BIO-AGRICULTURAL LIBRARY
UNIVERSITY OF CALIFORNIA
RIVERSIDE^ CALIFORNIA 92502

V. C.

^iMORE;

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Social Science ZcxUJBooUs

Edited by RICHARD T. ELY

AGRICULTURAL ECONOMICS

SOCIAL SCIENCE TEXT-BOOKS

Edited by Richard T. Ely

OUTLINES OF ECONOMICS

By Richard T. Ely, Ph.D., LL.D. Revised and
enlarged by the Author and Thomas S. Adams,
Ph.D., Max O. Lorenz, Ph.D., Allyn A.
Young, Ph.D.
OUTLINES OF SOCIOLOGY

By Frank W. Blackmar, Ph.D., and John Lewis
GiLLiN, Ph.D.
HISTORY OF ECONOMIC THOUGHT (Revised Edi-
tion)
By Levv^is H. Haney, Ph.D.
BUSINESS ORGANIZATION AND COMBINATION

By Lewis H. Haney, Ph.D.
PROBLEMS OF CHILD WELFARE

By George B. Mangold, Ph.D.
SOCIAL PROBLEMS

By Ezra T. Towne, Ph.D.
THE NEW AMERICAN GOVERNMENT

By James T. Young, Ph.D.
COMPARATIVE FREE GOVERNMENT

By Jesse Macy, LL.D., and John W. Gannaway, M.A.
AMERICAN MUNICIPAL PROGRESS
By Charles Zueblin.

APPLIED EUGENICS

By Paul Popenoe and Roswell S. Johnson, M.S.

AGRICULTURAL ECONOMICS

By Henry C. Taylor, M.S. Agr., Ph.D.

THE LABOR MARKET

By Don D. Lescohier, Ph.D.

AGRICULTURAL
ECONOMICS

BY

HENRY C. TAYLOR

CHIEF OF THE OFFICE OF FARM MANAGEMENT

U.S. DEPARTMENT OF AGRICULTURE

ONE TIME PROFESSOR OF AGRICULTURAL ECONOMICS

IN THE UNIVERSITY OF WISCONSIN

Weto gork

THE MACMILLAN COMPANY

1920

All rights reserved

Copyright, 1919,
By the MACMILLAN COMPANY.

S«t up and electrotyped. Published November, 1919.

Noriuaol) }^rttt

J. 8. Cuohing Co. — Berwick & Smith Co.

Norwood, Ma«8., U.S.A.

RICHARD T. ELY

A STUDENT WITH AN EVER YOUTHFUL AND OPEN

MIND AND A TEACHER WHO GIVES AN

INSPIRATION THAT LASTS

PREFACE

This book is intended for the student and the farmer inter-
ested in the study of those economic principles which underlie
the effective organization of the farm, and for the statesman
interested in establishing laws and institutions for the develop-
ment of agriculture. The subjects treated correspond to those
studies grouped under the head of Farm Management in some
colleges and under the head of Agricultural Economics in others.
From the author's point of view these two terms as used at
the present time cover essentially the same subject matter so
far as they relate to the economics of production on the indi-
vidual farm, but he believes that the latter term is much the
broader, including also the problems of marketing, land eco-
nomics, farm finance, and farm life.

The matter here presented is the result of a gradual develop-
ment of twenty years of study in this field. Its publication
marks the close of seventeen years of teaching of agricultural
economics by the author in the University of Wisconsin, where
he first gave a course to the short-course students in the winter
of 1902-1903, at which time a "Syllabus of Lectures on Agricul-
tural Economics" was printed for the use of his class. In 1905
"An Introduction to the Study of Agricultural Economics,"
containing thirteen chapters, was published, the main points
of which have been included in the present volume. For many
years, parts of the present volume have been mimeographed
and used in the classroom.

J While the author has been working in this field for twenty
years he recognizes that the pioneer stage is only now passing
and that the next few years will result in great progress both
in research and education in agricultural economics. The
present treatise is looked upon as being by no means a final
statement on the subject, but the author's change of position

vm PREFACE

and the demand on the part of many of his former students
for the materials which have been accumulated in his experience
as a teacher make it seem advisable to publish this volume
in its present form with the expectation that in a few years
the rapid development of the subject will make it possible to
make a much more adequate statement of the subject than is
here presented.

The author wishes especially to thank Professors Richard
T. Ely, T. N. Carver, W. J. Spillman, and G. F. Warren, who
have been of great help to him from time to time, in conferences
and through correspondence, in clearing up many of the diflS-
cult problems in this field. He has also received help from time
to time from the succession of students who have been in his
classes. In leaving the classroom to enter upon activities
in the Government Service the author will miss the stimulus
which he has received from year to year through contact with
students. He is hoping that students who have occasion to
use this book will feel free to write to him in regard to any
of the subjects discussed in order that he may in some degree
continue to keep in touch with student thought on this subject.

CONTENTS

CHAFTEK PAGE

I. Agricultural Economics Defined and Described i

II. Economic Motives and Ideals in Agriculture . . 13

III. Development of the Farmer's Economic Problem . 20

rV. Economic Goods and Their Valuation ... 31

V. The Choice of Crops 43

VI. Economics of the Livestock Industry ... 54
VII. Miscellaneous Work Correlated with Crop and

Livestock Enterprises 62

VTTT. What Should the Nation Produce? .... 68

IX. Land as a Basis of Agricultural Production . 79

X. Farm Equipment 93

XI. The Human Basis of Agricultural Production . 102
XII. The Choice and the Combination of the Grades of

the Factors of Production 116

XIII. The Proportions of the Factors of Production . 132

XIV. The Size of Farms 154

XV. Farm Labor and Wages 168

XVI. Farm Credit and the Rate of Interest . . .178

XVII. Rents and Profits 190

XVIII. The Value of Farm Land and Equipments . . 204
XIX. The Farmer's Means of Acquiring Land . . -215

XX. Tenant Farmers in the United States Prior to 1880 238
XXI. Farm Ownership and Tenancy in the United States

smcE 1880 251

XXII. Forms of Land Tenure in the United States . .270
XXIII. Forms of Land Tenure in the United States (Con-

tinued) 285

iz

X CONTENTS

CHAPTER PAGE

XXIV. The Decline of Landowning Farmers in England . 305

XXV. Relations between Landlords and Tenants in

England 323

XXVI. Marketing Farm Products 352

XXVII. The Farmer and the Middleman . . . -357

XXVIII. Price-Fixing and the Cost of Farm Products . . 366

XXIX. The Social Side of Farm Life 380

XXX. Methods of Studying Agricultural Economic Ques-
tions 405

AGRICULTURAL ECONOMICS

AGRICULTURAL ECONOMICS

CHAPTER I
AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED

The subject matter of Economics is found in the relations
arising among men in their efforts to satisfy their wants for food,
clothing, shelter, and the many conveniences and luxuries of life.

Such a relation arises when one man has wheat to sell and
another wishes to buy wheat. Here the problem is that of
agreeing upon the price at which the wheat is to be transferred.
Other economic relations arise when the use of land is to be
secured either by lease or by purchase, when equipments are
to be purchased, and when labor is to be employed. In all
these cases the relation centers upon the question of price
fixing, i.e. the agreement upon a rental for land, a price for
equipment, and a wage for labor. These relations which focus
upon price determine in a large measure the character of the
work which men will do, what they will produce, and the methods
they will use in producing them. Thus it is, that choice of a
farm, choice of hve stock and machinery, the choice of crops,
the size of farms, the grouping of farm enterprises, the intensity
of culture, and hundreds of smaller matters which arise from
day to day have to be settled in terms of the prices of things
used in production, that is, the cost, and the prices which can
be secured for the different articles which may be produced.
The farm manager, in deciding upon what to do and what not
to do to secure a maximum profit, bases his choices upon relative
costs and relative prices.

There are those who look upon economic problems not as
problems of production, but problems of distribution, that is,
the problem of sharing the food, clothing, and shelter among

2 AGRICULTURAL ECONOMICS

those who want it. Economics has to do with production as well
as with distribution. If all human wants could be satisfied
without any effort, there would be no economic problem, neither
of production nor of distribution. But while she has provided
abundant opportunities for producing the means of satisfying
human wants, Nature has decreed that man must work, —
" In the sweat of thy face shalt thou eat bread." Or to give
Virgil's version of the same law,

The sire of all, great Jove himself decreed

No work save those that task us should succeed.

Since it is by work that the wants of men are satisfied, it is of
general interest that this work shall be so directed as to yield
the largest possible returns in human satisfaction. Viewed
from this standpoint it may be said that economics is first of all
a treatment of the economy of energy required for the satis-
faction of human needs. It is desirable that the energy re-
quired for the satisfaction of human wants be used most eco-
nomically, not that men may work less strenuously, but that
they may live more abundantly.

Farming is often spoken of as the most independent of all oc-
cupation, and it is true that the farmer is less dependent upon
his fellow men than is his city brother. But while the farmer
is brought into vital contact with other men less frequently
than is the merchant or the manufacturer, yet, on the other
hand, he is brought into much more vital contact with Nature.
The manufacturer, for example, may know each evening what
tasks are to engage his attention the next day, but the farmer
simply knows what he would hke to do, and awaits the dicta-
tions of the weather. Socially considered, the farmer may be
more independent than the man of the city, but he is certainly
more directly dependent upon the conditions set by his physical
environment. Much that is characteristic of farm economics
as a field of special inquiry grows out of this dependence upon
Nature. This is shown especially in the influence of the sea-
sons and the laws of plant growth upon the variety of work which
the farmer performs.

AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED 3

But while the farmer may be more directly dependent upon
Nature than are those engaged in the industries of the city,
he is by no means independent of his fellow men. The pioneer
fanner, who looked primarily to the satisfaction of the wants
of his own household, may have selected the crops which he
cultivated, without giving any thought to the needs of other
men ; but the modern farmer, who produces primarily for the
market, and procures upon the market a large share of the
necessaries, conveniences, and luxuries of life, is bound to take
into account the demands of his fellow men. The modern
farmer must consider the price for which the produce can be
sold as well as the costs of production, if he would manage his
farm successfully.

This close dependence of the farmer upon physical and social
conditions which are subject to variation from year to year
makes it unprofitable for him to manage his work by rule of
thumb. He must follow general principles rather than specific
rules. He is always being required to adjust himself to new
commercial conditions. Demands are being made upon his
judgment many times in the course of each day's work, as he
tries to adjust his farm operations to the varying conditions of
soil and climate, ever holding in mind the demands of his market
and the cost of each of the agencies of production, namely,
land, labor, and equipment. It is necessary that the farmer be
ever alert. " It is a maxim universally agreed upon in agri-
culture," says Pliny, " that nothing must be done too late ;
and again, that everything must be done at its proper season ;
while there is a third precept, which reminds us that oppor-
tunities lost can never be regained." It is, therefore, of ex-
ceedingly great importance that the farmer have in mind some
guiding principles which, Uke the compass, will enable him to
direct his actions in accordance with a definite purpose.

There remains until this day that class who fail to recognize
the presence of natural laws, and who attribute the unusual
success of the men of extraordinary abihty to dishonesty or to
foul play of some sort, while to " bad luck " they ascribe the
results of their own lack of foresight, lack of judgment, or lack

4 AGRICULTURAL ECONOMICS

of industry. These men who talk of " luck " and who are not
willing to attribute to brain and brawn the success of their
neighbors, may well draw a lesson from the following story,
related by Pliny, the ancient writer already quoted :

" C. Furius Chresimus, a freedman, having found himself
able, from a very small piece of land, to raise far more abun-
dant harvests than his neighbors could from the largest farms,
became the object of very considerable jealousy among them,
and was accordingly accused of enticing away the crops of
others by the practice of sorcery. Upon this, a day was named
for his trial. Apprehensive of being condemned, when the
question came to be put to the vote among the tribes, he had
all his implements of husbandry brought into the Forum to-
gether with his farm servants, robust, well-conditioned, and
well-clad people. The iron tools were of first-rate quality,
the mattocks were stout and strong, the plowshares ponderous
and substantial, and the oxen sleek and in prime condition.
When all this had been done, ' Here, Roman citizens,' said he,
* are my implements of magic ; but it is impossible for me to
exhibit to your view, or to bring into this Forum, those mid-
night toils of mine, those early watchings, those sweats, and
those fatigues.' Upon this, by the unanimous voice of the
people, he was immediately acquitted."

It is highly desirable to emphasize the importance of strenuous
mental and physical effort in winning success in farming. The
element of uncertainty should not be underrated, for this is
one of the characteristics of farming ; but it should be remem-
bered that as a rule the chance element is more or less equal
in a given community, and at a given time, for all those who are
competing for high rank as farmers. The big differences are
due to differences in the farmers themselves, in their alertness
and in the quality of their muscles and their minds. The more
rational farmers are usually willing to admit that the unusual
degree of success attained by one of their number is the result
of hard work, clear thinking, and skillful management. These
more intelligent farmers are coming to recognize that there are
fundamental economic principles which, when carefully followed,

AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED 5

lead the way to success in agricultural production. To under-
stand these principles is the reason for studying agricultural
economics.

Of the recent writings on agricultural economics in Europe,
that of Jouzier, a French writer, may be taken to illustrate the
content of the phrase. "Philologists," says Jouzier, "tell us
that the word economics is formed of two Greek words, which,
united, mean laws, or rules of the household, that is to say,
developing the idea which the ancients attached to the words,
the manner of regulating the relations of the different elements
composing the resources of the household, whether it be their
relations to each other or to the members of the household,
in order to insure the greatest prosperity of the family. i

"The addition of the qualifying adjective, agricultural, does
not change the meaning of the word ' economics ' at all ; it
simply limits the domain to which it is to be applied. In
place of saying 'the household' we must say the 'agricultural
household.' But, as the agricultural household is the farm
we shall say that Agricultural Economics is thai branch of
agricultural science which treats of the manner of regulating the
relations of the different elements composing the resources of
the farmer, whether it be their relations to each other or to human
beings in order to secure the greatest degree of prosperity to the
enterprise.

"These relations consist in (i) relations of contact (supple-
mentary, complementary, or competitive) between the different
branches of the enterprise, such as, for example, the simul-
taneous raising of cereals and animals on the same farm ;
(2) relations of activity between the different means employed in
the process of production, as in the simultaneous employment of
machinery and human labor ; (3) in relations of value, between
the means employed in production and the product itself;
(4) in commercial relations with the people to whom farmers
sell their products or from whom they buy goods.

"The domain of Agricultural Economics, then, covers the
examination of each element of agricultural production, whether
in connection with any one of the above named relationships

6 AGRICULTURAL ECONOMICS

in particular, or with several of them together, for the purpose
of obtaining the greatest net profit.

" We may consider Agricultural Economics as a science or
as an art, from a theoretical point of view or from a practical
point of view. If we consider it as a science or theory, it is
the knowledge of the laws which govern the above named rela-
tions ; if as an art or practical matter, it is the application of
this knowledge in a Umited, particular environment for the
realization of results from these relationships."

It will be clear from this statement that Jouzier looks upon
farm economics as (i) the science which treats of the principles
which underHe the coordination of all the factors involved in
farming (land, labor, equipments, and the various lines of pro-
duction) in such a manner as will enable the farmer to secure
maximum net profits, and (2) the art of applying these princi-
ples on a given farm,

Jouzier's definition may be accepted as describing that part
of the field of agricultural economics which relates to the
organization and the operation of the farm, but it fails to in-
clude all of the subject matter of agricultural economics as
conceived in the United States to-day, and it fails to include
the social point of view which needs to be considered as weOs
the individual point of view when recommending changes in
our laws and institutions which affect the agricultural interests
of the country.

Agricultural economics deals with the principles which under-
lie the farmer's problem of what to produce and how to produce
it, what to sell and how to sell it in order to secure the largest
net profit for himself consistent with the best interest of society
as a whole. More specifically agricultural economics treats
of the selection of land, labor, and equipments for a farm, the
choice of crops to he grown, the selection of live stock enterprises
to he carried on, and the whole question of the proportions in which
all these agencies should be combined. These questions are
treated primarily from the point of view of costs and prices.
The economic basis for answering these questions is found in
the price of land, the wages of labor, the cost of tools, machinery,

AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED 7

and live stock, and the prices for which the various products
can be sold.

Agricultural economics deals not only with economy in pro-
duction but also with the problems of justice in the distribution
of wealth among the various classes of society with especial
reference to the effect of the wages system, the land system,
the credit system, the methods of marketing, the comparative
standards of living of country and city workers, and the rela-
tive opportunities for accumulating wealth by the different
classes, upon the farmer's share in the national dividend and
upon the relative well-being of the agricultural population.
This subject requires the attention of the agrarian statesman as
well as that of the farmer. The farmer needs to understand
the economic forces which underlie his success in order to help
himself, and the statesman needs to understand these forces in
order that he may pass helpful legislation with respect to land,
labor, credit, taxation, marketing, etc., and in order that the
necessary regulation of the farmer's activity may be carried out
with a minimum of reduction in productivity.

While the economic prin|i|ies which govern the management
of^mns can be formlftatea^n should be borne in mind that no
specific rules can be laid down, which are of general applica-
tion. Farms cannot be operated by rule of thumb. What is
right practice at one time is wrong at another time, and what is
right practice in one place is wrong in another. The best
scientific training that could be given to farmers would com-
prise a thorough knozvledge of the physical and biological principles
which underlie agriculture, the laws of economics which relate to
agriculture, and a thorough system of accounting for the purpose
of testing results on the individual farm. Any system which
purports to furnish a complete scheme of farm administration
applicable to all conditions, is manifestly either Utopian or
fraudulent. Such rules must be worked out upon and for the
individual farm, or at most for well-defined communities where
the conditions are similar.

Economics is scientifically coordinate with the physical and
biological sciences in the study of agricultural problems. The

8 AGRICULTURAL ECONOMICS

conditions and forces in the farmer's environment which in-
fluence his activities as a farm operator constitute the subject
matter of agricultural investigation and education. In the early-
history of agricultural education, the economic aspects of the
problem of the farmer received a large proportion of the space in
the books on agriculture. This is true of the Roman books on Agri-
culture and it is true of the English works pubKshed prior to 1840.
With the development of Agricultural Chemistry, Agricul-
tural Physics, Agricultural Bacteriology, Plant Pathology, etc.,
these aspects of the farm problem were brought to the fore-
ground, and the physical and biological aspects became dominant
in the publications on agriculture. The chemist, for example,
has used the most approved scientific methods in his investiga-
tions. Naturally he has discredited much that was counted
good doctrine on the subject of agriculture. But while they
have discredited much that was once held as true, the scientists
trained in the physical and biological sciences have not been
able to replace the old with a complete system of knowledge for
the farmer. Many of the bulletins published by experiment
stations have been wrought out wi^_great care by the specialist
learned in some one science and rP^^ pieced together with the
most unlearned notions regarding other aspects of the problem,
and especially the economic aspects. For example, not long
ago a chemist made a most careful analysis of some sugar
beets grown in a given locality. He found the sugar content
normal, and proceeded to draw the conclusion that sugar beets
could be grown profitably in that part of the state, without
giving any consideration to the quantities produced per acre,
the cost of producing the beets, the cost of marketing the crop,
the difficulty of securing labor, the relative profitableness of
beets and other crops which would require labor at the same
time of year, to say nothing of the tariff in its relation to the
sugar industry. The farmers wanted an answer to the question
" Will it pay us to grow sugar beets ? " The chemist's work was
a part, but only a part, of the scientific work required to answer
the question, but to meet the demand for an answer, the wrong
answer was given.

AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED 9

Bulletins of this character have brought home, to the men
in charge of experiment stations, the truth that every problem
is many-sided and that no experiment station results are ready
for the farmer until the many sides have been studied by the
many specialists with the requisite, preparation, and the results
welded together into a harmonious statement of the whole truth
about the question so far as it can be obtained.

The lack of this rounding out process means the issuing of
half truths, and it is the issuing of half truths that has done much
to discredit the experiment stations and to make farmers look
upon scientific farming as proper fun for men of fortune, but poor
business for farmers.

It is in the circle with the other scientists specializing in
agriculture, devoting himself to the economic forces which in-
fluence the farmer, that the economist is finding a place. While
economics deals with but one of the main groups of forces operat-
ing in the farmer's environment, yet it practically becomes the
actively guiding science underlying farm management for the
reason that while the functioning of physical and biological
forces change but little from generation to generation, the
resultants of economic forces are ever shifting, and it is neces-
sary for the farmer constantly to watch the shifting of economic
conditions ; that is, the shifting of costs and prices, with a view
to reorganizing his operations from time to time to fit the new
conditions.

It is perhaps for this reason that some writers have used the
term farm management to describe this field of research and
education, which we here call "agricultural economics." This
usage has the advantage of carrying some meaning to the mind
untrained in economic terminology, but has the disadvantage
of including much that is taught in other branches of agricul-
tural education, and failing to convey any new and significant
meaning. Literally " farm management " is the art of manag-
ing a farm. To manage a farm intelligently the operator
should have a clear understanding of all the forces which in
any way affect the results of his actions. Some of these forces
are physical and are dealt with by the chemist, the physicist,

lO AGRICULTURAL ECONOMICS

the geologist, the specialist on soils, or the climatologist ; other
forces are biological and are dealt with by the plant and animal
physiologist, the entomologist, the pathologist, the geneticist, or
the bacteriologist. A third class of forces which have much to
do in determining what the farmer should do are social, that is,
they are inherent in the relations arising among men because
of the pursuit of farming as a means of making a living. These
are called economic forces. Each of these sets of forces should
be handled by specialists in modern institutions of education
and research. If, therefore, the term " farm management " is
preferred, it would be well to designate the particular phase of
the subject. For example, one may properly speak of the
chemistry of farm management, the physics of farm manage-
ment, the biology of farm management, and the economics of
farm management, in which it will be noted that the term
" agriculture " as commonly used is simply replaced with the
somewhat narrower expression " farm management." The so-
lution of this problem of terminology may be to adopt the
term *' farm economics " as being both simple and scientifically
correct.

The Report of the Committee on Courses of Study of the
American Association of Agricultural Colleges and Experiment
Stations in 191 1 throws further light upon this subject. " The
subject taught or investigated under the head of farm manage-
ment, as related to the organization and management of indi-
vidual estates devoted to agriculture in the judgment of this
committee necessarily involves the application of the prin-
ciples of economics. These principles constitute the scientific
basis of farm management and give this subject its only just
claim for consideration as having a pedagogical value entitling
it to a place in courses of study or a scientific standing as related
to problems of investigation.

" It is true that the farm manager should take into account
what is taught under agronomy, animal husbandry, agrotechny,
and rural engineering, but he is chiefly and essentially concerned
with the application of economic principles to the conduct of
his business; outside of economics there is nothing which

AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED II

can give his business a sound scientific basis. The mere col-
lection of the details of methods of conducting different farms
will not sufi&ce. There must be the reference of these matters
to some underlying principles. When this is done it is clear that
farm management comes within the domain of economics be-
cause the purpose of farming is to secure a profit from the use
of the land and its equipment. If profit is lost sight of, the
farm manager, though trained in all branches of farm practice,
is doomed to failure."

For practical purposes farm economics may be divided into
the economics of production, the economics of marketing, and
the problem of maintaining and improving the economic and
social position of the farmer.

The economics of production centers upon the choice of
crops and live stock enterprises, the choice and organization of
the instruments of production, and the principles which under-
lie economy in the operation of the farm with a view to optimum
results. The economics of marketing treats of the actual
movement of produce from producers to consumers, the pro-
cesses involved, the middleman services rendered, the fairness
of the charge made for the middleman service, and methods of
estabhshing economy and justice in these distributive processes
through education, cooperation, and government activity or
regulation. The problem of maintaining and improving the
economic condition of the farmer centers upon those dynamic
forces which are gradually bringing about changes in the farmers'
economic well-being as shown in the ownership of property,
the standard of living, etc.

All three of these phases of farm economics should be viewed
from the standpoint of the individual farmer who desires maxi-
mum returns for what he puts into farming operations and also
from the standpoint of the statesman who desires maximum
well-being for the nation as a whole. The individual interest
may conform in the main to the common interest, but where
this is not true government activity may be essential in order
to estabKsh harmony of interests. The individual point of view
should be studied by the farmer that he may know his own

12 AGRICULTURAL ECONOMICS

interest, and by the statesman in order that he understand the
forces he is proposing to control. The national point of view
should be studied by the statesman in order that he may know
the extent to which individual interest conflicts with the general
interest and in order to know the best means of harmonizing
these interests so far as possible. The farmer, as a good citizen,
should be interested in the national point of view as well as in
the individual point of view.

CHAPTER n
ECONOMIC MOTIVES AND IDEALS IN AGRICULTURE

The primary motive which impels most men who engage in
farming is the desire for food, clothing, shelter, and the many-
forms of recreation. The primary ideal, then, is to secure the
maximum results in money or products for direct use per unit
of effort put forth.

When one studies man's motives and ideals, one finds a very
complex mixture of motives and a great variety of ideals.
Some of these motives are economic, some are social, some are
rational, some are irrational, some are emotional, some are
religious, and others are legal in character. In some instances
one class of motives dominates ; in other instances an almost
entirely different set of motives will be found to impel the
farmer to action.

I. The desire for the means with which to satisfy one's wants.
In the minds of many farmers the desire for money stands out
as the dominant reason for working. In some instances the
use to which the money is to be put is more or less secondary
in the mind of the worker. The extreme case is the miser
who wants money primarily to hoard, or with which to buy
land for the pleasure of its possession. But the more normal
form of this economic motive is the desire for money with which
to buy food, clothing, shelter, and various forms of entertain-
ment. But even in the single man working for wages, this is
not the sole factor in determining where he will work or how
well he will work. There are many direct satisfactions which
often seem equally important. The way in which the employer
or his wife speaks to the hired man may seem at times more
important to him than the money which he receives. Personal
likes and dislikes, therefore, become very important secondary

13

14 AGRICULTURAI. ECONOMICS

factors in impelling men to action. But the sum total of en-
joyment to be secured by the satisfaction of one's own individual
wants is relatively small compared with the satisfactions derived
from the larger relations of life.

2. The desire to satisfy the wants of others. A motive of out-
standing importance with practically all the mature men en-
gaged in agriculture is the desire for a home and a family. As
the young man grows older, he thinks less and less of his own
immediate satisfactions and more and more of the satisfactions
of others. Pope described this change in his " Essay on Man " :

Self-love but serves the virtuous mind to wake,
As the small pebble stirs the peaceful lake ;
The center moved, a circle straight succeeds ;
Another still, and still another spreads ;
Friend, parent, neighbor, first it wiU embrace,
His country next, and next aU human race.
Wide and more wide, th' o'erflowing of the mind
Takes ev'ry creature in, of ev'ry kind.

This motive for home and family may be of the simplest in-
stinctive form, or ii may take the form of great family pride,
desire for a large and dignified family estate, for education for
the whole family, for social standing in the higher classes of
society, etc. In its higher forms this motive is sufficiently
strong to impel action throughout the whole lifetime of a man
without completely attaining the ideal.

3. Pride in one^s work. Many a young farmer takes great
pride in the straightness of his furrows, in the straightness of
his corn rows, in the cleanness of his corn fields, in the high
production per acre of all of his crops, in the fine appearance
of his work horses, in the high productivity of his milch cows,
and in the general upkeep and tidy appearance of his farm.
This is an exceedingly wholesome motive and not only yields
a great amount of personal satisfaction, but results also in in-
creasing agricultural production and maintaining the appear-
ance of the countryside.

4. The accumulation of landed property. This motive often
leads men to strenuous activity, when other motives are rela-

ECONOMIC MOTIVES AND IDEALS IN AGRICULTURE 15

tively ineffective. The writer once knew a man who had
followed this motive to the extreme of acquiring land to the
extent of about 2000 acres, but his farm presented a very
shabby appearance, and none of his land was handled accord-
ing to the rules of good husbandry. When asked by what
method he was able to accumulate so much wealth he said,
" It is not what you make but what you save that counts."
The personal appearance of the farmer as well as that of his
farm showed the stultifying effect of putting the accumulation
of wealth ahead of living a satisfactory life.

5. Joy in work. Many a farmer enjoys driving a team,
watching the clean soil turned over by the plow, watching the
crops grow, and caring for live stock. So satisfying is this life
to many a man that he will continue his activities as a farmer
year after year, even though he knows that men in other occupa-
tions are winning very much more money than he, for he is
wise enough to recognize that he is paid in direct satisfactions
as well as in money, and that much of the richness of his Ufe is
due to things which money cannot buy.

6. Habit. With many an unthinking farmer, habit is the
substitute for conscious motives. Because he was trained to
do farm work, he continues to do the work in the same way and
in about the same amount year after year, and this often con-
tinues long after he has acquired a competence. Habit may or
may not be a good substitute for conscious motives. Where
by habit one follows the higher types of farming the results
may be as good as if conscious motives were in operation, but
with the progress of agriculture, farming by habit will ever be
lagging behind, and for this reason it will usually be true that
the man with conscious motives will be far ahead of the man
who works as a result of habit.

7. The desire for ease and time for enjoyment. In that com-
plex set of motives which dominate the life of man are found
those which retard his economic activities as well as those
which promote productive work. This motive is illustrated
in the laborers of certain races who quit work for the remainder
of the week so soon as they have earned enough to support them

l6 AGRICULTURAL ECONOMICS

one week. It has been said that in recent years the laborers
in Porto Rico and many negroes in the southern part of the
United States, as a result of higher wages, knock off as early as
Thursday noon when previously with a lower wage rate they
worked until Saturday noon. Thus, it would seem that the
economic motive is strictly limited, and that an increase in
wages instead of increasing the labor supply may sometimes
reduce the labor supply. Another illustration of this same char-
acter is found in the farmer who retires in the prime of life
because he has accumulated a competence. Thus, as the man
of lower civilization works part of a week in order that he may
earn enough to live a week, so the retiring farmer of this type
works only part of a Hfetime in order that he may have enough
to live upon for a lifetime. We have here essentially the same
motive, the difference being that the latter has a longer-time
point of view.

8. Patriotism and community spirit as motives. In times of
great national stress and great need of agricultural products
many a farmer will work longer hours and more strenuously than
he otherwise would because he feels it his duty to farm more
and farm better in order that he may in this way contribute to
the national welfare. It is also true that many a man takes
great pride in the standing of the agriculture of his native state
and is willing to do many things to promote the interests of
agriculture not only for his own benefit, but for the benefit
of all the farmers of the state. Then, again, the community is
sometimes the geographic limit of a spirit of mutual helpful-
ness. A community spirit may become established which
makes every one desire that his community shall be known
for its fine-appearing farms and the quality of its products.
More might be done in the way of stimulating community
spirit. Public opinion developed by community leaders might
be a means of getting more farmers to destroy the noxious weeds
which are spreading from farm to farm and which one man can-
not eradicate from his farm unless his neighbors attempt to do
likewise. It is hard to say to what extent public opinion forces
men to be patriotic and public-spirited in their actions, and to

ECONOMIC MOTIVES AND IDEALS IN AGRICULTURE l^

what extent this action arises from the independent character
of the man ; but in either case it is effective.

9. Legal compulsion. The activity of many farmers is in-
fluenced by legal compulsion. For instance, the law requires
that milk sold in cities shall contain a minimum percentage of
fat. It prescribes the maximum number of bacteria and the
maximum amount of dirt which can be sold with the milk.
It also prescribes the kinds of weeds which must be destroyed
before seeding and in many ways regulates the live stock in-
dustry. To the extent that the farmer possesses right motives,
legal compulsion is unnecessary, but there are usually some in
every community who would not live up to the standards laid
down by law if it were not for the necessity of doing so.

10. Religion and the idea of duty. In the minds of many
farmers the religious motive to action is a very important one.
There are farmers who look upon themselves as stewards of the
property they possess and feel that it is their duty to handle
their property to the advancement of religious ideals. There are
very many who are much influenced in their deaUngs with other
men by the ideas of right and wrong which have been established
by rehgious teaching. ReHgious ideas with respect to the keep-
ing of the first day of the week as a day of rest and religious
education, as well as the keeping of various religious holidays,
may to some extent limit the amount of time devoted to agricul-
tural production and increase the amount of time devoted to
self-improvement and to the direct satisfactions of life. It is
probable that if farmers as a class should cease to observe
Sunday as a day of rest and religious activity and devote seven
days in the week to farm work, they would get no more pay for
the seven days than they are getting for the six. It seems to
be true that city workmen are getting as much pay for a shorter
day as they formerly did for a longer day.

With this complex set of motives in operation, it is certain
that maximum net return in money and in products for direct
consumption, primary though it be, is too limited an ideal for
the farmer.

In the mind of the high-class young farmer, a life for him-
c

l8 AGRICULTURAL ECONOMICS

self and his family, in accordance with a high standard of com-
fort, and right relations in the community, will give purpose
and force to the primary economic motive and hold it in its
right position as a means to an end, but not as an end in itself.
With the passing years, and the accompanying accumulation
of wealth, the primary motives weaken, and the higher motives
come more and more to dominate. Without the desire to render
service to others, there is danger that the latter part of a man's
life may be wasted ; but with this motive ever strengthening,
man may continue action.

The hired man may well have the motive of economic gain to
stimulate him to earn and accumulate wealth and to strive to
improve his ability in order that he may chmb to the position of
a tenant farmer, where he can safely assume the responsibility
of a family. For the tenant farmer, to achieve a comfortable
living and accumulate funds with which to buy a farm, and
to be well thought of in his community, is a praiseworthy
ideal. Later the education of the family and the improvement
of the farm should be supplemented with some community
service. The critical moment comes when the farm is improved
and paid for. Unless the higher ideal of service to others
comes into the foreground, there is danger of inactivity just at
the time when the farmer has the capital to farm in the proper
manner, and just at the time when he is most worth while as
a community leader, both in economic, social, and educational
work.

Stimulating the higher motives. Much can be done to
stimulate in men the desire to be of service to their fellow men
by farming well and living in right relations with their com-
munity. The " Honorary Recognition " given to farmers by
the University of Wisconsin for unusual service in some branch
of agricultural or country life work is intended to stimulate
the higher motives in others. The Pennsylvania Railroad
Company publishes a leaflet entitled " Information for Em-
ployees and the Public " which stimulates the higher motives
of the men in its employ. The pictures and Ufe sketches of
the men who have been trustworthy and pubhc-spirited in

ECONOMIC MOTIVES AND IDEALS IN AGRICULTURE 19

their work are printed by this company and put into the hands
of all the employees. The local leaders in rural communities,
and extension workers, agricultural papers, and every other
educational agency touching rural life should give due em-
phasis to the broader and higher motives on the theory that
" What is honored is cultivated."

This sketch of the complex motives which impel the farmers
to action prepares the way for an understanding between
the reader and the author on one important question which
must be agreed upon if the reader is to benefit from the follow-
ing discussions. The purpose of the author is not to explain
how men will act under given conditions. The motives of men
are too complex and too varied for this. What is attempted is
to show what it is the economic interest of the farmer to do
under given conditions. To the extent that this can be done,
the principles of farm economics will prove a guide to the
farmer in organizing and operating his farm, and to the states-
man who seeks to improve agricultural conditions.

CHAPTER III
DEVELOPMENT OF THE FARMER'S ECONOMIC PROBLEM

There was a time when each farm family or each small
community tried to produce for itself all the food, clothing,
and shelter necessary to its well-being, — each family carried
on both agriculture and manufactures. This was the ideal in
western Europe in the middle ages and it has not been long
since it was a necessity with the pioneer farmer in America.

The beginners of American agriculture were EngHshmen, and
the course which they first took in the New World was greatly
influenced by the stage of industrial progress with which they
were famihar at home. In the seventeenth century, the greater
part of the land in England was divided into small hold-
ings cultivated by tenants or by landowning farmers who
looked primarily to the production of such crops as were needed
in their own households. In some parts of the country, how-
ever, the organization of agriculture had taken on a very
different form. Large areas of land in the southeastern part
of England had been made into sheep farms on which wool was
produced primarily for the market.

Thus in the seventeenth century, England had two types of
farmers. The peasant farmer was a hard-working, painstaking
tiller of the soil who was able to live " unto himself." The wool
and flax which were grown on his little farm were manufactured
by the farmer and his family into the various articles which were
desired for home consumption. The peasant's house was usu-
ally of simple construction, such as the farmer could make for
himself out of such materials as could be found in the immediate
neighborhood. Cottages made of mud and straw were very
common in the central and northern counties. This farmer

DEVELOPMENT OF FARMER'S ECONOMIC PROBLEM 21

was just the kind to succeed in a new country where commerce
could not be counted upon to supply such stores of goods as
the wants of men demand.

The second class of English farmers had been in the habit of
producing primarily for the market, and depending upon the
market for the supplies of clothing, luxuries, etc., which it was
their desire to consume. They had passed on to that stage in the
evolution of industrial society where the commercial side of
their agriculture dominated, and without a market they could
not well survive. Having before our minds these two classes
of EngHsh farmers, let us next take a glance at the country
which they were to occupy.

The new country provided new crops, such as maize, potatoes,
and tobacco, the culture of which could be learned from the
Indians. The climate of the eastern coast of America is very
different from that of England, and much colder in winter than
the settlers may have expected to find in a latitude so much south
of their mother country. The Atlantic coast presents two very
different areas : tidewater Virginia, with her mild climate,
rich soil, and slow-flowing rivers which were well suited for
becoming the arteries of commerce ; and New England, with
her more severe climate, her poorer soil and rough surface
traversed by swift-flowing streams which did not lend them-
selves readily to the purposes of transportation.

Both of these classes of English farmers came to America.
The first class, the self-sufficing farmers, got along well in New
England. They learned to grow maize and potatoes. They
found plenty of fish in the streams. Their old habits of build-
ing houses for themselves, manufacturing their own clothing,
and producing and preparing for winter's use abundant sup-
plies of food, made them the natural inhabitants of the isolated
New England of that time.

But the commercial farmers were not so successful in the
North as were their less pretentious fellow countrymen. They
sought diligently for some agricultural product which could be
transported to London with profit; for it was from London
that they could draw the comforts and luxuries which they had

22 AGRICULTURAL ECONOMICS

learned to consume, but which they were unable, themselves,
to produce. As it was unprofitable in those early days to ship
grain to London except in years when the price was abnormally
high, and as no staple was found which would bear shipment
to Europe, commercial agriculture was unable to play an im-
portant role in New England.

In the South, the commercial farmer met with better success.
There, as in New England, a thorough search was made for a
staple which would form the basis of a profitable system of
commercial agriculture. The production of silk was attempted,
but with little or no success. Wine was looked to as a possible
solution of the problem, but this, too, led only to disappoint-
ment. Tobacco was tried with success in the southern colonies,
and the South was launched upon a career of her own. To-
bacco had become fashionable in England, and commanded a
high price. This was the opportunity of the commercial
farmers. They could produce tobacco and send it by the cargo
directly from the river wharves on their own plantations to
the markets of London. This enabled them to order what-
ever they pleased from the merchants of Europe.

The labor problem arose. Free white men could do better
working for themselves in a country where rich soil was to be
had for the taking. Contract labor was resorted to, but this
did not satisfy the demand. The African negro was introduced
to supply the tobacco plantations with the desired number of
laborers. And thus, it was tobacco and slaves that made com-
mercial agriculture possible and profitable to the farmers of
the South and made possible the successful operation of the
large plantations of Virginia, which were comparable in size
and dignity to some of the estates of the country gentlemen of
England. The small farmers were, sooner or later, crowded
out of the fertile lands conveniently accessible to water trans-
portation in tidewater Virginia. Plantation agriculture based
on tobacco, rice, and cotton dominated the South, and it is
the conditions w^hich have grown out of slavery and the planta-
tion system which provide the leading problems of Southern
agriculture to-day.

DEVELOPMENT OF FARMER'S ECONOMIC PROBLEM 23

In the North the self-sufficing economy remained important
for a long time. Small farmers from New England, New York,
and Pennsylvania gradually moved westward, and it was the
same conditions which made them successful in the early settle-
ment of the North that fitted them for the life of the pioneer.
Since the days of railways, new countries can be settled success-
fully by commercial farmers, but it was only yesterday that
the self-sufficing pioneer ceased to be an important factor in the
development of the resources of the United States.

The self-sufficing pioneer farmer was free from the power of
trusts and corporations, but his life was full of hardships such
as few farmers would now wilhngly endure. The following
quotation, descriptive of the life of a pioneer family during
their first year in their new home in western Pennsylvania, in
1773, sets forth the hardships of these pioneers in a ver>'- pa-
thetic manner. " For six weeks we had to live without bread.
The lean venison and the breast of the wild turkey we were
taught to call bread. The flesh of the bear was denominated
meat. This artifice did not succeed very well. After Hving
in this way for some time we became sickly, the stomach seemed
to be always empty, and tormented with a sense of hunger.
I remember how narrowly the children watched the growth of
the potato tops, pumpkin and squash vines, hoping from day
to day to get something to answer in the place of bread. How
dehcious was the taste of the young potatoes when we got them !
What a jubilee when we were permitted to pull the young corn
for roasting ears. Still more so when it had acquired sufficient
hardness to be made into johnnycakes by the aid of a tin
grater." ^

The agriculture of the North has gradually been transformed
until now the commercial element dominates. Manufacturing
was for a long time a household industry carried on by nearly
every farm family, but in the course of time more and more
of this work was turned over to those who made a specialty
of manufactures. The swift streams of New England were
harnessed and made to turn the wheels of industry. This

1 Rev. Jos. Doddridge, Haxt's "American History," Vol. II, p. 387.

24 AGRICULTURAL ECONOMICS

movement followed but slowly the path of the pioneer farmer,
yet in the course of time the older parts of the North became
noted for their manufactures. With the development of
manufactures, a market has grown up for the ordinary forms of
farm produce, such as wheat, oats, pork, beef, and dairy prod-
ucts. As markets have developed and the means of transpor-
tation have been improved, the old self-sufficient farming has
been changed into a commercial economy, until the remnants
only, of the old system, are now to be found. This change has
come about because men have found that a given amount of
economic activity will produce the means of satisfying a greater
number of wants when each man devotes himself more or less
exclusively to some one line of production. This specializa-
tion in production brings larger returns because (i) some parts
of the world are especially well suited for the production of cer-
tain products, (2) some men are especially well fitted for per-
forming one kind of work while others can best do something
else, and (3) since the invention of power machines in manu-
factures large scale specialized production is much cheaper
than the old handicraft system.

As a result of the development of commerce in the products
of agriculture, the modern farmer has found it profitable to
look primarily to the production of a few staples which can be
put upon the market in exchange for the great variety of things
which he desires to use. Incidentally many modern farmers
produce certain articles, such as fruits and vegetables, primarily
for the use of their own households, and here they are free to
follow their own instincts, as did the self-sufficing farmers of
olden times, and produce those things which they like best to
consume ; but in the production of the staples of commerce
they must, if they would best succeed, produce those things
which will enable them to obtain upon the market the largest
possible means of supplying their wants, in return for the effort
which they expend upon their farms.

From the point of view of the farmer, then, the first problem
before us in the economics of agriculture pertains to the selec-
tion of land and the management of a farm in such a manner as

DEVELOPMENT OF FARMER'S ECONOMIC PROBLEAI 25

will enable the farmer, one year with another, to win the largest
net profits. For example, if a farmer is operating land in a given
community he should endeavor to determine which grade of
land to cultivate, which kinds of crops to grow, how intensely
the land should be cultivated in the case of each crop, and how
large a farm he should attempt to operate in order that, after
he has counted out the rent of the land (or the interest on the
value of the land, the taxes, and the cost of repairs, etc., if he
owns the land), the expense (in the forms of interest and wear
and tear) to which he has been put for the use of equipments,
that is for the use of capital goods, and the cost of hired labor,
the total net profit which is left to him and his family in return for
their own labor, skill, and enterprise shall be as large as possible.

From the standpoint of economy in production, commercial
agriculture is, without question, far superior to the old self-
sufficing system, for it undoubtedly enables the farmers to win
a large net profit ; but from the standpoint of justice in distri-
bution, the commercial system has been challenged, and there
is unquestionably a chance for improvement in this regard.
It is believed by many that when a given farmer puts forth a
certain amount of labor and capital in the production of goods
which he sells upon the market for one hundred dollars and then
invests in the various articles which he wishes to consume,
it will be found that the commodities which he is taking home
in return for his products were produced by much less labor
and capital than the amount which he expended upon the com-
modities which he took to the market. Certainly where such a
condition exists it is an injustice to the farmer, even though the
articles which he received in this way would satisfy many
more wants than he could hope to satisfy if he tried to produce
for himself every article which he consumes.

It has been alleged that there are men who do no work, but
simply sit at certain points where exchanges are made and
demand that their baskets be filled. To avoid this alleged
injustice in the distribution of wealth, it has been proposed
that " Farming Corporations " be organized, and that these
corporations make it their business to produce for themselves

26 AGRICULTURAL ECONOMICS

everything they want to use. It is proposed that no attention
shall be paid to the commercial world nor to commercial values,
but simply to the wants of the farmers and their famihes.
Every kind of agricultural product wliich may be desired for
use by the members of this corporation is to be produced by
them. Wool is to be produced and converted into clothing,
beef is to be produced for home use, and the hides of the animals
converted into shoes for home use. Thus to avoid unjust
treatment it is proposed to throw away many of the advantages
of the commercial system and revert the old self-sufficing system
in agricultural production.^

L. H. Kerrick, who lived at Bloomington, Illinois, and who
was in his Hfetime a leading and successful farmer of that state,
delivered an address at the Iowa Agricultural College, Ames,
Iowa, a few years ago, in which he said in part :

"The fanner has, in my region certainly, become too much im-
bued with the spirit of commercialism. He has gone too far, I
think, in the way of producing things to 'sell.' He raises big crops
of corn and oats to sell, or feeds many cattle and hogs for the market.
He sells these at the other fellow's prices. Then he turns about
and buys, at the other fellow's prices, supphes of various kinds that
he might easily have produced on his own farm. By this practice
he puts himself twice in the enemy's hands — once when he sells,
and again when he buys. This is not the highest and best idea of
hving by farming. The first thing a farmer should do is to surround
himself in his farm home with everything he can make or produce
that will promote the health, comfort, safety, and pleasure of him-
self and family. This is what the farm is for, first. And how few
good and needful things there be that may not be produced and
provided on a good farm and in and about a real farm home ! I do
not attempt to name the innumerable good things of his own garden
and orchard and field — aU prime, fresh, and exactly to his liking,
which the provident farmer may have if he can only get that idea of
raising things to seU out of his head or at least modified, and get
that other idea of producing things on his own farm for his own
use. If farmers everywhere would think first and work first to pro-
vide for their wants on their own farms, then they might be able to
set the price on the surplus they have to sell. Then the surplus
1 Wilber Aldrich, Farming Corporations, p. 169.

DEVELOPMENT OF FARMER'S ECONOMIC PROBLEM 2^

would not be so overwhelming in voluxne. Then there might be
competition among the buyers of his surplus. The consumer might
not then be so able as now to sit complacently waiting to be solicited
to buy this enormous surplus at his own price. The railroad people
then might take on better manners and be willing to give a more
nearly just rate, and they might be more careful to give good service.

"The farmer with the right idea of farming and of farm Hfe and
of farm opportunities is the man I have most faith in to curb trusts
and corporations generally — such as need curbing.

"The makers of machines and implements and of barbed wire and
of all that sort of thing cannot eat their stuff — they must sell to
get any good out of their product. They cannot live at aU without
selling. But the right kind of a farmer can live a long time without
selling his product — he can eat it and live. Suppose the other
fellow asks you an exorbitant price for his wares. Just let him keep
them, because he can't eat them; and to get something to eat,
he must sell. But you, my farmer friends, can keep yours a while
and be living like kings — eating your bread and meat and good
apples and fresh butter and eggs and mUk. The other fellow can
only keep his just a Uttle while, imtU you hear the prices of his wares
are cracking. The farmer is a trust breaker, if he only knows it.
I have Httle faith in legislatures and courts and magazine writers
and orators, as trust breakers. But the farmer with the right idea,
as I have been trying to illustrate, can fortify himself in his farm
home for a much longer siege than the manufacturer or the railroad
manager can put up against hun. And the beauty of it all is, the
farmer can be happy all the same, and aU the time."

That too many farmers neglect to provide their families with
the variety and abundance of fruits and vegetables which they
might and should produce primarily for home use, and that
they also generally fail to appreciate the possibility of creating
for themselves beautiful surroundings by planting flowers and
shrubs and trees, is frankly admitted. This condition of affairs
is to be regretted, and should be remedied. One of the great-
est of economists, John Stuart Mill, has said, " Solitude in the
presence of natural beauty and grandeur is the cradle of
thoughts and aspirations which are not only good for the in-
dividual, but which society could ill do without." ^

> "Principles of Political Economy," Book IV, Chapter VL

28 AGRICULTURAL ECONOMICS

We need more of the " thoughts and aspirations " such as the
" natural beauty and grandeur " of the ideal country home may
inspire, and it is certainly to be hoped that the American farmer
will avail himself of his natural opportunities and surround him-
self with everything which will add to the dignity and beauty of
his home.

But if these beautiful surroundings are to be created they must
first be desired by the farmers, and it will certainly be admitted
that the desire for food, clothing, and shelter naturally and prop-
erly come first and should be satisfied before much attention
is given to the creation of beautiful surroundings ; and, again,
to enjoy the beautiful surroundings, one must have leisure, and
in order to have time, after satisfying the more urgent wants,
to create and enjoy beautiful surroundings, it is important that
the farmer avail himself of the most economical means of satisfy-
ing these wants. We object, therefore, to the general principle
laid down by Mr. Kerrick, that farmers everywhere should
" think first and work first to provide for their wants on their
own farms," rather than look primarily to the production of
those things which will give them the greatest purchasing
power in the market. We believe the latter method to be the
one which will bring the largest means of satisfying wants for a
given amount of exertion, whereas, Mr. Kerrick's suggestion
points towards a reversion to the self-sufi&cing economy of
earlier times, and to a sacrifice of much of the benefit which has
resulted from the extension of commerce and from specializa-
tion in industry.

There are, doubtless, many injustices in the present complex
commercial system of agricultural production ; but, in spite of
this objection, the commercial system is superior to the old self-
sufficing economy which was desirable only in an earlier stage
of economic society when the dangers to commerce were so
very great and the means of transportation had been so little
developed that the farmers could gain little or nothing by pro-
ducing for the market. Modern agriculture is not entirely
commercial, yet production for the market is the dominant
feature. The commercial system has replaced the self-suffic-

DEVELOPMENT OP^ FARMER'S ECONOMIC PROBLEM 29

ing system because it brings larger returns for the efforts ex-
pended, and our aim should be, not to revert to a less econom-
ical system in order to avoid the evils which have arisen,
but to remove the evils which accompany it and thus perfect
the present commercial system.

When the farmer follows the rule of seeking the largest net
profits, he will not be bound to any one system, he will produce
for home consumption just to the extent that he can do so
more economically than to buy upon the market. That which
is good practice in this regard at one time and place may be
bad economy at the same time in another place, and in the same
place at another time.

Producing for the market has made farm management a
complex problem. The farmer can no longer look within the
limits of his own domain and find all the information needed
for the guidance of his husbandry. If the farmer would succeed
he must give heed to the demands of millions of people, most
of whom he does not and cannot hope to know. He must give
thought also to other farmers who may be producing the same
article for the market. His knowledge of what other farmers
are doing is limited to such statistical information as can be
secured by public and private bureaus of information regarding
what has recently been produced. Fortunately, the farmer
finds in market prices the record of the present results of supply
and demand and may use prices thoughtfully studied through a
long period as a guide to his future actions. The physical and
biological environment given, the prices of the products and
the prices of the agencies of production — land, labor, and
equipments — determine what to produce and how to produce
it in order to secure maximum profits.

The commercial economy, with its farm machinery, its eleva-
tors, its mills, its packing plants, its railway and steamship
lines, has made the total labor of the people much more produc-
tive. Every one is benefited. Where some are receiving
more than a fair share, a remedy must be provided through such
control of the marketing system as will give a fair share of the
proceeds to each one who helps in their production, but the

30

AGRICULTURAL ECONOMICS

farmer should, so far as possible, take advantage of the great
economy in production due to the commercial system. The
farmer should study his soil, his climate, his labor force, his
market, and his costs, and adjust his farm operations in such a
manner as will enable him to win a maximum profit in cash and
direct satisfactions.

The state should so regulate the marketing system, especially
with regard to the sharing of the consumer's dollar among those
who produce the goods, that the farmer will be in a position to
live as well and save as much from his earnings as those of
similar ability with like investments engaged in other occupa-
tions. If this is not done, there is danger that those in other
occupations will gradually accumulate wealth, buy land, and
in the course of time make the farmers subject to them as land-
lords. The objective point in agricultural economics is the well-
being of farmers as an integral part of a nation. This well-
being demands justice in distribution as well as economy in
production. Both of these goals are kept in mind as the
purposes in view in the chapters which follow.

CHAPTER IV
ECONOMIC GOODS AND THEIR VALUATION

The purpose of farming is to produce goods which are needed
directly or indirectly to satisfy the wants of man. Any material
thing or personal service which directly or indirectly satisfies
a human want is called a good. Tobacco satisfies a want,
hence it is a good, in the sense in which the word is used in
economics. It may seem like a paradox to call a bad thing a
good ; but this will be understood when one bears in mind that
it is economic qualities rather than moral qualities that are here
being considered. Goods satisfy desires. Desires may be
moral or immoral. Ruskin divides all goods into two classes,
those the use of which he approves he calls wealth, those the
use of which he disapproves, because he thinks they are detri-
mental to man, he calls " illth."

Economic goods. Some useful goods are generally found
without any efEort on the part of man in great abundance in the
form, at the place, and at the time they are needed. Such
goods are called free goods. Air, for example, is a free good.
But when a person commences to make a Hst of the things he
wants, he finds free goods rather infrequent on the list. For
most goods some effort must be put forth in order to secure a
^supply. For example, farm products, the products of the mines,
and the products of the factories all require effort in their pro-
duction, hence they are limited in quantity and are called
economic goods.

Causes of scarcity. Goods which can be increased in supply
indefinitely by the use of land, labor, and capital are scarce
because of the labor and sacrifice required in their production.
This may be called cosi of -production scarcity. This class in-
cludes most agricultural products. It will be recognized that

32 AGRICULTUR.\L ECONOMICS

while in the long run the supply of farm crops depends upon the
activities of man, it is also true that variations in seasons and
the attacks of pests influence greatly the supply produced in
any one year. The acreage of a given crop is in the control of
man, but the production per acre is in so large a measure de-
termined by the weather that the total production in any one
year is very uncertain, hence the degree of scarcity of farm
products in a given season is in a large measure the result of
natural forces beyond the control of man.

The degree of scarcity of economic goods is in many cases
influenced by men who are in aj position to limit the supply with
a view to demanding a price higher than would prevail under
competitive conditions. Scarcity created in this way is called
monopoly scarcity. Monopohes arise out of natural con-
ditions and out of laws granting patents, trademarks, copy-
rights, etc. The occasion of monopoly is not the size of the
business or the character of the organization, but the essential
unity of control. Unity of control makes it possible to limit
supply in such a manner as to command a price which will
yield maximum total profits for the monopolists. It is in this
sense that we speak of monopoly scarcity.

Economic goods may be scarce because of an absolute limi-
tation on the supply, that is, there is no way of increasing the
supply. Absolute scarcity may be permanent or temporary. A
beautiful picture painted by an artist who has passed away has
been given as an example of absolute scarcity which is per-
manent. Here there is no chance of increasing the supply of
originals at any time.

Absolute scarcity may exist temporarily in many farm prod-
ucts. This is a matter of great interest to the farmer. When the
wheat crop of the United States and Canada has been harvested,
nine months pass before the supply can be increased from this
source. If the supply is not enough for the normal demand,
prices tend to rise and the demand fall until there is a balance
between the supply and the demand. The prospect for a new
crop may be unusually good, but the new crop to be harvested
in July cannot be used in June. The supply of old wheat is

ECONOMIC GOODS AND THEIR VALUATION 33

temporarily in the class of absolutely scarce goods. Potatoes
would serve as another example of temporary absolute-scarcity
goods.

Goods must be both useful and scarce in order to be
classed as economic goods. Goods may be useful because they
possess certain physical and chemical properties ; for example,
wheat contains starch and gluten which makes it a valuable
food, and cotton fiber possesses tensile strength which makes it
useful in the manufacture of cloth. This is called elementary
utility. Goods are useful because of the elements they possess.
Wheat when transformed into bread has additional utility.
Cotton fiber has additional utility when transformed into
clothing. This kind of utility is called form utility.

When the flour and the clothing have been manufactured,
they may be a long way from the men who are to use them.
By shipping them to the places where they are most wanted
they are more useful. In this way place utility is added to them.
The wheat crop is harvested largely in one season and con-
sumed the year around. Those who store the wheat or flour
for many months in order that consumers may eat bread the
year around have added time utility to these goods.

It has been suggested that the advertiser adds utiUty to the
goods. The fact would seem to be that advertising operates
on the prospective consumer rather than upon the goods and
changes his state of mind regarding the goods. This may in-
crease the individual estimate of the importance of a given
elementary utility or a given form utility.

Some goods will stand long shipment and long storage with-
out danger of deterioration. For example, wheat, wool, and
lumber are in little danger of deteriorating in shipment and
storage. These we shall call durable goods. Other goods are
in great danger of deterioration in transit and cannot be kept
long in their original form. Strawberries and milk are examples.
They have commonly been called perishable goods. One of the
triumphs of modern inventive genius is the successful conver-
sion of perishable goods into durable goods by dehydration,
canning, and other methods of preserving.

34 AGRICULTURAL ECONOMICS

Economic goods may again be classified as permanent and as
temporary goods according to the number of times used. For
example, a piece of cotton cloth may be used many times and
through a series of years, hence it is here called a permanent
good, whereas wheat flour, in the form of bread, is used but
once and is called a temporary good.

There is a close relation between the degree of scarcity of
a good and the intensity of the desire which people will have for
it. Other things being equal the greater the scarcity of a given
good, the higher will be the intensity of the desire for it ; the
greater the abundance, the lower the intensity of the desire.
Common observation teaches us that the, more completely one's
desires for a given article are satisfied the less he will give for
an additional supply of that good for his own use. The con-
verse of this fact is that in order to induce people to consume
more products it is necessary to lower the price to correspond to
the reduced satisfaction resulting from the additional units of
goods consumed. At a higher price less will be consumed;
at a lower price more will be consumed.

It is obvious that the quantity of the various farm products
demanded will depend upon a number of conditions. Other
things being equal, (i) the higher the individual estimates of the
importance of the goods in the minds of the great mass of consumers,
the greater will be the demand. (2) The greater the incomes of
the consumers, the greater the demand for goods. (3) On the other
hand the very thing which great demand tends to create, namely,
high prices, tends to reduce the demand so that the demand
varies inversely with the price.

The exchange value of goods. It has been seen that in
order to be economic goods, that is, goods with a value placed
upon them, goods must be both useful and scarce. There is a
great difference in the usefulness and in the abundance or
scarcity of different goods ; hence there is a corresponding dif-
ference in their exchange values. Exchange value has been
defined as the quantitative ratio in which goods or services are ex-
changed. For example, if one bushel of wheat will exchange for
two bushels of oats we think of wheat as worth twice as much

ECONOMIC GOODS AND THEIR VALUATION 35

per bushel as oats. For the sake of convenience it has become
the custom to value all other articles in terms of one article
which is made by law the standard of value. In most countries
gold is the commodity decided upon as the standard of value.
The amount of gold for which a definite amount of a given
commodity will exchange is called the price of that commodity.
In other words, price is value expressed in terms of the standard
of value, or as we commonly speak of it, in terms of money. The
value of farm products may remain the same, when expressed
in terms of each other, and yet the prices of these products
may all change because of a rise or fall in the value of gold:
The value of a given weight of gold (25.8 grains 9 tenths fine)
may be looked upon as the measuring stick with which the
values of other products are measured.

The exchange value of a specific good at a given time is de-
termined by its relative abundance, that is, by the supply in
relation to the demand for this good when compared with
other goods.

Behind the fact of demand, as has been noted, is the more
fundamental fact of human wants. The desire to satisfy
wants impels men to produce supplies of utilities, i.e. things
which satisfy wants. The effort which man must put forth in
order to gain the means of satisfying his wants sets a limit
to the supply of economic goods. It usually happens that long
before all of the wants of a man are satisfied, the pain of exer-
tion becomes so great that it more than balances the possible
pleasure which might be produced by consuming the products
of further exertion. So long as there is an unsatisfied desire
for an article, that article will have some value placed upon it.
The relative intensity of the buyer's desire for an article deter-
mines how highly he will value it, and what price he will be
willing to pay for it ; but the price which must be paid deter-
mines how much of the goods he will take for his own use and
how completely the want will be satisfied. In short, the higher
the price the more intense will be the desire which will be left
unsatisfied.

On the other hand, the natural facilities for increasing the

36 AGRICULTURAL ECONOMICS

supply will determine how high the price must be before the
producer can afford to increase the supply. Marshall says,
" For long periods the supply price is that which is just needed
to call forth those new investments of capital, material and
personal, which are required to make up a certain aggregate
volume or production." ^ The higher the cost at which the
producer adds an increment to the supply, the more limited the
total supply that will be put upon the market ; but the smaller
the amount of an economic good consumed, the more intense
is the desire for it and the higher it is valued. Thus it is that
the marginal utility, or the intensity of the last want which is
satisfied, tends to adjust itself to the cost of producing that share
of the supply which is produced under the most unfavorable
circumstances. But it is also true that the price which is
offered at a given time, and which corresponds to the marginal
utiUty at that time, determines the maximum amount which
can be expended in the production of a given article with profit,
and hence determines ultimately how far down the scale of
less and less favorable circumstances its production can be
carried on. Thus it is that the forces which lie behind the
demand for an article, and the conditions under which the
article may be supplied, regulate its price.

Causes of fluctuation in values. Values may fluctuate from
year to year because of changes in the quantity produced, or
changes in the quantity demanded, that is, changes in the
supply or in the demand. Fluctuation in the annual produc-
tion may be due to the climate, to the ravages of insects, or to
the conscious changes in the plans of a considerable proportion
of the producers. The more durable the product the less the
value will fall as the result of an unusually large crop. A por-
tion of the supply can be held over until the next year. The
fact that wheat can be held over at a relatively small cost and
without losing its usefulness, while potatoes of one year's
production have little or no value after the new crop becomes
generally available, explains, in part, why a given variation in
the wheat crop influences the price less than the same propor-

1 Alfred Marshall, "Principles of Economics," third edition, p. 448.

ECONOMIC GOODS AND TPIEIR VALUATION 37

tional variations in the potato crop. The prices of farm prod-
ucts are influenced by the fact that most of the supply of a
given product becomes available during a small portion of the
year, and this supply must last until the next year's supply is
ready for use. A factory manufacturing steel rails, copper
wire, or cotton cloth may put out a continuous flow of goods,
but with most farm products the output is intermittent.
The tendency is for the price to be low when the greatest
supply becomes available, and high in the period prior to
the arrival of the new supply. This is due to the fact that a
part of the supply must be stored, which involves the expense
for storage room, interest on the money invested in the prod-
uct, and a loss due to shrinkage.

The variation in demand due to changes in prices is very dif-
ferent with different classes of goods. For some goods the de-
mand is very stable ; for others it is very elastic. Where the
demand is stable it takes a big change in prices to force people
to make any changes in the amounts consumed. On the other
hand, where the demand is elastic the quantity consumed tends
to fall off rapidly with increased prices or decreased suppUes
of money to spend. By elasticity of demand is meant its
sensitiveness to changes in the price as a result of changes in
the quality or the quantity of the product or in the purchasing
power of the commodity. A stable demand is one which is
not easily influenced by changes in these conditions. The
demand for bread and for potatoes is fairly regular throughout
the year, and a considerable change in price is required to make
any important change in the demand, hence, the demand for
these articles may be said to be inelastic, or stable. On the
other hand, the demand for eggs varies greatly during the year
in response to changes in the price and in the quahty of the
supply, hence the demand is said to be elastic. The more
readily a substitute can be found the more elastic will be the
demand, and the less will prices fluctuate as a result of changes
in the supply. Where substitutions are easily made the quality
of the product affects greatly the quantity demanded. If the
first order of cabbages made by the housewife turns out to be

38 AGRICULTURAL ECONOMICS

of poor quality she is likely to try some other vegetable the
next time. In this way the poor quality of one man's products
may reduce the price which another man may get for first-class
goods. This illustrates what is called sohdarity of interest.

The demand is steadier for established grades, that is, goods
of standard qualities, than for unstandardized articles. Many
people will buy a given article if they are sure of securing goods
of high quality who, when in doubt, refrain from making the
purchase. This places a premium upon goods of known stand-
ard of .quality over what goods of the same quality would
command if sold in an ungraded mixture along with goods of
varying quality. Standardization is one purpose of trade-
marks. The trade-mark is of high value only when it stands
for an established quality that can be counted upon. The
name of the farm might well be placed upon the label of the
milk and cream bottles, or stamped upon the eggs, the berry
boxes, the apple barrels, the grape baskets, etc. The regis-
tration of farm names for this purpose, giving the exclusive
use of a given name to a given farmer, might well be made
possible by legislation. This use of a trade-mark will enable
the purchasers to buy with a knowledge of the character of the
producer, and would result in a greater range in prices due to
variations in the quality of the goods. This would put a pre-
mium on the production of goods of high quality and be an
effective stimulus to good agriculture.

The individual farmer is often not in a position to incur the
expense of advertising a given brand of products to such an
extent as to establish a reputation beyond the limits of the local
market. Community action is often essential to the establish-
ment of brands of farm products on distant markets. Com-
munities have succeeded in establishing brands of fruit and
other perishable products. The apple growers of the Pacific
northwest, the grape growers of New York, the butter and egg
producers of Denmark, are conspicuous examples.

Costs and prices. It has been common to hear the statement,
" The price should be high enough to pay the cost of production
and a reasonable profit." This phrase when properly under-

ECONOMIC GOODS AND THEIR VALUATION 39

stood is full of significance. It is a misinterpretation, however,
to assume this phrase to mean that every producer of a given
product has a right to expect and to demand a price which will
cover his costs and give him what he considers a reasonable
profit. There are many causes of variation in costs : (i) varia-
tion in natural conditions, such as soil and climate of the dif-
ferent areas producing a given crop, (2) variations in the abun-
dance of labor in the different localities, (3) variation in the
kinds of equipments which can be made use of, (4) variations
in the distance from the market, and (5) variations in the effi-
ciency of the farmers who give direction to the work on the
different farms. As a result of the wide variations in the
efficiency of the instruments of production, it usually happens
that there is an inefficient producer here and there who is pro-
ducing at a cost greater than the price at which other farmers
find it profitable to produce enough to supply the market.
If the price were artificially pushed up to a point where the in-
efficient farmer can make a profit, this would make the enter-
prise exceedingly profitable to the efficient farmers, and would
tend to increase their production, the greater supply would
force prices down, and the second state of the inefficient farmer
would be worse than the first. Some of those who are produc-
ing at a loss might well change to some other line of production
in which their quahfications count for more. It often happens,
for example, that a low grade dairyman is a high grade tobacco
producer, that a low grade grain farmer can make money in the
grazing of cattle. Every farmer should strive to get into the
field of work in which he is best able to compete.

Low efficiency of the farmer in a given line of production
is only one of the causes which may result in costs which exceed
prices. For example, the wheat regions of the world are
numerous and widely scattered. The cost, per bushel, of pro-
ducing wheat and putting it upon the world's central wheat
market, Liverpool, vary greatly. During periods when the
supply of wheat is increasing slowly and the demand for wheat
is increasing at a slightly more rapid rate, the price of wheat
will tend to remain high enough to retain the wheat industry

40 AGRICULTURAL ECONOMICS

in the region where the costs are greatest. When, however, as
a result of a new discovery or the extension of means of trans-
portation a new and fertile wheat region enters into competition
with the old regions, it may happen that the supply of wheat
will increase more rapidly than the population, and to induce
the people to consume more wheat per capita the price must
be lowered. As a result of the fall of wheat prices some of the
old wheat regions find their costs greater than the prices they
can get, and will find it necessary to change to some other crop.
This condition was brought about in the wheat industry when
the fertile wheat regions of Kansas, Minnesota, and the Dakotas
were made accessible and poured their abundant supplies of
grain upon the markets of Europe. The farmers of England
found wheat growing a losing enterprise. Had they understood
the cause of the fall in wheat prices they would have known that
the one thing to do was to drop wheat growing and take up some
other line where foreign competition was not so keen. After
a long time this came about, the wheat lands were converted
into meadows and pastures, and the dairy industry paid well
for the efforts expended. Unfortunately many farmers held
to wheat production long after it ceased to yield a profit. In
some cases this resulted in bankruptcy which alertness to the
price situation might have avoided.

We are not without illustrations of this principle in this
country. The falling wheat price due to the rapid growth of
the wheat industry in the Northwest was an important factor
in driving Wisconsin farmers from a system of grain farming
with wheat as the money crop into the live stock industry
with dairy products as the chief sources of income.

The westward movement of the wheat industry in the North
was paralleled by the westward expansion of cotton production
in the South. From the old centers in Georgia and the Caro-
linas, the cotton industry extended into the fertile " Black
Prairie of Alabama," sprang up in the rich alluvial of the Mis-
sissippi and confluent rivers, and in the Black Prairie of Texas.
The result was a rapid increase in the quantity of cotton pro-
duced. The increased supply was produced at a lower cost

ECONOMIC GOODS AND THEIR VALUATION 41

than was possible in the old regions. The obvious result was
falling prices and an unprofitable industry in the old cotton
regions.

Another illustration, which is of particular interest to-day,
may be drawn from the Burley tobacco situation in Kentucky.
Burley tobacco was first grown in Kentucky in the northern
part of the bluegrass region. This is a rough country where the
soil soon lost much of its fertihty. The industry gradually
spread southward into the counties of Scott, Bourbon, Franklin,
Woodford, Fayette, and Jessamine. These counties contain
the blue limestone region known as the heart of the bluegrass
country. This is a region of unusual natural fertility. A
large proportion of this land had remained in bluegrass pastures
from the first settlement of the country. As the tobacco in-
dustry commenced to encroach upon this fertile region the
farmers found it exceedingly profitable to plow up the old pas-
tures and plant tobacco. Under these conditions the supply
of tobacco was increased enormously. Prices fell, but the
farmers in the new regions of production were making large
profits at prices which meant starvation to the growers of the
old Burley tobacco centers. The result was the " night rider "
movement in 1908, which was a strike in the dark, figuratively
as well as Hterally. The men fighting for higher prices came
from the regions of high cost of production. They failed to
understand that the fundamental cause of falHng prices was
the fact that an increase in the supply was being produced at
a reduced cost. The " night riders " forced practically all the
Burley tobacco growers to omit growing tobacco in 1908 with
a view to securing a high price for the 1907 tobacco crop then
in the hands of the farmers. This method of limiting the supply
was temporarily effective, and prices rose to a level far above
that necessary to stimulate an adequate supply. The next
two years brought an unusual expansion of Burley tobacco
production on the rich lands of central Kentucky followed by a
decline of this crop on the poorer tobacco lands in the northern
edges of the tobacco region. Many look upon this episode as
a victory of the farmers over the tobacco trust, and there were

43 AGRICULTURAL ECONOMICS

unquestionably some bad practices on the part of the tobacco
buyers which were improved as a result of this experience ; but
it was, fundamentally, a victory of economic forces over the
inertia of the farmers. The economic fact of lower cost of
production in a large area capable of supplying the demand
forced the tobacco growers to transfer their activities from the
areas of high cost to the areas of low cost.

We have dwelt at considerable length upon the economic
forces which determine prices because the relative prices of
products and their relative costs of production determine what
the farmer should produce if he would win maximum profits
as a result of his farming operations.

The cost of production is determined by a great number of
things all of which will be taken up as we proceed to study the
problems of farm organization with a view to securing a maxi-
mum total margin between cost and price. One thing should
be remembered, however, that the same general economic
principles underlie the elements of costs which underlie the
prices of products. What is to the farmer cost of production
is to the laborer the price paid for his service. What is cost of
feed, seed, etc., is also price. What is cost of using land is the
competitive price paid for the use of the land. Thus it is that
value is at the bottom of all our considerations in agricultural
economics, whether viewed from the standpoint of cost or
price. What we are needing as farmers is to learn how to ad-
just ourselves to price forces in such a manner as to get the
greatest satisfaction for the effort put in, consistent with na-
tional welfare, and when viewed through a series of years.

CHAPTER V
THE CHOICE OF CROPS

All will agree that in managing a farm one should produce
the crops which pay best. The difficulty is to know which
crops actually add the most to the farmer's profits. A manufac-
turer may decide upon some one line of production, and devote
his entire time to the one thing ; but most farmers find it neces-
sary to produce a number of crops.

Suppose a farmer found one crop profitable and decided
to produce nothing else, what difficulties would arise? The
risk of depending entirely on one crop, — " putting one's eggs
all in one basket," — has often been used as an argument against
the single crop system. This is a point in favor of diversifica-
tion which should not be lost sight of, but which should be given
no more than its fair weight in the argument. If the one crop
requires a very large proportion of one's time through the
farming season, it may pay to specialize. If another crop can-
not be introduced without cutting the area of the special crop,
the question should be decided on the basis of which system will
pay best in the long run. In figuring long-time average profits,
soil depreciation or appreciation should always be considered
and the element of risk should be covered.

One of the chief economic reasons for diversified farming is
to provide profitable employment more nearly throughout
the year for men and horses. Suppose a farmer should decide
to produce nothing but Indian corn. The work of preparing
the seed bed, planting and cultivating the crop, might keep
him busy for from eight to ten weeks in the spring and early
summer. The corn laid by, there would be nothing to do until
corn harvest. The corn harvested, the farmer would have

45

44 AGRICULTURAL ECONOMICS

another rest. From the point of view of the employment of
man and horse labor, other enterprises are needed. Small
grain, oats or barley, demands the farmer's energy just when he
cannot be working on the corn. The oats, barley, or spring
wheat is seeded very early in the spring, usually beginning
about a month before the soil and air are warm enough for
planting corn. The corn is then planted and cultivated several
times before hay harvest. Not only does the small grain
supplement the corn in providing employment, but it provides
the nurse crop for seeding meadows. The harvesting of a
limited amount of clover hay is supplementary to corn in its
labor demands in the north central states. The clover harvest
precedes the oat harvest and laps with the last half of corn
cultivation, but this lapping may not reduce the amount of
corn which one man may grow, because the limit on corn is
set by the area one can prepare the seed bed for, plant, and
cultivate the first and second time. After the corn reaches this
stage, one can care for it and devote from a third to a half of
his time to other work.

Corn, oats, and clover may be called supplementary crops,
because they fit together nicely from the standpoint of demand
for labor in their production. They are also supplementary
in their utiUzation on the dairy farm, silage, clover hay, and
ground oats making excellent cow feed, and the oat straw is
needed for bedding.

Crops which require attention at the same time of year are
said to be competitive or conflicting crops. Corn, cotton, tobacco,
sugar beets, and potatoes are examples of competing crops
which conflict with each other in their demands for the atten-
tion of the farmer, and it happens that all these are tilled crops,
and for this reason any one of them may be chosen so far as
the problem of maintaining tilth is concerned. Other examples
of competing crops are oats, barley, and spring wheat. These
crops compete for the farmer's time and are about equally
useful as nurse crops for starting meadows, hence the most
profitable one should be chosen and the others dropped out of
the field system.

NOV. I DEC. I JAN.

OATS

BARNEY

mn

III I

I III

TOfeACCO

liljl M I

MAR. I APR. I MAY | JUNE JULY [ AUO. | SEPT. [ OCT. [ NOV. DEC. | JAN. | FEB.

Figure i. — Distribution of man labor on lo acres of oats, 15 acres of barley,
30 acres of corn, and 4 acres of tobacco on a farm near Madison, Wisconsin,
in igio.

46 AGRICULTURAL ECONOMICS

Should one grow the crop which yields the greatest value per acre t
Not necessarily, for the crop which sells for the most may have
cost very much more, and the net proceeds might be relatively
small. Should one select the crop which yields the maximum
net profit per acre? There are circumstances where this would
be a safe rule, but as a general principle this standard fails.
Crops which require essentially the same amount of labor and
the same kind of equipment may be compared on this basis.
For example, oats and barley lend themselves to this basis
of comparison without great danger of mistakes. In case of
tobacco and Indian corn this would not, however, be a safe
basis for comparing relative profitableness for the reason that
the tobacco requires much more labor per acre than does the
corn, and one man can grow three or four times as many acres
of corn as of tobacco.

Profit per hour of man labor has been suggested as a basis
of comparison where one crop requires much more labor than
another. Where the two crops conflict at all stages and require
the same class of labor, this may serve as a fair basis of com-
parison ; but where a large amount of labor is demanded on the
one crop at a time of year when there is no demand for labor
on the other crop, a serious difficulty in comparing profits is
introduced. For example, tobacco and corn may conflict
throughout the growing and harvesting season, but the corn may
provide more labor in the winter, utilizing the silage in the
dairy, at a time when no other profitable employment could be
found. Under these circumstances corn might add more to
the farmer's profit than tobacco, even though tobacco yielded
a higher return per hour on the average than corn. For example,
assume, that after paying all expenses, excepting for labor, the
net return left as pay for labor and managerial activity was
40 cents per hour for labor on corn and its utilization in the
dairy, and 50 cents per hour for labor on tobacco ; but that the
two crops were competitive during only 60 per cent of the labor
hours put upon corn and cows. Let us suppose, however, that
during the remaining 40 per cent of the time the work at which
the tobacco man could be employed yielded only 15 cents per

THE CHOICE OF CROPS 47

hour. In this case, for each hundred hours the corn dairyman
received $40, whereas the tobacco man received $30 plus $6,
or $36 for tobacco and supplementary work.

It has been suggested that profit per acre, multiplied by the
number of acres a fnan can operate may be a better method of
comparing the relative profitableness of competing crops than
profits per hour. This method would seem to possess all the
merit of the other methods mentioned, but is not without the
objection that whereas corn, for example, may be put in the
silo and made the basis of winter employment in the dairy, no
such farm enterprise rests upon tobacco. Furthermore, to-
bacco usually conflicts not only with corn but with small grains.
Tobacco lends itself to a single crop system. For this reason
it becomes necessary to compare the profits from tobacco plus
whatever may be combined with this single crop, with corn,
oats, and hay, plus the live stock industry which is based upon
these crops. In this case the effect upon the land should be
carefully considered.

Where two crops confhct and the increase of the one requires
the decrease of the other, the various rules may be used to aid
in passing judgment, but in the final analysis all cases come to
this : Everything considered, choose from each group of competing
crops the one which will add most to the farmer^ s total net profit,
and combine as many 7ion-competing crops as will add enough
to the total profits of the farm to make it worth his time to produce
this crop rather than use the time for self-improvement or the en-
joyment of life.

When this principle of crop selection is followed, it will
not be true, necessarily, that each crop will be grown where the
facilities for its production are the greatest; for it may happen,
for example, that in the region where the facihties for the pro-
duction of sugar beets are best, tobacco or some other competing
crop will enable the farmer to win a larger net profit, in which
case the sugar beet might well be excluded from the system of
crop rotation in the very region where the natural conditions
for its production are best.

It is by knowing relative prices that the farmers, who know

48 AGRICULTURAL ECONOMICS

roughly relative costs, are able to choose wisely from a given
group of competing crops. These prices are the resultant of
the forces lying behind demand and supply. Assuming a
demand, the supply of a given commodity is influenced by the
extent of the area available for its production within the terri-
tory competing on the same markets. In the case of the great
staples the market is world-wide. Hence a knowledge of the
agricultural geography of the world is essential to a well-bal-
anced judgment on the question of probable price relations.

Let us compare the four competing crops, — cotton, Indian
corn, sugar beets, and potatoes, — with regard to the extent of
territory available. The areas available for corn and cotton
overlap, but the area available for cotton culture is more limited
than the area available for growing Indian corn. If cotton were
to be excluded wherever Indian corn can be grown, the cotton
supply would be very small, whereas corn can be produced in
enormous quantities outside of the potential cotton regions.
The result is that the relative prices of cotton and corn tend to
be such that cotton will pay better than corn on the best cotton
lands and the extent of the area planted to cotton and the extent
to which cotton will drive corn out of their common territory
will depend upon the relative demand for these two products.
History shows that corn has not found a place on the best
cotton land of the South as a commercial crop. It may pay
to grow corn for home use in the cotton belt, and not pay to
grow it to sell or for commercial hog or cattle production.
Again, a small amount of corn may be grown on a cotton farm
without Hmiting the cotton area which one family can handle.
This is because a family can grow more cotton than it can pick,
and a small amount of corn may be supplementary to cotton.
It is this commercial demand for cotton and the fact that cotton
conflicts with the commercial growing of all other crops that
has had much to do in forcing upon the South the one crop
system with all its disadvantages of probable soil depletion and
the risk of crop failure of price depression. Whenever cotton
prices have been low, some planters have given more attention
to other crops. This has limited the supply of cotton and re-

THE CHOICE OF CROPS 49

suited in higher prices, then cotton has again paid best and
continued to be king in the South.

Indian corn and sugar beets have wide areas of common
territory so far as the physical and biological conditions of
plant growth are concerned. It happens, however, that sugar
beets thrive in northwestern Europe and in the western part
of the United States where climatic conditions do not favor
the culture of Indian corn. In other words, the area suited to
Indian corn is much more limited than the area suited to sugar
beets. The normal economic result is that corn prices are high
enough to enable this crop to crowd sugar beets out of the sys-
tem of farming throughout the areas best suited to Indian corn.
The opportunities for producing sugar beets are so great out-
side of the corn belt as to yield a supply great enough to keep
sugar prices too low to enable sugar beets to encroach very far
over the margin of the potential corn area.

Potatoes can be grown more widely than corn or sugar beets.
Potatoes thrive on sandy soils which are less valuable for the
production of corn and sugar beets. The result is that com-
mercial potato growing is found most largely on light lands
outside of the corn belt, although for local consumption they
are produced throughout the corn belt.

The general truth is that where two competing crops which are
in general demand can be grown on the same land, prices will
tend to he such that the one with the more limited potential area
will have its choice of territory and its area will expand in the
direction of the less and less favorable conditions for its produc-
tion until rising costs and lowering prices, due to increased pro-
duction, will make it unable to extend farther, owing to greater
profits secured from the competing crop. As a result of price
variations, there will ever be more or less uncertainty in the
zones where the differences in profits are never great. In
other regions, where the advantage of some one crop is great,
the system of cropping becomes definitely established.

Distance from market has long been recognized as an im-
portant factor in determining what should be produced on a
given farm. As one rides from a large city into the country,

50 AGRICULTURAL ECONOMICS

one will usually find the market garden district just beyond the
outlying plotted area held speculatively for city lots. Next
beyond this, and often more or less intermingled with the
gardens area at first, are found farms devoted to the produc-
tion of city milk, beyond this may be found the butter industry,
the cheese industry, beef or pork production or grain farming,
depending upon the location of the city.

This division of territory among the various types of farming
or fines of production is the result of relative farm prices of
the different products. This difference in farm prices is due
to two factors, namely, the perishabifity and the quantity pro-
duced per acre of the products. Perishable products must be
produced near enough to the market or under such favorable
conditions of transportation that the commodity can be put
on the market in good condition. Other things being equal,
the greater the c|uantity produced on a given area, the lower
will be the price per pound, and the closer to the market it
should be produced. It is usually a combination of these two
factors that puts market gardens near the markets, and puts
sheep and wheat farms at a distance from the market.

