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6. The Origin of the Federal Farm Loan Act: Issue Emergence and Agenda-Setting in the Progressive Era Print Press
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Chapter 6 The Origin of the Federal Farm Loan Act Issue Emergence and Agenda-Setting in the Progressive Era Print Press Stuart W Shulman The passage of the Federal Farm Loan Act of 1916 (FFLA) opened a new era of federal regulation of agriculture in the United States. It was the first extension offederal responsibility for farm credit and laid a foundation for New Deal farm programs. Close examination of the history of the creation and promotion of this landmark legislation reveals that it passed in spite ofwidespread agrarian opposition or indifference . This chapter will trace the way in which key non-farm interests set an agenda for agricultural financing, thereby establishing a path for agriculture's future that few farmers would have chosen. As Finegold and Skocpol (1995) suggest, agricultural history is path dependent. For example, policy choices during the 1910s about who should receive subsidized credit and on what terms contributed to the rise of mass production agriculture. Lawrence Goodwyn (1978) asserts that the historic commitment of United States policy during the twentieth century has been primarily to meet the credit needs of an affluent class ofcommercial farmers and prosperous agricultural landowners . Defeated along the way were alternate paths of agricultural development, such as those featuring large numbers of diversified, small to mid-size ecological farms, regional economies, and progressive forms of rural cooperation (Strange 1988). Scholarship in the field of historical new institutionalism identifies the political regulation ofcredit in capitalist systems as one of the most important factors in state and economic development. Skocpol (1985) argues that the financial resources of the government are a crucial measure of state capacity. The ability to channel credit to particular sectors or enterprises is fundamental to any state-sponsored effort at industrial reorganization. According to this view, a state's financial resources determine its capacity to create or strengthen organizations, 114 Stuart W. Shulman employ personnel, co-opt political support, and subsidize economic development. Similarly, Berk (1994) asserts that state allocations of credit are made in contingent and political struggles over distributional rights. Credit which targets a particular form of production (e.g., mass production) determines whether a sector moves toward economies of scale or scope. With the passage of the Federal Farm Loan Act of 1916, a portion of the agricultural capital markets in the United States initiated a new system offederal subsidy and regulation (TootellI967; Putnam 1916). The FFLA was the first extension of federal responsibility for farm credit, and it came to characterize the political and economic development of agriculture, particularly after the New Deal (Kenney et al. 1991; Berlan 1989). Some of the more complex origins of this landmark agrarian financiallegislation remain largely unexamined. Descriptions of the law as the result of electoral manipulations by party politicians (Link 1964), an expression ofthe Rural Life Movement (Bogue 1976; Sunbury 1990; Danbom 1979), or as a triumph of a populist "agrarian-statist agenda," ushered in by politically influential dirt farmers (Sanders 1999), not only contradict one another, but lack compelling empirical support.1 Left unexamined are questions about the way latent political ideas about rural credit became accessible to large numbers of individuals or their representative interest groups as they emerged publicly in the shape of competing policy proposals. Agenda-Setting Theory This chapter presents an alternative analytical framework for understanding the origins of the FFLA. Historical agenda-setting theory augments interpretations focused on parties, electoral concerns of the President, voter alignments, and the United States Congress. Agendasetting theory highlights empirical evidence derived from the print press of the period being studied. It functions in two ways. First, agenda-setting theory guides the gathering and analysis of the primary historical data. The data for this study consists of news reports and editorials from three Progressive Era print press categories: the farm, farm organization, and urban agrarian press.2 Second, the trope agenda-setting aptly describes the role of elite journalists and other important contributors to the press who described themselves as manufacturers , conduits, and editors of public information about major policy initiatives during the Progressive Era. Agenda-setting hypotheses look for evidence that through the institutions of mass communication, the press agenda becomes the basis Origin of the Federal Farm Loan Act 115 for the public agenda, which in turn affects the policy agenda (Wanta and Hu 1994; Protess and McCombs 1991; McCombs and Shaw 1977; Sparrow 1997). An agenda-setting framework forces us to theorize about press autonomy and capacity in state building the same way that...