Accommodating Agriculture within US Capitalism: Cotton, Cooperatives, and Intermediate Credit in the Early Twentieth Century

Abstract Focusing on cooperative marketing associations (CMAs) in the raw cotton sector, this article asks how the federal government got involved in providing intermediate credit to farmer cooperatives. Around the turn of the twentieth century, farmers and financiers shared some key financial reform objectives, but it was only during and after World War I that the federal state began supporting CMAs’ access to credit through the Federal Reserve and War Finance Corporation. Key public and private actors appropriated decades-old Populist claims about cooperatives’ macroeconomic benefits to justify top-down efforts to support their development. Cotton played a central role in these institutional reforms designed to neutralize the danger that commodity markets and agrarian politics posed to US capitalism through centralized mechanisms of monetary and credit control. But even the creation of the Federal Intermediate Credit Banks in 1923 failed to provide CMAs with the generic working capital necessary to coordinate both production and distribution. Instead, federal policies focused on trade financing in the name of good financial practices and therefore patently ignored Southern Populists’ progressive dream of eliminating the crop-lien system.