Can the farmer work out the most profitable system of crops for
his farm, once for all, so that he need give this matter no further
attention? Unfortunately the economic problems of farm
management are never permanently solved. Changes in rela-
tive prices of competing crops often make it necessary to change
from the one to the other. This change in relative prices may
result from the growth of a near-by city, such as to increase the
demand for bulky and perishable products. The increased
demand results in increased prices, which enables these crops
to crowd out their competitors in a larger and larger territory
surrounding the city. The farmer should, however, be very
conservative in changing, once he has a profitable system
established. Changes are expensive. They involve learning
new things, buying new equipment, and meeting new prob-
lems of crop conflict, etc. One should not let temporary price
fluctuations move him to change his plans. But he should
not be too conservative; if changes in prices result from

THE CHOICE OF CROPS 5 1

permanently changed conditions, the system of farming
should be quickly adjusted.

The change hi relative prices may result from a change in
the number of uses to which a staple crop like cotton or corn is
put, or it may result from an expansion of the area available for
the one crop without a like expansion of the area available for
the other. The expansion of cotton production in Brazil
or west central Asia or India might reduce the price of cotton
relatively to that of corn so that corn would replace cotton on
the margin of the cotton belt of the United States. It will be
noted that the stability of the system will be greater in the
heart of the corn belt and in the heart of the cotton belt than
on the margin between these two regions.

Fluctuations in the rent of land without any change in the
relative values of the products may necessitate a change in
crops. Suppose, for example, that the rent of a given piece
of land is three dollars per acre, and that the net profit per acre
is five dollars when the land is devoted to corn, and that the
net profit is twenty dollars per acre when the land is devoted to
sugar beets ; but that the farmer can operate thirty-five acres
of corn and only seven acres of beets. Then he could win one
hundred and seventy-five dollars net profit by producing corn,
and only one hundred and forty dollars by producing beets.
But, suppose the rent of the land should rise to five dollars per
acre, without any change in the prices of the products or in the
costs of production. The profits per acre of corn would then
be three dollars, and that of an acre of beets would be eighteen
dollars, so that with the same acreage of these two crops, the
total net profit which he could win from the production of corn
would be reduced to one hundred and five dollars, while that
from the beets would have been reduced to one hundred and
twenty-six dollars only. In this hypothetical case, the rise in
the rent would result in a subtraction of only fourteen dollars
from the total profits of the beet crop, while it would result in a
reduction of the profits on corn of seventy dollars, so that the
crop which was the more profitable before the rise in the rent
would become the less profitable as a result of the rise in rent.

52 AGRICULTURAL ECONOMICS

Changes in farm labor conditions may affect the choice of
farm enterprises. An unusual demand for laborers in the city,
or the withdrawal of men from the farm to go into the army,
may so change the condition in a given community that it
becomes necessary to select crops which require much less
labor. This might easily result in a change from an intensive
crop like tobacco or sugar beets, which require very much
labor per acre, to a more extensive crop like corn, which re-
quires much less labor per acre. On the other hand, a farmer
with a growing family may find it desirable, as his children be-
come old enough to help, to introduce sugar beets or some other
intensive crop on his farm in order to give employment to the
members of his family.

The amount of available capital may influence the farmer in
the choice of crops. If he has little capital with which to buy
dairy cows, he may for this reason produce grain to sell instead
of producing feed for dairy cows, which might be the more
profitable if he had the capital with which to go into the
dairy business.

The characteristics of the farmer, his likes and dislikes, his
previous training and special skill in particular lines of produc-
tion, may very greatly affect his choice of enterprises. That
which is profitable for one farmer to produce in a given com-
munity may not be profitable to another because of the fact
that the second farmer may lack the skill required in carrying out
that line of production.

It is a well-recognized fact that the different crops make
different demands upon the soil. For this reason, the crops
which are associated together in the systems of rotation should
be such as will make supplementary demands upon the soil's
elements of fertility. This in itself, however, is not a safe
guide in determining which plants should be introduced into
the field system ; for it might lead to the cultivation of the less
profitable of two competing crops, and thus reduce the farmer's
total net profit. Yet it should ever be kept in mind that if
one of two competing crops exhausts the soil while the other
adds to its fertility, this fact must be taken into account when

THE CHOICE OF CROPS 53

calculating the net profit which these crops can be made to
yield. The crops being chosen which will, one year with another,
enable the farmer to win the largest net profit, they should be
arranged in the field system in such a manner as best to supple-
ment each other in their demands upon the soil.

It has been the purpose of this chapter to outUne the think-
ing which the farmer needs to do in order to keep his system of
cropping adjusted to the conditions of the market in such a
manner as to yield maximum results. There are other reasons
for studjdng market conditions, but this chapter emphasizes
one most important occasion for keeping posted on market
prices. Much has been said in recent years about farmers
controlling their products in order to secure fair prices. With-
out going into the question of organized control, attention is
here called to the fact that if every farmer wall produce the
crops which pay best on his farm, this in itself will " cut out the
losses and let the profits run on," and may be a more feasible
plan than attempting to have prices artificially raised because
a given farmer is producing at a loss.

CHAPTER VI
ECONOMICS OF THE LIVE STOCK INDUSTRY

There are certain crops such as cotton, tobacco, and flax
which are always intended for the market in their native form ;
there are many other crops, such as the grains and the hay and
forage crops, which may be sold in their native form or trans-
formed by the farmer into animal products; and there are
many other products of the farm, such as soft corn, corn fodder,
second growth on grain fields and meadows and the grass
growing on land not suited for tillage or hay crops, which are
not salable in their original form, but which may be converted
into valuable products by means of live stock.

No question arises regarding the utilization of the first and
the third of these three classes of products, but in case of the
second class the farmer has ever before him the problem of
determining whether the largest, long-time average net profit
can be obtained by selHng or by feeding these crops. The
proper solution of this question is determined by the relative
prices of the crops and the live stock products.

One factor ever to be kept in mind in counting the profits of
the live stock industry is the value, as fertilizer, of the manure,
which is a very important by-product of this industry. This
element is usually underestimated in a new country, but in
the older countries, where commercial fertilizers have long been
necessary if the farmer would secure the largest net profit in
the production of field crops, full value must be given to this
by-product.

Charles F. Curtiss, of the Iowa Agricultural College, says : ^
" Maintenance of fertiUty is secured by rotation of crops, by

* From a paper entitled " Economic Functions of Live Stock," read before the
Economic Section of the A. A. A. S., St. Louis, December, 1903.

S4

'economics of the live stock industry 55

chemical fertilizers, and by physical and bacteriological methods ;
but by none of these has the virgin strength of the soil been
maintained over long periods except as plant production has
been associated with animal husbandry. By selling dairy
products in the form of butter and cheese, and restoring the
by-products by feeding the skim milk, buttermilk, and whey,
we take from the soil but one-tenth of the fertility lost by a
grain crop. ... If fertilizing material must be bought
for the farm, it can, under all ordinary conditions, be bought in
vastly cheaper form as feedstufe and utiKzed as such, and the
residue applied to the soil, than by purchasing fertiUzers out-
right. The very best of fertilizers are often obtained in this
way without any direct outlay. The use of feedstuffs, rich in
fertility, may even return a handsome profit as a separate
proposition, and thus fertilizing constituents come on to the
farm under most advantageous circumstances. The British and
other European farmers buy large quantities of our flaxseed
and corn by-products. They figure that they are the gainers,
even if they do not make any profit on their feeding operations
with these products, and they are. Until recently the packing-
house by-products, including dried blood and tankage in various
forms, have practically all gone direct to the land as fertilizers.
To-day these products are serving a most important purpose
as feedstuffs, and the time is near at hand when practically
every pound of this material will first be utilized as stock
food, and later returned to the soil. The returns are so much
greater and so much more economical in this way as to put
the purely commercial fertilizer farmer out of business in the
space of a few years at the outside, where other conditions are
similar."

The feeding of grain, hay, and fodder to live stock is an effec-
tive means of converting these crops into products of higher
specific value, which will better stand the costs of transportation
to distant markets. " Cattle and hogs not only convert, but
also condense, Indian corn (maize). They enable it to be raised
profitably in regions too far removed from the markets of the
country to be transported in that form. By condensing the

56 AGRICULTURAL ECONOMICS

corn to one-fifth or one-sixth of its bulk and weight, and re-
ducing the cost of transportation in something Hke a similar
proportion, the possibility is secured of raising corn in regions
situated thousands of miles from the market at which the corn
products, or, what is practically the same, the pork and beef,
are consumed."

Indian corn is largely consumed on the farms where it is
produced. Four out of five of the corn producers of the United
States feed their entire crop. From 80 to 82 per cent of the
corn is consumed on the farms where produced, and much of
that sold is consumed on other farms. About one-fourth of
the oats is sold from the farms where grown, and nearly nine-
tenths of the hay and coarse food is consumed on the farms where
grown. The percentages of these crops sold varies greatly in
the different parts of the country. Illinois leads in the sale of
both oats and corn. The relative importance of Illinois as a
region from which feedable crops are sold is shown in the Thir-
teenth Census, Vol. V, map before page 561, which shows the
receipts from sales of feedable crops in 1909. Twenty-one
counties in east central Illinois show receipts from feedable
crops representing 46.7 per cent of the total value of all cereals
produced. Corn and oats are the principal crops produced
in this region. There is no other region in the United States
where feedable crops are so largely sold. In the state of Iowa,
Illinois's closest competitor as a corn and oat state, the value of
feedable crops sold represents 25 per cent of the value of all
cereals produced.

There are several reasons for this difference in the type of
farming in central Illinois and the remainder of the corn-oats
belt, but distance from the market is certainly a very important
factor. Chicago is the greatest corn market in the United
States, and Milwaukee and Peoria rank high among the minor
markets.

The following table shows the prominence of Chicago as a
market for both corn and oats for the year 1914. It will be
seen that the receipts at Chicago were three and one half times
that of Omaha, the closest competitor.

ECONOMICS OF THE LIVE STOCK INDUSTRY

57

TABLE I

Receipts of Corn and Oats at the Primary Markets for the
Year 1914

Chicago .
Minneapolis
St. Louis .
Milwaukee
Kansas City
Omaha
Peoria . .
Toledo
Detroit .
Cincinnati

Corn
(bu.)

106,600,000

12,260,000

17,106,000

18,338,000

23,173,000

30,005,000

14,520,000

4,310,000

3,349,000

8,468,000

Oats
(bu.)

138,400,000

22,215,000

24,945,000

26,792,000

9,258,000

16,951,000

12,926,000

3,586,000

3,998,000

5,958,000

Nearly all of the com and oats shipped into Chicago arrives
over the railways extending west and southwest from Chicago,
whereas practically all these grains shipped from Chicago go over
eastern railways or by lake. This implies that the demand is in
Chicago and east of Chicago, hence the advantage of this cen-
tral Illinois area as one in which to grow corn and oats for the
market.

So far as the writer has been able to ascertain, the freight
rate per hundred pounds of hogs in carload lots from the various
Iowa and Illinois railway stations to Chicago is about twice
that for corn in carload lots from the same stations. It appears,
also, that the rates for these commodities are, on the average,
about twice as high from the Iowa as from the Illinois stations.
On the assumption that the feeding of the corn to hogs and cattle
condenses the product to one-sixth of its original weight, there
would be a saving of two-thirds the freight by sending the con-
densed product. But the saving would be twice as great for
the Iowa farmers as for the Illinois farmers, and as the price of
corn rises, the point where it would be more profitable to ship
than to convert it into live stock products would be reached in
Illinois before it would be reached in Iowa.

58 AGRICULTURAL ECONOMICS

In comparing the relative profitableness of crops and live
stock, especial attention should be given to the alternative
opportunities for the employment of labor and to the extent
to which crops and live stock compete with each other in their
demands for labor.

The live stock industry comes into competition to some extent
with the production of field crops. The farmer who feeds and
properly looks after hogs, cattle, or sheep may not be able to
spend as much time in the field as he who keeps no stock of
these kinds. The dairy industry comes more into competition
with the crops of the fields than do the other live stock indus-
tries. But while a part of the time devoted to live stock must
be subtracted from the time which can be spent in the field, yet,
for the most part, the live stock industry is supplementary, in
its demands for labor, to the other branches of farming. Live
stock requires the especial attention of the farmer in the winter
when nothing can be done in the fields. In the summer, when
the farmer is busy in the field, much of the live stock is shifting
for itself in the pasture, and there is usually enough time when
the ground is too wet for work in the field, to permit the farmer
to give the needed attention to the Hve stock which is in the
pasture.

To the extent that the hve stock industry is supplementary,
in its demands upon the time and energy of the farmer, to the
production of farm crops, he has only to decide whether the
additions to his total net profit resulting from the transforma-
tion of the various crops into animal products, are sufficient
to remunerate him for the extra efforts put forth. But to the
extent that the live stock industry encroaches upon the time and
energy available for crop production, the problem of determin-
ing whether to sell his crops or convert them into animal prod-
ucts presents itself in practically the same form as that of
selecting crops for the field system. The general principle is
simple, " Seek the largest, long-time average net profit," but
the practical application of this principle is especially diflScult,
because of the limited extent to which these two lines of work
come into conflict with each other. It can be said, however,

ECONOMICS OF THE LIVE STOCK INDUSTRY 59

that the Hve stock industry should enable the farmer to win as
large a long-time average net profit as he could secure from
other sources, and enough more to make worth while the extra
effort put forth when he could have found employment in no
more productive Hne of activity, but which time might have
been spent in enjoying the products of his labor or in improving
his mind. One thing to consider in this calculation is that the
crops are usually much larger on stock farms than on grain
farms of equal natural fertility.

Whether a given farmer should keep cattle, hogs, or sheep,
or a combination of these, is determined by the kind of feed at
his disposal, the relative prices he can secure for the different
classes of Hve stock products, and in some measure upon his
personal likes and disHkes. The corn belt is preeminently the
hog belt, and the region for finishing beef cattle. The northern
edge of the corn belt is the principal dairy region, partly be-
cause of the demands made by cities for whole milk; partly
because the corn is in danger of being damaged by frost and can
be more safely handled through the silo.

In the heart of the corn belt the farmer finds it profitable
to put a full day in the cornfield. The labor demands made by
hogs and beef cattle are almost neghgible during the time of
year when corn is demanding attention, whereas the dairy
makes a heavy drain on the farmer's time throughout the sum-
mer, and hence the cow is relatively a stronger competitor
in the region where corn is a less profitable crop than in the
heart of the corn belt.

Cows have replaced sheep in Vermont, New York, north-
eastern Ohio, and southern Wisconsin. Wool production has
found its way to the Rocky Mountains. The high specific
value of wool enables this grazing industry to thrive on rough
lands at great distances from the market, hence it gives place
to perishable products or products of lower specific value near
the markets and on lands suited to field crops. World-wide
competition has been an important factor in keeping the price
of wool low, and in discouraging wool production in most parts
of the United States. During the world war, conditions were

6o AGRICULTURAL ECONOMICS

temporarily changed and the high price of wool stimulated the
sheep industry.

Horse breeding is an important industry throughout the corn
belt and the grazing areas of Missouri and Kentucky. Horses
are required for growing corn, but are required to work hard only
a few months in the year. By combining horse raising and corn
growing, the horse labor cost in corn production is greatly re-
duced. Even in the central Illinois corn area, where hogs and
cattle have practically disappeared, the rearing of colts is an
important industry, based in part upon the great amount of
unsalable roughage available on the corn-oats farm.

The individuals of any class of live stock are so varied that
one may have diflficulty in deciding which breed or which quality
to keep. " The best are most profitable " is a saying which
helps little. The problem is to know which will pay best.
What is best in dairy cows for one locality may not be the best
in another. The cow which is best for a careful, intelligent
dairyman may be poorest for a careless, ignorant man who
keeps cows. This is true primarily because the superior cows
cost more money, and while they are worth more to the superior
dairyman, they are worth no more to the man on whose farm
all stock soon come to look like scrubs.

Some cattle are excellent for beef production and of little
use as dairy animals. Other breeds of cattle are efficient pro-
ducers of milk, but their carcasses have little value as human
food. Intermediate between these extremes are found a few
breeds such as the Holstein, the Ayrshire, and the Brown
Swiss which are excellent dairy animals and produce excellent
veal calves, while the defective cows yield large quantities of
fairly good beef. The relative merits of these three classes of
cattle depend upon the circumstances. On inferior grazing
lands, where the herd must lead a migratory fife during the
summer, and where labor is dear and land cheap, the special-
ized beef type usually proves most profitable, but such animals
are not suited to a city milk district, where the price of the
carcass of a dairy cow is not to be ignored, but where the pri-
mary consideration is a large flow of milk of acceptable quality.

ECONOMICS OF THE LIVE STOCK INDUSTRY 6 1

The choice between the extreme dairy type and the cow which
produces both milk and meat should depend upon the price of
meat. In a country where great quantities of high-class beef
are produced at low cost, there is more economic reason for the
highly specialized dairy cow than in a country where beef of
any kind is high. In other words, the right choice of breeds
depends upon economic conditions which are ever changing.
Conditions in America have in the past encouraged highly
specialized beef cattle and highly speciaHzed dairy cattle. It
does not follow that this will be true in the future.

CHAPTER VTI

MISCELLANEOUS WORK CORRELATED WITH CROP AND
LIVE STOCK ENTERPRISES

There are many odd jobs on every farm which are here classed
as miscellaneous work because they are not connected directly
with any of the important crop or live stock enterprises. For
example, the repairing of old fences, the building of new fences,
the cutting of weeds along fences and ditches, the filling of
washes, the repair of buildings, making concrete walks, trim-
ming trees about the house, making posts, cutting stove wood,
improving roads about the farm, etc., may be classed as mis-
cellaneous work.

This class of work has sometimes been called unproductive.
This characterization arises out of the fact that even though all
this work be done perfectly, the farm will yield no income
without the crop or live stock enterprises. Yet the crop and
live stock enterprises cannot long be carried on if all this mis-
cellaneous work is neglected. It is better, therefore, to call this
labor indirectly productive rather than unproductive.

One of the most important problems in farm management is
to keep the indirectly productive labor out of the way of the
directly productive labor and yet get it done. Just to the
extent that crop work must be stopped in order to make or
repair a fence, the possibilities of profits are reduced. The
purpose of this chapter is to make some suggestions which may
be helpful in organizing the farm work in a manner that will
tend to keep the proportion of time on directly productive
labor at a maximum and arrange to get the miscellaneous work
done when no directly productive labor can be carried on.

The experienced farmer usually anticipates his need for fuel
during seasons when crop work demands his attention, by pro-

62

MISCELLANEOUS WORK 63

viding a large pile of wood, ready for the cook stove, before the
frost is out of the ground in the spring. He likewise anticipates
his need for fences and utilizes the time after the frost is out of
the ground until work can commence in the field, building and
repairing fences. Not only is this time relatively free from
conflicting enterprises, but there is no other time of year when
a post can be set with so httle labor as in the loose, moist soil
as it is found just after the frost is out of the ground. The
shiftless farmer who neglects this opportunity and comes to
the date when the cattle should be turned into the pasture
without having the fences in repair may have to take a man
and team out of the cornfield a day at a time when labor on
corn is worth 75 cents an hour, to do work which might have
been done when alternative opportunities would pay no more
than 10 cents an hour.

Instances might be multiplied without end showing how the
neglect of miscellaneous work when time is available results in
great loss to the farmer. To facilitate getting work done at the
most opportune time the following classifications of work have
been made :

(A) (i) Work which must be done at a definite time.

(2) Work which may be done any time within a wide latitude.

(3) Work which is often postponed indefinitely.

(B) (i) Work that can be done when it is raining.

(2) Work which cannot be done while rain is falling, but can

be done while the ground is wet.

(3) Work requiring dry weather and land dry enough to work

or drive over (hauling manure, lime, etc.).

(C) (i) Work which cannot be done while ground is frozen.

(2) Work which can be done while ground is frozen.

(3) Work which can be done when ground is covered with

snow.

A. (i) Feeding and milking dairy cows, sowing oats, plant-
ing corn, the cultivation of corn, and the harvesting of the oats,
are examples of work which will suffer if not done at the right
time. The farmer who neglects his cows will soon have no
milking to do. The farmer who delays sowing oats until the

64 AGRICULTURAL ECONOMICS

warm, dry days of early summer finds his harvest Hght, and he
who delays the cultivation of his corn for one week after it is
large enough to plow will have a weedy field and a poor crop.
Success in farming demands that all other classes of work be
kept out of the way of work which by nature must be done at
a definite time to secure best results. This class of work is
often called rush work, not because it should be done poorly,
but because the profits of the farm depend upon the doing a
maximum of this work and doing it well. In rush seasons one
should work the maximum day, expecting to relax when the
rush is over, but when this class of work demands attention
one should " do nothing to-day which can as well he put of until
to-morrow,'" in order to devote a maximum of effort to the rush
work.

(2) Work which may be done any time within a wide lati-
tude requires the very especial attention of the farmer, because
the time comes when this work cannot be put off longer and it
may crowd the labor which can be done only at a definite time.
For example, seed corn may be tested and shelled at any time
after it is thoroughly cured, but if neglected until the fields are
ready to plant, this most profitable work of the farm may be
delayed. It takes a better manager to perform all these tasks
in seasons when there is no rush work than it does to concentrate
on rush work, for the season calls the farmer to the task which
must keep pace with nature, while it is only the power of the
mind which takes thought of future needs and anticipates these
wants by making the needed preparation. The rule to follow
when there is no rush work pressing for immediate attention
and which must be enforced with methodical and industrious
habits if the farmer is to rank high as a manager is found in the
old phrase " Put of nothing until to-morrow which can he done
to-day, ^^ in order to be free to devote a maximum of time to the
rush work when it comes.

(3) There is much work which should be done in order to
keep the farm looking tidy and to make life on the farm more
livable which is often left undone indefinitely. Many a farmer
has neglected beautifying his lawn because it is not connected

MISCELL.\NEOUS WORK 65

in a vital way with the money profits of the farming operations.
In considering work of this class careful attention should be
given to the fact that the farm is capable of providing for the
direct satisfaction of many wants without the intervention of
money, and that the importance of these wants should be com-
pared with those to be satisfied by the expenditure of money,
before deciding to neglect these direct satisfactions to earn
more cash profits. Many of these wants can be satisfied, how-
ever, without reducing the cash income, by planning the work
more carefully.

B. (i) The second classification is based upon weather and
soil conditions mth respect to humidity. There is a great
variety of tasks which can be done under shelter and which
should as nearly as possible be cared for on rainy days. Shell-
ing seed corn, mending the harness, and repairing tools are
typical examples. It is necessary to have some device to assist
one in thinking of these tasks when the rainy day arrives or
one will let these golden opportunities slip unimproved. The
writer knows a farmer who keeps a notebook in his pocket in
which he jots down the tasks which can be performed on a rainy
day. He calls this his rainy day book. This enables ham
quickly to plan the work for a rainy day when it comes, and to
choose the tasks wdth attention to the date prior to which they
must be performed or come in conflict with rush work. The
rule is to push rainy day work when it is raining, and to do no
rainy day work when it is not raining, if there is " outside "
work to be done.

(2) There is a large class of tasks which may be called " wet
land work." In this class falls the cutting of weeds in the fence
rows, the repairing of fences, the cleaning up of the wood lot,
the repair of buildings, the laying of concrete walks, the digging
of trenches for laying water pipes from the well to the house
and to the barn, and a score of other tasks which will crowd
themselves upon the farmer's mind as he considers the things
he wants done. The rule is to push the wet land work when
the land is not dry enough to work and do no work of this class
when there is field work which can be done.

66 AGRICULTURAL ECONOMICS

(3) The work which requires dry land and dry weather
comprehends the greater number of field operations which
must be performed at a definite time, hence the importance of
keeping this time free for these activities. The percentage of
time capable of being used in the field which is actually used
for this purpose is a measure of one's ability as a manager.

C. The third classification is based upon the condition of the
ground with respect to frost and snow.

(i) The work which cannot be done while the ground is
frozen comprehends a large share of the field operations. Some
of the activities which one is in danger of postponing too long
and for this reason suffer loss are potato digging, beet Hfting,
and fall plowing. Every farmer should be informed as to the
time of year the ground usually freezes sufficiently to stop these
fines of work and bend every effort to having all work of this
nature out of the way before chat date. The fact that the
permanent freeze is some years much later than the ordinary,
should not be used as a reason for delay. The good manager
keeps step with nature, but tries to keep considerably ahead
of the date when a given task cannot be performed. The early
dates when the ground has frozen enough to stop plowing
should be held in mind rather than the later dates. The gen-
eral rule in autumn is " work which cannot be done when the
ground is frozen should take precedence over work which can
be done later." Fall plowing should be looked after first and
corn husking afterwards because the husking can be done when
the ground is frozen and the plowing cannot.

(2) In the corn belt, the husking of corn stands out as an
important task which is performed when the ground is frozen
but which should be completed before a heavy snow falls. It
is the fear of snow and severely cold weather that impels the
corn farmer to bend every energy to clear the field of corn
before the first of December, or some other date fixed by the
experience of the community as the time when there is danger
of weather which will stop the work.

(3) There are many tasks which can be done in winter and
while the ground is covered with snow. Examples are : hauling

MISCELLANEOUS WORK 67

manure, spreading lime, hauling and preparing stove wood,
hauling and storing ice, visiting the herds of successful farmers,
attending the farmers' course, reading books on the culture of
crops, on the breeding, care, and feeding of live stock, and on the
best methods of marketing farm produce. This is the time of
year for the farmer to work a short day and take time for self-
improvement.

CHAPTER VIII
WHAT SHOULD THE NATION PRODUCE?

From the standpoint of the farmer, the guiding principle in
the organization of a farm is to seek the largest net profit ; but
there is another point of view than that of the farmer, and
that is the point of view of the statesman. Since not only the
farmer, but every one else, is interested in agriculture, the ques-
tion arises, are the interests of the country as a whole best
conserved when each farmer follows tenaciously his own self-
interest and succeeds in gaining the largest net profits in return
for the effort which he expends in agricultural production?
There may be, at certain points, a conflict between the narrower
and the broader interests. In this case we are confronted with
the problem of determining whether the individual or the
general interest should be promoted. To the extent that the
greatest good to the greatest number demands that the general
or social interests be served, it falls within the domain of our
subject to propose laws which will limit the free action of in-
dividuals in such a manner as to promote the highest interests
of society as a whole.

But while human welfare or the greatest good to the greatest
number has long been recognized as the standard by which
every law or custom should be accepted or rejected, this prin-
ciple is so abstract that men may be fully agreed upon its ac-
ceptance as their standard, and yet hold exactly opposite
opinions as to the desirability of a particular measure. The
statesman needs a more concrete standard which may be used
with safety in his efforts to set proper limits to the free action
of farmers and of those with whom they have economic rela-
tions, in the pursuance of their daily toils.

Should the maximum in quantity of farm products be the
goal of the agricultural statesman ? The phrase, " More food

68

WHAT SHOULD THE NATION PRODUCE? 6g

this year is patriotism " has at times been interpreted in a way
which suggests that some leaders in the promotion of agricul-
ture would make quantity of product the goal in view. If
quantity of product in pounds or bushels were the goal in pro-
duction, the agriculture of this country would be very different.
We would produce more potatoes and other bulky crops, only
to find the demands of the consumers too small for the supply
of these articles, and a part of the supply wasted.

Human desire is the starting point in economic considerations,
and human welfare is the end in \'iew in economic legislation.
To the extent that human desires are wholesome, values may
be made the basis of determining what a nation should produce,
for human desires reflect themselves in values. The highest
value of the productions of a country has, therefore, been set forth
as a practical economic ideal for the statesman. It has been said
that " the prosperity of a nation is in proportion to the value
of its productions." ^ This is the economic ideal which was
set forth by their leaders as the aim and the end of the Patrons
of Husbandry in their efforts to promote the interests of agri-
culture.

To this principle, as an economic ideal, it may be objected
that legislation may be of such a character as to increase the
value of the farm products of a country and at the same time
not improve the economic well-being of the people of the coun-
try as a whole. It is quite conceivable, for example, that duties
on imports may be so levied as to increase the total value of the
farm products of a country without increasing the prosperity
of the nation.

It is necessary, in order that this national ideal shall be at-
tained, that the labor and capital of a country be properly
distributed among the various lines of economic activity. The
labor and the capital of a nation should be so distributed among
the various industries that the portion of these factors which
is employed under the most unfavorable circumstances shall
be equally productive, socially considered, in all industries.
The necessity of this proper adjustment of the productive

1 See the preamble of the Constitution of the Patrons of Husbandry.

70 AGRICULTURAL ECONOMICS

forces should ever be kept in mind in the discussion of the
movements of population from country to city, or vice versa.

When the prodiictive forces are properly distributed among
the various lines of production, and where the relative values
of products are not to be directly affected by public action, it
would seem that a just and practical ideal to be held in mind
by the statesman when passing judgment upon what crops
should be grown, the management of live stock, the intensity
of culture, the size of farms, and the laws which limit and define
farmers' rights in their relations to each other, to their land-
lords, to laborers which they employ, and to those to whom
they sell their products, would be the highest long-time average
value of the farm products of the country as a whole.

We wish to mark out clearly the distinction between the social
ideal and the ideal of the individual. The individual seeks the
largest net profits. He desires to have that share of the product
which is left to him, after paying what is necessary to engage
the other factors of production, as large as possible. Where
the personal interest of the farmer does not extend to all of the
factors of production, conflicting interests are certain to arise,
as between the landlord and the tenant, or the employer and
the employee. While the farmer is interested, personally, in
having his own share of the produce large in proportion to the
efforts which he puts forth, the statesman should be interested
equally in having the returns to all the factors of production
as large as possible.

The conflict between the national point of view and that of the
farm operator may relate to the choice of crops, the intensity of
culture, the character of the live stock industry, the control of weeds,
the control of disease, the quality of the products sold, and the
conservation of the land and the economic and social welfare of
all classes. When viewed from the national standpoint, it is
not the return to any one factor in particular, but the sum of
the returns to all the factors which should be of vital interest
to the statesman. With the limitations which have been suggested,
the highest long-time average value of the total product of the agri-
cultural industry may be looked upon as the goal, when agriculture

WHAT SHOULD THE NATION PRODUCE? 71

is viewed from the standpoint of maximum efficiency in produc-
tion for the nation as a whole.

But maximum efficiency in production may not be the sole
aim of a nation. National defense may seem at times to be so
important as to make it desirable to reduce the efficiency of
production in order that the nation be self-sufficing to an
adequate degree. This may be the most profitable thing to
do with a view to meeting the national needs in times of inter-
national strife when international commerce is extremely
hazardous.

The problem then becomes that of ascertaining to what ex-
tent a nation should produce everything it needs as nearly as
possible and to what extent it should produce those articles
which enable it to secure the maximum free competitive values
and depend upon international trade to provide the great
variety of articles which can, in times of peace, be secured
from abroad more cheaply than they can be produced at home.
The answer to this question depends upon the national ideal
and the progress of civilization in the direction of protecting
international trade.

To the extent that civilized nations desire to live in peace
with one another, making mutual concessions from time to time
and recognizing one another's rights and the mutual benefits
to be derived from the exchange of commodities, advantage
may be taken of the benefits of division of labor among nations
and the resulting international commerce. On the other hand,
if strong nations are unwilling to enter this world comity,
and insist on extreme nationalism and stand ready to encroach
upon the rights of others upon land and upon sea, it may be-
come necessary to adopt an economic pohcy very different from
the one which would be most productive if a world economy
were practicable.

Under the system of extreme national economy, where the
nation must be self-sufficing in the primary necessities of Hfe,
industry, and war, many of the advantages of modern civiliza-
tion may be lost. Luxuries may be secured from abroad in
times of peace and dispensed with in times of war. A national

72 AGRICULTURAL ECONOMICS

system may not only point to the production within the nation
of the entire supply of the necessities of life and the munitions
of war, but may result in an agricultural policy which looks to
the production of a large number of effective soldiers rather than
a maximum of agricultural products. In this way the size of
farms, the tenure of land, and the credit system may all be
modified with a view to maintaining a very much larger number
of farm families than would otherwise exist.

The larger the country and the greater the diversity of soil
and cKmate found within her borders, the smaller will be the
economic loss in adopting a national system of agriculture.
For this reason the United States would be in a strong position
compared with other nations under the necessity of a self-
sufficing national economy. Yet the United States may well
afford to spend millions annually in maintaining friendly inter-
national relations rather than undertake to live an isolated
economic life.

A study of the exports and the imports of the United States
will give basis for some conclusions regarding the way in which
American agriculture would be affected if a complete national
system were adopted with respect to the production at home
of all the agricultural products used in our homes and in the
maintenance of our national life.

The agricultural imports may be classified as follows on the
basis of the possibility of producing the supply at home :

I. Of our agricultural imports some cannot under natural
conditions be produced in the United States. There is a lack
of proper soil and climate which makes it physically impossible
to grow the product without providing artificially the necessary
conditions. For example, rubber, cocoa, and bananas are
tropical products which play an important part in our life,
and which we would probably do without if we could not carry
on commerce with South and Central America. Coffee may
belong in this same class, though it has been claimed that
rather large potential coffee areas exist along our southern
border. Where these articles are luxuries, we may be better
off in times of war without them, but where they are important

WHAT SHOULD THE NATION PRODUCE? 73

in our commerce and industry, as for example the raw material
for making binder twine, the probability of having the supply
cut off in times of war should be carefully considered, and, if
the case be serious enough to justify the action, the production
of substitutes should be stimulated, or great quantities held in
storage with which to meet emergencies.

2. Other agricultural products which are now largely im-
ported could be produced in the United States in great abun-
dance, but the natural conditions for their production are rela-
tively less favorable than in foreign countries. Hemp, jute,
and lemons may be given as examples. If world peace can be
assured as a condition of a world economy, articles of this class
may well be brought from abroad ; but if peace is very uncertain,
the necessities in this class may better be produced at home at
a greater cost.

3. Some of our agricultural imports could be produced in
the United States in quantities sufficient to take the place of
the imported supply, and the natural conditions are as favorable
for their growth in this country as in foreign countries, and yet
it is profitable in times of world peace to import them from
abroad rather than produce the whole supply at home. This
may be true (c) because the land which is well suited for the
production of a given imported crop can be used more profitably
in the production of some other crop which does not thrive in
the foreign country from which we import, ib) Again, this
may be true because labor and capital are more abundant and
wages and interest are lower in the foreign competing country.
The sugar beet may be taken as an example of a crop which
thrives as well in parts of the United States as in Europe and
which cannot be produced with profit in the United States
without a bounty or a protective tariff. Both of the above
conditions are operative in making beets unprofitable in parts
of the United States. There are large areas with suitable soil
and climate for the production of beets where corn or tobacco
are competing crops. These crops do not compete in the beet
regions of northwestern Europe. Hence, under free competitive
conditions, it pays better to import sugar than to produce it

74 AGRICULTURAL ECONOMICS

in the com belt of the United States. Outside of the corn belt,
especially in California, Colorado, Utah, and Idaho, the question
is less a matter of competing crops than it is a matter of high
cost of labor, yet in these regions beets compete with potatoes
and alfalfa. Raw silk and tea are good examples of crops which
are practically excluded from being produced in the United
States because of the wide difference in the cost of labor in the
United States and in eastern Asia. The first of these reasons
for finding it more profitable to buy than to produce is a perma-
nent one. It is based upon natural forces. The second is
based partly upon differences in the density of the population
in different parts of the earth, and, hence, being a social condi-
tion is subject to change.

4. Some articles can be produced profitably in limited quan-
tities but not in sufficient abundance to satisfy the demand of
the nation because of the limited areas on which they prove to
be the strongest competitors for land, labor, and equipment.
Wool is an example. Wool is the most profitable product
which can be produced in some of the high, dry areas of the
Rocky Mountain region, and in some other regions where rough
grazing lands are abundant and where the dairy cow is not a
strong competitor. Sheep may also find a profitable place in
small numbers on the general farm, but so long as cheap wool
may be secured from South America and Austraha, it may be
that the greater part of the supply can be imported more cheaply
than produced at home. This has proved true even when a
protective tariff favored the home grower of wool.

5. Some articles can be produced profitably in certain qualities,
but not in all qualities desired by the people of the United States.
Cotton, for example, is imported, not because we do not produce
as much cotton as we consume, but because it is possible to get
a very special variety of cotton from Egypt. Tobacco is another
example. We ex-port much tobacco, but, in order to meet the
demand for certain qualities, tobacco is imported from Cuba and
Sumatra.

When all these conditions which give rise to commerce are
considered, it becomes obvious that with a given outlay of

WHAT SHOULD THE NATION PRODUCE? 75

labor and capital the wants of the people can be more com-
pletely satisfied by producing the things which pay best and
buying from abroad the articles which cannot be produced or
which it is less profitable to produce in this country.

The economic policy which should be followed by a nation
will depend largely upon the prospects for world peace and the
safety of international trade. Were world peace assured, a
world economy would be desirable, but at the present time the
student is constrained to give due attention to the importance
of the all-round development of agriculture with a view to being
able to feed and clothe the people with a minimum of com-
merce in times when all international law is swept aside.

The opinion one will hold regarding free trade and protection
depends in part upon one's judgment with regard to future
peace. If we must become self-sufiicing as a nation, protection
is one means of inducing farmers and manufacturers to produce
commodities which they would otherwise find unprofitable.
The national policy should be the one which will yield the maximum
well-being for the people of the nation through a long series of
generations. In view of the long periods of peace which the
world has enjoyed, particularly since the days of Napoleon,
and in view of the present hope for the beginning of a new era
of peaceful international relations, it would not seem wise to
look to a continuous self-sufl&cing policy in order to be ready
for war emergencies, but to be prepared for rapid readjustment
in agriculture if a period of unsettled international relations
should again overtake us. Sir James Caird advocated the free
importation of wheat into England on the theory that since at
that time wheat growing was less profitable to the nation than
grazing, it would be better to produce cattle during times of
peace and buy wheat with the expectation that if war condi-
tions should cut off the foreign supply the pastures could be
plowed up, put into wheat, and made to produce more for the
emergency than if wheat had been grown continuously. This
is exactly what England did, and during the World War the
wisdom of Caird's advice was demonstrated.

Grain and cotton stand out as our great agricultural exports.

76 AGRICULTURAL ECONOMICS

Sugar, molasses, and sirup together take the lead in value of
agricultural imports. Coffee is next in importance. Fruits
are both exported and imported in large quantities. This is
due to the fact that the United States produces a surplus of
certain kinds of fruits, namely, dried apples, prunes, raisins,
apricots, and peaches, which are exported, whereas we produce,
for example, less than we consume of bananas, lemons, and
pineapples.

To become a self-sufficing nation we would have to reduce
our grain crops and our cotton crops and produce more cane
and beets for sugar and molasses, and either reduce our coffee
consumption or learn to grow great quantities in the potential
coffee regions of the United States. Our area is broad and in-
cludes a very great variety of soils and climate, and yet there
would be undoubtedly a much smaller amount of agricultural
products available for consumption in this country under a
self-sufficing economy than under a world-wide commercial
economy.

The experimental and educational method of stimulating the
introduction of new crops has proved important in this country.
For many years the Secretary of Agriculture made large ex-
penditures to stimulate the beet sugar industry in the United
States. There were those who pointed out that the high cost
of labor put this country at a distinct disadvantage over the
beet sugar producers of northwestern Europe. Others pointed
out that in the corn belt, in particular, the beet would be unable
to compete with corn for the reason that the area on the surface
of the earth capable of corn production is very small compared
with the area capable of beet production, and for this reason
the relative prices of corn and sugar on the world market will
tend to be such as will enable corn to drive sugar out under
conditions of open competition, and that there are other crops
which we can grow which will add more to the well-being of
the people. These views seemed justified and were true under
the assumption of world peace. But, as a matter of fact, the
stimulus resulting from government activity established a beet
sugar industry which was tottering to a fall under free trade,

WHAT SHOULD THE NATION PRODUCE? 77

but which has come forward with great energy to meet the
emergencies incident to war. In the Hght of recent events and
taking into account the entire cost of stimulating this industry
in time of peace, has the fostering of the beet sugar industry
been justified ? The same question arises with respect to wool
and other farm products. The experimental method may be
better than the bounty or tariff for stimulating industries which
will succeed on a small scale. This is true of most farm crops,
but it is perhaps not true of most manufactures.

There are many conditions under which it is desirable to
stimulate the production of articles which the farmers have
not on their own account found occasion to produce. The
absence of production may be due to lack of knowledge of the
profits, lack of skill in the new line of production, or it may be
due to the fact that the crop is temporarily less profitable than
some competing crop, but in the long run would be more profit-
able. Where a crop is less profitable than another, and this
is due to permanent physical conditions, only the necessity for
a self-sufficing national poHcy will justify stimulating the farmer
to produce the crop. But where the conditions which make the
crop unprofitable are temporary, social conditions which may
be changed, such as sparse population, lack of knowledge or
skill, the case is a very different one. It may pay to stimulate
immigration and education, and give bounties or tariff protec-
tion which will make it profitable for farmers to take up the new
lines of production.

In general, any industry which can be established in a few
years, and which when once established will be able to stand
on its own merits without government stimulus, should be
stimulated during the period of its introduction. During the
infancy of the new crop or agricultural industry, the labor and
capital expended may add less to the national dividend than
some old crop or industry, but this loss is only apparent, and
is really chargeable to the capital account of the country if when
established the new crop pays better than the one it displaces.

To summarize, each nation should produce those agricultural
products which in the long run will add most to the well-being

78 AGRICULTURAL ECONOMICS

of the people. So far as feasible, the products should be those
which will make the agricultural productions reach the maximum
long-time average value tinder conditions of free competition among
producers and among consumers throughout the civilized world.
In estimating the long-time average values of products, weight
should be given, however, to the chance of war, if they must
be secured from abroad. Furthermore, in figuring the maximum
average value, where there are temporary conditions which re-
tard the development of an industry, the principal weight should
be given to the future.

In addition to the economic and poHtical conditions which
have been considered above, there are ethical questions which
should not be lost sight of by the statesman in settling the
question of what the farmers of a nation should produce. Many
statesmen will feel that the desires of men should be curbed in
the interest of human welfare. This may lead them to study
physiological and ethical principles with a view to eliminating
certain crops or products made from farm crops which are
injurious to mankind.

CHAPTER IX
LAND AS A BASIS OF AGRICULTURAL PRODUCTION

Land, labor, and equipment are the agencies of production.
Without land there is no production of economic goods by the
farmer, the manufacturer, or the merchant. The term " land "
is here used in the broad sense to include all natural agents.
When a man buys land he acquires the use of the air, the sun-
shine, the rainfall, the wind blow, and in the United States,
unless especially specified to the contrary, he acquires all
minerals lying beneath the surface.

While all elates of economic activity require land, agri-
culture makes the greatest demands for this agent of produc-
tion. The census of manufacturer > fails to record the area used
by the manufacturers, but gives especial attention to the statis-
tics of labor, material, and machinery used in the manufactur-
ing enterprises. In the agricultural census the subject of the
land area used is given a prominent position, and it is shown
that in 1910 there were 878,798,325 acres of land in farms in
the United States.

The economic uses of land have been classified as (i) affording
standing room, (2) supplying mineral products, and (3) provid-
ing the conditions and materials of plant growth. Manufac-
turers use land for standing room and make heavy demands for
the products of the mines. Commerce makes hea\y demands
for land to be used for transportation purposes and the loca-
tion of warehouses, but agriculture makes use of the soil in
the growing of plants which are the means of satisfying human
wants.

Farm land varies greatly in its economic capacity. The
capacity of a given area of land is measured in terms of the number
of units of labor and capital which can be associated with it with
optimum results at a given stage of industrial progress. The

79

8o AGRICULTUR.\L ECONOMICS

capacit}^ of land is influenced by its topography, temperature,
rainfall, texture, and the kind of crops grown. Clay loam
usually has greater capacity than sandy loam., that is, a greater
amount of labor and capital must be put upon a given area in
order to secure optimum results in a given line of production.
In other words, land with high capacity permits of a higher
degree of intensity of culture in a given year in the production
of a given crop than land with a low capacity. This will be
further explained in a later chapter.

Land varies not only in its economic capacity but also in its
economic efficiency. The economic efficiency of land is measured
in terms of the value of the product per unit of labor and capital
expended upon it. The term " efficiency " is here used in the
same sense as it is used by the engineer who calculates the effi-
ciency of his locomotive in terms of the power developed per
unit of coal shoveled into the lire-box, the only difference being
that here we are calculating the number of dollars' worth of
product per dollar's worth of labor and capital put into the
land. More briefly stated, efficiency is measured in terms of
output per unit of " input" whereas capacity is 7neasured in
terms of input per acre of land.

Capacity and efficiency are the two dimensions of productivity.
If one would compare the productivity of two pieces of land
it is not enough to know how much corn or other crop it will
yield per acre ; it is necessary to know the expense of the pro-
duction (the input) and the product per unit of expense. A
piece of land might yield a large product per acre and yet class
as relatively poor land because of the great expense of produc-
tion.

The product is always equal to capacity multiplied by efficiency,
and in order to compare the worth of two grades of land one
should ascertain the number of capacity units per acre and the
efficiency per unit of capacity. For example, in comparing
land " A " and land " B " let us assume that land " A " has
ID units of capacity and " B " 8 units of capacity. If their
efficiency were the same the ratio of usefulness would be as
lo is to 8. But each capacity unit, that is each dollar ex-pended

LAND AS A BASIS OF AGRICULTURAL PRODUCTION 8l

on " A " land yields $i.6o, whereas each dollar expended upon
" B " yields only $1.50. The productivity of " A " is, there-
fore, $1.60 X 10, or 16, while the productivity of " B " is $1.50 X8,
or 12. Thus while the capacity ratio of " A " and " B " is
5 to 4, the efficiency ratio is 16 to 15 and the productivity ratio
is 4 to 3. How much more can a given farmer afford to pay
per acre for " A " land than for " B " land?

Productivity of land may be thought of in terms of pounds
or bushels of product per acre, physical productivity; or pro-
ductivity may be thought of in terms of the value of the prod-
uct per acre, economic productivity. Land varies greatly in
physical productivity due to differences in its physical and
chemical properties, and it varies greatly in its economic pro-
ductivity because of differences in the value of the product per
unit in different localities as well as in the kinds and quantities
of products on different pieces of land.

Under the physical conditions which are conducive to plant
growth are included : (i) the moisture and (2) the tempera-
ture of the soil and the air, (3) topography, and (4) the mechan-
ical structure of the soil. The amount of rainfall and simshine
remaining the same, the moisture and the temperature of the
soil, and its capacity for retaining the chemical elements of
fertility vary greatly from place to place because of differences
in the size of the particles of the soil. By cultivation the soil
may be improved to some extent, in this respect. By drainage
and by irrigation the moisture of the soil can be modified, and
by the use of glass and artificial heat the temperature of both
the soil and the atmosphere can be regulated. But in most
places and for most purposes Nature has done infinitely more
for man than he can do for himself in providing the land with
these desirable physical quahties.

From the standpoint of the economist the most important
chemical conditions of plant growth are : (i) nitrogen, (2) phos-
phoric acid, (3) potash, and (4) water. Other chemical com-
pounds contribute to plant growth, but these four are the
ones which require special attention because they are present
in the soil in limited and varying quantities, and because they

Figure 2 shows, by counties, the approximate percentage of the total
land area which was improved farm land April 15, 19 10. The statistics,
taken from the reports of the Thirteenth Census, afford the latest informa-
tion available on the subject.

LAND AS A BASIS OF AGRICULTURAL PRODUCTION 83

are more or less readily exhausted and require considerable
effort to increase or replenish their supply. In the humid
regions where the water needed by plants is abundantly sup-
plied by nature this element of fertility requires little or no
attention, but in the arid regions water ranks first in economic
importance. The carbon dioxide gas of the air is as important
to plant growth as is water, but it is present in such great
abundance that it has no value placed upon it and hence does
not enter into the list of economic conditions which require
our attention.

In comparing the value of two pieces of land physical pro-
ductivity is not a safe basis for the reason that the physical
product of two pieces of land may be the same but the values
of the products may be very different, due to differences in the
cost of marketing the products.

When a man contemplates the purchase of a farm, he wants
extent of land with even topography and he wants this land
to be fertile, but what is sometimes even more significant than
these qualities is the location of the farm which he is to cultivate.
In fact the physical and chemical characteristics of the land are
greatly influenced by its location. Heat and moisture, and the
character of the rocks from which the soil is formed vary greatly
from place to place. But besides these variations in the natural
conditions, there are variations in the social conditions which
influence the production and sale of products. Large popula-
tions are in some places concentrated on small areas, leaving
vast territories sparsely settled. This variation in the density
of population may be explained, in part at least, in terms of
variation in the physical environment, but our especial interest
is in the effect and not the cause of this variation in the density
of population. The farmer who is near a great center of
population, such as London or New York, can sell his products
for the same price which is paid for like products which have
been shipped great distances. Thus it is that of two pieces
of land possessing the same physical productivity, or fertility,
the farmer prefers the one located nearer a great center of popu-
lation, because of the greater " farm value " of the products.

§4 AGRICULTURAL ECONOMICS

Because of these variations with respect to fertility and
location, land is said to vary in economic productivity, or, in its
value-producing power. Variation in physical productivity of
land is due to variation in soil, variation in rainfall, and varia-
tion in temperature. The soil in the United States varies from
the sterile, arid sands of the great American desert to the well-
watered fertile loams of central Illinois, from land that will
yield nothing to land which will yield enormous crops of corn
year after year.

The improved land of the United States is shown in the
accompanying map which is based upon the " improved land
in farms." In 1910 there were 478,451,750 acres of improved
land in the United States. The enumerators were instructed
to include under improved land, " all land regularly tilled or
mowed, land pastured and cropped in rotation, land lying
fallow, land in gardens, orchards, vineyards, nurseries, and land
occupied by buildings." The improved land is not evenly
distributed over the United States. For example 82.9 per
cent of the total area of Iowa, 78.2 per cent of Illinois, 33.7
per cent of Wisconsin, and 1.8 per cent of New Mexico is im-
proved farm land. Only 25.1 per cent of the total area of the
United States is given as improved farm land, whereas 73.2
per cent of England is improved farm land. The relatively
low percentage of improved land in the United States and the
uneven distribution of this land can be explained largely in
terms of topography, soil, and climate. A map showing the
topography of the United States helps one to understand the
low percentage of improved farm land in the large are as occupied
by mountains. (See Fig. 3.) A map showing the rainfall helps
one to understand why vast areas are eliminated from this class
of plowed or mowed land, there not being enough rainfall to
support tilled crops. (See Fig. 4.) The soil map shows the
great irregularity of the soils of the United States with regard
to their usefulness. A map showing the mean temperature
during the growing season also throws light on the distribution
of improved land. The resultant of all these forces is given in
a map showing the value of all farm crops by counties in the

Figure 3 shows the topography of the United States in a generalized
way. It is a photograph of a reUef model of the United States, and was
courteously supplied by the U. S. Geological Survey.

Figure 4 shows the average annual precipitation (rain, melted snow,
sleet, and hail). It is much reduced and generalized from a map pre-
pared by the U. S. Weather Bureau for publication in the Precipita-
tion and Humidity section of the Atlas of American Agriculture.

LAND AS A BASIS OF AGRICULTURAL PRODUCTION 87

United States in 1909. (See Fig. 5.) The variation in value of
crops is due, of course, not only to differences in topography, soil,
and climate, but to differences in the character of the people cultivat-
ing the land and to differences in the distances from the market.

While only 25.1 per cent of the total land area of the United
States is improved farm land, 46.2 per cent of the total area is
in farms. Thus 21.1 per cent represents unimproved land in
farms. This is not to be ignored when considering the land
basis of agriculture. Much of this unimproved land provides
valuable pasture. It is never plowed or mowed, because it is
too wet, too hilly, or contains too many obstructions such as
stones and stumps. In five counties in southern Wisconsin
for which pasture statistics are available, 78.5 per cent of the
unimproved land in farms is reported as used for pasture, about
f of which was designated woodland pasture. A large share of
the woodland on farms yields considerable pasture. This same
area 3delds wood for fuel, fencing and buildings, also wood prod-
ucts for the market, such as posts, lumber, and cord wood,
which supplement the farmer's income. On one farm in
central Wisconsin, which is more than half woodland and on
which the tillage area is gradually encroaching on the timbered
area, about one-fifth of the total farm receipts comes from the
sale of wood in various forms.

The vast areas of land not in farms in the United States is
mainly occupied by mountains, deserts, forests, cities, railways,
etc. A part of it is used as range pasture, but much of it serves
no agricultural purpose. Some of it can be converted into farms,
but the greater part of it is at present far below the margin of
profitable utilization.

Irrigation is proving an important means of extending agri-
culture in the arid regions. To quote Professor Elwood Mead :
" The uninhabited and mismanaged areas of the arid region are
full of opportunities. A reaUzation of the possibiHties of this
region and of what man can accompHsh by a right use of its
resources has been of slow growth. To the early fur traders
and explorers the arid region was a dreary, worthless waste.
To neither Bonneville, Fremont, nor any of the multitude who

FlGUEB S

LAND AS A BASIS OF AGRICULTURAL PRODUCTION 89

crossed its vast expanse to reach the golden rivers of California
was there given any prophetic vision of the magic to be wrought
by irrigation. Nor is this surprising. It is difficult to imagine
anything less attractive than the stretches of barren sand broken
only by the isolated yuccas of the Mojave Desert, or anything
more dreary than the crucifixion thorn of Arizona. Only in
locahties where the work of the reclamation has been in prog-
ress long enough to permit the growth of trees, flowers, and
shrubs, can the possibilities of the soil and climate be appre-
ciated. No greater contrast can be found anywhere than is
afforded by a comparison of the desert above the ditches and
the cultivated fields below them. . . . The arid West is the
nation's farm. It contains all that is left of the pubhc domain,
and is the chief hope of those who dream of enjoying landed
independence, but who have Uttle beside industry and self-
denial with which to secure it. As it is now, this land has Httle
value. This is not because the land lacks fertility, but because
it lacks moisture. Where rivers have been turned from their
courses, the products which have resulted equal in excellence
and amount those of the most favored district of ample rain-
fall." And yet, with respect to the proportion of these arid
regions which may be made productive, the same authority
gives the following rather discouraging estimate : " if every
drop of water which falls on the mountain summits could be
utiHzed, it is not likely that more than ten per cent of the total
area of the arid West could be irrigated, and it is certain that,
because of physical obstacles, it will never be possible to get
water to even this small percentage." ^

The clearing of cut-over land. There are vast areas of land
in the United States formerly in forest from which the saw
timber has been cut, much of which may be converted into farm
land. This land usually requires a very considerable amount of
labor supphes and equipment to clear it of stumps and brush.
This accounts for the fact that it has been passed by so long
as rich prairie lands were available. Unfortunately, however,
much of this cut-over land both in the North and in the South
* Irrigation Institutions, pp. 2, 3, and 5.

90 AGRICULTURAL ECONOMICS

is of poor quality for farming purposes because of the excess
of sand in the soil. By careful selection very important quanti-
ties of good land can be added to our farm area at an expense
which will prove a profitable investment.

Drainage is another important means of expanding the area
of improved farm land. Along the rivers and coasts and in
much of the glaciated area of the United States marshes and
swamps are found which when drained will add greatly to the
supply of farm land. It has been estimated that 70,000,000
acres of land await improvement by drainage.

The introduction of new varieties of grains and forage crops
which are suited to semiarid regions makes possible the exten-
sion of agriculture where the rainfall is too light for the crops
which are commonly grown in the humid regions. For example,
the drought-resisting macaroni wheats have recently been in-
troduced with great profit. " In many places west of the looth
meridian, where wheat growing with other varieties is prac-
tically impossible on account of drought, the eastern Russian
varieties by virtue of their extreme drought-resisting qualities
will produce, ordinarily, a crop of from twelve to twenty bushels
per acre. By the use of these wheats, therefore, these locali-
ties may become important additions to the wheat area." ^

The introduction of several varieties of sorghum as forage
crops in the southwest is resulting in the expansion of farm land
in western Kansas and parts of Texas and New Mexico.

Along with the introduction of new crops which can be grown
on semiarid lands, much is being done to expand the area of
plow land by new methods of culture commonly known as
" dry-farming," which consists in cultivating the land to con-
serve the moisture. It is common to cultivate the land for one
season with nothing growing on it in order to conserve the
moisture and then seed to wheat. By this means the wheat
crop may have the benefit of more moisture than would
be available if attempts were made to secure a crop each
year.

' United States Department of Agriculture, Bureau of Plant Industry, Bulletin
No. 3, p. 28.

LAND AS A BASIS OF AGRICULTURAL PRODUCTION 91

The future will be very different from the past with regard
to the expansion of the area of farm land. In 1850 the land area
of the country was 1,884,375,680 acres, but only 15.6 per cent
of it was in farms, only 6 per cent was improved farm land, and
there were only 1,449,073 farms. In 1910 the total land area
of the country was 1,903,289,600 acres, 42.6 per cent of which
was in farms, 25.1 per cent of which was improved land, and
there were 6,361,502 farms. The best farm land of the United
States was brought into cultivation during the sixty years
from 1850 to 1910. Prairie land and the development of the
railway system made this the period of the most rapid develop-
ment of farms in the history of this country. A study of the
soil, climate, and topography convinces one that the expansion
of the agricultural area will proceed much slower in the future
than it has in the past. In fact the decade from 1900 to 1910
showed a great decline in the rate of expansion. Between
1890 and 1900 the farm area expanded more than 215,000,000
acres, while between 1900 and 1910 the farm area expanded only
about 40,000,000 acres, though the increase in population was
greater in the latter decade than in the former.

Quality of the new land. During the past sixty years, when
the area of farm land was increased, it was not unusual for the
new land to be more easily brought under cultivation and more
fertile than the land already under cultivation.

This was true during the period of the development of the
prairies of the north central states and the black prairie of
Texas. In the future, however, when the demands for agricul-
tural products make it desirable to resort to lands not now used
for agricultural purposes, the new additions to the supply will
either be expensive to bring under cultivation or infertile when
brought into use. This means that the new increments of supply
will yield less per dollar of expenditure upon them and can for
this reason be resorted to with profit only under condition of rising
prices for farm products or falling costs for labor and equipment.

The growth of our population is sure to make increasing
demands upon the agricultural resources of the country, a part
of which may be met by extending the industry into regions

92 AGRICULTURAL ECONOMICS

which are not being used; but the most important means of
increasing the supply of agricultural products in the future
will be doubtless by farming more intensively the land which is
already in use. This means that the part which labor, equip-
ment, and skill in management will play in agricultural produc-
tion will be more important, relatively, in the future than in
the past. In other words, there will probably be a continual
increase in the amount of labor and capital it will pay to expend
on a given area of land with a view to increasing the product.
This will make the problem of the proper degree of intensity of
culture a central one in the minds of the thinking farmers.

While the product can be greatly increased by means of
increased intensity of culture, it is true that after a certain
point has been reached the return per unit of expense decHnes
with every increase in intensity. Thus whether the new in-
crements of supply of farm products are secured by expanding
the farm area or by increasing the product per acre, the law of
increasing costs and diminishing returns per unit of social economic
energy put into agricultural production is almost sure to operate.
The hope for relief from the depressing efect of the law of diminish-
ing returns lies in the improvements in men and equipment which
will increase their efficiency.

CHAPTER X
FARM EQUIPMENT

By the term " equipment " we mean all produced instruments
of production. In this class fall all agencies of production ex-
cepting man and land or nature. Thus horses, tools, machinery,
buildings, fences, seeds, feeds, and other supplies are here classed
as equipment. Economists have used the term " capital "
in the same sense the term " equipment " is used here. The
term which clearly refers to the concrete goods rather than to
their value or to the amount of money invested in them is
preferred because a large share of the readers of this book are
accustomed to thinking of " capital " as the amount of money
invested in the land and the equipment together.

The equipments of the farm may be classed as movable and
immovable. In the first class fall the live stock, tools, machin-
ery, and supplies, while buildings, fences, wells, etc. form the
latter class. A distinction is sometimes made between operat-
ing capital diTid fixed capital; the former is applied to those items
which we call movable equipment, the latter including land as
well as permanent improvements. It is only fair to note, how-
ever, in this connection, that a dairy cow barn and silos are just
as truly operating capital in the milk business as the cows them-
selves, and a tobacco curing shed is operating capital to the
tobacco grower as much as his transplanter, but in the common
usage of the terms, the barns, silos, and shed would be classed
as fixed capital.

Farm buildings in the United States were valued at $6,-
325,451,528, April 15, 1910, or about 15 per cent of the valua-
tion of all farm property. Implements and machinery were
valued at $1,265,149,783, and live stock at $4,925,173,610.

93

94

AGRICULTURAL ECONOMICS

The average value of farm buildings was $7.20 per acre, that of
implements and machinery $1.44, and that of live stock $5.60
per acre, a total of $14.24 per acre for these equipments. The
feeds, seeds, and other supplies on hand were not given, but
the equipments given represent 30.5 per cent of the total in-
vestment shown in the census, and it is believed that when
supplies are added for April 15, the equipment will equal at
least one-third the total farm investment of the country.

The average value of each class of farm property per acre
of land in farms is shown in the following table :

TABLE II

Average Valtje per Acre of Farm Property
April 15, 1910

All Farm
Property

Land

Buildings

Imple. and
Mach.

Live Stock

New England . . .

S43-99

$19-34

$17-06

$2.58

$4.97

Mid. Atlantic .

68.52

33-86

22.70

3-88

8.08

E. No. Central

85.81

61.32

13-93

2.28

8.28

W. No. Central

58.18

43.21

6.71

1-59

6.67

So. Atlantic .

28.44

18.15

5-81

0-95

3-53

E. So. Central

26.78

16.28

5-05

0.92

4-53

W. So. Central

22.69

16.06

2.44

0.71

3-49

Mountain . .

29.52

^9-73

2-44

0.83

6.53

Pacific .

54-17
46.64

43-76
32.40

4-52
7.20

1.29
1.44

4.60

U. S

5.60

From this table it will be seen that buildings and machinery
are very much more important in the North than in the South,
and in the East than in the West. These differences are due
to differences in climate, type of farming, and the standard
of living of those who live on farms. While the above table
is useful in making comparisons with respect to the amount
invested per acre in the different parts of the United States,
the following table, showing the percentage distribution of
value of farm property, is more useful in comparing the relative
importance of each class of investments.

FARM EQUIPMENT

95

TABLE III

Percentage Distribution of Value of Farm Property
April 15, 1910

Geographic Div.

Land

Buildings

Imple. and
Mach.

Live Stock

United States . . .

69-5

iS-S

3-1

II. 9

New England

44.1

38.8

5-8

II-3

Mid. Atlantic

49-4

33-^

5-8

11.8

E. No. Cen.

71.4

16.2

2.7

9-7

W. No. Cen.

74-3

II-5

2.7

ii-S

So. Atlantic

63.7

20.5

3-3

12.4

E. So. Cen.

60.8

18.9

3-4

16.9

W. So. Cen.

70.7

10.8

3-r

15-4

Mountain

66.8

2.8

2.8

22.1

Pacific

80.0

8.2

2.4

8.5

During the second half of the 19th century, northern agricul-
ture was revolutionized by the application to agriculture of a
great variety of labor-saving machinery. The sickle, the cradle,
and the scythe were replaced by the reaping and mowing ma-
chines which did the work of many men. The reaper first
simply cut the grain and left it to be bound by hand, but before
the end of the eighties the self-binder was the common method
of harvesting small grain of all kinds where grown in commercial
quantities.

The methods of threshing small grain made great progress
during the past century. Threshing with the flail, and tramp-
ing out by means of horses or cattle, were being replaced by
simple forms of threshing machines in 1840. The early thresh-
ing machine consisted of a cylinder and a concave each studded
with spikes. This machine was driven by horse power. This
machine knocked the grain loose but did not separate it from
the straw and chaff. The winnowing was usually done by
means of the fanning mill turned by hand, though many farms
in the West had no fanning mill. The thresher and fanning mill
were soon combined in the one machine which threshed and
cleaned the grain.

96 AGRICULTURAL ECONOMICS

Aside from these inventions which center about the small
grain, the most important inventions were the steel plow,
the corn planter, the corn cultivator, the mower, the rake, and
the horse hay fork. These inventions eliminated a great share
of the labor involved in growing the staple crops of the
North. By the use of machinery the effectiveness of human
labor in the production of northern field crops was more than
doubled.

This development of machinery seems to have been the result
of a scarcity of labor at a time when railway transportation made
the fertile prairies of the north central states accessible to the
eastern markets, making commercial grain growing profitable.
The invention of machinery has reduced the part played by
human brawn and increased the part played by human brain,
and by mechanical and animal equipment. The main tendency
has been to increase the amount of land one man can operate.
What the effect will be ivhen population increases more rapidly
than the land, and the desire is to get larger amounts of product
per acre instead of farming more acres, is a question worthy of
attention. Every effort has been devoted to increasing the
capacity of machinery with respect to land and the efficiency of
machinery with respect to man. The future need will be in the
direction of greater efficiency of machinery, when measured in
terms of product per unit of land.

The invention of the cotton gin in the previous century
stamped upon the South a type of farming making large demands
for hand labor in the field in hoeing and picking cotton. Little
progress has been made in the use of labor-saving devices for
the picking of cotton and the husking of corn.

The improvements in the live stock have been in the direc-
tion of greater productivity. The tendency has been to secure
a hog which can be prepared for the market in from 6 to 9
months instead of from 12 to 15 months. The tendency has
been to develop a cow which will yield a large amount of butter
fat without careful records to show whether this is the result
of large product per unit of feed or simply large product without
regard to feed consumed. With high feed costs more atten-

FARM EQUIPMENT 97

tion must be given to the efficiency of cows if the farmer would
secure high profits.

Throughout the past century the presence of cheap grazing
lands resulted in the most careless use of land and feed in the
beef cattle industry, but the recent movement has been the
same as that in hog production. The beef animals are being pro-
duced in a shorter period which usually means greater efl&-
ciency in terms of land and feed. The baby-beef industry is
the result of this movement for reducing the length of time re-
quired to produce a steer. This usually means more intensive
culture and probably small gross returns per hour of human
effort put into the business, but it provides labor for many more
hours in the year and greatly increases the returns per unit of
land.

Equipments of all kinds vary in capacity and efficiency.
This is true of horses, cattle, sheep, and hogs. In each class
there is a variation in the amount of feed and labor demanded
by the different animals, or their capacity; there is also a
wide range in the product per unit of input, that is in their
efficiency. There has been a tendency for experimental feeders
to confuse digestive efficiency and economic efficiency. This
has led some people to believe that all differences in dairy
cows, for example, are differences in capacity. The table on
the following page based upon the results of the Wisconsin dairy
cow competition, 1909-igii, throws light upon the question of
differences in the economic efficiency of dairy cows.

It is believed that this table helps to establish the idea that
being a " good feeder," however desirable this quality in a
cow, is not the only qualification of a dairy cow. In the above
table the cow which ranked second in the amount of feed con-
sumed ranked twenty-fifth in product per unit of feed.

The range in efficiency of the 26 cows in the herd from which
these figures were taken was from 1.44 to 2.46. When all of
the 398 cows in the competition are compared the variation is
much greater, varying from .92 to 2.71. It should be recognized,
however, that when cows on different farms are compared, the
differences may be due in part to differences in the efficiency

98

AGRICULTURAL ECONOMICS

of the men in charge of the cows, and only partly to differences
in the potential eflSciency of the cows themselves.

TABLE IV

Variations in Efficiency and Capacity of 26 Registered Holstein
Cows under the Same Management

Efficiency

Capacity

Productivity

Product

Value of

Value of

Value of

Product

minus Cost

of Feed

Rank

per Unit

Rank

Feed

Rank

Product

Rank

of Feed

Consumed

per Cow

I

$2.46

I

$99-83

I

$246.10

I

$146.27

2

2.40

16

S6.42

5

207.76

4

121.34

3

2.38

7

91.05

3

216.52

3

125.47

4

2-34

5

94-05

2

220.01

2

125.96

5

2.28

4

94.06

4

214.87

5

120.81

6

2.13

18

86.06

6

183-53

6

97-47

7

2.09

20

84.20

10

176.39

7

92.19

8

2.06

14

86.70

8

178.56

8

91.86

9

2.05

13

86.75

9

178.II

9

91.36

10

1-93

15

86.59

13

166.70

12

80.11

II

1.91

II

88.52

12

169.20

II

80.68

12

1.91

6

94.01

7

179.25

10

85.24

13

1.82

17

86.23

15

157-20

14

70.97

14

1.76

3

98-93

II

174.64

13

75-71

15

1.74

26

82.69

20

143-61

18

60.92

16

1-73

25

82.94

22

143-18

10

60.24

17

1.72

12

87.03

18

150.02

16

62.99

18

1.72

9

89.07

16

153-51

15

64.44

19

1.72

21

83-52

21

143.61

20

60.09

20

1.69

23

83.10

23

140.46

22

57-36

21

1.69

9

89.16

17

150.68

17

61.52

22

1.65

24

83.01

24

136.60

24

53-59

23

1.63

8

89-32

19

145-41

23

56.09

24

1.60

22

82.22

25

131-35

25

49-13

25

1.58

2

99-74

14

157.28

21

57-54

26

1.44

19

84-77

26

122.22

26

37-45

Average

$1.91

$88.46

$168.72

$80.26

FARM EQUIPMENT 99

There is a wide range in the efl&ciency and the capacity of
the different machines intended for essentially the same pur-
pose, as for example plows, harrows, mowers, hay rakes, hay
loaders, reapers, threshers, and silage cutters.

These differences exist at a given time because one kind of
machine is suited to one condition with respect to climate and
topography while another machine suits best under other con-
ditions. The fact is, however, that improvements made by
one company of manufacture is soon duplicated by another,
so that the machines on the market, available for a given type
of farming, vary but little after the principle has once been
thoroughly worked out. Mowing machines and self-binders,
for example, vary but httle in construction aside from speed of
the sickle and length of the cutter bar, which differences enable
the farmer to choose to suit his condition.

The range in the efficiency and capacity of machines is best
emphasized when the subject is viewed historically. Studies
made by the United States Department of Labor show that by
the methods used in 1 829-1 830 one hundred hours of labor
would produce about 46.5 bushels of barley, whereas in 1895-
1896 one hundred hours of man labor results in over 1 100 bushels.
While all of this change cannot necessarily be attributed to the
improvement of machinery it is certainly true that the effi-
ciency of machinery as measured in terms of product per unit
of human labor was enormously increased as a result of the
new forms of machinery introduced during this period.

In the production of wheat each day's labor produced 3-^
bushels in 1829-1830, while under the machine method of 1896
the product had expanded to 60 bushels per day of human labor.
In general the increase in product per unit of man labor has
varied from 150 per cent in the case of rye to 2244 per cent in
the case of barley.

Some of the machines which have so greatly increased the
product per man in agricultural production are too expensive
to be owned by the small farmer. The threshing machine, the
ensilage cutter, and the corn sheller are typical examples. In-
stead of increasing the size of the farm beyond the point of

lOO AGRICULTURAL ECONOMICS

economy when other forms of equipment are concerned or
reducing the machine to an inefficient size in order to make the
machine fit the farm, the practical solution has been to have
one farmer own a machine with which he does the work for a
whole neighborhood. For six weeks in the fall the dairy farmer
of southern Wisconsin works in cooperation with his neighbors
threshing grain and filling silos.

For some farms the self-binder is a burden because it is kept
a year for two days' work. Where there is but little machine
work to do the economy of making one binder do the work on
several farms is obvious.

The tractor is the most expensive piece of farm machinery
which the farmer has contemplated buying for his own use.
It would appear that some plan whereby the plowing of a neigh-
borhood might be done by one tractor would be more in keep-
ing with good farm economy than to put a tractor on each farm
where it will stand in the shed most of the time. Furthermore,
before buying an expensive machine, like a tractor, the farmer
should consider very carefully the annual cost of its use including
interest, depreciation, repairs, and supplies. This should be
balanced over against the reduction of other costs and the in-
creased income. The danger is that the farmer will underesti-
mate the cost of using a tractor and overestimate the amount it
will reduce other costs, such as horse labor costs and human
labor costs. The fact that machinery has done so much for the
farmer in the past leaves him open to exploitation, and the
danger is that the agricultural papers will join hands with the
manufacturers in carrying on this exploitation.

Equipments are very different from land with regard to the
possibiHty of increasing the supply. The increase in the supply
of animal equipment is limited only by scarcity of land on which
to produce herds. The supply of tools and machinery may also
be increased indefinitely, the limit being set only by the amount
which the farmers can use with profit on the available land
area. In general, it may be said that the equipments may be
expected to increase more rapidly than the land supply.

The contrast between land and equipments is greatest, how-

FARM EQUIPMENT lOl

ever, when the qualities of the new increments of supply are
considered. Whereas the new increments of supply of land are
expected to be less and less useful as time passes, not only are
the new increments of supply of equipments expected to be more
useful than the old supply, but the old supply may be replaced
by improved varieties. This is especially easy in the case of
machinery where a new design unrelated to those formerly in
use may entirely replace the old. With live stock, Umitations
are set by the fact that the new is the progeny of the old and
possesses essentially the same characteristics. The oppor-
tunity for quick improvement here comes from the multiply-
ing of the animals of superior quality and eliminating those of
inferior quality.

In general, the possibility of continuous improvement of the
usefulness of farm equipments makes the outlook for the future
optimistic in spite of the fact that the new additions to the farm
land area may be less afid less useful.

BIO-AGRICULTURAL LIBRAR
UNIVERSITY OF CALIFORNIA
RIVERSIDE. CALIFORNIA 925

CHAPTER XI
THE HUMAN BASIS OF AGRICULTURAL PRODUCTION

While it is the purpose of agricultural production to satisfy
human wants, and man is rightly considered the end in view
in the production of all economic goods, it is also true that
human brawn and human brain are so important in giving direc-
tion to the other factors that man may easily be counted the
most important of the three factors of production. Whatever
affects man as an agent in agricultural production seriously
affects the results of this basic industry.

There is essentially but one class of people engaged in agri-
culture in the northern part of the United States, but in the
South there are clearly defined lines of demarcation between
managers and workmen. In the North the same man is usually
a manager and a workman. Those who are workmen and not
managers are usually young men who expect to become farmers
on their own account in the course of time. The difference
in the South is due to the presence of the colored workmen who
labor under the direction of white managers. In many foreign
countries there is a classification of the agricultural popula-
tion into landlords, farmers or managers, and laborers. This
is notably true of England. While one man may represent all
of these classes in the United States, there are functions corre-
sponding to the three classes. Especial attention will here be
given to labor and management as functions of the human
factor in agricultural production.

In 1910 there were about twelve and one-half miUion persons
engaged in agricultural pursuits in the United States. About
half of these were classed as farmers, and the other half were
classed as laborers. Five-sixths of the total were male and one-
sixth female, but of the laborers, three-fourths were male and

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION 1 03

one-fourth female. Over three-fifths of the laborers are members
of the farmers' families, and less than two-fifths are " working
out."

The human element in agriculture is, as a rule, organized
into family groups. Where the natural family is too small for
the farm, additional members are taken into the family as wage
earners. Where the families are too large for the farm, some
of the members work for other families. While this is the rule,
there are numerous exceptions. It is by no means uncommon
to find a cottage on the farm where a married laborer lives and
works for the farmer.

The family organization lends much to the permanency,
the physical and mental character, and to the means of control
of labor in agriculture.

The functions of man in agriculture may be divided into
management and labor. There is no clear-cut division between
the managers and the laborers on most farms in the United
States. The organization is usually more or less democratic.
The farmer or manager participates in the labor of the farm,
and the other workers usually feel free to make suggestions
regarding the management.

The managerial functions may be divided into two classes:
First, the function of determining general policies. For ex-
ample, the choice of a farm with respect to location and size,
or the choice of types of farming with respect to crops to grow
and live stock to keep, are questions which require careful
deliberation. Second, the function of immediate supervision
of the work. The projecting of the program of the day, and
the meeting of emergencies as they arise require alertness of
mind if the labor is to be directed with best results. Since
every farmer must perform both of these functions, it is evident
that farming is a business requiring men of many qualities.

Farmers vary greatly in their ability as managers and as

workmen. This is a matter of common observation. J. E. T.

Rogers ^ says, " Just as one field may grow more corn than

another field, without putting the farmer to any greater cost in

1 "Social Economy," pp. 36-37.^

I04

AGRICULTURAL ECONOMICS

Ranges and Frequencies of Labor Incomes.

FiGTTBE 6. — The location of each dot in this chart indicates the labor income,
i.e. the personal net earnings of one farmer. The wide range in earnings indicates
a wide range in the ability of the 60 farmers, living near Verona, Wis., whose
records are the basis of this chart. The farmers whose incomes are indicated by the
shaded dots received food and shelter ranging in value up to about $ 500. The
white dots represent the fanners who lost money as well as their time.

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION 105

cultivating it, — just as a shop in one street may be more suit-
able for business than an equally good shop in another street, —
just as one mine may yield more coal or iron than another mine,
while the cost of working both is the same, and so on with a
variety of other such naturally useful objects, — so one man
may, with no greater cost of preparation than his neighbor,
earn a great deal more than that neighbor. There is a superior
fertility of certain fields, a greater profit to be got in certain
places, richer veins in certain mines, and similarly there is a
greater natural power in certain minds. Two lawyers may have
the same education and be equally diligent, but one may earn
hundreds where another only earns tens. Two physicians
may have had the same advantages of study, and have equally
striven to profit by their opportunities, and one may make a
fortune while the other can barely earn a living.

" Now in the case of the field, the shop, and the mine, it is
easy to measure the natural advantage which the more favored
possess over the less. ... It is not so easy, however, to meas-
ure the advantage which superior abiUties give some persons
over others who work in the same calHng ; but they are none the
less real and solid."

There are, likewise, differences in men's bodies. These differ-
ences are easily recognized, but before giving further attention
to the significance of these differences, an attempt will be made
to outline the qualities of men which are essential to success.

Health and strength are essential qualities of the farmer.
There are tasks on the farm which require skill rather than
muscle, yet when the workman on the farm is followed from
task to task and from day to day there is a great deal of work
found which requires plain muscular strength, tasks in the
performance of which the strong man may move with ease,
whereas the weakling will wrestle without results. Two
weak-muscled men are often required to do the work of one
strong man, and it often happens that a fine team of horses
stands entirely too long, awaiting the loading of the wagon,
simply because adequate human brawn is lacking. The man
with ill health, who is often unable to work, has little hope for

I06 AGRICULTURAL ECONOMICS

success on the farm. The tasks of the farm must be done
at the right time. The farmer cannot drop out for a day or
a week and come back and pick up the work where he left off.
There is no place for the weakling on the farm.

Skill in the variety of tasks of the farm is essential if one is to
earn anything farming. The man without skill often earns
less than nothing for the reason that he is associated with land
and equipments which possess potential powers of production
which may not be realized upon if not properly handled. For
example, four horses and a gang plow cost about 50 cents an
hour and should plow about half an acre per hour. If an un-
skilled plowman fails to plow more than one -third of an acre
in an hour, the loss in the utilization of horse labor is enough to
hire a skilled plowman. In feeding a calf, the unskilled feeder
endangers the life of the calf twice a day and often occasions
losses much greater than the amounts required to hire a skilled
calf feeder.

No premium is usually paid for ordinary skill in farming over
what the unskilled worker gets in other lines, for the reason
that farmers of ordinary skill are abundant, and there is no
alternative use for such skill. More people are trained in
agriculture than are needed for the farms. What is not scarce
has no value, and yet the young man without farm rearing who
undertakes farming has before him the problem of acquiring
skill at a time in life when it is expensive to acquire. No
time is lost when a small boy picks up one by one the " tricks
of the trade " and the skill of hand needed on the farm, but if a
grown person has this skill to acquire he should not hope to se-
cure very high wages while he is acquiring it. In fact, the farmer
can scarcely afford to take a man without farm experience
without charging him for the privilege of acquiring skill. It
usually happens, however, that there are unskilled tasks about
the farm at which the workman can earn something, although
at the more important tasks he may be earning nothing or even
losing money for the farmer.

The workman should be capable of making suggestions which
may improve the quality of the work he is doing. Ingenuity

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION 107

in improvising means of accomplishing the task assigned him is
usually desirable if not associated with a stubborn disposition
wliich makes the workman unhappy if he cannot have the priv-
ilege of making changes in methods without the approval of
the manager. It is a fine quaHty to be able to suggest changes
without any insistence that they be introduced contrary to the
judgment of the employer.

The work habit is essential to a satisfactory workman. One
who is industrious by habit enjoys his work and would rather
work than be idle ; putting forth his muscular energy is a joy
to him. This is markedly in contrast to the lazy person for
whom every action requires will-power to overcome the pain of
exertion. It is the latter class who are always pulling back,
setting a slow pace for the crew, and stirring up discontent.
There is no place on a good farm for a man who does not enjoy
work.

A clear vision of what is to be done is essential to both the
functions, — management and labor. Ability to arrange the
work in such a manner as to get a maximum of result with a
given outlay is essential to good management. A clear mental
picture of the work to be done, and how it may best be done
makes farm management an easy task. Without this vision
a manager is a bhnd leader.

Good ntdgment in deciding what to do at a given time and what
to leave undone requires both knowledge of farming as well as
experience in farming. Every workman must take a share of
the responsibility for the successful operation of the farm;
hence it is important that every man on the farm possess good
judgment. Judgment is required in tightening a nut on a plow
bolt, for if left loose it will come off, and if turned too tight it
may break and delay the work. Judgment is required in feed-
ing and in watering a horse, to say nothing of the judgment
required in fitting a collar to a horse in such a manner as to
keep the shoulders sound and in good working order. Then,
again, judgment is required in setting and holding a plow or a
cultivator, and in a thousand and one other things which arise
in succession from day to day through the year.

Io8 AGRICULTURAL ECONOMICS

Knowledge is essential to good judgment. Knowledge of
crops, live stock, and machinery is essential to intelligent man-
agement. This knowledge should include the needs of the
various crops and live stock, and the results which may normally
be expected in terms of the physical productivity of each. This
is not all that is needed, however. In order to decide intelli-
gently on what to produce, it is necessary to know the prices
which may be secured for each product of the farm and the
price which must be paid for the use of land, labor, and equip-
ments. The former knowledge comprises the physics, chemistry,
and biology of farm management ; the latter is the center of
the economics of farm management. It is only the active-
minded man who continually looks for new information who
will keep informed in all these branches of knowledge which
form the basis of rational farm management.

Ability to give and to receive directions and explanations relating
to the work is very important. The tasks of the farm are
spread over so much territory that each workman is largely
self-directive in the carrying out of the work of the farm. The
ability to hold conditions in mind in giving instructions, and
to hold instructions in mind when carrying out the work is
very important to the success of the operation. A workman
should require to be told but once the depth the ground is to
be plowed in a given field for a given purpose, the course to
take in harrowing the plowed field the first time after plowing,
the policy of the manager with regard to deep and shallow
cultivation of corn, the system of feeding the horses and each
other variety of live stock, the approved method of milking
cows, and many other details. A man who forgets what he is
told and does as he likes may prove an unsatisfactory workman,
and certainly will unless he is very wise in directing his energies
in the interest of the proprietor.

Self-control is one of the very important qualifications of the
farm manager. He who cannot control himself will have little
success in controlling others. Self-control is also essential to
rational decision on crops to grow and live stock to keep. The
man who lets his likes and dislikes take precedence over facts

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION lOQ

and figures will certainly fall short of the possible results. One
who follows his own taste, regardless of economic results, may
temporarily get more personal satisfaction, but will make a less
productive use of the land. From the national point of view,
such a one is an undesirable kind of farmer in this one respect
at least, and in the long run will be eliminated by competitive
forces. The high-type farmer coolly acts in conformity with
economic forces, regarding it as his duty to himself, his family,
and his country to make the right use of the agencies of production
and to deal honestly and fairly with all men. It is not always
easy to be fair-minded in a transaction with a rascal, but even
here the emotions should not lead a man to lose control of him-
self and let the spirit of revenge have supremacy over rational
judgment. Self-control is essential to the mastery of economic
forces.

