The New Deal in the territories mostly applied to those US territories whose people were, by law, US citizens—Alaska, Hawaiʻi, Puerto Rico, and the Virgin Islands. The Philippines didn’t fall into this category because they were supposed to become independent of the United States and by 1934 the Tydings–McDuffie Act had set a schedule for it. But one part of the New Deal did apply to the commonwealth—the Agricultural Adjustment Administration (AAA).
Early in 1933 Congress passed a Philippine independence act over Herbert Hoover’s veto. Hoover said he thought the islands weren’t ready for self-government but also told an aide he was “afraid” Congress would during his lame-duck period dispose of so many controversial issues (including repeal of Prohibition and the Agricultural Adjustment Act) that “Roosevelt will get out of an extra session of Congress in the spring”—and if that happened, Roosevelt wouldn’t have obviously taken responsibility for the Depression.1 But Congress was determined to set the archipelago on the path to independence. The Philippine legislature vetoed the provision in large part because wrangling over the control of sugar prices remained unsettled; the Tydings-McDuffie Act of 1934 passed when an outline for a sugar program was mostly settled, and it provided broadly the same terms of independence as the 1933 law.2
But the Philippines’s economy remained closely tied to that of the mainland United States and the Department of Agriculture determined that the AAA’s sugar program needed to go into force there, to levy a tax on processing sugar and payments to compensate growers for reducing production. Normally, farmers would agree to sign AAA contracts and those contracts would go to Washington to be processed for payment. But the Philippines were so far away it would take mabye three months to process payment. “Such delay would be fatal to the program,” M.L. Wilson (who was Mr. Domestic Allotment) wrote.3 So the program would have to be administered in the commonwealth.
According to the summary report on the AAA, this program went into effect for about 18,200 Filipino producers and reduced the size of the archipelago’s sugar crop from about 1.6m tons to about 700,000 tons, in exchange for about $12.5m in benefit payments by 1936, when the Supreme Court voided the program.4
Footnotes
Herbert Hoover, “Veto of a Bill Providing for the Independence of the Philippine Islands, January 13, 1933,” in Public Papers of the Presidents of the United States (Government Printing Office, 1977), 1932–1933; Theodore Joslin, diary, HHL, January 17, 1933.↩︎
Paul A. Kramer, The Blood of Government: Race, Empire, the United States, & the Philippines (University of North Carolina Press, 2006), 424.↩︎
M.L. Wilson to Comptroller General, April 9, 1934, fldr “Farm Relief - Sugar,” box 1993; on Wilson see William D. Rowley, M.L. Wilson and the Campaign for the Domestic Allotment (University of Nebraska Press, 1970).↩︎
United States Department of Agriculture, Agricultural Adjustment, 1933 to 1935 (Government Printing Office, 1936), 222.↩︎