The first food stamp plan established by the U.S. Department of Agriculture began as an experiment in Rochester, New York.
In May, 1939, eleven million people in the United States were receiving federal food assistance through direct donations of commodities. At that time, various groups were searching for methods of increasing consumption of grapefruit and other surplus foods. In January, 1939, at the National-American Wholesale Grocers Convention in Chicago, a plan developed by the grocers had been presented that proposed the issuance of “scrip” vouchers to unemployed people and those with low incomes. The vouchers would permit recipients to purchase designated foods and foodstuffs at retail grocery stores at prices 50 percent below normal. The federal government would make up to grocers the difference between the amount actually charged and the normal price. The plan’s cost to the government was estimated at $1.4 billion. In addition to providing food to the needy at reduced prices, the plan would help wipe out agricultural surpluses.
The plan was submitted to the National Food and Grocery Conference Committee,
The decision to try a food stamp or coupon approach in lieu of direct distribution of commodities was based on the following factors. First, the food stamp approach reflected a desire to match more closely the kinds, varieties, and amounts of foods being made available to low-income families to the actual needs of such families. Second, such a plan was thought to provide more assurance that federal subsidies would actually increase food consumption rather than partially replace previous food expenditures. Third, planners believed that there were inherent advantages in utilizing regular commercial food-distribution channels rather than food banks or charities.
The plan called for the issuance of food stamps to needy persons receiving or certified for public aid. Each such client would be permitted to purchase a minimum value (varying according to size of family) of one type of stamp that could be used to purchase any food product. In addition, clients would receive, free of charge, another type of stamp in an amount equal to 50 percent of the value of the stamps purchased. These supplemental stamps would be redeemable only for certain food commodities. This feature of the plan was intended to guarantee that the free stamps would increase consumption, especially of surplus commodities. According to Secretary of Agriculture Henry A. Wallace, who addressed a meeting of the National Food and Grocery Conference Committee in Washington, D.C., on March 13, 1939, the plan aimed to increase the domestic consumption of surplus food commodities. Issuance of the stamps would create demand for commodities that were surplus not because the need for them did not exist but because the persons who needed them most could not afford them.
Records of various public health services and studies by the Bureau of Home Economics indicated that malnutrition and undernourishment, particularly of children, were widespread in every U.S. state at that time. These same studies estimated that millions of people in the United States spent an average of $1.00 or less per week for food. Such low expenditures translated into low prices and surpluses for farmers and into diets for low-income families that were less than the minimum necessary to maintain adequate standards of health. The proposed plan was designed to raise average spending on food to $1.50 per week per person for those eligible to participate in the program. The plan was heartily endorsed by the National Food and Grocery Conference Committee.
The first food stamp plan established by the U.S. Department of Agriculture began as an experiment on May 16, 1939, in Rochester, New York, and was subsequently extended to five additional experimental areas: Montgomery County, Ohio; King County, Washington; Jefferson County, Alabama; Pottawatomie County, Oklahoma; and Des Moines, Iowa. Secretary of Agriculture Wallace stated that the stamp plan would apply at first only to food but that it might be extended to other goods, cotton products in particular, if it proved to be successful and if satisfactory arrangements could be made with retailers. Wallace also stated that measures such as the stamp plan, with the government subsidizing expanded consumption, were not the most desirable solution to the problem of making abundance work for the American people; he hoped that other solutions ultimately would be found.
The first food stamp program was established through the broad authority contained in Section 32 of Public Law 74-320, passed in 1935. Section 32 permanently appropriated an amount equal to 30 percent of U.S. Customs receipts from all sources each year for the secretary of agriculture, to be spent on three purposes: encouragement of agricultural exports, encouragement of domestic consumption of agricultural commodities, and reestablishment of farmers’ purchasing power. Specifically, Section 32 provided that the funds were to be used “to encourage the domestic consumption” of agricultural commodities or products. The secretary of agriculture was given authority to pay benefits to low-income people to further the three stated purposes.
The food stamp plan was first administered by the Federal Surplus Commodities Corporation and later by the Surplus Marketing Administration and its successor organizations, the Agricultural Marketing Administration and the Food Distribution Administration of the U.S. Department of Agriculture. The United States was divided into four regions, each with a regional director who was given considerable discretionary powers to carry out program policy and procedures.
A two-color stamp plan was formulated in an attempt to ensure that the federal subsidy actually was used for additional food purchases and to control the kinds of food participants could purchase with the free additional coupons. Participating families were required to exchange an amount of money representing estimated normal food expenditures for orange stamps of the same monetary value. Along with these orange stamps, participants were provided, without cost, additional blue stamps, which they could use to buy designated surplus foods. In this manner, the plan attempted to concentrate the additional purchasing power on surplus foods—that is, foods for which there were marketing difficulties. In 1939, a significant portion of the nation’s food supply could be classified in the surplus category. When the program was first begun, the surplus commodities on the blue stamp list were butter, eggs, white and grain flour, cornmeal, oranges, grapefruit, dried prunes, and dried beans. At one time or another the list also included rice, hominy grits, peaches, pears, apples, raisins, peas, tomatoes, snap beans, cabbage, onions, pork, and lard.
