<u>C) Paying farmers to plant less cotton, which caused the price of cotton increase. </u>
The Agricultural Adjustment Act was one of the New Deal's major effort to address economic welfare in the United States. The act aimed to restore agricultural prosperity and to increase the farmer's purchasing power, damaged by the War, by increasing agricultural prices through the reduction of export surpluses and farm production.
Under this statute, the Government paid farmers money for cutting back production by about 30 percent of corn, wheat, cotton, rice, peanuts, tobacco, milk and others, in order to even the balance of supply and demand for farm commodities, so the farmers would sell their produce at a higher price and their purchasing power could be increased.
The money for these subsidies was raised by a tax on companies that bought farm products and processed them into food and clothing.