Ability to hold one^s mind on one's work is essential to doing
the work well. The good workman who enjoys his work has
no trouble on this score, but the lazy timeserver usually allows
his mind to wander and his tongue to clatter, which insure in-
efi&ciency of the employee and his associates, whereas the man
with his mind on his work adjusts his operations to changed
conditions when needed and is in a position to improve methods.
There is no place on the farm for the former, but the latter
makes farming a joy to himself and his associates.

Ability to work to schedule is sometimes called the " time
sense." Even among men with the work habit who enjoy
their work, some know how to keep pace with time and turn off
the work, while some do not. Men with the " time sense "
will start the milking at the same time each day and finish the
task without a variation of more than two or three per cent
in the amount of time required. In plowing a field the man with
the time sense turns off a day's work each day. He knows
how many furrows he must plow in order to accompHsh the
amount he deems a day's work. He knows how much he must
do each hour, and as the railway engineer watches his schedule,
so does the good workman sense the pace required to accom-
pHsh a day's work. This is not so simple a task for the farmer

no AGRICULTURAL ECONOMICS

as for the locomotive engineer, because varied work and tem-
perature, the air movement, the dryness of the soil, and the
character of the previous crops all affect the speed which is
correct for a given day. The schedule must be figured for each
combination of circumstances which presents itself. The
farm workman who has the time sense and for this reason works
to schedule will earn from $5 to $10 per month more for this
reason. Much of the occasion for long hours on the farm can
he removed by introducing system and snap into the work.

Ability to control m,en is essential in the farmer who is an
employer of help. This requires the ability to understand the
temperament of men and to treat them in such a way as to bring
out the action desired with good feehng on the part of every one.
Fairness in the treatment of men is essential to this result.
The manager who feels hke criticizing the workman for accom-
plishing so little should assume in his questions that an adequate
cause prevented the man from accomplishing more. In case
of uncertainty as to how much should be accomplished, the
manager should put his hand to the task. This will often make
him well pleased with what others have accomplished. The
manager who criticizes his workmen on the basis of things he has
imagined to be true without making sure of the facts will lose
the confidence, good will, and respect of the men under him,
without which control is impossible.

Control is usually easier where workmen are young. Boys
who have been used to parental guidance conform more readily
to directions than older men who have been used to greater
freedom of action. The fact that about half of the workers
on farms in the United States, other than the farmers themselves,
are members of the family of the farmer, greatly facilitates
control of the workers on farms. This not only gives a paternal
basis for control, but is supplemented by the worker's interest
in the estate as one who may expect to share in the inheritance.
This is one reason why the family farm is usually more success-
ful than the farm operated by hired men.

Ability to cooperate with neighbors is important, especially at
threshing time and when the silos are to be filled. Good

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION ill

relations with one's neighbors depends more upon Uttle things
than upon important matters. The cats, the dogs, the pigeons,
or the pet rabbits are more hkely to cause trouble than the
horses or the cows. The laws and customs regulating the
farmer's rights and privileges with regard to these larger animals
are well established, whereas in the case of these smaller animals
property rights and restrictions on the freedom of these animals
are not so well established. Generosity in these matters is
essential to good relations with one's neighbors. It pays to
humor one's neighbors in all small matters. This done, the
larger relations are likely to be easily adjusted.

Faithfulness to the interests of the farm is a quality which
makes the workman invaluable if he possesses the other neces-
sary qualifications. This requires that the workman put the
success of the farm, that is the doing of his work well and at the
right time, above his own personal desire for comfort and enter-
tainment. Hired managers are sometimes valueless, and often
worth much less than nothing. Unless the leader is faithful,
little can be expected of the other men. It sometimes happens
that farmers do not take their own farm work seriously. Such
farmers never command the respect of good workmen.

Interest in one's work is essential to faithfulness, and makes it
easy. The time killer, the slipshod workman, the man of un-
even and uncertain pace, the man of irregular habits regarding
his eating, sleeping, and social activities, the man who likes to
sit down but hates to get up; the man who continually uses
intoxicating Uquor; or the man without hard muscles and a
clear mind has a difficult task before him even if he has a desire
to do the square thing, and tries to be faithful to the interests
of the farm.

One should carry out faithfully the plan which has been de-
liberately decided upon. For example, there may be differ-
ences of opinion as to whether the corn should be checked or
drilled. The workman may desire to drill the corn, but the
manager may decide, after considering all the arguments for
and against drilling, to have the corn checked, especially be-
cause he fears the field cannot be kept clear of weeds unless it

112 AGRICULTURAL ECONOMICS

can be plowed both ways. Faithfulness demands that the work-
man forget the contention, and put forth all his skill and energy
in checking the corn so that it can be cultivated in both direc-
tions with ease. Workmen have been known who, under these
circumstances, dehberately ran the check wire too loose or too
tight or allowed the wire to creep across the field by drawing more
from one end than from the other, and in various ways botched
the job so that the corn could not easily be cultivated cross-
wise, and hence nothing was gained by checking instead of
drilling. Such action is proof that the workman is incapable
of faithful ser\ice, and hence unworthy of his position.

Honesty is a prime requisite. The man who says he doesn't
know, or who avoids telling his employer something which he
knows and which the employer has a right to know, is dis-
honest. The man who breaks a tool and lays the parts together
and assumes to know nothing about the accident is at heart a
liar. There is no place on the farm for the liar, because he can
never be trusted. The only safe and sane way is for the work-
man to report his mistakes and his accidents. A mistake re-
ported may be adjusted and forgotten, but a hidden mistake
grows into a larger difficulty, endangers mutual distrust, and
ultimately the discharge of the employee. The only profitable
way is for both parties to be honest where there is clearly
something which ought to be said. Frankness may go too far,
however. Too great freedom in saying what one thinks may
lead to hasty and ill-advised statements. Only after careful
consideration should criticisms be made, but when made they
should always be presented directly to the one criticized and
not to others.

Courage is a quaHty which adds greatly to the effectiveness
of a man in any Une of work. It is important, however, to dis-
criminate between courage and conceit. Courage is defined by
Webster as : " That quality of mind which enables one to en-
counter danger and difficulties with firmness, or without fear or
fainting of heart." One who is conceited, according to the same
authority, entertains a " flattering opinion of one's self." Con-
ceit greatly reduces the value of a man to the farm. The con-

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION 1 13

ceited man makes mistakes which are expensive and unneces-
sary. Conceit sometimes makes a man seem courageous who
is really not courageous but foolhardy. True courage pre-
supposes a correct estimate of one's own ability, knowledge of
the difficult task to be performed, good judgment in under-
taking or refusing to undertake the work, and resoluteness in
executing the task if undertaken. Courage greatly increases
the usefulness of a man on a farm.

Patience is another quality which adds to the value of the
worker on a farm. A great variety of live stock must be trained
to do what is wanted, and made to do the thing while yet un-
trained. The man who loses patience loses power. The man
who keeps patient conserves his energies, and that of the animals
with which he is working. The love for farm animals makes it
easy to be patient in handling them.

These physical, intellectual, and moral qualities are possessed
by farmers in widely different degrees of perfection. These
diferences in the abilities of men account largely Jar the dif-
ferences in the profits secured by diferent farmers and in the
wages secured by different workmen. A satisfactory choice of
workmen on the part of employers, or a wise choice of employer
on the part of workmen requires ability to judge the qualities
of men.

It makes a difference which laborer is employed. Owing to
the fact that men and equipment, as well as land, vary in
their economic productivity, the total produce will be influenced
by the way in which the grades of the different factors are as-
sociated for productive activity. The way in which this com-
bination should be made is the subject of a later chapter. '

The supply of the human factor. The human factor in pro-
duction is less under direct economic control with regard to the
rate of increase of supply or the quality of the new increments of
supply than are farm equipments. Malthus' theory of popula-
tion emphasized that population tends to be as great as the pro-
ductive energy of the country will permit. In the form in which
Malthus first stated the theory, the idea was emphasized that
the pressure of population upon the food supply would ever be
I

114 AGRICULTURAL ECONOMICS

such as to cause a great deal of misery. He later recognized
various checks on population other than poverty, and it is now
recognized that the standard of Hving desired by a people will
determine how much the population will increase as a result of a
given increase in the production of economic goods. Further-
more, the Darwinian idea of evolution through the struggle for
existence and the survival of the fittest when viewed in the
light of our present knowledge of the variations in the economic
productivity of men leads to the view that it is those who are
less capable as producers who are in danger of not being able
to make a living in normal times. This means that there is a
process of natural selection going on which tends to ehminate
the less efficient, and thus Hft the average of human efficiency.
The ultimate good resulting from this evolution should not lead
to ignoring the suffering of these who are on the lower margin.
Society should care for them in a humane way which will not
encourage their reproduction.

Whatever else may be true, the population of the United
States has increased more rapidly than has the land basis of
agriculture, and it is a matter of common belief that such
an increase will continue, and that workers in agriculture will
probably increase more rapidly than the land basis.

It has been seen that the new increments of land will probably
be less and less desirable as more and more must be brought
under cultivation to supply the needs of man. It has been
noted that farm equipments may ever be replaced by those of
the better quality. The quality of the new increments of supply
of farm workers may he improving from generation to genera-
tion not because of control, as is true of farm' equipment, but
because of the existence and improvement of our educational
systems. It would seem at times that the inefficient have
large families and the efficient small families, and that this
militates against progress in the average intelligence of the
farming population. It is often said, also, that education is a
stepping stone from the farm and tends to sort out the best
and take them from the country. These are the pessimistic
points of view. The few data available tend to show that the

THE HUMAN BASIS OF AGRICULTURAL PRODUCTION II5

educated farmers are more efficient than the uneducated farmers
in competition with them. One who is optimistic by nature
will believe in the possibility of and actual progress in the in-
creased economic efficiency of people who do the farm work of
this country. But if a person is by nature pessimistic, he may
magnify the possibihties of decline in the qualities of men due
to the fact that the whole population gradually gives place to
the younger generation. The hope is in the educational effort
which teaches the younger generations what the older genera-
tions learned from experience and experiment, and thus makes
the wisdom of the race cumulative.

When the three factors of production are compared, it will be
noted that they are alike in that the individual units vary in eco-
nomic productivity ; they are unlike with respect to the rate at which
they are increasing in quantity and with respect to the quality
of the new increments of supply. If one assumes no change in
men and equipments and a tendency to increased population
not limited by present or higher standards of living, it is logical
to take a pessimistic view of the future of mankind ; but if one
believes that the improvements in the qualities of men and
equipment will offset the declining productivity of the succeed-
ing new increments of land, and if one believes in the power of
education to advance the standard of living, it is easier to be
hopeful.

CHAPTER XII

THE CHOICE AND THE COMBINATION OF THE GRADES OF
THE FACTORS OF PRODUCTION

It has been noted that all the factors of production have
this common characteristic that they vary in their capacity
and in their efficiency. Much has been heard in recent years
about efficiency and the efficiency movement in the industries.
About twenty years ago, at a time when some men occupying
prominent positions in the field of economics were emphasizing
the resemblances of the instruments of production, with a view
to formulating simple and comprehensive principles. Professor
Ely was saying to his students : " Give careful attention to the
differences in the economic characteristics of the instruments of
production. In these differences we may find some of the
most significant conditions of our economic life." The facts
and theories which are presented in this chapter are the result
of taking this advice.

Capacity has been defined as power to receive, absorb, take
into, or associate with. The word capacity has in recent years
been popularly used to indicate the output of a mill or factory.
In this book the original, and still the dictionary, meaning of
the word " capacity " will be adhered to. In this sense ca-
pacity refers to " input," not to output. It has been recog-
nized since the days of Ricardo that land varies with respect to
the amount of labor and capital which can be invested per acre
with optimum results, that is, land varies in capacity. Cows
vary greatly in the amount of feed which they can consume
with optimum results when fed with the same care and by the
same man, hence cows vary in capacity. The same thing is
found true of every specific class of instruments of production
from milk pails to threshing machines. Variation in capacity

ii6

THE GRADES OF THE FACTORS OF PRODUCTION 117

exists likewise in the human factor. There is a very wide range
of differences in men with respect to the amounts of land, labor,
and capital they can operate. High capacity is not always a
desirable quality. For example, certain land requires much
more power to plow and more work with the pulverizer and
harrow to put it in condition for planting seeds, yet does not
produce extra large crops per acre. The labor of milking some
cows is twice as great as that required in milking others, and
they do not necessarily produce any more milk. Capacity,
or the power to absorb the other factors, implies nothing as to
usefulness of a factor in cases of this kind unless taken in con-
junction with efficiency.

Efficiency is defined as a ratio between the energy put in
and the results secured. The efficiency of a factor of produc-
tion is measured in terms of the value of the product per unit
of the other factors (of given grades of efficiency) when as-
sociated in the most profitable proportions. To illustrate,
two pieces of land may yield widely different results per hour
of man and horse labor expended upon them by the same man.
Two cows may vary widely in the amount of butter fat they
yield per pound of feed consumed when the two cows are fed
by the same man upon the same feeds.

The relation of capacity, efficiency, and productivity are
easily understood. The productivity of a physical unit of an
instrument of production, as an acre of land or a cow, is the
resultant of capacity and efficiency. The product divided by
the capacity equals the efficiency. In other words, capacity
relates to " input " ; efficiency to " output " per unit of " in-
put " ; and productivity relates to the total product per acre
of land, per cow, or per man. The calculation of efficiency
may be made in terms of physical product or in terms of the
value of the product. In analyzing the productivity of cows
and other movable instruments of production, physical produc-
tivity is often the better basis of comparison because of differ-
ences in values at different locations. In the case of immovable
instruments of production the value of the product is the more
satisfactory basis of comparison.

Il8 AGRICULTURAL ECONOMICS

To illustrate the sense in which the term capacity is here used,
assume that a given farmer, with a given outfit of horses, tools,
and other equipment, can operate 80 acres of "A" grade land
or 100 acres of " B " grade land, farming either piece to the
proper degree of intensity of culture. This implies that " A "
grade land has greater capacity for absorbing labor and equip-
ment than " B " grade land. Each acre of the " A " grade
land requires i^ per cent of the labor and equipment in question
while each acre of " B " land absorbs only i per cent, which
means that the capacity of "A" grade land is one-fourth or
25 per cent greater than that of " B " grade land.

To illustrate the idea of eflSciency, assume that a given farmer
with a given outlay for labor and equipment can secure a prod-
uct worth $1800 on " A " grade land and a product worth $1600
on " B " grade land. Under these conditions the " A " grade
land would be said to have a higher degree of efficiency than the
" B " grade land. The difference in efficiency would be meas-
ured in terms of the difference in the product per unit of outlay.
One hundred per cent of outlay yields $1800 in one case and
$1600 in the other; $1800 is 12^ per cent greater than $1600,
hence " A " grade land may be said to be 12^ per cent more
efficient than " B " grade land. For further illustration see
the problems at the end of this chapter.

One should not be confused by the fact that a given factor
may have high capacity or efficiency in terms of one other factor
and low capacity or efficiency in terms of another. For ex-
ample, a gang plow may have high capacity in terms of horses
and low capacity in terms of men. The same plow may have
high efficiency in terms of men and low efficiency in terms of
horses. Neither should one be confused by the fact that land
with high capacity may have low efficiency and vice versa,
e.g. heavy clay land may require much more labor per acre
than a silt loam and for this reason, though the crops be larger,
the product per unit of labor, i.e. the efficiency, may be smaller.

Variation in the economic efficiency of land was emphasized
by Ricardo ; variation in the efficiency of managers was elabo-
rated by Walker. Clark called attention to the variation in

THE GRADES OF THE FACTORS OF PRODUCTION 1 19

the usefulness of all the factors, but failed to recognize the
distinction between differences in capacity and differences in
efficiency, apparently assuming no differences except differ-
ences in capacity. Capacity and efficiency, under given condi-
tions, are concepts as different as length and breadth. For
example, if the capacity of a cow is measured in terms of the
land, labor, feed, and other equipment properly associated
with her, and if her efficiency is measured in terms of the value
of her product per dollar of expense for the other factors, it
becomes obvious that while two other cows of half the capacity
and the same efficiency might be equally useful, because the
product per unit of outlay would be the same, two other cows
with the same capacity each as the one in question but possess-
ing only half the efficiency could not be substituted for her
without loss, for they would cost twice as much to keep and
would 5deld only the same total product or only one-half as
much per unit of expenditure.

A few facts may help to make clear the ideas in mind. In
recent years a great deal of first-hand study has been made of
the conditions of productivity in agriculture. The census
method and the accounting method have been largely used in
this work. In Table V are found the results of a careful census
of the farmers centering about Dallas, Barron County, Wiscon-
sin. There were fifty-one farmers in the community. The
returns which these farmers secured per dollar of annual outlay
varied from 77 cents to $3.05. In this calculation the annual
outlay included all operating expenses, including depreciation
and interest. A glance at the second column of figures in
Table V shows a variation from $1734 to $293 in the annual
outlay with which these farmers associated themselves. The
former are termed variations in efficiency ; the latter are desig-
nated differences in capacity. (Though the writer would
recognize that perfect adjustments may not exist with regard
to the amount of land, labor, and equipment associated with
some of the men, yet these men are probably striving for the
optimum.) The variations in total product per man range
from $3644 to $686. The farmers, as the residual claimants,

120

AGRICULTURAL ECONOMICS

TABLE V

Variations in Efficiency and Capacity

Efficiencv

Capacity

Productivity

Rank

Product per
Dollar of
Outlay

Rank

Annual
Outlay

Rank

Total Value
of Product

Rank

Residuum
for Farmer's

Effort

I

$3-05

48

$ 421

37

$1285

18

$ 864

2

2.84

33

932

8

2649

4

1717

3

2.63

47

434

41

1 143

22

709

4

2.48

51

293

48

727

34

434

5

2.40

49

2,2,2,

46

799

32

466

ui

6

2.16

4

1683

I

3644

I

1961

1

7

2.13

16

1334

7

2844

6

1510

""

8

2.12

39

775

26

1646

16

871

»o

9

2. II

29

1026

16

2165

12

1139

ZJ

lO

2.10

13

1379

6

2895

5

1516

o

II

2.10

32

961

18

2018

13

1057

^

12

2.09

I

1734

2

3619

2

188s

X>

13

2.07

5

1675

3

3473

3

1798

ft)

J3

14

2.05

21

1303

10

2472

8

1269

H

15

2.03

30

983

19

2000

10

1017

i6

1.90

50

395

49

749

41

354

17

1.88

15

1344

9

2533

II

1 189

i8

1.86

6

1618

4

3016

7

1398

19

1.84

42

739

3Z

1361

26

622

20

1.83

37

881

27

1610

21

729

32

1.56

46

440

51

686

44

246

33

1-52

40

764

39

1162

37

398

34

1.52

22

"73

25

1778

27

60s

35

1.48

7

1595

II

2358

20

763

36

1.47

27

1090

28

1602

31

5"

37

1.47

31

978

31

1435

33

457

38

1.38

14

1358

23

1878

30

520

d

39

1-37

2

1703

12

2339

24

636

tt

40

1.36

8

1595

17

2165

28

570

g

41

1.29

28

1018

36

1309

42

291

o

42

1.26

9

1505

21

1898

39

393

43

1.24

10

1492

24

1853

40

361

44

1.24

20

1211

30

1496

43

28s

45

1.20

25

1 103

35

1320

45

217

46

I. II

26

1095

38

1219

46

124

47

1.08

34

932

44

1009

48

77

48

1.07

19

1263

34

1348

47

8S

49

1.02

41

742

47

759

49

17

SO

.88

38

804

50

713

50

91

,51

•77

II

1469

42

H31

51

-338

Average

$1.66

$1079.8

$1797-2

$717.4

THE GRADES OF THE FACTORS OF PRODUCTION I2I

received payments for their efiforts varying from $1961 to
minus $338. It will be noted that, so far as the figures in this
table go, there is no definite relation between a man's capacity
as measured by his outlay and his efficiency as measured by
product per unit of outlay. A man with high efficiency may
have low capacity and the man with high capacity may have
any degree of efficiency. These facts are brought forward to
illustrate the well-known fact of variations in the ability of
men and to note that at least two measuring sticks are needed
if we hope accurately to measure man's abiHty.

Table VI illustrates some of the differences which exist in one
class of instruments of production, namely, cows. This table
shows the best ten and the worst ten of 398 cows entered in
the Wisconsin Dairy Cow Competition during the two years
1^09-1911, each cow being in the contest one year. It will be
Boted that the difference in value of product per dollar's worth
of feed consumed by the best ten cows varied from $2.71 to
$2.19 and that the range for the least efficient ten cows was
from $1.25 to 92 cents. The total range was from $2.71 to
92 cents, the average result of the best ten was $2.38, and that
of the least efficient ten was $1.11. In Table VI a common or
standard price level was used in calculating the cost of the feed
and the value of the product. It remains, however, to be ex-
plained that these cows were not all under the same manage-
ment. The differences in product per unit of feed are due,
therefore, to differences in the efficiency of men as well as to
differences in the efficiency of cows. The cows in one herd in
the same barn, receiving the same feed, care, and management,
must be compared if cow efficiencies are to be isolated.

The fact of dijferences in efficiency and capacity granted, are
they significant from the standpoint of production? From the
point of view of the effective management of farms the signifi-
cance of this analysis of the grades of the factors of production
lies in its relation to the problem of right choice of the instru-
ments of production which are to be combined under a given
management. If difference in market valuations corresponded
to each man's estimate of the variations in the usefulness

122 AGRICULTURAL ECONOMICS

TABLE VI

Efficiency, Capacity, and Productivity of the Best Ten and the

Poorest Ten of the 398 Cows in the Wisconsin Dairy Cow

Competition, 1909-1911

(Feed and Product Values Standardized)
The Most Efficient Ten Cows

EFriCIENCV

Capacity

Productivity

Rank

Product

per Unit of

Feed

Rank

Value of
Feed Con-
sumed

Rank

Value of
Product
per Cow

Rank

Value of

Product

Minus Cost

of Feed

I
2

3
4

5

$2.71
2.62
2.60
2.49
2.46

8

5
10

9

2

$ 75-32
88.56
64.62
72.60
99-83

5

6

10

9

2

$204.11
200.33
167.94
180.60
246.10

4

7

10

8
2

$128.79
III. 77
103.32
108.00
146.27

6

7
8

9
10

2.36
2.34
2.31
2.28
2.19

7
6

3
4

I

78.24
83.88
99.20
94.06
129.40

8

7
3
4

I

184.94
196.06

229-55
214.87
283.84

9
6

3
5

I

106.70
112. 18

130.3s
120.81

154-44

Average

of
best ten

$2.38

$88.57

$210.83

$122.26

The Least Effi,cient Ten Cows

I

$1-25

6

$ 77-17

3

$ 96.69

I

$ 19-52

2

1.20

2

96.55

2

"5-75

2

19.20

3

1. 18

10

67.28

8

79.10

5

11.82

4

1. 18

9

74.82

6

88.06

4

13-24

S

I-I3

I

103.69

I

117-45

3

13.76

6

I. II

4

82.47

4

91.72

6

9-25

7

1. 10

7

75-22

7

82.66

7

7-44

8

1.06

3

84.85

5

90.26

8

5-41

9

.98

8

76.38

9

75-14

9

1.24

10

.92

5

80.26

10

74.16

10

6.10

Average

of

poorest

ten

$1.11

$81.87

$91.10

$9.33

THE GRADES OF THE FACTORS OF PRODUCTION 123

of these instruments, the problem of choice would be solved,
but this is not true. The individual valuations of given instru-
ments of production have a wide range above and below the
market valuations.

It is this discrepancy between individual and market valua-
tions which makes it incorrect to take the position that one
dollar's worth of agricultural land, labor, or equipment is as
useful to the farmer as any other dollar's worth, that market
prices eliminate the necessity of careful selection of the grades
of the factors of production. It is, therefore, necessary for
each farmer to use great care in the choice of the productive
agents with which he associates himself.

An hypothesis which has been made and which bids fair to
prove a practical guide is that the factors which possess high ef-
ficiency should usually be associated together. The high efficiency
land should he occupied by the high efficiency farmer operating
high efficiency equipments. For example, suppose the superior
efficiency of " A " grade land over " B " grade is due to its
location near the market, so that while the physical product
per unit of the other factors (of given efficiency) is the same as
on " B " land, the value of the product is twice as great on
" A " as on " B " grade land. Assume also that farmers " I "
and " II " vary also in their efficiency, which shows itself in
the fact that the physical product which " I " can grow on a
given grade of land is twice as great as that which '* II " can
grow. Under these conditions each farmer can secure twice as
much product, in value, from the " A " grade land, as from the
" B " grade land, but the extra product is twice as great for
" I " as for " II." Each man can afford to pay more for " A "
grade land, but the one with the higher efficiency can clearly
afford to pay more than his less efficient competitor, and hence
competition will tend to give the best locations to the most
efficient users.

Variations in efficiency of two pieces of land may be due
solely to differences in the amount of physical product per unit
of labor and equipment put upon them. In this case is it important
that the more efficient farmer operate the more efficient land ?

124 AGRICULTURAL ECONOMICS

The reply is, he should occupy that which is to him the more
efficient land, recognizing the fact that all men will not grade
land the same for a given purpose and that gradations vary
greatly for different purposes. Assume our two pieces of land
to be corn land and that one piece has more fertile soil, greater
warmth, better drainage, etc., so that each stalk of corn grows
more vigorously and yields a larger ear of corn and more fodder.
Then call to mind the character of the differences which may
exist in the men. The more efficient man uses better judgment
regarding the time to plow the land so that the soil is kept in
good tilth ; he harrows at the proper time, driving in the right
direction to smooth and crumble the land, thus reducing the
holes and the clods to a minimum ; he uses judgment in select-
ing the seed corn, which makes sure that each grain is vigorous
and of the right variety for the particular soil ; he plants the
optimum amount of seed at the optimum depth ; he cultivates
at the right time ; he maintains the stand of corn, that is, does
not cover or otherwise destroy the stalks of corn ; he eliminates
the weeds; he maintains the soil mulch to hold the moisture
when needed ; and he avoids destroying the corn roots when
cultivating large corn. For all these reasons he has more corn
plants growing, and each plant yields more product.

Is it not obvious that this extra product due to more plants
and better plants better tilled will be greater on the more efficient
than on the less efficient land ? To simplify the concepts con-
fine the discussion to the influence of the stand of corn. The
more efficient farmer has 95 per cent stand while the less effi-
cient farmer has an 80 per cent stand of corn. That is, where
there is room for 100 stalks of corn the one will grow 95 while
the other will grow 80. Is it a matter of some importance that
these extra 15 stalks be on the more efficient land, which means
15 large ears instead of 15 small ears of corn ? From the stand-
point of the competing farmers there is clearly an incentive for
the more efficient farmer to seek the more efficient land and to
outbid his less efficient competitor for this land.

The same principle applies to the choice of cows, horses, and
hogs as to the choice of land. A good cow has been said to

THE GRADES OF THE FACTORS OF PRODUCTION 125

produce 15 per cent less milk under inefficient care than under
efficient care, where other factors are the same. Fifteen per
cent of the product of efficient cows would be a greater loss
than the same percentage loss on a low efficiency cow. Further-
more, in the handling of a herd of high efficiency the efficiency
of the animals will fall from decade to decade under low effi-
ciency management and improve under high efficiency manage-
ment, so that regardless of first choice the efficiency of the cow
tends to correspond to that of her keeper.

It will readily be recognized that gradation of land and equip-
ments, as well as men, are very different for different purposes.
To avoid confusion on this point it is best to recognize the
presence of gardeners, dairymen, grain farmers, beef men, hog
men, sheep men, cotton farmers, tobacco farmers, and various
combinations of these such as are found in the various types of
farming in the United States to-day. Each farmer falls into
some class with respect to type of farming. He has only to
consider grades of land and equipment which competition
among types of farming has left to his type and then choose on
the basis of gradation in this class in terms of his ability.

The practical man who recognized this principle of choice
may properly suggest that its appUcation is not easy for the
reason that it involves knowledge of one's own relative efficiency
as well as that of land and each of the kinds of equipment.
The truth is, it takes time for a farmer to find his place in the
system. If he ranks himself too high, losses will bring him
down, for he cannot compete successfully with his competitors.
If he rates himself too low, he makes some profit but not so much
as if he had the use of more efficient land and equipment. The
practical method is to be modest in rating one's self and gradually
adjust equipment to ability by taking every opportunity to
secure more efficient cows, horses, or machines when profits are
clearly increased by the change. The adjustment to land
qualities cannot so easily be made a gradual process. It is
often necessary to change farms. During the period of tenancy
is the time to work this point out so that when land is purchased
it will be of the right quality.

126 AGRICULTURAL ECONOMICS

Does it make any difference which grades of capacity are
chosen by the farm manager? Only in the same sense that
the mason finds use for stones of different sizes in building a
wall, each occupying space according to its size, where there
are spaces of varying dimensions to be filled. If land is of low
capacity more can be used. If horses and cows are of low
capacity but of the desired efl&ciency, more can be kept. The
workman of low capacity may prove the right choice if only a
small increase in help is needed. The city man who wants to
produce milk for his family may find a cow of small capacity
more profitable than one of high capacity because she suppUes
his needs and he has no profitable means of disposing of the
surplus. The man who has small demand for horse labor may
find the small capacity horse most profitable, while the man
with much horse labor to perform might find such a horse un-
profitable ; thus variation in capacity helps to adjust the pro-
portions of the factors, especially where the scale of the business
is small.

In the choice of workmen it often happens that a man has
high capacity for some purposes and low for others. For
example, a boy may cultivate corn, cut hay, or drive a tedder
or rake, showing the same capacity as a man who has much
greater capacity than the boy in pitching hay in the field or
handling the hay in the mow. By taking advantage of these
differences and using each man where he shows the greatest
capacity, profits may be increased.

There are various conditions which retard the movement
toward the most economical combination of the factors. Ig-
norance of better opportunities and desire to stay where one's
folks live are common hindrances to adjustment. Inherited
wealth often enables an inefficient man to hold a highly efficient
piece of land for a lifetime without being crowded out, whereas
the same man would have found his level in a few years with-
out the aid of his inheritance.

How does the right combination of efficiency grades affect
total productivity? Total productivity of society is greatly
increased by the combination of the factors which throws the

THE GRADES OF THE FACTORS OF PRODUCTION 127

most efficient factors together. The productivity of the in-
efficient is minimized, it is true, but the productivity of the
most efficient is at the maximum, and the total product, it is
believed, is greater than any other combination would yield.
True social econom.y calls for this combination, and it is these
facts of variation in efficiency which give hope that competition
may gradually Hft the average of efficiency by the elimination
of the marginal and the multiplication of the better and the
best. So long as this process is in operation poorhouses will
be needed, but is it not cheaper to provide for the inefficient
in this way than to have them match their inefficiency with
land and equipments which have high potential productivity ?

Variations in efficiency and capacity have an important rela-
tion to the problems of the distribution of wealth, with especial
reference to the ownership of land. It is the wide range in the
efficiency and the capacity of farmers that makes possible the
saving of the funds essential to the climbing of the agricultural
ladder. Assuming the acceptance of the theory of the relation
of prices of agricultural products and marginal costs, it follows
that every man possessing efficiency superior to that of the
marginal farmer may save from the surplus and rise to a higher
rung on the agricultural ladder. It would seem also that the
man of high capacity may save more than his competitor of
equal efficiency who possesses lower capacity on the assumption
that the man of high capacity has the same standard of living as
his competitors.

It is not so much the purpose here to show how these factors
have worked themselves out as it is to show the individual
farmer how better to adjust himself to his complex environment,
and to call the attention of the agrarian statesman to this fact
of variations which are too often overlooked because it is easier
to deal with the average, which is often a dangerous basis for
practical legislation. From a political point of view this fact
of variation gives basis for aid in education and for poor relief.

In choosing a farm the grade of land selected should correspond
to the degree of efficiency of the farmer. A highly efficient
farmer can make some profit on any grade of land. On the

128 AGRICULTURAL ECONOMICS

most ej05cient land the chances for profits are greatest for
the most efficient man, but the chances for losses are also
greatest if one prove to be less efficient than his competitors.
The safe thing for a young man to do is to rent land on shares
and take the best land he can get. If he handles land well, he
will be sought by the men who have the best farms. This
will more or less automatically put the tenant farmer on the
land corresponding to his ability. When he is ready to buy a
farm, his experience as a tenant will give the basis for judging
whether he should buy the choicest land and pay the price,
which will necessarily be high, or take land of second or third
class for which the competition is not so keen and for which
an. appreciably lower price will be asked.

Having decided to be a farmer, the young man should next
decide upon the kind of farming he is to follow. This should
be settled only after considering carefully his personal abilities,
his hkes and dislikes, and the results which he can hope to
secure in the various kinds of farming.

Having settled upon the kind of farming to be followed, one
should select land which competitive forces have set aside for
this kind of farming. To insist on dairying in a hog and beef
cattle district, or to insist on being a grain farmer in a region
especially suited for and actually being used as a dairy district
is to invite failure at the first move.

The character of the soil is an important consideration both
from the standpoint of total product per acre and the cost per
acre to operate. It is too common for farmers who are seeking
land to judge the land entirely by the product per acre without
looking into the cost per acre involved in growing the crop. It
costs very much more to prepare a seed bed in one kind of soil
than in another. In other words, the power of the land to
absorb labor is very important, for the greater the input per
acre the fewer the acres a man can operate and, the profit per
acre being the same, the smaller will be his total profits. The
starting point, in determining which land to buy, is to calculate
as best one can the total net return which can be secured from
the different farms which are available and then buy the one

THE GRADES OF THE FACTORS OF PRODUCTION 129

which will leave the largest amount as net profit after deduct-
ing interest on the price of the farm, taxes, repairs, and deprecia-
tion.

The proportion of the time the land is in condition to be
worked is of importance in choosing a farm. This is especially
important on a grain farm where the field labor is the only form
of directly productive labor. It is less important on a dairy
farm, yet is not to be ignored. The variations in the amount
of time the land is in condition to be worked may be due to
difierences in the amounts of rainfall or to differences in the
character of the soil. Where there is considerable rainfall,
sandy soil can be worked many more days per month than
the silt loams, and either of these soils will be dry enough to
work more days per month than the heavy clay soils. While
this is important in determining the acres of corn or oats one
man can care for, having the land dry very quickly has its
drawbacks. The heavy lands may be far superior for grazing
and may yield crops enough larger to compensate for the loss
of time due to wet land. An ideal arrangement would be to
have more than one kind of land in the same farm. In the
absence of this it is very important for the farmer on heavy
land to have productive labor to do when he cannot work in
the field.

Location with respect to the market is important, but is in-
volved in the question of the efficiency of the land. The farmer
who can produce the most product on a given piece of land
gains the most by being located near the market, whereas the
farmer with low efficiency would gain least by being near the
market, for two reasons : he would have less to haul to the
market, and his time is worth less for other work than hauling
his products.

Sanitary conditions should be given careful consideration.
A farm may be worth less than nothing if its occupier is in
danger of losing his health or that of the members of his family
by hving on the farm. The seriousness of conditions of this
kind depends upon the ease with which the sanitary conditions
can be improved.

130 AGRICULTURAL ECONOMICS

The character of the neighbors is worthy of close inspection
before buying a farm. The farmer cannot go it alone. He
has to do with his neighbors continually in one way or another.
The character of the people of a neighborhood will have much
to do with the conditions of the roads, the absence or presence
of noxious weeds, the cost of threshing, silo filling, and other
farm work which is done cooperatively. The moral standards
of the community as is evidenced by the prevalence of drunk-
enness, illegitimate children, and other evils on the negative side,
and in terms of good schools, effective churches, and a clean
social life on the positive side, should be looked into with great
care. The moral standards of a community stamp themselves
upon the younger generation. The older folks not in sympathy
with the standards of the community may have an opportunity
for doing some valuable missionary work, but unless they use
rare tact they may find themselves cut loose from the life of
the community as a result of their efforts.

It should never be forgotten by the farmer who is trying to
buy a farm that he is buying a home as well as a place to work.
His life and that of his family may be influenced more by the
character of the farm and the community as a place to live
than by the farm as a place to make money. The richness of
farm life consists largely in things which money cannot buy.

PROBLEMS

1. If one man with a given outfit of horses, tools, and other equip-
ment can operate 80 acres of "N" grade land with the same outfit as
he can operate 100 acres of "M" grade land, which land has the
greater economic capacity per acre and how much greater? (It is
assumed in all questions that the factors are combined in the most
profitable proportions.)

2. If ten men of "E" grade of economic capacity are required to
operate a given farm, while only seven men of "G" grade economic
capacity would be required, which men have the greater capacity per
man ? How much greater ?

3. If from a given outlay for labor and equipment a given farmer
can secure a product worth $80 on "D" land and a product worth

J. C. EuVCRE

THE GRADES OF THE FACTORS OF PRODUCTION 131

$70 on "C" land, which grade of land has the greater economic
efficiency? How much greater than the other?

4. With given land and given equipment, farmer "A" produced
$80 worth of product; while farmer "B" could produce $110 worth
of product; which farmer has the greater economic efficiency?
How much greater?

5. If a given amount of labor and equipment may be employed
profitably upon 100 acres of ''N" land, or upon 120 acres of "M"
land, with a product of $1200 on the ''N" land or a product of $1400
on the "M" land, which land has the greater capacity? How much
greater? Which has the greater efficiency? How much greater?

6. If on the same farm cow No. 8 is kept and milked at an annual
cost of $45, whUe cow No. 9 is kept and milked at a cost of $60, and
cow No. 8 yields a product worth $54, while cow No. 9 yields a prod-
uct worth $72, which cow has the greater capacity? Which the
greater efficiency ? How much greater ?

7. Plow "A" requires 2 horses and one man and will plow 2 acres a
day. Plow "B" requires four horses and one man and will plow 3I
acres a day. Compare the capacity and the efficiency of these plows
in terms of men and of horses.

8. Workman ''A" can pitch grain for 3 wagons in threshing, while
workman "B" can keep but two wagons going, and each of "A's"
three wagons hauls 30 per cent more grain in a day ; but in harvest-
ing grain, "B" was able to drive five horses to an eight-foot binder,
while "A" was unable to drive more than a three-horse team to a
six-foot cut binder, and while "B" cut 15 acres of grain "A" cut
only 10 acres per day. Explain where each has the greater capacity
and where each has the greater efficiency.

CHAPTER XIII
THE PROPORTIONS OF THE FACTORS OF PRODUCTION

The law of variable proportions. In the production of a given
crop, like corn, all the factors of production, land, labor, and
equipment, are brought into play ; but there is no definite pro-
portion in which they must of necessity be combined in order
to bring the corn crop into existence. The quantity of corn
produced on a given area of land will be gieatly injfluenced,
however, by the amount of labor and equipment associated
with the land.

The law of increasing and diminishing returns operates when
increasing amounts of labor and equipment are associated with
or apphed to a given area of land. A small apiount of labor and
equipment per acre may yield 20 bushels of corn to the acre,
double the amount may produce 45 bushels per acre, whereas
three times the amount may produce only 58 bushels per acre.
In the first instance the law operates to give increasing re-
turns, in the second, diminishing returns.

At any given time and place there is a certain proportion
in which the factors combine most profitably. If less or more
than a certain amount of labor and equipment be associated
with a given area, the profits will be less than they should be.
The proportion which is right for one farm at a given time may
be wrong for another. This may be due to differences in the
physical and biological character of the land or to differences
in location with respect to the market. Also it is true that
the adjustment of proportions which yield maximum profits
on a given farm at one time may be wrong at another time on
the same farm. This will result when there is a change in the
relative costs of the factors of production.

132

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 133

Changes in the relative abundance of the factors of produc-
tion, resulting in changes in their relative cost to the producer,
arise out of differences in the rates of increase of the supply
of land, labor, and equipment. If the land supply increases
less rapidly than labor and equipment, land will become rela-
tively more valuable and should be used more sparingly. As
a matter of fact, there was a period in the past century when
the area in farms was increasing more rapidly than the number
of farmers. This was due to the settlement of the prairies
aided by railway transportation. During this period the tend-
ency was to use more land per man and the great scarcity of
men in the presence of such large supplies of good land stimu-
lated the invention of machinery of every sort to enable man to
associate himself with more land. In recent years the supply
of land is increasing less rapidly and there is every reason for
believing that in the future the more rapidly increasing sup-
pKes of men and equipment in agriculture will demand that
land be cultivated more and more intensively. This implies
that the farmers will need to be alert on the question of in-
tensity of culture.

While the question of right proportions, of wliich intensity
of culture is one phase, involves all the factors equally, it has
been common to center the discussion about the utihzation of
land. This has grown out of the feeling that land is usually
the more slowly increasing factor, and must be used more
intensively as the years go by. Hence, intensity of culture
becomes the central problem in the study of the proportions of the
factors, though the proportion between men and equipment
is also important and has been changing rapidly in the past
century.

Table VII compares the increase in the acreage of improved
farm land with the increase in the number of persons engaged
in agriculture and the value of farm implements and machinery
from 1870 to 1 910. According to this table the land increased
more rapidly than the workers up to the close of the 19th
century, but the workers increased more rapidly than the land
from 1900 to 1 910. With the exception of one decade, ma-

134

AGRICULTURAL ECONOMICS

chinery increased more rapidly than land, and in every instance
more rapidly than land workers.

TABLE VII

The Rate of Increase in Worked Land and Land Workers

Improved Land in Farms

Persons Engaged
IN Agriculture

Value of Implements
AND Machinery

Acres

T ^^

Increase

Number

Increase

Total Value

%
Increase

IQIO

478,541,750

15-4

12,567,925

21. 1

1,265,149,783

68.7

1900

414,498,487

15-9

10,381,765

13-4

749,775,970

Si-7

1890

357,616,75s

25.6

9,148,448

18.6

494,247,467

21.6

1880

248,771,042

50.7

7,713,87s

29.7

406,520,055

SO. I

1870

188,921,099

5,948,561

270,913,678

1870

to

I9IO

153-3

III. I

367.1

Intensity of land utilization may be viewed from various
standpoints, as follows :

1. A given crop in a given year projected in advance with
a view to a general estimate as to the right proportion between
land area and working force.

2. A given crop at a given stage in the progress of its pro-
duction with a view to maximum economy in the utilization
of the operating force on a given day when there are various
demands for the operating forces.

3. A given farm organization as a whole at a given time.
The amount of farming of various kinds which can be done on a
given area with optimum results with the understanding that
the operating capital and the labor supply may be adjusted in-
definitely with a view to securing maximum economy of organi-
zation for the farm as a whole.

4. The entire agriculture of a country in a given year.

The first, third, and fourth points of view may be studied
historically and geographically as well as at a given time and
place.

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 135

All these problems may be studied from the individual and
from the social point of view.

Standpoint i. Most of the discussion of this subject has been
from standpoint i. In the discussion of this problem, land,
labor, and capital equipments are assumed to be at the disposal
of a manager (a farmer), who is attempting to use men and
equipments upon land in the proportions which will yield
maximum profits for himself as the responsible party who stands
the losses or secures the profits. The problem of how much
land, labor, and equipment he should operate is another ques-
tion of proportions which will be considered in the chapter on
the size of farms.

To illustrate the economic principles underlying the proper
degree of intensity of culture on a given farm in the production
of a given crop, let us first suppose that the farmer can get as
much land of a given grade as he may want to use, without
paying anything for its use. Under such circumstances, how
many composite units made up of laborers and capital-goods
should be associated with an acre of land ? For the purpose of
this illustration let us assume a small composite unit, the use
of which costs the farmer one dollar. It is obvious that in the
production of corn, for example, the application of one of these
units, per acre of land, would ordinarily produce very little,
if any corn at all. It is possible that the expenditure of two
units would produce a small crop ; but then the third unit would
increase the product more than the second, the fourth more
than the third, and so on until a point of stationary returns
has been reached, after which the succeeding units may be said
to continue for a time to add less and less to the total product,
until a point may be reached where further applications would
add nothing to the total product. Thus in agricultural produc-
tion the returns to succeeding composite units made up 0} laborers
and equipments may be said to follow the law of increasing returns
until a point of stationary returns has been reached, after which the
law of diminishing returns per succeeding unit commences to operate.

This may be illustrated by means of a diagram. In Fig. 7
the composite units of labor and capital-goods applied to a given

136

AGRICULTURAL ECONOMICS

acre of land are measured on the line AB, commencing at A.
The line AI'B represents the increasing and diminishing re-
turns per succeeding unit. Having in mind land with a given
degree of productivity, the distance between the lines AB and
AI'B will depend upon the degree of efl&ciency possessed by
the farmer, and also upon the character of the laborers and
capital-goods which he employs. For this reason it will be
necessary to keep in mind a given farmer employing a given
grade of laborers and capital-goods, as well as a given piece of
land. With these conditions in mind we may speak of the area

AC'C (Fig. 7) as representing the product which would result
if but one unit were employed per acre, and of the area CC'D'D
as representing the increase in the product due to the addi-
tion of the second unit and so on for the succeeding units. As
illustrated in Fig. 7, the product of each succeeding unit is
greater than the one preceding it until six units have been ex-
pended, after which each succeeding unit may be said to 5deld
a smaller product than the one immediately preceding it.

It may be true that the law operates to give stationary
returns per succeeding unit during the application of a few
units, after the final point of increasing return has been reached
and before the starting point of diminishing returns per succeed-
ing unit has been reached. It may be true also, that the line
AT in Fig. 7, should rise rapidly with the appHcation of one
particular unit, say the fourth, and then remain stationary or
even fall with the application of the fifth, and then rise very
rapidly again with the appUcation of the sixth. The introduc-
tion of drainage or the use of commercial fertilizers might bring

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 137

such a result. There are at present no data from which to
calculate the exact curve which the returns per succeeding unit
will follow, but the general rise followed by a general fall is a
matter of common observation.

With this illustration (Fig. 7) before us, suppose the farmer
has one thousand of these composite units, made up of laborers
and capital-goods, to expend in agricultural production. In
other words, suppose that this farmer has found that he can
secure the largest net profit when he operates just one thousand
of these units of labor and capital-goods. With free land at his
disposal, how many acres will he use and how many units will
he employ upon each acre? Will he apply five units per acre
and use two hundred acres of land? No, his expenditures will
produce a greater total product when he employs six units per
acre and confines himself to one hundred and sixty-six and two-
thirds acres. But will this make the labor and capital-goods
most productive? On first thought one might answer yes,
because the seventh unit adds less to the product than the sixth ;
but upon looking more closely into the matter, it is apparent
that there is no good reason for ceasing to apply more units
simply because the point of diminishing returns per succeeding
unit has been reached. The seventh unit may add less to the
total product than the sixth, and yet add more than any of
the first four units, and the average product per unit may be
greater when seven units have been appHed than when only six
have been expended. Hence the total product of the thou-
sand units may be greater when seven units have been appHed
to each acre and only one hundred and forty-three acres of
land employed. But at what point should the farmer cease
to increase his applications per acre of land ? It is obvious that
there is a limit, that, for example, a thousand units expended
upon one acre of land in the production of Indian com would
yield a smaller return per unit than when more land is used and
the number of units applied to each acre is more limited. But
what is the Hmit ? It is true that in the case before us the sixth
unit increases the total product more than any unit before or
after it, but all units cannot be sixth units. The first, the second,

138 AGRICULTURAL ECONOMICS

and the third are indispensable; and, in case a farmer can
manage a fixed number of these composite units, made up of
capital-goods and laborers, when employed in the production
of a given crop without reference to the area on which they are
employed, the highest average return per unit is the thing which
he should seek, for with a fixed cost per composite unit this will
enable him to secure the largest net profit per composite unit,
consistent with the proper intensity of management, and hence
will enable him to secure the maximum total net profit for his
exertion.

In the illustration (Fig. 7) the average product per unit
curve AP \s represented as increasing rapidly until the sixth
unit has been applied and then less rapidly until a point is
reached where the return per increment is just equal to the
average. At this point the average return per imit reaches the
maximum, and the application of another increment would
reduce the average product per unit employed. The thousand
composite units are used in the most economical manner when
the acreage is so limited that the number of units applied to
each acre is just sufficient to yield the maximum average return
per unit. For example, the highest average return would be
gained by the application of X units in the case before us in
Fig. 7, where the location of X is determined by the fact that
the rectangle A VX'X is drawn in such a manner that its area
equals the area AI'X'X, which represents the total product
of X composite units of the two factors laborers and capital-
goods. That part of the rectangle lying between the line HE'
and the line //', for example, represents the average return
per unit. Had the applications stopped at /, after the appli-
cation of but six units, the total product would be represented
by the area AT I, or the rectangle AW NI, and the average
return per unit would have been less. Likewise had the appli-
cations been increased to nine units, the average return per
unit would have fallen. Hence a curve of increasing and dimin-
ishing average returns may be drawn, based upon the increasing
and diminishing returns of the successive composite units
of labor and capital-goods. This curve of averages is repre-

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 139

sented by line AX'P (Fig. 7), which is so drawn that it will
pass through the upper right-hand corner of any rectangle which
has AC, AD, AE, etc., or any part thereof, as a base and which
incloses an area equal to the area AC'C, AD'D, AE'E, etc.,
respectively, as rectangles AWN I and AV X' X have been
drawn in Fig. 7.

As illustrated in Fig. 7, the curve of averages reaches the
highest point at X' and the highest average product per unit
is gained by employing seven and two-fifths units per acre,
and it will be seen at once that, since all the charges which must
be deducted are a fixed amount per composite unit of labor and
capital-goods applied, the higher the average return per unit,
the greater will be the farmer's net profit per composite unit,
and under the assumption that, in the production of a given
crop, the same amount of managerial acti\aty is required per
composite unit without regard to the area of the land on which
it is employed, and when there is no rent to pay, the applica-
tions should increase until the point of maximum average re-
turns per unit is reached. This is the most extensive agricul-
ture that is consistent with the greatest net profit to the farmer
under any circumstances, in the production of a given crop;
and, under the above assumption as to demands upon managerial
activity, it is the most intensive that is in accord with the
farmer's highest economic interest, where the use of land may
be had free.

It has been said ^ that the intensity of culture should be in-
creased until the final increment adds no more to the total
product than enough to cover the cost of that unit. If, in Fig.
7, for example, the value of the product represented by a rect-
angle whose sides are KL and LL' equals the cost of securing
the use of a composite unit, the applications should, according
to this view, be increased just to point L. It is true that this
would enable the farmer to secure the largest net profit per acre
of land, but unless he be a marginal farmer, in which case the
two statements coincide, it would reduce his net profit per
composite unit of the other factors. If the farmer were able

1 T. N. Carver, " The Distribution of Wealth," p. 80.

I40

AGRICULTURAL ECONOMICS

to operate a given number of acres of land without regard to the
degree of intensity of culture, then it would be desirable to
secure the largest net profit per acre ; but if he can, to advan-
tage, manage only a given number of units of labor and equip-
ment, regardless of the area on which it is expended, then he
should seek the largest net profit per unit of these factors.

TABLE VIII

Illustrating Differences in Two Methods of AscERTAtNiNG the
Proper Degree of Intensity of Culture

1

Annual Expense

PEE Acre por
Labor and Equip-

2

Value of Prod-
uct Secured

BY —

3

Increment of
Product Due to
$2.50 Incre-
ment OF Ex-
penditure

4
Gross Return

PER $1.00 OF

Expenditure

FOR Labor and

Equipment

6

Net Return
PER $1.00 of
Expenditure
($5.00 Rent
Subtracted)

ment

A

B

A

B

A

B

A

B

S-oo

7-50

5-6i

5.00

3-75

1.50

1. 12

•50

•125

7-50

13-50

lO.Ij

6.00

4-5

1.80

1-35

I-I3

.68

lO.OO

19.00

14-25

5-50

4-1+

1.90

1-425

1.40

-92s

12.50

23.27

17-45

4-27

3.20

1.866

1.396

1.46

-99

15.00

27.07

20.30

3.80

2.8s

1-805

1-35+

1.47

1.02

17-50

29.60

22.20

2-53

1.90

1.69

1.26+

1.41

.98

20.00

31.00

23-25

1.40

1.05

i-SS

1.16+

1.30

.912

Table VTII is intended to show the difference in the degree of
intensity of culture resulting from the application of the two
competing theories of intensity of culture. The assumption
here is that two men, A and B, are farming the same grade of
land, but that while A is a superior farmer, B is a marginal
farmer. Column three illustrates the degree of intensity car-
ried to the point where the product of the last increment
most nearly approximates the cost. According to this theory
there is more intensive application of labor and capital by
A than by B. Farmer A could have made more profit by stop-
ping at an earlier point and using a proportionate amount of
additional land with the additional labor and capital. Column

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 141

four shows the point of maximum average gross returns which
would yield maximum return per unit of outlay where no rent
had to be paid. Column five shows the net return per dollar
of expenditure after deducting a five dollar rent. It will be
noted that the payment of rent tends to force the intensity of
culture to a much higher point. Note also that the degree of
intensity for farmer B is the same in columns three and five ;
whereas the superior farmer would act in one way if he followed
the first theory and in another way if he followed the second
theory.

It may be well at this point to devote a few Unes to the
assumption, that, within the Hmits of the variations in intensity
of culture which is likely to exist in the production of a given
crop, the same amount of managerial activity is required per
composite unit composed of the two factors, laborers and equip-
ment, without regard to the area of the land on which it is
employed.

In general, we believe this assumption to be very near the
truth. In the production of corn, for example, the amount of
managerial activity required for each laborer with the team and
tools which are used by him would be the same whether thirty
acres of the crop were cultivated three times, or the same
laborer and capital-goods were used in cultivating twenty-two
and one-half acres of corn four times. Certainly if one must
choose between this assumption and the assumption that the
same amount of managerial activity is required for each acre
of land, regardless of the intensity of culture, there is little
question as to the choice. It is doubtless true that one man can
superintend the operations of more laborers and capital-goods
when they are brought together under one roof as in a large
manufacturing plant than when they are distributed over a vast
area of land ; but on the farm and in the production of a given
crop we believe that, as a rule, the demand upon the time and
energy of the manager, per composite unit of the two factors,
laborers and capital-goods, will remain practically the same
regardless of the area on which such unit is expended. We
shall proceed, therefore, upon this assumption in our attempt to

142 AGRICULTURAL ECONOMICS

ascertain the degree of intensity of culture which is most eco-
nomical where land has acquired value so that payment must
be made for its use.

When a fixed sum per acre must be paid for its use, land should
be cultivated more intensively than when it could be had free.
Suppose, for example, that three dollars per acre must be paid
for the use of land. We may think of this rent as taking all
of the product of the first four and one-half, or R composite
units, of the factors applied (Fig. 7). In this discussion we shall
speak of that share of the product which is left after paying
the rent, as a net return. The farmer may be said to receive
no net return from his expenditures until the rent is paid.
Should he cease his applications when R units have been em-
ployed, the product would just pay the rent and he would lose
the cost of the labor and equipment, besides receiving nothing
for his trouble. Whatever he produces by further applications
is the fund which gives rise to the net profits after the wages
of hired laborers and the payment for the use of capital-goods
have been withdrawn.

When there is no rent to pay, the farmer seeks the highest
average gross return per unit of expenditure ; but, where a fixed
rent must be paid, he no longer seeks the highest average gross
return, but the highest average net return per unit, for, under
the assumption that, in the production of a given crop, the
amount of managerial activity per composite unit of laborers
and capital-goods remains the same regardless of the area on
which it is expended, the largest net return per composite unit
of these factors will enable the farmer to secure the largest net
profit per unit of managerial activity put forth, and this is the
goal in agricultural production when viewed from the stand-
point of the farmer.

The average net return per unit follows the law of increasing
and diminishing returns in the same manner as the average
gross return ; but, when a fixed rent is paid, the line of increas-
ing average net return starts at point R (Fig. 7) ; for all of the
product up to point R is required to pay the rent, and the aver-
age net return at that point is zero. After the application of five

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 143

units the average net return per unit will be represented by
one-fifth of the area RR' H' H ; for the total return minus the
rent is represented by the area RR' H' H, and since five units
have been applied this net return must be divided by five
to find the average. Likewise after the application of the sixth
unit, it will be one-sixth of the area RR'I'I. After the ap-
plication of the seventh unit, the average will be one-seventh
of the area RR' K' K. Thus the line of average net returns
(Une RY'P' in Fig. 7) rises rapidly until the line //' is crossed,
after which it rises less rapidly until it crosses the line I'B, after
which it falls. When a fixed rent is paid, the line of average
net returns can never rise so high as the line of average gross
returns, and the point Y', where the line of average net returns
reaches its maximum distance from the base line AB, will
always be farther to the right than point X' ; and hence the
highest average net return per composite unit of labor and
capital-goods employed on land for which a fixed rent must
be paid will be gained by a more intensive culture than when the
same land could be had rent free.

When the farmer follows the rule of seeking the largest net
profit for his exertion, the degree of intensity of culture on a
given piece of land and in the production of a given crop will
vary with the amount of the fixed rent which is paid for its
use, — the greater the amount of rent, the higher the degree
of intensity, for when a higher rent must be paid for the use
of the land a more intensive culture is necessary if the highest
average net return is to be secured.

If the proposition is reversed and we think of successive
increments of land being brought under a given number of
composite units of the other factors, the simple statement will
sufl5ce that the amount of land should be increased until the
final increment of land adds just enough to the total product
to pay the cost of securing the use of the land.^ It will readily
be seen that this would result in the degree of intensity of cul-
ture which will yield the largest net return per composite unit
of the other factors. On the assumption, therefore, that one
1 See " The Distribution of Wealth," by T. N. Carver, pp. 80-83.

144 AGRICULTURAL ECONOMICS

farmer can manage a given number of the composite units of
labor and capital-goods without regard to the area on which it
is expended, the same conclusion will be arrived at with regard
to the proper degree of intensity of culture where land can be
had free or where a fixed rent must be paid for its use, whether
one adds successive units of the other factors to a given area
of land until the average net return per unit reaches the maxi-
mum, or whether one adds successive acres of land to a given
number of the composite units of the other factors until the
final increment of land adds just enough to the total product
to pay the fixed rent which must be paid to secure the use of
said increment of land.

The conditions are practically the same where the farmer
owns the land which he cultivates as where he pays a fixed rent,
the only difference being that he has paid for the perpetual
use of the land, whereas the tenant pays annually for its use.

The payment of a share rent does not tend to increase the
intensity of culture. The share rent increases as the total prod-
uct increases ; and it may be thought of as taking some fixed
portion, say one-third, of the product of each succeeding unit
of labor and capital-goods applied, so that the farmer gets
only two-thirds of the product of each unit, and his share reaches
the highest average return per unit with the same degree of
intensity which 3delds the highest average gross return per
unit. Hence, where the share tenants follow their own self-
interest, they will farm no more intensively on the best land
when less productive grades of land have been resorted to than
when only the best grade was cultivated.

To illustrate this point, draw a curved line from ^ to 5 in
Fig. 8, at such a distance from lines AI' B and ^5 as to leave
two-thirds of the area of each section between the lines AB and
AIB. Then draw a line through the points [of average net
returns per unit employed, in the same way as the line of average
gross returns was drawn. This new line of averages will reach
the line of maximum net returns per unit when the line AZP'
crosses the line AIB. The point Z will be one-third of the
distance from X' to X and neither to the right nor to the left

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 145

This means that the point of maximum net returns is reached,
in the case of a share tenant, with the appHcation of the same
number of units which yield the largest average gross product.

Other things remaining the same, how will a change in wages
and interest influence the intensity of culture? Suppose that
wages and interest fall twenty per cent ; will it then pay the
farmer to invest more units per acre? If the rent should re-
main the same as before the reduction in wages and interest,
and if the foregoing reasoning with regard to the proper in-
tensity of culture be true, the degree of intensity in terms of

Figure S

quantities of labor and capital-goods which would yield the
largest net return would not change; but the expenditure per
acre in value would be decreased and the profits of the farmer
would be increased in the same proportion. This higher profit
might increase the demand for land, however, and this would
likely result in a rise in rents, after which it would pay to in-
crease the quantity of labor and capital-goods employed,
excepting in the case of the share tenant.

The influence of a rise or fall in the price for which the prod-
uct can be sold will influence the degree of intensity only
as it may affect the amount of rent which must be paid for the
use of land. As prices rise the rent tends to rise and the degree
of intensity should be increased, while the reverse is true in the
case of falling prices. This is true because land of a given degree
of productivity is limited, and as labor and capital-goods increase
in quantity, land of a less productive grade must be resorted to,
and without improvements this is possible only when wages and
interest fall or prices rise. But there is a close relation between

146 AGRICULTURAL ECONOMICS

the gross return which the marginal land will yield and the
amount of wages and interest which labor and capital-goods can
command on other grades of land. This means, of course, that as
the less productive lands are resorted to the rent which the com-
petitors will offer for the better land will rise, and then the largest
net return, and hence the largest net profit per composite unit
of labor and capital-goods, can be gotten only by more intensive
culture.

In this connection the influence of lower wages and lower
interest and higher rents, upon the choice of crops, should be
reviewed, because it often happens that a rise in rents will
result in the change from a crop which requires but little ex-
penditure for labor and capital-goods per acre to one that re-
quires large expenditures per acre.

That degree of intensity of cuture which brings the largest
net profit to the landowning farmer or to the tenant who has a
fixed rent to pay seems also to be that degree of intensity
which makes the total amount of land, labor, capital-goods,
and managerial activity employed in the agricultural industry
most productive. It appears, therefore, that at this point there
is a harmony of interests between the individual and society
as a whole; but it would seem that the interest of the share
tenant is not in harmony with the interest of society as a whole
in this regard, for if the better grades of land are farmed as
extensively as the interest of the share tenant seems to dictate,
poorer grades of land would need to be used in order that the
labor and capital-goods of the country be employed, and some
of this labor and equipment on the marginal land would be
creating a smaller product than it could be made to yield if
employed in farming the better grades of land to a more in-
tensive degree ; and, therefore, vv^hile a given share tenant could
increase his net profit by this extensive culture, such culture
would reduce the total value of the agricultural productions of
the country as a whole.

The interest of the share tenant is also out of harmony with
that of the landlord in this regard. Since it is to the interest
of the landlord that the share which accrues to him as rent

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 147

shall be as large as possible, he may desire that the intensity
of culture be carried to the farthest extreme. So long as an
increment of expenditure will add anything to the product it
might seem to his interest to have the increment applied, for
it would add to his income. Thus, stated in its extreme form,
it would seem that while the share tenant would desire to farm
so extensively that the average gross return per unit of labor
and capital would reach the maximum, the landlord might
desire that the gross return per acre should reach its absolute
maximum, without regard to cost per unit of the product.

It is evident that the interest of the landlord as well as that
of the share tenant is here in conflict with the interest of society
as a whole ; for to follow what seems to be the landlord's high-
est economic interest in this particular would result in the re-
duction of the total agricultural product which could be pro-
duced with a given amount of social energy.

But it becomes apparent that the landlord will always be
unable to induce his share tenant to farm any more intensively
than an owner of land or a tenant with a fixed rent finds it to his
interest to farm his land, for the tenant could othermse do
better by paying a cash rent or by taking up new land of nom-
inal value. On the other hand, the share tenants are, in the
United States, quite generally under the direct supervision of
the owners of the land, who insist that the share tenant should
farm as well as the owners would do. It may be true that this
ideal is not often perfectly attained, and yet the tendency is
for the landlord to so bring his influence to bear upon the share
tenant that the social loss due to share tenancy is, perhaps,
not very great.

In fact the advice of a landlord who himself is a successful
farmer often results in an important increase in the product of
the farm to the benefit not only of the landlord and the tenant
who shares the profits, but to the consumer of the goods.

Standpoint 2. We have here the more immediate problem of
determining the proper intensity of culture at a given stage in
the process of producing the crop. This depends largely upon
the exigencies of the weather. The farm manager cannot tell in

148 AGRICULTURAL ECONOMICS

advance the extent to which corn cultivation and clover harvest
will conjQict ; neither can he know exactly how much time there
will be for field work. Having made his general plan for the
year, he must, from day to day and week to week, distribute
his labor where it will count for most. If more labor can be got
temporarily, that will be distributed on the same basis, i.e.
put in where it will count for most. Under these conditions
the area has already been determined, but unusual weather
conditions may put the farmer ahead or behind his regular
schedule. In either case the correct policy is to make such use
of the available resources as will add most to the total profit
of the farm regardless of the assumptions made in projecting
the plans at the beginning of the year. Plans are valuable
but emergencies often demand their readjustment.

Staiidpoint 3. The problem as it confronts the farmer in
action is found in standpoint 3. How can the amount of business
under a given farm organization be increased, i.e. how can the
gross income be increased in such a manner as will add most to
the farmer's net profit? Take a dairy farm, for example,
where the sale of whole milk is the principal source of income.
To increase the gross income means essentially to increase
the milk check, (i) The milk check can be increased by im-
proving the sanitary quality of the milk so as to secure a higher
price for the product. This requires greater expenditure for
labor in the dairy and on the milk route, but makes no increased
demand for feed or land. (2) The milk check may be increased
by producing a greater quantity of milk of the same quality.
This may be done by :

A. Securing cows of greater efficiency and capacity. This
increases the investment in cows and makes some change in
the demand for feed, which may be produced as a result of more
labor on the farm on the same area or the feed may be pur-
chased.

B. Securing more of the same quality cows, building greater
bams, hiring more laborers, buying or raising more feed.

Which of these things to do depends on relative costs. If
more feed is raised it can be done by more intensive culture or

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 149

by expansion to a greater area. Intensity of culture and the
area of the farm are in a real sense reciprocals.

Standpoint 4. Intensity of culture may be viewed from the
standpoint of the entire agriculture of a country. When
viewed in a given year there is found a very wide range in the
degrees of intensity in the different parts of the country. On
the cheap marginal lands the expenditure per acre is small and
the farming is said to be extensive, while on the high-priced
lands near the markets, the expenditure per acre is large and
the farming is said to be intensive. This difference may be due
to the appHcation of more labor and capital to a given kind of
production or to the production on the higher-priced land of
crops which require (under any condition) very much more
labor and capital per acre. For example, market gardening is
much more intensive than wheat growing and is usually found
on higher-priced land near the market.

Likewise, when the whole country is viewed geographically
it is found that certain kinds of land are farmed more intensively
than others because of the character of the soil, more labor and
capital being required to jdeld optimum results on certain kinds
of land than on other kinds of land. This simply means that
the capacity of certain kinds of land is higher than that of other
land, due to differences in the physical properties of the land.

Viewed historically, an increase in intensity in the utiliza-
tion of land is the result of a relative increase in the popula-
tion. On the other hand, a decrease in population or an in-
crease in the available agricultural land supply will make a more
extensive culture desirable, unless improvements in equipments
are such as to make possible the greater use of machinery, so
that, while the application of human labor is less per acre, this
may be counteracted by the use of more capital per acre, and
in this way maintain or increase the intensity of culture as a
basis of a greater per capita consumption.

The proportions of laborers and equipments. In farm organi-
zation it often happens that a fixed number of laborers must be
combined with certain equipments; for example, one man is
required for each self-binder ; but in many cases it may be a

150 AGRICULTURAL ECONOMICS

matter of indifference, aside from the element of profit, whether
the work be done by hand or by horse power and machinery.
In the production of wheat, for example, the proportion of
capital-goods might be reduced and the same produce obtained
by increasing the number of laborers. The reverse is also true.
But while these variations may be made arbitrarily they have
an influence upon the amount of the farmer's share of the prod-
uct. Of all the various operations necessary to produce and
market a bushel of wheat, some can be performed more cheaply
by the use of horses and machines, others by means of laborers
without horse power.

Where the farmer's aim is to have the net profit which is
left after paying the hired laborers and paying for the use of
the equipments as large as possible, every operation should
be performed by laborers, if this method will lower the costs
of production, increase the product, or in any other way in-
crease the net profits ; and everything should be done by means
of horses and machines or other forms of equipments, which
can be done to better advantage in that way. It may often
happen that the cost of performing certain farm operations can
be reduced by the use of horses and machinery in the place of
laborers, but it may at the same time happen that the product
resulting from these operations is also reduced. It is not
always true, therefore, that every operation should be per-
formed in the least expensive manner, in fact, it may easily
happen that a more expensive method will result in the largest
net profit.

One point never to be overlooked in considering the desir-
ability of substituting laborers for equipments or vice versa,
is the relative demand which will be made upon the time and
energy of the manager. Any change in the proportions of these
factors in the composite unit which will increase the amount
of managerial activity per such unit must sufficiently increase
the farmers' net profit per composite unit to balance the loss
which results from the fact that fewer units can be brought
under a given amount of managerial activity.

One consideration which favors choosing machinery rather

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 151

than laborers as a means of accomplishing a given result is
the greater control over equipments. In case of great demands
for workers in other localities, laborers may leave the farmer
with his crops in the fields, whereas the horses and machines are
certain to be at the farmer's disposal when he wants them.
Laborers can make themselves more valuable by becoming
more dependable.

Where the substitution of the one factor for the other makes
no change either in the quantity of the product or in the amount
of managerial activity required, the rule is a simple one : where
there is a choice between using laborers or capital-goods in the
performance of certain operations, choose the cheaper method.
And yet, the qualifying phrases in this formula are so important
that the problem is far from being a simple one, and in many
cases, perhaps in most cases, it is the more fundamental prin-
ciple of seeking the largest net profit per unit of managerial
activity which must be kept uppermost in mind.

A change in the rate of wages without a corresponding change
in the cost of equipments, or vice versa, will necessitate a read-
justment of the relative amounts invested in the employment
of laborers and in the employment of equipment. As wages rise
relatively to interest and depreciation charges on equipment,
there should be less labor and more capital-goods employed.
Improvement in machinery often makes it profitable to substi-
tute capital-goods for laborers. The self-binder, the hay-
loader, and the windmill are examples where this has been true.

PROBLEMS

I , Suppose a farmer who operates his own farm with his own labor
finds that by putting all the time he can upon a corn crop he can
grow:

60 acres of corn yielding 24 bu. per acre
50 acres of corn yielding 30 bu. per acre
45 acres of corn yielding 33 bu. per acre
40 acres of corn yielding 36 bu. per acre
35 acres of corn yielding 40 bu. per acre
30 acres of corn yielding 44 bu. per acre

IS2

AGRICULTURAL ECONOMICS

Which combination will be most profitable if the land is rent free?
If a rent of lo bu. per acre must be paid? If one-half of the crop
must be paid as rent ?

2. To illustrate and compare the two points of view on the proper
degree of intensity of culture in a given year on a given grade of
land and in the production of a given crop, let the following figures
represent the returns resulting from the varying expenditures per
acre:

Dollars per Acre

Bushels per Acre in
Field A

Bushels per Acre in
Field B

X

0

0

a

0

3

3

0

6

4

0

IS

5

10

28

0

25

37

7

38

42

8

48

46

8.3

49.1

46.6

8.4

50.3

47.1

8.6

Si-3

47-5

8.8

52.3

47.8

9.0

53-2

48.0

9.3

54-1

48.3

9.4

54-9

48.4

9.6

55-7

48.6

9.8

56.5

48.8

10.0

57-0

49.0

II.O

60.0

49-5

12.0

62.0

49.8

I3-0

63.0

50.0

14.0

63-5

So.i

15

63-5

50.1

(i) Supposing that the farmer could get all the land he cared to
use, rent free, either of the quality found in Field A or Field B, which
kind of land would it pay him the better to use ?

(2) When maize is worth 25 cents per bushel and a rent of $2.50 per
acre is charged for the land of either grade, which grade would prove
the more profitable to the farmer, and to what degree of intensity
should he cultivate it ?

(3) In case the farmer must give one-third of the crop to the land-
lord, as rent, to what degree of intensity would he farm each of the

THE PROPORTIONS OF THE FACTORS OF PRODUCTION 153

fields, A and B, if he followed his own highest economic interest?
To what degree of intensity if he followed the highest economic
interest of the landlord? Explain fully how society as a whole
would lose in either case.

(4) When maize is worth 35 cents per bushel and the rent which
must be paid for the use of the land in Field A is $5.00 per acre, what
is the highest rent which the farmer could afford to pay for the use
of the land in Field B ?

(5) How would a rise of 20 per cent in the cost of labor and capital-
goods affect the above problems ?

(6) How would the second problem (2) be affected if the price of
corn shovdd rise to 40 cents per bushel and the rent shovdd at the
same time rise to $4.00 ?

(7) How would problem three (3) be affected if the landlord should
agree to take twelve and one-half bushels of maize per acre instead
of one-third of the crop ?

3. In order to ascertain the optimiun amount of acid phosphate to
put upon a corn field which is known to lack phosphate, the follow-
ing varying quantities were appUed per acre with the corresponding
results :

50 lb. yielded an increase of 2 bushels per acre
100 lb, yielded an increase of 5 bushels per acre
150 lb. yielded an increase of 7^ bushels per acre
200 lb. yielded an increase of 9^ bushels per acre
250 lb. yielded an increase of 11 bushels per acre
300 lb. yielded an increase of 12 bushels per acre
350 lb. yielded an increase of 12I bushels per acre
400 lb. yielded an increase of 12^ busheb per acre

The cost of the fertilizer is i cent per lb., to be paid for when corn
is in crib.
The cost of application is 50 cents per acre.
The cost of gathering com is 3 cents per bushel.
The value of corn in the crib is 63 cents per bushel.
Determine optimtun appUcation of acid phosphate.

CHAPTER XIV
THE SIZE OF FARMS

The size of farms is usually measured in terms of area. It is
obvious that all land is not equally useful and that some uses
of land make very different demands for labor and capital per
acre than others. From certain points of view, a 20-acre
fruit and vegetable farm may represent as much business as a
thousand-acre wheat farm. There are many measures which
might be used. For example, the total investment, the number
of laborers, the number of horses used, the number of cows
milked, the number of cattle and hogs fattened, or the number
of sheep on a sheep ranch, may give a more accurate basis of
judging of the importance of a given farm than a bare state-
ment of area. Area is, however, common to all farms, and
next to the number of persons employed, is perhaps the most
satisfactory starting point for the discussion of the size of farms.

The farms of the United States have been classified for statis-
tical purposes into ten size-groups based upon area. The
table on the following page shows the number and percentage
of the farms found in each size-group in 1910.

This table shows a wide range in the size of farms in the
United States in 1910. A study of the tables in the census
volumes shows that this is a condition of long standing. A
study of conditions in foreign countries shows the same wide
range in the size of farms. It would seem, therefore, that there
is no one size of farm which can be generally recommended,
but that the proper size for a given farm depends upon many
variable conditions. It becomes a matter of importance,
therefore, to outline the principles which determine the size
of farms, with a view to the proper adjustment of the size in
the case of each individual farmer.

154

THE SIZE OF FARMS

TABLE rX

Farms in the United States Classified by Area, 1910

155

NnUBEE

Percentage

Under 3 acres

18,033

317,010

504,123

1,414,376

1,438,069

1,516,286

534,191

443,984

125,295

50,135

0.3
50

7-9
22.2

3 to 9 acres

10 to 19 acres .

20 to 49 acres .

50 to 99 acres

22.6

100 to 174 acres

17s to 259 acres

260 to 499 acres

500 to 999 acres

1000 acres and over

23-8
8.4
7.0
2.0
0.8

All farms

6,361,502

100. 0

While there is no one proper size for farms in general, there
is always a proper size of farm for a given man, at a given stage
of his own development, on a given type of soil, in a given line
of production, with given labor and market conditions. In
general, cotton farms are smaller than wheat farms. For ex-
ample, the average area of improved land in farms in Bell
County, Texas, where more than half the improved land is in
cotton, was about 70 acres in 1910, whereas the average was
about 270 acres in Barton County, Kansas, where more than
half the improved land was in wheat. If Washington County,
Mississippi, is compared with Cass County, North Dakota,
the contrast is even more striking. In the former county,
the average area of improved land in farms is 23 acres ; in the
latter it is about 470. In the Mississippi county, over 47 per
cent of the improved land was in cotton, while in the Dakota
county 44 per cent was in wheat.

These facts indicate that the crop grown is a factor in deter-
mining the size of farms ; but that this force is not operating
alone is shown by the wide range in the size of wheat farms and
of cotton farms. In general, the cotton farms of the black
prairie of Texas are larger than the cotton farms of the Yazoo
delta in Mississippi, as is indicated by the counties compared

IS6 AGRICULTURAL ECONOMICS

above. In Bell County, Texas, more than 96 per cent of the
farmers are white, whereas in Washington County, Mississippi,
over 95 per cent of the farmers are colored. As has been noted,
the improved area per farm is three times as great in the former
as in the latter. This gives a strong suggestion that the capac-
ity of the individual farmers is a potent factor in determining
the size of farms.

{. In 1900, farms were classified by size and by principal sources
of income. The statistics show a wide range in the size of farms
used for any one purpose ; for example, there were cotton farms
in every size group from under 3 acres to over a thousand
acres, but the most common size was from 20 to 50 acres.
Hay and grain farms showed also a wide range, but the most
common size was from 100 to 175 acres. Live stock and dairy
farms were most largely in the group ranging from 50 to 175
acres. The most common size of fruit and vegetable farms was
from 20 to 50 acres. Thus, while there is a wide range in sizes
of farms in a given line of production, the dominant size varies
with the kind of agriculture carried on.

Topography is a factor in determining the size of farms. In a
broken country where the fields are small because of the limited
areas of plow land found lying together, and where large ma-
chines cannot be used to advantage because of the unevenness
of the ground, the cultivated area in farms is usually small.
This same condition may result in large farms for grazing
purposes.

The climate influences the size of farms in many ways. In
Cahfornia, where the wheat crop can be left standing for some
time after it is ripe, a given crew can harvest a much larger
area of wheat than in the more humid regions where the crop
must be cared for in a few days.

The number of days per week the land is dry enough to work,
during the season when crops are being put in and cared for,
is an important factor in determining how many acres of each
crop can be handled per man and team, and hence how large
an acreage of improved land will be found per farm.

The character of the farm work influences the size of the

THE SIZE OF FABLMS 1 57

unit of organization. The large area demanded per man gives
rise to two conditions which point toward the economy of a
relatively small unit of organization when compared with many
Unes of manufacture. The distance which workmen must
travel in going to and from their work is against large farms.
The time required in going to and coming from the fields is
subtracted from the time devoted to the field work. -^ Further-
more, the fact that the work is spread over a wide area makes
close supervision of the workmen impracticable. Every
workman on a farm must be interested and largely self-direc-
tive in carrying out the day's work if the farm is to prove
profitable. This has resulted in the major portion of the work
on most farms being done by the farmer and his family.

It has been said, "■ The typical American farm is a family-
farm." Limiting this statement to America is unnecessary.
The statement is equally true of France and of Germany. If
the farms of the whole world were considered, it would still
be true that the typical farm is a family-farm. The world over,
farming is very generally organized in accordance with what
has been called the " domestic system " in industry. There
has been talk about the " factory farm " and corporation farm-
ing, but nothing of general economic importance has been
developed along this hne. The family-farm is, for the present
at least, the farm to keep in mind in studying the economic
problems of the farm manager. Hence the working force of
the family is an important consideration in deciding upon the
proper size of farm for a given farmer.

The fact that adding to the size of the farm adds to the work
in the home and detracts from the pleasure of living, tends
to limit the size of farms. The farmer considers the extra
work for his wife involved in taking an extra man into the
home. The writer uses the word " home " advisedly. The
hired man is not satisfied simply to eat and sleep in the house.
He expects to be made to feel at home, and if he does not feel
at home, he will move along and try another place. The
farmer and his hired man work side by side in the field, and
in the barn ; they sit side by side at the table, and it is per-

158 AGRICULTURAL ECONOMICS

fectly natural that the employee should expect to be con-
sidered a part of the family.

The size of the farm often grows with the family. As the
boys become able to help on the farm, the successful farmer
adds to its size with a view to having enough land for his
labor force, and with a view to having a piece of land for
each of the boys when they have grown up and want to com-
mence farming for themselves. Under these circumstances,
the splitting up of the farm as the boys start in on their own
account often results in a reduction in the size of the farm as
the family is dispersed.

How will the decline in the size of the American farm family
affect the size of farms? In the first place, it will not only re-
duce the number of family workers per farm, but will tend to
reduce the number of paid laborers on farms. The principal
supply of satisfactory farm laborers is the boys from farm
families where the degree of prosperity has not been such as
to enable the farmer to expand his farm so rapidly as the family
labor supply has increased. With the decline in the size of
families, this source of labor is greatly reduced, and the laborers
who can be drawn from other sources are not so satisfactory
from the point of view of being skilled, subject to control, and
reliable. The most satisfactory solution of the farm labor
problem in many parts of the United States is to reduce the
size of the farm to what can be handled by the family.

There are those who would not carry this so far as to reduce
the labor force below two men. " There are many farm opera-
tions that require two men, so that no matter how small the
farm may be, one man cannot do all the work to good advan-
tage." The whole question involved here is : will the advantage
of having another man right at hand for doing the two-man
jobs counterbalance the social and economic burden of keep-
ing him all the time ? The answer to this question depends upon :
(i) the managerial ability of the farmer in making a margin
of profit on hired labor, (2) his tact in handhng men so as to
prevent the hired man from being a nuisance in the home,
(3) the possibility of hiring a married man who is efficient,

THE SIZE OF FARMS 1 59

and whose family does not detract too much from the well-
being of the neighborhood (an effective man married to an
effective woman usually operates on his own account very soon,
and cannot be had on the wage basis), (4) the possibility of two
single-handed farmers arranging to help each other on the
tasks requiring two men.

Economy in the utilization of machinery. " Most of the
common farm machinery can be used to do the work on a 200-
or 300-acre farm, as well as on a small farm." ^ There is truth
in this statement so far as certain types of machines are con-
cerned. In the production of corn, no ver\' expensive ma-
chinery is used unless a corn binder is used. Plows can be had
of varying capacity from one horse to the great tractor plows.
In the production of small grain, the binder is the one machine
usually owned by the farmer which costs over one hundred
dollars, and in humid regions and on rich land, the acreage to
be cut by one machine cannot be expanded much beyond what
two men can put in without the risk of losing a part of the
crop. The two single-handed farmers will find it profitable
to own a binder jointly and work together in grain harvest.
The question always arises, " Will the greater degree of utiliza-
tion of a given machine compensate for the other disadvantages
involved in increasing the size of the farm? "

This leads to a discussion of the unit of organization on the
farm. On the great wheat fields in California, the unit may
be based upon the combined harvester and thresher. This ma-
chine, the crew to operate it, and the land, men, horses,
and other equipment required to raise that amount of wheat
which can be cut during the normal harvest period, may here
make up the unit of organization. In the corn belt of central
Illinois, where corn is the principal source of income, one man
and team of from two to four horses, a plow, a harrow, a corn
planter, a corn cultivator suited to the horse power decided
upon, becomes the basic unit of organization. This same unit,
with the addition of a grain seeder, a binder, and a mower, will
care for oats and hay in combined amounts equal to the area

' G. F. Warren, "Farm Management," p. 257.

l6o AGRICULTURAL ECONOMICS

of corn handled. The area of corn which this one man and
equipment can prepare the land for, plant, and keep clean the
month after planting, plus the amount of land used for sub-
sidiary purposes, becomes the unit of economical farm organiza-
tion. One or many of these units may make up a given farm,
depending upon the managerial ability of the farmer, the
conditions in the household, and the size of the family labor
force. In the corn belt, a farm which will not employ one unit
is clearly too small. To be of proper size, the farm should
make demand for one, two, three, or more of these units, but
should not fall halfway between. A farm which is too large for
one man, and too small for two, cannot be economically or-
ganized for corn production.

In the dairy regions where milk or cream is the principal
source of income, one man and the number of cows he can milk
and produce hay and silage for, becomes the unit of organiza-
tion. While the unit for any given type of farming varies
greatly in land-using power from place to place, and from man
to man, the dairy unit is an unusually flexible one on the family-
farm, because of the possibility of using children and women
in the dairy.

