On January 1, 1919, the day Al Smith (1873-1944) was inaugurated for his first term as governor of New York State, the upstate farmers of the Dairymen's League began a 2-week strike. They refused to deliver milk to New York City because, they said, the Milk Conference Board (a group of wholesalers and distributors) had set prices too low.
In his inauguration speech, though, Smith called the high price of milk a “public menace,” and argued that as an essential commodity, milk should be regulated the same way utilities were.
So: was the price too high or too low? The price of milk had nearly doubled over the course of World War I. My guess is that by 1919 it was beginning to decline as the economy settled back to a peace-time footing. But milk was an easy target for government action. It was an important source of nutrition for low-income city-dwellers, and there were no substitutes. On the other hand, dairy products accounted for about a third of the income of New York farmers. Low prices and high prices were both bad.
To his chagrin, Smith found that he did not have authority to control milk prices: the bureaucrats involved reported directly to the state legislature. But here in New York, liberal intellectuals and legislators have long believed that the government knows best and should impose its superior knowledge on the citizenry. In 1933 the New York State legislature created the Milk Control Board to fix minimum and maximum retail prices for milk. (Click here to read an appalling 1934 Supreme Court ruling against a storekeeper who dared to sell milk for less than the minimum price.)
With the late-20th-century shift to a service economy and the decreasing number of farmers in the Northeast, not to mention the availability of manufactured formula and of milk so purified that you can store it on a pantry shelf, you might assume that regulation of milk prices is ancient history. Unfortunately once they get on the books, such regulations tend to stick. A quick Google search turned up an 8/8/2003 press release from Senator Charles Schumer’s office assuring his constituents that he had drafted legislation by which farmers would receive payments when the price of milk fell below a certain point. The funds were to be provided from assessments on milk processors and “federal funds” (read: your tax dollars).
Although Smith wasn’t able to regulate the price of milk in 1919, guess which of the following he did support or sponsor during his tenure as governor (1919-20, 1923-26):
If you said “All the above,” you’ve got a pretty good grasp of what New York City politicians typically do to maintain their popularity.
Complete lyrics here.