New Deal Regulation and the Revolution in American Farm Productivity. A Case Study of the Diffusion of the Tractor in the Corn Ielt, 1920–1940

Abstract

Based on the cost savings of tractors relative to horses, nearly twice as many farmers in the Corn Belt should have invested in tractors as actually did so in the 1920s. During the Great Depression, however, the proportion of farmers owning tractors jumped from 25 to 40 percent. I argue that financial barriers explain farmers' reluctance to buy this expensive invention during the 1920s, while two New Deal regulatory agencies altered farmers' investment climate and spurred the adoption of capital equipment.