The significance of the unit system lies in the fact that in
general the increase in the area of the farm cannot go on by
small additions of an acre now and an acre then, but must be
made in considerable jumps if the area is to conform to the
demands of economical farm organization. The difficulty in
making these jumps often results in adjusting the organization
to the available area, sometimes with too high a degree of in-
tensity of culture, sometimes with too low a degree of intensity
to yield maximum profits. One method of adjusting the size
of a farm is to change from one farm to another,! and while this
is objectionable from the standpoint of the cost of moving, it
is often the most practical way of adjusting the size of the farm
to the ability of the farmer and his potential labor force.

The problem of right proportions between managerial activity
and the other factors of production is one of the most important
problems related to the size of farms. No rule can be laid down,

THE SIZE OF FARMS

i6i

but it is worth while to discuss the principles underlying this
problem. In applying a given amount of managerial activity
to land, equipment, and laborers the law of increasing and
diminishing returns must be considered. If the managerial
activity is expended upon too small a farm, the profits will fail
to rise to the maximum through lack of business, and if the
farm is too large, the expenses will absorb too large a pro-
portion of the income, and the profits will not be at the maxi-
mum.

This point may be illustrated by means of the following table,
in which the number of composite units (a unit may be thought
of in this illustration as one laborer and the amount of capital-
goods and land which should be associated with him) to be
associated with one unit of managerial activity (which may be
thought of as the amount of such activity which one farmer
wishes to devote to production) is increased seriatim from
one to eight, and as a result of the increase in the number of
the composite units brought under the one management, the
net profit per composite unit is represented as gradually falling
from $260 to $80, while the resulting net profit per unit of
managerial activity is represented as increasing until after the
fifth composite unit is added, after which it is represented as
falling.

TABLE X

Composite

Total Outlay

Gross Value

Net Profit per

Manager's

Units

OF Product

CoMp. Unit

Total Propit

I

$ 740

$1000

$260

$260

2

1480

i960

240

480

3

2220

2880

220

660

4

2960

3720

190

760

S

3700

4500

160

800

6

4440

5220

130

780

7

5180

5880

100

700

8

5920

6560

80

640

The figures here used are selected more or less arbitrarily
to illustrate the general truth that, as the number of the com-

l62 AGRICULTURAL ECONOMICS

posite units brought under one management is increased, the
average return per composite unit, and hence the average net
profit per composite unit will fall, but that for a time this fall
in the net profit per composite unit is more than balanced by
the increase in the number of such units, and the net profit per
unit of managerial activity continues to increase until finally
the point is reached where the net profit per unit of managerial
activity reaches its maximum, and if the number of composite
units associated with a given amount of managerial activity
be increased beyond this point, the net profit per unit of the
latter, and hence the total net profit which the farmer will
be able to secure as a manager, will be reduced below the pos-
sible maximum. Any conditions which retard the bringing
about of this adjustment not only reduce the profits of the
farmer, but increase the cost of the nation's food supply.

One permanent occasion for differences in the size of farms is
the differences in the amount of energy the men are willing to
put into the operation of a farm.

Having decided upon the number of the composite units of
the factors which should be brought under a given amount of
managerial activity, that is, the intensity of the management,
other things remaining the same, the size of the farm should vary
directly with the amount of effort which the farmer is wilhng
to put forth in its management. The farmer's energy is, of
course, limited, and after he has performed a given amount of
work per day, it requires more and more inducement to impel
him to increase his activity. It may be that a few hours of
work each day would be a pleasure to him and that the profits
which he received from these few hours' labor would be much
more than enough to induce him to perform the work of manage-
ment ; but when hour after hour is added to the time which he
must spend in the fields, and the rapidity of his movements
from place to place must be increased more and more, in order
that the farm may be properly operated, each succeeding addi-
tion to the time and the speed of his work becomes more and
more wearisome, while at the same time the wants which are
to be satisfied by the fruits of this increased labor become less

THE SIZE OF FARMS

163

and less important to him, until finally the point is reached
where the increase in the net profit is not sufficient to induce
the farmer to increase his activity.

This can be illustrated by means of a diagram. In Fig. 9
the succeeding composite units of the agents are measured

C' D' e' F' G' !f l' K' L' M'

E F G H I K

Figure 9

M N

on the base line A X, and the net profit which the farmer re-
ceives for managing these units is represented by the area
between this line and the line BY, so that the area ABC'Cy
for example, represents the net return from one of the composite
units. If the idea of a composite unit seems too abstract to
the reader, he may think of one of these units of the agents of
production as being one laborer and the amount of land and
equipment associated with him. That share of the net profit
per unit which is represented by the area lying below the curved
line PP' may be thought of as the amount which is required to
yield to the manager a pleasure in consimiption of goods equal
to the pain of performing the work of management. Assuming
that he devotes exactly the same care to each unit, as he con-
tinues to increase the number of units the perpendicular dis-
tance between lines AX and BY will remain constant; but
a larger and larger proportion of the net profits of the succeed-
ing units will be required to counterbalance the pain or disutihty
accompanying the added exertion required for the manage-
ment of such units, hence the curve PP' will gradually rise
until at some point it will cross the Hne BY, beyond which
point the pain of exertion exceeds the net profit to be secured.

The curve PP', representing the increase in the pain cost,
may start high up the line AB and rise rapidly with a lazy
man, or it may start far below A, rise slowly and not reach

1 64 AGRICULTURAL ECONOMICS

line BY until some point far to the right of M'. This illus-
trates one of the causes of differences in the capacity of men
which is a permanent cause of differences in the size of farms.

From this point of view it becomes obvious that there can be
no one size of farm which will pay best for all farmers, and hence
the attempt to draw conclusions from statistical studies regard-
ing the proper size of farms sheds Uttle or no light upon the
problem of the individual farmer, however valuable these
figures may be for the study of geographical and historical dif-
ferences in the organization of farms.

Which is the most desirable from the social point of view, the
large, the medium-sized, or the small farm? Having in mind that
farmers vary greatly in their degrees of efficiency, it would seem
socially desirable to have the managing done by the most effi-
cient farmers ; for in this way the labor would be under more
efficient direction than where every man directs his own ac-
tivities. Another advantage of large farms lies in the fact that
they facilitate a more extended division of labor. There can
be a shepherd who devotes all of his time to the sheep, and for
this reason he can better understand his business. So it is in
every line of work on the large farm. Machinery can be used
to better advantage on the large farm. The efficient manager
of the large farm can better determine what will pay and what
will not pay, so that he is in a much better position to direct
the labor power of society to the best advantage. The man
who is toiling in the field as well as managing the farm is less
likely to be far-sighted at a time when he is tired, and at such
times he may sacrifice much of the profits for a relatively small
saving of labor.

On the other hand, what improves the efficiency of the manage-
ment in this way may lower the quality of the workmanship.
There are some men, it is true, who seem to work better for
others than for themselves, but with many others the opposite
is true. There are vast numbers of small farmers who do not
use good methods, who, because of their interest in that which
is their own, will put forth greater effort than they would if
they were working for some one else.

THE SIZE OF FARMS 165

It has been said that certain kinds of farming lend themselves
more readily than others to large-scale operations; that wheat
farming, for example, is especially suited to large-scale opera-
tions, but that as this one crop system gives way to diversified
farming, the advantages of smaller farms assert themselves.
The owner of young stock takes more pains with them than he
would if he were a hired laborer. It is certainly true as a general
rule that the man who owns the lambs or pigs will lose more
sleep and go to more trouble than will a hired man. " He
that is an hireling, and not the shepherd, whose own the sheep
are not, seeth the wolf coming, and leaveth the sheep, and fleeth :
and the wolf catcheth them, and scattereth the sheep. The
hirehng fleeth, because he is an hirehng, and careth not for the
sheep."

The management of a farm is something which must he dif-
fused through the details of the work. There is a withdrawal of
the efficient manager's abihty from the details and a concentra-
tion of it upon the general supervision of the farm as the size
of the farm increases. As more and more of the details are
delegated to hired men these details are hot looked after so
well as they might be if looked after directly by the master.
Cato, a Roman agricultural writer, says : " Neither the assi-
duity and experience of the hired manager, nor the power and
willingness of the master to lay out money in improvements,
are so effectual as this one thing, the presence of the master;
which, unless it is frequent with the operations, it will happen
to him as in an army when the general is absent ; all things will
be at a stand." And again, PKny says: " The ancients were
in the habit of saying that it is the eye of the master that does
more towards fertilizing a field than anything else."

The question of the most desirable size of farms, when viewed
from the standpoint of the most economic use of the productive
energies of a country, is a matter of determining the point at
which the advantages of the more efficient general supervision
as to crops, field-systems, intensity of culture, etc., are balanced
by losses in the execution of the details of the work with less
skill and personal interest.

1 66 AGRICULTURAL ECONOMICS

The purely economic conclusion is, therefore, that every man
who can make more by hiring to a farmer should do so, and every
farmer who can increase his net profits by hiring men and in-
creasing the size of his farm, without increasing the amount of
effort which he need put forth, should do so. Each man would
then get the largest net income, and the value of the farm
products of the country would reach the maximum.

But the actions of men are not controlled entirely by economic
motives. There is a pleasure to be derived from being one's
own master, which is often prized more highly than many of
the things which money can buy. As a result many men re-
main independent farmers when they could secure a larger
income' for themselves and add more to the value of the farm
products of the country by being hired men under the direc-
tion of more efficient managers. And yet it may be that this
economic loss is compensated for in the social gain that comes
from self-directed activity.

The proper size of farms is a subject which has commanded
the attention of agricultural writers since ancient times. " The
ancients," says Pliny, " were of opinion, that, above all things,
the extent of farms ought to be kept within proper bounds.
Wherefore it was a maxim amongst them, to sow less and plow
better. Such, too, I find, was the opinion entertained by
Virgil, and indeed, if we must confess the truth, it is the wide-
spread domains that have been the ruin of Italy, and soon will
be that of the provinces as well. . . . With that greatness of
mind which was so peculiarly his own, and of which he ought
not to lose the credit, Cneius Pompeius would never purchase
the lands that belonged to a neighbor."

Columella, another Roman agricultural writer, also taught
moderation in the size of farms. " To the other precepts,"
says he, " we add this, which one of the seven wise men has
pronounced as a maxim, that holds true in all ages, that there
ought to be limits and measures of things ; and this ought to be
understood, as applied not only to those that do any other
business, but also those that buy land, that they may not buy
more than they are fully able for. To this is applicable the

THE SIZE OF FARMS 1 67

famous sentence of our poet, You may admire a large farm,
but cultivate a small one; which ancient precept this most
learned man (Virgil), . . . expresses in verse. This, too,
is agreeable to an acknowledged maxim of the Carthaginians,
a very acute nation. That the land ought to be weaker than the
husbandman ; for, when they struggle together, should the
former prevail, the master must be ruined. And, indeed, there
is no doubt, that a small field well cultivated produces more
than a large field ill cultivated." " Among the maxims of the
ancients, recorded by Palladius," says Dickson, " there is one
to the same purpose with that mentioned by Columella, ' A
small farm cultivated is more fruitful than a large farm
neglected.' "

CHAPTER XV
FARM LABOR AND WAGES

The farm labor problem presents different aspects in the
different parts of the United States. On the general farm in
the northern part of the country the typical wage worker on
the farm is a young man who is temporarily a member of the
farmer's family as well as a part of the farm crew. He eats
at the family table, reads the paper in the family living room
after supper, puts his soiled clothes into the family washing,
and in general shares the life of the farm home. If he is a good
hand he will soon become interested in the work of the farm and
attached to the farm by many ties other than the wages he
draws. This young man is a part of the farm family, and
whether he is contented with the life and interested in the work
depends largely upon the success of the farmer and his wife
in developing sympathetic and happy relations. There are
no class distinctions. The young man expects to become an
independent farmer and feels that he is gaining skill, money,
and credit which will enable him to establish a home of his own
in a few years. His life and his motives tend to make him a
fine workman and a good citizen.

The farm with a separate boarding house for the hired men
has problems of its own. Much of the personal touch is lost.
The spirit of the group about the boarding table is not that of
a family group. The interests of the farm are secondary in
the minds of the men. The wage is the one important motive
for remaining on the job. On the wheat farm, transient laborers
surround this boarding house table for a short time during the
harvest period and are soon gone. On the large dairy farm the
table is occupied the year around, but there is a constant shift-
ing of men. Men are going and new men are coming every few

1 68

FARM LABOR AND WAGES 169

days. The life lacks many of those finer human sentiments
which make for good farm hands and for good citizenship.

Another type of wage worker on farms is the married hired
man who Uves in a cottage and works for the farmer by the
month or by the year. He is usually furnished a cottage, a
garden, and often some fuel, and a definite amount of milk
per day in addition to the cash wage he receives. Another
class of farm workers find places to live and work by the day
or month for a farmer who pays cash wages for the work done.
These outside workers become less definitely a part of the farm
organization. At least two persons (the man and his wife)
and often others (the children) have to be contented if the
married workman is to be vitally interested in his work. Un-
less the family is interested in the farm, he is out of touch with
the pulse beat of the farm when not at work.

While the Ufe may be more satisfactory, the outlook of the
married farm hand is not so alluring as that of the single man.
A family must Hve from the wages. The chance of saving and
becoming an independent farmer is more remote, and as a
result many such famiHes give up the hope of climbing the
agricultural ladder round by round from wage earner to tenant
farmer, then to mortgaged owner and finally to the free owner of
a farm. Without this outlook and this goal the farm hand
becomes a different type of man, less to be desired as a work-
man and as a citizen.

In those parts of the United States where colored and oriental
laborers dominate, the conditions are very different. The
colored laborer lives outside of the farmer's house in a cottage
belonging to the farm, or he may Hve in the near-by village and
go to the farm from day to day. In the North the typical
farm hand is a neighbor's son, in the South he belongs to a dif-
ferent race. This gives ground for a difference in the status of
the worker in the farmer's home, which is to be expected.

Wages. The wage of the farm hand is a complex thing not
easily shown in statistical tables. The cash wage is but one
of the many considerations. The young man who becomes a
part of the farmer's family often makes other matters than cash

lyo AGRICULTURAL ECONOMICS

wages the deciding factor in determining whether he will take
a position and whether he will hold it when once on the job. If
it may be assumed that the board, the washing, and the hving
conditions have continued to play the same role in holding
the farm hand in his position through the period for which wage
statistics are available, it will appear that farm wages have
greatly increased during the past half century.

The statistics show a rise in the average monthly cash wage
rate of men hired by the year with board from $10.09 in 1866
to $18.05 in 1909 and a range in wages in 1909 from $10.91 in
South Carohna to $37.50 in Nevada. When hiring by the
season the average monthly rate with board ranged from $12.69
in 1866 to $20.80 in 1909 ; without board the rate ranged from
$18.08 in 1866 to $28.22 in 1909. This rise in the average
wage impHes changes from year to year and differences from
place to place in the supply, the demand, or the quality of the
wage workers on farms.

The wage of a given man at a given time and place is the
result of a bargain made by the employer and the employee.
The amount the wage worker will take depends upon his desire
for employment and the pay offered in the various positions
open to him. The amount the employer is willing to pay de-
pends upon the use he has for the man and the number of men
offering their services. The maximum wage is determined
by the productivity of labor but the actual wage is the result-
ant of competition among workers for positions, and among
employers for men. Variations in the wages in different parts
of the United States and on the same job are due to differences
in the qualities of the men, in the degree of responsibility placed
upon the men, the character of the work, and the conditions of
life. Differences in different localities may be due to differences
in the relative abundance of men. It is probable also that dif-
ferences in the cost of living will have a considerable influence
upon the wage rate required to draw or hold laborers in a given
community. For example, wages are low in the South when
compared with the North. This may be attributed to several
things. The quahty of the labor may be lower. The cost of

FARM LABOR AND WAGES 171

living is less, hence the supply may multiply on a lower income
scale in the South. In the western states wages have been
relatively high, due largely to the relative scarcity when com-
pared with the East.

In general the price-fixing forces operate in much the same
manner in determining the price paid for labor as in determin-
ing the price paid for the products of the land. One differ-
ence when compared with a staple of world commerce like
wheat, arises out of the fact that the supply of laborers does
not move so readily from place to place to adjust itself to the
demand as the wheat supply does. Any arrangement which
will provide for the easy shifting of labor will tend to bring
the wages to the same level for men of the same ability in
regions far from each other if the Uving conditions are the same.

Variations in wages are in part due to the differences in the
usefulness of the employees. These differences relate to knowl-
edge, wisdom, skill, physical strength, interest in the work,
honesty, and temperament. In general the range in wages is Jar
less than the range in usefulness. This is partly due ^^to lack of
a good measure of the differences, and partly because there is
a variety of positions to be filled which require varying degrees
of ability. Then again, some men possess one quality, some
another quality, and to the extent that each person finds his
proper position, he realizes on his strong points. One may have
knowledge but possess poor judgment. For example, a man
who knows something of the anatomy of the horse, and knows
many things about giving first aid to the sick in the horse barn
and in the dairy, once seriously proposed hitching to a mowing
machine a 1400-pound three-year-old colt which had never
had a bridle on before. Another example is that of a man
who possessed heavy muscles but who used poor judgment in
deciding how much muscle to use on a given occasion. As a
result fork handles were continually broken, bolts were twisted
off, and the cows' udders suffered from the excessive applica-
tion of muscle in milking. Again a man may possess good
qualities but be a grouch. He may hate nearly every one he
comes in contact with and be kept on the job, at ordinary

172 AGRICULTURAL ECONOMICS

wages, only because he does a lot of work, but being denied
the high position his other qualities would have justified,
because of this lack of self-control and kindly attitude toward
other people. On the other hand, a young man who at first was
so ignorant of farming that he walked through the hay up to a
mowing machine in motion and into the cutter-bar, to his
sorrow, and who was continually making mistakes which cost
the farmer money, held a position, drew the going wage, and
in a few years worked his wa}^ to a head position on a good
farm which he filled admirably. This was made possible be-
cause of the fine spirit he always showed. He was a master
at being kind, he was industrious, and he took great interest
in the work of the farm. These qualities win the farmer and
he will pay full wages and be patient if he likes the man and feels
that he is improving in his work.

The number of wage workers on farms in the United States
increased from 3,004,061 in i8go, to 4,410,877 in 1900, to
5,975,057 in 1910. The number of farms increased also but at
a less rapid rate. In 1890 there were, in addition to the farmers
themselves, 66 workers or farm laborers for every hundred
farms. In 1900 there were 77, and in 1910 there were 94.

While this was a period of increase in the labor supply per
farm, it was also a period when new types of labor-saving ma-
chinery were coming into use. The gang plow was much more
widely used at the end than at the beginning of this period.
The two-row corn cultivator also tended to reduce the demand
for laborers, and a wider harrow was drawn by the multiple
teams used on the gang plow.

Yet in spite of this increase in the supply of labor and the use
of labor-saving machinery, there was apparently a relative
shortage of labor as manifested by the talk about the scarcity
of labor and the actual rise in wages. Either the farmers them-
selves worked less (which might be their desire as good prices
made them prosperous) or there was more work per farm.
This might arise from an increase in the size of farms or from a
more intensive use of the land. The fact is, the average size
of farms in the United States fell from 146.2 acres in 1900 to

FARM LABOR AND WAGES 173

138. 1 in 1910. But the average improved acres increased
from 72.2 to 75.2 per farm. This implies a more complete
utiHzation of the farm. The total number of acres of land per
person engaged in agriculture was about 81 in 1900 and about
70 in 1910. Thus, in spite of the fact that the investment in
farm implements and machinery increased from about 90 cents
per acre to $1.44 per acre, each person engaged in agriculture
operated on the average 13.5 fewer acres. This means more
intensive utilization of the land or less work per man. More
work may take the form of milking cows. In Wisconsin and
Minnesota where dairying was on the increase, the acreage per
man decreased. In Nebraska and Kansas there was an in-
crease in the number of acres per man. In Indiana, Illinois,
Michigan, and North Dakota, the ratio changed but little.
In these grain states new types of machinery would tend to
have this effect. That is, the more intensive farming was
accomplished by means of more equipment instead of more
labor.

The demand for labor is not an absolute thing. In fact it
is quite flexible. The farmer can make use of more or less labor
depending upon the cost of that labor. The farmer can operate
his farm so as to use much or little labor. He can plow his land
or graze it ; he can feed his grain to cattle or he can sell it ; he
can keep steers and hogs or he can keep milch cows. Which
he should do depends upon which pays best with a given wage
scale. The higher the wage the greater the inclination to get
along with less help and to choose a type of farming which
makes one free from the hired man.

Many farmers who own farms and are so well-to-do as to
desire to hire all the work done on their farms, avoid the whole
farm labor problem by moving oS the farm and putting, as
share tenant on the farm, a younger man who expects to work
hard and who has a family willing to help with the farm work.
The farmer who stays with the farm and faces the farm labor
question finds that his reward is little greater than that of his
neighbor who turns over to a tenant the problem of getting the
work done.

174 AGRICULTURAL ECONOMICS

The man who faces the farm labor problem and who must
solve it for his own farm finds that custom and sentiment must
be used for all they will bring if he is to succeed. Custom does
much to determine a wage rate which had as well be adhered
to. Sentiment determines how difficult or how easy it is to
secure and keep laborers at the customary wage.

One of the real problems is finding the right man for the given
farm. Just as custom and sentiment have much to do in
determining the wages the farmer must pay if he decides to
keep help and leaves him entirely free to hire or not as he
pleases, so also do these same factors tend to retard the move-
ment of surplus labor from one place to another. But a still
more important hindrance to the movement of laborers is the
lack of knowledge of the opportunities available for the workers
who are in the region of relative oversupply and who could
do much better for themselves and serve a more important
purpose in another region. Lack of knowledge of the exist-
ence of these men on the part of would-be employers, and when
they are heard of, lack of knowledge of the ability and char-
acter of these employees, make the calls few for movements of
labor excepting in outstanding cases like the annual movement
of transients to the wheat fields in harvest time. Another retard-
ing force is the cost of the trip, though in many instances the dis-
tance is not great if there were a means of knowing where to go.

There is real need of a network of farm labor bureaus which
will provide for the information as to the character and loca-
tion of positions open and the qualities and locations of men
available to fill the positions. A system of this kind would
go far toward stimulating better farming for the reason that
many a farmer now continues to tolerate inefficiency on the
part of hired men who, if they were in danger of being dropped,
would do very much better work. If a bureau were at hand
there would probably be more shifting of laborers for a time
at least, but the result would be a better fitting of men to jobs,
a greater productivity, better wages, and larger profits.

There are various methods of paying labor. The wage
agreed upon may be for a year, a season, a month, a week, a

FARM LABOR AND WAGES 1 75

day, an hour, or by the piece. Any of these may be sup-
plemented by bonuses, profit sharing, or by the sliding wage
scale. The payment may be all in cash, but usually part in
cash and part in kind.

The most common method of hiring labor in the general and
dairy farming districts is to pay a definite wage per month
v\ith an agreement extending for a season or for a year. In
many instances the wage rate is different for the different
months of the year. For example, forty dollars per month and
board for the eight months from April to November, inclusive,
and twenty-five dollars per month and board for the four months
from December i to March 31 has been noted. The funda-
mental character of this agreement is not very different from
an agreement upon a wage by the month without any agree-
ment as to the term of months the arrangement is to con-
tinue. In most instances the relation is brought to a close as
soon as both parties are dissatisfied, even if there has been an
agreement for an extended period of time.

Harvest workers and transient laborers usually work for a
definite wage per day when employed and board while at work
and while lying over because of weather conditions which stop
the work.

In England the common method is to pay wages by the week
and to settle every Saturday night. It is often the custom to
supplement this regular wage by a bonus at the end of harvest
if all have done well. In some instances a lump sum is paid
to the crew for putting up the harvest. Under this plan each
worker gets his proportion of the lump sum instead of the weekly
wage. This is a higher wage and is intended to stimulate more
strenuous effort in the harvest field.

Profit sharing may take the form of a percentage of the net
proceeds of the year's business. This is not very satisfactory
because it is very difficult to arrive at an accurate statement of
the profits of a given year. Crop sharing or sharing the gross
proceeds, which becomes a form of tenancy, is the most satis-
factory arrangement if the profits are to be divided.

The bonus has its advantages. For example, if each work-

176 AGRICULTURAL ECONOMICS

man in a dairy is to receive an extra wage if the bacteria count
is kept below a certain number throughout the month, the
bonus may prove helpful. The bonus may be used as an un-
promised reward of industry and ability. When wisely ad-
ministered this has a wholesome effect upon the organization.

The piece-work wage is used on the farm in getting special
jobs done. Corn is often husked for so much per bushel ;
plowing is done by the acre ; threshing is paid for by the bushel ;
silos are filled for so much per foot, depending on the size;
ditch digging is paid for by the rod ; and berries are picked by
the box. Many other examples of piece work will be noted
by the observing student.

Piece work is advantageous in that it stimulates strenuous
activity at a time when there is an unusual amount of work to
do. It results in a greater justice in the payment of wages
than is secured from a standard daily wage, for each is paid
according to the work he has accomplished. The rate of pay
is usually much higher than the standard wage and is used in
agriculture to draw an extra supply of labor for a short time
as well as to speed up the work.

The main difficulty in the piece-work system arises out of
the danger that the quality of the work will suffer. For ex-
ample, in husking corn by the bushel there is danger that the
unscrupulous workman will take the large ears and leave the
smaller and less accessible ears in the field. In this way the
workman may damage his employer more than the work
done is worth. To be a success the work done under
the piece-work wage system must be subject to inspection in
order that the quality of the work may not be slighted.

The goal of the hired man is the position of an independent
farmer on a farm of his own. The possibility of attaining this
goal depends upon many things, all of which center about the
opportunity to learn how to farm for profit and the opportunity
and the incUnation to save his wages. The young man who
receives a moderate wage and works for a successful farmer who
himself is climbing the agricultural ladder and is in the process
of paying for his farm, is more likely to succeed than the young

FARM LABOR AND WAGES 177

man who receives a high wage for working on a farm owned by
a wealthy man who is farming for show rather than for profit.
The latter position teaches the wrong kind of farming methods
and the wrong kind of spending habits for one who expects to
save from his wages, become a successful farmer, and later
buy a farm. The wise young man will give due consideration
to the environment as well as the wage which the position offers,
for wisdom, skill, good habits, and credit go farther than money
in starting one on the safe road to success as a farmer.

CHAPTER XVI
FARM CREDIT AND THE RATE OF INTEREST

In the discussion of the organization of production in the
previous chapters, it has been assumed that the farmer is in a
position to command the instruments of production in quanti-
ties suited to his ability and to the type of farming he is under-
taking. It is a well-recognized fact that many farmers do not
possess wealth enough to own the land and equipments needed.

Farm credit is essential to good agriculture. If each farmer
were limited to the equipment and the land he could buy and
pay for, some farmers would be wasting their energies working
with too little land or inadequate equipments, while others
would be trying to operate more than they could use to advantage
and be " land poor." A good credit system is one which will
facilitate the adjustments between those who have more than
they can operate to advantage and those who can profit by
operating more with a view to maximum economy. Such a
credit system increases the incomes of both parties and increases
the productivity of the country as a whole, hence a good farm
credit system is a matter of importance to all consumers as
well as to many producers of farm products.

The hanks of this country are organized primarily to take
care of the merchants and manufacturers. These classes of
business men have a rapid turnover in their business and re-
quire large sums of money for short periods. The farmer's
turnover is not so rapid. He invests in Hve stock, machinery,
buildings, and land, all of which are essential to the success of
his business, but he does not sell them in ninety days and put
the proceeds back in the bank for a few days and then borrow it
again for another transaction. The farmer continues to use
the same land and equipments for a series of years, and if

178

FARM CREDIT AND THE RATE OF INTEREST 179

the banker had a way of viewing this investment and testing
its worth from time to time, he would be better off lending the
funds to farmers on long-time loans than lending to business
men on short-time loans. As it is now commonly operated,
the bank is too rarely a farmers' credit institution.

With the growth of banks owned and controlled by farmers
and with the work of a few prominent men in educating the
bankers to the needs of the farmers, the situation is improving.
It is hoped that one effect of the federal reserve system will be
the possibility of more rediscounting on the part of banks in-
stead of such frequent repayment on the part of the borrower.

The period of the loan should correspond to the farmer's
turnover, or, if the property is not turned over in the regular
order of affairs but held continually, then the term should be
such as will enable the farmer to gradually pay the debt out of
his earnings. The merchants' bank is not organized for this
latter function and cannot be depended upon. Some form of
land credit institution is needed for this purpose.

While the bankers of some parts of the United States are
meeting the farmers' needs for short loans, there are other
locaHties where this need is not being so well cared for. This
is more particularly true of the South, where farmers quite
frequently ask for advances on which to live while making a
crop. It often happens that the banker is unwilling to lend
directly to the farmer, but lends to the merchant, who makes
advances to the farmer, often on ruinous terms. The bankers
are not solely responsible for this situation, as has been proved
by an experiment at Red Springs, Texas, located in a county
where it was said bankers do not lend money to farmers. At
Red Springs a cooperative credit association was organized in
which the farmers of a neighborhood combined their resources
as a basis of credit and borrowed money in $1000 lots and lent
it out among their members in smaller amounts as needed.
At first the bankers wanted nothing to do with this credit
association, but after a year's successful operation the banks
of the county seat were ready to advance the money needed
by the association. This is a commendable move on the part

l8o AGRICULTURAL ECONOMICS

of the farmers and illustrates what is often needed in order to
make farmers desirable bank patrons. The group of farmers
organized into an association may be looked upon as a banking
auxiliary or as a farmers' borrowing organization. There is
work for both the farmer and the banker in developing a better
credit system.

The trust company deals in a class of long-time loans of which
the farm mortgage is the typical example as far as they have
to do with farming interests. Banks are much less attracted
by farm mortgages. Banks and trust companies are probably
of much less importance in the making of loans to farmers for
the purpose of buying land than are the well-to-do farmers
and the retired farmers of a prosperous neighborhood. These
men know land values and know the borrowers both with re-
spect to their character and their abilities as farmers. For this
reason they are in a strong position to make loans with safety
and at no expense for investigations, whereas the bank or trust
company would find it necessary to be at considerable expense
in ascertaining the merits of each particular case.

Many of these country money lenders are fine citizens and
leaders for a better country life who take pleasure in seeing the
young farmer climb the agricultural ladder to the position of
financial independence. On the other hand, some of them are
selfish, close-fisted men who enjoy making foreclosures. In
general a more systematic and standardized system of money
lending to farmers on mortgages is desirable.

The agents for insurance companies make great numbers of
loans on farm mortgages. These agents are usually men who
know the local situation thoroughly and who receive a com-
mission from the company for placing loans. The insurance
company is in no hurry for its money, hence it prefers long-time
loans. Neither does it want land, hence it is not anxious to
make foreclosures. On the other hand, the insurance company
does not care to receive partial payments from time to time and
hence the farmer may have to accumulate his savings and hold
them without interest or receiving a low rate of interest while
he continues to pay the higher rate for the money he has bor-

FARM CREDIT AND THE RATE OF INTEREST l8l

rowed. What is needed is an institution which will lend money
at reasonable rates and provide for a flexible system of partial
payments.

Neither the local money lender nor the agent of the insurance
company provides farmers with a means of investing their sav-
ings. The young farmer who saves but a few hundred dollars
each year cannot hope to lend this money on a mortgage,
because those who wish to borrow money to invest in land
generally desire a larger sum at one time. Hence the farmer
finds the country bank with its low rate of interest about the
only chance for investing his savings during the years he is
trying to accumulate enough capital to enable him to invest in
land. When the time has come for him to make an invest-
ment by paying half of the value of a piece of land from the
savings of many years, he is embarrassed by the fact that while
he has been able to get no more than four per cent for the use
of his money, he must pay six per cent for the money which he
wishes to borrow. This should certainly be enough to convince
the farmer that something is wrong. The important question
is, Can anything be done to remedy this condition of affairs ?

Something has been done in other countries, and something
is being done in this country to give the farmer a better credit
system. More than a hundred years ago institutions were
established in Germany for the purpose of lending money to
the farmers at a low rate of interest ; and the years have proved
the wisdom of this course of action. The most important
institutions for making loans to farmers, in Germany, are the
district cooperative credit associations (Landschaften), which
are pubUc or semipublic institutions for the purpose of lending
money on mortgages. These are organizations of landowners,
who by combining their resources into an unlimited company
are able to borrow money at a very low rate, — at a rate com-
parable to that for which the government can float its bonds.
As the institution is not intended for profit, the loans are made
to landowners at a rate just enough higher than that paid by
the institution to cover the costs of carrying on the business.
Money is lent on mortgages to the farmers and in order to

1 82 AGRICULTURAL ECONOMICS

raise the money for such loans, the institution is permitted by
pubHc authority to issue mortgage bonds to the value of the
mortgages it holds. As all the members of the association are
jointly and severally liable to the full value of their lands, the
bonds are considered excellent investments, and are floated at
a low rate of interest.

When the money has been lent to a farmer by one of these
institutions and a mortgage given to secure the loan, it is the
regular thing to collect a small amount as a partial payment
each year until the whole amount is paid. If, for example,
the rate of interest charged by the institution is four per cent,
five per cent will be collected each year. Four per cent is
interest and the one per cent is a partial payment which ac-
cumulates with interest until at the end of a little over forty
years sufficient has been paid in to cancel the debt. It is also
possible for the more thrifty farmers to make other payments
which shorten the period required for canceling the debt. In
some cases, these additional partial payments must be paid
in mortgage bonds, which can be bought at the market price.
">' These mortgage bonds make a safe and ready means of
investing the farmers' savings. In them the farmer finds a
safe investment which is as permanent as he may desire to have
it, and at the same time an investment on which he can reahze
at any time in case he decides to invest in land. The German
form of the institution may not exactly meet our needs, but it
is certainly true that the principle of association is especially
desirable in any system of land credit.

Not only do such institutions make it possible for the young
farmers to invest their savings until they are ready to buy, and
then to borrow money to finish paying for the land, but they
make it more desirable for the retiring farmers to sell their land,
as they can invest in bonds which are as safe as the investment
in land and pay practically the same returns. Thus it is that
a good credit system is the best means of keeping the tenant
problem from becoming acute.

The safety of these institutions is insured by the fact that
they are district associations. Each institution operates only

FARM CREDIT AND THE RATE OF INTEREST 183

within a very limited and well-defined field, so that the ofl5cials
are able to know the men and the land values throughout the
district.

The effect of this credit system is shown by the fact that, in
1895, only 16.42 per cent of the farms in Germany were com-
posed entirely of leased land; and only 12.38 per cent of all
the land included in farms was leased land. Indeed, Germany
is a nation of landowning farmers, while in France 47.2 per
cent of the cultivated area is occupied by tenants, and in Eng-
land the landowning farmer is the exception. Practically all
the land of England is farmed by tenant farmers or hired
managers.

In the last few years much has been done to bring about the
estabHshment of a better farm credit system in the United
States. This has resulted in the Federal Farm Loan Act of
1915, which provides for the establishment of Federal Land
Banks which have for their purpose the lending of money to
farmers at a low rate of interest on mortgage security.

The Federal Farm Loan Act provides for the division of the
United States into twelve districts and the establishment of one
Federal Land Bank in each district. The farmers normally
come in touch with the land banks through the National Farm
Loan Association. This association is a local institution made
up of ten or more farmers of a given district who wish to borrow
money on farm mortgages. Loans are limited to $10,000 for
each person. For each hundred dollars borrowed, the borrower
must subscribe for one five-dollar share of stock in the associa-
tion. This limits the actual amount one man can secure for
farm purposes to $9500. The amount of the loan is Umited,
also, to 50 per cent of the value of the land plus 20 per cent of
the value of the buildings. The farm loan associations indorse
the mortgages and turn them over to the Federal Land Bank
of the district as security for the funds borrowed from that insti-
tution. In turn the Land Bank issues bonds which are sold to
raise the money which is lent to the association and in turn lent
to the farmer. It is stipulated in the law that every mortgage
" shall contain an agreement providing for the payment of the

l84 AGRICULTURAL ECONOMICS

loan on an amortization plan by means of a fixed number of
annual or semiannual installments sufficient to cover, first,
a charge on the loan, at a rate not to exceed the interest rate in
the last series of farm loan bonds issued by the land bank
making the loan ; second, a charge for administration and profits
at a rate not exceeding one per centum per annum on the unpaid
principal, said two rates combined constituting the interest
rate on the mortgage ; and, third, such amounts to be applied
on the principal as will extinguish the debt within an agreed
period, not less than five years nor more than forty years:
Provided, that after five years from the date upon which a loan
is made additional payments in sums of $25 or any multiple
thereof for the reduction of the principal, or the payment of the
entire principal, may be made on any regular installment date
under the rules and regulations of the Federal Farm Loan
Board. . . . No loan on mortgage shall be made under this
Act at a rate of interest exceeding six per centum per annum,
exclusive of amortization payments."

The efect of a good credit system is to encourage landowner-
ship on the part of farmers. Much has been said of the in-
spiration which ownership of land gives to the farmer which
leads to better farming and better citizenship. Much might
be said of the greater joy of life on the owned farm where the
home can be beautified with assurance that the worker may
reap the reward of his efforts.

On the other hand, better credit usually means greater in-
debtedness. In a period of rising prices when the value of the
farm is rising while the debt is being paid with money which
is ever more easily secured, indebtedness has few horrors. But
in a period of falling prices when the value of the land falls as
rapidly as the debt is paid, and when the dollars are ever harder
to get, the joy of ownership becomes entirely overshadowed by
the fear of foreclosure. To insure that a credit system shall
be a blessing it may be desirable to introduce some plan which
will stabilize the purchasing power of the dollar.

Another bad effect which has been claimed against the credit
system which lowers the interest rate is that it increases the

FARM CREDIT AND THE RATE OF INTEREST 185

value of the land and in this way makes it necessary for the
prospective buyer to pay the same amount of interest and a
larger principal. The effect of better credit, in this regard,
depends upon the source of the funds. If, for example, the
federal farm loan bonds are sold in New York City and the
money borrowed by Iowa farmers, the effect might be to force
the price of land up. On the other hand, if the bonds were
marketed in the same region where the money is borrowed,
the effect might be very different. Many farmers in Iowa buy
more land than they care to farm because they have no other
safe investment available. When federal farm loan bonds can
be bought at the country banks in Iowa many farmers who are
now paying high prices for land just as a safe investment and
many retired farmers who hesitate to sell their farms for lack
of a safe investment will prefer bonds to land. The result will
be that many of the strongest bidders for land will cease to buy
and many holders of land will decide to sell. This will tend to
increase the number of farms for sale and decrease the demand
from one class of buyers at the time when an increasing number
of young farmers are buying because of the better credit system.
What the result of these varied forces will be is hard to predict,
but where the whole system is handled in a satisfactory manner
both landlord and tenant may be benefited by encouraging
ownership in place of tenancy.

Interest is paid for the use of borrowed money. This money
may be borrowed to invest in land or equipments, to pay labor,
or to buy the necessities of life. In ancient times money was
borrowed primarily to buy subsistence. At that time the
charging of interest was looked upon as wrong, just as we would
look upon it as wrong for a farmer to refuse to lend his ax for
half a day free of charge to the son of a poor widow, in order
that he may cut some stovewood for his mother. The charging
of any interest was once called usury. Now only the charging
of an excessive rate is called usury. This change of attitude
is due to the fact that in modern life loans are usually made
for productive purposes.
While interest is nominally paid for the use of money, it is

1 86 AGRICULTURAL ECONOMICS

the equipments the farmer buys with the money he is really
securing the use of. It is the equipment which is productive.
That is, the farmer working with teams, tools, and machinery
can usually produce more than working without them. Where
this is true he is willing to pay for the use of these equipments.
Furthermore, if he has not the means of acquiring the equip-
ments when needed he is wiUing to pay a premium to have them
now rather than wait for them until he can earn the money with
which to buy them. This premium takes the form of interest
paid for the use of borrowed money. How much the borrower
is willing to pay for the advances of funds depends upon what
he hopes to gain by their use. This varies greatly with dif-
ferent people and with different investments for the same
people. At a given time the demand for loanable funds will
depend upon the number of fine prospects for investments and
upon the interest rate.

Why do the lenders of money insist on charging interest?
Some of these money lenders are unable to direct productive
agencies. Widows and orphans are often given as examples of
this class. There are others who have more than they can
manage to very great advantage and who will lend the money
to some one else if the interest rate is better than the rate of
return this potential lender can make on this fund when used
by himself. The choice between lending and not lending is
not always a choice between two classes of investments ; it may be a
choice between saving and spending. The higher the interest
rate the borrowers are willing to pay, the more inducement
there is to refrain from present consumption in order to have
money to invest. Some economists attempt to measure
interest in terms of the premium which people place tipon
present consumption over future consumption. Familiarity
with the law of diminishing utility leads one to believe
that after an individual has satisfied present wants to a
certain point, future wants seem more important than the
unsatisfied present wants. The degree of civilization possessed
will determine where this point will be found. There are al-
ways people who will save whether or not they receive a pre-

FARM CREDIT AND THE RATE OF INTEREST 187

mium in the form of interest for doing so. There are others who
would not save even if the rate of interest were very high.
With people as they are at a given time, the amount of saving
will depend upon the extent to which the present wants seem
more important than future wants and by the premium offered
in the form of interest to counterbalance this greater present
importance.

It has been shown why funds are useful and why they are
scarce. Hence a market value is placed upon their use ; this
market value expressed in terms of money is the interest charge.
The rate of interest at any given time is determined by the
opportunities for productive enterprises and the number and
energy of the men who want funds for this and other purposes,
that is, the intensity of the demand for funds, the abundance
of funds, and the relative importance of present and future
wants in the minds of potential lenders. In other words,
price-determining forces work here as elsewhere.

Why is the rate of interest different at (liferent places at the
same time, and with different people at the same time and place ?
That is, why is the rate of interest not uniform at all places
and on all loans ?

Unevenness of demand. Where there is a continuous use
for funds the rate will tend to be lower than where there is a
large demand for certain seasons of the year and a small demand
other seasons. If funds must lie idle half of the year awaiting
a seasonal demand, a high rate must be charged for the time
the money is lent in order to make up a normal average rate,
or else funds must be imported, at some expense, for the de-
mand period and sent elsewhere for investment the remainder
of the year.

Immobility of funds. One reason for different rates at dif-
ferent places is because some money lenders do not know so
much about the character of the investments at a distance and
prefer to have their funds close at home. Others are willing to
lend money at a distance but find that it costs more to ascer-
tain the character of the loan, hence they must have a higher
rate, and, again, when the financial institutions intervene to

1 88 AGRICULTURAL ECONOMICS

adjust the supply of funds this costs something which must be
added to the interest rate. The interest rate tends, therefore,
to be lower in a region where there is a surplus of savings than
in a region where there is not enough local saving to care for
the needs of investors.

Risk. The fact that some loans are safer than others is
legitimate ground for differences in the interest rates. If there
is any chance of losing the principal, a certain amount of in-
surance is added to the interest rate to compensate the money
lender for taking this risk. It often happens that lack of knowl-
edge on the part of the lender makes him assume the risk is
great where it is really small. Credit associations, made up of
farmers who know each other, can reduce greatly the amount
of risk by eliminating the dangerous loans, and by carrying for
themselves the risk which would otherwise fall upon the money
lender. This is one reason the credit association can borrow
at a lower rate than can the individual members of the asso-
ciation.

Interest and the purchase price. It frequently happens
that the rate of interest upon deferred payments is fixed as
a part of the bargain in the sale of a farm. For example, a
retired farmer sold his farm and took a mortgage for $12,000
at four and one-half per cent annual interest. When asked by
the writer why he made the interest rate so low, the reply was,
*' Well, I was getting a long price for the farm." Often the
buyer who may have been in the habit of paying rent, thinks
especially of the amount he will have to pay in interest each
year. A desire to keep this amount low may result in paying
too high a price for the farm if he is favored by a low interest
rate. The purchaser should keep both sale price and interest
rate in mind when making the bargain. Otherwise what seems
to be a low rate of interest may be a very high one.

Terms 0} payment. The purchaser may better afford to
pay a somewhat higher rate of interest if he has the privilege
of making partial payments whenever he has some money,
rather than to borrow at a lower rate for a long period, say five
years, with no chance to make payments until the note is due.

FARM CREDIT AND THE RATE OF INTEREST 189

If one gradually saves the whole amount during the j5ve years
and deposits in a savings bank at a rate two per cent less than he
is paying, the loss may be equivalent to one per cent on the face
of the loan for the whole time. Where the borrower can secure
a part of the funds needed at a low rate and a part at a higher
rate with privilege of paying whenever he has an even hundred
dollars, he will be in a position to benefit by both of these
systems.

CHAPTER XVII
RENTS AND PROFITS

In this chapter the eflfort will be to describe the economic
forces which determine the amount paid for the annual use of
land. This is important from the point of view of one making
a rent contract, and it is important from the point of view of
the improvement of the well-being of the succeeding genera-
tions of land workers.

The important economic questions regarding rent relate to
the causes which determine the amount of rent paid at a given
time for a given farm, the difference in the amounts of rent paid
for different farms at the same time, and the changes in the
amounts of rent on a given farm during a period of years. Rent
is paid for only such farms as are useful and scarce. Useful
farms with improvements may be scarce while raw land of the
same quaUty is abundant, in which case a price may be paid
for the improvements and not for the land. In any densely
populated country, however, highly productive land is scarce
and people are willing to pay for the privilege of using it.

The supply of farm land may be increased by settling unoc-
cupied prairie regions, clearing forest lands, draining marshes,
irrigating arid regions, etc., but it is generally true that the land
to be secured in these ways is less inviting to the farmers in
competition for the use of land, either because of the large in,
vestments required to bring the land into cultivation, which
reduces greatly the return per unit of investment in the land,
or because of lack of fertility or desirable location. For these
reasons it has been common to think of the new increments of
land supply as having a lower degree of economic productivity
per unit of investment, that is, lower efficiency, than the land
already in use. On this assumption Ricardo based his theory

190

RENTS AND PROFITS 19I

that with the increase of population rents would tend to rise.
Exceptions to this general truth arise when new and fertile
regions are made easily accessible by the extension of railways,
by Indian treaties, or other means of like character. When the
agricultural population is increasing and the increased supply
of land must be taken from the less efficient grades, the trend of
rent is upwards. When new and more efficient grades of land
are made available more rapidly than the population increases,
the trend is downward. Thus rents may rise or fall according
to the relative demand for its use. By the middle of the nine-
teenth century the westward movement of population in the
United States had reached the prairies of the Central States,
where the cost of bringing land into cultivation was at a mini-
mum and the natural fertility of the land was at a maximum.

With the expansion of the corn area the movement was first
from poor corn land to good, then from good to excellent, but
with the further expansion, less and less satisfactory corn land
was resorted to and it was only in this latter stage that rents
began rapidly to rise. This was partially true of wheat though
it is a question whether any wheat lands in the United States
have ever surpassed the best wheat regions of New York and
Pennsylvania. The significant fact was the great abundance of
good wheat land, which resulted in the decline of wheat prices
and a decline in the value of wheat lands in the older wheat
regions. The westward movement brought better lands into
cultivation. These better lands, for example, the black prairie
of Alabama, the alluvial soils of the Mississippi, and the black
prairie of Texas, were selected spots surrounded by wide
areas of less useful lands which were passed by to take the better
lands. The general eSect was to reduce prices and rents for
the time. As better and better corn, wheat, and cotton lands
were taken up, price levels were on the decline, and many
farmers in the older regions suffered a decrement instead of
getting the expected unearned increment in land values. But
with the growth of population the increased demand for land
results in keen competition for the better farms, which brings
about rising rents.

192

AGRICULTURAL ECONOMICS

The motives that underlie the actions of men when bidding
for the use of land are fundamentally the same as those that
operate in determining the values of other useful things. The
theory of rent is therefore an attempt to indicate the way in
which the theory of value works itself out when applied to the
annual value of land.

While all land that is useful and scarce is valuable, all such
land is not equally valuable, for the simple reason that all land
is not equally useful. This variation in usefulness may be due
to variations in the fe'rtiHty of the land or to differences in the
location of the land with respect to the market for the goods
produced. Economists have usually thought of the least
desirable land in use at a given time as being rent free. That
is, it is assumed that the least desirable land will be in great
abundance in proportion to the demand for such land, and,
therefore, that no rent will be paid for its use. This " no-
rent " land is then taken as the starting point for measuring
the rent of the more useful grades of land. According to the
Ricardian Theory,^ the rent of any given grade of land is m^eas-
ured by the difiference in the value of the produce resulting from
a given outlay of labor and capital on that land, and on the no-
rent land. For example, suppose a farmer can, with the same
effort and expenditure, produce goods as shown in Table XL

TABLE XI

Ricardian Remt

On first-grade land . . . .
On second-grade land . . .
On third-grade land . . . .
On fourth-grade land . . .
On fifth-grade land . . . .
On sixth-grade or no-rent land

fSoo
400
300
200
100
000

The assumption is that, if all these grades of land, and no
more, are needed to supply the market, competition will tend
to make the rent of the requisite quantity of fifth-grade land
$100, that of fourth-grade $200, that of third-grade $300, that

> David Ricardo, "Principles of Political Economy and Taxation," Chapter II.

RENTS AND PROFITS

193

of second-grade $400, and that of the first grade $500. This
is said to be true because it is assumed that the farmer can as
well afford to pay these sums as use the no-rent land. This
theory ignores the variation in the efl&ciency of the factors
other than land, and, while it shows the differential character
of rent, which was the point Ricardo was emphasizing, it cannot
be regarded as a measure of rent.

Many economists have ignored variations in the efficiency
of farmers, manufacturers, and men of commerce, but others,
following Walker,^ adhere to a theory of profits analogous
to the Ricardian theory of rent. They believe that all farmers
are not equally efficient, and that the farmers who, because of
their better judgment and greater skill, manage their farm opera-
tions better than their competitors, are able to secure larger
returns from the same expenditures for labor and equipment
on the same grade of land. These economists would assume the
returns given for the various grades of land in the above illustra-
tions to be the product of the least capable farmer needed to
supply the demand for agricultural products, and that the farmer
whose ability is superior to that of the least capable farmer will
be in a position to secure a profit. The profit of a given farmer
will be measured, it is said, by the difi'erence in the value of
the product that he can secure and the value of the product
secured by the least capable farmer, with a given outlay on
a given grade of land. For example, suppose that with a given
outlay on no-rent land (that is, on the least useful land needed
to supply the demand for agricultural products) the value of the
product secured by the different grades of farmers is as follows :

TABLE XII

Product

Profit

Farmer A

$1000
900
800
700
600
500

$500

Farmer B

400
300
200

Farmer C

Farmer D

Fanner E

100

Farmer F

000

1 Francis A. Walker, "Political Economy," chapter on Profits.

194 AGRICULTURAL ECONOMICS

The assumption is that, if the produce of all these grades of
farmers, and no more, is in demand, Farmer F will just be able
to pay expenses, including a living for himself and his family,
but Farmer E can retain a profit of $ioo, D $200, C $300,
B $400, and A $500, because the more efficient farmers secure
larger returns in value, as a result of the same outlay, than
does the marginal farmer. This larger return may be due to
the ability of a more efficient farmer to secure more produce of
the same quality, or to produce a better quality of products,
or at the same time to produce more and of a better quality.

The influence of variations in eflBciency on rents and profits.
These theories of rent and profits point in the direction of the
truth but fall short of an accurate statement because they leave
out of account at least three important considerations, namely,
(i) the influence of variation in the efficiency of farmers on the
amount of competitive rent; (2) the influence of variations in
usefulness of land on the amount of profits ; and (3) the in-
fluence of the variation of the usefulness of equipments and of
hired laborers on rents and profits. Each of these points may,
to advantage, receive our attention. .

To illustrate the way these forces will tend to determine the
amount of rent and profits, let the figures in the following table
represent the value of the gross product that the farmers of the
respective grades can produce as a result of an outlay of five
hundred dollars for labor and for the use of equipments, our
fixed unit of expenditure on the different grades of land. It
will be assumed, in this illustration, that the more efficient
farmers always invest the given outlay in the more productive
forms of l^abor and equipments. In order to make this and the
foregoing illustrations include the element of variation in in-
tensity of culture, we have taken a fixed outlay for labor and
for the use of equipments, instead of a fixed area of land. If,
therefore, 100 acres be the area of sixth-grade land on which this
expenditure is made, less than 100 acres of the more useful
grades are likely to be cultivated with this same outlay, for it
is usually true that the more useful the land, the more intensive
the culture that is most profitable.

RENTS AND PROFITS

195

TABLE XIII

Grades

OF

Grades of Land

Profits

Farmers

First

Second

Third

Fourth

Fifth

Sixth

A .
B .
C .
D .
E .
F .
Rent

$2000
1800
1600
1400
1200
1000
725

$1800
1620
1440
1260
1080
900
540

$1600

1440

1280

1 1 20

960

800

375

$1400
1260
1 1 20
980
840
700
230

$1200
1080
960
840
720
600
I OS

$1000
900
800
700
600
500
000

$775
580
40s
250

IIS
000

Note that in Table XIII the figures representing the product
of the F-grade farmer on the different grades of land are the
same as in Table XI, where the Ricardian theory of rent was
illustrated. Note also that the figures representing the prod-
uct of the various grades of farmers on sixth-grade land are
the same as those used in Table XII, where Walker's theory of
profits is illustrated. And note further that the remainder of
this table is the result of simply following out logically the as-
sumption in the two preceding tables. That is, in this table,
instead of stopping with a statement of the variations in the
product of the different grades of land when farmed by the
F-grade farmer, and a statement of the variation of the product
of the different grades of farmers on the sixth-grade land, we
here give a statement of the product which each grade of farmers
produce upon each grade of land, also the rent and the profits
which would be approximated, in the case of free competition
among the different grades of farmers for the various grades of
land.

It is here assumed that the F-grade farmer, when operating
sixth-grade land and a corresponding grade of labor and equip-
ment, will just be able to make a living without paying any
rent for the use of the land. In other words, we have here a
no-profit farmer operating no-rent land. On a basis of the
figures in Table XIII, the F-grade farmer can afford to pay $100
as rent for the quantity of fifth-grade land on which he would

196 AGRICULTURAL ECONOMICS

make the same outlay as on 100 acres of sixth-grade land, for,
instead of a product worth $500, he would there be able to
secure a product worth $600. Following the same reasoning,
the F-grade farmer could afford to pay $200 for the fourth-
grade land, $300 for the third-grade land, $400 for the second-
grade land, and $500 for the first-grade land.

When all the grades of land are viewed from the standpoint
of the A-grade farmer, it becomes apparent that he can make a
profit on land of any of these grades, and that he would do as
well to pay a rent of $200 for the use of the fifth-grade land,
$400 for the use of the fourth-grade land, $600 for the third,
$800 for the second, and $1000 for the use of the first-grade
land, as to farm the sixth-grade land rent free. But is there a
competitor who will make the A-grade farmer pay the price?
This we must ascertain by studying the interests of the competi-
tors.

The E-grade farmer is able to produce $600 worth of products
on the sixth-grade land, leaving him a profit of $100. It can-
not be expected that he will be willing to accept less profit
from land of any other grade. He can pay $120 as rent for the
amount of fifth-grade land on which the same outlay is made
as on the 100 acres of sixth-grade land, and retain the same
profits, $720 — ($5oo+$ioo) =$120. But the F-grade farmer
can bid no more than $100 for the use of the fifth-grade land,
and, so far as he is concerned, the E-grade farmer can have the
fifth-grade land for anything over $100, and can give a balance
to turn the bargain. Let us, in this illustration, figure that
he will pay $105. This will leave him a profit of $115;
$720 — ($5oo+$io5) =$115. In bidding for the fourth-grade
land, he could not be expected to accept a smaller profit. His
gross income on fourth-grade land is $840. This, minus the
$500 outlay and the $115 profit that he could make on fifth-
grade land, leaves $225 as the maximum rent that the E-grade
farmer can bid for the fourth-grade land.

When the rent of fifth-grade land is S105, the D-grade farmer
can secure a profit of $235 on that grade of land,
$840 — ($5oo-|-$io5) =$235. He could secure this same profit

RENTS AND PROFITS 197

on fourth-grade land and pay a rental of $245 for its use,
$98o-($5oo+$235)=$245. But so far as the competition
of his inferiors is concerned, any amount over $225, let us
say $230, is all the D-grade farmer need pay for fourth-grade
land. This will leave him a profit of $250, $980 — ($5oo-f $230)
= $250, which is $15 more than he could make on fifth-grade
land at the rent the E-grade farmer is willing to pay. To
secure the same profit on third-grade land the D-grade farmer
cannot pay more than $370 for its use, $1120 — ($5oo-|-$25o) =
$370. But the C-grade farmer, whose profits on fourth-grade
land at a rental of $230 would be $390, $1120 — ($5oo-f$23o) =
$390, can secure the same profit from third-grade land after
paying $390 as rent, $1280 -($500-!- $390) =$390. It will
be profitable, therefore, for C-grade farmer to outbid the D-
grade farmer for the use of the third-grade land by paying $375,
for this will leave him a profit of $405 ; $1280 — ($500-}- S375) =
$405. To secure the same profit on second-grade land, the
C-grade farmer can bid no more than S535 for its use, $1440 —
($5oo+$405)=$535. But the B-grade farmer whose profit
on third-grade land at a rental of $375 would be $565, $1440 —
($5oo+$375)=$565, can secure the same profit from second-
grade land after paying a rental of $565 as rent, $1620 —
($5oo+$565)=$555. It will be profitable for him, therefore,
to outbid the C-grade farmer for second-grade land by paying
$540. This will leave him a profit of S580; $1620 -(S500
+$540) =$580. The B-grade farmer could pay no more than
$720 for the use of the first-grade land and retain this same net
profit, $1800 -($5ooH-$58o) =$720; but the A-grade farmer
can pay any amount up to $740 for first-grade land rather than
take second-grade land at $540 ; for his profit on second-grade
land would be $760 ; $1800 - ($5oo-f$54o) =$760, and $2000 -
($5ooH-$76o) =$740. As $720 is the most any other ct)mpeti-
tor can pay for the use of first-grade land, the A-grade farmer
can secure this grade of land for a fraction over that amount,
let us say, $725, and retain a profit of $775.

It is a matter of common observation that competition tends
to distribute the farmers on the diiierent grades of land in ac-

198 AGRICULTURAL ECONOMICS

cordance with their efficiency, the A-grade farmer on the first-
grade land, the B-grade farmer on the second-grade land, and
so on. The fact that each grade of farmers can win a larger
profit on the grade of land that corresponds to his degree of
efficiency is the force that tends to bring about this condition of
affairs. But it is not the individual farmers alone who are
benefited as the result of the working out of this tendency.
The combination of the productive forces that puts the most
useful agents of production into the hands of the most efficient
farmers results in the largest total production of economic
goods for the country as a whole.

These points may be illustrated by use of Table XIII. Let
the student calculate the profits that each farmer could make
on the various grades of land and it will become more clear that
competition makes the rents of the various grades of land such
that the farmer's profit is the greatest on the land to which his
grade of efficiency adapts him. Again, let the student cal-
culate the total value of the product of all grades of land when
the A-grade farmer is on the first-grade land, the B-grade
farmer on the second-grade land, and on down the list.
($2ooo+$i62o+$i28o-f$98o-f$72o-|-$5oo = $7ioo); then let
him try any other combination, and it will be found that no
other combination of the grades of farmers and land will result
in so large a total product.

In actual practice it is evident that custom, sentiment, and
lack of knowledge retard the operations of the economic forces
to the detriment of individual and national well-being. Yet
the fact has long been recognized that the farmers who are the
most efficient do actually tend to get the best grades of land
and equipment.

This analysis of the forces of distribution forms the basis for
drawing some significant conclusions. First : It makes a dif-
ference which grade of land the farmer chooses. The farmer who
is the most efficient can secure the highest profits from the land
that is most useful for his lines of production. This is likewise
true of the labor and equipment employed by him. Second :
All farmers of superior ability may save from their profits and

RENTS AND PROFITS 1 99

thus get ahead in the world, i.e. " the iron law oj wages " operates
only for the marginal farmer. Third : the farmer can make use
of the highest degree of skill and knowledge without fear that the
landlord will he able to take, in the form of a higher rent, all of
the extra product due to more efficient management.

Thus far rent and profits have been considered at a given time
with a given supply of land, equipments, laborers, and farmers,
and a given market condition. It is well recognized that with
the passing of time, the relative abundance of the factors of
production changes, market conditions change, and the degree
of skill and knowledge changes, resulting in changes in the
amount of rent paid for a given piece of land.

With the growth of population a double effect on rent tends
to follow: First, increased demands for produce increase the
price of the products so that the rent measured in terms of money
will rise even though the share of the product going to land
remains the same. Then again the growth of population and
the resulting increase in competition for the use of the land
tends to make people willing to take up land formerly considered
too poor to make it worth while to cultivate it, but before
taking this inferior land they will bid higher for the land
already in cultivation and this will result in an increase in
the proportion of the product paid for the use of land. On
the other hand, improvements in the means of transportation
which will result in an increase in the supply of good farm
land more rapidly than the farm workers increase will tend to
reduce the share of the product paid for the use of the land.
This was true during the period following the extension of rail-
ways into the prairies of the North Central States. The general
principle is that with changes in the relative abundance of land,
labor, and capital, the most slowly increasing factor is in a posi-
tion under conditions of free competition to command an in-
creasing proportion of the product.

The withdrawal of large numbers of farm workers from
agriculture in case of great national emergencies like the world
war will tend to increase the proportion going to the human
factor and reduce the proportion if not the amount of rent.

200 AGRICULTURAL ECONOMICS

On the other hand, the call of patriotism and high prices may
stimulate men to utiUze more completely their maximum po-
tential capacity for farm work. This will tend to overcome the
tendency for rents to fall, for increasing the capacity of men
means that each man will demand more land, which will in
turn tend to increase rent or at least retard its fall.

The increase in the efl&ciency of men, which results in more
produce from the same amount of land and labor, will, other
things being the same, tend to reduce rents for, with the demand
for produce remaining the same, increased supply will tend to
lower the prices of produce. While this would be the first
effect, lower prices would tend to stimulate population and in
the long run increased efl&ciency will enable a growing popula-
tion to encroach farther and farther down the scale to less and
less productive land and bid higher and higher for the good
land, driving rents higher than they could have been without
the increased human efl&ciency.

The accumulation of capital may result in the increase of rents,
and the reduction in the supply of capital available for agricul-
ture may reduce rents. The growth of the capital supply
normally tends to reduce the rate of interest, and the price of
equipments, and for these two reasons stimulate the buying
of farm equipments, which not only tends to increase the total
product of the land but to give a larger proportion of the
produce to the owner.

Any improvement in the type of farming in a given locality
which will give more nearly continuous profitable employment
throughout the year, either by using more land or by providing
more profitable labor on a given piece of land, will tend to give
an increased proportion of the produce to the owner of the
land.

Tnus while it is true that differences exist among men
as well as among the different grades of land, which give basis
for a special differential return in the form of profits to men,
it is true also that competition may result in the decrease of
one of these surpluses to the advantage of the other. If farmers
and workmen and equipments increase more rapidly than land

RENTS AND PROFITS

20I

of the quality in use, competitive forces tend to increase rent
at the expense of the return to the other factors.

Figure lo is intended to illustrate the distribution of the
gross returns of the agricultural industry, among the factors of
production. This illustration is based upon Table XIII and it
is assumed that the factors will be brought together in the most
productive manner, that is, with the most efiScient farmers
operating the most efficient forms of equipments upon the most
efficient land, and that these factors are associated in the proper

I
I
I

I

-----■^H'

J,

B

Figure io

proportion. Under these conditions the composite units which
are made up of the most productive grades of the factors will
yield a relatively larger product, in proportion to their pro-
ductivity, even, than the units made up of the less productive
grades of the factors, and hence, in the higher grades each factor
will receive the necessary minimum and a further differential
due to superior efficiency and to the cooperation of the more
productive grades of the factors.

When the subject of distribution is viewed from the stand-
point of industrial progress, through a long period of years,

202 AGRICULTURAL ECONOMICS

the most important fact to be considered is that the other fac-
tors usually increase more rapidly than does land. As the
farmers and the equipments continue to increase more rapidly
than the land, some of the better grades of these more rapidly
increasing factors are crowded down farther and farther upon
the less and less productive land. This necessarily results
in the driving out of business of some of the lower grades of
farmers and equipments, leaving upon the margin higher
grades of these factors, which will be able to earn their necessary
minimum upon lower grades of land, and hence the margin of
cultivation may be driven down to less productive land by the
competition of the increasing numbers of farmers and the in-
creasing supplies of equipments. The resulting change in the
distribution of the gross product among the factors is illustrated
by the dotted lines in Fig. lo, where it will be noted that the rent
rises as a result of a fall in the returns to the other factors of
production.

It is possible for the rent to rise, however, without any
absolute decline in the returns to the other factors. Changes
in the prices of agricultural products will greatly influence the
share which will be accounted to land. When, as a result of
increased demand for food and clothing, the prices of agri-
cultural products rise, the share of the returns of a given farm
which may be credited to land increases. When, for any reason,
such as the opening of vast areas of very productive land, the
prices of agricultural products fall, the share of the gross re-
turns which can be paid for the use of land will, other things
remaining the same, necessarily fall, and the movement will
tend to be the reverse of that shown in Fig. lo.

The laws of value and price hold true with respect to the
price which is paid for the use of land and equipments ; but
as we have seen, the conditions of supply and demand are very
complex, and the difficult problems in distribution arise out of
the fact that costs and prices do not correspond except on the
margin where the least productive of all of the factors are
brought together, and that there are large surpluses over
costs, to be divided. It was one time thought that all of this

RENTS AND PROFITS 203

surplus should be attributed to land ; but in recent years econo-
mists have come to see that each of the factors is in a position to
command a share of the surplus, that the share secured by each
is worked out through supply and demand, and that the most
slowly increasing factor tends to receive a larger and larger
proportion of the surplus.

CHAPTER XVIII
THE VALUE OF FARM LAND AND EQUIPMENTS

It is easy to say that the price of land, Hke the price of any
other economic good, is determined by the forces and conditions
which regulate the demand and the supply; but this is too
general to be of any help to the farmer who is trying to esti-
mate the value of a particular piece of land.

The net rent, or the share of the gross returns which, under
conditions of free competition, is credited to land, above what
is necessary to keep the land intact, is the starting point for
figuring the value of a piece of land. When a man invests in
land, the thing for whicji he really pays is the perpetual right
to use the land and to be free from the payment of rent, or to
receive the income which the land will yield if leased to some one
else.

The essential difference between the buying of a piece of
land and the buying of a perpetual annuity bond lies in the fact
that while the income from the latter is fixed in terms of a money
income, the former may rise or fall as a result of changes in
the conditions of competition for the use of land, or from changes
in the value of the unit of the standard of value.

Let it be assumed that the net rent of a given acre of land is
six dollars. On the further assumption that this amount will
not change, we may think of this acre of land as a perpetual
bearer of an annual income of six dollars. Six dollars this year,
six dollars next year, and the next, and so on so long as time
shall last. The total amount of rent which may be received from
this land is incalculable. If there is no limit to the number
of years during which rent may be received for the use of this
land, then the amount of rent to be received may become in-
finitely great, and if one were required to pay down the full

ao4

THE VALUE OF FARM LAND AND EQUIPMENTS 205

amoant of all these possible rents, which the future years may
possibly yield, the price of land would be such that no man could
purchase it.

As a matter of fact, however, the present market value of
the perpetual rent bearer is often not more than twenty times
the net rent, and it is seldom more than thirty times the rent.
This is explained by the fact that present wants are estimated
more highly than future wanls, which leads to the discounting
of future incomes ^ "at a rate that reflects the prevailing
premium on the present." The rent which will be due one year
from date is discounted at this prevailing rate, and so it is for
all the succeeding rents. The present values of the succeeding
future rents grow smaller and smaller as the time one must wait
for them becomes greater and greater, until finally the rent
which is due at the end of an infinite period of time would be
infinitesimal.

When the rate of discount is five per cent, for example, the
present valuation of a six-dollar rent which will be due in ten
years is approximately three dollars and sixty-eight cents;
the six-dollar rent which is due after twenty years has a present
valuation of about two dollars and twenty-four cents ; and the
six-dollar rent which is due in forty years has a present value
of about eighty-four cents. If this process of discounting future
rents be carried far enough, the point would finally be reached
where the present value of the future rent is too small to be
taken into account. The present value of the rent which is
due after an infinite number of years is infinitesimal. If the
present values of all these future rents be added together, the
sum would be the present capital value of the land, or the amount
of capital which, if lent at a rate of five per cent per annum,
would yield the same income as the land is yielding at the present
time.

The simple mathematical method of finding this " sum "
is to divide the annual value, that is, the net rent, by the rate
which " reflects the prevailing premium on the present." If

» Frank A. Fetter, Publications oj the Am. Econ. Assn., Papers and Proceedingi
of the Sixteenth Annual Meetmg, Part I, p. 196.

206 AGRICULTURAL ECONOMICS

the net annual income derived from a piece of land is six dollars
per acre, and the rate of discount is five per cent, the present
capital value of the land would be one hundred and twenty
dollars per acre. One hundred and twenty dollars is, then,
the amount of money which, if lent at five per cent, would
yield an annual net income of six dollars. This is usually spoken
of as the capital value of the land.

That this simple method of dividing the six-dollar net rent
by the prevailing rate of discount to find the capital value of a
piece of land is equivalent to finding the sum of an infinite
series of prospective net annual three-dollar rents discounted
at the same rate may be demonstrated as follows :

The present value of a dollars due in / years if the interest

be compounded annually at the rate of r would be , y since

X dollars compounded at rate r would give X{i-\-ry, and if

Xii+rY=a then X = -, — ; — r,. If then the net income of a
(i+r)'

farm be a dollars a year its value would be expressed by the

equation : V = — — \- -, — r—r,+ } — r-ri + } — rr; + ad inf.
^ i+r (i+r)2 {i-\-ry (i+r)"

This is an infinite " geometrical " progression with first term

and ratio —7—. The limit of the sum of such a series is

a
— which reduces to -. We have then the formula for

r

the value : V=- which is the ordinary method of capitalizing
r

rent.

As a matter of fact, however, the present capital value of the

land as determined in this way does not often correspond with

the price which is paid for land. There are several important

reasons for this difference. First it is not certain that the annual

income that can be drawn from one hundred and twenty dollars

will always be six dollars. The rate of interest may fall to four

THE VALUE OF FARM LAND AND EQUIPMENTS 207

per cent, which would reduce the income to be derived from that
amount of money to four dollars and eighty cents, while the
annual income from the land would not be reduced by a lower-
ing of the current rate of interest. The belief that there is a
greater probabiUty of a dechne in the income to be derived
from the money than from the land, often makes men willing
to pay more for land than the amount of capital which will
now yield the same income.

Another reason which leads men to pay more for land than
a money loan which will, at the present time, yield the same
income, is the beUef that with the progress of society the compe-
tition for the use of land will result in a rise in rents, that,
while there is a tendency for the annual income which can be
derived by lending a given amount of money to dechne, there
is at the same time and under like conditions a tendency for
the income of a given amount of land to increase.

The available land supply of a country usually increases
less rapidly than the population, so that it becomes necessary
to resort to land which is either less fertile, less favorably
situated, or more difl&cult to bring under cultivation; and as
a result of keener competition for the better grades of land the
amount which will be offered for the use of such land will rise.
While this is what usually happens in the long run, it sometimes
happens that the discovery of great quantities of very fertile
land, and the invention of better means of transportation mak-
ing this new land more accessible, will for a time reduce the
competition for the land which was already under cultivation,
and the rent of such land may, for a time, be reduced ; but it is
beUeved that the occasional reactions of this kind cannot per-
manently counteract the tendency for the price of land to rise.

The land which yields the highest rent at one time may be
surpassed in the amount of rent which it will yield at another
time, by land which was formerly let for a smaller rent. This
may be the result (i) of the introduction of a new crop which
thrives best on the land which for other purposes was counted
inferior; (2) it may be the result of a dense population in a
region which had formerly been sparsely populated, in other

2o8 AGRICULTURAL ECONOMICS

words, the development of a better home market ; (3) it may
be the result of an improvement in the means of communica-
tion which makes the land which was formerly more fertile
but less accessible, equally accessible, and hence, more valu-
able ; or (4) it may be the result of a rise in the prices of agri-
cultural produce, or a fall in the current rate of interest, either
of which would result in a more rapid increase in the value of
land which is more fertile and accessible, but which requires
relatively larger expenditures to bring it into cultivation,
than in the value of land which is less fertile or accessible but
much more easily brought into cultivation. All of these pos-
sible variations in the annual value of land must be properly
anticipated and included in the list of future incomes which
are discounted to find their present values.

Perhaps enough has been said to impress the thoughtful
reader with the fact that to determine the value of a piece of
land is by no means a simple matter. When a man sells a
piece of land he transfers his right to a series of annual incomes
which may be greater or less as time passes by, but which will
probably increase as the years go by. In payment for this
land he is to accept another income-bearer which may yield a
larger or smaller annual income as the years go by, but which
will probably yield a smaller income in the future than at
present. This circumstance makes it impossible to do more
than approximate the actual present value of a piece of land.

The presence of so many uncertainties makes the buying of
land partake more or less of the character of speculation, and
during times of prosperity the tendency is for men to be optimis-
tic and overestimate the probabiUties of a rise in rents or
a fall in the rate of interest. On the other hand, when periods
of depression come, the tendency is for men to underestimate
the future possibiUties. As a result of this psychological ele-
ment, the tendency is for the price of land to rise too high dur-
ing periods of prosperity and to sink too low during periods of
depression. As many years are usually required for one of
these changes from undervaluation to overvaluation to take
place, land does not lend itself so readily to speculation as does

THE VALUE OF FARM LAND AND EQUIPMENTS 209

wheat, for example ; and yet the man with plenty of funds which
are available at the right time may win large profits from specula-
tions in land. Speculation if indulged in at the proper time
may keep the price of land from falling so low as it might other-
wise do in times of depression, and also from rising so high as it
otherwise might during times of inflated values. This is true
only where the speculator is wise enough to buy when prices
are too low and to sell when the values rise too high. Unwise
speculation in land may have the very opposite result.

The study of the rise and fall of the price of land in the United
States seems to show that there are times when the price rises
rapidly for a few years and then remains stationary for several
years. This latter period is usually characterized by the fact
that sales of land are relatively few. Land is generally held at
the prices which were reached during the period of rapid sales,
when optimistic views of the future forced the price considerably
beyond the present capital value. If sales are made during this
dull period they are likely to be at a price appreciably lower
than that at which land is usually held, and likely to be a forced
sale. The price of land, then, may be illustrated by a curve
which rises during one period, remains on the same level or
falls during a succeeding period, and then rises again. When
viewed for a long period of time, the general rise in land values
is evident, but the temporary fluctuations are very important
to any one interested in buying land.

The price of land in any given district is influenced by the
number and character of the men who desire to be farmers in
that district. It often happens that competition for the use of
land is keener in some regions than in others, even though the
land be as fertile, and the prices of agricultural products as
high, in the one place as in the other. Some districts produce
more high-grade farmers each generation than do other districts,
and as a strong motive is required to impel the surplus of
farmers to remove to another district, competition in the over-
populated district forces the rents and the prices which are paid
for land higher and higher until they are appreciably above the
level of those which are paid for land in other districts which

210 AGRICULTURAL ECONOMICS

are capable of producing crops which are just as valuable in
terms of money.

Again, it sometimes happens that land is valued for the social
standing which accompanies its ownership, as well as for the
income in money which it yields. In a country where this is
true, and where, at the same time, there are large numbers of
persons who have great fortunes and who are very desirous of
attaining to a high social position, the prices which may be
paid for land often rise far beyond what could be paid if the
series of annual incomes in cash were the only factor to be taken
into account.

Of two pieces of land which will rent for the same amount,
that in one district may sell for a higher price than that in an-
other because there is more money seeking investment in the
one place than in the other. A man of wealth will usually
rather have his capital invested in land near where he lives than
at a great distance where he cannot so readily look after his
property, or if he invests in land at a greater distance he will
usually expect a higher rate of return to counteract the disad-
vantages arising from the distance.

This same principle of capitaHzation may be applied to other
forms of income bearers as well as to land. In estimating the
value of a given machine, the farmer may think of the amount
of service he is to get out of the machine during the next ten
years, let us say, on the assumption that the machine will be
worn out in that time. This is a rather difficult process be-
cause the deterioration of the machine and perhaps, also, the
invention of a better machine to do the same work will result
in a gradual reduction in the usefulness of the machines ; and
yet, if he is to invest wisely in the various forms of equipment,
the farmer should attempt to estimate the value of the series
of uses which may reasonably be expected to be gotten from
the particular instrument of production during the time which
it shall be at all serviceable, and then find the present value
of these future uses by discounting them " at a rate that reflects
the prevailing premium on the present."

This capital value of the instrument represents the maximum

THE VALUE OF FARM LAND AND EQUIPMENTS 211

price which the farmer can afford to pay, but does not, of course,
necessarily represent the market price of the instrument of
production. The market price may be greater or less than the
capital value obtained in this way, for the instrument of pro-
duction may have as many valuations as there are different
grades of farmers to use it and different grades of uses to which
it may be put by a given farmer. In order to get a capital
value that will correspond more or less closely to the market
value of the various forms of capital-goods it will be necessary,
therefore, to arrive at the competitive price which -wdll be paid
for the use of a given equipment during the series of years of its
usefulness, and then find the present value of the series of in-
comes, in the same way as has been done in the case of land.
But since it is not common in this country to let horses, tools,
and machinery to farmers for a hire, this method of capitaliza-
tion is less practical to the farmer when appHed to equipments
than when applied to land.

The cost of producing the machine or the horse is an important
element in determining the price which must be paid for it in
order that it may be produced. On the other hand, the use-
fulness of the machine or the horse to the farmer forms the
basis for his estimating whether or not he can better afford
to pay the market price or do without them. It may be true
even that the capital value of the instrument, when calculated
on the basis of its usefulness to a given farmer, may be greater
than its market value and yet it might be unprofitable for the
farmer to buy the particular horse or machine, because other
means of securing the same end might prove more profitable.

The theory of capitalization is especially useful in the con-
sideration of the value of farm land because the value of a given
piece of land has no particular relation to the cost of bringing
such land under cultivation. The income received by the
landlord is largely a surplus which is credited to land becaust
it is scarce, rather than because it costs any definite amoune
to improve the land. Land is also much more permanent in
character than is equipment, and for this reason, also, it lends
itself with more facility to the above method of capitalization.

212 AGRICULTURAL ECONOMICS

The fear that the price of land has been rising too rapidly
and that present prices are highly speculative is rapidly gaining
in its hold upon the minds of farmers. It can be shown that a
rise in the price of land has been warranted, but the present
situation deserves careful consideration and conservative
action. The young farmer had better continue as a tenant a
while longer unless he has at least half the purchase price in
addition to funds enough to equip and operate the farm.

The price per acre of farm land in the United States doubled
during the decade from 1900 to 1910. There is no record of
an equally great rise in the price of farm land in any other period
in the history of our country. From 1850 to i860, after the
mid-century gold discoveries, the price per acre of all farms
increased 46.5 per cent; from i860 to 1870, 11. 8 per cent;
1870 to 1880, 4.2 per cent ; 1880 to 1890, 12 per cent ; whereas
the average price of farm' land in the United States fell 7.1
per cent during the decade from 1890 to 1900, owing largely to
the depression in the West. The unparalleled rise in the prices
of farm lands in recent years calls for some explanation. Where
the increase in the price of land is due to a rise in the returns
from investments in land, this increase is normal and to be
expected. On the other hand, to the extent that the price of
land rises without a corresponding rise in the income from land
or a general fall in interest rates, the farmer and the nation have
something to fear.

As farm land values should depend upon rents, so farm rents
are dependent upon the prices of farm products. The value
per acre of farm products increased 66.8 per cent during the
same period that the price of land doubled. If rents increased
in proportion to the prices of products, this would yet leave a
third of the increase in the price to be explained in terms of
other forces.

An increase in the share of the proceeds of the farm secured
by the landlord would normally result in a more rapid rise in the
price of land than in the price of crops. There has been a rise
in share rents in parts of the north central states. Some land
which rented for a third came to rent for two-fifths. Some land

THE VALUE OF FARM LAND AND EQUIPMENTS 213

which rented for two-fifths is rented for one-half. Unfortu-
nately, the census gives no measure of the increase in rents.

The cash income from land may remain the same and a
legitimate rise in the price of land result from a fall in the
interest rate on safe loans. It is doubtful if this has been an
important influence in the recent rising prices of land.

BeUef in future increase in the returns from land may be
the occasion of a rise in prices beyond the amount on which
the rent will at present pay interest. This is the speculative
factor in the present price of land. Just what share of present
prices are speculative no one can tell. Much which was specu-
lative investment prior to war prices appears no longer to be
speculative, because the return which goes to land as share
rent pays a satisfactory rate of interest on the present price
of the land. The danger is that the prices of products will
fall and leave the land values on a speculative level again.

The paying of a price for farm land beyond its worth as a
basis of farming operations is not so serious a matter for the
purchaser who is able to pay cash for the land. If he has paid
too much and the price does not rise, or having risen falls again,
he is poorer but not broken. With the man who buys on a
land contract with only 20 per cent of the purchase money paid
down, the case is different. In recent years many farms have
been purchased at a high price and with only a small proportion
of the purchase money paid down. The outcome has usually
been good because of the ability of the purchasers and the trend
of prices. If debt paying is favored by rising prices of farm
products, most farmers will pull through safely, even when
land prices are above the productive value of the land. In
case of stationary prices, all have a hard time, but the more
able will succeed in spite of the burden of excessive principal
and interest. If an era of falling prices should follow, hope
would soon be crushed and the failure of all but the very ablest
would be all but certain. It is unwise for a farmer to invest
a large share of his savings in a non-interest bearing speculative
margin in the price of land.

There are many explanations of the extraordinary rise in

214 AGRICULTURAL ECONOMICS

prices in the first decade of the twentieth century. It followed
a period of depression. It was the period when people became
conscious that the land supply is limited, and that the good,
free land has been taken up. It was a period of great increase
in the supply of gold and also a period of great increase in the
use of bank checks in the place of gold certificates, — this is
thought to be suflacient to account for half the rise in the prices
of farm products. The ease with which old debts were paid with
cheaper money has made people hopeful in obligating them-
selves for the payment of larger debts.

These are some of the most important principles and con-
ditions which should be kept in mind in the consideration of
the values of farm land, and of farm live stock and equipment.
The prospective buyer of land will do well to bear in mind the
advice of Cato, a Roman agricultural writer, who is quoted by
Pliny ^ as saying : " Do not be too eager in buying a farm. In
rural operations never be sparing of your trouble, and, above
all, when you are purchasing land. A bad bargain is always
a ground for repentance."

1 Pliny's "Natural History," Book XVIII, Chapter VI; "Bohn'a Library" edi-
tion, Vol. IV, p. II.

CHAPTER XIX
THE FARMER'S MEANS OF ACQUIRING LAND

Free land. Hitherto the progress of American agriculture
has been powerfully influenced by the presence of vast areas
of governme'nt lands which were easily secured, easily brought
into cultivation, and which gave large returns upon invest-
ments. The presence of these vast areas of cheap land of great
fertility in a country where labor was scarce led to the inven-
tion of many labor-saving devices until America became noted
the world over for her agricultural machinery ; but, above all,
the presence of free land has made oppressions by landlords
impossible. The farmers have been able to take up valuable
government lands. This means of acquiring land ownership
has been very important from the time the first settlers landed
in the New World until the present time. When, in the earUer
days, land became scarce in Massachusetts, emigration to Con-
necticut set in, and when the best lands in both of these colonies
were occupied, there still remained unoccupied good land in
New York. When the small farmers of Virginia were crowded
out by the great planters, they found unoccupied lands in North
Carolina, and later they followed Boone into the wilderness of
Kentucky. In time the occupation of the Mississippi valley
was completed, and in more recent years, since the great plains
have been made easily accessible by railways, the settlement of
new land has gone on at an exceedingly rapid rate.