Foods were designated as blue-stamp (surplus) food each month by the secretary of agriculture, and a list of the foods designated was sent to participating retail merchants. Participating retailers were required to post notices of these monthly designations in their stores as a means of informing participants of the foods that could be purchased with the blue stamps. It was intended that this posting also would bring these foods to the attention of other customers and thereby encourage increased purchases of the surplus foods among higher-income families not participating in the plan.
Both the orange and the blue stamps were printed in two denominations—twenty-five cents and one dollar—and resembled postage stamps in design. In fact, an engraver’s plate for an old postage stamp was redesigned and used for food stamp purposes. The stamps were issued in books. Participating areas were required to use public funds to establish a revolving fund to purchase the orange stamps from the Department of Agriculture. The revolving fund was subsequently replenished from the proceeds received from the sale of these orange stamps to participants.
As measured by the number of participants, the food stamp plan reached its peak in May, 1941, when approximately four million people participated. New geographic areas were brought into the plan after 1941, but it never operated on a nationwide basis. As measured by the number of geographic areas served by the plan, the peak was reached in August, 1942, when 1,741 counties—about half of the counties in the nation—and eighty-eight cities were included. These areas contained almost two-thirds of the population of the United States, according to the 1940 census. During the forty-six months that the plan was in operation, the additional food purchasing power provided to participants by the federal government was $260 million.
Surveys and studies indicated that the plan did increase food consumption levels among participating groups. The early plan, however, was believed to have been greatly abused. The Department of Agriculture estimated that 25 percent of all benefits were misused. Some of the same types of abuse were repeated in later food stamp programs. For instance, some stamps reportedly were traded for liquor and tobacco, and some grocers would buy them for cash at a discount, an activity now known as trafficking.
The plan was discontinued in early 1943, when World War II wartime conditions had greatly reduced unemployment and greatly increased demands on U.S. food supplies, thereby removing part of the rationale for the program. Inasmuch as the program was predicated on the existence of surplus foods, the program was terminated as such surpluses turned to scarcity during the early years of U.S. involvement in World War II. The program had been established administratively and never had been explicitly authorized by Congress.
Immediately following termination of the plan, two bills were introduced to establish a food stamp, or food allotment, program legislatively: House Resolution 2997, by Representative Christian Archibald Herter (Republican of Massachusetts), on June 18, 1943, and Senate Bill 1331, by Senators George D. Aiken (Republican of Vermont) and Robert M. La Follette, Jr. (Progressive of Wisconsin), on July 8, 1943. An amendment to establish a food stamp program, incorporating the thrust of the Senate bill, was proposed in the Senate on February 10 and 11, 1944, by Senators Aiken and La Follette. The amendment was defeated by a vote of forty-six to twenty-nine. Hearings on the bill itself had been concluded on January 26, 1944, by a subcommittee of the Senate Committee on Agriculture and Forestry.
The U.S. government did not institute another food stamp program until 1961, when a pilot program was undertaken. That program became permanent with the passage of the Food Stamp Act of 1964, but it underwent a number of changes in the latter part of the twentieth century. In May, 2002, the Food Security and Rural Investment Act reauthorized the federal government’s food stamp program.
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Batchelder, Alan B. The Economics of Poverty. New York: John Wiley & Sons, 1971. Discussion of poverty in the United States includes a chapter titled “Transfer Programs Now Operating,” which contains a short discussion of the food stamp program that was created in the early 1960’s. -
Gaus, John M., and Leon O. Wolcott. Public Administration and the United States Department of Agriculture. 1940. Reprint. New York: Da Capo Press, 1975. Presents an excellent brief description of the first food stamp plan and how the plan evolved out of a proposal developed by the National-American Wholesale Grocers. -
Harrington, Michael. The New American Poverty. New York: Holt, Rinehart and Winston, 1984. Examines poverty in the United States and praises the food stamp program for establishing uniform national levels of nutritional assistance. Asserts that “food stamps have been a triumph.” -
Haveman, Robert. Starting Even: An Equal Opportunity Program to Combat the Nation’s New Poverty. New York: Simon & Schuster, 1988. Discusses the impacts of programs intended to address the problem of poverty in the United States, including food stamps. Presents statistics and examines proposed reforms for the food stamp program. -
Katz, Michael B. In the Shadow of the Poorhouse: A Social History of Welfare in America. Rev. ed. New York: Basic Books, 1996. History of the development of social programs aimed at relieving the plight of the poor in the United States. Includes notes and indexes. -
King, Ronald F. Budgeting Entitlements: The Politics of Food Stamps. Washington, D.C.: Georgetown University Press, 2000. Discusses the political and governmental budgeting issues related to the federal food stamp program since the 1960’s. Includes index. -
U.S. Congress. Senate. Committee on Agriculture, Nutrition, and Forestry. The Food Stamp Program: History, Description, Issues, and Options. Washington, D.C.: Government Printing Office, 1985. Includes an excellent description of the first food stamp plan, with details on how the program was administered, the problems it encountered, and evaluations of its successes and failures.
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Sheppard-Towner Act
Great Depression
Roosevelt Signs the Social Security Act