to the Great Depression," in ''Rural Oklahoma'', ed. Donald E. Green (Oklahoma City: [http://digital.library.okstate.edu/encyclopedia/entries/T/TH007.html Oklahoma Historical Society] {{webarchive |url=https://web.archive.org/web/20121119144217/http://digital.library.okstate.edu/encyclopedia/entries/T/TH007.html |date=November 19, 2012 }}, 1977).</ref> | Attached as Title III to the Act, the Thomas Amendment became the 'third horse' in the New Deal's farm relief bill. Drafted by Senator [[Elmer Thomas]] of [[Oklahoma]], the amendment blended [[populism|populist]] easy-money views with the theories of the New Economics. Thomas wanted a stabilized "honest dollar," one that would be fair to debtor and creditor alike.<ref name="Webb, RuralOklahoma">David Webb, "The Thomas Amendment: A Rural Oklahoma Response to the Great Depression," in ''Rural Oklahoma'', ed. Donald E. Green (Oklahoma City: [http://digital.library.okstate.edu/encyclopedia/entries/T/TH007.html Oklahoma Historical Society] {{webarchive |url=https://web.archive.org/web/20121119144217/http://digital.library.okstate.edu/encyclopedia/entries/T/TH007.html |date=November 19, 2012 }}, 1977).</ref> | ||
The Amendment said that whenever the President desired currency expansion, he must first authorize the [[Federal Open Market Committee]] of the [[Federal Reserve]] to purchase up to $3 billion of federal obligations. Should [[open market operation]]s prove insufficient, the President had several options. He could have the [[United States Department of the Treasury|U.S. Treasury]] issue up to $3 billion in [[United States Note|greenbacks]], reduce the gold content of the dollar by as much as 50 percent, or accept 100 million dollars in silver at a price not to exceed fifty cents per ounce in payment of | The Amendment said that whenever the President desired currency expansion, he must first authorize the [[Federal Open Market Committee]] of the [[Federal Reserve]] to purchase up to $3 billion of federal obligations. Should [[open market operation]]s prove insufficient, the President had several options. He could have the [[United States Department of the Treasury|U.S. Treasury]] issue up to $3 billion in [[United States Note|greenbacks]], reduce the gold content of the dollar by as much as 50 percent, or accept 100 million dollars in silver at a price not to exceed fifty cents per ounce in payment of World War I debts owed by European nations.<ref name="Webb, RuralOklahoma"/> | ||
The Thomas Amendment was used sparingly. The treasury received limited amounts of silver in payment for war debts from World War I.<ref name="Webb, RuralOklahoma"/> On 21 December 1933, Roosevelt ratified the London Agreement on Silver (adopted at the [[London Economic Conference|World Economic and Monetary Conference]] in [[London]] on 20 July 1933).<ref>{{cite web |url=https://archive.org/details/4925381.1933.001.umich.edu/page/534 |title=Statement and Proclamation Ratifying the England Agreement on Silver - December 21, 1933 |last=Roosevelt |first=Franklin D. |date=December 21, 1933 |website=Internet Archive |publisher=National Archives and Records Administration |pages=534–535}}</ref> At the same time, Roosevelt issued Proclamation 2067, ordering the United States mints to buy the entire domestic production of newly mined silver at 64.5[[¢]] per ounce.<ref>{{cite web |url=https://archive.org/details/4925381.1933.001.umich.edu/page/535 |title=Proclamation No. 2067: Accompanying the Preceding Statement - December 21, 1933 |last=Roosevelt |first=Franklin D. |date=December 21, 1933 |website=Internet Archive |publisher=National Archives and Records Administration |pages=535–539}}</ref> "Roosevelt's most dramatic use of the Thomas amendment"<ref name="Webb, RuralOklahoma"/> came on 31 January 1934, when he decreased the gold content of the dollar to 15 5/21 grains (0.98741 grams) .900 fine gold, or 59.06 per cent of the previous fixed content (25 8/10 grains, or 1.6718 grams).<ref>{{cite web |url=https://archive.org/details/4925383.1934.001.umich.edu/page/64 |title=White House Statement on Presidential Proclamation No. 2072: Fixing the Weight of the Gold Dollar - January 31, 1934 |last=Roosevelt |first=Franklin D. |date=January 31, 1934 |website=Internet Archive |publisher=National Archives and Records Administration |pages=64–66}}</ref><ref>{{cite web |url=https://archive.org/details/4925383.1934.001.umich.edu/page/67 |title=Presidential Proclamation No. 2072: Fixing the Weight of the Gold Dollar - January 31, 1934 |last=Roosevelt |first=Franklin D. |date=January 31, 1934 |website=Internet Archive |publisher=National Archives and Records Administration |pages=67–76}}</ref> "However, wholesale prices still continued to climb. Possibly the most significant expansion brought on by the Thomas Amendment may have been the growth of governmental power over [[Monetary policy of the United States|monetary policy]].<ref name="Webb, RuralOklahoma"/> | The Thomas Amendment was used sparingly. The treasury received limited amounts of silver in payment for war debts from World War I.<ref name="Webb, RuralOklahoma"/> On 21 December 1933, Roosevelt ratified the London Agreement on Silver (adopted at the [[London Economic Conference|World Economic and Monetary Conference]] in [[London]] on 20 July 1933).<ref>{{cite web |url=https://archive.org/details/4925381.1933.001.umich.edu/page/534 |title=Statement and Proclamation Ratifying the England Agreement on Silver - December 21, 1933 |last=Roosevelt |first=Franklin D. |date=December 21, 1933 |website=Internet Archive |publisher=National Archives and Records Administration |pages=534–535}}</ref> At the same time, Roosevelt issued Proclamation 2067, ordering the United States mints to buy the entire domestic production of newly mined silver at 64.5[[¢]] per ounce.<ref>{{cite web |url=https://archive.org/details/4925381.1933.001.umich.edu/page/535 |title=Proclamation No. 2067: Accompanying the Preceding Statement - December 21, 1933 |last=Roosevelt |first=Franklin D. |date=December 21, 1933 |website=Internet Archive |publisher=National Archives and Records Administration |pages=535–539}}</ref> "Roosevelt's most dramatic use of the Thomas amendment"<ref name="Webb, RuralOklahoma"/> came on 31 January 1934, when he decreased the gold content of the dollar to 15 5/21 grains (0.98741 grams) .900 fine gold, or 59.06 per cent of the previous fixed content (25 8/10 grains, or 1.6718 grams).<ref>{{cite web |url=https://archive.org/details/4925383.1934.001.umich.edu/page/64 |title=White House Statement on Presidential Proclamation No. 2072: Fixing the Weight of the Gold Dollar - January 31, 1934 |last=Roosevelt |first=Franklin D. |date=January 31, 1934 |website=Internet Archive |publisher=National Archives and Records Administration |pages=64–66}}</ref><ref>{{cite web |url=https://archive.org/details/4925383.1934.001.umich.edu/page/67 |title=Presidential Proclamation No. 2072: Fixing the Weight of the Gold Dollar - January 31, 1934 |last=Roosevelt |first=Franklin D. |date=January 31, 1934 |website=Internet Archive |publisher=National Archives and Records Administration |pages=67–76}}</ref> "However, wholesale prices still continued to climb. Possibly the most significant expansion brought on by the Thomas Amendment may have been the growth of governmental power over [[Monetary policy of the United States|monetary policy]].<ref name="Webb, RuralOklahoma"/> | ||