That the acquisition of landownership was an easy task for
the American farmer of the earUer days is indicated by the
following quotation taken from a description of the settlements
along the Monongahela in 1772 and 1773 : "Land was the
object which invited the greater number of these people to
cross the mountains, for as the saying then was, ' It was to be

215

2l6 AGRICULTURAL ECONOMICS

had here for taking up ' ; that is, building a cabin and raising
a crop of grain, however small, of any kind, entitled the occupant
to four hundred acres of land, and a preemption right to one
thousand acres more adjoining, to be secured by a land office
warrant." ^

In 1790 Alexander Hamilton proposed a plan for the dis-
position of the public lands which reads as follows : "In the
formation of a plan for the disposition of the vacant lands of
the United States there appear to be two leading objects of
consideration : one, the facility of advantageous sales, accord-
ing to the probable course of purchases ; the other the accom-
modation of individuals now inhabiting the western country,
or who may hereafter emigrate thither. The former, as an
operation of finance, claims primary attention ; the latter is
important, as it relates to the satisfaction of the inhabitants of
the western country. It is desirable, and does not appear im-
practicable, to conciliate both. Purchasers may be contem-
plated in three classes : moneyed individuals and companies who
will buy to sell again ; associations of persons who intend to
make settlements themselves; single persons or famihes,
now resident in the western country or who may emigrate
thither hereafter. The two first will be frequently blended,
and will always want considerable tracts. The last will generally
purchase small quantities. Hence a plan for the sale of the
western lands, while it may have due regard for the last, should
be calcuated to obtain all the advantages which may be derived
from the two first classes." ^

The government was slow in formulating the plan which
finally became most significant in the conversion of the public
domain into a nation of farms. The American statesmen of
the eighteenth century looked upon the western lands " as
an asset to be cashed at once for payment of current expenses
of government and extinguishment of the national debt." *
This desire to convert the public domain into cash led to the

1 The Settlement of the Western Country, by Reverend Joseph Doddridge, in
Hart's "American History Told by Contemporaries," Vol. II, p. 387.

* See "The Pubhc Domain," by Donaldson, p. 198. ' Ibid., p. ig6.

THE FARMER'S MEANS OF ACQUIRING LAND 217

sale of land in large tracts. Under the ordinance of May 20,
1785, surveyed lands were offered in lots as large as a whole
township of 36 sections of 640 acres each, for not less than $1
per acre.^ Under an Act passed May 18, 1796, which provided
for the survey of certain lands in the present state of Ohio,
surveyed lands were to be offered at public sale in sections of
640 acres, and in lots of eight such sections each. The minimum
price was then fixed at $2 per acre.^ Prior to May 10, 1800,
1,484,047 acres of land had been sold from the public domain
for the benefit of the United States. From these sales was
realized $1,201,725.68.^ ']

Under an Act of May 10, 1800, land offices were opened in the
Northwest Territory. The minimum price was kept at $2
per acre. Lands were offered for three weeks at public sale in
sections and half sections, and what remained at the end of
this period was to be sold privately, as wanted, at the minimum
price. During the next twenty years the net sales of govern-
ment lands were 13,642,536 acres, from which the sum of
$27,900,379.29 was realized.^ In 1820 the minimum price of
land was reduced to $1.25 per acre. The revenue idea was
gradually abandoned and the settlement of the western country
came to be looked upon as the principal end in view in the dis-
position of the public domain.

The preemption system, which gave the preference to actual
settlers in the sales of land at the minimum price, was em-
bodied in sixteen special Acts between 1801 and 1841. At the
latter date a general Act was passed which, with minor changes,
remained in force until 1891. The actual settlers were per-
mitted to enter upon tracts of land not larger than 160 acres
nor less than 40 acres before such lands had been offered at
public sale. The requirements were that the person should
reside in a dwelling upon the tract, improve and cultivate a part
of the land, and after a limited period pay $1.25 per acre.

" The preemption system," says Donaldson,^ " arose from
the necessities of settlers, and through a series of more than 57

> See "The Public Domain," by Donaldson, p. 1Q7. * Ibid., p. 200.

» Ibid., p. 201. * Ibid., p. 203. ' Ibid., p. 215.

2l8 AGRICULTURAL ECONOMICS

years of experience in attempts to sell or otherwise dispose of
the public lands. The early idea of sales for revenue was
abandoned and a plan of disposition for homes was substituted.
The preemption system was the result of law, experience, execu-
tive orders, departmental rulings, and judicial construction.
It has been many-phased, and was applied by special acts to
special localities, with peculiar or additional features, but it
has always and to this day [1880] contains the germ of actual
settlement, under which thousands of homes have been made
and lands made productive, yielding a profit in crops to the
farmer and increasing the resources of the nation."

The Homestead Act of 1862 was the final step in the direc-
tion of free land for actual settlers. This law was the result,
in part at least, of the agitations of the Free Soil Democrats.
They claimed " that the public lands of the United States be-
long to the people, and should not be sold to individuals, nor
granted to corporations, but should be held as a sacred trust
for the benefit of the people, and should be granted in limited
quantities, free of cost, to landless settlers." ^

The homestead law enables the landless farmer to secure
a quarter section, 160 acres, of land and acquire a title to the
same by maintaining residence thereupon and improving and
cultivating the land for the continuous period of five years.^

" The homestead act," says Donaldson,^ writing in 1880,
" is now the approved and preferred method of acquiring title
to the public lands. It has stood the test of eighteen years,
and was the outgrowth of a system extending through nearly
eighty years, and now, within the circle of a hundred years
since the United States acquired the first of her public lands,
the homestead act stands as the concentrated wisdom of legis-
lation for settlement of the public lands. It protects the gov-
ernment, it fills the states with homes, it builds up communities,
and lessens the chances of social and civil disorder by giving

1 See "The Public Domain," by Donaldson, p. 332.

* Circular from the General Land OflSce showing the manner of proceeding to
obtain title to public lands, 1904, p. 11.

' See "The Public Domain," by Donaldson, p. 3S0> -.

THE FARMER'S MEANS OF ACQUIRING LAND 219

ownership of the soil, in small tracts, to'the occupants thereof.
It was copied from no other nation's system. It was originally
American, and remains a monument to its originators."

From 1873 to 1891 a Timber Culture Act was in force. This
act, as first passed, enabled " any person " to obtain not more
than 160 acres of land by planting 40 acres of timber and properly
caring for the same for ten years. The number of acres of
timber required was finally reduced to 10, and the period of
cultivation to eight years. The privilege came to be restricted,
however, to persons twenty-one years of age, heads of families,
citizens of the United States, or one who has filed his declara-
tion of intention to become such. The law was a failure from
the standpoint of timber culture, but in all 44,229,950 acres
of land were entered by this method.

! The total area included in farms was more than doubled
between i860 and 1900. The acreage in farms was 407,212,538
in i860, and in 1900 it was 838,591,774. The importance of
free land in this increase in the total area of land in farms is
shown by the fact that between January i, 1863, and June 30,
1900, 188,149,032 acres of land were entered under the home-
stead laws. It is estimated that public lands had been dis-
posed of by the government prior to June 30, 18(60, to the extent
of 417,587,322 acres.^

The free distribution of farms by the Government practically
no longer exists. Although over one-tenth of the total land
area of the United States, exclusive of Alaska and the insular
possessions, remains unappropriated and unreserved (222,448,-
225 acres in 1918 out of the total area of 1,900,947,200 acres),
this land is nearly all desert or semi-desert and unsuitable for
the production of crops. It is located principally in Arizona,
California, Colorado, Idaho, Montana, Nevada, New Mexico,
Oregon, Utah, and Wyoming, and most of it is used for grazing
sheep and cattle particularly, during the winter and spring

1 Donaldson ("Public Domain," p. 519) says: "The disposition of the public
domain from its origin to June 30, 1883, is estimated at about 620,000,000 acres."
From this number has been subtracted the sum of the amounts annually disposed
of each year from June 30, i860, to June 30, 1883, or 202,412,322 acres.

220 AGRICULTURAL ECONOMICS

months when the vegetation is more abundant. A large
acreage is required to support a family even in a modest
pioneer manner, as is indicated by the fact that under the
Grazing Homestead Act, which allows only 640 acres to an
applicant, but 20,000,000 acres had been designated by June 30,
1919, divided between nearly 33,000 applicants. Practically
all these grazing homesteads which offer the slightest possi-
bility of success have been applied for. When an Indian
reservation is now thrown open to settlers there are many
applicants for every desirable piece of land. In the summer
of 1904 there were in one case 106,308 persons registered with
the hope of drawing farms where there were but 2412 pieces of
land of 160 acres each for distribution.

Land settlement. While free land, useful for agricultural
purposes, is scarce and no longer plays an important part in
the maintenance of landownership on the part of farmers in
the United States, there is much unoccupied land in the old
forest regions which is now on the market at a low price.
Whether the price is relatively low when compared with the
old prairie farms may be doubtful, but the absolute figures look
small to the farmer who has worked $200 land as a tenant until
his hair is gray and who is still unable to make the first payment
on the farm he occupies. The man in this position takes a
trip to the cut-over country and finds an eighty-acre farm with
thirty acres cleared and the remainder covered with second-
growth, interspersed with occasional open grass spots connected
by cow-paths. At first blush, before he has any idea of the
cost of clearing the remaining fifty acres of brush land except
the opinion given by the land agent, and without any knowledge
of what a year's labor will yield on this farm, $50 or $60 an
acre sounds cheap. It is within his means. The desire for a
home of his own after many years of tenancy turns the balance
quickly in favor of buying. Thus it is that a good deal of the
savings of tenant farmers occupying high-priced land is used
in getting homes on the lower-priced and less valuable land.
While this tends to emphasize tenancy in the regions of high
land values it provides the funds for developing new lands and

THE FARMER'S MEANS OF ACQUIRING LAND 221

helps to maintain the percentage of landownership in the United
States as a whole.

That this movement to cheaper lands in order to acquire
landownership may have the best results for the farmers and
for the country as a whole, the movement must be guided by
people who know the possibilities of the land and who have no
personal interest in any particular piece or kind of land. The
dishonest real estate agent does much to retard this movement
by levying a heavy tax upon the farmers who are so unfortunate
as to fall into his hands. The honest, intelligent real estate
agent who takes a professional interest in the upbuilding of his
community is rendering a valuable service. Several states,
through their immigration bureaus, are doing much to encourage
the settlement of their sparsely settled regions by carrying on
an educational campaign among those people who wish to
move to newer and cheaper lands. Much more work needs
to be done by these states in the way of estabhshing well-
worked-out plans for settling the land on a basis profitable to
the settler and to the state as a whole. This will not only in-
crease the wealth of the country but facilitate the maintenance
of the landowning farmer as the dominant class in American
agriculture.

Gift and inheritance. A vast amount of wealth passes on
from generation to generation by gift and inheritance. Hence
it is not necessary, in order to maintain the class of landowning
farmers in a country where this class is already established,
that each succeeding generation of farmers should save from the
profits of their industry sufficient wealth to purchase their
farms, and to hand this accumulated wealth over to the preced-
ing generation of landowners. This would be necessary,
however, in order to reestablish a class of landowning farmers
in one generation in a country where landlordism has become
universal. In England, where most of the land is owned by a
comparatively small number of landlords, the estates are handed
down from generation to generation and thus remain the
property of the landlord class ; and in that country it is un-
usual indeed for a tenant farmer to undertake to purchase

222 AGRICULTURAL ECONOMICS

a farm. In Germany, where peasant proprietorship is the
rule, the farms are handed down from father to son by in-
heritance, and thus the property is kept in the hands of the
tillers of the soil. The conditions with respect to inherited
wealth are, therefore, of great importance in determining the
status of farmers with respect to landownership.

In the United States it is a matter of common observation
that farmers who are able to do so, assist their sons in
buying farms. This assistance may be relatively very great
in the case of a wealthy farmer who has a small family; and
again it may be very small in the case of a farmer in moderate
circumstances, who has a large number of children among whom
he wishes to distribute his assistance. Often the home farm is
greatly enlarged by purchasing a " forty " here and an " eighty "
there while the boys are growing to manhood, and then parceled
out as the young men wish to establish homes for themselves.
Again, when the parents are gone, the remainder of their ac-
cumulated wealth passes by inheritance to their sons and
daughters and helps very greatly in the enlargement of
their farms as their growing families make larger farms de-
sirable.

The movement of population from country to city, which
has been so great in recent years in this country, results in the
transfer of a vast amount of wealth from the agricultural in-
dustry, which must be replaced from some source if the wealth
of farmers is not to decline. The general principle may be
thus stated : The greater the amount of land and other forms of
wealth acquired by one generation and transmitted to the farmers
of the next, and the more evenly this wealth is distributed, the
greater the ease with which the ownership of land may be acquired
by the succeeding generations of farmers; but the larger the farm
families of a given community, and the larger the percentage of
each succeeding generation who seek a livelihood in other indus-
tries, the greater the amount of wealth which will be drawn from
agriculture into other industries by gift and inheritance, and the
smaller the part which inherited wealth will play in the acquistion
of landownership.

THE FARMER'S MEANS OF ACQUIRING LAND 223

The number of persons employed in the various other occupa-
tions has increased much more rapidly than has the number
engaged in agriculture. This is shown by the following table,
which gives the proportion, of those engaged in all gainful
occupations, which were employed in " agricultural pursuits."^

TABLE XIV

Date

Percentage Engaged in Agriculture

1820

87.1
77-S
47-S
44.4

39-2
35-7
32-9

1840 ....

1870

1880

1890

IQOO

IQIO

Perhaps the most important explanation of this more rapid
increase in the percentage of those engaged in other occupations
than agriculture, is the transfer of a share of the agricultural
population to the other industries. This has often been spoken
of as the movement from the country to the city. Men who
have long been farmers sometimes move to the cities and enter
other occupations, but what is more significant than this is the
movement of the farm boys from country to city. A large
percentage of the boys who are brought up in the country are
educated and sent into the city, where they enter occupations of
every description. A large percentage of the men who control
the industries of cities to-day were one-time farm boys.

This movement from country to city was especially rapid
during the seventies and eighties for two reasons : First, agri-
cultural methods were transformed by the introduction of labor-
saving machinery, until a much smaller percentage of the total
working population was required to produce the same supply
per capita of food stuffs and raw materials. Second, the

* Twelfth Census of the United States, 1900, Special Reports, Occupations,

pp. XXX, I.

224 AGRICULTURAL ECONOMICS

manufacturing industries have been developing rapidly during
the same period, giving opportunity for a share of the increasing
farm population to find remunerative employment in the in-
dustries of the cities. To quote Dr. A. C. True, " Between
1870 and 1890, speaking relatively and in round numbers, two
million men gave up farming and went to join the great army of
toilers in cm* cities. Taking their families into account, six
million people from the farm were added to the population of the
town. . . . Men leave the farms because they are not needed
there. The introduction of labor-saving machinery and rapid
transportation has produced the same result in agriculture as in
manufactures. A smaller number of men working in our field
turns out a much greater product than the greater number of
laborers could possibly secure in olden times, and the producers
of all lands are easily carried where they are needed. . , .
Within the past twenty-five years, invention has gained the
mastery in agriculture as in other arts. The brain of man has
triumphed over his hand here as elsewhere." ^

If only the poor moved from country to city, the total wealth
of the country would be affected but little by this movement of
population. But the rich farmers are quite as apt to move to the
cities as are the poor ones, in fact they are perhaps more Ukely
to do so, for they are in a position to live from the rent of their
farms, as many retired farmers are doing in nearly every town
of the country. The sons of the well-to-do farmers are more
likely to receive an education and to be attracted to other
pursuits than are the sons of poor farmers ; on the other hand, it
may be true in many cases that the son of a poor farmer would
be more likely to seek employment in the city because his
chances of getting a start in the country are not so good as those
of the young man with a well-to-do father to aid him.

This stream of population is carrying a vast amount of wealth
from country to city every year. This movement of wealth
from country to city has rightly been given as one cause of an
increase in the percentage of tenancy, for it transfers to the
city the owners of many farms, and these farms are cultivated

1 A. C. True, "The Arena," Vol. XVII, pp. 538-539-

THE FARMER'S MEANS OF ACQUIRING LAND 225

by tenants until some farmer is able to acquire its ownership by
transferring to the city owner an equivalent amount of wealth.

Thus while gift and inheritance are economic conditions of
great importance in determining the status of farmers with
respect to landownership, and make any rapid change in their
status in this regard impossible, some other means of accumu-
lating wealth must be available if the present percentage of land-
owning farmers is to be maintained. This leads to the investi-
gation of savings in agriculture as a means of acquiring land-
ownership.

Savings. The process of saving from the earnings of many
years and making a purchase is a means of acquiring land-
ownership which is of especial significance in the consideration
of the conditions which make it possible for tenant farmers
to become landowners. The majority of the tenants are able
to save from their earnings, because their net returns are more
than enough to cover the expenses of living. When long periods
of time are taken into consideration, the prices of agricultural
products tend to be such that the total product of the least
capable farmer who can remain permanently in the business will
equal his cost of living and all other annual expenditures,
including rent and normal returns on permanent investments.
This is true partly because long-time-average prices are a most
important factor in determining the degree of efficiency which is
necessary for making a living by farming, and all who do not
prove themselves efficient to that degree must leave agriculture
to those who are more capable ; again, it is true partly because
the long-time-average price must be such as will encourage the
production of sufficient produce to supply the effective demands
of the people, and the least capable farmer who is required to pro-
duce this supply must receive prices which will enable him to
live in accordance with his idea of a living, to pay rent, wages
(unless he and his family do all the work, in which case this
item is included in a living), wear and tear on machinery, and
normal returns on permanent investments.

It is true, certainly, that, at any given time, there are those
who are producing at a loss, others who are just able to make

Q

226 AGRICULTURAL ECONOMICS

both ends meet, and still others — and ordinarily this class
includes the vast majority — who are able to make an extra
profit because of their superior ability.^

This differential gain, or profit due to superior ability, is the
condition which, even where gift and inherited wealth are
insignificant, makes it possible for farmers to accumulate wealth
and to become the owners of farms. It is true, certainly,
that the more efficient may live much better than the least
capable, or marginal farmers, and thus the habits of life may
reduce the power of the more efficient farmers to save from their
profits. But the condition which gives rise to this differential
gain certainly makes it possible for the more efficient tenant
farmers to buy land.

The greater the number of those who have gained a degree
of efficiency above that of the marginal farmers and the greater
the difference between the degree of efficiency of the majority
of farmers and that of the marginal farmers, the greater is the
differential gain which will go to farmers as personal profits, and
the better able they will be to become landowners. On the other
hand, the more homogeneous the farmers who supply the market,
that is, the smaller the number who have gained a degree of
efficiency above that of the marginal farmer and the less this
degree of difference, the smaller is the total differential profit
and the less able are tenant farmers to accumulate sufficient
wealth to buy farms.

Credit. It is a common practice in the United States for
farmers to borrow money to invest in land. When a young
man has saved enough money to pay some share, say half or
two-thirds of the price of the farm, he borrows the remainder
and makes an investment, a mortgage being given to secure the
loan. This enables the farmer to buy land much sooner than
he could if he were required to save the entire amount before
making the purchase. Where the rate of interest charged is
not too high, it is often more desirable to pay interest than to
pay rent ; for the difficulty of adjusting the relations between
the landlord and tenant is in this way removed, and the farmer

1 Fur details on this point see Chap. XII.

THE FARMER'S MEANS OF ACQUIRING LAND 227

is free to improve the land as he chooses, knowing the benefits
will be his own.

Farm mortgage indebtedness was first reported by the United
States Bureau of the Census for 1890. At that time 28.2 per
cent of the farms operated by their owners were mortgaged.
In 1900 the percentage was 31, and in 1910 it was 33.6. The
total encumbrance reported was $1,085,995,960 in 1890 and
$1,726,172,851 in 1910. The former represented 35.5 per cent
of the value of the mortgaged farms, while the latter represented
only 27.3 per cent. The lower rate is explained by the fact of
increased land values.

Throughout the southern states, where the percentage of
tenancy is high, the percentage of mortgaged farms is low as
compared with the percentage in the North, where the mortgage
is used largely as a means of acquiring landownership on the
part of young men. At the same time retiring farmers favor the
plan of selling the farm and leaving a large share of its value
in the land, taking a mortgage for security. This not only
facihtates the climbing of the agricultural ladder on the part
of the young farmer, but it aids the old farmer in making a safe
retreat from the farm, giving him plenty of time to familiarize
himself with other forms of investment before withdrawing
his funds entirely from the form of investment which he under-
stands.

The extent to which mortgages are given to cover a part of
the purchase price is illustrated by the following quotation
taken from a special study made in connection with the census
for 1890 :

"As a result of inquiries made in 102 selected counties, distributed
throughout the United States, the conclusion is that 80.13 per cent
of the mortgages in force were made to secure the purchase price of
real estate and to make real estate improvements, when these objects
are not complicated with other objects, and that the original amount
of these mortgages is 82.66 per cent of the total original amount of
all mortgages in force. If to these objects are added the objects of
business and the purchase of various articles of personal property of
the more durable kind, such as domestic animals, wagons, farm

228

AGRICULTURAL ECONOMICS

THE FARMER'S MEANS OF ACQUIRING LAND 229

machines, when not combined with other objects, the mortgages are
89.82 per cent of the entire number in force, and their original amount
is 94.37 per cent of the total original amount of aU mortgages in
force. . . . The mortgages distinctly representing a loss of wealth,
or wealth soon to be consumed, are embraced in the description of
farm and family expenses, and their number is 5.4 per cent of the
total number of mortgages in force, w^hUe their original amovmt is
1.73 per cent of the total original amount. ... A distinction must
be observed between the cause and the consequence of mortgages.
The mortgage, in its motive, is for the most part a mere business
venture, and, so far as foreclosures show, for the most part a success-
ful one. It becomes a misfortune when for any reason it becomes a
business mistake." ^

These figures, it is true, refer to real estate mortgages gen-
erally; but there is no reason for thinking that the mortgage
is used for other purposes than the securing of the purchase
price of real estate in the case of farm mortgages more frequently
than in the case of other real estate mortgages. In general, we
would be inclined rather to think that farm mortgages were
more likely to be given to secure the purchase price than the
mortgages on city lots, for example, where the total value of the
lot might be relatively small compared with the value of the
business which might be established thereon, and which might
be an occasion for desiring to mortgage the real estate to secure
funds to extend the business. In general, the conclusion which
should be drawn seems to be that the mortgages on farms are
in the vast majority of cases used as a means of making the
transition from tenancy to landownership, and are frequently
an evidence of growing prosperity.

The evidence seems to show, also, that the farmers are usually
successful in their use of the mortgage as a means of acquiring
the ownership of land. In Illinois, Michigan, Minnesota, and
New Jersey, from one-third to one-half per cent, only, of the
farm mortgages are foreclosed each year ; ^ and the average
duration of farm mortgages in the United States is about five

1 Eleventh Census of the United States, i8go, Report on Real Estate Mortgages,
p. 310.

* George K. Holmes, Quarterly Journal of Economics, 1896, Vol. X, p. 49.

230

AGRICULTURAL ECONOMICS

years.^ From this we may conclude that in the above-named
states not much more than from one and two-thirds to two and
one-half per cent of the farm mortgages are foreclosed. But
we cannot argue from this that from ninety-seven and one-half
to ninety-eight and one-third per cent of the mortgages are duly
paid, out of the profits of agriculture. Many cases will come to
the mind of the reader, where the unsuccessful aspirants to
landownership have sold their mortgaged farms in order to pay
off the mortgage and save a part of their original investment.
However, it is fair to say that the vast majority of such ad-
ventures prove successful.

A classification by age groups of the owners of farm homes,
in the United States, may be obtained for the years 1890 and
1900, which gives the percentage of the owned farm homes which
are encumbered. This classification is shown in the following
table : -

TABLE XV

The Percentage of Owned Farm Homes which were Known to be
Encumbered, in the North Central Division, in 1890 and 1900,
Classified by the Age of the Owners

Age

Percentage Encumbered

1890

1900

Under 25 years

2? to xA. years

40.7

49-5
49.1

44-S
32.1

43-6
48.3
48.3
41.5
32.2

7,=^ to 44 years

A^ to ^4 years

55 years and over

From these figures it will be seen that the percentage of
encumbrance increases from youth to middle age, and declines
from middle age to old age. This fact, and also the relation
between the increase in the percentage of mortgages and the
decline in the percentage of tenancy, is shown more clearly in

* Eleventh Census, Repwrt on Farms and Homes, p. 109.

2 These figures were calculated from the Report on Farms and Homes for 1890,
and from Vol. II of the census for 1900.

FARM OWNERSHIP AND TENANCY IN UNITED STATES 263

364

AGRICULTURAL ECONOMICS

from 49.8, in 1S90, to 64.4 in 1900. Of the farm-home occupiers
belonging to the age period from 35 to 44 in 1890, and to the age
period 45 to 54 in 1900, 64 per cent were owners at the earlier
date, and 70.7 per cent at the latter.

TABLE XXI

Percentage of Farm Homes Classified by Tenure and Age of Farmer,

1900

State

Age

Per Cent

Per Cent

Per Cent

Owned

Rented

Unknown

United States

Under 25 years . .

27-35

71.07

1.58

25-34 years . . .

44-85

54-17

.98

35-44 years . . .

64.02

35-35

.63

45-54 years . . .

70.34

29-15

•51

55-64 years . . .

78.64

20.85

-51

65 years and over .

84.29

15.00

-71

Alabama

Under 25 years . .

18.56

80.24

1.20

25-34 years . . .

32.53

66.61

.86

35-44 years . . .

47.67

51.69

.64

1

45-54 years . . .

45-92

53-49

•59

55-64 years . . .

51-78

47-55

-67

65 years and over .

56.18

42.98

.84

Georgia

Under 25 years . .

15-23

83-03

1.74

25-34 years . . .

27.67

71.21

1. 12

35-44 years . . .

42.00

57-14

.86

45-54 years . . .

46.64

52.61

•75

55-64 years . . .

50.94

48.31

-75

65 years and over .

57-91

41.05

1.04

Mississippi

Under 25 years . .

15.21

83-53

1.26

25-34 years . . .

27-31

71.90

■79

35-44 years . . .

38.37

60.89

•74

45-54 years . . .

45-67

53-72

.61

55-64 years . . .

46.53

52.86

.61

65 years and over .

49.72

49-56

.72

Texas

Under 25 years . .

20.05

79-o8

.87

25-34 years . . .

34-48

64.90

.62

35-44 years . . .

52-98

46.63

•39

45-54 years . . .

60.04

39.61

•35

55-64 years . . .

68.31

31-33

•36

65 years and over .

74.06

25-34

.60

Tlllnoi*

Under 25 years . .

23.69

74.67

1.64

25-34 years . . .

35-63

63.26

I. II

35-44 years . . .

56.83

42.51

.66

45-54 years . . .

69.58

29.84

•58

55-64 years . . .

81. IS

18.28

•57

65 years and over .

88.53

10.62

.85

FARM OWNERSHIP AND TENANCY IN UNITED STATES 265

TABLE XXI (Continued)

State

Age

Per Cent

Per Cent

Per Cent

Owned

Rented

Unknown

Indiana

Under 25 years . .

29.38

68.76

1.96

25-34 years . . .

47.63

51-51

.86

35-44 years . . .

67.56

31.89

.55

45-54 years . . .

77-95

21-57

.48

55-64 years . . .

87.10

12.45

.45

65 years and over .

91.71

7-58

.71

Iowa

Under 25 years . .

23-66

74-88

1.46

25-34 years . . .

29.08

69.92

1. 00

35-44 years . . .

70.65

28.88

-47

45-54 years . . .

76.24

23-35

.41

55-64 years . . .

85.20

14.18

.62

65 years and over .

90.50

8.61

.89

North Dakota

Under 25 years . .

82.97

15-37

1.66

25-34 years . . .

86.44

12.52

1.04

35-44 years . . .

90.40

8.88

-72

45-54 years . . .

92.17

7-32

.51

55-64 years . . .

93-56

5-74

.70

65 years and over .

93.86

5-11

I -03

Massachusetts

Under 25 years . .

57-54

39-67

2.79

25-34 years . . .

70.30

27.91

1.79

35-44 years . . .

80.74

18.74

-83

45-54 years . . .

87-43

12.02

•55

55-64 years . . .

92.61

7-04

-35

65 years and over .

95-04

4.28

.68

Nebraska

Under 25 years . .

26.53

71.80

1.67

25-34 years . . .

4234

56.6c

-97

35-44 years . . .

64.07

35-31

.62

45-54 years . . .

75-56

23-90

-54

55-64 years . . .

82.80

16.65

-55

65 years and over .

85.24

13.64

1. 12

New York

Under 25 years . .

36.40

61.77

1.83 '

25-34 years . . .

50.53

48.40

1.07

35-44 years . . .

67.10

32-22

.68

45-54 years . . .

77.89

21.71

.40

55-64 years . . .

85.96

13.60

-44

65 years and over .

91.69

7-75

•56

Wisconsin

Under 25 years . .

57.76

40.93

1.31

25-34 years . . .

72.47

26.73

.80

35-44 years . . .

85.70

13.92

.38

45-54 years . . .

91.05

8.61

•34

55-64 years . . .

94.42

5-16

.42

65 years and over .

95-23

4.09

.68

266 AGRICULTURAL ECONOMICS

These figures indicate a constant movement from tenancy to
landownership. But, from generation to generation, a smaller
percentage of the farmers are able to make this transition. It
should be noted in the above table that of the occupiers of farm
homes who were under 25 years of age, a smaller percentage
were owners in 1900 than in 1890. This is true for every age
period given in the table except one ; the reverse being true
for the period from 35 to 44. This suggests that the decline
in the percentage of landownership is due, in part, to the in-
abihty, or disinclination, of the succeeding generation to acquire
landownership so generally as their predecessors.

The movement from tenancy to ownership has been more
complete in some parts of the United States than in others.
This is shown in the previous table, which shows the farm
homes of selected states classified by tenure and by age of the
farmer.

These figures show that in those southern states where negro
farmers are dominant the movement from tenancy to ownership
is far less pronounced than in Texas where the whites predomi-
nate over the blacks. In the Northern States farmers appear to
be highly successful in becoming the owners of farms. Even in
Illinois, where 39.3 per cent of the farmers were tenants, all but
about one-tenth of the farmers 65 years of age and over had
succeeded in becoming owners. The residuum of tenants left at
this age was 8.6 per cent in Iowa, 7.6 per cent in Indiana, and
only 4.1 per cent in Wisconsin. To contrast the old with the
new, Massachusetts showed 4.3 per cent and Nebraska 13.6
per cent of tenancy among farm-home owners 65 years of age
and over. That this contrast is not general is shown by the
fact that in North Dakota the percentages of tenancy among
these older farmers was only 5.1.

A proper conception of the economic status of the American
farmer at the close of the nineteenth century must give proper
emphasis to the fact of landownership on the part of farmers.
In the North landowning farmers generally predominated. In
the Cotton Belt tenants outnumber the landowning farmers.
Figure 12 shows the distribution of landowning farmers in

FARM OWNERSHIP AND TENANCY IN UNITED STATES 267

1910. The small number of owners in that region is indicative
of the fact that in the South there is a distinct tenant class.

In the Cotton Belt the land is still in the possession of a land-
lord class. In parts of Virginia where the land has not been
so generally retained in large estates, the percentage of land-
owning farmers among the negroes is very high. This can be
explained in part by the lack in eastern Virginia of a great staple
crop like cotton which would make profitable the operation of
plantations by tenants, and partly by the fact that the negroes
of Virginia are a higher type than those of the Cotton Belt.

The apparent superior economic position of the northern
farmer is somewhat reduced when the question of mortgage
indebtedness is raised. In 1900, 30 per cent of the farm homes
occupied by owners were mortgaged. The census for igoo
shows a more complete analysis of the farming classes by tenures
than do the census reports for 1880 and 1890. Those other
than cash and share tenants renting all the land they cultivated
were divided into four classes, namely, owTiers, 54.9 per cent,
part owners, 7.9 per cent, owners and tenants, .9 per cent, and
managers, i per cent. The practice of farming a tract of rented
land in addition to the land owned seems to have been a common
practice in many of the grain-growing sections.

Farms operated by managers were not so numerous but were
more generally large farms, so that while they are only i per
cent of the farms they represent 10.7 per cent of the aggregate
area in farms. In spite of the fact that these farms include
many of the country homes of wealthy city folk, the cheap areas
of the West included in these managed farms reduce their value
to only 5.5 per cent of the aggregate value of farms.

The position of the tenant farmers is better understood when
one knows more of the character of the landlords whose land
they cultivate. It has been shown that in the North most
tenant farmers sooner or later become landowning farmers, while
in the South a very large proportion of the tenants never rise
to the position of landowners. The vast majority of the rented
farms in the North are owned by men who have passed through
various stages of acquiring land for their own use, and who are

268 AGRICULTURAL ECONOMICS

found in the landlord class only in the later years of their lives.
In the southern states, in the region of negro cotton tenants,
there is a landlord class whose life work is the management of
landed estates operated by tenants.

Great landed estates, such as the Scully and the Sibley
estates in IlHnois, and the Wadsworth estate in New York,
are found here and there in the North, but they are exceptions.
As a rule the landlords are retired farmers. Even in the South,
outside of the areas densely populated with negroes engaged
in cotton production, which is equivalent to saying outside of
the regions where large cotton plantations were operated by
slaves in i86o, the landlords with but one or two tenants are
most common.

The statistics relating to the ownership of rented farms in
1900 were published for no territorial unit smaller than the
state, hence the statistics do not show the contrast within the
southern state with respect to the size of estates in the counties
where negro tenants predominate in numbers and in the counties
where white tenants are in the majority, but the influence of
the old cotton plantation system and its reorganization upon
the statistical averages for the South is shown by the fact that
while only 2 per cent of the rented farms owned by residents
of the North Central States were in estates comprising ten farms
or more, the percentage of farms of the same class in the South
Central States was 20.9.

Landlords in the United States, whether they belong to the
numerous class of retired farmers or to the small class of owners
of great estates, are, as a rule, residents of the district in which
their lands are located. " Of the 1,934,346 farms in the United
States for which the names and post-office addresses of the
owners were reported, the owners of 1,523,863, or 78.8 per cent,
resided in the same county in which their farms were located ;
307,656, or 15.9 per cent, in the same state but not in the same
county ; 102,827, o^ 5-3 P^r cent, outside of the state (of which
1097, or .051 per cent, were in foreign countries). Many
residing in the same state, but not in the same county, had
homes very near their rented farms. This was notably the

FARM OWNERSHIP AND TENANCY IN UNITED STATES 269

case with farms located near county lines. Such owners can
hardly be classed as non-residents, and the very small per cent
of rented farms owned by non-resident landlords would have
been still further reduced if it had been practicable to exclude
such owners.

" The Western division had the smallest proportion of rented
farms whose owners resided in the county where their rented
farms were located. . . . The South Central and South
Atlantic divisions had the largest proportion of owners residing
in the county where their rented farms were located. . . .
The North Central division had the largest, and the Western
the next largest, proportion of rented farms with owners residing
outside of the state." ^

The character of the landlord has great significance when
viewed from the standpoint of the tenant farmer who hopes
to rise to the position of a landowning farmer. Land leased by
the retired farmer is not held out of the market for many years,
because of the limits set to life. Upon the death of the retired
farmer, if not at an earlier date, the land is divided among heirs
or sold to settle the estate. This brings land upon the market
and helps those who inherit the proceeds to buy farms. Per-
manent landed estates managed by a landlord class keep land
ofiE the market so far as tracts of a size which a small farmer
can buy are concerned, and the influence of inheritance is to
maintain the landlord class. The permanent landlord class
trained to manage estates operated by tenants is, however, not
without its redeeming feature, as any one will conclude who
studies the present methods of operating landed estates in the
regions of negro tenants in the South to-day. Trained land-
lords with large estates are, as a rule, more agreeable for a
tenant, white or black, to deal with than are the retired farmers
who enter the landlord class for a few years late in life.

1 Twelfth Census of the United States, 1900, Vol. V, p. kxrvii.

CHAPTER XXn

FORMS OF LAND TENURE IN THE UNITED STATES

IS A CERTAIN AMOUNT OF TENANCY A GOOD THING ?

In the discussion of the size of farms it was noted that for a
given farmer engaged in a given type of farming at a given
stage in his own development, and with given conditions with
respect to wages, interest, land values, and prices for his prod-
ducts, there is a size of farm which will pay him best. The
question now to be taken up relates to the various ways in which
he can get the use of the amount of land he finds it most profit-
able for him to operate.

Few young farmers are financially able to own the amount of
land they can operate to best advantage. If each man operated
the land he is capable of owning, many young farmers would
be operating farms too small for their energies, and many old
farmers would have in hand far more land than they could
utilize advantageously, to the loss of the young farmer, the old
farmer, and the people of the nation who consume farm
products.

Farm tenancy is an institution which provides for getting the
land into the hands of those who are in a position to cultivate it,
but who are unable to buy farms. In its best forms, tenancy
in a limited amount may be a good thing. In 1910 there were
2,354,676 or 37 per cent of the farmers of the United States
reported as tenants who owned none of the land they farmed,
and 593,825 or 9.3 per cent who leased part of the land they
cultivated. Thus, it would seem that nearly half of the farmers
are using tenancy as a means of securing the use of the land
they feel capable of operating, but which they are not yet able
to own. It is, therefore, a matter of great importance that the
methods of leasing land be such as will be conducive to good

270

FORMS OF LAND TENURE IN THE UNITED STATES 271

farming and to the well-being of the tenant farmers and to the
nation as a whole.

A large proportion of the tenant farmers are young men who
are in the process of earning enough money to buy a farm.
This is especially the case in the Northern States. In Illinois,
for example, nearly 44 per cent (43.77) of farm homes which
were rented were occupied by persons under thirty-five years
of age, whereas less than 1 5 per cent of those owning their farm
homes were under thirty-five years of age.

The owners of rented land are quite generally older farmers
who have retired or who have more land than they wish to
farm; 80 per cent of the owners of rented land have but one
farm let to tenants, 11.4 per cent have but two, 5.4 per cent
have three or four, 2.3 per cent have five to nine, .7 per cent have
ten to nineteen, .2 per cent have twenty or more farms. Taking
the United States as a whole the large estate made up of rented
farms is the exception and the landowner with one or two
farms to rent is the rule. In a vast number of cases the tenant
is the son or son-in-law of the landlord. At the time when the
parents are ready to retire from the active duties the farm
is usually turned over to one member of the family on a tenant
basis, with the expectation that in time title to the farm will be
secured by the tenant and he will become the owner of the farm.

While tenancy is common at the present time and has been
present in the United States since the beginning of our nation, it
has ever been looked upon merely as a stepping stone, a
temporary means of acquiring the use of land, and not as a
permanent condition for any individual. The statistics show
an increase in the percentage of tenancy, however, and it appears
that, on the average, farmers grow older as tenants than they
did when land values were lower. One important subject
of consideration relates to the means of maintaining the move-
ment from tenancy to ownership. This will receive especial
consideration in a later chapter. In this chapter especial
attention will be given to the methods of renting land with a
view to the right use of the land and to the equitable distribution
of the products of the land.

272 AGRICULTURAL ECONOMICS

Points to be considered in renting land. The first point to
be considered by the landlord is the character of the tenant
to whose care he is to commit his farm. Honesty is the first
essential, without which the farm may be damaged within a
year to an amount greater than the annual rent.

Young men who desire to succeed as tenant farmers cannot
have the importance of honesty too strongly impressed upon
them. The efficient young man who is honest finds no difficulty
in gaining control of land and capital, but no one with capital
will have anything to do with a dishonest tenant if he knows him
and can get any one else. Many men do things which they
count very shrewd, but which at once puts them in the class
of men who have to be watched, and it is a general principle
that the greater the risk the higher the rate of profit which
the capitalist should demand. The honesty of the tenant in-
sures the landlord against the losses he is in danger of sus-
taining if the tenant is dishonest. The landlord can afford, and
is usually willing, to pay a liberal premium for this insurance.

Efficiency is equally important. If the farm is let on shares,
the income of the landlord is dependent upon the efficiency of the
tenant. If let for cash, it is much better to have a capable
tenant who can pay the rent with ease, since the reputation of
the farm depends upon the success of the tenant. Every tenant
has a record, — look into this record before making a contract.

The tenant should be in possession of a requisite amount of
capital to operate the farm effectively. This amount will de-
pend upon the type of farming and the form of tenure. It
is a common practice for the landlord to supply a large
proportion of the operating capital where he is assured of the
honesty and efficiency of the tenant. It does not make so
much difference who provides the capital, the important thing
is that the capital certainly be provided.

The Farm and the Landlord

In choosing a farm, consider its suitabiHty to the type of
farming most congenial to the tenant, location with respect to
markets, schools, etc., the qualities of the soil, the arrangement

FORMS OF LAND TENURE IN THE UNITED STATES 273

of the fields and buildings for economy of labor, the size of
the farm, whether it will give full scope to the energy of the
tenant, the water supply, and the sanitary conditions of the
home. Ascertain if there has been any sickness in the family
or disease among the animals of the former tenant. The fair-
ness of the rent asked should be looked into by the tenant.
By making inquiry of the outgoing tenant, the neighbors, the
thrasher man, and the operator of the local creamery or cheese
factory, the prospective tenant can get information on many
of these points and at the same time ascertain the amount of
the income, the expenditures, and other factors which will show
the possibilities of the farm.

The farm being found satisfactory, make sure that the land-
lord is a fair-minded man, capable of giving good advice but
not overfree with his suggestions nor overinsistent upon his
own notions being followed in detail. A nagging landlord
makes the day long and the work tiresome.

The landlord should try to see the situation from the view-
point of the tenant as well as his own and then strive to be
fair. This will pay not only in the satisfaction that results
from being decent with one's fellow-men, but also in greater
returns from the farm. The landlord who takes advantage of a
tenant who is striving to do the right thing, and " grinds him
down," may gain a few cents in the beginning, but he will
lose dollars in the end. He will gain the reputation of being
a grasping landlord. Good tenants will avoid him, for it is
true not only that the efficient farmers tend to get the most
productive land, but also that the honest tenant tends to get
the honest landlord.

What the lease should contain. The lease should contain a
description of the land (the description found in the deed to the
land), the buildings, and such other property belonging to the
landlord as may be involved in the agreement.

Uses of property. The uses and the limitations upon the
uses to which the property may be put by the tenant should
be stated specifically in the contract. For example, the land
to be retained in permanent pasture should be described, the

274 AGRICULTURAL ECONOMICS

area to be kept in meadow stated, the crops which are not
to be grown named, the uses named for which trees may be
cut, etc.

Disposition of products. It is through the regulation of
what crops are to be produced upon the farm, and the forms
in which the products of the farm are to be disposed of, that
the farming may be directed along lines least exhausting to the
soil. In general, tenant farmers are too much inclined to sell
grain and hay rather than live stock and dairy products. This
is partly due to the lack of capital on the part of tenant. Re-
strictive clauses in leases which require that all hay, straw, corn
fodder, corn, etc., be fed upon the farm should be accompanied
with provisions enabling the tenant to secure the necessary
animals to consume these products.

Use of manure made on the farm. The manure made upon
the farm, from feeds produced thereon, belongs to the land,
and in no case should any tenant be allowed to remove this
manure from the land. Danger from this source arises most
commonly in the case of farmers who own a farm and hire ad-
ditional land. Land leased in this way should receive its pro
rata share of the manure.

Contracts usually provide that the tenant shall spread all
manure upon the land at such points as the owner shall direct.
This clause is more or less useless, as a new tenant will gladly
haul all the manure he can find, while a tenant who expects to
leave before another cropping season cannot easily be forced
to haul manure for his successor. The obvious remedy is to pay
the tenant for hauling the manure from which he is to derive
no benefit or else not expect him to perform this service.

Purchase of feed and fertilizers. In order that the tenant
be not discouraged in buying feeds and fertilizers to be utilized
upon the farm the contract should provide for compensation to
the tenant upon the termination of his lease for the unexhausted
supplies of fertility placed in the soil from these sources. The
payment for such improvements should never be for more than
the benefit to be derived by the incoming tenant. Unwise
expenditures should be the loss of him who makes them.

FORMS OF LAND TENURE IN THE UNITED STATES 275

Destruction of noxious weeds. Great care should be taken
to provide in the contract for the cutting of all noxious weeds
before they mature their seeds. A clause should be inserted
providing that in case the tenant neglects to destroy seed-bearing
weeds in proper season the landlord may enter with the necessary
help, destroy the weeds, and charge the cost to the tenant.

In the case of Canada thistles and quack grass, provision
should be made against the spreading of their roots over the
fields. These plants may have got a start along a fence rov/ or
along a ditch where the land has not been cultivated for years.
By plowing one furrow closer than has been the practice in a
place of this kind a great quantity of the roots may be loosened
and dragged out over the field. Danger of spreading these
plants should be guarded against strenuously. The saving of
the land from the encroachment of noxious weeds is even more
important, if there be any difference, than the avoidance of soil
exhaustion.

Where a state law requires the destruction of noxious weeds
it should be strenuously enforced. It is the duty of every
landlord and of every tenant to see that such laws are obeyed.

The landlord whose farm is foul with weeds should not ex-
pect the tenant who was not to blame for this condition of affairs
to clear the farm from these pests without compensation.
Where this work is not performed as a part of the regular culture
of the crops, the tenant should receive compensation in cash in
proportion to the service rendered. The landlord who does not
spend money in fighting the encroaching army of noxious weeds
will soon accept a much lower rent. Where the destruction of
weeds is a regular farm operation necessary to the production
of a crop the tenant should not expect other compensation than
that coming from increased production. The landlord whose
farm is clear of weeds can easily secure enough more rent to
make his activities and expenditures in the destruction of weeds
very profitable.

Value of a tidy farm. The landlord should take great care
to provide neat farm buildings and fences. The tenant should
agree to maintain a tidy appearance about the house, the barns,

276 AGRICULTURAL ECONOMICS

the feed lots, the fence rows, and every other part of the farm.
There is a considerable advertising value in good appearances
which should not be disregarded. Where it is not profitable in
dollars and cents it pays abundantly in the satisfaction that
comes from the greater degree of contentment and self-respect
enjoyed by the farmer and his family.

New buildings and fences. In the construction of new
fences and buildings there seems to be no settled practice. In
some cases the landlord provides the material, performs all of
the work, and pays for the board of the workmen, the tenant
hauhng the material from the nearest station and boarding the
workmen at a fixed rate. In other cases the tenant performs all
of the unskilled labor and boards the skilled laborers without
charge while making the improvement.

Repairs on fences afid buildings. The common practice in
all forms of leases in the Northern States is for the landlord to
furnish the material and the tenant to do all the work required
in making ordinary repairs on fences and buildings. In some
cases a distinction is made between the " inside " fences and
the outside or " line fences," the landlord making the repairs
on the latter and the tenant doing the work required in making
repairs on the former.

Another plan which has been found more satisfactory in some
instances is for the owner of the land to pay the tenant a fixed
sum per day for time expended under the owner's supervision
in the construction and repair of fences and buildings and ad-
justing the rent accordingly. This may result in a more cheerful
service of the tenant in working on fences and buildings.

Some experienced landlords require the tenants to make good
at their own expense damages done to gates, barn doors, pumps,
etc., where the wear and tear is likely to be very great with a
careless tenant and very httle with a careful one. The practice
on some estates is for the landlord to furnish the parts of the
pump and the windmill which are subject to little wear, and to
require the tenant to furnish the wearing parts. This was sug-
gested by the difficulty met with in getting tenants to oil the
windmill. If the tenant owns the gearing and wheel of the

FORMS OF LAND TENURE IN THE UNITED STATES 277

windmill he is less likely to let the wheel run loose in a high
wind or let it run for weeks at a time without oil.

Fence posts. Where post timber is found in the farm wood-
lot it is common practice for the tenant to make the posts needed
for repairs. The main difficulty arises from the fact that tenants
do not often make the posts early enough to give them time to
season before they are put into the ground. The remedy
suggested by one landlord is to keep a supply of posts on hand
on the farm all the time and require the tenant to make, under
the direction of the landlord, as many posts each year as he has
found occasion to use. This problem is easily solved where the
landlord looks after all repairs and pays the tenant for his
labor in making repairs.

Firewood. It is the common practice where there is a wood-
lot on the farm, to allow the tenant to secure firewood free of
charge. It is often prescribed that only dead and down timber
may be taken for this purpose. In any case growing trees
should not be cut until all dead timber has been taken. It is
usually prescribed that all tops or slashings not taken for firewood
shall be piled and burned by the tenant.

The road tax. The general rule is for the tenant to work or
pay the road tax. It is often stated that in return for this service
the tenant shall be allowed to secure firewood from the farm,
although in some cases where this latter privilege is not granted
the tenant is required to work the road tax without any special
compensation beyond the use he gets of the road.

Duration of leases. There is perhaps more land let for
one year at a time or from year to year, than on any other terms
in the Corn Belt, and yet three-year leases and five-year leases
are very common, and leases for two years and for four years
have occasionally been noted. It is not uncommon to lease a
farm for a period of three or five years, and then allow the tenant
to remain on the farm from year to year after this period has
elapsed, in case this is agreeable to both parties. Another
method is to let the farm for one year with the agreement that
if the parties are both satisfied with the arrangement the first
year, the contract becomes good for two or four more years.

278 AGRICULTURAL ECONOMICS

It is generally agreed among landlords that a tenant will do
better if he can plan to remain for three or five years, than if
he is uncertain how long he may remain. One year is required
for the tenant to become acquainted with the farm.

On a dairy farm, where stock is let with the land, it is much
better that the same man should have charge of the cows for
a long period than for the tenants to be changing from year
to year. In case the cows are owned in partnership it is very
unsatisfactory to be dividing the herd every year. The follow-
ing quotation from a letter from a Wisconsin farmer, who lets
land on shares and furnishes a part of the stock, will help to
put this matter in a clear light :

"If I knew the man to be a good one, and one that would suit, I
would prefer to let for a term of years, say from three to five years,
as a man only gets started the first year, for he has the farm to learn,
and it is not best to be changing stock every year. I think if a tenant
knows this to be his home, he will take more interest in keeping up
the place. But if you are not sure the man will suit, or be satisfied
to stay, I should rent for one year, as it is very easy to continue the
old contract or make a new one, as the case requires."

If there is any difference, there seems to be more reason for
letting land for a number of years when let for cash than when
on shares. It is thought that the tenant will take much better
care of the land when he has it for a number of years.

The system of crop rotation should be taken into account in
determining the period of the lease, so that the tenant may have
time to complete the rotation. It is a well-recognized fact that
where the land is so operated as to prove most profitable in the
long run, the tenant is required to make investments in the form
of labor in improving the tilth of the soil, in hauling manure, and
sowing grass seeds, on which he can realize the full return only
after a number of years. For this reason it is thought best to let
land for several years at a time.

In Scotland this long ago led to the introduction of 19- and
2 1 -year leases, yet these very long-term leases have their objec-
tionable features even in Scotland, where the land is held in
large estates by rich men who have no thought of anything

TENANT FARMERS IN UNITED STATES PRIOR TO 1880 247

"When I called the family were from home, but in a few hours
Colonel Wadsworth, the younger son, visited me, in a most open and
kind manner pressingly invited me to take up my residence at his
father's house, an invitation which I accepted.

"I found the elder Mr. Wadsworth the very beau ideal of a fine
old EngHsh country gentleman : tall and graceful in person, and in
manners courteous, affable, and hospitable.

"Mr. Wadsworth's property comprises about forty miles of coun-
try, the richness and picturesque appearance of which it is impossible
in adequate terms to describe. Of this property Colonel Wadsworth
occupies 1600 acres, 1000 of which, in the Genesee flats, are alluvial
meadow land equal to any in the vales of Aylesbury and Buckingham.
"Mr. Wadsworth has a numerous tenantry, but under a tenure
which can yield neither profit to the landlord nor benefit to them-
selves ; they have no leases, but plow and sow from year to year,
the landlord receiving for rent a portion of the produce in kind.
His portion is ascertained on the field after the crop is reaped, and
is delivered by the tenants at an appointed barn where it is instantly
threshed out and the straw given to the winds. Such a system must
be a bar to every improvement ; it in fact operates as a prohibition
of all exertion and expenditure by the tenant for increasing the
fertility of his farm, it being unreasonable to expect that any tenant
will use exertions or lay out capital, where the landlord is to reap,
certainly a large share of the benefit thence accruing, and from the
precariousness of the tenure perhaps the whole. Mr. Wadsworth
therefore may go on to draw his share of the pittance of grain which
his tenants may under present circumstances be able or disposed to
raise, but he must lay his account that in these circumstances nothing
can be done by them to improve the soil and render it duly pro-
ductive. . . .

"Now, although Mr. Wadsworth is an acute well-informed man
who must have seen well and far before him, having at an early
period made an extensive purchase of land at a price greatly under
the value to which time and circumstances have raised it, yet it
appears to me he is much wedded to old customs, otherwise he would
at once perceive the advantage of dividing his estate into farms of a
proper size, erecting on them suitable buildings, and granting leases
for such a term of years as would insure to the tenants a return for
money expended on improvements. By similar means and by es-
tablishing and stipulating for judicious modes of culture, the value of

248 AGRICULTURAL ECONOAIICS

land in Scotland has in my own time been tripled; and I have no
doubt that by adopting them the value of Mr. Wadsworth's prop-
erty would be increased in the same ratio ; but I was unable by this
argument or by any other to persuade him to change his system of
tenancy." ^

This criticism by Captain Barclay, made in the face of the
fact that he had been entertained in the house of this American
country gentleman of the English type requires some explana-
tion. The original James Wads worth of Geneseo, while travel-
ing in Europe in connection with the sale of lands in western
New York, formulated the plan of establishing himself in the
Genesee Valley after the fashion of an English landlord. It
is fair to assume, therefore, that he was not without knowledge
of the English system of leasing land. That he should have
modified his system to conform to American conditions is a
mark of his sagacity. Furthermore at the time when James
Wadsworth was falling in love with the English landed estates,
letting land from year to year was the rule in England, but
a cash rent was the rule instead of a share of the crops. It
should be noted also that seventy years of experience has
proved that Captain Barclay's view on the subject of long
leases has not been adhered to in Great Britain.

Whatever truth there may have been in Captain Barclay's
criticism to ^he effect that the Wadsworth in charge of the
estate in 1841 was much wedded to old customs, the system of
rent paying on the Wadsworth estate had materially changed by
1867 and more or less in conformity to the suggestion of Barclay,
at least the rent had become a fixed charge instead of a share,
though the payment was partly made in kind.

In writing of tenant farming in 1 8 6 7 , a correspondent of the New
England Farmer residing in Orleans County, New York, said :

"Probably one of the best systems of tenant farming in this covm-
try is that adopted on the Wadsworth farms, in western New York,
which are only let from one year to another. But then no tenant is
turned off without cause; the rule being never to turn off a good
tenant, nor keep a poor one. These farms are managed by an ex-
1 "Agrioiltural Tour in the United States," pp. 36, 38, 44. '

TENANT FARMERS IN UNITED STATES PRIOR TO 1880 249

perienced agent, who each year directs which fields are to be sown
to wheat, which put into spring crops, and which mowed or pastured ;
all being arranged in rotation, so as to keep the land in good condi-
tion, and give a reasonable chance to make m.oney. The rent being
a certain amount of wheat per acre, for the land sown to wheat ;
something less, in money, for spring crops ; less yet for meadow, and
least of all for pasture. The tenant also pays a moderate rent for
buildings and orchard, and all taxes. Repairs made by tenant, new
buildings and fences by landlord. Stipulations in regard to seeding
down and making manure are favorable to the land, without being
hard on the tenant. About one-fi^fth of the farm is generally sown
to wheat, which gives a good income to the proprietor, and a good
chance to make money to the tenant." ^

While the methods of letting land on the Wadsworth estate
have not conformed very closely in detail to the English system,
the general principles of estate management are essentially
the same. The estate agent is found performing the same
functions as in England and the idea of living after the fashion
of the EngHsh country gentleman has not been lost sight of by
the present generation. In 1907 one driving about Geneseo
might meet upon the road a carriage party driven by a liveried
coachman similar to that of an EngHsh squire or a Scottish
laird. Considerable space has been given to the Wadsworth
estate because it is a rare instance of a landed estate of the
EngUsh type in America.

Tenant farming in New York was not confined to large
estates. An instance is given of a dairy farm with 25 cows in
Herkimer County which had long been operated by the owner
but which was being operated by a tenant in 1845.^ In the
sheep regions of New York and Vermont farms were sometimes
let to tenants who owned a half interest in the " sheep and other
stock." 3

To quote from The Cultivator of 1844, " The practice prevails,
to some extent, of letting farms to tenants, and receiving in the
shape of rent a portion of the produce in kind, say a third, half,

1 New England Farmer, 1867, p. 97.
* The Cultivator, 1845, p. 84.
*Ibid., 1846, p. 287; 1849, p. III.

250 AGRICULTURAL ECONOMICS

or two thirds, varying with the amount of stock, seed, etc.,
furnished by the proprietor." ^ This probably relates to the
state of New York.

H. L. Ellsworth, an owner of large areas of land near La-
fayette, Indiana, throws some light upon tenant farming in
Indiana in 1845 : "I was offered sixteen bushels of corn as
rent, per acre, instead of one-third of the crop which is the usual
share for the landlord. I have rented one thousand acres of
ground for sixteen thousand bushels of shelled corn delivered in
the crib." ^ Similar methods of renting land were in use near
Coshocton, Ohio, where in 1850 there were " many large land-
holders," some of whom rented out their lands on shares, or for
20 bushels of com per acre. The tenants occupied only from
year to year.^

As far west as Oskaloosa, Iowa, farm land was rented to
tenants as early as 1858.^ In lUinois, in 1859, when land could
be purchased for $2.50 an acre land was let to tenants for a
share of the grain. ^ Near Belvidere, lUinois, in i860, a region
which had been settled about 25 years, the " renting so many
farms without having them stocked " is mentioned as having
a bad effect upon the agriculture of the region, but is explained
by the lack of capital.^ Near Madison, Wisconsin, a landlord
was advertising for a man " to carry on a large farm either
as foreman or on shares, for a term of years." ^

These statements give no basis of passing judgment on the
question as to the numerical importance of tenant farmers prior
to the Civil War, but they give such evidence of the existence of
tenancy as keep the student from being surprised when he comes
upon the statistics of tenancy in 1880 and finds that a fourth of
the farmers did not at that time own the acres they tilled.

1 The Cultivator, 1844, p. 151. ^ Pat. Office Report, 1845, P- 384.

' The Cultivator, 1850, p. 358. * Country Gentleman, 1858, Vol. XI, p. 33.

* Caird, "Prairie Farming in America."

'Country Gentleman, i860, Vol. XV, p. 234.

' The Wisconsin Farmer, 1859, Vol. XI, p. 72.

CHAPTER XXI

FARM OWNERSHIP AND TENANCY IN THE UNITED STATES

SINCE 1880

In 1880 there were 4,008,907 farms in the United States.
Three-fourths (74.44 per cent) of these farms were occupied by-
owners, while one-fourth (25.56 per cent) were operated by ten-
ants. The tenant farmer was not confined to the older parts
of the United States. The renting of farms was practiced in
the regions of most recent settlements as well as in the older
states of the East. Tenants were found on the very margin of
cultivation in central Kansas. In Illinois there were more
tenants than in any other state in the Union. The percentage
of all farms operated by tenants was only 8.2 in Massachusetts,
and 16.5 in New York and in Pennsylvania, while 31.4 per cent
of the farms of lUinois were operated by tenants.

In 1910 there were 6,361,502 farms in the United States, 63
per cent of which were operated by the owners directly or
through hired managers, while 37 per cent were operated by
tenants. The greater part of this increase took place prior to
igoo. The percentage of tenants in 1900 was 35.3. Thus the
percentage of tenancy increased only 1.7 between 1900 and
1910, while the percentage rose from 28.4 in 1890 to 35.3 in
1900, an increase of 6.9. Our chief attention should be given,
therefore, to the explanation of changes in tenancy prior to
1900. The tenure statistics for the four census dates for which
such statistics are available are not exactly comparable. For
1900 and 1910 farms operated by owners are divided into three
classes. In 19 10 those owning all the land they operated repre-
sented 52.7 per cent of all farmers, those renting additional
land 9.3 per cent, those operating through hired managers .9
per cent. The percentage of the improved land operated by
tenants was 32.7 in 1910. The percentage in 1900 was 30.2.

351

252

AGRICULTURAL ECONOMICS

Thus in terms of area, tenancy has not made quite as great
inroads as the percentage of farms operated by tenants would
indicate. The increase between 1900 and 1910 is greater, how-
ever, in terms of improved land than in terms of farms.

The percentage of tenancy was higher in many southern
states than in Illinois, but it does not necessarily follow that
a higher proportion of the farm land in the South was rented.
In the South tenant farms were usually small and owned farms
were generally large. This is shown in the following table :

TABLE XVIII

Percentage under 50 Acres of All Farms Operated by Tenants or

BY Owners

1880

State

Tenants

Owners

United States
Alabama . .
Georgia . .
Mississippi .
So. Carolina
Illinois . .
Indiana . .
Iowa . . .
Ohio . . .

49-25
74-55
63-57
74-56
79-35
30-51
36.77
19-73
29.26

22.48

15-50
11.64

13-94
20.85
19.79
26.59
14.38
30.49

In the four corn states under consideration in this table, there
is no such marked difference in the proportion of rented and of
owned farms under fifty acres. This gives ground for the
belief that the percentage of the agricultural area operated by
tenants in the South was much smaller, in 1880, than the per-
centage of farms operated by tenants.

A share of the product was the most common form of rent
throughout the Union in 1880, with the exception of a few
counties in the Cotton Belt where the rent took the form of a
specified amount of cotton and was counted as cash rent in the
census reports. Of all farms in the United States 17.52 per
cent were operated by share tenants, 8.04 per cent by cash

FARM OWNERSHIP AND TENANCY IN UNITED STATES 253

254

AGRICULTURAL ECONOMICS

FARM OWNERSHIP AND TENANCY IN UNITED STATES 255

2S6 AGRICULTURAL ECONOMICS

tenants, and 74.44 by owners. This predominance of share
tenancy explains why references to tenancy in the Hterature
of the earher decades related so generally to share tenancy.
Share tenancy had many forms and was common. Cash
tenancy was less common and was more simple and less varied
in form, hence cash tenancy was discussed less than share
tenancy.

The decade following the census of 1880 brought an increase
of a half million in the number of farms. The increase in tenant
farmers was more than proportionate, and the percentage of
share tenants rose to 18.41, that of cash tenants to 9.96, while
the percentage of owners fell to 71.63. In the decade from 1880
to 1890 share tenants increased in numbers in the new grain-
growing region of Minnesota, the Dakotas, Nebraska, and
Kansas. There was a marked increase in the nmnber of share
tenants in the cotton regions of Texas, Mississippi, and Georgia.
Cash tenants increased markedly in the cotton region of South
Carohna, Alabama, and the alluvial of the Mississippi.

The next ten-year period brought an increase of more than a
million in the number of farms, but in spite of the increase in
farms, the percentage of tenancy increased more rapidly than
in the preceding decade. In 1900 share tenants constituted
22.2 per cent, cash tenants 13. i per cent, leaving 64.7 per
cent representing farms operated by owners or part owners
directly or through hired managers. It will be noted that cash
tenants increased at a more rapid rate than share tenants.
This was especially true in those cotton states where negroes pre-
dominated. In Texas where cotton is grown largely by white
farmers there was an increase from 33.1 to 42.4 in the percentage
of share tenants and a decline from 8.8 to 7.3 in the percentage
of cash tenants. In South CaroHna the percentage of cash
tenancy increased from 27.75 ""^ 189° to 36.7 in 1900, while the
percentage of share tenancy decreased from 27.5 to 24.3. But
the more rapid increase in cash tenancy was not confined
entirely to the South. In Iowa the percentage of cash tenants
increased from 12.35 ^^ 1S90 to 19.5 in 1900, the percentage
of share tenancy declined from 15.7 to 15.4 in the same period.

FARM OWNERSHIP AND TENANCY IN UNITED STATES 257

In the South regions of cash tenancy are more generally
regions of negro tenants. In the Black Prairie of Texas, where
share tenants are very numerous, negro tenants are scarce
and white tenants are present in great numbers. In the Yazoo-
Mississippi delta, where with the exception of two counties cash
tenancy prevails, negroes constitute almost the whole tenantry.
The same is true of the Black Prairie of Alabama and eastern
Mississippi. In Georgia and South CaroHna negro tenants
and cash tenancy are associated together while farther to the
north and northwest, in these two states, where share tenancy
prevails, the negro tenant is not common, while white tenants
are found in abundance.

It should be borne in mind that the cash rent of the Cotton
Belt is not necessarily a fixed amount of money. It is very
commonly a fixed amount of cotton. Furthermore it should not
be inferred that cash rent necessarily represents a higher form
of tenancy tJian share rent. These subjects will be discussed
in detail in later chapters on the methods of renting land. The
purpose here is to show the trend of affairs with regard to the
increase in tenancy.

By comparing the figures one will be impressed with the
enormous increase in the number of tenants between 1880 and
1900. During this twenty -year period the total number of farms
increased 43 per cent, wliile the number of farms operated by
cash and share tenants increased 98 per cent. These questions
properly arise : Why should the percentage of tenancy increase
so rapidly during a period when so many new farms were becom-
ing available ? Is it not true that these new farms have been
secured by taking up new lands at a low price which is conducive
to an increase in the ownership of land on the part of tenants ?
In answering these questions many facts need be taken into
account. It is true, when the United States is considered as a
whole, that the area in farms has increased more rapidly than
has the number of farms, so the average size of farms was
greater in 1900 than in 1880. The average size in 1880 was
133.7 acres, while in 1900 it was 146.6 acres. But when the
specific states are considered in which tenancy has been in-

2S8

AGRICULTURAL ECONOMICS

creasing so rapidly, the matter appears somewhat different.
This is shown in the following table :

TABLE XIX

Average Size of Farms and the Number of Farms of 500 Acres and
Over in Specified States in 1880 and in 1900

1880

1900

State

Average
Size

Number of
Farms of
500 Acres

AND OVER

Average
Size

Number or
Farms of
500 Acres

AND OVER

Alabama

Georgia

Mississippi

South Carolina ....

139-
188.
156.
143-

6,513
10,508

5,769
5,328

92.7

II7-S
82.6
90.0

3,744

6,576
3,320
3,324

These figures suggest that the increase in tenancy may have
resulted from the breaking up of large farms into small holdings
let to tenants. All of the states in the above table showed a
marked decrease in the number of farms containing 500 acres
and over, and a great increase in small farms.

The decline in the number of large farms was not confined
to the Southern States. The number of farms of 500 acres and
over in Illinois decreased from 3898 to 2333, though there was
no important change in the average size of farms in that state
owing to counterbalancing changes in other size groups. In
Texas a breaking down of large farms into small ones was
going on in the Black Prairie, but this was more than counter-
balanced in the state as a whole by the development of large
ranches in the cattle country to the west and south. Hence,
this cotton and cattle state illustrates the way in which averages
covering diversified territory cover up the facts regarding the
tendencies in given regions.

That cotton production was gradually becoming organized

on a tenant basis instead of a wages system is further borne out

by statistics which show a decline in the expenditure for labor

in 1870 ^ and in 1900 in this region. There was a decline in the

> No statistics available for 1880, hence 1870 figures are used.

FARM OWNERSHIP AND TENANCY IN UNITED STATES 259

26o AGRICULTURAL ECONOMICS

wages system in the same regions where large farms were
decreasing and where small farms and tenant farmers were
rapidly increasing. These facts seem to bear out the theory
that in the Cotton Belt tenancy had increased at the expense
of the wage laborers and hence marked a rise in the status
of the tillers of the soil. The extent to which this change in
name corresponded to a real change in economic status will be
considered later.

Lest there should be a tendency to credit the high percentage
of tenancy in the South entirely to the presence of the negro,
who so recently started life as a freedman with nothing but his
hands, let it be noted that in the Black Prairie of Texas and in
the northern parts of the cotton regions of the older cotton
states, where the farmers are generally whites, the increase
in tenancy has gone on with very great rapidity if not quite as
rapidly as in the regions of negro tenants. By comparing the
location of slaves in i860 with the location of negro tenants in
1 9 10 it becomes obvious that in the southern states few negro
tenants were found in 19 10 beyond the regions where they were
abundant as slaves in i860. In the new cotton region of Texas
the whites have gone in to occupy the land. The remarkable
thing is that they are so generally tenants.

One hypothesis which may be ventured as an explanation of
this common fate of the whites of the new cotton region and the
negroes of the old cotton regions, is that while in the old slave
regions the wages system gradually gave way to a form of tenant
holdings which the census recognized as separate farms, there
was a breaking down of great cattle ranches in Texas into
small farms and that white immigrants, largely from the older
cotton states, went in as tenants of the large proprietors. The
two cases had this in common that the land had previously been
acquired in large estates. The breaking down of large farms
does not imply the breaking down of estates. The change may
have been in the landlord's method of operating his land.

The change from large farms operated by hired laborers to
estates of small farms operated by tenants is not a complete
explanation of the increase in tenancy.

FARM OWNERSHIP AND TENANCY IN UNITED STATES 261

It is a matter of common observation that in the northern
states, young men start in as laborers, become tenant farmers,
and later buy farms and join the ranks of landowning farmers.
The above facts show that in the southern states the movement
from the wage earners to tenant farmers was abnormally rapid
between 1880 and 1900, due to a reorganization of the methods
of handling landed estates. To some extent this same move-
ment was in evidence in central IlUnois and in other northern
states, but there are facts which tend to show that the increase
in tenancy was due in part to a slowing down of the movement
from tenancy to ownership. This is shown in the following table :

TABLE XX
Percentage of Persons Owning and Renting Farm Homes

1890

1900

Owned

Rented

Owned

Rented

Under 25 years

25 to 34 years

35 to 44 years

45 to 54 years

SS years and over

32.6
49.8
64.0

72.3
82.2

67.4
50.2
36.0
27.7
17.8

27.8

45-3
64.4
70.7
81.4

72.2
54-7
35.6

29-3
18.6

This table indicates that nearly three-fourths of the farmers
under twenty-j&ve years of age are tenants ; that the percentage
of tenant farmers declines, and the percentage of landowning
farmers increases, as we pass from the younger to the older age
periods, until less than a fifth of the farmers who are fifty-five
years of age and over are tenants.

Statistics of this kind were first collected in 1890, and while
they showed the status at that time and suggested a movement
from tenancy to landownership, they did not prove the existence
of such a movement. By comparing the figures for 1890 with
those for 1900, this movement is clearly shown. The occupiers
of farm homes who were from 25 to 34 years of age in 1890, were
from 35 to 44 in 1900. By comparing these occupiers at the
two dates, we find an increase in the percentage of home owners,

262

AGRICULTURAL ECONOMICS

FARM OWNERSHIP AND TENANCY IN UNITED STATES 263

e>

* ,

264

AGRICULTURAL ECONOMICS

from 49.8, in 1890, to 64.4 in 1900. Of the farm-home occupiers
belonging to the age period from 35 to 44 in 1890, and to the age
period 45 to 54 in 1900, 64 per cent were owners at the earher
date, and 70.7 per cent at the latter.

TABLE XXI

Percentage of Farm Homes Classified by Tenure and Age of Farmer,

1900

State

Per Cent

Per Cent

Per Cent

Owned

Rented

Unknown

United States

Under 25 years . .

27-35

71.07

1.58

25-34 years . . .

44-85

54-17

.98

35-44 years . . .

64.02

35-35

.63

45-54 years . . .

70.34

29.15

•SI

55-64 years . . .

78.64

20.85

•51

65 years and over .

84.29

15.00

.71

Alabama

Under 25 years . .

18.56

80.24

1.20

25-34 years . . .

32.53

66.61

.86

35-44 years . . .

47.67

51.69

.64

45-54 years . . .

45-92

53-49

-59

55-64 years . . .

51.78

47-55

-67

65 years and over .

56.18

42.98

.84

Georgia

Under 25 years . .

15-23

83.03

1-74

25-34 years . . .

27.67

71.21

1. 12

35-44 years . . .

42.00

57-14

.86

45-54 years . . .

46.64

52.61

•75

55-64 years . . .

50-94

48.31

-75

65 years and over .

57-91

41.05

1.04

MissisBippi

Under 25 years . .

15.21

83-53

1.26

25-34 years . . .

27.31

71.90

•79

35-44 years . . .

38-37

60.89

•74

45-54 years . . .

45-67

53-72

.61

55-64 years . . .

46.53

52.86

.61

65 years and over .

49.72

49-56

.72

Texas

Under 25 years . .

20.05

79.08

.87

25-34 years . . .

34-48

64.90

.62

35-44 years . . .

52.98

46.63

•39

45-54 years . . .

60.04

39.61

•35

55-64 years . . .

68.31

31-33

•36

65 years and over .

74.06

25-34

.60

nnnoii

Under 25 years . .

23-69

74-67

1.64

25-34 years , . .

35-63

63.26

I. II

35-44 years . . .

56.83

42.51

.66

45-54 years . . .

69.58

29.84

.58

55-64 years . . .

81.15

18.28

•57

65 years and over .

88.53

10.62

.85

FARM OWNERSHIP AND TENANCY IN UNITED STATES 265

TABLE XXI (Continued)

Age

Per Cent

Pee Cent

Per Cemt

State

Owned

Rented

Unslnown

Indiana

Under 25 years . .

29.38

68.76

1.96

25-34 years . . .

47.63

51-51

.86

35-44 years . . .

67.56

31.89

•55

45-54 years . . .

77-95

21-57

.48

55-64 years . . .

87.10

12.45

-45

65 years and over .

91.71

7-58

-71

Iowa

Under 25 years . .

23.66

74-88

1.46

25-34 years . . .

29.08

69.92

1. 00

35-44 years . . .

70.65

28.88

-47

45-54 years . . .

76.24

23-35

.41

55-64 years . . .

85.20

14.18

.62

65 years and over .

90.50

8.6t

.89

North Dakota

Under 25 years . .

82.97

15-37

1.66

25-34 years . . .

86.44

12.52

1.04

35-44 years . . .

90.40

8.88

.72

45-54 years . . .

92.17

7-32

.51

55-64 years . . .

93-56

5-74

.70

65 years and over .

93-86

5-11

I -03

Massachusetts

Under 25 years . .

57-54

39-67

2.79

25-34 years . . .

70.30

27.91

1.79

35-44 years . . .

80.74

18.74

.83

45-54 years . . .

87-43

12.02

.55

55-64 years . . .

92.61

7.04

.35

65 years and over .

95-04

4.28

.68

Nebraska

Under 25 years . .

26.53

71.80

1.67

25-34 years . . .

42-34

56.6c

.97

35-44 years . . .

64.07

35-31

.62

45-54 years . . .

75-56

23.90

.54

55-64 years . . .

82.80

16.65

•55

65 years and over .

85.24

13.64

1. 12

New York

Under 25 years . .

36.40

61.77

1.83

25-34 years . . .

50.53

48.40

1.07

35-44 years . . .

67.10

32.22

.68

45-54 years . . .

77.89

21.71

.40

55-64 years . . .

85.96

13.60

-44

65 years and over .

91.69

7-75

.56

Wisconsin

Under 25 years . .

57.76

40.93

1.31

25-34 years . . .

72.47

26.73

.80

35-44 years . . .

85.70

13-92

.38

45-54 years . . .

91.05

8.61

•34

55-64 years . . .

94.42

5-16

.42

65 years and over .

95-23

4-09

.68

266 AGRICULTURAL ECONOMICS

These figures indicate a constant movement from tenancy to
landownership. But, from generation to generation, a smaller
percentage of the farmers are able to make this transition. It
should be noted in the above table that of the occupiers of farm
homes who were under 25 years of age, a smaller percentage
were owners in 1900 than in 1890. This is true for every age
period given in the table except one; the reverse being true
for the period from 35 to 44. This suggests that the decline
in the percentage of landownership is due, in part, to the in-
ability, or disincUnation, of the succeeding generation to acquire
landownership so generally as their predecessors.

The movement from tenancy to ownership has been more
complete in some parts of the United States than in others.
This is shown in the previous table, which shows the farm
homes of selected states classified by tenure and by age of the
farmer.

These figures show that in those southern states where negro
farmers are dominant the movement from tenancy to ownership
is far less pronounced than in Texas where the whites predomi-
nate over the blacks. In the Northern States farmers appear to
be highly successful in becoming the owners of farms. Even in
Illinois, where 39.3 per cent of the farmers were tenants, all but
about one-tenth of the farmers 65 years of age and over had
succeeded in becoming owners. The residuum of tenants left at
this age was 8.6 per cent in Iowa, 7.6 per cent in Indiana, and
only 4.1 per cent in Wisconsin. To contrast the old with the
new, Massachusetts showed 4.3 per cent and Nebraska 13.6
per cent of tenancy among farm-home owners 65 years of age
and over. That this contrast is not general is shown by the
fact that in North Dakota the percentages of tenancy among
these older farmers was only 5.1.

A proper conception of the economic status of the American
farmer at the close of the nineteenth century must give proper
emphasis to the fact of landownership on the part of farmers.
In the North landowning farmers generally predominated. In
the Cotton Belt tenants outnumber the landowning farmers.
Figure 12 shows the distribution of landowning farmers in

FARM OWNERSHIP AND TENANCY IN UNITED STATES 267

1910. The small number of owners in that region is indicative
of the fact that in the South there is a distinct tenant class.

In the Cotton Belt the land is still in the possession of a land-
lord class. In parts of Virginia where the land has not been
so generally retained in large estates, the percentage of land-
owning farmers among the negroes is very high. This can be
explained in part by the lack in eastern Virginia of a great staple
crop like cotton which would make profitable the operation of
plantations by tenants, and partly by the fact that the negroes
of Virginia are a higher type than those of the Cotton Belt.

The apparent superior economic position of the northern
farmer is somewhat reduced when the question of mortgage
indebtedness is raised. In 1900, 30 per cent of the farm homes
occupied by owners were mortgaged. The census for 1900
shows a more complete analysis of the farming classes by tenures
than do the census reports for 1880 and 1890. Those other
than cash and share tenants renting all the land they cultivated
were divided into four classes, namely, owners, 54.9 per cent,
part owners, 7.9 per cent, owners and tenants, .9 per cent, and
managers, i per cent. The practice of farming a tract of rented
land in addition to the land owned seems to have been a common
practice in many of the grain-growing sections.

Farms operated by managers were not so numerous but were
more generally large farms, so that while they are only i per
cent of the farms they represent 10.7 per cent of the aggregate
area in farms. In spite of the fact that these farms include
many of the country homes of wealthy city folk, the cheap areas
of the West included in these managed farms reduce their value
to only 5.5 per cent of the aggregate value of farms.

The position of the tenant farmers is better understood when
one knows more of the character of the landlords whose land
they cultivate. It has been shown that in the North most
tenant farmers sooner or later become landowning farmers, while
in the South a very large proportion of the tenants never rise
to the position of landowners. The vast majority of the rented
farms in the North are owned by men who have passed through
various stages of acquiring land for their own use, and who are

268 AGRICULTURAL ECONOMICS

found in the landlord class only in the later years of their lives.
In the southern states, in the region of negro cotton tenants,
there is a landlord class whose hfe work is the management of
landed estates operated by tenants.

Great landed estates, such as the Scully and the Sibley
estates in IlHnois, and the Wadsworth estate in New York,
are found here and there in the North, but they are exceptions.
As a rule the landlords are retired farmers. Even in the South,
outside of the areas densely populated with negroes engaged
in cotton production, which is equivalent to saying outside of
the regions where large cotton plantations were operated by
slaves in i860, the landlords with but one or two tenants are
most common.

The statistics relating to the ownership of rented farms in
1900 were published for no territorial unit smaller than the
state, hence the statistics do not show the contrast within the
southern state with respect to the size of estates in the counties
where negro tenants predominate in numbers and in the counties
where white tenants are in the majority, but the influence of
the old cotton plantation system and its reorganization upon
the statistical averages for the South is shown by the fact that
while only 2 per cent of the rented farms owned by residents
of the North Central States were in estates comprising ten farms
or more, the percentage of farms of the same class in the South
Central States was 20.9.

Landlords in the United States, whether they belong to the
numerous class of retired farmers or to the small class of owners
of great estates, are, as a rule, residents of the district in which
their lands are located. " Of the 1,934,346 farms in the United
States for which the names and post-office addresses of the
owners were reported, the owners of 1,523,863, or 78.8 per cent,
resided in the same county in which their farms were located ;
307,656, or 15.9 per cent, in the same state but not in the same
county ; 102,827, o^ 5.3 per cent, outside of the state (of which
1097, or .051 per cent, were in foreign countries). Many
residing in the same state, but not in the same county, had
homes very near their rented farms. This was notably the

FARM OWNERSHIP AND TENANCY IN UNITED STATES 269

case with farms located near county lines. Such owners can
hardly be classed as non-residents, and the very small per cent
of rented farms owned by non-resident landlords would have
been still further reduced if it had been practicable to exclude
such owners.

" The Western division had the smallest proportion of rented
farms whose owners resided in the county where their rented
farms were located. . . . The South Central and South
Atlantic divisions had the largest proportion of owners residing
in the county where their rented farms were located. . . .
The North Central division had the largest, and the Western
the next largest, proportion of rented farms with owners residing
outside of the state." ^

The character of the landlord has great significance when
viewed from the standpoint of the tenant farmer who hopes
to rise to the position of a landowning farmer. Land leased by
the retired farmer is not held out of the market for many years,
because of the limits set to Hfe. Upon the death of the retired
farmer, if not at an earher date, the land is divided among heirs
or sold to settle the estate. This brings land upon the market
and helps those who inherit the proceeds to buy farms. Per-
manent landed estates managed by a landlord class keep land
oflf the market so far as tracts of a size which a small farmer
can buy are concerned, and the influence of inheritance is to
maintain the landlord class. The permanent landlord class
trained to manage estates operated by tenants is, however, not
without its redeeming feature, as any one will conclude who
studies the present methods of operating landed estates in the
regions of negro tenants in the South to-day. Trained land-
lords with large estates are, as a rule, more agreeable for a
tenant, white or black, to deal with than are the retired farmers
who enter the landlord class for a few years late in life.

» Twelfth Census of the United States, 1900, Vol. V, p. Ixxxvii.

CHAPTER XXn

FORMS OF LAND TENURE IN THE UNITED STATES

IS A CERTAIN AMOUNT OF TENANCY A GOOD THING ?

In the discussion of the size of farms it was noted that for a
given farmer engaged in a given type of farming at a given
stage in his own development, and with given conditions with
respect to wages, interest, land values, and prices for his prod-
ducts, there is a size of farm which will pay him best. The
question now to be taken up relates to the various ways in which
he can get the use of the amount of land he finds it most profit-
able for him to operate.

Few young farmers are financially able to own the amount of
land they can operate to best advantage. If each man operated
the land he is capable of owning, many young farmers would
be operating farms too small for their energies, and many old
farmers would have in hand far more land than they could
utiUze advantageously, to the loss of the young farmer, the old
farmer, and the people of the nation who consume farm
products.

Farm tenancy is an institution which provides for getting the
land into the hands of those who are in a position to cultivate it,
but who are unable to buy farms. In its best forms, tenancy
in a limited amount may be a good thing. In igio there were
2,354,676 or 37 per cent of the farmers of the United States
reported as tenants who owned none of the land they farmed,
and 593,825 or 9.3 per cent who leased part of the land they
cultivated. Thus, it would seem that nearly half of the farmers
are using tenancy as a means of securing the use of the land
they feel capable of operating, but which they are not yet able
to own. It is, therefore, a matter of great importance that the
methods of leasing land be such as will be conducive to good

S70

FORMS OF LAND TENURE IN THE UNITED STATES 271

farming and to the well-being of the tenant farmers and to the
nation as a whole.

