Agricultural Adjustment Act of 1938 50 Stat. 246

Author:David Gordon

Page 62

After the Supreme Court invalidated the AGRICULTURAL ADJUSTMENT ACT (AAA) OF 1933 in UNITED STATES V. BUTLER (1936), Congress passed a second AAA in 1938, citing the effect of farm PRODUCTION on INTERSTATE COMMERCE as the act's basis. Congress once again sought to achieve parity levels for principal commodities and maintain earlier soil conservation payments as well. The act retained voluntary participation and, acknowledging Butler, Congress now levied no processing taxes nor did it set up production quotas; instead the act inaugurated a system of marketing quotas. Such a quota applied only when two-thirds of a commodity's producers approved. Once a general quota was authorized, the secretary of agriculture could set specific quotas for individual farms and assess a penalty tax on violators. Moreover, approval of quotas made available special loans to help store surplus production. The 1938 act also provided means of increasing consumption to help...

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