Wheat Price Guarantee Act
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, the US government passed the Lever Food Act|Lever Act. 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, 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 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 United States 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, 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 Republican Party, the 65th Congress approved this and it was signed into law by Woodrow Wilson. 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 US Government 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 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 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.