A large proportion of the tenant farmers are young men who
are in the process of earning enough money to buy a farm.
This is especially the case in the Northern States. In Illinois,
for example, nearly 44 per cent (43.77) of farm homes which
were rented were occupied by persons under thirty-five years
of age, whereas less than 15 per cent of those owning their farm
homes were under thirty-five years of age.

The owners of rented land are quite generally older farmers
who have retired or who have more land than they wish to
farm ; 80 per cent of the owners of rented land have but one
farm let to tenants, 11.4 per cent have but two, 5.4 per cent
have three or four, 2.3 per cent have five to nine, .7 per cent have
ten to nineteen, .2 per cent have twenty or more farms. Taking
the United States as a whole the large estate made up of rented
farms is the exception and the landowner with one or two
farms to rent is the rule. In a vast number of cases the tenant
is the son or son-in-law of the landlord. At the time when the
parents are ready to retire from the active duties the farm
is usually turned over to one member of the family on a tenant
basis, with the expectation that in time title to the farm will be
secured by the tenant and he will become the owner of the farm.

While tenancy is common at the present time and has been
present in the United States since the beginning of our nation, it
has ever been looked upon merely as a stepping stone, a
temporary means of acquiring the use of land, and not as a
permanent condition for any individual. The statistics show
an increase in the percentage of tenancy, however, and it appears
that, on the average, farmers grow older as tenants than they
did when land values were lower. One important subject
of consideration relates to the means of maintaining the move-
ment from tenancy to ownership. This will receive especial
consideration in a later chapter. In this chapter especial
attention will be given to the methods of renting land with a
view to the right use of the land and to the equitable distribution
of the products of the land.

272 AGRICULTURAL ECONOMICS

Points to be considered in renting land. The first point to
be considered by the landlord is the character of the tenant
to whose care he is to commit his farm. Honesty is the first
essential, without which the farm may be damaged within a
year to an amount greater than the annual rent.

Young men who desire to succeed as tenant farmers cannot
have the importance of honesty too strongly impressed upon
them. The efficient young man who is honest finds no difficulty
in gaining control of land and capital, but no one with capital
will have anything to do with a dishonest tenant if he knows him
and can get any one else. Many men do things which they
count very shrewd, but which at once puts them in the class
of men who have to be watched, and it is a general principle
that the greater the risk the higher the rate of profit which
the capitalist should demand. The honesty of the tenant in-
sures the landlord against the losses he is in danger of sus-
taining if the tenant is dishonest. The landlord can afford, and
is usually willing, to pay a liberal premium for this insurance.

Efficiency is equally important. If the farm is let on shares,
the income of the landlord is dependent upon the efficiency of the
tenant. If let for cash, it is much better to have a capable
tenant who can pay the rent with ease, since the reputation of
the farm depends upon the success of the tenant. Every tenant
has a record, — look into this record before making a contract.

The tenant should be in possession of a requisite amount of
capital to operate the farm effectively. This amount will de-
pend upon the type of farming and the form of tenure. It
is a common practice for the landlord to supply a large
proportion of the operating capital where he is assured of the
honesty and efficiency of the tenant. It does not make so
much difference who provides the capital, the important thing
is that the capital certainly be provided.

The Farm and the Landlord

In choosing a farm, consider its suitabiUty to the type of
farming most congenial to the tenant, location with respect to
markets, schools, etc., the qualities of the soil, the arrangement

FORMS OF LAND TENURE IN THE UNITED STATES 273

of the fields and buildings for economy of labor, the size of
the farm, whether it will give full scope to the energy of the
tenant, the water supply, and the sanitary conditions of the
home. Ascertain if there has been any sickness in the family
or disease among the animals of the former tenant. The fair-
ness of the rent asked should be looked into by the tenant.
By making inquiry of the outgoing tenant, the neighbors, the
thrasher man, and the operator of the local creamery or cheese
factory, the prospective tenant can get information on many
of these points and at the same time ascertain the amount of
the income, the expenditures, and other factors which will show
the possibilities of the farm.

The farm being found satisfactory, make sure that the land-
lord is a fair-minded man, capable of giving good advice but
not overfree with his suggestions nor overinsistent upon his
own notions being followed in detail. A nagging landlord
makes the day long and the work tiresome.

The landlord should try to see the situation from the view-
point of the tenant as well as his own and then strive to be
fair. This will pay not only in the satisfaction that results
from being decent with one's fellow-men, but also in greater
returns from the farm. The landlord who takes advantage of a
tenant who is striving to do the right thing, and " grinds him
down," may gain a few cents in the beginning, but he will
lose dollars in the end. He will gain the reputation of being
a grasping landlord. Good tenants will avoid him, for it is
true not only that the efficient farmers tend to get the most
productive land, but also that the honest tenant tends to get
the honest landlord.

What the lease should contain. The lease should contain a
description of the land (the description found in the deed to the
land), the buildings, and such other property belonging to the
landlord as may be involved in the agreement.

Uses oj property. The uses and the limitations upon the
uses to which the property may be put by the tenant should
be stated specifically in the contract. For example, the land
to be retained in permanent pasture should be described, the

274 AGRICULTURAL ECONOMICS

area to be kept in meadow stated, the crops which are not
to be grown named, the uses named for which trees may be
cut, etc.

Disposition of products. It is through the regulation of
what crops are to be produced upon the farm, and the forms
in which the products of the farm are to be disposed of, that
the farming may be directed along lines least exhausting to the
soil. In general, tenant farmers are too much inclined to sell
grain and hay rather than live stock and dairy products. This
is partly due to the lack of capital on the part of tenant. Re-
strictive clauses in leases which require that all hay, straw, corn
fodder, corn, etc., be fed upon the farm should be accompanied
with provisions enabling the tenant to secure the necessary
animals to consume these products.

Use oj manure made on thejarm. The manure made upon
the farm, from feeds produced thereon, belongs to the land,
and in no case should any tenant be allowed to remove this
manure from the land. Danger from this source arises most
commonly in the case of farmers who own a farm and hire ad-
ditional land. Land leased in this way should receive its pro
rata share of the manure.

Contracts usually provide that the tenant shall spread all
manure upon the land at such points as the owner shall direct.
This clause is more or less useless, as a new tenant will gladly
haul all the manure he can find, while a tenant who expects to
leave before another cropping season cannot easily be forced
to haul manure for his successor. The obvious remedy is to pay
the tenant for hauling the manure from which he is to derive
no benefit or else not expect him to perform this service.

Purchase of feed and fertilizers. In order that the tenant
be not discouraged in buying feeds and fertilizers to be utilized
upon the farm the contract should provide for compensation to
the tenant upon the termination of his lease for the unexhausted
supplies of fertility placed in the soil from these sources. The
payment for such improvements should never be for more than
the benefit to be derived by the incoming tenant. Unwise
expenditures should be the loss of him who makes them.

FORMS OF LAND TENURE IN THE UNITED STATES 275

Destruction of noxious weeds. Great care should be taken
to provide in the contract for the cutting of all noxious weeds
before they mature their seeds. A clause should be inserted
providing that in case the tenant neglects to destroy seed-bearing
weeds in proper season the landlord may enter with the necessary
help, destroy the weeds, and charge the cost to the tenant.

In the case of Canada thistles and quack grass, provision
should be made against the spreading of their roots over the
fields. These plants may have got a start along a fence rov;- or
along a ditch where the land has not been cultivated for years.
By plowing one furrow closer than has been the practice in a
place of this kind a great quantity of the roots may be loosened
and dragged out over the field. Danger of spreading these
plants should be guarded against strenuously. The saving of
the land from the encroachment of noxious weeds is even more
important, if there be any difference, than the avoidance of soil
exhaustion.

Where a state law requires the destruction of noxious weeds
it should be strenuously enforced. It is the duty of every
landlord and of every tenant to see that such laws are obeyed.

The landlord whose farm is foul with weeds should not ex-
pect the tenant who was not to blame for this condition of affairs
to clear the farm from these pests without compensation.
Where this work is not performed as a part of the regular culture
of the crops, the tenant should receive compensation in cash in
proportion to the service rendered. The landlord who does not
spend money in fighting the encroaching army of noxious weeds
will soon accept a much lower rent. Where the destruction of
weeds is a regular farm operation necessary to the production
of a crop the tenant should not expect other compensation than
that coming from increased production. The landlord whose
farm is clear of weeds can easily secure enough more rent to
make his activities and expenditures in the destruction of weeds
very profitable.

Value of a tidy farm. The landlord should take great care
to provide neat farm buildings and fences. The tenant should
agree to maintain a tidy appearance about the house, the barns,

276 AGRICULTURAL ECONOMICS

the feed lots, the fence rows, and every other part of the farm.
There is a considerable advertising value in good appearances
which should not be disregarded. Where it is not profitable in
dollars and cents it pays abundantly in the satisfaction that
comes from the greater degree of contentment and self-respect
enjoyed by the farmer and his family.

New buildings and fences. In the construction of new
fences and buildings there seems to be no settled practice. In
some cases the landlord provides the material, performs all of
the work, and pays for the board of the workmen, the tenant
hauling the material from the nearest station and boarding the
workmen at a fixed rate. In other cases the tenant performs all
of the unskilled labor and boards the skilled laborers without
charge while making the improvement.

Repairs on fences and buildings. The common practice in
all forms of leases in the Northern States is for the landlord to
furnish the material and the tenant to do all the work required
in making ordinary repairs on fences and buildings. In some
cases a distinction is made between the " inside " fences and
the outside or " Hne fences," the landlord making the repairs
on the latter and the tenant doing the work required in making
repairs on the former.

Another plan which has been found more satisfactory in some
instances is for the owner of the land to pay the tenant a fixed
sum per day for time expended under the owner's supervision
in the construction and repair of fences and buildings and ad-
justing the rent accordingly. This may result in a more cheerful
service of the tenant in working on fences and buildings.

Some experienced landlords require the tenants to make good
at their own expense damages done to gates, barn doors, pumps,
etc., where the wear and tear is likely to be very great with a
careless tenant and very httle with a careful one. The practice
on some estates is for the landlord to furnish the parts of the
pump and the windmill which are subject to little wear, and to
require the tenant to furnish the wearing parts. This was sug-
gested by the difl5culty met with in getting tenants to oil the
windmill. If the tenant owns the gearing and wheel of the

FORMS OF LAND TENURE IN THE UNITED STATES 277

windmill he is less likely to let the wheel run loose in a high
wind or let it run for weeks at a time without oil.

Fence posts. Where post timber is found in the farm wood-
lot it is common practice for the tenant to make the posts needed
for repairs. The main difficulty arises from the fact that tenants
do not often make the posts early enough to give them time to
season before they are put into the ground. The remedy
suggested by one landlord is to keep a supply of posts on hand
on the farm all the time and require the tenant to make, under
the direction of the landlord, as many posts each year as he has
found occasion to use. This problem is easily solved where the
landlord looks after all repairs and pays the tenant for his
labor in making repairs.

Firewood. It is the common practice where there is a wood-
lot on the farm, to allow the tenant to secure firewood free of
charge. It is often prescribed that only dead and down timber
may be taken for this purpose. In any case growing trees
should not be cut until all dead timber has been taken. It is
usually prescribed that all tops or slashings not taken for firewood
shall be piled and burned by the tenant.

The road tax. The general rule is for the tenant to work or
pay the road tax. It is often stated that in return for this service
the tenant shall be allowed to secure firewood from the farm,
although in some cases where this latter privilege is not granted
the tenant is required to work the road tax without any special
compensation beyond the use he gets of the road.

Duration of leases. There is perhaps more land let for
one year at a time or from year to year, than on any other terms
in the Corn Belt, and yet three-year leases and five-year leases
are very common, and leases for two years and for four years
have occasionally been noted. It is not uncommon to lease a
farm for a period of three or five years, and then allow the tenant
to remain on the farm from year to year after this period has
elapsed, in case this is agreeable to both parties. Another
method is to let the farm for one year with the agreement that
if the parties are both satisfied with the arrangement the first
year, the contract becomes good for two or four more years.

278 AGRICULTURAL ECONOMICS

It is generally agreed among landlords that a tenant will do
better if he can plan to remain for three or five years, than if
he is uncertain how long he may remain. One year is required
for the tenant to become acquainted with the farm.

On a dairy farm, where stock is let with the land, it is much
better that the same man should have charge of the cows for
a long period than for the tenants to be changing from year
to year. In case the cows are owned in partnership it is very
unsatisfactory to be dividing the herd every year. The follow-
ing quotation from a letter from a Wisconsin farmer, who lets
land on shares and furnishes a part of the stock, will help to
put this matter in a clear light :

"If I knew the man to be a good one, and one that would suit, I
would prefer to let for a term of years, say from three to five years,
as a man only gets started the first year, for he has the farm to learn,
and it is not best to be changing stock every year. I think if a tenant
knows this to be his home, he will take more interest in keeping up
the place. But if you are not sure the man wUl suit, or be satisfied
to stay, I should rent for one year, as it is very easy to continue the
old contract or make a new one, as the case requires."

If there is any difference, there seems to be more reason for
letting land for a number of years when let for cash than when
on shares. It is thought that the tenant will take much better
care of the land when he has it for a number of years.

The system of crop rotation should be taken into account in
determining the period of the lease, so that the tenant may have
time to complete the rotation. It is a well-recognized fact that
where the land is so operated as to prove most profitable in the
long run, the tenant is required to make investments in the form
of labor in improving the tilth of the soil, in hauling manure, and
sowing grass seeds, on which he can reaUze the full return only
after a number of years. For this reason it is thought best to let
land for several years at a time.

In Scotland this long ago led to the introduction of 19- and
2 1 -year leases, yet these very long-term leases have their objec-
tionable features even in Scotland, where the land is held in
large estates by rich men who have no thought of anything

FORMS OF LAND TENURE IN THE UNITED STATES 279

else than letting their land to tenants. In the United States
landowners are so generally retired farmers, whose farms are
likely to be sold in the course of a few years to men who will
farm their own land, that very long-term leases are out of the
question. Compensation for unexhausted improvements is the
remedy for many of the evils of short-term leases.

Amount of rent to be paid. The rent of a farm is the price
paid for its annual use either in the form of money or products.
The amount which should be paid depends upon the usefulness
of the land and the scarcity of farm land of the grade in question.
It is not always an easy matter to ascertain exactly what the
" square deal " is. The amount of rent which should be given
for the use of the land varies with the fertility of the land, the
local market prices of products, the distance and character of the
roads to the markets, the length of the term, the restrictions
under which the land is to be farmed, and the probability that
the tenant will improve a farm or bring about its deterioration.

In figuring on the amount which he can afford to pay, the
tenant should compare the opportunities offered and the rents
asked for as many farms as possible in order* to select the farm
which will enable him, after paying the rent and other expenses,
to have left the largest possible returns for his own labor and
capital.

No tenant should sign a contract until he sees clearly sources
of income over and above the amount of the rent, sufficient to
pay all annual expenses for labor and equipment, support his
family in accordance with the standards of the community, and
leave a surplus. This surplus is the ground for hope of be-
coming the owner of a farm. Every honest and efficient farmer
will be able to make a surplus from which to save if he is on
the right farm on the right terms. But this statement does
not give ground for the belief on the part of every tenant who
makes no surplus that his rent is too high. Before coming to
such a conclusion let the tenant makv, sure that he is an efficient
farmer. Let him compare his farming in every detail with
that of other men who are making a surplus, and this, if care-
fully done, will point to the true cause of the lack of profit,

28o AGRICULTURAL ECONOMICS

whether it be the terms of the contract or the methods of
farming.

The landlord should not be overzealous in driving a hard
bargain. The landlord who drives the hardest bargain often
finds himself beaten in the end. A farm, like a horse or a cow,
is more or less attractive and more or less useful according as
it is well or ill treated. Under proper management land may
be made to increase in productivity. It is equally true that ill
treatment may greatly reduce the fertility of the land. 111
treatment is the more to be feared for the reason that in this
way a tenant may sometimes increase his profits for the one
year. Hence the following quotations, from men who have
had long experiences in letting farms, are in point : "If you
try to get more than a fair rent, the tenant will take more
than the difference out of the property ; " and again, " Do not
beat a tenant before he comes, or he will beat you afterwards ;
give him a good * lay,' and in the long run it will pay you best ;
an honest, fair way will always win in the long run."

The tenant who makes the highest bid is not always the most
profitable man to have on the farm. Landowners have too often
overlooked the importance of having a thorough understand-
ing as to the way in which the land is to be used and the con-
dition in which the land and the buildings are to be left at the
end of the tenancy. A tenant can well afford to offer an extra
high rent for the use of the land for a year or two if he is free
to plow up the rich old pastures, produce the most exhausting
crops, and take no care to leave the farm in condition for mak-
ing a profit in the future. No landlord can afford to sacrifice
his capital for the sake of reaping a high rate of interest on his
investment for a short time. It is very important, therefore,
that the conditions of farming should be such as will guarantee
that the farm will be returned to the landlord in as good condi-
tion as it was at the beginning of the tenancy. This is not a
matter that can be provided for perfectly in the contract, even
if the tenant gives bond. To have to appeal to the law to en-
force one's rights is always undesirable. It is better to take a
smaller rent from a fair-minded man who can be trusted to

FORMS OF LAND TENURE IN THE UNITED STATES 28 1

do the right thing, than to take chances on a man of doubtful
character. In European countries where state-owned lands are
let to tenants the principle is well estabUshed that farms will
not necessarily be let to the highest bidder.

In share tenancy the ability of the tenant to manage a farm
is a matter which should receive more attention on the part of
the landlord than the exact terms of the contract. On a given
farm, stocked in a given way, one tenant will be able to sell
$3000 worth of products each year, and keep the farm in as
good condition as another tenant who may not be able to sell
more than $2500 worth of products. If the land is let for
one-half of the proceeds, this will make a difference of $250
in the income of the landlord. In order to get the better ten-
ant, therefore, the landlord can iafford to be liberal in making
the bargain. Even where the share of the product to be re-
ceived by the landlord is fixed by custom, there are many points,
such as the landlord's share of the poultry, the paying of the
thrashing bill, the twine bill, the amount of free garden land,
the free use of milk for the tenant's family, the colts, the horse
feed, etc., regarding which the landlord and the tenant must
bargain. Here is the opportunity for the owner to be liberal
and get a good tenant.

Where land is let, in accordance with the customs of the dis-
trict, for one-half of the proceeds, it is often more important
to the tenant that he should look out for the best farm, owned
by an agreeable and far-sighted landlord, than to stand out
too strongly on any small matter of detail as to what the land-
lord shall furnish. The same labor and capital may easily
bring a return 20 per cent larger on one farm than on another in
the same neighborhood, and this will more than compensate for
being liberal in matters of detail.

When the landlord seeks the best tenant he can get, and the
tenant seeks the best farm he can get, the result is Hkely to
be that the best tenant will be on the best land, and while the
tenant profits by being on the better land, the landlord profits
equally by having an excellent tenant on his farm. Large num-
bers of farmers have mentioned this point, and they generally

282 AGRICULTURAL ECONOMICS

agree that the best tenants do get the best rented farms, and
that the inefficient tenants have to take what they can get,
which is usually the more sterile or run-down farms. One land-
lord expressed himself as follows on this point :

"If you mean by the best tenant, the one who takes proper care of
the soil, and then makes the most money, one year with another, the
best tenants are on the best land. A good tenant gets a good farm,
and he can hold it. The inefficient tenant is always looking for a farm
and the landowners with good farms want only the best tenants ; so
the inefficient tenants are crowded to the poorer grades of land."

Time of paying rent. The lease should be most explicit as
to when payment of rent is to be made. Where the land is let
for a share of the proceeds, the common practice is to divide the
money as soon as the sales are made. It is very common for
the division to be made at the creamery or cheese factory, and
one check is sent to the landlord and another to the tenant.
Where land is let for cash, the practice varies widely, and yet
there is a tendency to make the time of payment conform to
the time when the tenant is likely to make sales. One-half at
the middle of the year and the remainder at the end of the
year is a common practice, with the modification that in the case
of the last year of the tenancy all payments shall be made one
month before the end of the year. Monthly payments are be-
ing introduced on dairy farms which are let for cash. This
conforms to the time of receiving payments for the milk and
grows very naturally out of a change from the share system to
the cash system on dairy farms.

Guarantee that the rent shall he paid. In many of the North
Central states, laws have been passed during recent years which
declare that the landlord shall have a Hen for his rent upon
all crops grown upon the leased premises. In others there are
no statutory laws providing for a landlord's lien, although, of
course, a lien can be created by agreement of the parties, if
properly made, and it is quite common to have a clause in the
lease which secures the payment of the rent. In some cases
the owner of the land requires that all of the products shall
remain his property until the rent is paid, and in some cases the

FORMS OF LAND TENURE IN THE UNITED STATES 283

tenant is authorized by the landlord to market the products in
sufficient quantity to pay the rent, after which he may dispose
of the remainder of the produce as he pleases. In some cases
the tenant gives a chattel mortgage to secure the payment
of the rent.

It is common for the landlord to remit a part of the rent in case
of a great disaster over which the tenant had no control, and
which makes it impossible to pay the rent from the year's
productions. This should become a well-established custom.
Good customs do much to insure happy relations between land-
lords and tenants. The best landlords realize that food for the
family of an honest, industrious tenant should come before
the landlord's rent. Well-estabHshed customs impel the less
well-disposed landlords to Hve up to the standards estabhshed
by the better landlords.

Enforcing the agreements. The lease should provide for en-
forcing the contract. Fines are sometimes provided in case of
failure to conform to the contract either by omission or com-
mission. It is sometimes agreed that in case either party shall
fail to perform his part in the agreement, as illustrated by an
example of the destruction of weeds by the tenant or the making
of an improvement by the landlord, the other party may hire a
third party to carry out the terms of the agreement and charge
the costs against the crop or against the rent, as the case may be.

It should be provided in the agreement that in case either
party fails to perform his part, the tenancy may be brought to a
close, by due notice, at the end of the current year. As a rule
it is unwise to be strenuous in enforcing the terras of the contract.
In case either party fails to perform his part in the contract to
such an extent that appreciable loss results, it is better to bring
the contract to a close.

While a change usually results in some loss, it is better than
tolerating excessive negligence. New agreements are better
than old agreements. The landlord tries harder to please a new
tenant than an old one. The new tenant operates under a new
stimulus, his expectations are high, and his work moves with
renewed energy.

284 AGRICULTURAL ECONOMICS

Notice to terminate lease. Where land is let from year to
year or for one, three, or five years, with the understanding that
the tenant may remain as much longer as it is mutually agree-
able, it is common to include a clause in the lease to the effect
that (after the fixed period has elapsed) in case either party de-
sires to bring the tenancy to a close at the end of the year, he
must give the other party written notice to that effect ninety
days (sometimes six months) prior to the end of the year. In
the absence of any notice, the contract is to be considered
renewed for another year.

CHAPTER XXIII
FORMS OF LAND TENURE IN THE UNITED STATES (Continued)

Share versus cash rent. Is it better to let land on shares
or for cash? The answer to this question depends largely
upon the amount of time the landlord can give to the supervision
of the farm and to the amount of money and ability possessed
by the tenant. The landlord who lets land on shares must give
much attention to the management of the farm, but he who lets
his land for cash need give little attention to the farm beyond
the securing of the right tenant under proper agreements.
Share tenancy usually yields larger returns to the landlord than
cash tenancy, because he renders more service, takes more
risk, and often furnishes more of the capital.

The tenant with Httle capital and but httle experience in
farming finds share tenancy better than remaining a hired man.
Compared with the cash tenant he is more dependent and may
make less money, but if he lacks the capital and skill to succeed
as a cash tenant he will find share farming under the supervision
of a landlord who has been a successful farmer more profitable,
as well as a more independent life, than working for wages.
For many young farmers a period as share tenant under the
supervision of a good landlord who is himself a successful farmer
is a most valuable apprenticeship in farm management.

Share tenancy. Share tenancy is more common than cash
tenancy in the United States. In 1910 there were 1,399,923
tenants whose entire rent was paid in the form of a share of
the product or a share of the proceeds. There were 128,466
who paid rent in the form of a share of the product and who paid
a cash rent in addition usually for a part of the farm, the pro-
ceeds of which were not shared with the landlord. There were
712,294 tenants reported as paying a cash rent solely, but a

28s

286 AGRICULTURAL ECONOMICS

very large part of these paid a fixed quantity of produce, for
example a fixed amount of cotton is paid for a given area of
cotton land, instead of a fixed amount of cash rent.

Share tenancy is preferred by many tenant farmers because the
risk is less than in cash tenancy. The thought of paying a fixed
rent whether the crop is large or small and whether the prices
are high or low is not attractive to the majority. And again,
many of the tenants do not possess sufficient wealth to enable
them to own all of the stock necessary to operate a farm on a
cash basis.

The landlords who live in close proximity to the land which
they let, and who have time to devote to its supervision, usually
prefer a share of the crop because they find it more profitable
to them. The share system is more profitable to the landlords
largely because of the close supervision which they give to the
farms let on shares. Many of the tenants are young and in-
experienced, and are wilHng to leave the general management
of the farm to the landlord, who is very Hkely to be an elderly
farmer, and the fact that he has a farm to let suggests that he
has been a successful farmer. All tenants are not so willing
to be directed by their landlords, but if they pay a share of the
products as rent the landlord's right to give advice is apparent
and is a well-established custom, whereas under cash tenancy
there has seemed to be less reason why the tenant should be
compelled to accept interference on the part of the landlord.
The principle being established that the landlord has a right
to direct more or less definitely the operations of the farm, as in
the case of share tenancy, the landlord has little difficulty in so
directing the management of the farm as to preserve the fer-
tihty of the land. The choice of crops, and the organization
of the field-system are subjects which the share tenant is usually
willing to leave to the landlord, and in many cases the landlord
controls the field operations in the minutest detail. For ex-
ample, the depth to which land is to be plowed, the time of
sowing, planting, harvesting, and the number of times a field
of Indian corn should be cultivated are details to which the
landlord often gives his attention under this system of letting

FORMS OF LAND TENURE IN THE UNITED STATES 287

land. The landlord is willing to exert himself for these purposes
because his profits are increased by such activity.

Another reason often given by landlords for preferring a share
of the crop to a cash rent is that, in a country where most of the
tenants have little wealth, a share of the product proves more
profitable to the landlord, in the long run, because he shares
the benefit of an extra large crop and gets something out of the
smallest one, whereas in case he is receiving a fixed rent, the
tenant gets all the advantage of an extra large crop, but in case
of a crop failure the tenant is often unable to pay the fixed rent
and the landlord has to stand the losses when the crops are
short without getting the advantage of the extra large crops.
Where the tenants are men of considerable wealth and can
stand a loss from time to time this is a matter of less importance.

Again, it is said that the collection of the rent is an easier
matter where a share of the crop is given. " Farmers will give
a fifty cent chicken for a church dinner when they would not
think of giving as much as twenty-five cents in cash," says an
Iowa farmer who has tried both systems, and he continues,
" They will give the landlord his share of the farm products
much more cheerfully than pay him cash."

The share rent adjusts itself to changes in the value of the
products without any change in the contract. This is looked
upon by some farmers and landlords as a reason of first impor-
tance for adhering to the share system.

Participation of the landlord in the management of the farm
is the chief reason for the success of share tenancy in this country.
This point has been emphasized over and over again in the
communications received from men who are in a position to
know. Share tenancy is, as a rule, more profitable to the land-
lord only when the farm is under his immediate supervision.
If the management must be left entirely to the tenant farmer,
the cash system is usually preferable to the landlord. If the
tenant is a capable manager, so that the supervision of the
landlord adds nothing to the product, then it is better for the
tenant to pay a fixed rent, if he has the capital to do so, and
secure the extra profits due to his superior ability.

288

AGRICULTURAL ECONOMICS

The methods of letting land on shares are so varied that a
brief description of the forms of share tenancy is essential to an
understanding of the subject. Share tenancies vary with
respect to :

(a) The proportion of the product received by each party.
(6) The equipment and supplies furnished by each party,
(c) The degree of control exercised by each party.

These characteristics of the share systems of operating land
will be described for the various parts of the United States
under a classification based on the share received by the land-
lord. The other characteristics will be discussed under sub-
headings.

The one-fourth system. One-fourth the product as the land-
lord's share is the lowest share rent which has been found to exist

Figure i8

in an important way in the United States. This system was
found on the western edge of the wheat region of the Dakotas,
Nebraska, and Kansas, and also in Oregon and California in
the first decade of this century. In general it may be said that
the one-fourth system existed in the North only on relatively

«/• C. E? '"^nr
FORMS OF LAND TENURE IN THE UNITED STATES

289

unproductive lands. In the South the practice of giving the
landlord one-fourth of the cotton crop was very common wher-
ever white tenants engaged in cotton production. It was there
most generally found in conjunction with a " third " system for
the grain crops. It is common in the South to speak of the
" third and fourth " system, which usually means that the
landlord receives one-fourth of the cotton and one-third of the
grain crops.

In the " fourth " system the tenant usually furnishes all the
equipment and seeds, but in case commercial fertilizer is used,
as is sometimes the practice in the cotton country, the landlord
pays one-fourth the cost. In the northern states the landlord
often furnishes nothing but the bare land for one-fourth of the
crop.

Under the fourth system the tenant is usually left free to
produce the crops as he pleases, the landlord exercising little
control beyond the determination of the crops to be grown and
the area of each.

The one-third system. The one-third system is very common
throughout the United States with the exception of the regions

FORMS or iHARE TEKANCY
LMOLosD nccnvct OW^Hi

'•''■^^ - t^'".yK^"''' h^' X •/ »

k

Figure 19

290

AGRICULTURAL ECONOMICS

of very high land values in the North Central states. Under
this system the landlord receives one-third the grain and some-
times he receives all the straw and corn stalks and stands none
of the expense of production.

The landlord receiving a third of the produce usually furnishes
no part of the operating equipment of the farm. In many
instances the tenant pays a cash rent for the house in which
he lives and for pasture for his Kve stock. In many other cases
fields only are rented for one-third the crop. The tenant lives
on the land which he may have bought or leased and takes two-
thirds the grain and leaves the roughage on the farm where
grown. Where the " third " system exists with respect to grain
crops, the hay crop is usually shared half and half.

Wliere land is let for one-third the crop, the landlord usually
controls in detail the kind of crops to be grown on each field.
Beyond this he leaves the tenant to do much as he pleases.

The two-fifths system. In the Corn Belt the two-fifths system
has been an intermediate stage in the rise of share rents from

Figure 20

one-third to one-half the crop. This system differs from the
" third" system primarily in the fact that the landlord receives

FORMS OF LAND TENURE IN THE UNITED STATES 291

two-fifths of the grain, straw, and corn fodder, and the tenant
receives three-fifths. The system is usually the same as the
one-third system so far as what the landlord furnishes is con-
cerned and also with regard to control.

The half-share system. The letting of land for one-half the
product is found in all parts of the United States. The half-
and-half system varies greatly with respect to what the landlord
furnishes in addition to the land and buildings.

Grain farming on the half system. In one form of half-share
tenancy found in the grain regions of Minnesota, Kansas,

Figure 21

Nebraska, the Dakotas, and in the wheat regions of the Pacific
coast, the landlord furnishes the seed grain and gets one-half
the crop. In these regions it is often counted that one-half the
crop, when the landlord furnishes the seed and pays for one-
half the time and threshing, is equivalent to one-third the crop
where the landlord does not furnish the seed.

In central Illinois and in west-central Indiana the landlord
who receives one-half the grain crops furnishes nothing but the
land and buildings and exacts a cash rent for the land used

292

AGRICULTURAL ECONOMICS

for hay and pasture. The exacting of a cash rent for hay and
pasture land often accompanies the share system in the North
Central states, where the landlord receives one-third or two-
fifths, as well as where he receives one-half of crop. In the
South, corn land is sometimes let for cash, while cotton land is
let on shares. In central Illinois, the landlord sometimes
demands half the grain and one dollar per acre in addition, and
it is the regular thing to require that the tenant deHver the
landlord's share of the grain at the nearest market at such time
as the landlord may desire to dispose of his share of the product.
It is in the heart of the Corn Belt of central Illinois that the land-
lords are able to make the heaviest demands upon their tenants.
In eastern Ohio, in Pennsylvania, Maryland, and some adjoin-
ing territory where wheat has long been considered central in the

COUNTIES WHERE THERE IS EVIOENCE THAT
THE PRnPORTION Of THE PRODUCT
RECEIVED 3t THE L4ND1.0SDS HAD
IHCRE4SED PSIOS TO 1903

Figure 22

farming system, the landlord who receives one-half the grain
usually lets the tenant have the use of the buildings, the hay and
pasture land and all the straw he cares to feed on the farm,
without any additional compensation. This custom is held
to rather tenaciously and in one instance the writer found a
tenant who was making about one hundred dollars a month

FORMS OF LAND TENURE IN THE UNITED STATES 293

from his dairy. This was appreciably more than the entire
value of the grown crops, yet the landlord continued to accept
one-half the grain and let the tenant have all he made out of
the dairy.

The land-and-stock share system. Another form of the half-
and-half system is the land-and-stock share system, in which the
landlord furnishes a part of the live stock or owns a half interest
in all or a part of the live stock. This system is most common
in the dairy regions of New York, Ohio, Illinois, Wisconsin,
Iowa, and Minnesota. The variations are numerous, but the
system has many features which are in general use.

The landlord furnishes the land and the buildings including
the house for the tenant. The tenant furnishes the horses,
tools, and machinery, and all the labor required to operate the
farm. The landlord and tenant own, jointly, the cattle, hogs,
and poultry kept on the farm. The items of expenses are
likewise in three classes. The landlord furnishes material for
making repairs and the tenant performs the work, unless a
skilled workman is reqmred, in which case the landlord pays for
the mechanic. The tenant stands all expenses in keeping his
horses, tools, and machinery in working order. Expenses for
twine, thrashing, silage cutting, etc., are usually shared equally.
The dairy equipment is often owned jointly. This refers
especially to the cream separator and shipping cans. A common
variation of this system is for the landlord to furnish all the
cows. This is more or less common on the less valuable dairy
farms of Wisconsin and is often found in New York.

The land-and-stock share method of letting land has been
in use in the United States for more than a hundred years.
During this time a large number of questions with regard to
the duties and privileges of landlords and tenants have arisen.
It may be beneficial, therefore, to take up these questions one
by one, and indicate the way in which they have been answered.

Ownership 0} the partnership property. Where the landlord
agrees to furnish half of the live stock and the tenant the other
half each party should own an undivided half interest in the
stock. A partnership herd, for example, in which the tenant

294 AGRICULTURAL ECONOMICS

owns 1 2 certain cows and the landlord 1 2 other certain cows is
sure to give rise to trouble. There should be a description of
all partnership property possessed at the time the contract takes
effect, and an agreement as to the number of cows to be kept,
the number of pigs reared, etc.

At the beginning of the tenancy the stock which each party
wishes to put into the partnership should be carefully appraised
and the difference in value settled in cash. This means that
the landlord buys a half interest in the tenant's cows, hogs,
chickens, etc., and the tenant buys a half interest in the cows,
hogs, chickens, etc., placed on the farm by the landlord.

Where the landlord furnishes all of the cows, provision must
be made for maintaining the herd by replacing old cows with
young ones produced upon the farm. The money received for
the cow sold is divided and the young cow reared by the tenant
becomes the property of the landlord.

Description of property furnished by tenant. It is the most
common practice for the tenant to furnish the teams, tools,
and machinery. The income of the landlord is influenced by
the character of these equipments. Hence there should be a
written agreement as to how many horses are to be kept and
the kinds of tools and machinery to be used. Especial care
should be taken to have an understanding regarding the manure
spreader, the silage cutter, the cream separator and any other
equipments which may be needed on the farm but which are
not commonly found in the tenant's outfit.

Description of labor to be employed upon the farm. It has
always been the rule to have in the lease a careful descrip-
tion of the land. In share tenancy it is equally important
to have a careful description of the labor supply to be fur-
nished by the tenant. Where land is let on the land-and-stock
share system it is common to speak of the arrangement as a
partnership in which the labor balances the land. It is obvious,
therefore, that some more or less definite amount and quality of
labor should be agreed upon. This agreement is desirable for
the reason that the interest of the landlord leads him to desire
a large amount of labor on his land, whereas the interest of the

FORMS OF LAND TENURE IN THE UNITED STATES 295

tenant leads him to cut down too much on the labor bill. Trouble
can be avoided by agreeing in advance upon the amount of labor
to be provided by the tenant.

Horse feed. Where the tenant furnishes all of the horses
to operate the farm, which is the most common practice, the
question has arisen as to whether these horses should be fed from
the undivided grain and hay or from the tenant's share of the
grain. This has generally been settled in southern Wisconsin
in favor of feeding the horses from the undivided grain and
hay. In some districts, where grain farming is an important
adjunct to dairy farming, the landlord furnishes all of the seed
grain, and the tenant is required to feed his horses from his
share of the grain, but may feed them from the undivided hay.
Where special circumstances give rise to opportunities for
the profitable employment of the tenant's horses in hauling
stone or some other materials, landlords have sometimes ob-
jected to such employment, but this outside work should be dis-
couraged only to the extent that it may encroach upon time re-
quired properly to perform the farm work. The tenant should
furnish the grain fed to the horses during the time they are
employed on outside work of this kind. In general, it is better
for the landlord to let land for cash where there is regular
opportunity for outside employment. This opportunity will
enable the tenant to pay a higher rent than he could otherwise
pay. This point should not be overlooked by the landlord.

Colts raised by tenant. Where the horses have been fed
from the undivided grain, the question has arisen as to the
ownership of the colts in case any should be raised. It is
contended by the landlord that if the colts eat undivided grain
there should be some method of remunerating the landlord. It
is also claimed that brood mares require more feed per unit
of work performed on the farm than do other horses, and for
this reason the landlord should have an interest in the colts.
On the other hand, it is claimed that considerable risk is taken
by the tenant where colts are raised and that if the landlord
does not share this risk he should not share the colts.

This problem has been solved in various ways. In many

296 AGRICULTURAL ECONOMICS

cases the difficulty has been avoided by raising no colts?. In
some cases the amount of feed consumed by the colts has been
accounted for. This is not a very satisfactory method. In
other cases the expenses involved in the rearing of the colts
have been shared equally and the colts have been the common
property of landlord and tenant. Where this practice is fol-
lowed the landlord should stand the entire charge for stallion
service to balance the risk taken by the tenant. In still other
cases this problem has resulted in the landlord owning a half
interest in the horses. Where horse breeding is to be any
important part of the farm this is the best plan.

Poultry. The most approved method is to own the poultry
in partnership, feed it from the undivided grain, and divide the
proceeds. In some instances the tenant is allowed what poultry
and eggs he desires for home consumption, and where sales
are made the proceeds are divided. In other agreements the
landlord is to receive an amount of eggs and poultry equal to
that consumed by the tenant, and the remainder sold and the
proceeds divided.

Thrashing and twine bills. The thrashing bill is usually
shared equally by landlord and tenant, but landlords do not so
generally share the twine bill, yet on a very large share of the
farms the landlord has found it necessary to agree to pay one-
half of the twine bill in order to secure the tenant desired.

Corn shredder, silage cutter, etc. In recent years the intro-
duction of the corn shredder, the silage cutter, and the corn
binder has brought new problems. These machines are not in
use on all farms, and where they are used there is no settled
practice as to who shall pay the bills. This is a point on which
the parties use their bargaining power. It is here argued, for
example, that the shredder saves the labor of the tenant, and
that the tenant should pay the shredder bill. On the other
hand, the landlord has to admit that the use of the shredder
results in better care of the fodder, and leaves the manure in
much more desirable form to be spread upon the land.

Terms gradually improved for tenants. During the last 50
years the conditions of this form of share tenancy have, on

FORJVIS OF LAND TENURE IN THE UNITED STATES 297

the whole, become more favorable to the tenant. In the earlier
days, when the butter and cheese were made on the farms, the
labor was performed by the tenant, or, more often, by his
wife. The introduction of the creamery and the cheese factory
has relieved the farmer's wife of this task, and the expense of
manufacturing these products in the creamery or the cheese
factory has been shared equally by landlord and tenant.

Management oj the farm. The landlord usually participates
in the management of the farm where the land-and-stock
share system is in use. This custom arises naturally out of the
fact that the landlord has a very large investment and is de-
pending upon the management of this property for his income.
On the other hand, the tenant is usually a young man, of much
less experience than his landlord and finds it profitable if not
always agreeable to his own feelings to be guided by the experi-
ence of the older man.

It is usually stated in the agreement that the farm shall be
managed by mutual agreement of the landlord and the tenant.
It seems to be generally conceded by the tenant farmers that
where land is let on shares the landlord has a right to participate
in the management.

Sharing the proceeds. The landlord and the tenant share
equally the proceeds of all sales and all increments and decre-
ments in the value of all partnership property. The division
of income should be made at once upon its receipt where large
sales are made. Small items should be settled once a month.
It is common, where milk is deUvered to a butter or cheese
factory, to have separate checks made out for the landlord and
for the tenant so that no occasion for trouble may arise in
making the division.

Division of partnership property at termination of lease.
The most favored system seems to be that of requiring the
tenant to divide the partnership stock of each kind into two
equal groups. Where the units are large, as in the case of the
dairy herd, it is common to balance small differences with a
fixed amount of cash. For example, if after every combina-
tion has been tried one bunch is thought by the tenant to be

298 AGRICULTURAL ECONOMICS

worth $20 more than the other, it is agreed that the person
taking the more valuable herd shall pay to the other $10 or
half the difference.

The tenant having made a division of each kind of stock,
either of two methods may be used in determining which group
will be left for the landlord and which taken by the tenant.
One method is to draw lots. This method is good because the
tenant, knowing he stands an equal chance of getting either
group, will strive to make the groups of equal value. It is
even permissible under this system to have the landlord assist
in making the divisions.

Another method of determining which group the tenant shall
take is to let the landlord have his choice of the groups arranged
by the tenant. This is a less satisfactory arrangement for the
reason that the tenant knows the record of the cows better than
the landlord, and where this plan is followed it is possible to
get the more profitable cows into one bunch and the better ap-
pearing cows in the other in such a manner as to make the
tenant reasonably sure to get the more profitable cows.

Another system of making a division of the jointly owned
property is for the landlord and the tenant to take turn about
in choosing from the herd or flock. This plan has been objected
to on the ground that the party who is the better judge of Hve
stock, or who may be the more famiUar with the live stock, has
a decided advantage over the other party.

Still another system is to have the live stock appraised by dis-
interested parties and the interest of one party purchased by
the other. Where the landlord and the tenant fail to agree upon
any other method, a public sale may be called and the live
stock put up at auction.

Croppers. The form of half-share tenancy found in the cotton
and tobacco regions of the United States requires no capital on
the part of the tenant. The landlord furnishes the land,
buildings, teams, tools, and other equipment, and often advances
the tenant enough goods, money, or credit to hve on while
" making " the crop. The tenant, or cropper as he is commonly
called in the South, furnishes the labor required to produce

FORMS OF LAND TENURE IN THE UNITED STATES 299

and harvest the crop. The cotton cropper receives one-half
the value of his crops and free house rent and garden as pay for
his efforts. In many of the cotton regions the cropper is not
an independent operator. This is especially the case on the
rich cotton lands where the plantation is the effective means of
organizing and controlling a class of tenants who are differ-
entiated from wage hands principally by the fact that they
receive a share of the crop instead of a fixed wage. The system
of control on a typical cotton plantation in the Yazoo delta of
Mississippi has been described as follows : ^

"While there are some small holdings, a large proportion of the
land is cultivated under a plantation system, white overseers manage
the plantation and direct the cultivation from seedtime until the
cotton is ready for market. The plantations are cut up into tracts
varying somewhat in size, but usually from eighteen to forty acres
in extent ; on each tract is a cabin of two or four rooms and a ' lean-to ' ;
at a little distance is a cotton house for storing seed cotton during
the picking season. Around or back of each cabin is usually a patch
of ground, perhaps half an acre, for a garden, often inclosed by a
paling fence, which serves as firewood in the winter season. Each
house is occupied by one or two families, who cultivate the allotted
land about the house, either as renters or croppers.

"The cropper works like any wage laborer; and the daily routine
has a distinct flavor of the ante-bellum plantation regime. The bell
is rung at daylight during the cultivating season, the negroes gather
at the lot where the mules of the plantation have been penned and
fed during the night ; each one receives his mule from the caretaker,
and if he needs a new implement he gets it from the implement store-
house upon order from the manager ; he brings it back when he has
finished using it. Each man works with his family in his own lot ;
the overseer endeavors to visit each lot twice a day to see that the
cropper is working and to direct him in his work, set his tasks, and
instruct him in their performance. At noon, the bell rings again,
the mules are brought in, fed by a man in charge, and taken out
after the nooning is over. At sunset, or a httle later, the plantation
bell rings again, the negroes stop work, and the mules are brought
to the common lot to be fed and shut up for the night. From first
to last every bit of work is supervised, the culture planned, the
1 In unpublished manuscript prepared by A. E. Conce.

3CO AGRICULTURAL ECONOMICS

amount and area of crop dictated by the overseer, the cotton picked,
ginned, and baled under supervision, the corn harvested and housed,
the produce divided, the indebtedness deducted, and the balance
turned over without a word on the part of the cropper.

"Mules are kept in a common lot simply to insure good feed and
care, and to prevent their being ridden at night or on Sundays and
holidays by the negro. When the cropper's lot is at some distance
from the mule lot and he is a reasonably careful man, the mule re-
mains in his charge from Monday morning untU Friday night or
Saturday noon, when it is brought back again to the mule lot. This
one item of plantation management has been a source of great saving
both in efficient work and goodlwork stock to the planter and fruitful
cause of the change from share to fixed rent on the part of the negro."

" The cropper," often called " halves " in the upland counties,
is usually found working on a verbal contract with a small land-
owner or a credit merchant who has a large number of farms in
his possession. If a merchant is his landlord, he is under super-
vision from March to December. " We oversee all our share
hands," said a Holly Springs merchant who owns thousands of
acres in Marshall and Lafayette Counties, " we don't ' suggest '
or ' stipulate ' — we ' dictate ' what crops they shall raise, and
where they shall raise them. We require cotton mostly, but
we insist that they raise sufficient corn and fodder to feed our
mules during the winter season, from January i to April i,
when we keep them in our own lots." The supervision is not
nearly so close as on the large plantation ; a "riding boss " gets
around to each farm two or three times a v;eek and notes the
needs and condition of the crop. But the share hand makes
his own hours of labor, has command of the mule furnished him,
and is really very much freer to come and go, to work and "lay
off " than the cropper of the bottom lands. When the landlord is
a small owner, or lives at some distance, the oversight is still
less. The land is less fertile, more must be tilled to make a
fair crop, the tools furnished are less modern than those of the
large planter, the mules are less valuable, and the resulting culti-
vation is very poor. Many owners live in town some miles distant
from their lands and take very little care of the share hand's crop.

FORMS OF LAND TENURE IN THE UNITED STATES 301

The two-thirds system. Somewhat similar to the upland
cropping system is a system found here and there throughout
the northern part of the United States which may be called the
two-thirds system. Under this system the landlord furnishes
everything but the labor and receives two-thirds of the proceeds,
while the tenant, or share hand, as he is more properly called,
furnishes all the man labor and receives one-third of the pro-
ceeds of the farm. While this system is found widely scattered,
it is not beHeved to be very common.

Cash tenancy. In 19 10 there were only about half as
many cash tenants as share tenants in the United States.
While cash tenancy is common in the Corn Belt it is most com-
mon in certain parts of the Cotton Belt. Cash tenancy and negro
tenancy are found in the same regions. In the Cotton Belt of
Texas and in the northern part of Georgia, where white
tenants prevail, share tenancy is dominant. When it is further
noted that most of the so-called cash rent among negroes is
paid in the form of a fixed amount of cotton without regard
to its cash value, it will become evident that actual cash rent
is a minor form of tenancy in the ^United States at the present
time.

Landlords who live too far from their land or are too busy to
give it the needed supervision for making share tenancy a suc-
cess, usually prefer to let their farms for a cash rent. It is
claimed by many landlords that the tenants devote much greater
care to their farming under the cash system of letting land.
The feeling that every extra bushel of grain and every extra
fork of hay is all his own will naturally make the tenant more
painstaking than he would be if only a part of these products
were to be added to his own profits.

This desire to obtain as large a return as possible is, at the
same time, the greatest source of trouble in adjusting the rela-
tions between landlords and tenants. The tenant who has a
contract for but one year is incHned to look too strictly to
securing as large a profit as possible for that one year, without
any regard to the future. As a result of this short-sighted
economy, too large a proportion of the land is often devoted

302 AGRICULTURAL ECONOMICS

to exhausting crops, and the larger profit of the one year is
obtained at the expense of the profits of future years.

By proper regulations with respect to the proportion of the
land which shall be devoted to certain crops, this difl&culty
can be more or less successfully overcome, but such regulations
are always annoying to the tenants. The granting of a lease
for several years is thought by many to be all that is necessary
to meet the difficulties arising from the short-sightedness of
the tenants, but many landlords object to making a contract
for a period of any great length. With all the difficulties which
may beset this system, cash tenancy is preferable to share
tenancy whenever the management of the farm is to be left
almost entirely to the tenant, and where agriculture is extensive
and the use of commercial fertilizers is unknown the letting of
land for cash is a fairly successful method.

Where intensive culture and the use of commercial fertilizer
have become necessary the tenant problem takes on a more acute
form. If we would study to advantage the problems which
arise under these conditions, we must turn our attention to an
older country than our own, where the tenant problem has been
a more serious one, and whence we may learn from the experience
of others the remedies which are fast becoming necessary to
good relations between landlords and tenants in this country.

The experience of England shows that the compensation for
unexhausted improvements is more successful than long leases
as a means of solving the problem of good farming by cash tenants.
This system will be considered in detail in a later chapter.

Where land is let for cash rental the management of the
farm falls definitely to the tenant. For this reason there is
believed to be more occasion for restrictions in cash leases than
in share contracts where the landlord is joint manager with the
tenant.

Restrictions have not been numerous in American cash leases,
but in Wisconsin for example, the following are restrictive
clauses which have been found :

I. Specified parts of the farm shall not be plowed but shall
be kept in permanent pasture.

FORMS OF LAND TENURE IN THE UNITED STATES 303

2. A specified number of acres shall be kept in meadow, and
old meadow shall not be plowed up until an equal area of new
meadow has been successfully seeded.

3. No flax shall be grown.

4. Only . . . acres of tobacco may be grown.

5. Only . . . acres of cabbage may be grown.

6. No straw or fodder shall be sold from the place.

7. No hay shall be sold from the farm.

8. Instead of 6 and 7 another lease requires that enough
stock be kept to consume all the grain and forage crops produced
upon the farm.

9. Live stock shall not be allowed in the fields while the frost
is going out of the ground.

10. Hogs shall be provided with nose rings in such a manner
as will keep them from rooting up the turf when allowed in
the pastures or fields.

Such restrictions, it will at once be seen, are intended to force
the tenant into a conservative type of farming. The danger is
that such restriction may so fetter the tenant as to make his
farming unprofitable.

It has been stated most emphatically by an EngHsh authority
upon this subject that " no landlord who is determined to in-
troduce unreasonable and unnecessary conditions into his leases
is entitled to or can expect to get first-class tenants. . . .
There is no difl5culty in getting inferior tenants to agree to any
stipulated terms of management, but great caution is necessary
in laying restrictions upon really good farmers. . . . The
art of farming is progressive and cannot be fettered by any
set of rules that are meant to be of universal and unvarying ap-
plication. Hence, all the terms of farm leases should in one
respect be of a most general kind. A good tenant ought not to
be tied down with restrictions which can only be of service to
the landlord in enabling him to prevent a bad farmer from
injuring the land."

In this country, where cash tenants have been put under few
restrictions, as in the eastern counties of Wisconsin, the re-
sults have been on the whole unsatisfactory. Cash-rented farms

304 AGRICULTURAL ECONOMICS

are not, as a rule, so well kept up as farms which are let on
shares. This is due in part to the fact that the owner is more
interested in keeping up the buildings and fences on the farm
where his income depends directly upon the annual value of the
products, but where land is let for one year at a time, the cash
tenant is interested in securing the largest possible profit for
that one year, without regard to the condition in which the land
may be left. Cash tenants have too commonly neglected to
sow clover seed, to produce and spread large quantities of ma-
nure upon the farm, and to destroy noxious weeds.

The demand is for a system of renting land which will avoid
the evils of soil robbery without the evils of too great restriction.

CHAPTER XXIV
THE DECLINE OF LANDOWNING FARMERS IN ENGLAND

Two hundred years ago landownership on the part of farmers
was common in England, but by igoo it was very rare.
According to the estimates compiled by Gregory King, there
were 180,000 landowning farmers and 150,000 tenant farmers
in England in 1688. Ownership did not in all cases mean the
same in England at that time that it does in the United States
to-day. A man was classed as an owner if he paid about two-
thirds the value of a piece of land for the right to the free use of
the land so long as any one of three persons named in the lease
lived. This was said to be leased out on hves. Again, there
were copyhold tenures which gave a perpetual right to the use
of the land with the provision, however, that certain payments
— which frequently became nominal in amount — were made
to the manorial lord from time to time in accordance with the
customs of the manor. The tenure was permanent, and where
all these payments were brought together and compared with a
regular annual rent, they were very often small. It is fair to say,
therefore, that toward the close of the seventeenth century more
than half the farmers of England belonged to the landowning
class.

In 1900, 86 per cent of all the land under crops and grasses
in England was occupied by tenant farmers; while slightly
less than 14 per cent was occupied by owners, but the owners
were generally the great landlords, not landowning farmers.
By making close inquiry while passing through more than half of
the counties of England in 1899, the writer found a scattering
few who owTied the land which they cultivated, but such farmers
were extremely rare. The greater part of the land designated
as " occupied by owners " was composed of the " home farms "
X 305

3C6 AGRICULTURAL ECONOMICS

of landlords, and of farms which they had not been able to let
since the depression. In this way the Duke of Grafton occupied
five farms besides his home farm, in 1899. The five farms
aggregated five thousand four hundred and ninety acres. Each
one of these farms, as well as the home farm, had a bailiff
(manager) upon it. There were more than seventeen thousand
(17,189) farm baihffs in England according to the census of 1891.
Tenant farmers who keep bailiffs are very rare. The vast
majority of these bailiffs were, doubtless, operating land which
is recorded in the Agricultural Returns as " occupied by owners."
Hence " occupied by owners " quite generally indicates a lower
status of the farmer than that of the tenant farmer, though in
some instances it indicates land cultivated directly by the
owner. Kent was a county noted for her landowning farmers in
the years gone by, but in 1898 it was stated that " the small
landowners have in most instances been compelled to sell their
land, and the yeoman of Kent has practically disappeared."

To-day practically all the farmers in England lease the land
which they occupy. The young man becomes a tenant farmer
with the expectation of remaining such all his life. When
money has been saved he looks for a larger farm where he may
employ his surplus funds, but very rarely does he even think
of investing in land. To an American this seems strange,
and raises two important questions : First, what forces were
operating in England to bring about so complete a disappearance
of the landowning farmer ? Second, what has been done in Eng-
land to make tenant farming a satisfactory life for the farmer?
The first of these questions will be discussed in this chapter,
and the second will be discussed in the chapter on methods of
adjusting the relation of landlord and tenant in England.

Many of the small landowning farmers disappeared as a
result of improvements in the methods of farming during
the eighteenth century. The names of Jethro Tull and
Charles Townshend are associated with movements most
significant in the history of English agriculture. These great
agriculturists carried on their important experiments during
the second quarter of the eighteenth century. With the name of

DECLINE OF LANDOWNING FARMERS IN ENGLAND 307

Tull should be associated the word tilth; and the fact that his
contemporary was called " Turnip Townshend " suggests at once
the phase of agricultural improvement in which he was interested.

Tull, in his " Horse-Hoeing Husbandry," emphasizes the
importance of pulverizing the soil. " The chief art of hus-
bandry is to feed plants to the best advantage," says Tull,
and he beheved that, in the feeding of plants, tillage is much
more important than the application of fertilizers. He devotes
one chapter of the book to the " Pasture of Plants." In this
chapter he emphasizes the importance of dividing the soil into
fine particles in order that the plants may find " pasture "
for their roots. The important field crops of the time were
all sown broadcast, so that it was difficult, if not impossible, to
cultivate the crops while growing, and the only chance of giving
tilth to the soil other than in preparing the seed bed was during
the fallow year. To surmount this difficulty, Tull invented a
drill, for the sowing of all kinds of grain and roots, in order
that these crops could be cultivated between the rows while
growing. He also invented a horse hoe with which to cultivate
the drilled crops.

The name of Townshend is most closely associated with the
introduction of turnips and clover into England, and with the
reorganization of the English field system. The introduction
of turnips, which could be cultivated while growing much more
satisfactorily than could the small grains, enabled the farmers
to dispense with the fallow wherever tliis crop would thrive.
As the production of a crop of roots did not require a great
deal more labor than caring for a bare fallow, it was only neces-
sary that an increased demand for beef and muttons should
increase the value of fodder crops sufficiently, in order that
turnips should be very generally introduced. Upon the intro-
duction of roots and clover, the old three-field system of crop
rotation was replaced by the " Norfolk four-course system,"
which consisted of a root crop, followed by spring grain with
which clover and grass seeds were sown ; and the third year the
hay crop was removed in time to plow the land for sowing wheat
or rye.

3o8 AGRICULTURAL ECONOMICS

To the names of Tull and Townshend should be added that of
Bakewell — the third member of the trinity of great men
whose names have been most closely associated with " the new
agriculture in England." Bakewell flourished at Dishley, in
Leicestershire, from 1760 to 1795, and produced the necessary
complement to good culture and fodder crops, namely, a breed
of mutton-producing sheep and a breed of beef-producing cattle.

This " new agriculture " is of interest here because it led to
an increase in the size of farms, and to the inclosure of the
common fields, both of which movements had a marked influence
upon the status of the landowning farmers. In the agricultural
Hterature of the early part of the eighteenth century, one reads
of the great benefits to be derived from the inclosure of the
common-fields for the purpose of adopting the new agriculture ;
and these inclosures often involved the buying out of small
freeholders who held rights over the commons along with the
lords of the manors. Laurence, who wrote in 1727, taught with
emphasis that " A Steward should not forget to make the best
inquiry into the disposition of any of the freeholders within or
near any of his lord's manors to sell their lands, that he may use
his best endeavors to purchase them at as reasonable a price as
may be for his lord's advantage and convenience. Some instances
there have been of stewards, who, after they have made haste
to be rich, have made these inquiries for their own sakes, and
have purchased out the freeholders, thereby making an estate
for themselves, even within their own lord's manors ; insomuch
that sometimes I have known it so ordered that the lord's
tenants have been called to do suit and service at his own [the
steward's] court. But, for the sake of honor and honesty, I
hope these instances are rare ; and so I content myself to have
given this hint, still persuading the vigilant steward to be zealous,
for his lord's sake, in purchasing all the freeholders out as soon
as possible especially in manors where improvements are to be
made by inclosing commons and common-fields ; which (as every
one, who is acquainted with the late improvement in agri-
culture, must know) is not a little advantageous to the nation
in general, as well as highly profitable to the Undertaker."

DECLINE OF LANDOWNING FARMERS IN ENGLAND 309

The writer has not found evidence showing any great progress
in this direction until later in the eighteenth century, but there
is reason for believing that Laurence's advice was acted upon
many times during the next sixty years. In 1786 Marshall
records in detail an inclosure where the proceedings seem to have
been in exact accordance with this advice.^

Contemporaneous with the new agriculture, and perhaps it
is not too much to say making the new agriculture necessary
and possible, was the enormous growth of English manufactures
and commerce. These Hnes of development greatly increased
the demand for agricultural products so that by the end of the
eighteenth century the price of such products had greatly risen.
The high prices which could be obtained for the products of the
farm gave high values to land and made larger farms and
intensive culture extremely profitable. It required a great deal
of capital to stock a large farm and cultivate it in accordance
with the new methods. To own both land and capital required
relatively great wealth; and the rural economists of the time
advised farmers to use their capital in stocking large farms
rather than to invest nearly all they had in buying land, in
which case the farms would be too small and too poorly stocked
to be most profitable. It came to be the argument that, whereas
a farmer could realize no more than 3 per cent on investments

1 "In the parish of Felbrigg, in Norfolk, some seven or eight years ago, Mr.
Wyndham, who is Lord of the Manor, was also the sole proprietor in this parish,
excepting one small farm, of seventy pounds a year, belonging to a young man, a
yeoman, just come of age. An extensive, heathy waste, and some common-field
lands, were desirable objects of inclosures; consequently, the possession of this
young man's estate became an object of importance to Mr. Wyndham. Steps
were accordingly taken towards obtaining the desired possession; not, however,
by threats and subterfuges, too commonly but very impolitically made use of upon
such occasions; but by open and Uberal proposals to the young man, the joint
proprietor; who was made fully acquainted with the intention; and frankly told
that nothing could be done without his estate. He was, therefore, offered, at once,
a specific and considerable sum, over and above its full value to any other person ;
and, to insure the object in view, he had, at the same time, an offer made him of a
considerable farm, on advantageous terms. The young man being enterprising,
and his little estate being, I believe, somewhat encumbered, accepted the offer,
sold his estate, and agreed for a farm, consisting partly of old inclosures, in part of
common-field land, and in a still greater proportion of the heath to be inclosed."

3IO AGRICULTURAL ECONOMICS

in land, he could make a profit of lo per cent by using it in
stocking a farm.^

There is evidence that many landowning farmers became
tenant farmers because they found it more profitable. For
example, before the new agriculture was introduced there were
many small owners in Norfolk who cultivated their own land.
Instances are noted of parishes which had at one time been

' James Anderson is the author of a short article published in Hunter's " Georgical
Essays,'' Vol. VI, p. 213 (York, 1804), which is entitled, "The Bad Consequence
of a Farmer Lessening his Capital by the Purchase of Land." The article reads as
follows: "Those who are fond of poUtical calculations may have here full scope for
their ingenuity, by supposing that two men of equal spirit, knowledge, and capital,
set out in the agricultural line. One of them as a farmer, on a lease ; and the other
as a small proprietor, or yeoman. Let the capital be taken any how at random;
say, £2000. The yeoman, we shall say, lays out £1500 of that sum in the purchase
of a farm, which at thirty years' purchase [that is, thirty times the annual rent or
annual value] would be worth £50 a year, and he has 500 left for stocking and im-
proving it. The other leases a farm, which, at a fair rent, is worth £200 a year.
Let us follow out the calculation, — first, in regard to the profits that the difl'erent
occupiers themselves can enjoy, and the rate at which their families can afiord
to live; and, second, with regard to the augmentation of agricultural produce that
each of them could afford to the state; and let this calculation be continued for a
considerable number of years. Then strike the balance, and see what an amazing
difference!"

Again, in recent times when the subject of restoring the old order of yeoman
farmers was being agitated, James Caird (J. R. Agr. S. E., Series III, Vol. I, p. 27)
gives a very clear statement of the problem suggested by James Anderson three
quarters of a century earlier. Caird writes: "There are two capitals employed in
British agriculture; that of the landowners and that of the farmer. The first,
which is the land itself, and the permanent improvements upon it, had hitherto
been certain and safe, and, therefore, yielding a small, but regular, return; the
other, the hvestock and crops, subject to risk of seasons, and speculations, and
liable to compensation prices, requiring a much larger percentage to cover risk.
The capitalist is content with 3 per cent for his heretofore secure investment, which
carried with it also influence and social position. A farm worth £50 an acre for
the freehold needs a further capital of £10 an acre to provide the farmer's capital
for its cultivation. The landowner is satisfied with a return of 3 per cent on his
£50, while the tenant looks for 10 per cent for management and risk and interest
on his £10. Let us suppose that the farmer has a capital sufficient to buy 100 acres
at this price, and stock them; he would get for his £5000, invested in freehold,
£150, and for his £1000, farm capital, £100; together, £250. But if he followed
the custom of his country and used the whole of his capital in cultivating another
man's land, he would with his £6000 hire 600 acres, on which his returns ought to
be £600. He, in truth, thus trades on the capital of the landowner, practically,
let to him at the moderate rate of 3 per cent, which he converts into a trade profit
on his own capital of 10 per cent."

DECLINE OF LANDOWNING FARMERS IN ENGLAND 311

occupied entirely by this class of farmers. But by 1787 there
had been a striking decline in the number of those belonging to
this class. Marshall says that the small proprietors saw all
about them tenant farmers, whom they had held as their
inferiors, reaping great profits and rising to a degree of afiluence
superior to their own. The tenant farmers were able to live
in a style too extravagant for the small proprietors, and this
naturally made the latter dissatisfied with their position, " and
either launched out into extravagance ill suited to their income,
or voluntarily sold their comparatively small patrimonies, in
order that they might, agreeably with the fashion or frenzy
of the day, become great farmers." The lands owned by these
yeoman farmers fell into the hands of men of fortune and became
united with their large estates.

The manufacturing industries did not merely expand during
this period, they changed their form of organization ; and this
change in organization had an important influence upon the
small farmers of England. As the factory system became
established, the domestic system of manufacturing was no
longer profitable, and the small farmers who had depended
upon spinning and weaving for a part of their income were
deprived of this means of supplementing the returns of their
small holdings. Many of these small farmer-manufacturers
were absorbed by the large industries of the towns, others turned
their entire attention to agriculture and became prosperous
farmers, while others were reduced, in time, to the ranks of the
agricultural laborers.

But these are not the only ways in which the growth of manu-
factures and commerce influenced rural affairs. Many who had
made their fortunes in manufactures or in commerce desired
to own country homes. These country homes often consisted
of very small areas with villas built upon them, but more com-
monly, owing to an " inordinate desire " to be connected with the
new agriculture, the wealthy merchants and manufacturers pur-
chased farms and operated them, not for profit, but for pleasure.

While farming for pleasure led to the buying out of many
landowning farmers in the vicinity of the large centers of wealth,

312 AGRICULTURAL ECONOMICS

this was of less permanent significance than the fact that many
of the men who had acquired wealth wished to acquire social
and political position ; and this could be done most readily
by becoming great landlords. This led many of the new men
of wealth to buy land and establish their families upon large
estates. This competition of rich men in the land market
resulted in high land values relatively to the rental value of
land, which made it all the more difficult for farmers to buy
land. In these various ways the reorganization of agriculture
in England at the close of the eighteenth century tended to
reduce the number of farmers who owned the land which they
cultivated, and to increase the numbers of great landlords and
of tenant farmers.

Fluctuating land values and agricultural depressions hastened
the decline of landowning farmers. The wide discrepancy
between the rate of return on investment in land, and the rate
of interest which farmers had to pay on borrowed funds, was a
constant force tending to reduce landownership on the part of
farmers. The work of the agricultural depression was that of
speeding up the movement at times by reducing incomes and
forcing mortgaged owners to sell their farms.

In the normal movement of affairs the farms passed from
father to son, but it was usual for the other members of the
family to be provided for. This usually meant that the son
who took the farm had to do so under heavy encumbrance.
It would appear that primogeniture and entail were institutions
affecting the large landlords, but little practiced among the
smaller owners, with whom the idea of more or less equal division
of property among all members of the family prevailed. There
were always miany landowning farmers who were heavily in
debt and to this class depression often resulted in forced sale.
With wealthy lords always in the market for land these farms
were absorbed into the large estates.

The depression in English agriculture from 1820 to 1836
resulted in a marked decline in landownership on the part of
English farmers. The first twelve years of the nineteenth
century were extremely prosperous times for English agriculture,

DECLINE OF LANDOWNING FARMERS IN ENGLAND 313

and until 1820 prices had not been reduced very materially;
but from 1820 to 1836 prices were comparatively low. This
era of low prices, following the great prosperity of war times,
wrought disaster among all classes in England who were de-
pendent upon agriculture for an income. Tooke attributes
the high prices of one period and the low prices of the other to
the war, the currency, and the variations of the seasons, along
with a rapidly growing population engaged in manufactures
and commerce. The war made the importation of food danger-
ous and expensive and a somewhat debased currency, and bad
seasons at the close of the century, with an increasing demand
for food, resulted in extraordinarily high prices. On the other
hand, peace, a restored currency, and a series of excellent crops
after 18 19 resulted in a great reduction in prices.

The parHamentary report made by the Select Committee on
Agriculture for the year 1833 shows large numbers of landowning
farmers in the various parts of England at that date. Many
of these men held estates which had been handed down from
father to son for many generations, while large numbers had
purchased the land they occupied. But these yeomen farmers
were hard pressed and many had sold their land before 1833.
When we go carefully through the minutes of evidence given
before the committee we are especially impressed with the rapid
decrease in the number of landowning farmers, which had
taken place after the war, and before 1833. In Cumberland
and Westmoreland the number had " considerably diminished."
Up to the war properties had continued long in the same famihes,
but in 1833, Mr. Blamire said he believed that since 181 5 a
greater change had taken place in the proprietorship of the
small farms than in any antecedent period of much longer
duration. In 1837, Blamire was again before the Committee,
and says : " The condition [of the landowning farmers in
Cumberland] is generally speaking most pitiable. At the
present moment they are as a body, in fact, ceasing to exist at
all." Mr. Merry, the owner and occupier of a three-hundred
acre farm in the North Riding of Yorkshire stated that in the
different dales in the district where he lived the farmers had

314 AGRICULTURAL ECONOMICS

nearly all been '' ancient freeholders " ; but the number of
such farmers had been " regularly lessening for ten years,"
during which time they had been reduced about a seventh.
From Mr. W. Simpson we learn that the landowning farmers
were " nearly all gone " near Doncaster, Yorkshire. In Not-
tinghamshire there were " comparatively very few remaining."
In Leicestershire, Northumberland, and the Midland Counties,
generally, small proprietors farming their own land were numer-
ous, but " a great many of them " had been ruined. In Shrop-
shire and in Cheshire the number of " small landed proprietors "
had " greatly diminished, . . . since the year 1800." In Here-
fordshire there were still a great many yeomen but fewer than
twenty years earher. In Worcestershire a good many free-
holders, who farmed their own lands, had sold out. In Kent,
near Rochester, no great number had gone to the wall, but they
were poor, many of them living little better than workingmen.
Such farmers were yet numerous in Hampshire and West
Sussex, but many had been compelled to sell their estates and
those who remained were " much reduced in point of circum-
stances." In Wiltshire the number of landowning farmers had
diminished " most materially " within the past fifteen years.
In Somersetshire land had been changing hands a great deal since
the war, and the number of farmers who bought land was not so
great as the number of those who had sold. It was the custom
there for the landlords to " run out " the life leases and not
make any new ones. Thus all the evidence points to the con-
clusion that an unusually rapid decline of the yeomanry had
taken place during the period of the agricultural depression
which followed the close of the Napoleonic wars. We shall now
investigate somewhat in detail the causes of this unusually
rapid decline.

Extravagance, living beyond one's income, often leads to
bankruptcy in all lines of business, and it would be strange,
indeed, if this were not, occasionally, the cause which compels
farmers to sell their estates. From John Norden we learn
that in 1607 this was sometimes the cause of failure on the
part of landowning farmers in England. In 1833 a great many

DECLINE OF LANDOWNING FARMERS IN ENGLAND 315

of the yeomen of Cheshire were living beyond their means.
During the period of high prices they had accustomed them-
selves to a standard of living which they were unable to main-
tain after prices had fallen, without gradually consuming their
estates. Lee says of this class, " Their property is nearly gone."
There is a suggestion that a change of this kind in the habits
of the yeomen farmers may have been the occasion of forced
sales of land in Worcestershire and in Somersetshire.

But while extravagance may at times have been the cause of
failure, the yeomen as a class were industrious and frugal.
Speaking of the yeomanry of Cumberland, Blamire says, they
" are quite as frugal as the tenantry and often more so, and
their situation is often worse. . . . They equally lodge their
laborers in their own houses, and dine at the same table
with them." Having to give up their estates was "by no
means the effect of improvidence on their part." Mr. W. Thur-
nall said that in Cambridgeshire the yeomen were very economi-
cal and always hard-working men. " There is not a more
industrious man in the three counties," says J. B. Turner,
" than a man in Herefordshire whose estate has been sold under
bankruptcy."

It was not, as a rule, lack of frugality and industry which ruined
so many of the yeomanry during this period of depression ;
it was primarily the fall in prices at a time when indebtedness
was very prevalent with this class. This indebtedness was
sometimes incurred for the purpose of purchasing land, some-
times for improvement, often to provide for the younger mem-
bers of the family, and, occasionally, to cover general living
expenses.

Mr. W. Simpson told the Committee of 1833 that the yeo-
manry near Doncaster were " many of . them bankrupts."
" Farmers who, having four or five thousand pounds, bought
farms twenty-five or thirty years ago, borrowing part of the
purchase money, have been obhged to sell, and they have
nothing left." In Nottinghamshire " a great number bought
land at high prices, and having mortgaged their farms for
more than their value at the reduced prices, they have been

3l6 AGRICULTURAL ECONOMICS

almost universally ruined." This class of farmers met with the
same misfortune in Lincolnshire. In Cheshire, " A great many
farmers got a considerable sum of money, and were mad to
lay it out in land. They purchased land at forty years' pur-
chase, in some instances, and borrowed probably half the
money," and soon after, the produce sold for so much less than
formerly that they could not pay the interest on the money they
had borrowed and were " obliged to sell their properties for
what they could get." In Shropshire, again, farmers paid
high prices for land and " borrowed money, as much as they
could sell the property for afterwards," These same stories
are repeated for Norfolk, Hampshire, Somersetshire, Berkshire,
and Buckinghamshire.

Improvements do not appear to have been very generally the
occasion of indebtedness, but in some instances the witnesses
before the Select Committee gave this as an important cause.

The provision for younger children, or the paying off of the
other heirs when one member of the family took the estate,
was often the occasion of heavy indebtedness. In Cumberland,
the " statesmen " had large families and " from a miscalculation
of their real situation " they left their children " larger fortunes
than they ought to have done, and saddled the oldest son with
the payment of a sum of money which it was impossible for
him to pay." This is given as an important cause of in-
debtedness in Nottinghamshire, Somersetshire, Berkshire, and
Buckinghamshire.

Thus it would seem that in 1833 these small estates were very
generally encumbered. The indebtedness had been incurred
during the period of high prices ; and when prices fell the debt
was often equal to, if not greater than, the value of the land.
The whole net product would not, in many cases, pay the
interest. Where this did not force the yeomen to give up their
estates at once, the land usually came into the market at the
death of the owner, as no member of the family cared, as a
rule, to take up the burden of mortgaged ownership which had
come to be looked upon as less desirable than tenancy. This
fall of prices at a time when mortgages were very prevalent

DECLINE OF LANDOWNING FARMERS IN ENGLAND 317

was the immediate cause of the rapid decHne in landownership
on the part of farmers during the twenties, thirties, and forties
of the nineteenth century.

When this land came upon the market it was usually pur-
chased by great landlords, merchants, or manufacturers, who
very rarely cared to put it upon the market again ; and thus
the results of this temporary depression have been more perma-
nent than we should expect in a country where landownership
on a large scale does not involve so many social advantages,
and where systems of primogeniture and entail do not bind the
large estates together permanently.

By 1836 the depression which followed the war had prac-
tically ceased and the period from this date until 1875 was,
on the whole, an era of great prosperity for English agriculture,
though the low returns on landed investments, lapsing life
leases, forced sales for settling estates, etc., were gradually
reducing the number of yeomen farmers decade after decade,
until by the close of the third quarter of the century they were
found only here and there ; and tenancy was the rule. In 1883
John Rae estimated that probably not more than 5 per cent of
the farmers of England owned the land which they cultivated,
yet during this period of prosperity farmers sometimes pur-
chased land. A slight movement in this direction to some
extent counteracted the result of the tendency on the part of
landowning farmers to alienate their estates.

By 1875 the foreign wheat supply had become more easily
accessible, as well as more abundant ; and the depression which
followed ruined hundreds of farmers and rendered many of the
landlords comparatively poor. In 1895 the Royal Commission
on Agriculture sent assistant commissioners into the various
parts of the country to gather information concerning the
effects of the agricultural depression. Many of these assistant
commissioners did not report upon the landowning farmers,
possibly because they found no representatives of this class,
but others have given valuable bits of information.

Cumberland still retained some of her " statesmen," land-
owning farmers, in 1895, but the problems of the second quarter

3i8

AGRICULTURAL ECONOMICS

of the century were still confronting them. In consequence
of the legacies and annuities which eldest sons had to pay on
the basis of the high prices which prevailed before the depression
of 1875, a great many yeomen farmers were " over head and
ears in debt." Not only had prices fallen, but the number of
years' purchase at which land could be bought had been reduced.
These estates were usually mortgaged, and often so heavily
that the farmer who nominally owned his land had more to
pay as interest than the tenant farmers paid as rent. It is
said that this class of farmers had been gradually decreasing
in numbers for many years. This gradual decline is illustrated
in a most interesting manner by the figures available for the
parish of Abbey Quarter, as shown in Table XXII.

TABLE XXII

Year

1604
1648
1780
1812

1837
1864
1894

Number of
" Statesmen "

83
81

SI

38
30

Number of
Leaseholders

None

29
41

Average Size
^OF Holdings

42 acres

54 acres

58 acres

58 acres

100 acres

100 acres

100 acres

" There have been three causes for the gradual diminution in
numbers of the statesmen," says Mr. Fox. " In the first place,
many of them, tempted by the high prices offered for their land
by large landowners, have sold. . . . Secondly, a number of
them, since the lower prices, have let their land to tenants.
But, thirdly, the quaHties which are necessary to insure success
on a small holding, and which should be conspicuous both in
the owner and his wife, namely, energy and thrift, are not
necessarily hereditary qualities . . . and there are cases where
land has had to be sold because the mode of life, which was
pursued by the father, and accompanied by success, was not
acceptable to the son."

DECLINE OF LANDOWNING FARMERS IN ENGLAND 319

In Westmoreland the landowning farmers had gradually
disappeared until, in 1895, they were nearly extinct. " How-
ever, we may regret the change," to quote Coleman, after
Wilson Fox, " it appears to have been inevitable. Land is an
expensive luxury, and not a profitable investment. As civi-
lization progressed, and the cost of Uving increased, returns
were not proportionately advanced. The land became gradu-
ally burdened with charges, and often sufiFering in condition, was
eventually parted with, going as a rule to swell the larger
estates. Nor as regards the public advantage, need such a
result be lamented, for it is quite certain that a flourishing ten-
antry under a liberal and wealthy owner, are far more productive
than owners whose means are too straitened to allow of the
proper appHcation of capital. Probably the most complete
illustration of this change is seen in the Earl of Bective's fine
property at Underly, which comprises about 25,000 acres.
... A large part of this property was formerly owned by
small proprietors, mostly statesmen. These men held on as
long as possible, and were eaten up by debts and charges,
and the soil wretchedly impoverished. The trustees of the
late Alderman Thomson, who himself, if I mistake not, sprang
from a statesman family, bought up the farms by degrees, and
there is still money waiting similar investments. In no case
did the investment pay more than two and three-fourths per
cent on the purchase money. In many cases the former owners
continued as the tenants; and when the land was drained
and limed, and proper buildings erected, these men, who were
formerly hard up, became well-to-do farmers. . . . The
Underly Estate probably yields more than double the prod-
uce of which the land was capable when divided and ill
managed."

Writing of this same estate, Lefevre gives some additional
facts which are very interesting and give clearness to the
picture. " This great property . . . was gradually accumulated
and purchased under the express direction of the will of a man
who, two generations ago, made a large fortune in trade, and
whose only daughter married a nobleman. The estate was

320 AGRICULTURAL ECONOMICS

made up of 226 different purchases, nearly all of them cases
where the vendors belonged to the class of yeomen farmers,
or statesmen, as they are called in that district, who, them-
selves and their ancestors, had cultivated their own lands for
many generations. Instead then of 226 distinct owners of
land, there is now a single owner. It may safely be assumed,
in respect of this great property, that, under the existing system
of family entail permissible by law, it will for generations
to come remain intact in a single ownership."

Lincolnshire still possessed a large number of small peasant
proprietors and some large yeomen farmers, in 1895. Many
farmers had bought land during the prosperous times prior to
1875, and had paid double the price for which it would sell
after the fall in prices had brought on the depression. A large
proportion of the purchase money had frequently been obtained
by giving a mortgage on the land, and in some cases the land
had fallen in value until it was worth less than the face value of
the mortgage. Fox says of these men : " Many . . . have
already sunk, overwhelmed by the burden of interest they had
to pay." Mr. Fox devotes several pages to the condition of
the small landowning farmers of the southern part of 'Lincoln-
shire. Most of these people worked hard and Uved poorly.
In reading the report one might easily think Mr. Fox was para-
phrasing Young's report on the same district, written one hun-
dred years before, were it not for the further evidence of ruin
on every hand. In speaking of these small proprietors, Fox
says: "The possession of land has been the ruin of hundreds
in the past and is a millstone around the neck of hundreds in the
present. Not the least regrettable reflection in this sad story
is that most of these small owners are the flower of a class, the
pick of the foremen and the laborers, who excelled in the
performance of their duties, who toiled and saved and denied
themselves for years to raise themselves out of one class into
another, and who, when they had bought their independence
and a new social position, found themselves bound to admit
failure, their hard savings gone, their energies wasted, their
hopes crushed, to retrace their steps back into the ranks out of

J. C. ELMORE

DECLINE OF LANDOWNING FARMERS IN ENGLAND 321

which they had stepped, at a time of life when they had expended
much of their vitality and all their ambition."

In Cambridgeshire the depression proved very disastrous
to the farmers generally. The landowning farmers, burdened
with mortgages, were the first to succumb ; and those of this
class who remained, in 1895, were in great straits. " In several
districts," says Fox, " evidence was privately given me of this,
and in one of them a gentleman, who was in the position to
know the facts, stated that all the yeoman farmers there . . .
were heavily mortgaged."

" We have had a good many yeomen in the County of Nor-
folk," said Mr. Read before the Commission in 1897, " and I
say that they are much the hardest hit of all. They have to
bear both the losses of the landlord and the losses of the tenant,
and there have been the most disastrous failures. A good many
of our farmers were told twenty-five years ago that the best
thing that they could do was to buy their farms, and they did
so, but they had not enough cash, and they had to mortgage their
farms. They have gone to the wall worse by far than the
common tenant farmers. There are a good many of our old
and most respected yeomen who have disappeared within the
last few years. I feel confident that they will almost all of
them go unless there is a change for the better."

Speaking of Suffolk, Mr. Everett of the commission said, " We
had a great many yeomen farmers and in the intense competition
for land in the good times, a great many men took that course of
making themselves, as they thought, independent ; they bought
land and mortgaged it, and I should think three quarters of
that class of men are now stripped of every penny they had."

During the " good times," the farmers of Wiltshire saved
money and many of them were able to purchase farms, but as
in other places, they borrowed money and their investment
proved disastrous. One witness cited four instances within
his own knowledge of farmers who bought their farms about
1875. Of these, two had come to grief and absconded, a third
had lost his farm, which was in the hands of the mortgagee,
while the fourth was still holding his land.

322 AGRICULTURAL ECONOMICS

In speaking of the condition of landowning farmers in general,
the final report of the Royal Commission states that " As a
rule their properties, whether inherited or purchased by the
present proprietors, are charged with mortgages, and the
mortgagee makes no remission of the interest due to him.
In consequence of the shrinkage in the value of land, the interest
on the mortgage has become in many cases a burden, which the
owner has been unable to bear, and frequently where the yeoman
farmer has succeeded in paying the interest due from him it
has been a heavier rent than he would have paid to a landlord."

Thus it has come to pass that landowning farmers are rare
and the tenant farmer employing a considerable number of
agricultural laborers is typical in England to-day. Under
conditions as they exist in England landownership is not eco-
nomically profitable to the farmer. Whether tenant farmers
are equally desirable citizens, and whether the nation which
leaves the problem of landownership to the free play of forces
which eliminate the small landowner and establish tenant
farming on a larger scale with a large agricultural laboring class
will prove to be as strong a nation as where the landowning
farmer is established and protected is one of the great questions
that should receive consideration by American statesmen to-day.

CHAPTER XXV

RELATIONS BETWEEN LANDLORDS AND TENANTS IN
ENGLAND

So long as a country has an abundant supply of productive
land, and its agriculture is characterized by the extensive use
of the natural fertility of the soil, the adjustment of the relations
between landlords and tenants is a comparatively simple matter.
But when some of the elements of this original fertility have
begun to show signs of exhaustion, or when the increasing
demands of a growing population make it necessary that each
acre of land shall yield a larger product, so that it becomes
necessary to introduce a more intensive system of culture,
involving investments which cannot be realized upon for several
years, the tenant problem becomes a serious one.

The same progress which makes intensive farming necessary
tends also to augment the numbers of those who must hire the
land which they cultivate. With the growth of population, com-
petition for the use of land becomes more and more keen and
drives the price of land higher and higher. This makes it ever
more and more difl&cult for the succeeding generations of farmers
to acquire the ownership of land. Other things remaining
equal, with the progress of society the tenant problem becomes
more general as well as more difficult to solve.

England is preeminently the land of tenant farmers. Less
than 14 per cent of the farm land of that country is reported as
operated by its owners, and in most cases such land is operated
by hired farmers, or bailiffs as they are called. About 86 per cent
of the farm land of England is operated by tenants who pay a
fixed rent for its use. Share tenancy is not practiced in England.

It was more than a century ago that the progress of English
industrial society had reached the stage of development where

323

324 AGRICULTURAL ECONOMICS

intensive agriculture was socially desirable, and also profitable
to the farmers where their relations to the land were so adjusted
as to guarantee to them just returns upon their investments.
The earliest attempts at improving the agriculture of the
country at once brought forward the tenant problem. In 1649
Walter Blith wrote : ^ " If a tenant be at ever so great pains or
cost for improving of his land, he doth thereby but occasion
a great rack upon himself, or else invest his landlord with his
cost and labor gratis, or at best lies at his landlord's mercy
for requital, which occasions a neglect of good husbandry to
his own, the land, the landlord, and the kingdom's suffering."

For more than a century the rural economists of England
have been trying to solve this problem. Hence it is in England
that the tenant problem can best be studied in the Hght of
history.

Prior to the introduction of the new agriculture, which move-
ment became important during the latter half of the eighteenth
century, the tenant farmers of England usually held their lands
" at will," without any written agreements. Under this tenure,
the common law and the customs of the estates formed the only
tie between owners and tenants, and either party could bring
the tenancy to a close, by giving six months' notice to the other.^
Towards the close of the eighteenth century, it became a com-
mon custom, where land was held from year to year, to draw
up legal agreements, by which the tenants bound themselves
" to the fulfillment of certain clauses and conditions." * But
the most significant movement of this period was that in favor
of leases for a term of years. The rural economists of that time
were quite generally of the opinion that long leases were neces-
sary wherever the farmers were expected to make investments
in or upon the land, such as require several years to yield their
full return. It was stated in 1799 that the improvements which
had taken place in England prior to that time had been almost

1 Thorold Rogers, "Work and Wages," pp. 458-450-

* Loudon, "Encyclopedia of Agriculture," p. 764; also, W. Marshall, "Landed
Estates," i8o6, p. 378.

' H. E. Strickland, "Agricultural Survey of the East Ridins of Yorkshir«."

RELATIONS BETWEEN LANDLORDS AND TENANTS 325

entirely due to the custom of granting twenty-one-year leases,
and that where it was uncommon to grant leases for long periods
of years, agriculture remained in a backward condition.^

During the early years of the nineteenth century the EngHsh
Board of Agriculture published a series of surveys which set
forth the conditions of agriculture in every county of the king-
dom. This material, supplemented by the other agricultural
writings of the time, makes it possible to present, in considerable
detail, the history of the attempts to solve the tenant problem
in England by the introduction of long leases.

From these surveys it appears that the greater part of the
tenant farmers of England one hundred years ago held their
farms " at will," without written agreements, or " from year
to year " under written agreements. In either case they might
be thrown out of the possession of their farms on six months'
notice, at the pleasure of the landlord. But while this was the
dominant form of land tenure throughout the greater part of
England, the use of long-term leases had greatly increased during
the latter part of the eighteenth century, and leases varying in
duration from three to twenty-one years were found in every
county. Twenty-one-year leases were much used in the eastern
counties, and leases running from seven to fourteen years were
quite common in the western and southern counties. The
county of Norfolk, the home of the new agriculture, was pre-
eminently the land of long leases. Arthur Young wrote of
this county : " The great improvements which for seventy
years past have rendered Norfolk famous for its husbandry,
were effected by means of twenty-one-year leases, a circum-
stance which very fortunately took place on the first attempt to
break up the heaths and warrens in the northwestern part
of the county. ... In general it may be held for sound
doctrine in Norfolk, that an estate can neither be improved, nor
even held to its former state of improvement, without long
leases." ^ This view was held, also, by that most competent

1 Brown, "Agricultural Survey of West Riding of Yorkshire," p. 30; also, Arthur
Young, "Survey of Norfolk," p. 47.
a "Survey," p. 47-

326 AGRICULTURAL ECONOMICS

agricultural writer of the time, William Marshall/ who wrote
as follows on this same subject, in 1795: "Marling is the
principal improvement of a Norfolk farm, but who would marl
on a seven years' lease? Where much marling is to be done,
fourteen years is too short a term."

In some places, it is true, the old and simple system of holding
land from year to year was thought to be entirely satisfactory.
It was reported that great estates were let in full confidence
without leases in the East Riding of Yorkshire, " where a lease
was never asked for, probably never wished for," because the
tenants were " equally secure " when holding their farms from
year to year.^ In Staffordshire the conditions were much the
same.^ In Derbyshire, the Duke of Devonshire granted no
leases, "but owing to his fair treatment of tenants" improve-
ments were carried on extensively ; but the other landlords of
the county were not able to inspire such confidence.* Arthur
Young, who was the champion of long leases, laid down the
general rule, that upon rich soils where no improvements are
necessary, " the want of leases cannot be material ; but where
liming, marling, draining, fencing, etc., are demanded, the
want of a lease will often be the want of the improvements." ^

But while " tenancy at will " or " from year to year " was
quite satisfactory where no improvements were to be made, or
where the landlords were able to win the confidence of their
tenants, the surveyors reported quite generally that the security,
of long leases was necessary to induce the farmers to carry on
the needed improvements. In remarking upon the lack of
security to the investments of tenants in England, at that time,
James Anderson says " an unprejudiced person, who should
attentively consider the whole system of conduct pursued by
landed [proprietors, and the ideas that in general prevail in
this respect, would believe that agriculture was an employment
which it was deemed to be a good policy to repress above all
others." «

1 "Rural Economy of Norfolk," Vol. I, p. 68. * "Survey," p. 72.

*Ibid.,p. SI. *Ibid., p. 35.

^Ibid., "Lincobshire," pp. 57-60, • "Agriculture," Vol. Ill, p. 92.

RELATIONS BETWEEN LANDLORDS AND TENANTS 327

John Tuke, who for many reasons favored the letting of land
from year to year, says in his report on the North Riding of
Yorkshire : " Experience, nevertheless, teaches us, that under
some landlords, especially those in straitened circumstances,
... or where considerable improvements are to be made at the
expense of the tenants, it is more advisable to be under greater
certainty, though attended with greater rent." ^ The desir-
ability of increasing the number of twenty-one-year leases in
the West Riding of Yorkshire was stated very forcibly by
Robert Brown, who believed that without long-term leases
improvements could not be made.^ In Derbyshire improve-
ments were thought to be much retarded because the tenants
lacked the security of long-term leases.^ In Lincolnshire, where
leases for a term of years were very rare, it was generally be-
lieved that, while improvements had been carried forward
fairly well, long-term leases would result in much greater im-
provement."* In Leicestershire, the yeomen farmers were
improving their lands, but the tenant farmers were slow to
make improvements owing to the lack of long-term leases. It
was said that while in many cases the present landlords could
be trusted by the farmers, the estates might change hands at
any time and that a new lord usually meant a different ordering
of affairs. The phrase, " New lords, new laws," was current
in Leicestershire.^ In 1784 William Marshall was of the
opinion that, in the midland counties, it was of little importance
whether land was held under a lease for a term of years, or from
year to year, — such was the confidence of the tenantr}^ in
the landlords. An instance is given of a young man who held
a large farm from year to year, and who proceeded to improve
the land in various ways. Five years later the following note
was added to the earlier statement : " Unfortunately for the
tenant, in this instance, his farm is now on sale, and the very
expensive improvements which he has been making, are, prob-
ably, in a great measure sunk." ®

1 " Survey," p. 55. 2 Ilnd., p. 30. » Ibid., Vol. Ill, p. 638.

* Ibid., p. 57. « Ibid., p. 341.

« "Rural Economy of the Midland Counties," Vol. II, p. 52.

328 AGRICULTURAL ECONOMICS

It was thought that farmers would be more enterprising in
Shropshire, if more leases were granted.^ In Worcestershire,
it was believed, both by the landlords and by the tenants,
that, where improvements were to be made, a lease for a term of
years was necessary. John Friest, the author of the " Bucking-
hamshire Survey," made a plea for long leases, especially where
improvements were to be made. In Cambridgeshire, where
most of the farms were held on yearly tenures, the lack of cer-
tainty of tenure was much felt. In general the tendency was
for the tenant farmers who held their farms from year to year,
to adhere to the old customs and to attempt no new improve-
ments ; for the saying :

He that havocs may sit,

He that improves must flit,

expressed a common belief among the tenant farmers of that
day who held their land from year to year. The farmers and
the rural economists of the time were quite generally agreed that
the adoption of long-term leases throughout the land was
essential to the introduction of the desired improvements in
agriculture.

The long-term lease of one hundred years ago reached its
highest degree of perfection in the county of Norfolk. The
two main objects to be secured by the covenants of the lease
were : first, to guarantee to the tenant the continued possession
of the farm for a period sufficiently long to encourage invest-
ments in improvements, especially such improvements as are
made in and upon the soil by careful tilth and by the addition
of artificial fertilizers ; and second, to secure the landlord against
improper use of the property during the last few years of the
tenancy so that the farm would be returned to the landlord
in good condition. " No department of the management of
an estate gives more uneasiness to both landlord and tenant,"
says Marshall, " than do removals, or exchanges of tenants ; and
every covenant which facilitates this unpleasant business is
valuable." ^

> "Survey," p. 137.

* "Rural Economy of Norfolk," second edition. Vol. I, p. 69.

RELATIONS BETWEEN LANDLORDS AND TENANTS 329

In the Norfolk leases the greater number of the covenants
which restrict the farmer in his operations pertain to the last
three years of the tenancy. This was true to a greater or less
extent in the other counties where long-term leases were in use.
This method of laying down restrictions seems to have been
based on the belief that the interest of the tenant would lead
him to farm in accordance with the rules of good husbandry until
the last few years of the tenancy, at which time he could increase
his own profits by exhausting the soil and leaving the farm in
bad condition for the incoming tenant.

We wish to call especial attention to a covenant given by
Marshall as found in the Norfolk leases, which forbids the taking
of more than two grain crops without a whole year's fallow, a
crop of turnips, or " a two years' lay." Writing nine years
later than Marshall (1804), Arthur Young gives the following
clause among " new covenants " in use in the county of Norfolk.
The tenant " shall not sow any of the lands with two successive
crops of corn, grain, pulse, rape or turnips for seed," ^ without
the consent of the landlord. The rule that two grain crops
should not be grown in succession on the same piece of land
became an established custom in most of the grain-growing
districts of England. This rule was in harmony with the
Norfolk four-course system of crop rotation. In this four-
course system, a fallow crop, that is a cultivated crop, usually
a root crop, is followed by a crop of spring grain with which
clover or grass seeds are sown. After harvesting the hay the
next season, the field is plowed and put into condition for fall
grain which is the fourth crop in the course. For more than a
century this system has been the most highly approved of all
systems of crop rotation in use in England. This same system
was introduced into Germany by Albrecht Thaer.

A study of the leases in use in the various counties of England
at the close of the eighteenth century does not give so favorable
an impression as do the descriptions of the Norfolk system.
The limitations and restrictions as to the crops which could be
grown, and as to the system of crop rotation, were often of

1 "Agriculture of Norfolk," p. 50.

330 AGRICULTURAL ECONOMICS

such a character as to make them injurious to the interests of the
farmers. These regulations were Ukely to be of such a character
as would make it impossible for the farmers to adjust their
farming to the demands of the times. In the Vale of Gloucester,
for example, where nearly all of the land was as yet in the
common fields, the tenants were required " to fallow the arable
land, every third or fourth year ; according to the established
course of husbandry of the township." And again, " not to
sow hemp, flax, or rape seed on any part of the premises. Nor,
otherwise, to cross-crop ; but to sow the same corn and grain,
from year to year, according to the best and most usual course of
husbandry used in the respective townships." ^

In writing on the subject of the restricting clauses, generally
found in the leases of his time, Robert Brown says : " The
restrictions imposed during the time he occupies his farm,
prevent the farmer from changing his management, or of adapt-
ing his crops to the nature of the soil he possesses. Agriculture
is a living science which is progressively improving, consequently
what may be esteemed a good course of cropping at one time,
may, from experience and observation, be afterwards found
defective and erroneous. That particular covenants in a lease
are obstacles to improvements cannot be disputed ; for the very
nature of a covenant supposes that the practice to be regulated
by it had arrived at its ne plus ultra, and could not be mended.
These covenants or restrictions subsist more or less in every
lease we heard of ; and the shorter the lease the more numerous
they are. . . . General rules of management are very proper
in leases, such as, to keep the farm in good order, to consume
all the straw raised upon it, and to sell no dung. These restric-
tions we will allow ; and every good farmer will follow them
whether he is bound to do so or not. Nay, we will go farther —
if leases of a proper duration were granted, it is very reasonable
that the property of the landlord should be protected by restrict-
ing clauses for the three years previous to their expiration.
But after all, it will be found that no clause can be inserted,
besides the general ones already mentioned, that will serve to
1 W. Marshall, "Rural Economy of Gloucestershire," Vol. I, p. 25.

RELATIONS BETWEEN LANDLORDS AND TENANTS 331

enhance the value of the land, except obliging the farmer to
leave a proportional quantity of such land in grass at the
expiration of the lease, and specifying the manner in which that
land is to be sown down. Other clauses serve only to distress the
farmer, but will never promote the interests of the land-lord."^

The agricultural writers of the time were by no means all in
full agreement with Robert Brown in his views on the subject
of leases. Leases seem to have been in best repute in the eastern
counties, where they were usually for a term of twenty-one years.
Mr. Bailey is quoted as saying, in criticism of Mr. Brown's
position as stated above, that, " if the proprietors of land were
sure of always getting tenants that would act properly there
would be no need of restricting covenants; but this is not
always the case, and there are many instances of estates being
much injured by exhausting crops where tenants were not
properly restricted. That many covenants are useless or
hurtful I readily admit ; but covenants may be so framed, that a
tenant shall have ample liberty to take such crops as he shall
think proper, and to propose such modes as shall benefit himself
without injuring his landlord." ^

It was quite generally agreed that long leases, properly drawn,
were extremely desirable from the standpoint of the farmer,
wherever improvements were to be made. But the landlords
were not so generally of the opinion that long-term leases
were a good thing. Many landlords claimed that it made the
tenants too independent.^ But a more important objection was
found in the fact that while a lease of sufl&cient length would
enable the tenant to make improvements, it was hard to arrange
matters so that the tenants would not exhaust the land at the
end of the tenancy. It often happened that a tenant would
bring the land into good tilth and to a high degree of fertility
during the early years of his tenancy, and then take as nearly
everything out of it as possible during the last few years of
the lease.

1 "Agricultural Survey, W. R. Yorkshire," pp. 42-44. ' Ibid., p. 50.

* " Stafifordshire Survey," p. 30; "Leicestershire Survey," pp. 51-52; "North-
amptonshire Survey," p. 45.

332 AGRICULTURAL ECONOMICS

Another objection to the granting of leases for long terms
became quite general between 1790 and 181 5. The landlords
objected that as a result of rising prices during the period covered
by the leases, they sustained great losses. It was maintained
by the landlords of Surrey, for example, that by letting land for
a term of fourteen or twenty-one years or any longer period,
the owners of the land actually received, " almost every year
during the currency of the lease, and certainly in the latter years
of it, a less rent than he did at the commencement, from the
depreciation in the value of money." ^ And for this reason the
landlords were objecting to the granting of leases. Even in the
county of Norfolk, where the twenty-one-year lease had proved
so beneficial, the landlords objected to long leases because it so
often happened that soon after a farm was rented the prices
of agricultural produce would rise so much higher than when
the lease was taken, that the tenants were " under-rented "
for a series of years. ^ The basis for complaint on this ground is
shown by the fact that the average price of wheat was about
twice as high for the five years from 1809 to 18 13 as for the
five years from 1790 to 1794.^

A statement of the tenant problem and the solution proposed
by an eminent rural economist of the time will be interesting in
this connection. In his work on " Landed Estates," pubhshed
in 1806, William Marshall reviews the existing forms of land
tenure,'* " the tenant holding ai will "; " holding from year
to year, under a written agreement, with specified covenants " ;
" leases for a term of years, as seven, fourteen, twenty-one, or
greater number of years " ; and says :

" Objections are urged against each of these species of tenancy. The
depreciation of the circulating value of money, and the consequent
nominal rise, in the rental value of lands, has rendered long leases
greatly disadvantageous to proprietors: while annual holdings are
not only discouraging to tenants ; — especially to men of exertion
and capital — but are a bar to the improvement, and a clog on the

1 W. Stevenson, "Agriculture of Surrey," p. q8.

2 Marshall, "Rural Economy of Norfolk," Vol. I, p. 67.

» Prothero, "English Agriculture," Appendix I. * Pp. 378 to 382.

RELATIONS BETWEEN LANDLORDS AND TENANTS 333

prosperity of an estate : beside being, in the first instance, unfriendly
to the interests of proprietors ; inasmuch as they lower the fair rental
values of their lands.

" Some years ago, on perceiving the antipathy which had gone forth
among men of fortune, against granting leases for long terms, and
being well aware of the disadvantages of annual holdings, it occurred
to me that agreements for occupying from three years to three years,
instead of from year to year, would be an eligible species of tenancy :
or, which is the same thing, granting leases for six years certain;
with a condition that if neither party give notice to quit, before the
expiration of the first three years, then the term to be prolonged to
nine years; and so on, from three years to three years . . . until
three years after notice has been duly given, by either party to the
other.

" This gives room for a tenant 'to turn his hand in,' and a loose to
his exertions. He has, in reality, a fresh lease of six years granted
him, every third year. This is sufficient to encourage him to keep
his lands, continually, in a husbandlike state. And if he execute, at
his own expense, any of the higher improvements, such as [improving
waste lands, etc.] it is but reasonable that he should have, whenever
be may quit his farm, an equitable remuneration for the remainder
of such improvements. Thus, the tenant is placed on sure ground.
He may till, manure, and improve, with much the same confidence,
as if the lands in his occupation were his own property.

" In return for such advantages, the tenant cannot refuse to cove-
nant, that, during the last three years of his term, he will manage his
farm in a husbandlike manner, and, at the end of the term, wiU leave
it in such a state of cultivation and repair, as will induce a good tenant
to take it, at a full rent ; or suffer the proprietor to put it in such a
state, at his (the outgoing tenant's) expense.

" An estate which is under lease, on these principles, and under
attentive management, cannot be let down to an unprofitable state.
It must continually remain under a regular course of husbandry,
and in a state of cxiltivation and repair. If the acting manager do
his duty, even the changing of tenants cannot interrupt its prosperity.
The incoming tenant (under attentive management) steps into his
farm, with the advantages that he would have enjoyed, had it been
under his own direction for the three preceding years.

" But, with a lease on this principle, and with a proper choice of
tenants, removals can rarely happen. What superintendent, who

334 AGRICULTURAL ECONOMICS

knows the diflSculty of procuring a good tenant, would wish to dis-
charge him? And no such tenant will readily leave the farm he is
settled upon, if he find proper treatment. Even should notice be
given, in consequence of any misunderstanding between the parties,
three years allow time for reflection; and, before they expire, re-
sentment may die away, and cordiality be restored. If, however,
either party remain dissatisfied, he has an easy way of dissolving the
connection. Or if a proprietor or a superintendent is desirous to
make fresh arrangements on an estate ; or to regulate its rent roll,
by the existing value of money; he need not wait many years to
fulfill his desire. For if the tenant in occupancy will not agree to
pay a fair rent, he has three years before him to choose one who will ;
another valuable advantage of the tenancy proposed.

" Thus, a lease on this principle has a decided preference by a pro-
prietor, to long leases. And its advantage over annual holdings is
not less considerable. The lands of an estate are weU worth from 5
to 10 per cent more, to a tenant, under the former, than under the
latter, tenancy. So that, besides the conveniences mentioned, a
proprietor may be immediately adding very considerably to his in-
come, by this principle of management.

" This species of tenancy I have had the happiness of being the
means of introducing, upon some considerable estates, in England,
in Wales, and in Scotland ; with, I believe, the mutual satisfaction
of the men of fortune who possess them, and of their tenants."

While this system proposed by Marshall might solve the
problem of adjusting the amount of rent to changes in real
rental values, and vi^hile it might encourage the tenant to make
such improvements as he could realize upon in three years, it
lays down no scheme for determining the value of unexhausted
improvements, and, indeed, does not even propose that a tenant
shall have remuneration for the investments made upon the land
during the last three years, and on which, if he farms in a hus-
bandmanlike manner, he cannot realize all of the benefit.
Thus it seems that Marshall failed to solve the most permanent
difficulty which the tenant problem presented ; for the unsettled
condition of the money market became less important in the
course of time, while the problem of unexhausted improvements
has been of increasing importance as the years have gone by.

RELATIONS BETWEEN LANDLORDS AND TENANTS 335

Various methods were devised, in different parts of England,
for keeping the tenants from leaving the land in an exhausted
condition at the termination of their leases. It was the custom
on one estate in Shropshire to lease the land for twenty-one
years " certain," and for seven years more at the option of the
landlord. At the end of the twenty-one-year period, a new
contract of the same kind might be entered into, if terms could
be agreed upon, or the tenancy might be brought to a close,
but the important condition was that if the tenant had reduced
the land to a very low degree of fertility he could be forced to
keep the farm for seven years longer at the old rent. Even if
this system had succeeded in protecting the landlord, it failed
even to recognize the right of the tenant to unexhausted improve-
ments.

The system which subsequent history has shown to be the most
effective means of keeping the farmers from exhausting the land
during the last few years of the tenancy, is that reported in the
" Yorkshire Survey." The system was that of granting remun-
eration to the retiring tenant for all his investments on which
time had not yet allowed him to reaHze their full returns ; the
tenant was then left free to farm as he pleased so long as he con-
formed to the rules of good husbandry. One of the examples
of this system is as follows :

" The landlord covenants to allow the tenant, on quitting his farm,
what two indifferent persons shall deem reasonable, for what is
generally called full tillage and half tillage, being for the rent and
assessment of his fallow ground, the plowing and the management
of the same ; the lime, manure, or other tUlage laid thereon ; the
seed sown thereupon ; the sowing and harrowing thereof ; also for
the sowing, harrowing, manuring, and managing any turnip fallow
which he may leave unsown ; also for any clover seed sown on the
premises ; and harrowing and rolling in of such seed ; and for every
other matter and thing done and performed in a husbandrylike
manner on such fallow lands, in the two last years of the term ; also
for the last year's manure left upon the premises ; and for any manure
and tUlage laid upon the grass land." ^

' "W. R. Yorkshire," p. 40.

336 AGRICULTURAL ECONOMICS

During the period of rising prices prior to 1812, the farmers
were anxious to rent land on long leases. It is said that at that
time, " good tenants always wanted leases," that " they were
galloping after one another to take leases at any rent." ^ After
the close of the Napoleonic wars, prices fell back almost to their
old level. The average price of wheat was just about half as
high for the five years from 1821 to 1825, as for the five years
from 1809 to 1 813. With this fall in prices the farmers became
even more averse to the taking of long leases than the landlords
had previously been. One after another the witnesses before
the Parliamentary Committee on Agriculture, in 1833, bore
testimony to the fact that the farmers were objecting seriously
to taking long leases, because they did not know how soon
they might be unable to pay the rent, as their capacity to pay
the rent depended upon such uncertain prices. The farmers
were in doubt as to how much protection they were to have from
the competition of foreign producers. But without regard to
this, they knew that the prices of agricultural products had been
falling for several years in succession, and they were unable to
tell when the limit would be reached.

With depressed prices the landlords found new reasons for
objecting to long leases. This was the time, one might think,
for the landlords to regain what they had lost during the period
of rising prices, but they found it rarely happened that the
tenants were able to stand the losses incurred by falling prices.
The farmer could not be forced to live up to his contract, if he
was losing money. It was said that leases were binding upon
the landlords but not upon the tenants. The fall in prices
seemed to demoralize the farmers, so that the landlord was
never certain that his tenant would not disregard the contract
in case of a fall in prices, whereas the tenant would certainly
remain to reap the benefits in case of a rise in prices.

The remedy which was often prescribed for the evils of
fluctuating prices was the introduction of " corn rents." ^ By
this it is not meant that the farmer was to give a certain

* Parliamentary Papers, 1833, Vol. V, questions 7420 and 8462.
^ Ibid., 1833, Vol. V, questions 2594-2596; 2601-2609.

RELATIONS BETWEEN LANDLORDS AND TENANTS 337

share of his crop to the landlord as rent, but that he should pay
as rent the value of a certain fixed amount of grain. The rent
was figured on the basis of what was called in Scotland the " fiars
prices of the county." In Scotland the sheriff of each county was
bound to summon a jury once each year to examine on oath
a number of witnesses, such as farmers, grain dealers, brewers,
etc., and according to the evidence thus obtained, to fix the
" fiars prices " of the different grades of grain. This system
was quite generally resorted to in Scotland during the period of
falling prices. Corn rents were advocated by the English rural
economists of the time, and were introduced with success in a
few instances in the western counties ; but this system failed to
gain general favor among the farm.ers and landlords of England.^

The use of long leases declined rapidly in England during
the period following the close of the continental wars. In those
counties where they had been most numerous and most bene-
ficial, the farmers came to prefer short leases or even tenancy
from year to year. The long lease as a means of solving the
tenant problem had been " weighed in the balance and found
wanting." Yet it must be admitted that long leases had done
a great deal of good in promoting improvements in English
agriculture and now that the prices of agricultural products
were depressed the farmers did not find it profitable to farm their
lands so intensively as formerly even if they had long-term
leases. Thus, the tenant problem was of less importance in
the minds of the farmers for a series of years, until the return
of prosperity again raised the question of investments in im-
provements and the means of securing just returns upon such
investments.

The period from 1836 to 1875 was one of general prosperity
for Enghsh farmers, and by 1850 the tenant problem was receiv-
ing the attention of Parliament. The use of long leases had
gradually declined during the first half of the nineteenth century,
and while there were agricultural economists who still advocated
this means of securing to the farmers legitimate returns upon

^Parliamentary Papers, Vol. V, questions 328 to 331; 347; 10438; 10448;
10454; 10591-10595.
z

338 AGRICULTURAL ECONOMICS

their investments, there was a very prevalent dislike to long
leases on the part of both parties concerned. Yet it was gen-
erally recognized that security to the tenant's investments was
essential to the promotion of that degree of intensity of culture
which was most profitable in the long run both to the tenant
and to the landlord.^

The long-period lease had proved so unsatisfactory that espe-
cial attention was now given to the perfecting of the " year
to year " agreement. The custom of " tenant-right," which had
proved satisfactory in Lincolnshire, formed the basis for the
hope that tenants holding their farms from year to year might
be given that degree of security which would promote good
agriculture.

The introduction of agricultural improvements came rather
later in Lincolnshire than in many other parts of England, but
when the transition did come it was " rapid and striking, perhaps
more so than in any other county in England." - These im-
provements were made, too, without the protection of long-
time leases. They were made under the protection of the
Lincolnshire system of tenant-right. " It was very fortunate,"
says Caird, " that when the time [for the introduction of agri-
cultural improvements] arrived, the leading landlords [of Lin-
colnshire] were liberal and intelligent men. . . . They saw
the advantage of encouraging tenants to embark their capital
freely ; and as leases were not the fashion of the county, they
gave them that security for their invested capital, which is
termed ' tenant-right,' or compensation for unexhausted im-
provements. Though this tenant-right may not be a strictly
legal claim, it is universally admitted in Lincolnshire, the land-
lord paying it when a farm falls into his own hands, and refusing
to accept a tenant who declines to comply with the custom. It
varies, however, considerably in the different parts of the county,

1 To avoid the necessity of making specific references in great numbers it will
simply be stated that the discussion of this period is based upon a Parliamentary
Report on Agricultural Customs, Par^jawew^ary Pa/^eri, 1 847-1 848, Vol. VII; and
Caird's "EngUsh Agriculture" in 1850 and 1851. In these sources the material
here used is indexed under "tenant-right."

^ Caird, "English Agriculture," p. 194.

RELATIONS BETWEEN LANDLORDS AND TENANTS 339

and appears to have enlarged in its obligations \A'ith the greater
development of agricultural improvements. In North Lincoln-
shire, the usual allowances claimed by the outgoing from the
incoming tenant, include draining, marUng, chalking, claying,
lime, bone, guano, rape dust, and oil-cake. The following is the
scale on which these allowances are usually made :

" ' When the landlord has found tiles, and the tenant has done the
labor, if done within twelve months before the end of the tenancy
and no crop has been taken from land after the draining thereof is
completed, the whole cost is allowed. If one crop has been taken
from such land, three fourths of the cost are allowed, and so on,
diminishing the allowance by one fourth for each crop taken; but
this allowance is made only when the work is well and properly done
by the tenant, to the satisfaction of the landlord or his agent, ex-
pressed in writing. For marling or chalking, if done within twelve
months before the end of the tenancy, the whole cost is allowed ; for
that done in the previous year, seven eighths of the cost are allowed ;
and so on, diminishing the allowance by one eighth for each year
that shall have elapsed since the marUng or chalking. — For Ume used
within twelve months before the end of the tenancy, if no crop has
been taken from the land limed in that year, the whole cost, including
labor, is allowed; if one crop has been taken from such land, four
fifths of the cost are allowed ; and so on, diminishing the allowance
by one fifth for each crop taken from such land. — For claying on
light land, a similar allowance to that for lime. — For bones used
within twelve months before the end of the tenancy two thirds of
the cost are allowed, and for those used in the previous year one
third of the cost. — For guano and rape dust used within twelve
months before the end of the tenancy for turnips or other green crop,
two thirds of the cost are allowed. — For oil-cake given to cattle and
sheep one third of the cost price of that so used within twelve months
before the end of the tenancy, and one sixth of the cost price of that
so used in the previous year is allowed.'

"The amount of these allowances is settled by arbitration. . . .
On the whole, . . . the system is beheved to have worked well."^

The custom of tenant-right was fully recognized in the
counties of Sussex, Surrey, and Lincoln, in the Weald of Kent,

* Caird's "English Agriculture in 1850 and 1851," pp. 194-105.

340

AGRICULTURAL ECONOMICS

in the northern part of Nottinghamshire, and in the West Riding
of Yorkshire. In some of these regions the system was not
giving very good results. In Surrey, the custom of tenant-right
was said to be " promoting an extensive system of fraud and
falsehood among the farmers." The custom seems to have
been quite loosely formulated in that country, and it was possible
for the farmers to " work up a quitting," as it was called,^ and
thus defraud the landlord or the succeeding tenant. Not being
properly regulated the " compensation " often embraced " large
payments for imaginary improvements and alleged operations,
which, even if they had ever been performed would be more
injurious than beneficial." ^

But while the custom of tenant-right was very imperfect
in its operations in some parts of England, the principle on which
it was based was sound, and in time it was to be embodied in the
laws of the land. The custom of tenant-right struck at the
very heart of the tenant problem. It guaranteed to the tenant
just returns for his investments, without involving the many
disadvantages of the long-period lease. The experience of the
landlords and tenants of Lincolnshire had already proved that
where the system was properly regulated the custom of tenant-
right was satisfactory in practice as well as sound in principle.
In 1850 a bill was introduced in ParHament which aimed
at the embodiment of this custom of tenant-right into a law.
It was entitled " A Bill for the Improvement of the Relation
between Landlord and Tenant in England and Wales." Its
purpose, as stated in the preamble, was to insure to farmers
compensation for properly constructed, permanent improve-
ments. The idea of enacting a law of this kind was not new
in 1850. Two hundred years before, Walter Blith advised that
a law be enacted " whereby every landlord should be obliged
. . . to"give him [the tenant] reasonable allowance for his clear
improvements." The bill of 1850 did not pass, but neither did
it die. Again and again similar bills were brought before Parlia-
ment, and in 1875 an act was passed, which laid down the
conditions for compensating the outgoing tenant, but unfor-
1 Caird's "English Agriculture in 1850 and 1851, p. 119. ^ Ibid., p. 119-

RELATIONS BETWEEN LANDLORDS AND TENANTS 341

tunately no provision was then made to keep the landlords from
requiring the tenants to contract themselves out of the right
to claim compensation under the law, and while the law was
beneficial in that it systematized and brought greater uniformity
into the practice of granting compensation where tenant-right
was recognized, it was not generally adopted. Even the author
of the bill asked his tenants to contract themselves out of the
benefits of the law which he himself had framed.

In 1883 a new bill, the Agricultural Holdings Act, was passed.
This Act contained a clause making it illegal for a landlord to
contract himself out of the conditions of the law. The law of
1883, with the slight modifications of the Acts of 1900, 1906,
1908, 1913, and 1914, is still in force, and it will be worth while to
examine it with considerable care. The law enables the tenant
farmers to obtain from the landlords as compensation for
improvements at the termination of their tenancies, " such sum
as fairly represents the value of the improvement to an incoming
tenant."

The improvements for which compensation could be claimed
under this law were divided into three classes. The first class
includes all those improvements to which the consent of the land-
lord is required if the payment of compensation is to be enforced
by law. This class includes the following Hst of improvements :

(i) Erection, alteration, or enlargement of buildings.

(2) Formation of silos.

(3) Laying down of permanent pasture.

(4) Making and planting of osier beds.

(s) Making of water meadows or works of irrigation.

(6) Making of gardens.

(7) Making or improving of roads or bridges.

(8) Making or improving of watercourses, ponds, wells, or reser-
voirs, or of works for the application of water power or for supply of
water for agricultural or domestic purposes.

(9) Making or removal of permanent fences.

(10) Planting of hops.

(11) Planting of orchards, or fruit bushes.

(12) Protecting young friiit trees.

(13) Reclaiming of waste land.

342 AGRICULTURAL ECONOMICS

(14) Warping or weiring of land.

(15) Embankments and sluices against floods.

(16) The erection of wirework in hop gardens.

[Note. — The above are subject to the provisions given under the
third class of improvements with respect to market gardens.]

The drainage of land is put into a class by itself. It is required
that the tenant shall give notice to the landlord of his intention
to construct a drainage system if he is to expect compensation
under the law for his improvement. This notice must be given
not more than three months nor less than two months before
the beginning of the execution of the work, and during this time
the landlord may, if the tenant has not in the meantime with-
drawn the notice, " undertake to execute the improvement
himself, and may execute the same in any reasonable and proper
manner which he thinks fit, and charge the tenant with a sum
not exceeding five pounds per centum per annum on the outlay
incurred in executing the improvement, or not exceeding such
annual sum payable for a period of twenty-five years as will
repay such outlay in the said period, with interest at the rate
of three per centum per annum, such annual sum to be recover-
able as rent. In default of any such . . . undertaking, and also
in the event of the landlord failing to comply with his under-
taking within a reasonable time, the tenant may execute the
improvement himself, and shall in respect thereof be entitled to
compensation " under the Agricultural Holdings Act.

The third class includes a large number of improvements for
which compensation can be claimed under the law, without
having gained the consent of the landlord or having given notice
to him previous to the execution of such improvements. The
list of improvements put into this class is as follows :

(18) Chalking land.

(19) Clay burning.

(20) Claying of land, or spreading blaes upon land.

(21) Liming of land.

(22) Marling of land.

(23) Application to land of purchased artificial or other purchased
manure.

RELATIONS BETWEEN LANDLORDS AND TENANTS 343

(24) Consumption on the holding by cattle, sheep, or pigs, or by
horses other than those regularly employed on the holding, of corn,
cake, or other feeding stuff not produced upon the holding.

(25) Consumption on the holding by cattle, sheep, or pigs, or by
horses other than those regularly employed on the holding, of corn
proved by satisfactory evidence to have been produced and con-
sumed on the holding.

(26) Laying down temporary pasture with clover, grass, lucerne,
sainfoin, or other seeds sown more than two years prior to the de-
termination of the tenancy.

(27) Repairs to buildings, being buildings necessary for the proper
cultivation or working of the holding, other than repair which the
tenant is himself under an obligation to execute. This, however,
requires notice to landlord.

In ascertaining the amount of compensation payable to a
tenant, account is taken of any benefit which the landlord has
given or allowed to the tenant for making the improvement.
Also in case the tenant is under contract to return a certain
amount of manure to the soil each year, and in case such amount
shall not exceed the amount that is produced from the feeds
which are produced upon the holding, this amount is excluded
from the amount for which compensation can be claimed.

In case the landlord and the tenant fail to agree as to the
amount of compensation which the tenant should have for the
various improvements which have been named above, the
difference is settled by means of arbitration.

In case of any breach of contract on the part of either land-
lord or tenant, damages may be claimed by the party injured.
Also in case the tenant causes or allows any waste, injures the
soil, or destroys the improvements, the landlord can make a
claim for payment for such injuries. These claims are arbitrated
the same as those for improvements.

In case of permanent improvements such as are not mentioned
in either of the above classes, the tenant may remove the
improvement unless the landlord may choose to buy the same,
with the proviso that he repair any damages which may have
been incurred by the removal of the building, that is, he must

344 AGRICULTURAL ECONOMICS

leave the premises in as good condition as if the improvement
had not been made.

It is the usual thing for the incoming tenant to pay the sum
which is due the outgoing tenant as remuneration for improve-
ments; and in case the new tenant remains but a short time
on the farm, so that at the expiration of his tenancy he has not
had time to realize in full upon such investments, he receives
remuneration for such improvements just the same as if he had
executed them himself.

These are the essential points of the Agricultural Holdings
Act of 1883 as modified by the later Acts. In igo8 two impor-
tant additions were made to the law, the one relating to damages
to crops from game, and compensation for unreasonable disturbance.
The first specifies that damage to crops from game which the
tenant has no right to take shall be compensated for by the
landlord if the damage amounts to more than one shilling per
acre of the area over which the damage extends. In order to
receive compensation the tenant must give notice in writing to
the landlord as soon as may be after the damage was first ob-
served by the tenant and a reasonable opportunity given the
landlord to inspect the damage.

The second provides for compensation for unreasonable dis-
turbance of the tenant who is removed by the landlord without
good and sufficient cause or who finds it necessary to move
because of demands for increased rents, demanded by reason
of an increase in the value of the holding due to improvements
which have been executed by or at the cost of the tenant, and
for which he has not, either directly or indirectly, received an
equivalent from the landlord. The tenant may claim compen-
sation for the loss or expense directly attributable to his quitting
the holding which he may unavoidably incur upon or in con-
nection with the sale or removal of his household goods, or his
implements of husbandry, produce, or farm stock on or used
in connection with the holding.

The law, as it now stands, seems to supply the regulations
necessary to an amicable adjustment of the relations between
landlord and tenant in England.

RELATIONS BETWEEN LANDLORDS AND TENANTS 345

Tenancy from year to year is the rule in England to-day,
and no question is raised as to the security of the landlord or of
the tenant. Either party may bring the tenancy to a close at the
expiration of any year, by giving proper notice. Under the
act, twelve months' notice is required, but by special agreement
between landlord and tenant the time may be changed to six
months.-^

Written contracts are generally used, but the leading agri-
culturists of the country agree that such contracts should contain
few restrictions upon the methods of farming, except that the
farm shall be operated in accordance with the rules of good
husbandry. Many of the written agreements now in use would,
if strictly enforced, bind the tenants hand and foot ; but as a
matter of fact many of these covenants are recognized to be
obsolete and others are " winked at " by the landlords. A
study of the written agreements nominally in force at the present
time would, in themselves, give a very erroneous idea of the
actual relations between landlords and tenants.

The farmers and the landlords of England have quite gen-
erally come to recognize that liberty and honesty are essential
to success in agriculture. The writer gradually gained the
impression by coming in personal contact with farmers and land-
lords, or more often the agents of the latter, that accompanying
the gradual perfecting of the Agricultural Holdings Act, there
has been the growth of a sense of justice in the minds of both
the landlords and the tenants. This sense of justice is all the
more effective because it is accompanied by the belief that in
farm management, whatever is beneficial to the farmer is like-
wise advantageous to the landlord.

The English method of regulating the relations between
landlord and tenant is successful throughout Great Britain.
The history of land tenure in Scotland would prove very inter-
esting and helpful. Leases of long duration, most commonly
for nineteen or for twenty-one years, have been in general use

1 The Agricultural Holdings Act as now in force may be found in convenient form
in the Journal of Ike Royal Agricultural Society of England, third series. Vol. XI,
Part III, 1900.

346 AGRICULTURAL ECONOMICS

in Scotland for more than a century. The system of " corn
rents," already referred to, proved an effective means of adjust-
ing rents to prices at the time when this problem was proving
disastrous to the long-term lease in England. At the present
time the Agricultural Holdings Act of Scotland is practically
the same as that in force in England. While it continues to be
the custom among Scottish landlords and tenants to have long-
term leases drawn, it has become the common thing to include
a clause which makes it possible for either the landlord or the
tenant to bring the tenancy to a close at certain periods, as for
example, at the end of the fifth, tenth, or fifteenth year, or at the
end of the second, fourth, sixth, etc., year, by giving proper
notice to the other party. In effect, therefore, the long-term
lease is passing away, for the same object is now attained through
the Agricultural Holdings Act.

In another connection the writer had occasion to pubUsh the
statement that, " the relation between landlord and tenant is
very satisfactorily arranged, the farmers are, as a rule, contented
with the present system, and the fields of England prove that
landownership on the part of farmers is not essential to good
agriculture." This statement has occasioned surprise on the
part of some American readers, but an eminent agriculturist
of Great Britain, Mr. John Speir, says this statement " expresses
briefly and concisely the position here." The writer had no
thought of minimizing the importance of landownership on the
part of farmers, but rather to emphasize that in spite of the fact
that tenancy is the rule in that country, the agriculture of
England is, in many ways, worthy of our emulation, and that
this advanced position of English agriculture is due, in a great
measure, to an excellent system of adjusting the relations
between landlord and tenant.

That Americans may profit by the experience of their British
cousins should be evident from the foregoing pages. That they
will be wiUing to draw upon the experience of the EngUsh will
scarcely be questioned. The Americans have become inde-
pendent in thought and action, and have become leaders in
nearly every line to which they have turned their attention.

RELATIONS BETWEEN LANDLORDS AND TENANTS 347

yet they have always been willing to accept all that is of value
in the achievements of other countries, and we believe that as
America has profited by the experience of the English in the
development of factory legislation, so will she profit by a study
of the English agrarian legislation.'^

Covenants Found in Norfolk Farm Leases, by W. Marshall

[The following description of the Norfolk leases is taken from the
second edition of William Marshall's "Rural Economy of
Norfolk" (1795), pp. 70 to 80.]

The following heads of a lease will place the general management
of a Norfolk estate in a clear and comprehensive point of view. They
are not, either in form or substance, copied, precisely, from the lease
in use upon any particular estate ; but exhibit, I believe, a pretty
faithful outline of the modern Norfolk lease.

Landlord agrees, i. To let certain specified premises, for a term
and at a rent, previously agreed upon.

2. Also to put the buildings, gates, and fences in tenantable repair.

3. Also to furnish rough materials, and pay half the workmen's
wages in keeping them in repair, during the term of the demise;
willful or negligent damage excepted.

4. Also to furnish the premises with such ladders as may be wanted
in doing repairs, or in preserving the buildings, in case of high winds,
fire in chimneys, etc. (an excellent clause).

5. Also to furnish rough materials for keeping the gates, gate-
posts, stiles, etc., etc., in repair; or to furnish the materials ready
cut out ; tenant paying the usual price of labor for cutting out.

6. Also to pay half the expense of such shores and ditches as he,
or his agent, shaU direct to be made or renewed.

Landlord reserves, i. All minerals, fossils, marls, clays; with
liberty to work mines, quarries, and pits, and to burn lime and bricks
upon the premises ; likewise to carry away such minerals, etc., etc. ;
excepting such marl, or clay, as may be wanted for the improvement
of the farm.

2. Also, all timber trees, and other trees and woods, imderwood
and hedgewood; with Hberty to fell, convert, char, and carry off
such timber or other woods ; excepting such thorns and bushes as
shall be set out by landlord, for making and repairing fences ; pro-

1 Ths Agricultural Holdings Acts, 1008-1914, by T. C. Jackson.

348 AGRICULTURAL ECONOMICS

vided the thorns, etc., so set out be cut in the winter months; ex-
cepting, however, out of this proviso, such few as may be wanted in
the course of the summer months, for stopping accidental gaps.

3. Also, full liberty of planting timber trees in hedges, or on
hedgebanks ; with a power to take to himself, after twelve months'
notice given, some certain number of acres of land for the purpose of
raising timber trees, other trees, or underwood; allowing the ten-
ant such yearly rent, etc., for the land so taken, as two arbitrators
shall fix.

4. Also, a power of altering roads, and of inclosing commons, or
waste lands, without the control of the tenant ; to which intent, all
common-right is usually reserved, in form, though seldom in effect, to
the landlord.

5. Also, the customary liberty to view the buildings, do repairs,
and, consequently, to bring and lay materials.

6. Lastly, the right of sporting and destroying vermin.

Tenant agrees, i. To pay the stipulated rent half-yearly; and
within thirty days after it be due; under forfeiture of the lease;
and further, to pay the last half-year's rent two months, or a longer
time, before the expiration of the term.

2. Also, to do all carriage for repairs (within a specified distance) ;
and to find all ironwork and naUs ; and to furnish wheat-straw for
thatching; and to pay half the workmen's wages, and find them
with small beer.

3. Also, to do all ditching, etc., set out by landlord (provided the
quantity set out do not exceed one tenth of the whole) ; and to pay
half the workmen's wages, and find them in small beer ; and to defend
with hurdles, or otherwise, all such young hedges as shall be exposed,
in spring and summer, to the browsings of pasturing stock.

4. Also, to make, or pay for making, such gates, etc., as shall be
wanted upon the farm during the term of the demise ; and to hew,
or to pay for hewing, all necessary gateposts ; and to put down and
hang, in a workmanlike manner, such gates and gateposts at his own
sole expense; as well as keep all the old gates on the premises in
tenantable repair.

5. Also, not to assign over, nor in any other way, part with pos-
session of his farm ; but to make it his constant residence during the
term of the lease. Nor to take any other farm; nor to purchase
any lands adjoining, or intermixed with it ; without the license and
consent of landlord ; under forfeiture of the lease.

RELATIONS BETWEEN LANDLORDS AND TENANTS 349

6. Also, not to break up any meadow, pasture, or furze ground,
under the penalty of ten pounds an acre a year. Nor to cut "flags,"
that is, turves, under fifty shillings a hundred.

7. Also, not to lop or top any timber tree, under the penalty of
twenty pounds ; nor other tree, under ten pounds ; nor cut under-
wood or hedgewood (except as before excepted) under ten pounds a
load. But, on the contrary, to preserve them from damage as much
as may be ; and, if damaged by others, to give every information
in his power under the penalty of twenty pounds.

8. Also, not to take more than two crops of corn without a whole
year's fallow, — a crop of turnips, twice hoed, — or a two years' lay,
— intervening, under the penalty of . . .

9. Also, to consume on the premises all hay, straw, and other
stover; and not to carry off, or suffer to be carried off, any part,
under pretense of being tithe compounded for, or under any other
pretense whatever, under the penalty of ten pounds, for every load
carried off . . .

10. Nor to carry off, nor to suffer to be carried off, any dung, muck,
etc., under five pounds a load.

11. Nor to impair the foundations of the buildings round the dung-
yard, by scooping out the bottom of the yard too near the buildings ;
but to keep up a pathway three feet wide between the dvmgpit and
the foundations (an excellent clause).

12. Also, not to stock any part of the premises with rabbits; but
to endeavor, as much as may be, to destroy them.

13. Also, during the last two years of the lease, not to take in any
agistment stock.

14. Also, in the last year, not to suffer swine to go loose without
being yoked and rung.

15. Also, in the last year, to permit landlord, or incoming tenant to
sow grass seeds over the summer corn ; and to harrow them in, gratis ;
and not to feed off the young grasses after harvest.

16. Also, in the last year, not to sow less than . . . acres of fallow,
of, at least, three plowings and suitable harrowings, with two pints
an acre of good, marketable, white-loaf turnip seed; and, in due
time, to give the plants two hoeings {or, if the crop miss, to give the
fallow two extra plowings) in a husbandlike manner; and, at the
expiration of the term, to leave such turnips growing on the premises ;
free from willful or neglectful injury; under the penalty of . . .
pounds an acre.

35© AGRICULTURAL ECONOMICS

17. Also, to permit the landlord or incoming tenant to begin, on
or after the first day of July, in the last year, to break up the two
years' lay (hereafter agreed to be left) for wheat fallow, or any other
purpose ; and to harrow, stir, and work the said fallows ; and to
carry and spread dung or other manure thereon, without molestation.

18. Also, in the last year, to permit landlord, or incoming tenant,
to lay up hay, or other fodder, on the premises, and to protect it
thereon.

19. Also, to lay up and leave upon the premises, at the expiration
of the lease, all the hay of the last year (or of any preceding year, if
unconsumed at the expiration of the term) except . . . loads, which
tenant is allowed to carry off.

20. Also, to lay up, in the usual barns and rickyards, the last
year's crops of corn; together with the tithe, if compounded for;
and to thresh them out in proper season ; and in such manner that
the straw, chaff, and colder shall be injured as little as may be.

21. Also, at the expiration of the term, to leave no less than . . .
acres of olland [meadow-land, HteraUy old-land], of two years laying
(including that which may have been broken up by landlord or in-
coming tenant) and which shall have been laid down in a husbandlike
manner, after turnips or a summer fallow, with not less than twelve
pounds of clover, and half a peck of ray grass, seeds an acre —
under the penalty of . . . pound an acre. Also not less than . . .
acres of olland, of one year's laying, to be laid down as above specified,
under the penalty of . . . pound an acre.

22. Also, at the expiration of the term, to leave aU the yard manure,
produced in the last year of the lease, piled up in a husbandlike
manner, on the premises ; excepting such part of it as may have
been used for the turnip crop ; and excepting such other part as may
have been used by landlord, or incoming tenant, for wheat.

23. Also, at the expiration of the term, to leave the buUdings, ladders,
gates, fences, watercourses, etc., etc., in good and tenantable repair;
landlord in this, as in every other case, performing his part as above
agreed to. Also, upon such parts of an estate as lie near the residence
of the owner, it is customary for the tenant to agree to furnish an-
nually, a certain nimiber of loads of straw, according to the size of
his farm ; also to do the carriage of a certain number of loads of coal ;
also to keep dogs, warn off sportsmen, and suffer them to be prose-
cuted in his name : remnants, these, of the ancient base tenures of
soccage and viUanage.

RELATIONS BETWEEN LANDLORDS AND TENANTS 351

Tenant to be allowed, i. The full value of all the hay left upon the
premises, of the last year's growth, or of the growth of any preceding
year ; provided the quantity of old hay do not exceed . . . loads.

2. Also, the full value of the turnips left on the premises; or the
accustomed price for the plowings, harrowings, and manuring; at
his own option.

3. Also, the feedage of the lays broken up, by the landlord, or the
incoming tenant, from the time of their being broken up until the
expiration of the term the ensuing Michaelmas ; also, for all damage
arising in carrying on manure or otherwise.

4. Also, the feedage of the young clovers, from harvest to Michael-
mas.

5. Also, the use of the barns and rickyards for summer corn until
Mayday ; and for winter corn until the first of July next ensuing.

6. Also (by way of a consideration for the stover), the customary
price for thrashing and dressing the corn ; the landlord, or incoming
tenant, also carrying the same to market, gratis: provided the dis-
tance required to be carried does not exceed . . . miles, and the
quantity required to be carried, at one journey, be not less than
. . . coombs. [A coomb is equivalent to four bushels.]

All the above allowances to be referred to two arbitrators ; one to
be chosen by each party, in Michaelmas week; and the amount
awarded to be immediately paid down by the landlord, or the in-
coming tenant.

CHAPTER XXVI
MARKETING FARM PRODUCTS

The problem. Thus far we have studied the economic prin-
ciples which underlie the activities of farmers in bringing agri-
cultural products into existence. This is usually called the
economics of production. We have also studied the economic
forces which determine the share of the farm value of these
commodities which goes to each of the factors of production,
namely, as wages of labor, interest and depreciation on equip-
ments, the rent of land, and the profits of management. This
division of returns is usually called the distribution of wealth.
We now turn to the problems of marketing. From one point
of view marketing is a productive function because it adds place
or time utility to commodities. From another point of view
the economics of marketing is a problem in distribution because
it has to do with the forces and conditions which determine how
the dollar paid by the consumer is divided among the men who
participate in the supplying of the article, from the farmer at
the one end to the retail dealer on the other end of a longer or
shorter line of middlemen.

We are interested in marketing as a productive activity from
the point of view of introducing economies into the system
and thus reducing the cost of the service, to the benefit of all
concerned. We are interested in the marketing problem also
from the standpoint of establishing a just division of the con-
sumer's dollar among those who participate in providing the
product at the point where the consumer gets it. This has
been otherwise designated as a square deal.

Direct sale. Some products are carried by the producer to
the consumer. Milk sold in a small city is a good example of
direct sale. Potatoes and garden truck are sometimes sold in

35«

MARKETING FARM PRODUCTS 353

this way. In some places farmers carry their produce to a
market place to which the consumers come to make purchases.
These sales all imply close proximity of producer and consumer
and hence are limited to goods produced in the neighborhood of
where they are consumed.

By means of public carriers such as the parcel post, the ex-
press companies, and the railways, farm produce may be carried
great distances directly to consumers. In this case there is, of
course, one intermediate organization which, acting as an agent,
renders a middleman service for a fixed rate of charge.

Each form of direct sale has its difiiculties. Where goods are
carried directly to consumers the producer and consumer must
in some way find each other and come to some agreement as to
terms of sale. For example, a farmer who lives five miles from
town has a few tons of timothy hay to sell. He telephones to
the liverymen, the ice and coal men, the operator of the sand
pit, because these men keep large numbers of horses. One
liveryman is found who wants one load of hay and the sand man
takes one load, but the roads are good, it is spring before work
in the field has begun and other farmers are anxious to sell hay.
So many farmers offer hay at the market price that the buyers
beUeve the market will break. As a result the hay is left at
the farm, the wagon stands empty, the horses stand munching
hay in the barn, and the farmer turns to his wood splitting. By
the next week the fields are dry and horses and men are pushing
hard to get the oats seeded. Just when he has it figured out
that he can finish a given field by Saturday night, the telephone
rings and the sand man wants a big load of hay right away at
the old price, of course, at which he did not care to stock up
when the farmer was free to haul, for he is out of hay and must
have a load. The farmer debates the matter in his own mind.
Time in the field in oat-sowing is very valuable — possibly as
high as two dollars an hour for a man and team. To haul a
load of hay will take a man and team five hours, making an
opportunity cost of ten dollars to haul the hay ; whereas if the
hay could have been hauled when field work could not be done,
the opportunity cost would have been no more than a dollar.

8A

354 AGRICULTURAL ECONOMICS

The conclusion arrived at is as follows : I can't leave my crop
work to haul hay, for the number of days I can work in the field
is very limited and I have planned all the field work which can
be accomplished during the available time. Hence I had better
sell the hay for much less and choose my own time for hauling
it, but to sell it all and choose my own time I must have it
baled and sell it to the feed man who will keep it in stock and
sell it to the sand man when he wants it. Thus after some
experience the thoughtful farm manager decides to abandon
the direct sale of hay, and yet many of his neighbors sell hay
direct and deliver it when it is wanted. Many market gardeners
have tried hawking their goods on the streets, or standing in the
market place awaiting customers. The main difficulty is that
the time thus spent can be used more profitably by a good
gardener working on his farm. The result is that the more suc-
cessful gardeners decide to sell their produce wholesale and
devote their energy to the problems of economy in production,
leaving the retailing of garden truck to those who are at the
same time retaihng other things also and making a business
of it.

The milk business succeeds better on the direct sale basis
for the reason that a line of customers can be secured who take
about the same amount of milk from day to day. When the
farmer's milk wagon starts out each morning the driver knows
where he is going and to whom the milk will be sold. If the
route is badly scattered this becomes an expensive system,
but for farmers living near the city there seems to be a profit.

One of the main difficulties in delivering milk from the farm is
the producing an even supply of milk for the trade. Some
months too much is produced ; other months not enough.
The disposal of the surplus in the one case and the finding of
means of increasing the supply at another time worries the
farmer milkman, and in many instances makes him glad to leave
the distribution of milk to a man who makes that his business.
The larger the city and the farther the farmer has to drive in
order to get to his customers, the more desirable it is to introduce
the milk dealer, who is of course a middleman.

MARKETING FARM PRODUCTS 355

Where distances are too great for the meeting of producer and
consumer, direct shipment may be resorted to. Butter, eggs,
pouhry,and vegetables have been shipped to special customers.
While this method has rarely proved cheaper than other systems
because of the smallness of the shipments and the expense of
the packages, yet it has proved a means of putting high quality
produce into the hands of those who appreciate quality and are
willing to pay the price.

Sales to and through middlemen. The development of
modern systems of transportation, the growth of great indus-
trial cities, and the expansion of specialized commercial agri-
culture has brought with it a complex middleman system which
needs to be studied with care with a view to its better organiza-
tion with a greater economy and justice.

For some articles the market may be said to be world-wide,
because the entire product is effective in determining the market
price. This is true of wheat, wool, cotton, sugar, tea, silk, and
many other nonperishable articles in general use. Liverpool
has for a long time been the central wheat market of the world.
Being a port situated on the outer edge of the wheat-deficit
area of western Europe, Liverpool became the objective point of
shipments of wheat from all wheat ports of the United States,
Canada, South America, AustraHa, New Zealand, India, and
Russia. In each of the countries producing a surplus of wheat,
primary wheat markets were established such as Chicago,
MinneapoHs, St. Louis, Kansas City, and many other points
to which the wheat is shipped from the farmer's local station.
Thus there are many stages, many processes, and many middle-
men between the wheat producer and the bread consumer.
The local grain dealer buys grain at all times in any quantity
and of most any quality the farmer has to sell. He holds it in
his warehouse until he has a carload lot and then ships it to a
primary market, consigning it to some commission firm at that
point for sale. At this point the wheat may be milled into
flour and by-products or it may be cleaned and graded and
reshipped in the direction of the wheat-deficit areas of the world.
, In either case, owing to the great distance, the wheat or its

356 AGRICULTURAL ECONOMICS

product — flour — is sold and resold many times, so that
while many men handle the wheat many men own the wheat,
so that there is always some one near who has a proprietary
interest in the wheat. Do these men, each in turn, render a
service? They do. Is this service rendered in the most eco-
nomical manner and for a just charge ? This question is not so
easily answered, and here lies the center of the middleman
problem. This is the real issue between the farmer and the
middleman, — an issue which has not been well defined as a
rule by those who have talked most about it.

CHAPTER XXVII
THE FARMER AND THE MIDDLEMAN

During the past ten years the marketing problem has come
prominently into the foreground. To some it has appeared
that the middleman is in a position to demand that his basket
be filled without rendering a corresponding service. To others
it has appeared that the present system of marketing is waste-
ful of human energy because there are too many middlemen.
There is truth in both of these suggestions, but, as often pre-
sented by the cartoonist and by the excitement-loving editor,
much besides the truth is conveyed to the reading public.
Fortunately, while the earlier farmers' conventions dealing with
tliis problem indulged largely in emotions and sentiments, recent
meetings of farmers give primary attention to fact and reason.

Our pioneer forefathers were not confronted with the modern
marketing problem. Their agriculture was conducted more
largely wth a view to the direct satisfaction of their own wants.
With the cheap freight rates resulting from modern methods of
transportation, agriculture has become commercial. The farmer
produces primarily for the market, and the farmers of the dif-
ferent parts of the country give a more especial attention to
some one or two lines of production. For example, the Dakotas
produce wheat ; Iowa markets hogs and cattle ; Wisconsin
specializes in dairy products and potatoes ; Texas sells cotton
and cattle ; and other states like\^ase have their specialties.
Each state produces a large surplus of a few articles and must
buy many articles from other states. It is the exchange of
these specialties which brings the marketing problem into the
foreground.

Those who criticize modern commercial systems as wasteful
are certainly not comparing the present system with that of the

3S7

358 AGRICULTURAL ECONOMICS

self-sufficing economy of the isolated pioneer, but rather with
some ideal which lies as a possibility of the future. Commercial
agriculture, that is, production primarily for the market and
buying upon the market many of the articles consumed by the
farmer, is more productive because: (i) each agricultural
territory can be devoted to the production of those articles for
which it is by nature especially suited ; (2) each man may devote
himself to the Unes of agriculture in which he is most effective ;
and (3) the agricultural classes may benefit by the economies
introduced into manufactures by machine methods and large-
scale production. To appreciate the economic significance
of the change from the self-sufficing to the commercial economy
one need only compare the comforts enjoyed by the modern
farmer with those of the pioneer.

With this great advantage accruing to the farmer as a result
of the commercial system, the question properly arises in your
minds, what are the farmers kicking about? Why are they
condemning the middleman who is essential to the commercial
system? This is the question the writer will attempt to
answer.

In the first place there are men who make it their business
to stir up trouble. These men take a few more or less well-
established facts and by the free use of their fertile imaginations
weave a fabrication which appeals to the avarice of men. It is
popular in this type of agitation to make a statement somewhat
as follows : " When the consumer pays a dollar, the farmer
gets only forty-eight cents " ; and then with a rolling of the eyes
and a stern, excited look intended to imply that he himself has
seen many of the thieves, the speaker says, " Who gets the rest ? "
The reply desired is, " the middlemen — the thieving middle-
men."

But why do intelligent farmers listen to such foolishness?
For a very simple reason. However intelligent they may be
regarding farming, they are uneducated on the subject of middle-
man processes and the costs of the middleman services. Their
honesty and good faith in the matter is demonstrated, when,
following in the wake of the " middleman swatters," the wily

THE FARMER AND THE MIDDLEMAN 359

promoters of creameries and farmers' packing companies call
upon them for liberal stock subscription, at least ij^ per cent
of which is available for paying expenses of promotion.

The farmers know a great deal about producing cotton and
wool and corn and hogs and wheat and cattle and dairy prod-
ucts, but they know but little as a class about the functions of
the middlemen, made necessary by the modern commercial
organization of industrial society. The farmer takes cotton or
grain, his hogs and his cattle, or his milk to the local market and
surrenders them to the local buyer. Year after year he may
see the train pull out of sight around the curve below the corner
of his farm without any clear vision of what happens to his
products from that point.

In the main, the functions of middlemen are little understood
by the producers or by the consumers. What is in the dark
may be evil, and his human imagination is prone to draw gro-
tesque pictures of what may happen in the realm of the unknown.
Thus it has come to pass that the producer sometimes covets
the whole dollar which the consumer pays for his products and
looks with disgust at the fifty-two cents which he receives.
This is a fertile field for sowing the seeds of discontent and there
have been plenty of writers and cartoonists ready to ride the
crest of the wave of popularity which has given prominence
in recent years to the marketing problem. It is only recently
that this onslaught has been participated in by the farmer.
The farmers have in general maintained a passive part while the
politicians and professional agitators have played the leading
role with the paid writers and cartoonists as emphatic seconds.

The thing that is needed most at the present time is education
on this question of middleman processes. It is not the writer's
purpose to imply that the producer is wrong in thinking there
may be an injustice, but it is his purpose to say that the starting
point in solving the marketing problem is not what may be
imagined about middlemen but the actual facts about middleman
services and middleman charges. This is a problem for the
scientist. The scientific economist should turn on the light
so that all may see the truth. He should study carefully and

360 AGRICULTURAL ECONOMICS

describe accurately what happens to a product from the time
it leaves the farm until it reaches the consumer. In the light
of these facts intelligent and safe steps may be taken to improve
conditions, whereas legislation striking in the dark stands great
chances of doing harm and little chance of doing good.

When the fog is cleared away the true character of the issue
may come into view. It will be recognized that, in general,
middlemen render a service. The real issue between the farmer
and the middleman relates to the fairness of the charge made for
the service. That more economical methods may be introduced
at certain stages in the middleman process will be accepted
without debate. A survey of the work of the middlemen which
would show how to replan the route from producer to consumer,
in such a manner as to shorten the line and reduce the number
of stops and the amount of rehandling, should be acceptable
to every one concerned. The wisest middlemen would be the
first to accept the new economies. There is clearly no issue
here between the middleman and the endmen. The real issue
then is the fairness of the charge for the middleman service.

This is an important issue from the farmer's point of view.
When considering the prices of the supply of farm products on
hand at the end of a given harvest the farmer may be looked
upon as the residual claimant. He gets what is left after all
charges are paid. Every expansion of middleman charges, with-
out added service for which the consumer pays, cuts the farmer's
income ; every reduction in cost increases the farmer's profits.

When the consumer pays the retailer a dollar for potatoes,
the dollar goes into the retailer's cash register. The retailer
may have to take eighty-three cents out of the till and pay it to
the wholesale dealer. Other parts have to be taken out to pay
store rent, clerks, taxes, delivery, etc., but we shall omit the
details and follow the main course of the remnant of the dollar
which works back from one middleman to another until the
farmer is greeted with his residual share. The wholesaler
takes out seven cents and passes seventy-five cents over to the
jobber, who pays eight cents to the railway company and keeps
five cents for his own service. This leaves sixty-two cents,

THE FARMER AND THE MIDDLEMAN 36 1

which is forwarded to the potato dealer in central Wisconsin,
who takes ten cents for materials furnished (sacks, car linings,
and heat) and services rendered. The cash register rings
out 52 cents to the farmer, and the transaction is closed, and
the question, Who gets the money ? is answered for one specific
case. Are all these charges fair? This is the real issue and
of course the burden of proof is on those who raise the question.
What is a fair charge? That, in itself, is not an easy question,
but equally difl5cult tasks should carry equal compensation as
nearly as possible whether it be farmer, manufacturer or mer-
chant. It is usually considered that where free competition
exists, prices tend to become fair.

Special instances may be mentioned where unfair charges are
Ukely to occur.

Along the railway lines in the grain-growing regions of the
United States there are many country stations where one elevator
can easily handle all the business. This elevator may be owned
and operated by an independent grain buyer, interested in
maximum returns for his services. It may be owned by a line
elevator company and operated by their hired man, or it may
be owned by the farmers who load grain at the station and
operated by the employee of the farmers' company. Either of
these methods will usually provide the necessary elevator
service. And it often happens that the same man will handle
the grain. The question that interests the farmers is. How
can we get this service performed satisfactorily for the lowest
cost? Such a local elevator partakes of the character of a
natural monopoly. If the independent operator is in charge,
he can make a monopoly profit which looks large to the farmer
and which attracts the attention of the grain merchants at the
central market. To introduce competition into the charge
made for this service, the independent operator is replaced by
an employee who works for a competitive wage. Who, then,
gets the monopoly gain which had formerly gone to the opera-
tor? The employer, of course. If the fine elevator company
is the employer, the monopoly charge may be increased due
to the elimination of the tendency for the operators at different

362 AGRICULTURAL ECONOMICS

Stations to compete for the trade in the middle zone between
the railway stations. On the other hand, if the elevator is
owned by the farmers, the monopoly gain is ehminated, local
prices are increased, production is stimulated. Increased
supply tends to lower prices to consumers and thus the benefits
of cooperative elevators are divided between the farmers and the
consumers.

Another example of what often appears to be an excessive
charge for local middleman services is that found at the local
stations in the districts from which potatoes are shipped.
Upon visiting one of these loading stations one is first impressed
with the fact that there are very many warehouses at each
station and for this reason may assiune that monopoly charges
are impossible. As a matter of fact an excessive number of
warehouses and potato dealers, as well as an excessive number
of grocers in a small town, may result in price agreements, which
give basis for monopoly charges for services rendered. It is
believed by many that a condition of this kind has at times
existed in the potato district of central Wisconsin. The method
of eliminating this monopoly has been the introduction of the
farmers' warehouses, where the service is performed by an
employee of the farmers, working for a competitive wage.

It is well established that wherever there is a tendency toward
a monopoly charge for a middleman service which is performed
locally, where the farmer comes in contact with the warehouse
and the man performing this service whenever he sells his prod-
ucts, cooperation is the natural and effective method of
eliminating the monopoly charge and distributing the benefits
widely through society.

But there are other middleman functions which are not under
the eye of the farmer. These are in operation at the central
markets and beyond, and for brevity in this discussion will be
called central market functions to distinguish them from the
local market functions. Examples of the central market func-
tions are the elevator business at the primary grain markets, the
packing business, and the distribution of potatoes, dairy prod-
ucts, and poultry. The problem of securing the services of the

THE FARMER AND THE MIDDLEMAN 363

middleman in the central market at a fair price has not been so
nearly solved as has that of the local market. Two methods
have been tried, each with some degree of success. The one
method is state regulation or control, and the other method is
cooperation. Cooperation may be on the part of consumers
who organize to reach out after their product, or cooperation
may be on the part of producers organized to reach out with
their produce beyond the central market with a view to securing
a higher price for their product. It is beHeved that both of
these methods should be resorted to.

Where there is a well-organized system of marketing capable
of absorbing all of the product whenever shipped, as is true of
the grain business and the packing business, it would seem that
state or Federal regulation is the best method of establishing
fair play. These are big businesses requiring much capital and
special skill and carried on at such a distance that the farmer
cannot supervise the work. He must trust the supervision to
others. He may not have any too much confidence in the Gov-
ernment, but experience will teach him that the Government is
at least as trustworthy as any comprehensive organization
which he can build to perform this function of securing fair
play.

Where there is no well-organized central market which will
absorb all the product and send it on to its final destination, the
local cooperative company often finds it necessary to reach out
long distances for a market. The potato market will serve
as an example. The farmers' produce company is in competi-
tion with the big line companies both at the local stations and in
the various cities throughout the country where the potatoes
are consumed. The farmers' company can handle the potatoes
at the loading station appreciably cheaper than can the line
companies, but in finding a market for the limited number of
cars handled by one warehouse, in competition with the line
companies which are handling from twenty-five to fifty times
as many cars in a year, the saving is largely lost. It is believed
therefore that the federation of local companies for the purpose
of finding a market is a necessary step if local cooperation is to

364 AGRICULTURAL ECONOMICS

reap its reward in the marketing of potatoes. In general it is
believed that where there are no well-established central mar-
kets subject to Government supervision, farmers will have to
look to federated local companies in order to compete success-
fully in the distribution of their products.

The success of the Wisconsin cheese producers' federation gives
ground for confidence in the ability of farmers to handle suc-
cessfully the distribution of their products in distant markets.
This organization has its headquarters at Plymouth, Wisconsin.
Prior to its organization the farmers Hving in the vicinity of a
cheese factory met once a year and hired a cheese maker to
convert their milk into cheese at so much per pound. So far
as could be determined the cheese maker did not get any too
much for his services. But the cheese was sold on an unregu-
lated market at a price which was unsatisfactory to the farmers.

The farmers had little or nothing to do with the selling of the
cheese. They left this function to the cheese maker, who had
no interest except the getting all of the cheese passed as first-
grade product, as he had agreed to stand the loss if the product
was not up to standard. This led to many irregularities, and
left the farmer in a position to take whatever was handed him.
In time he complained, and with the help of the State Board of
Public Affairs and the Agricultural College and the blessing of
a local leader who was wilHng to work for nothing and board
himself in good missionary fashion, these local groups of dairy-
men who took milk to the same factory were converted into
corporate units known as cheese producers' associations. These
in turn were federated into the cheese producers' federation.
This latter organization hired an experienced salesman to sell
the product of over forty cheese factories. They were unable
to rent space in the public cold storage warehouse of Plymouth.
This emergency was quickly met by building a warehouse for
their own use. Six seasons have passed, and the federation has
proved an unqualified success. This gives ground for the beUef
that wherever the farmers have the right mettle they can
cooperate successfully to reach out into the central markets.

In any case there is plenty of work for the state to perform in

THE FARMER AND THE MIDDLEMAN 365

solving the marketing problems. Local cooperative companies
would prosper better under state supervision, especially with
respect to the auditing of accounts. Farmers' federated com-
panies are doubly in need of aid and supervision in order to
succeed in their more difficult task. But a still more important
function for pubUc authority is the regulation and control of
private corporations dealing in farm products in the central
markets and beyond.

It should not be assumed, however, that all charges are unfair
and require regulation. Whenever middleman services are per-
formed for a fair charge, and it is beheved that this is true of a
great part of the middleman functions, regulation by farmers or
by government is but sand in the wheels of industry.

CHAPTER XXVIII
PRICE-FIXING AND THE COST OF FARM PRODUCTS

In the preceding chapter attention has been called to the
ways in which farmers may cooperate and the ways in which
governments may regulate the activities of middlemen with a
view to securing fair prices for farm products. In this chapter
attention will be given to the question of price regulation as a
means of solving the marketing problem.

Many who in the past have been satisfied to leave the fixing of
prices of farm products entirely to competitive forces operat-
ing under the law of supply and demand now see the need of
commissions to adjust prices. The Price Commission, to be suc-
cessful, cannot represent a class, but must stand for economic
justice to all classes. The condition and needs of the producer,
the distributor, and the consumer must be considered with equal
care. The biggest problem in price-fixing is to get the facts
needed as the basis of action.

For many years the idea of price control has received the at-
tention of farmers who have been hard pressed to make both ends
meet. Dollar wheat sounds cheap now, but at one time it looked
Hke a cure-all for the ills of the Dakota farmers. The control of
cotton prices has often been talked about in times of low prices,
and the price of Burley tobacco was more than doubled by the
concerted action of farmers in holding their product and refrain-
ing from growing a crop in 1908. In all this agitation it was
argued that the price should be enough to pay the cost of produc-
tion and a reasonable profit. This point of view stimulated in-
terest in farm cost accounting as a basis for price-fixing.

The United States Department of Agriculture and many state
experiment stations have cooperated with farmers in keeping
detailed records of man and horse labor, the use of equipment,

366

PRICE-FIXING AND THE COST OF FARM PRODUCTS 367

and other elements of costs, as well as the yield, in quantity and
value, of each kind of product. Occasionally a farmer has under-
taken detailed records on his own initiative and without official
aid, but the clerical work necessary for keeping a complete sys-
tem of cost accounts is more than most farmers have time to do.

In the official promotion of farm cost accounting, the purpose
has not always been well defined ; but there have been at least
two points of view. A position taken by many who are inter-
ested in the marketing problem is that costs should be known in
order that they may be used as a basis of price-fixing. A view
held by men interested in the problems of farm management is
that cost accounts show the relative profitableness of competing
crops and Uve stock enterprises, and hence give the starting point
for scientific farm management.

It would seem that the Federal Food Administration in fixing
the price of wheat, and the Chicago Federal Milk Commission
in its work of the winter of 1 918-19, assumed that cost of pro-
duction is the foundation of price-fixing, yet when these officials
have approached the final problem of price-fixing, they have
found themselves confronted with unexpected difficulties.

Why all this difficulty in the use of cost accounts as a basis
of price-fixing ? There are doubtless many reasons, but there are
three of unusual importance. First, variation in costs ; second,
joint costs ; and third, disagreement in the elements of costs.
But in spite of these difficulties, accounting may be used in price
control.

Variation in costs. There is a very wide range in cost figures
secured by careful methods of accounting, and there are wide
ranges in the estimates of costs by different producers. On the
basis of a farm management survey made on 51 farms in one
dairy district in Wisconsin, the return per dollar of annual out-
lay ranged from 77 cents to $3.05. The results of the Wisconsin
Dairy Cow Competition carried on in 1909-11 illustrated this
point. The return per dollar's worth of feed consumed by the
398 cows in this contest varied from 92 cents to $2.71 ; the aver-
age of the best ten was $2.38 worth of product per dollar's worth
of feed and the average of the poorest ten was $1.11.

368 AGRICULTURAL ECONOMICS

With wide ranges in the costs of production, which cost shall
be accepted as the basis of price-fixing ? The average has been
seriously suggested but abandoned in disgust when it has been
realized that a price fixed on the basis of average costs would
probably result in a loss on half the farms.

The marginal or greatest costs have also been suggested.
Economists have a theory that prices tend to equal marginal
costs ; this is thought to be true because it is assumed that the
man who is producing at a loss will drop out, or, if the supply
is short the price will rise to the point attracting others less fa-
vorably situated to enter the same line of production, thus
tending to maintain the price at a point equal to the greatest
cost, though at any given time they might be far apart. There
^seems to be some relation, therefore, between the highest cost
necessary to produce the desired supply and the price which in
the long run will have to be paid in order to get the supply.

Disagreements regarding cost factors. Determining the
price at which to charge supphes produced upon the farm
presents further difficulties in this regard. Shall feeds be
charged at cost of production or at market price ? In calculat-
ing the cost of a 1 91 8 corn crop, should the seed corn be charged
at the cost of production or at the market price? A similar
question arises with respect to seed potatoes. In figuring the
cost of milk the question arises : Should the hay, the oats, and
the corn produced on the farm be charged on the basis of cost
of production or at the market price? There seems to be an
accepted rule of accounting which gives definite directions to
charge all the produced supplies at cost and not at market
price. On the other hand, farm cost accountants connected
with the United States Department of Agriculture and the
various experiment stations have quite generally charged these
produced supplies at market price minus the cost of deHvering
them to the market.

A few years ago when the point of view was that of proving
that dairying was profitable and an industry which should be
stimulated by the press in every way possible, one agricultural
paper held tenaciously to the old accounting rule of charging

PRICE-FIXING AND THE COST OF FARM PRODUCTS 369

feed to the cows at cost of production because this magnified the
profits of dairying by throwing the field profits into the dairy
account. Now that the point of view has changed and the price
of milk is looked upon as the objective point in cow cost account-
ing, this same paper is definitely of the opinion that produced
feeds should be charged to the cows on the basis of market price.
It is not difficult therefore to understand why there should have
been two opinions, on this point, before the Chicago Milk Com-
mission. Each party accepts the rule of accounting which best
serves his interest.

If there were two methods of testing the amount of butter fat
in milk, one of which favored the farmer and the other the pur-
chaser, this same alignment of the interests would doubtless be
formed. Fortunately there is one accurate fat test accepted by
all, hence this occasion of trouble is avoided. What is needed is
to settle this question in accounting in accordance with the
economic principles underlying the case.

Joint costs. The typical farm provides a much more difficult
accounting problem than a sawmill, a flour mill, or a steel
mill. The problem is more nearly comparable to that in railway
accounting, where one expenditure affects a great number of
sources of income. The farmer who 'produces but one crop is
rare. On the typical dairy farm, corn, small grain, clover hay,
and pasture, cattle, horses, and hogs are all produced. The
same plows, harrows, and horses are used for the various crops
which require attention at different seasons, and the same
laborers are used for crops and live stock. When the corn is
being cultivated the corn is not only benefited but the land is
being put into better condition for the small grain crop which
will be grown the next year. When the land is prepared for
small grain the seed bed for the clover is being prepared, while
oats or barley serves as a nurse crop for the clover plant, which
in turn is able to draw upon the nitrogen of the air and provide
plant food needed for its own growth and for the corn crop
which is to follow. Hence the costs of these three crops are
said to be joint costs.

Under these circumstances, suppose it is found that the oat

370 AGRICULTURAL ECONOMICS

crop costs more than the market price, that the cost of oats is
ten cents greater than the price. What can the farmer do about
it? He can do a little figuring to see whether or not another
crop which requires his attention at the same periods and which
serves equally well as a nurse crop, barley for example, can be
substituted with a profit or with a smaller loss. If not, should
the farmer cut out the small grain crop? Usually not. The
total cost of man and horse labor would be reduced little by
omitting the oat crop, because oats and corn require labor at
different seasons and are supplementary to each other. If this
crop were not grown the hours of productive labor would prob-
ably be reduced and the average charge per hour for labor
applied to the corn would be greater.

But this is not all. Oats are used as a nurse crop for clover,
and while it may be possible to grow clover without a nurse crop,
this would cost nearly as much as putting in the oats. Hence
the growing of small grain is usually the cheapest way to get
a seeding of clover, and where clover thrives this is the best way
to secure nitrogen for the corn crop. Thus it is the joint results
of the joint costs which are important.

Having adopted a system of farming, the parts of it should
be adhered to so long as the system as a whole continues to be
attractive, and so long as each part of the system continues to
pay better than the substitute which is competing for a place in
the system.

The corn, oats, and clover combination is not a complete sys-
tem of farming in itself. It is usually combined with one or
more hve stock enterprises. Beef cattle and hogs, dairy cattle
and hogs, or straight dairying may be combined with this crop-
ping system. In each of these systems there are many instances
of joint costs. The joint cost of fattening steers and hogs is
commonly understood among feeders. Where butter fat and
pigs and veal calves are the products sold, these three products
have elements of joint cost. Where pure-bred cattle and milk
are sold the costs are joint and inseparable ; the important ques-
tion relates to the profit of the system as a whole.

Where grade cows are purchased and used for the production

PRICE-FIXING AND THE COST OF FARM PRODUCTS 371

of city milk we approach more nearly to a specific cost of a spe-
cific product as far as the Hve stock industry is concerned, with
only a small by-product in the form of a veal calf. And yet
this type of dairying has its costs intermixed with the system
of cropping, notably in the use of labor, the use of crops, and
the provision of fertiHzer. Hence, in mixed farming, joint costs
are present to block the effort to arrive at the cost of producing
any specific farm product.

Where two articles are produced as a result of the same work,
the combined prices of the two tend to equal the greatest neces-
sary cost of producing them, but the price of each article is
determined separately on the basis of supply and demand.

Consumers want a variety of things produced by the farmer.
How much a consumer will pay for a given article depends upon
the intensity of his desire for it. The intensity of this desire
depends upon how abundantly he has been suppHed. The more
he takes the less he will pay for any given unit of the goods.
Unfortunately, under conditions of joint costs there are certain
physical facts which determine the ratios in which goods are pro-
duced, without much regard to the ratios of the intensity of the
desire for them. As a result the supply-demand price of one
product may be higher and that of another lower than the cost,
but the combination of crops may prove profitable. The case
is similar to the situation in the oil business. GasoHne and kero-
sene have a joint cost ; and it is the condition of the market and
the relative proportion in which they are obtainable at a common
cost which makes the price of gasoHne nearly twice as high as
that of kerosene at the present time.

Total farm profits and price regulation. When the point of
view of total farm profits is accepted the problem becomes that
of so regulating prices that the farmer in one Hne of produc-
tion may reap as large a reward as he could earn producing
some other product, or else of helping him in getting into some
other line of production. By looking to total farm profits we
avoid many of the difficulties arising out of differences in the
costs of producing a given article by different men. Even if it
costs one man 2 cents a quart to produce milk, another 3 cents,

372 AGRICULTURAL ECONOMICS

another 4 cents, and still another 5 cents a quart in a given
city milk belt, yet each of these men may be doing the type
of farming which pays him best, and the industry may be stable
so long as relative prices remain the same. Likewise the ques-
tion of joint costs is avoided, for it is no longer a question of the
cost of a specific product, but of comparing the total farm profits
resulting from the various types of farming and from the dif-
ferent competing elements in each kind of farming. Further-
more, the question of charging feed at market price or cost of
production would seem to pass with the effort to find specific
costs. However, something akin to this latter problem remains.
The farmer may compare the profits he would make if he sold
his corn, oats, and hay at present market prices instead of
feeding them to cows and selling milk. In this he should not
assume that if the community turned from milk selling to
crop selling the prices of all these crops would be what they
were before the change, neither should he assume that his
crops would yield the same if he changed to grain growing
for the market. Oats and com are used directly for human
food and have many other uses, and are so easily shipped that
there would continue to be a market for them if not used as cow
feed ; but clover hay is a stock food and it is not so easily mar-
keted. The important alternatives uses for clover if not used for
cows are (i) to feed to beef cattle, (2) to sheep, or (3) to plow
under as a fertiHzer, any of which conserves its value as a land
builder for grain growing. Where clover has entered into
commerce it has usually been as a feed for dairy cows. When
discarded for this use, therefore, the marketing of clover hay
could not be counted upon. A farmer in the Chicago milk
district, for instance, insists that it pays better to sell grains
and plow the clover under than to make clover hay and feed it to
live stock. He is practicing this system and is satisfied. In
this and similar cases it is the alternative use value rather than
cost or present market price which becomes the basis of compar-
ing the profits of types of farming, and hence the basis of choice.
, This means that formally assigned specific costs are of Uttle
use in the discussion of price-fixing where the products in

PRICE-FIXING AND THE COST OF FARM PRODUCTS 373

question are produced under condition of joint costs. It does
not mean, however, that cost accounting is of no use in the study
of this problem ; in fact, accounts are very necessary, but in a
different way from what has been supposed. Accounts are
useful to the farmer in making choice of crops and live stock
enterprises and his methods of production. Accounts are
useful to the price commissioner in estimating the price necessary
to call out continuously the desired supply of produce of a given
kind and of suitable quality. For these purposes specific costs
may not be needed. What are needed are figures comparing
the profitableness of the different things to which the producer
can turn his attention. The alert farmer is ever figuring on the
combination of crop and live stock production which will pay
him best with a given price schedule and with given costs for
land, labor, and equipments.

When the point of view in farm cost accounting is shifted
from specific costs to comparison of profits the whole problem is
much simpHfied. In the attempt to secure specific costs, ac-
counts had to be kept in minute detail comprehending every
activity and economic relation of the farm. As soon as one
shifts to the point of view of comparing the profits of competing
enterprises, no record need be kept unless the farmer really has
a choice and then only such records as are essential to answering
the question. Does this pay better than that? For example,
the farmer in southern Wisconsin has a choice between growing
oats and barley. In order to make a wise choice on this point
it is not necessary to know the specific cost of growing either
oats or barley. All that is necessary is to know differences in
costs and differences in the value of the crops. In this case the
same tools, machinery, horses, and men are used at essentially
the same time of year whether the farmer grows the one crop
or the other. These common items of cost may be omitted, for
they cancel each other in the calculation. When put in this
form the question is so simple that almost any farmer can figure
it out on the basis of such facts as are easily available by keeping
a production record and by studying price quotations.

The milk producer has a number of ways of disposing of his

374 AGRICULTURAL ECONOMICS

product. He may sell whole milk to a city, or a condensery.
He may take his milk to a cheese factory and carry home the
whey, or he may separate the cream and sell it for city use or to
a butter factory. If the milk is marketed through the cheese
factory, hog production is introduced as a supplementary indus-
try using the whey. If he sells cream, calf raising and pork
production may be combined with dairying as a means of using
the skim milk. All of these different types of dairying can be
based upon the corn-oats-hay cropping system. The combina-
tion a given farmer should choose depends upon which pays
best under his particular conditions of production and marketing.

The dairy farmer has, of course, other alternatives. He can
change from dairying to beef and pork production, based upon
the same field crops. Again, he can abandon cattle and hogs
entirely, grow grain to sell and raise horses as a side-Une to use
up much of the unsalable roughage ; but in figuring the merits
of this last system, influence upon fertility and production of
grain per acre should not be ignored. He has the further alter-
native of trying his fortune in the city, and this horn of the
dilemma has frequently been the choice.

With all these opportunities before them, the farmers are slow
to shift from one thing to another in normal times because, for a
given community, the question of what pays best becomes fairly
well settled. Near the cities, whole milk of high quality is pro-
duced under sanitary conditions of a higher standard than in
other dairy regions. Outside of the milk zone there are scatter-
ing cream shippers selected mainly with respect to the characters
of the farmers participating. These are intermingled with the
farmers producing for the creameries and cheese factories. The
city milk zone becomes more or less well defined with the bound-
ary line moving out a little farther in winter and contracting
in summer, with a gradual expansion of the milk zone about a
growing city.

But in abnormal times, when radical changes are taking place
in the prices of all these competing lines of production, farmers
with their eyes upon the market become uneasy and unsettled
in their convictions as to what to produce. The fact that the

PRICE-FIXING AND THE COST OF FARM PRODUCTS 375

producer of city milk is getting more than he ever got before
is not a sufficient consolation if he might be making more profits
seUing grain, hogs, and butter fat, in spite of the fact that he
has gone to greater expense to equip his farm for meeting
the requirements of the city ordinances. It is this unsettled
condition which has given rise to the recent efforts to regulate
prices.

In deciding upon a fair price to the farmer on the part of a
commission the alternative choices of the farmer become the basis
for a rational decision. The industry should be made attractive
to the farmer if he is expected to remain in it. But what is
essential to make a given system of farming attractive ? Must
it pay some definite labor income to each farmer engaged in it ?
Apparently not, for as a matter of fact men are remaining in
each type of farming who are making small incomes while others
are making very large incomes.

Whether or not a man should continue to carry on a given
type of farming depends upon his opportunities in other Unes of
farming or other lines than farming. If there is no better out-
look, if he is doing better than he could do in any other place, he
will probably continue to produce the supply for the price he can
get and look to methods of reducing costs as a means of increas-
ing profits. If there is an alternative which will pay him much
better, which should he do, ask that his price be lifted to the
point where his present activities will pay as well as the alterna-
tive or quietly choose the better paying activity ? The answer
is not so obvious as it might at first appear. Shifting is often
expensive, and there is usually hope that conditions will change
and the old line will again pay better. It often takes a genera-
tion to build up a type of farming, and when the system becomes
unprofitable a serious loss is suffered before readjustment can be
made. Yet where permanent changes in market conditions have
come about, changes in farming are necessary. Where read-
justments should be made it is believed that pubhc expenditures
to aid in the readjustment, especially by means of educational
campaigns, may often be more desirable than price hfting as a
means of making the industry profitable.

376 AGRICULTURAL ECONOMICS

Here is work for price commissioners well trained in agricul-
tural economics, who will ascertain the true cause of price
changes, make a study of the conditions of production, and advise
the farmers in making readjustments in their farm management
or in standing by their old lines of production as the case may
warrant. In this work the price commissioner should not forget
that the well-being of the farmer is just as important as that of
the consumer, and that in the long run prices should be such as
will make farm work and country life attractive.

In carrying out this policy, price lifting may at times prove
desirable. This is most likely to happen in case of articles like
milk for which the price is more or less influenced by custom and
which is often sold at the same price for long periods and which
for this reason does not adjust itself quickly enough in times of
radical changes in the general price level ; but wherever isolated
farmers in great numbers are acting individually in selling their
produce to great corporations, need may often arise for price
regulation by public authority to maintain the public interest.

In deciding upon prices both the farmer and the price com-
missioner should keep the long-time as well as the immediate
effect in mind. It takes decades to build up the dairy industry
in a community. Equipments require time for construction.
Years are required to build up good herds, and decades are re-
quired to train a whole community in the fine art of producing
high-class milk. When such a community is diverted from
dairying to another line of production, the farmers suffer a great
loss while making the change and while adjusting themselves to
new lines of production, after which they may again prosper.
But if the farmers are needed to produce the supply of milk
essential to the welfare of the people of the city, the loss of skilled
dairymen will result in a heavy loss to the consumers, who will
have to pay higher prices for milk, and probably find it neces-
sary to lower their standards with respect to quality in order to
get the necessary supply.

Hence it is the long-time averages which must be considered.
The records of one year may indicate that the profits would have
been greater had the farmer been in another line of production,

PRICE-FIXING AND THE COST OF FARM PRODUCTS 377

similar to that practiced outside of the city milk belt. In con-
templating these figures, the farmer should look for the unusual
conditions which have made this true. If the conditions are
temporary he should hold fast to his present line and recall the
years when his profits were much the greater because he was in
the dairy business.

If, however, it becomes apparent that permanent changes in
market conditions have taken place which account for the change
in profits, a move should be initiated to bring about a readjust-
ment of the farming to suit the new market conditions ; possibly
some dairymen should change to other lines of production. But
this is not a matter for hasty action, especially in the case of the
dairy industry, where pubHc welfare is at stake and where a
change has far-reaching effects through a series of years.

Changes which the farmer may make in grain production or
hog production may be quickly readjusted, but not so with milk
production. One's ill feelings towards other people should not
enter one's decision. One should not get angry and sell his herd
of cows. Cold reason should form the basis of judgment. It
is easy to disperse a good dairy herd, but it takes years to rebuild
it. A much safer plan is to cut down a little on the number of
cows by culling-out the less profitable ones and to seU some
grain or hogs in addition to milk rather than to make a radical
change in type of farming.

If the profits of milk production are temporarily low on a
large share of the farms in a given city milk belt, due to short
crops of grain and hay, which for this reason must be shipped
in at heavy cost, the farmer should not only look to the long-
time average, and to the maintenance of his market, but he
should recognize the occasion of his loss, namely, the short crop,
and should lay this loss to the land or to the way he has handled
his land and not ask that the consumer should pay the rent on
the land which did not produce the feed and also pay for the
purchased feed.

The farmer should not be too insistent upon the consumer's
price varying exactly with his costs from season to season and
from year to year. Custom is a big item in determining what

378 AGRICULTURAL ECONOMICS

people will eat. So long as prices are the same the customer is
not likely to change, but every time the consumers' price changes,
consumption customs are shaken ; and the more violent the
change the more likely the custom is to be upset. It is not only
the industry, then, but the market which may be damaged by
impassioned actions.

Just as it is by comparing profits that the farmer makes choice
of types of farming, so it is by comparing prices in the market
that the consumer makes choice. If it is done in the right way,
the price of one commodity may be raised as rapidly as that of
its substitute. So long as relative prices are the same, the
choices may be expected to be the same. If, however, much
publicity of an antagonistic sort accompanies the change in the
price of one article while the change in another is accompanied
by shrewd advertising which wins the sympathy of the con-
sumer, there may be a falling off in the demand of the former and
an increase in the consumption of the latter.

Price commissions should make a careful study of the amount
and character of the product demanded at various prices and the
character and amount of the product which can be secured at
these prices, and adjust the price on the basis of maintaining an
equiUbrium between demand and supply through a long period.
In doing this, account will need to be taken of the substitutes
to which the consumer may turn, as well as profits in other types
of farming to which the milk producer may later change if the
price is fixed too low compared with other prices.

The forces and conditions which determine supply and demand
are too little understood. The law of supply and demand as a
price regulator does not always give satisfactory results. It
might be made to work much more equitably under the guid-
ance of a commission than when influenced by the unequal
bargaining power of great distributing corporations on the one
hand and of the isolated producers on the other.

A properly organized permanent price commission might
inaugurate an educational program which would improve the
mutual attitude of mind of the producer and consumer toward
each other, which would make each more considerate of the

PRICE-FIXING AND THE COST OF FARM PRODUCTS 379

rights of the other that are in the long run fundamental to the
interests of all concerned.

Furthermore, such a commission, well informed with regard
to the facts of production, distribution, and consumption, would
form a desirable medium for collective bargaining between the
organized producers on the one hand and the organized distrib-
utors on the other, which appears to be the logical outcome of
recent tendencies and which would appear to be desirable
wherever large numbers of isolated farmers are selling to large
corporations such as the milk distributors in the large cities, the
packers and the grain dealers, and possibly in many other in-
stances. Even where the more specific functions of price-fixing
are unnecessary, there is an important work for price commis-
sioners in studying market conditions and the conditions of
supply and in educating both producer and consumer to rational
action.

Statistical and historical methods of studying prices in their
relation to production will prove valuable to price commissioners.
Cost accounts are useful but should be supplemented by statis-
tical studies showing the effect of various price relations upon
supply and upon demand through a series of years. It will be
desirable to use every method of research known to economic
investigators in arriving at sound bases of judgment in the
control of prices.

CHAPTER XXIX
THE SOCIAL SIDE OF FARM LIFE i

The growth of national wealth makes possible improvements
in the conditions of life in the farm home and in the rural com-
munity. The tendency has been for the various modern con-
veniences to be introduced more slowly in the homes of the
farmers and in the social life of the rural communities than in the
more densely populated centers. This is true partly because of
the greater opportunity for human contact in the cities than
in the country, partly due to the fact that some of the city
conveniences can be provided more economically on a large than
on a small scale, and partly to the fact that farmers who have
been prosperous and gained a competence have too often given
their attention to buying more land rather than to the im-
provement of the conditions of life in the home and in the
social group.

Leaders like Sir Horace Plunkett have emphasized that with
" better farming and better business " should go " better liv-
ing." The natural opportunities for a full life are better in the
country than in the city. It is now practicable to bring into the
rural homes the conveniences which make for comfort. The
possibility of organizing social life in the country in a satisfactory
manner has been demonstrated by many communities.

In order that greater progress may be made in bringing about
conditions of " better living " in the country the conditions of
farm Hfe are being studied with a view to helping farmers in
their efforts to reach out for the better things of life.

Rural hope. The progress of the land worker up the ladder
of financial independence is marked by a continual struggle on his

' This chapter was prepared especially for this book by Dr. J. C. Galpin and
Miss E. J. Hoag.

380

THE SOCIAL SIDE OF FARM LIFE 381

part, both with forces within himself, which he often fails to un-
derstand and control, and with the forces of the outside world
which limit his actions in striving for success. He encounters
subtle resistance at every step on his way, yet he is able to rise
from the position of hired laborer to that of tenant farmer, from
the position of tenant farmer owning the equipments to that
of owner of the land and possessor of the profit, from isolated
farmer to member of an organized economic group.

Is there equal hope for the development of the social side
of the farmer's life ? Is there opportunity for growth in the
cultural, educational, religious, and aesthetic aspects of the life
of the farmer and his family, commensurate with its economic
progress ? It is the aim of this chapter to set forth the elements
of the social side of farm life, so as to disclose the basis of rural
hope.

The Country Life Commission. In 1908 Theodore Roosevelt,
then President of the United States, appointed a commission on
country life, for the purpose of gaining such information and
advice as would enable him to make recommendations to
Congress in the interest of better country living conditions.

President Roosevelt's letter appointing the commission affords
a good introduction to the study of the social side of our farm
life, as in fact it may be considered the beginning of the country
life movement in America. The following sentiments from
the letter form a significant admission that the social side of
farm Hfe, as a national problem, has lain outside the Hne of sight
of farmer, on the one hand, and statesman, on the other :

" The social and economic institutions of the open country
are not keeping pace with the development of the nation as a
whole. . . . The farmer must first of all grow good crops in order
to support himself and his family. But when this has been
secured, the effort for better farming should cease to stand
alone and should be accompanied by the effort for better business
andbetter Uvingon thefarm. . . . Agriculture is not the whole
of country Hfe. The great rural interests are human interests,
and good crops are of little value to the farmer unless they open
the door to a good kind of Hfe on the farm. . . . How can the life

382 AGRICULTURAL ECONOMICS

of the farm family be made less solitary, fuller of opportunity,
freer from drudgery, more comfortable, happier, and more at-
tractive ? . . . How can life on the farm be kept on the highest
level ? . . . How can a compelling desire to live on the farm be
aroused in the children that are born on the farm ? ... All of
these questions are of vital importance, not only to the farmer,
but to the whole nation. . . , There is no more important person,
measured in influence upon the life of the nation, than the
farmer's wife, no more important home than the country home,
. . . The farmers have hitherto had less than their full share of
public attention along the lines of business and social life.
There is too much belief among all our people that the prizes
of life lie away from the farm. "^

In response to President Roosevelt's letter, the Country Life
Commission made an analysis of the main deficiencies in country
life, and suggested remedies for the deficiencies. Three impor-
tant recommendations were handed to President Roosevelt.
First, a recommendation was made for a comprehensive plan of
study or survey of all the conditions that surround the people
who live in the country. The commission suggested that federal
and state governments, agricultural colleges, other educational
agencies, organizations of various types, and individual students
of the problem be brought into cooperation for the great work
of investigating with minute care all agricultural and country
life conditions.

Second, a campaign for rural progress was mapped out. The
commission believed there should be held state and national
conferences on rural progress, designed to unite the interests of
education, business organization, and religion into one forward
movement for the rebuilding of country life.

Third, according to the recommendations of the commission,
each state college of agriculture should be empowered to organize
as soon as practicable a complete department of college exten-
sion. The work should include such forms of extension teaching
as lectures, bulletins, reading courses, correspondence courses,
demonstration, and other means of reaching the people at home
' The Report of the Country Life Commission.

THE SOCIAL SIDE OF FARM LIFE 383

and on their farms. It should be designed to forward not only
the business of agriculture, but sanitation, education, home-
making, and all the intimate interests of country life.

National attention centered upon the farm family. The
report of President Roosevelt's Country Life Commission in
December, 1908, although not acted upon by Congress as the
President had looked for, aroused universal interest in country
Ufe. The press was quick to give wide publicity to topics which
had never before found a place in magazine or daily. State
conferences on country hfe matters, drawing together rural
people, were called at agricultural colleges, state universities,
and normal schools in nearly every section of the United States.
Farmers' organizations, rehgious bodies, and business clubs
were centers for the discussion of this new subject. From 1909
to 1914 city daihes, national magazines, and country weekUes
devoted constantly increasing space to country Hfe progress.
In 1914 the tragedy of the World War, however, quickly reduced
the space given by the press to the social side of farm life, and
forced the food side of farm Hfe into greater prominence.

However, the agitation of conference, pulpit, and press during
the five years succeeding the report of Roosevelt's Country Life
Commission report left a distinct trace in American thought.
National attention was turned to the human beings on the farm
and to farm Hfe institutions. There was at once an arrest of
flippant talk about the farmer and his family. Country foibles
ceased to be the butt of jest, and earnest effort was started to
understand social conditions surrounding the land worker.

After the first crop of superficial opinions and remedies, came
a determination to study seriously all phases of human life as
related to the farm. Commissions were appointed in the field
of rural religion, rural education, rural health and recreation.
CoUeges appointed instructors in rural Hfe, and " rural sociol-
ogy " became a claimant for a place among the sciences. A
group of young rural socio-economists developed. Theological
curricula began to give attention to the " rural church." State
boards of education began policies of redirection of rural
schools. University extension work added the " farm house

384 AGRICULTURAL ECONOMICS

and home " to its projects, and agricultural colleges and religious
bodies took the first " surveys " of rural life.

Broad interpretation. To thinking people the country life
movement is not in any sense a literary revival of the poetic
appreciation of nature, the open road, the pictured sky, and the
rural landscape. Nor is it a philanthropic enthusiasm with an
" upUft " motive. The country is not a national, out-of-the-way
slum to be cleaned out. Neither is the movement a conscious
class struggle of farmer against townsman.

But rather this new movement is to be interpreted as a creed,
a belief, if you please, that country Kfe has latent social forces
which are susceptible of development; that reorganization of
rural forces in such manner as to replace poorly adjusted social
relations with natural and logical adjustments will free the
farm population for a full and fair hfe. Those most closely
in touch with the new rural hope beheve that national hfe, yes,
even urban life, will be equally benefited by a development
and reorganization of country hfe and its institutions. How
far this rural hope, aroused by the country fife movement, is
justified by the facts of country life, labor, and struggle, it is
our purpose to determine in the topics which follow.

Rural investigations. The Country Life Commission, in its
list of deficiencies, gave prominence to " a lack of knowledge on
the part of farmers of the exact agricultural conditions and possi-
bihties of their regions. . . . The time has now come," the
report reads, " when we should know in detail what our agri-
cultural resources are. . . . We cannot make the best and most
permanent progress in the developing of a good country Hfe until
we have completed a very careful inventory of the entire country.
. . . This would result in the collection of local fact, on which we
could proceed to build a scientifically and economically sound
country life."

The chairman of the Country Life Commission had been an
exponent of agricultural surveys for nearly two decades. It
was but fitting that he should be the person to sound the note
for country hfe surveys and expound the survey idea as apphed
to the social side of farm life. In 191 1 he set forth the following

THE SOCIAL SIDE OF FARM LIFE 385

general ideas on the scope and character of rural survey work :
The real rural survey, he stated,should be a slowly and studiously
made record, rather than a mere exploration, an inspection, a
canvass, or a campaign. It was his belief that any lighter efforts,
however necessary for temporary uses, belong to a different order
of inquiry. Then, too, according to the chairman, the survey
should be strictly scientific in spirit, taking account of every
significant fact, wholly apart from bias in the mind of the sur-
veyor, the goal being the making of a record of the entire situ-
ation, and the telling of the whole truth, in order to accumulate
a substantial body of fact, so that every community might build
its life upon the fact of the community. It was the plan of the
chairman that these surveys should be made by many agencies,
such as colleges, schools, departments of agriculture, and experi-
ment stations, assisted by societies, churches, welfare agencies,
and individuals, all working under a plan of cooperation.^

Some rural surveys. In response to the policy of study, in-
vestigation, and survey set forth by the Country Life Commis-
sion, "an agricultural survey " in igii in Tompkins County,
New York, although devoted mainly to labor-incomes, took
stock of certain country hfe features, and pioneered the way
in survey making. Consideration, for example, was given
women farmers. Their labor incomes were compared with the
labor incomes of men. Their help problem on the farm was
inspected. Their total opportunity was assessed.

To take another instance, the farm near town or city, as a
residence, home, and side occupation for people in town or city
occupations was considered. The opportunity for a lawyer,
teacher, mechanic, and the like, to live in the country, operate
a farm, and still carry on work in town was estimated on the basis
of the instances encountered.

The value of good country roads was not allowed to pass
unnoticed. The empty houses in the country were explained,
interpreted, and differentiated from abandoned farms.

An interesting correlation was made between the education
and labor incomes of farmers in Tompkins County. A high school

' L. H. Bailey, "The Survey Idea in Country Life Work."
2C

386 AGRICULTURAL ECONOMICS

education in this area of investigation was apparently equal to a
$6000 bond bearing 5 per cent interest. Younger farmers, how-
ever, did not seem to be more highly educated than their elders.^

A remarkable series of " Rural Life Surveys," made from
the point of view of the church, in Missouri, Ohio, Tennessee,
Maryland, Illinois, Kentucky, Indiana, and other states, began
to appear in 191 1 and continued through a period of several
years. In each state selected several counties were surveyed,
generally by townships. The economic conditions, the general
character of the population, the social mind (involving communi-
cation, community manners, meetings, amusements, families,
cooperation, organizations), clubs, education, recreation, morals,
religious conditions and activities, social welfare (involving
public health, distribution of wealth, community improve-
ments), maps and charts, are all included in the wide array
of topics taken up by these studies. Photographic illustrations
of bad and good conditions appear frequently in the pamphlets.
This series of surveys has had a wide influence, especially in
focusing attention upon bad rural conditions, and leading
people to a program of rural progress.^

Some significant township social surveys have been made by
various universities and colleges. These cover the range of
social, reHgious, educational, health, and economic conditions
in a general way, and mark the beginnings of serious effort to
correlate the facts in the whole field of country life.^

A few educational studies covering the rural school situation
in a state have been pubHshed by departments of public instruc-
tion, state universities, and colleges of agriculture.*

1 C. F. Warren, "An Agricultural Survey," Bulletin 295, Cornell University.

2 The Department of Church and Country Life of the Presbyterian Board of
Home Missions.

2 Carl W. Thompson, " Social and Economic Survey of a Rural Township in
Minnesota." Lewis H. Haney and George S. Wehrwein, "A Social and Economic
Survey of Southern Travis County, Texas." Paul S. Pierce, "Social Surveys of
Three Rural Townships in Iowa." George H. Von Tungeln, "A Rural Social
Survey of Orange Township, Iowa."

«E. V. White and E. E. Davis, "A Study of Rural Schools in Texas." C. C.
Sargent, "The Rural and Village Schools of Colorado." W. H. Allen, "Rural
Schools in Wisconsin."

THE SOCIAL SIDE OF FARM LIFE 387

Health surveys are just starting with expert investigators
behind them. The units of measure are so well standardized
that rural health studies may be looked for in increasing
numbers.

Many rural community surveys have been attempted, but
very few have been published. A community survey of tenancy
here and there has shown the way to specialization in the study
of farm Hfe.^ Interesting school district surveys have been
taken by country children and teachers. Several analyses of
counties into communities by a process of survey have dis-
played the close relation of farm Hfe and village, town, and city
institutions.^ Beginnings have also been made in tracing out
county government budgets to locate the effectiveness of
official service in the county form of government.^

A cooperative plan of national research. Country life has
justified itself by these initial studies as a field worthy of investi-
gation. These surveys, although made in limited areas of the
United States, and carried on without regard to concerted
action, have proved stimulating and have awakened the hope
that a national plan of research may soon be set in motion.
The pressing need now seems to be for a determination of the
most significant problems which are susceptible of study in the
life of our farm populations. These problems should be stated
in standardized form, and then more or less uniform methods
of study should be agreed upon for general use.*

A federal bureau of country Hfe research would facilitate
the adoption of standard problems, methods, and a concerted
movement nation-wide.

The United States census of population. To know the move-
ment of populations is a desideratum from many points of view.
Heretofore the census has given us two main classes of popula-
tion, the rural, the urban. The urban population, broadly

• Agricultural Experiment Station of University of Wisconsin, Research Bulletin
44, "Farm Tenancy."

2 C. J. Galpin, "The Social Anatomy of an .Agricultural Community."

5 E. C. Branson, The University of North Carolina Record, September, igiy.

* Rural Sociology Committee, "Standardization of Research," American Journal
oj Sociology, November, 1918.

388 AGRICULTURAL ECONOMICS

speaking, has included all persons living in incorporated places
of 2500 people or more ; the rural population includes all persons
living outside urban territory. The movements of the popula-
tion engaged in agriculture have not been a matter of plain
scientific disclosure by the census, but rather an estimate wrung
from the classifications " rural " and " urban." All the figures
on " rural decrease " of population and on the gradual but
strong migration of " rural " people toward cities fail to give
the exact facts about people living on the land as land workers.
It is futile to build up permanent theories upon the movement
of farm population until we have census data upon farm popu-
lation as clean-cut as we possess about the population living in
cities of 100,000 people.

If the census could classify our population under three
heads, namely, city population (setting up a standard of
population for a city), village population (setting up a standard
of population for a village), farm population (population living
on farms), we would have the basis for a scientific calculation of
population movements, and we should begin to know exactly
about " decreases " and " increases " and direction of '' migra-
tions " of our land dwellers. It would be a source of valuable
knowledge on farm problems, moreover, to be able to dis-
criminate village population from farm population. The
relationships between village and farm require this discrimina-
tion, rather than the merging which we have at present.

Village problems on the human side are quite distinct from
farm problems. In fact, village psychology, village institutions,
village government, village abnormality, and the like, justify
separate research methods and separate treatment.

The census should become the great basal source of research
in country life problems. And it will take its place and function
in this respect just as soon as the foregoing threefold classifica-
tion of population is standardized. Then a series of tabulations
on Hteracy, iUiteracy, age groups, color, nationality, sex, marital
conditions, in respect to each of the three classifications, would
give the initial materials for further research.^

1 C. J. Galpin, "Rural Life," p. 359.

THE SOCIAL SIDE OF FARM LIFE 389

Reorganization. The country life movement is now at the
stage of reorganization. Old institutions are being subjected
to close inspection with a view to adapting them more perfectly
to present conditions. New institutions are being proposed
to give a better channel of life to the farming group. Methods
of rural organization everywhere occupy the center of attention.
Some urban institutions, likewise, are in process of adjustment
to newly recognized rural relations. Economic problems of the
farm in some cases wait upon the reorganization of the institu-
tional life of farm and town. A survey of the problems of
organization will disclose to a close observer the profound
character of the attempt thoroughly to organize the human side
of farm life.

The farm household. Family life in the farm household at
once engages the thought of those who would modernize living
conditions in the country. A general opinion obtains that the
American farm family is restless, no sooner getting settled
upon a piece of land in a community than it opens the doors to
floating suggestions of a better farm, a more favorable com-
munity, a more' congenial climate, elsewhere. Not that out-
and-out endeavors to shift from farm to farm are started ; but
that the American farm family always views shifting as within
easy range of the possible. So owners of farms in America are
not viewed as rooted and grounded in any particular community
to be transplanted with the same difficulty as a massive oak.
Farm tenants, moreover, are proverbially mobile, shifting, cut-
ting and trying from farm to farm, and from community to
community.

To this instabiHty of the American farm household has been
ascribed the undeveloped character of rural institutions. If
all farm famihes, even the leading ones, are shifting, then per-
manence, long-time policy, lavish attention, are impossible in
behalf of the institutions and organizations surrounding the
household. How to stabilize the farm home, therefore, without
rendering it immobile, is a problem of the first class, possibly
incapable of solution until tenancy shall have received prolonged
cooperative study and shall have been taken up more elaborately

390 AGRICULTURAL ECONOMICS

into public policy. A hope exists that tenant shifting may
be much decreased by a simple knowledge of the social forces at
work, and an application of methods of social control.

There is a suspicion, moreover, that instability in rural family
life may be related somewhat to the ideal of " getting on "
materially, or as the farmer views it, " getting out of debt."
The mortgage on the farm is the strong bond of household
partnership. Every one works to burn the mortgage ; every-
one, moreover, overworks ; and even if an actual obsession does
not completely control the whole family, too often so large a
preponderance of attention is given to production, profits,
savings for the mortgage, that the home spirit is driven from the
fireside. Deep sentimental attachments to the house as a human
habitation, to the farmstead as a spot sacred to the anniver-
saries and traditions of the family, frequently do not develop.

When the mortgage is burned, the work bond is broken, the
compelUng motive is withdrawn, and the family is susceptible
to new ideas of speculation or of a premature retirement from
an overcrowded economic life. If it has not been completely
smothered in the days of debt paying, the home spirit may
arise from the ashes of the mortgage, and new life may come to
all the inmates of the home, and life as a goal may be counted
more valuable than the material basis of producing. The new
spirit will gently lead the human beings where the old ideal
whipped the toilers to the field. When the mortgage bogie
is once driven from the American farm household, a calmer spirit
of stability, a firmer attachment to the spot where hfe is lived,
will ensue.

The mortgage bank with long-term loans, fair interest rule,
and very gradual payment of the principal, will do much to
drive away the " get out of debt quick " specter from the soul
of the farm home. Life, human life, then will more and more
become the motive of country living.

The problem of the farm household will not be solved until
there appears among its members an appreciation of the finer
things of life. This needed appreciation will come increasingly
as the farm housewife is freed from drudging toil, as the farm

THE SOCIAL SIDE OF FARM LIFE 391

child is allowed to get in touch with a larger cross section of life,
and as the farm father grows to feel on easy terms with the
business men of his community.

One strong influence leading to hope and appreciation in the
home will be a policy of screening off from the house and home
view, with objects of beauty, the more vulgar aspects of farm
work, necessary as they may be. Walls, trees, hedges, vines,
have always been used as screens, more or less, about the house.
A pubUc policy to this effect would make the practice more gen-
eral. Ail pictorial representations of farm life in advertisements,
in books, in magazine articles, in wall decorations, would do a
service to the life side of the farm household if they were to put
forward the best, the ideal indeed, rather than the common
realistic instance in posture, garment, gait, and use of hand
implements.

There is one reservation to be made in regard to the reorganiza-
tion and socialization of the farm household. America will
demand that no scheme of organization of the farm home shall
endanger the stamina of the farm family as a basal unit of the
nation. No social progress would be worth while at the price
of a weakening of the family tie on the farmstead. The final
statement, therefore, of the farm household problem is how to
give the farm family the higher goods of life in much larger meas-
ure, and how at the same time without fail to maintain the
present bond of viriUty in the family unit.

The neighborhood. Family life in the country is environed
with neighbors. As in biblical history, the drama of life on the
farm is played by father, mother, sons, daughters, servants,
and neighbors. The neighborhood is a unit of loose organiza-
tion. However, its bond of cohesion, racial, topographical, or
institutional, is usually very real and admits of tightening.
" Good neighbors," " accommodating neighbors," " neighbors
you can depend on," are phrases which indicate the tie of
organization. " Gossipy neighbors," " slippery neighbors,"
" rough neighbors," indicate a deficiency in organization.

The fact is that scientific farming needs neighborhood spirit,
enterprises, and mechanism of organization. Technical co-

392 AGRICULTURAL ECONOMICS

operation depends upon neighborliness, and good neighbors.
Common policies with respect to the territory of the neighbor-
hood, the institutions of the neighborhood, the roads of the
neighborhood, imply a degree of intensive organization.

The problem of organization of this territorial unit which
stands above the farm household involves, first of all, a some-
what ofl&cial or at least standardized recognition of neighbor-
hoods in the county. In fact, investigation is very much needed
at this point in order to locate these population groups which
are not bounded by statute lines. A map of a county containing
all the neighborhood groups discoverable would go far toward
clearing up and making standard this unit. It is quite probable
that the neighborhood population group, which has the flavor
of spontaneous choice about it, is one of the most important
groups for organization and social utihzation in farm Ufe.
How shall this unit be integrated into modern rural county
organization? Is it most naturally a school group? A co-
operative group? A farmers' club group? A neighborhood
house group ?

It is perhaps idle to let the fancy go upon this problem without
considerable study of the social texture, psychology, and eco-
nomics of the neighborhood. Very httle as yet has appeared,
either in literary or survey form, upon this feature of farm life.
Some few settlements, school districts, villages, some few moun-
tain clans, have been described ; enough in fact to substantiate
the claim that every county is packed with socio-economic
population groups of this character. It is greatly to be desired
that some responsible investigating agency should give us a
study of some county and make such an analysis as will etch the
neighborhood group into our geographic sense. Not till this
study has been made can the problem of organization even be
stated.

The business community. As the farmer becomes increas-
ingly a business man, it is of growing importance that he should
be a recognized member of some one business community.
Business is interlocking. The mercantile business, the manu-
facturing business, the farming business, are fit subjects for

THE SOCIAL SIDE OF FARM LIFE 393

closer mutual organization, but from the point of view of
country life, the first essential is that the farm shall be unmis-
takably linked with a particular local community of business
enterprises. The farmer needs the esprit de corps of business
associates, not only in farming, but in the other Unes of
business throughout his local community.

From being a soHtary seller of farm produce and buyer of
the raw materials which enter into his farm products, to being
associated with the farmers of his neighborhood in selling and
buying, is a considerable step ; but this sort of business associa-
tion falls short of ranging oneself with the business men in
general of a considerable village or small city trading center.
The farmer's kind of business is worthy of being represented in
the local business group. The modern farmer is personally
worthy of this association. Moreover, the community of
business in town and on farm has a unity of purpose, territory,
institutions, ideals, which logically demand that every farmer
of hope recognize himself as a member of the business group and
assume all the responsibihties of his common business citizen-
ship.

The time has passed when a modem farmer can evade his local
responsibihties as a business man with the plea that he can go to
several trading centers at will, for he can and should choose his
main business center and business associates. The time, also,
has gone when the mercantile and professional business
men of a village or city can ignore the outlying farmer as a
community partner in business enterprises on the ground that
he is not a voter in the village or city. The right attitude of
farmers and townismen is based upon the fundamental fact
that most villages and small cities in America have fixed agricul-
tural land bases, and that farm and town belong to each other.

The problem of reorganization of the business life of the farm
involves on the social side the distribution of American popula-
tion into rather definite population groups of town and terri-
torially associated farms. The sooner a farmer knows his
business groups and stands lo}'al to his group, the sooner a
community spirit will arise which will react upon the farmer's

394 AGRICULTURAL ECONOMICS

habits of life and thought. A great service remains to be done
through some sort of oflficial mapping of these community groups.
Whether a closer legal relation, such as some form of municipal
government, will ever obtain between the territory of farm and
adjacent town, it is premature to surmise. The feud between
farmer and townsman, although of long standing, in fact dating
back as far as the independent stride of the one, and the suave
speech of the other, is not without its history of truce and honest
endeavor to come to terms of community understanding.
The endeavors of many commercial clubs, boards of commerce,
business men's associations, town and country clubs, to bridge
the gap between town business and farming furnish grounds for
the beHef that some general and final agreement will prove
mutually satisfactory.

Educational institutions. If real hope is to enter country life,
considerable reorganization of the rural channels of education
will be necessary. Some expansion in their ideals of education
will need to come to farmers. There will be required also on
the part of townsmen some recognition that education, high
as well as low, is a legitimate privilege of the country dweller.
Some further adaptation of educational curricula to the voca-
tion of farming will have to be made. In fact, if the farmer's
family is to be a candidate for a hfe of culture, refinement, and
skill, the doors to right training must be opened wide, and this
means schools, large schools, high schools, vocational schools.

The problem of schools, — that is, the problem of leading
children into the world's experience before the child has had
his own experience, — is wrapped up in the whole problem of the
social side of farm Hfe. Not until the farmer has some abate-
ment of his timidities and senses his ability to use large units,
will he rise to the ideals of education for his children. Not until
he gets over the feverish obsession for clearing the debt ojff
the farm, and substitutes life as a goal, will the farmer come into
the full fruition of this educational hope. When the household
regime is enriched by a neighborhood regime, and this is sup-
plemented by community organization, education will pre-
sumably receive a large impetus.

THE SOCIAL SIDE OF FARM LIFE 395

The deficiencies of the country school have been generally
perceived, and the remedies are fast being applied. One
question, however, still remains unanswered: whether the
larger country school of the consolidated graded type shall be
organized with Kttle regard to the larger community of business,
or whether it shall be an integral part of a community system,
leading up to a community high school offering vocational
courses. Perhaps this undetermined question is fundamentally
a problem of democracy, and may be stated thus : shall the farm
child grow up in an educational democracy, or shall he be
trained in a group of farm children, somewhat aloof from the
children of tradespeople, artisans, professional people?

It may be that the country school which shall be organized
with respect to natural population grouping will be found to be a
school of large neighborhood, and contain only, or quite largely,
farm children ; but it may also be found that it is wholly within
one business community, and is correlated with a local commu-
nity high school.

The problem of educational organization will have one im-
portant question to determine, namely, whether the farmers'
high school shall be apart in the open country, or whether it shall
be democratic and be located in a town center. Both farmers
and townsmen are parties to this problem. The nation demands
workable democracies; but it also demands that each class of
workers shall be so protected that neither they nor their work
shall suffer. If a democratic high school can be operated so
as to be fair at every point to farming as an occupation, and to
farm people as a class, then a high school in town will be no
more objectionable than a bank in town. But if such a high
school shall act practically as a sponge to take up the children
from the land and squeeze them into the city for life, then a
high school in the country will be the chosen alternative.

Business institutions. How far can the farm get on without
the traditional mechanisms of economic exchange? Is the
retail town a necessity for farming? Or could farmers better
do with the mechanisms of a metropoUtan trade center, mail
agencies, parcels post, express, freight? These are questions

396 AGRICULTURAL ECONOMICS

which arise for academic debate, and many farmers act in their
trade as if they had come to a decision in the matter. Are new
mechanisms of trade required to displace the retail store of the
town? Should farmers band together in buying and selhng?
How completely should this policy, already tried a little, be
applied? Should there be farmers' mechanisms for selhng,
but not for buying? For selling all their products, but for
buying only such raw materials as enter into their agricultural
product ? Could the community trading town compromise with
farmers in trade matters to this extent, that it would agree that
farmers should operate in town selling exchanges, shipping
agencies, produce exchanges, etc. on the condition that the
farmers' buying agencies would deal only in articles which enter
into the agricultural product, such as hme, fertiHzer, seeds,
feed, farm implements, etc. ? Under the latter plan, the town
retailers would furnish at retail all domestic goods, clothing,
household furniture, groceries, meats, jewelry, etc. Would this
be an equitable bargain between town and farm?

These are some of the questions of organization of community
farm business. Experimentation is going on continually with
all kinds of trade arrangements and trade mechanisms. It
should be remembered, however, that the social side of farm
life depends upon community spirit, good will, democracy,
institutions, loyalty. The winning of the struggle to achieve
economic freedom and national cooperation among farmers
should not be construed by the farmer as a release from the civic
and social duties of community life. The problem of business
institutions and mechanisms, therefore, resolves itself into the
devising of ways and means for building up community life
through a system of integrated social channels and mechanisms
of business.

From this viewpoint, the farm bureau shows promise of
developing the educational, agricultural, and business interests
of farmers, and preserving lines of community loyalty in a
county. When the farm bureau shall be completely incor-
porated into county government, so that the electorate of a
county has control of the policy of the bureau as fully as it has

THE SOCIAL SIDE OF FARM LIFE 397

control of education in the county school system, then perma-
nence of organization will give chance for a democratic develop-
ment of the principles and methods of farming.

Even though it is difficult for the farmer to have a primary
interest in the educational side of farm bureau work, only a
sHght shift of emphasis need be made among the objectives of
the farm bureau to put the educational and social features into
a position of favor. For example, the farmer will always have
to sell his product. His interest in marketing, therefore, is per-
manent and continuous. Suppose the farm bureau commission
of the county, elected or appointed, make selling of the county
farm products a primary objective; creating the necessary
voluntary shipping associations ; relating the products of every
community to these associations; then every farmer in the
county would become interested in the farm bureau. It would
be an easy step, then, from selling to the formulas of agricultural
production. Standardization of quahty and the methods of
high yields would then be logically related to the farmer's
prime interest. Social projects, clubs, roads, fairs, fetes, would
follow these other interests. It remains for some organizing
genius to work out first the business mechanism of the farm
bureau idea so as to relate it to the electorate of a county;
secondly, to make marketing a primary object; and thirdly,
to correlate government extension service, both educational
and social, with each community.

Social institutions. The bright things of hfe which produce
the happier moods, the pleasant emotions of contrast, variety,
and the like, have often been mentioned as lacking in country
living. The tail of work is always attached to the farm kite of
play. Writers have become accustomed to load the odium of
many other defects upon this outstanding trait in rural char-
acter. " Bring about recreation, amusement, the wide and
frequent contact of personaHties in country Hfe, and," it is
said, " farm Hfe will be rehabiHtated."

We have by this time found out that country Hfe, and labor,
are by no means without their own manner of complexities;
and that these complexities are by no means set in sequence

398 AGRICULTURAL ECONOMICS

like ten-pins. The problem is not to knock down one pin and
see the others tumble. Rather, country hfe is a fabric, all
elements interwoven, the whole hanging together. It is a long,
arduous task to remake the fabric. It is no easy matter to
bring social pleasures within the pale of country living, and cause
the whole of life thereby to be quickened. But the problem
of social institutions, however difficult, must be faced, sooner
or later, in order that the more genial side of life may have its
rightful chance in country living.

Larger schools, providing age-groups of children who possess
similar experiences, ambitions, and joys will start institutions
for recreation. Farmers' clubs, junior clubs, young folks'
clubs, are good agencies to give the initial impulse toward
permanent forms of recreation. Home-made entertainment
will always prevail in the country, and a modicum of organiza-
tion of the younger persons will result in social enterprises.

The present wide-spread impulse to build neighborhood and
community houses will, it is hoped, materially accelerate the
coming of the lighter and brighter things of country life. It is
to be hoped that in our larger towns the Y. M. C. A. and
Y. W. C. A. buildings, especially their gymnasiums, may be
open for the use of near-by country youth, and that the plan
of interchange of hospitality between groups of young people
in town and country may be widely adopted. High school
pupils and teachers in a town high school have the opportunity
of setting the fashion in the larger community of exchanging
hospitalities with country schools. Municipal club-houses
and theaters have already been successfully managed for town
and farm people. Community fairs, too, have taken high rank
as rural social institutions.

The real problem of rural social institutions, after all, is to
discover natural population groups, and then find out how to
create the mechanism for democratic recreation within a whole
group.

Religious institutions. The modern view of rural progress
had some of its first apostles among those interested in the
country church. The threatened decadence of church life,

THE SOCIAL SIDE OF FARM LIFE 399

if not of religion, in the open country, startled church leaders.
So earnest has been the endeavor to meet the rural church
problem that the several national religious bodies have created
a department of church and country life, with a secretary or
superintendent. A staff of rural church thinkers has been
formed. Very positive plans to study the country church,
to reparish the farm population, to provide noble church edifices
and comfortable parsonages, to organize church congregations
for social service as well as for social religion have been set
forth. The auxiliary societies of the Y. M. C. A. and Y. W. C. A.
have undertaken the work of training for rural leadership in
county after county. The Federal Council of the Churches of
Christ in America has its commission of the church and country
life, which is entering upon a vast plan in connection with the
Interchurch World Movement to survey the rural churches of
America.

No other type of farm institution has displayed so patently
as the church the maladjustments of human life on the farm
under the stress of a national tide flowing cityward. It is not
strange, therefore, that the first questions were about the decay
of the rural church. Not strange that all sorts of proposals
and remedies have been made to improve the condition of
country churches.

An important problem of the church for farmers is un-
doubtedly connected with the question of permanent agricul-
tural population groups. A church in order to function must be
in a natural population group. But a far deeper problem
than this presents itself. Churches in modern times must
reach a certain minimum strength in order to succeed at all.
This minimum strength is at present frequently never reached
by individual churches. How to guarantee the irreducible
minimum strength to each country church amounts to an
enigma. In solving this problem, moreover, some arrangement
must be arrived at among the national religious bodies by which
a process of give and take, carried out with scientific inter-
change, shall enable these country churches to come up to
standard membership. There are many indications that the

400 AGRICULTURAL ECONOMICS

national leaders of diJfferent denominations are not only alive
to the case as a problem of academic importance, but that they
are determined, both from motives of national patriotism and
from motives of a deeper spirit of Christian concession, coopera-
tion, and unity, to work out a solution.

Health institutions. An inspection of the hospital records
in small cities will in certain sections of the United States dis-
close a surprisingly large use of hospital facilities by near-by
farm families, especially in surgical cases. The hospital,
general and maternity, should doubtless be extended into rural
territory for common use.

The country nurse is proving a welcome visitor in rural
schools and communities, and bids fair to become the founder
of an institution. If the Red Cross Association could be
persuaded to take over permanently as its " after the war "
field of acti\'ity, the rural sections of the United States, and
become an agency for rural health and home service, the rural
health problem would practically be on the road to solution.

Governmental institutions. One of the largest rural social
problems pertains to the local government of farm population.
The forms of government now prevailing in townships, counties,
magisterial districts, and parishes, should be inspected and
refitted to modern conditions. Reorganization is needed.
Very few attempts have been made to take the primitive tools
of rural government and replace them with machines for social
purposes. A commission in every state appointed to study
local government and present amendments would help solve the
problem of rural governmental institutions.

Here is where the farmer should be presented with his chance
to have a democracy if he so desires. New England already
knows the values of a township democracy of farm and village
or farm and city. Perhaps other sections of the United States
are ready to amalgamate farmer and townsmen in some form
of local municipaUty. If the farmer, however, shall prefer a
municipaUty made up of farmers alone, even then, contrary
to general belief, considerable reorganization will be necessary
in order to give him the right population group of farmers for

THE SOCIAL SroE OF FARM LIFE 401

strong local government. The present territorial units of rural
government, so far at least as they concern farmers, are, on the
whole, deficient in social cohesion. So reorganization will be
necessary under whichever theory prevails, — democracy of
farm and town, or detached farmer municipahty.

The farmer is ready for a set of governmental powers which
shall enable him to accomplish in his own group what cities
are enabled to accompHsh by charters for their population
groups. There should not be a period of long waiting until
the farmer demands tliis reorganization himself. The nation
needs this rural reorganization. This is demand sufficient for
thinkers and statesmen.

Theory oj organization. Social organization will proceed
as has been indicated upon one of two theories, or upon a com-
promise between the two. These two opposing theories should
be plainly known and reacted to.

The first, and it is the traditional theory, is that farm hfe,
so far as possible, should for whatever purpose be organized
by itself, aloof from the people of other industries, professions,
or trades, who for the most part live in cities and villages.

The second theory, and this is of recent origin, is that farm
life is only a part of national life, and more like than xmlike all
the other parts, and should for democracy's sake be organized
along with these other parts within a natural community popu-
lation group. Just as the nation is a thorough-going democracy
of all kinds of occupations, represented in Congress and public
offices; just as the state is a pure democracy of farmer, in-
dustriahst, and professional, so the local community should
be a pure democracy. How a compromise may be effected,
combining the principles of detached farm hfe and a pure
democracy, some communities can already show.

Rural legislation. The signs of hope for country life are
seen to advantage in recent attempts to put into statutes
freedom of action and power for farmers to employ the taxing
device and other modern social instruments. County agri-
cultural schools figure among the early endeavors to give priv-
ilege to rural folks. The county nurse is hkely to become man-

402 AGRICULTURAL ECONOMICS

datory upon counties. The introduction of mounted state
police, as militia for the protection of open country populations,
having given demonstration of usefulness in a few states is being
encouraged in legislatures of other states. Electrification of
township units seems Ukely to raise up a rural utility under
municipal control. Village and city rest rooms for country
people coming in to trade have become compulsory in one state.
This plan has its angles of interest and suggestiveness ; the
village or city must appropriate a certain amount of money
for rest-room maintenance, whereupon the state adds a like
amount.

Road legislation, frequent and even startUng, is recognizing
more and more rural population groups. The trunk line idea,
however, good and fundamental as it is, needs to be Unked up
with the community roads plan, whereby the retail trade popu-
lation of villages, towns, and small cities are integrated and
their institutional purposes are faciHtated. It is not too late
in the newer sections of the United States for legislation to
encourage the establishment of " residence roads," that is, the
selection of certain favorably situated roads pertaining to a par-
ticular trading center, upon which most of the farm residences
of settlers shall be located. Residence roads would save much
mileage of highly surfaced roadway, bring farming people into
closer neighborhood contact, and facilitate school transporta-
tion, and other institutional development.

Redistribution of rural routes. The farmer appreciates his
postal service ; in fact he appreciates this daily dehvery of mail
so much that he is slow to complain of any flaws in the present
system. One defect, however, sooner or later he will point out.
Just because he is becoming a business man along with a partic-
ular group of business men located in and around a particular
business center, he is going finally to object to having for his
maihng address, a little town or hamlet to which perhaps he
seldom or never goes. A closer application of the principle of
integrating the farmer with his own natural population group
will be requested of the government in distributing the rural
routes.

THE SOCIAL SIDE OF FARM LIFE 403

One of the latest movements in country life legislation per-
tains to the creation of new types of territorial districts. The
legaHzing of consolidated school districts, in shapes fitted to
topographical conditions; and the forming of high school
districts which unite village or city limits to surrounding farm
territory for an educational democracy are among the efforts
of rural life to stretch its boundaries in order to accommodate its
expanding institutional consciousness.

New types of municipality. One state has actually em-
powered its rural people to create a new type of rural munici-
pality out of any number of school districts. This statute stands
as a weathervane, showing the way the wind is blowing. A
desire for an easier position, for a better attitude for working
together, for a broader base for social operation and for selec-
tion of the right people to cooperate with, — this is the meaning
of the uneasy twisting and wriggling of rural populations.

In another state, villages have for many years been enabled
by law to build and maintain by tax a community house ; Hke-
wise cities; also the rubber-stamp square townships. But
certain farm population groups lying in parts of two or more
townships also desired community houses. So a bill was framed
and introduced into the legislature, permitting parts of town-
ships to be formed into a municipal district for the building and
maintenance of a community house ; not only parts of town-
ships, but parts of townships along with a village or city ; and
even a ward of a city alone, or along with parts of one or more
townships. The only requirement is that the territory shall be
compact, at least sixteen square miles in area, or containing a
population of at least 500 persons.

Rural planning and land policies. " Rural planning " is a
present popular subject for debate in legislative halls. A state
commissioner of rural planning and county boards of rural
planning form the heart of the program. The commissioner
of rural planning should be a specialist on the aesthetic side of
country life. He should see the streamside possibiUties, the
country park sites, the scenic effects which could be worked
into the highway system. Standards of landscape beauty for

404 AGRICULTURAL ECONOMICS

public and private use would be the outcome. These things
will without doubt eventually be provided for in statutes.
Land policies of great scope and influence upon country life are
bound to be more and more the subject of legislative enactment.
Legislation, if well considered, will rest upon investigation,
study, research. It is a very hopeful sign that an American
Association for Agricultural Legislation has been formed, to
furnish an impetus toward legislative study, publicity, and
wise enactment of law. A fundamental doctrine of true popu-
lation grouping seems needed most of all. Following this,
surveys may establish the location of these groups. Institutions
will thereupon spring up within these groups, and relations will
be estabhshed between group and group, making it possible
for the farm population to be connected vitally with the currents
of national life and progress. Hope, culture, and privilege
will thus follow freedom and the instruments of freedom.

CHAPTER XXX

METHODS OF STUDYING AGRICULTURAL ECONOMIC
QUESTIONS

In the preceding chapters it has been assumed that the
farmer possessed the knowledge essential to the passing of
judgment upon the relative profitableness of crops, the best
method of disposing of crops, the choice of livestock enterprises,
and the choice of agencies of production with respect to kind,
quality, and the amount of each. A perfect knowledge on these
points will never exist ; the problems to be solved always involve
the future with its unknown factors to lend uncertainty. It is
true, however, that a better knowledge of past results and
present conditions add greatly to the accuracy of judgments
regarding what to do in managing a farm or in planning legis-
lation affecting agriculture.

Our knowledge of the character of economic forces comes
through reasoning based upon the available facts. In economics
as in other sciences, the work of the student consists in gathering
facts, sifting and classifying them, formulating hypotheses,
gathering more evidence with which to test the tentative con-
clusions,until all the relevant facts have been considered and the
correct conclusions drawn. Through these processes it should be
possible in time to approximate the truth regarding the operation
of particular economic forces. But the economist is never
certain of having considered all of the facts, and he is ever
hoping to formulate a new hypothesis which will more completely
explain the evidence in his possession.

Theoretical work in general may be divided into two classes,
the sterile and the fruitful. The sterility of the theories of the
one class is usually due to failure to see the problem in its entire
setting. The conclusions are sterile, as a rule not because of

405

4o6 AGRICULTURAL ECONOMICS

illogical thinking, but because the premises are incomplete and
the conclusions therefore erroneous. The fruitfulness of the
other class of theories is due to the fact that they are in harmony
with the facts and become a guide to the mind in comprehending
the direction and strength of the forces with which the practical
man has to deal and hence increase the accuracy of his judgments
regarding the probable conditions of the future with which he
has to make his present actions harmonize.

The danger of holding to half truths is very great in the field
of economics. The forces involved are so numerous and the
facts so scattered that even the most careful student is in danger
of placing too great reliance upon a premature conclusion. And
yet practical men everywhere are constantly dealing with
economic forces. Day after day they are passing judgment
on the future action of these forces. Practical business men
often show a clearer grasp of the operation of economic forces
than do the economists of the chair. This is because the
business men are dealing directly with these forces.

The student must study economic forces in operation if he
would understand their character. The world of economic
activities should be the laboratory of the economist, and the
records of these activities should constitute his library. The
success of the student depends equally upon his ability to gather
data and his ability to draw correct inferences. It may be
true in some subjects that a person who is not capable of drawing
conclusions will be able to work independently and contribute
to the subject by gathering data which others may use, but in
the field of economics the problems are so complex that in order
to secure valuable results the two processes must be employed
simultaneously. No student should undertake independent
research work in economics who is not a good logician. He must
be capable of correct reasoning. He must be capable of drawing
the right inference from given facts and of remembering the
limitations of the basis of his reasoning. When a working
hypothesis is formulated, it should be looked upon as a means
to an end, not as an end in itself. In other words, he must
be capable of independent work in the field of economic theory.

METHODS OF STUDYING AGRICULTURAL QUESTIONS 407

Possessing this qualification, the student should devote most
of his time to gathering data which may form the basis of
generaHzations regarding the character and operation of eco-
nomic forces.

There are many ways of securing information on which to
base judgments on economic questions relating to farming.
The farmer learns from his own experience. He observes the
activities of others. He talks with his neighbors about which
crops pay best, which methods of disposing of crops pay best,
the proper wages for hired help, methods of renting land, and
every other question which may arise from time to time. This
accumulated knowledge is of very great importance to any
farmer coming into the neighborhood to take up farming.

In recent years personal and neighborhood experience has
been made more available than formerly by means of the farm
survey method of studying local farm management problems.
The farm survey has stimulated farm bookkeeping, which has in
some instances developed into a detailed set of records com-
plete enough for cost-accounting purposes. These methods of
studying the individual farm and the farming of a region give
valuable information regarding what is being done, the ways
in which things are being done, and the financial results which
are being secured. The important questions which are left
unanswered by these methods of study are : Why is the present
system profitable or unprofitable and what are the reasons for
beheving that some other type of farming may or may not be
more profitable ? To secure a basis for passing judgment upon
questions of this character it is necessary to have in mind the
conditions of agriculture and the demands for agricultural
products in the entire competing territory of which the local
region is a part. In order to secure this broad grasp of the
economic forces which determine what pays best on the in-
dividual farm and for the nation as a whole, it is desirable to
make an historical and geographical study of the economic
forces which have been and which are in operation throughout
the competing territory. After all other methods have been
exhausted the experimental method may have to be resorted

4o8 AGRICULTURAL ECONOMICS

to in order to secure some of the results desired. It will be
worth while to describe some of these methods of study briefly
in order to illustrate their use.

Farm accounts. Every farmer should undertake to keep
some record of his work. If he is not much inclined to figures
and feels that he does not wish to undertake anything more,
he should take an inventory once a year. A farm inventory
is a complete list of all the farm property owned by the farmer,
a Hst of his indebtedness, and a list of the bills payable to him.
All the items in the inventory are valued at the time of the
inventory. By comparing the value of property at the begin-
ning of the year with that at the end of the year, the farmer
knows how much he has gone ahead or fallen behind during the
year.

Many a farmer has thought he was doing well because he had
plenty of ready money, only to find himself hard pressed for
funds a year later. For a short time the farmer can take in
money faster by selling cows than by selHng milk, but in the
year's balance he may have lost heavily by this course.

The following summary of an inventory and financial state-
ment will help one to understand the use of this class of records :

Tarpleywick Farm
Summary of Inventories, March i, 1915-1916

Real Estate

igi5 1916

I. Land $19,675.00 $19,675.00

II. Buildings 4,739.06 4,649.61

III. Water System 167.25 201.50

Total Real Estate $24,581.31 $24,526.11

Livestock

IV. Horses $ 1,015.00 $ 930.00
V. Cattle 3,760.00 6,090.00

VI. Hogs 105.00

VII. Poultry 36.00 37-50

Vni. Sheep 18.00

Total Livestock $ 4,934-oo $ 7,057-50

rX. Produce, Seeds, and Feeds $ 1,273.86 $ i,S34-78

X. Miscellaneous SuppUes 264.90 $ 281.90

METHODS OF STUDYING AGRICULTURAL QUESTIONS 409

Equipment

XL

XII.

XIII.

Horse Equipment $
Cattle Equipment
Poultry Equipment
Horse and Power

Machinery
Miscellaneous

Equipment
Carpenter's Tools
Farm House

136.35

143.10

1.20

1,119.20

183.50
30.00
68.00

$

1 1 1. 00
130.20

XIV.

XV.

XVI.
XVII.

991.8s

165.55
20.00
62.00

Total Equipment
Total Farm Property
Increase in farm prope

rty

$ r

$32:
$ 2

,681.35

,735-42
,145.47

$ 1,480.60
$34,880.89

The first task in taking an inventory is to list and to give an
accurate statement of the quantity of goods on hand on the date
for which the inventory is taken. The quantity of grain in a
bin, the amount of hay in a mow or in a stack, etc., should be
ascertained with great care, using the standard measurements.

The Kvestock should be itemized one by one by classes as to
kind and age, all larger tools and machinery should be listed,
but small tools may be lumped as garden tools, carpenter
tools, etc.

Basis of valuation. The valuation of the goods listed on the
inventory is the next important task.

Is market price the starting point for valuing each piece of
property Usted in the inventory? "At what price shall I
inventory the oats grown on the farm last year, and at what
price shall I charge them to the dairy-herd accounts? " The
answer to this question is not so simple as one might desire.
The object of the oats account is to know whether to grow oats
or some other crop requiring attention at the same time of year.
The object of the dairy-herd accounts is to know whether to be in
the dairy business or something else. There are at least two
prices at which the oats may be inventoried. The oats may be
valued at the local market price minus the cost of hauhng them
to the market, or they may be valued at the local market price
plus the cost of hauling them from the market. Which of
these values to place upon the oats, depends upon the circum-
stances at the farm. If the farmer is an oat producer who

4IO AGRICULTURAL ECONOMICS

sells a part of his oats on the local market and is trying out the
dairy business on a scale that makes no demand for purchased
grain, it may be perfectly proper to value the oats at the local
market price, minus the cost of marketing. This is justified
on the ground that it gives the farmer the correct basis for
comparing the relative profitableness of oat production and
other competing enterprises ; on the other hand, if the farmer
is a dairyman who makes demand for large quantities of grain
beyond what he is in a position to raise, the oats may properly
be inventoried at the market price plus the cost of hauhng the
same amount of oats or other grain from the local market.
This is justified under these conditions on the ground that in
considering the relative profitableness of growing oats and doing
something else with a part of his time, this higher valuation is
the one the farmer must use in determining what it pays him
best to do. Furthermore, when calculating whether to increase
or decrease the grain ration fed his herd, or whether to feed oats
or some other feed, this higher price is the one which should be
made the basis of the calculation so long as the dairyman is a
buyer of oats or substitute feeds. Where the dairyman is a
seller of oats, the problem is different. He then needs to figure
on the basis of market price minus cost of marketing, in deciding
how many cows to keep and how generously to feed them.

Yet another condition may call for still a third basis of valuing
oats. A farmer may find it profitable to grow oats to feed his
cows, yet he may not find it profitable to grow oats to sell, nor
to buy grain to feed the cows. This may be owing to distance
from the market, or to various other causes. In this case, it may
be as well to throw the two accounts together and charge the
cows with the cost of producing the oats. The basis of deter-
mining whether to grow oats or do something else, then becomes
a matter of comparing the costs of the different methods of
getting cow feeds. This is probably an exceptional condition,
and the question of using cost as a basis of valuation is not
looked upon favorably, excepting where conditions rule out the
market factor and put the dairyman on a self-sufficing basis,
so far as dairy feeds are concerned. The disadvantage of using

METHODS OF STUDYING AGRICULTURAL QUESTIONS 411

costs as a basis of valuation is that it balances the account and
carries any loss or gain over to the next account, thus blending
the profits of two or more enterprises, which is contrary to
the aim of cost accounts, and reduces the system more nearly
to the basis of simple bookkeeping which shows the profit of
the business as a whole.

Valuation of ensilage. Ensilage is a feed which rarely enters
into commerce. True, it is sometimes sold at a sale and farmers
have sometimes sold ensilage by the load to their neighbors, but
in general ensilage is made for the exclusive purpose of feeding
it on the farm. The question then arises, How can market
prices be brought to bear in placing a value upon the ensilage ?
One method which can be used successfully is to start with the
price of corn on the local market, subtract the cost of husking
the corn and hauling it to market. The corn value thus obtained
plus the value of the dry stalks in the field may be the basis of
valuing the standing corn in the field at the time when it is cut
for ensilage. To this should be added the cost of harvesting
the corn and putting it in the silo. The storage costs, including
interest and depreciation upon the silo and shrinkage, must
be added in order to have a complete basis of valuing the
ensilage. This may be called an opportunity cost, but differs
from actual cost in that it leaves the same amount of profit
in the corn account as would have been secured by producing
com for the market. It also gives a rational basis for charging
the ensilage to the dairy industry, since the cows must be able
to pay at least this much for the ensilage in order that the
farmer can afford to produce ensilage instead of market corn.

Valuation of hay. The valuation of the hay in the mow
or in the stack presents a series of problems. Should the farmer
use cost of production or the market price as the basis of valuing
the hay? It is a well-recognized fact that if all the farmers in a
given dairy district should decide to sell their clover hay instead
of feeding it to cows, they would find the market price dropping
to a very much lower level than during the time when they were
feeding most of their hay, some of them selling and some of them
buying hay. In the district where some hay must be shipped

412 AGRICULTURAL ECONOMICS

in to maintain the dairy herds, it is obvious that the local market
price of hay, plus the cost of hauUng the hay from the market
to the farm, is the basis which should be used in calculating
whether or not it pays to grow hay, also the basis for calculating
whether or not to increase or decrease the number of cattle kept.
This then would seem to be the correct basis of valuation of hay
on hand at the time of taking the inventory. On the other
hand, if the farmer's condition is entirely different — if he is
raising hay for the market and finding it profitable to make
demand for only a part of the hay in the dairy — he may use
market price minus the cost of putting the hay on the market
as a basis of valuation and as a basis of calculating whether to
grow more hay or keep more cattle. For many farmers cost
of production may prove a practical basis for valuing clover
hay. Taking the country as a whole, clover hay is a farm feed
and has little market except for cattle and sheep feed. It is
usually produced as an adjunct to the livestock industry and
yet it is a soil builder as well as a feed for Hvestock. The other
crops which grow in rotation with clover benefit greatly by its
presence in the rotation. The livestock furnish the avenue
through which to market the hay. For these reasons it would
seem correct to credit the fields and charge the cows with the
specific production cost of the clover hay and return the resulting
fertiUty to the field without charge to the field or credit to the
cows. Where this view is accepted, clover hay will be inven-
toried at cost of production.

Valuation of livestock. In appraising the dairy herd and
taking the annual inventory a value should be placed upon
each animal in the herd. If a cow has been purchased recently
it is proper to inventory her at the cost price, because this is
presumably the market price. If a cow has been on the farm for
several years there may be some question regarding the price
at which she should be inventoried. Obviously the price for
which she would sell upon the date of the inventory seems to be
a fair valuation, and if the whole purpose of the inventory were
to ascertain the worth of all the farmer's assets, this would be
the correct basis of valuation.

METHODS OF STUDYING AGRICULTURAL QUESTIONS 413

The inventory may be taken for either or both of two pur-
poses : To ascertain the farmer's present worth, or to balance
his accounts and ascertain the profit of his annual operations.
Where the object is to ascertain the profits of operation during
the past year, each animal in the herd should be valued on the
basis of the previous inventory and marking down or up accord-
ing to the depreciation or appreciation which has taken place
during the year. Where the farmer is keeping his herd year
after year without expectation of using up the cows in the dairy
business, this would seem to be a satisfactory basis of making
the inventory. If it is possible, however, to use both bases,
place two values after each animal, one based upon last year's
inventory plus depreciation or appreciation, which will give a
basis of showing the results of the year's operation ; the other is
to place a value upon the basis of present market prices. The
difference between the sums of these two sets of values will show
the gain or loss during the year due to fluctuation in prices.

Valuation of machinery. Machinery which has just been
purchased may be valued at the cost price. The value of a
machine which has been used for one year should be reduced
from the cost price by the amount of its normal depreciation.
To value a machine at the end of the first year at the price at
which it would sell if put up at auction would hardly seem
fair to the year's business, and yet if the farmer could have
purchased a machine equally good at public auction instead
of buying the new machine, it would seem reasonable to mark
the new machine down to the sale price, assuming that the
farmer had paid the difference for the privilege of breaking in
the new machine and that this should be charged to his annual
expense.

One method of valuing machinery is to deduct a certain
percentage of the first cost each year. This is a very abstract
method of inventor^dng and does not get at the real truth of
the situation. Each machine should be looked over carefully
with a view to ascertaining the extent to which it had been worn
or broken during the year so that any extraordinary deprecia-
tion may be taken into account. Notice should also be taken if

414 AGRICULTURAL ECONOMICS

expensive repairs have been made during the year which may
make the machine more valuable than it was at the beginning
of the year.

Receipts and expenditures. While the inventory is an indis-
pensable record, it alone will not tell the whole story. The
farmer may have made money on the farm and spent it on his
automobile or other personal accounts, so that his net worth is
less at the end than at the beginning of the year. In order to
know what he has made as a result of his farming operation it is
necessary (in addition to the annual inventories) to keep a record
of farm receipts and expenditures. This is not a diflficult task
if each evening when any expenditure has been made or any
money received or any transaction made where payment is to
be made in the future, a notation is made in any simple book,
which may be kept for the purpose ; the matters will be ready
at the close of the year, or any previous time, for comparing the
farm receipts with farm expenditures and the old inventory with
the new ; the farmer may know how much he has made farming
during the year, for the increase in the inventory plus the in-
crease of receipts over expenditures equals the farmer's income,
which is the return he receives for his investments and his own
labor and that of his family.

Tarpleywick Farm

Expenses and Receipts, March i, igi^-March i, igi6

Expenses Receipts

Livestock $ 830 $ 430

Livestock products

Seeds and feeds

Labor

Miscellaneous and taxes

Total $3409 $4552

Balance $1143

At first a balance of $1143 may look very good, but after
thinking the matter over the farmer says to himself : " I have
made nothing, I could have sat on the fence and drawn 5 per cent
on the average investment if I had invested in farm mortgages,
and that would have amounted to $1690. I have lost $547 by

3872

217

136

1932

430

114

METHODS OF STUDYING AGRICULTURAL QUESTIONS 415

operating the farm, and I doubt whether the game is worth
the candle."

But at this point his attention is called to the large increase in
the number and value of the cattle on the farm, and the sugges-
tion comes that after all he may have made some money farming.
Before drawing any conclusions from the purchases and sales
account the inventory should be taken and compared with
that for the beginning of the year.

It will be noted that the inventory shows an increase of
$2145.47 which must be added to the $1143 balance of receipts
over expenditures. By combining these accounts we have a
statement showing the gains resulting from the operation of the
farm as follows :

Annual Statement, March i

Total farm property

Expense of operation

Receipts of operation

Interest on investment, at 5 per cent

1915

$32,735-42
3,409.00

igi6
$34,880.89

1,690.41

$37,83483
$ 1,598.06

4,SS2-oo

Net return for farmer and family for operation

$39,432.89

This $1598.06 represents what the farmer gained by farming,
but does not show whether he has got ahead or fallen behind
during the year. The farmer and his family may have spent
more than they received, both as interest and profits, or they
may have made a substantial saving.

To find how much he has got ahead the bills receivable and the
bills payable must be taken into account along with the inven-
tory. This may be shown as follows :

Farm property,
Bills receivable

March i,
North

1915

1915

$32,735-42
150.00

$32,885.42

12,423.00

$20,462.42

$ 1,202.47

March i,

X916

1916 $34,880.89
150.00

Total Assets
Bills payable
Net Worth
Gain in Net >

$35,030.89

13,366.00

$21,664.89

Thus, while the indebtedness increased, the property increased
still more, so that after the family expenses were paid, which

4l6 AGRICULTURAL ECONOMICS

amounted to $406 more than the interest on the farmer's net
worth, the proprietor of Tarpleywick Farm was $1202.47 better
off at the end than at the beginning of the year. This state-
ment gives courage for another year and a copy of this summary
statement put in the hands of the banker will give basis for a
better line of credit.

Farm crop accounts. The farmer has many lines of produc-
tion from which to choose. The problem of choosing the crops
which will yield maximum results can be solved only by a careful
study of the conditions which determine the character of farm
organization. As a rule the farmer does not confine himself
to one crop but combines a number of crops, for example, corn,
oats, and hay into one system of crop rotation. The farmer's
business problem, so far as crop selection is concerned, is that of
selecting from each group of competing crops the one which
wiU pay best and combining as many non-competing crops as
can be made to add to the profits of the farm. One who has
grown the various crops can usually classify them with reason-
able accuracy into conflicting and non-conflicting groups.
For example, in southern Wisconsin every farmer knows that
corn, tobacco, sugar beets, and potatoes conflict with each
other, but the question of which of these crops will pay the
farmer best is usually not so clearly in mind. There are those
who compare profits per acre and forget that one can plant
and care for three or four times as many acres of one crop as
of another.

The most accurate method of comparing profits is to keep cost
accounts, which will show the amount of labor and other expenses
laid out on each crop and the returns secured.

The accompanying summary of results of a cost account will
help one in understanding the way in which cost accounts aid
in the selection of crops.

This table shows the relative profitableness of the crops which
have been tried on Tarpleywick Farm. In this case the oats paid
better than the barley, although the income or gross returns per
acre were nearly the same, the expense in preparing the barley
land was greater ; hence the profits were smaller.

METHODS OF STUDYING AGRICULTURAL QUESTIONS 417
Summary of Crops on Tarpleywick Farm

Cbop

Income
PEE Ache

EXPENDITXJRE

PER Acre

Profit
PEE Acre

Profit per
Dollar of

EXPDT.

Barley ....

$ 20.09

$16.20

$ 3-89

$0.24

Oats

20.61

14.72

5-89

.40

Com

43-29

23.40

19.89

•8S

Tobacco . . .

107.25

65.00

42.25

•65

AlfaHa ....

45.00

30.00

15.00

•50

Clover ....

28.71

17.71

11.00

.62

The comparison of the relative profitableness of corn and
tobacco is not so simple. The tobacco showed a larger profit
per acre but a smaller return per unit of expenditure than corn.
The operating expense (aside from rent) being greater, one can-
not operate so many acres of tobacco, — probably not over
one third as many acres. For this reason profit per dollar of
expenditure for labor and equipment seems to be a more practical
basis for deciding which of two crops to grow than profits per
acre, although profits per acre multipUed by the number of
acres one can operate of each crop may in some cases be prefera-
ble to profit per unit of labor.

The fact that oats are less profitable than corn should not
deter the farmer from growing oats if they are more profitable
than any other crop which requires the farmer's energy at the
same time of year. Even if oats are less profitable than corn,
the com profits plus the oats profits look much better to the
farmer than the corn profit alone.

In order to arrive at all the facts essential to comparing profits
the cost accountant keeps a record of the hours of human labor,
horse labor, machine use, seed, fertihzer, twane, etc., put upon
each acre of land in each crop. In case of doubt as to the relative
profitableness of two competing crops, grow some of each until
the figures show clearly which pays the better. There are
various systems of keeping cost records, any one of which is
good. The cost system should be confined to a few comparisons
at a time, otherwise it becomes too much involved. If the com-

4l8 AGRICULTURAL ECONOMICS

parison is between corn and tobacco, simply charge each of
these crops for all it gets in the way of labor and supplies just
as one keeps an account with a neighbor with whom labor is
exchanged, from whom seed oats are borrowed, and to whom
some calves were sold on account. Accounts of this kind are
invaluable because they show which of two more or less profit-
able crops will add the greater amount to the total profits of the
farm. It should be kept in mind that in agriculture the purpose
of cost accounts is not to find out the specific cost of the different
products but to ascertain the relative profitableness of the
different types of farming and of the different competing ele-
ments in each type of farming. Not cost but relative profitable-
ness is the basis of answering all the economic questions in farm
management.

Livestock records and accounts. Every farm record should
form the basis of answering an important question. On the
dairy farm the production record is of first importance. Where
the corn, the oats, and the hay grown on the farm are used in the
dairy and marketed in the form of milk it is a matter of some
consequence to know what each cow in the herd is paying for her
feed. This requires feed records, milk records, and labor
records.

Feed records may be kept in a simple manner. For example,
the farmer has decided that a twelve hundred pound cow should
be fed thirty-five pounds of ensilage per day, twelve pounds of
hay per day, and a pound of ground oats (or some other grain
equivalent) for every four pounds of milk produced. In order
to feed intelligently the herdsman must have definite figures in
mind for each cow as he passes down the alley with his feed cart.
If the cow is cleaning up what she is receiving these figures will
not usually be changed oftener than every two weeks and then
the change is in the grain only. It is a simple matter, therefore,
to list the cows and the amounts fed each on the first of the
month and make no further entries until a change is made in
the ration of one of the cows, which is then entered with the
date. This gives a satisfactory record of what each cow has
consumed.

METHODS OF STUDYING AGRICULTURAL QUESTIONS .yn)

The right way to keep a milk record is to weigh the product
each milking and have the milk tested for fat once a month.
It takes about five seconds to weigh and record the weight of
the milk where the record sheet and the milk scales are con-
veniently located. Weighing the product each milking is
worth while in itself as it is a means of knowing at once if for any
reason the herd or any particular cow in the herd is not doing
well. This record is also the basis for adjusting the grain
ration from time to time. The fat test can be made by the
farmer but the more practical way is for the farmer to have
the samples tested at the creamery.

Labor records show the amount of time spent in the operation
of the dairy. In addition to keeping general labor records
which will show the time spent on the dairy herd as a whole,
it is desirable to take account once a month of the differences
in the amount of time required by the different cows. For
example, Mary and Molly give essentially the same amount of
product, but Molly is easily milked in five minutes whereas ten
minutes are required to milk Mary. The number of cows one
man can handle depends largely upon the ease with which they
can be milked.

The first object of dairy accounts is to know whether or not
it pays better to operate the dairy than to sell the crops which
are fed to the cattle. In answer to this question the records
should give basis for an annual statement as follows :

Account with Herd of Ten Cows for Year Ending March i, 191 5

Expenses

Twenty tons of hay, farm value $ 240

Eight hundred bushels oats, farm value 480

Sixty tons of com ensilage, farm value 240

Labor, 1400 hours 280

Interest on value of herd 60

Depreciation on herd 70

Interest on dairy barn and equipment 48

Depreciation on dairy bam and equipment .... 40

Salt 7

Veterinary 22

Total cost $1487

420 AGRICULTURAL ECONOMICS

Receipts

80,000 pounds of milk $1300

Five veal calves 47

Four heifer calves 60

One calfskin i

Eighty tons of manure 80

Total $1488

Upon balancing his account the farmer often finds as here
illustrated that he is just about " breaking even." The dairy
is furnishing a market for his crops and his labor. If it were
not for the dairy, much time which is put on the cows would not
find profitable employment. The dairy provides employment
the year round with emphasis on the winter months, while
the growing of hay, oats, and corn give summer employment
mainly. Furthermore, the farmer may find that, while he can
produce good ensilage, the corn is caught by the frost three years
out of five and that the attempt to produce merchantable corn
is a precarious undertaking.

Everything considered the farmer decides that in spite of the
showing on the balance sheet he can do no better than to continue
to produce milk. But if he is thoughtful he will ask himself the
question, How can I increase my production of milk without a
proportional increase in cost ? By looking over the herd record
he finds that his best cow, Bedelia, gave 13,500 pounds of milk
testing 3.8 per cent butterfat, whereas the poorest cow, Lily,
gave only 4860 pounds of milk testing 4.2 per cent. The milk
from Bedelia was worth $1,675 P*^'" hundred or $226.125 ; that
from Lily was worth $1,725 per hundred or $83,835. The total
charge against Bedelia was $168.70 and that against Lily was
$131.20. The profit on Bedelia was $57.42, while the loss on
Lily was $47.37. A further study showed the farmer that if he
could dispose of the poorest five cows in the herd and replace
them with cows as good as the average of the other five, his net
profits on the herd would be $260. The leading purpose of
milk and feed records is to eHminate the " boarders " and fill
the barn with high producers.

The cost-accounting method is suited especially to testing the
competing elements in a given type of farming. The general

METHODS OF STUDYING AGRICULTURAL QUESTIONS 421

financial account including receipts, expenditures, and inventories
shows the profits of a given type of farming under a given
manager. For example, if in one region where the conditions
are the same it is found that the farmers who are seUing cream
and some dairy cows, and hogs about equal in value to the total
dairy receipts, are through a series of years making more money
than those who buy cows, sell whole milk from a larger herd
but keep no hogs, it would seem to indicate that the former were
the more profitable type of farming. It rarely happens that
all the farmers of a district keep accounts which give basis for
such a comparison. In the absence of financial accounts the
" Farm Survey " is a very useful method of finding a basis for
making up a statement of the profits derived from operating a
farm.

The farm survey is an attempt to get the farmer to call to
mind what he had on hand in the way of farm property of all
kinds at the beginning of the year, the receipts and expenses
during the year and the property on hand at the close of the
year, in order that an annual statement may be made showing the
profits of operation. While these surveys lack much of complete
accuracy, they give basis for making comparisons which give
important suggestions regarding the relative profitableness of
t)^es of farming. The farm survey has been most useful in
stimulating bookkeeping on the part of farmers. It is a method
of permanent value, improving with the increase in bookkeeping
by farmers. Its future use probably lies in the field of statistics
rather than in the field of accounting.

The historical method. Much is gained by studying the
operations of economic forces through a period of time. Eco-
nomic forces are not easily measured, and they are so numerous,
of such varying strength, and so often operate in opposite direc-
tions that at any given moment it is difficult to make an estimate
of the future resultant of these forces, unless the changes
wrought by them in the past can be resorted to as a basis of
judgment.

The federal census for 1900 showed that more than a third of
the farmers of the United States were tenants and about a third

422 AGRICULTURAL ECONOMICS

of the farms operated by owners were mortgaged. Without re-
sorting to the historical method it would have been impossible
to know whether the forces making for tenancy were overbalanc-
ing the forces making for ownership, or vice versa. It might
be inferred by one viewing these facts without this historical
setting that ownership had once been universal and that the
owners had lost money, mortgaged their farms, lost their titles
to the land, and become tenant farmers. On the other hand, one
might infer that farmers were using tenancy and the mortgage
as means of making transition from landless laborers to the
free ownership of land. This illustration is to the point because
inferences were drawn in 1880 when statistics of land tenure
were collected for the first time.

At the present time, with the changes of thirty years recorded
at ten-year intervals, it is possible to demonstrate clearly the
trend of affairs during that period, and to describe many of the
forces which have been operating. The available materials show
that young men do very generally rise through the successive
stages of tenant farmers and mortgaged owners to the free own-
ership of farms, but the data show also that there has been a
retardation in this movement and that longer time is required
to make this movement recently than in earlier years. The
census data for 1890 and for 1900 show that older farmers are
generally owners, while tenancy is most common among young
farmers. By comparing the data for the two periods, it be-
comes clear that some force is retarding the movement from
tenancy to ownership, for a smaller percentage of those of the
various ages were owners, and a larger percentage were tenants
in 1900 than in 1890. This is illustrated in Figure 17. Illinois
is used for this illustration because tenancy is more common
in that state than in any other part of the North. The illus-
tration shows that the percentage of owners among 3^oung farm-
ers is very small, but that ownership increases with the age
of a farmer and that, of the farmers fifty-five years of age and
over, about 85 per cent are owners. By comparing the situation
in 1890 and 1900 for each age group, it becomes clear that while
there is a movement toward land ownership, as the farmers

METHODS OF STUDYING AGRICULTURAL QUESTIONS 423

grow older, it is true, however, that a smaller proportion of the
farmers of each age group were owners in 1900 than in 1890,
showing retardation in the movement from tenancy to free
ownership. The right hand illustration in Figure 1 7 shows the
reverse situation with regard to tenancy, that tenancy is most
common in the younger age groups and gradually decHnes.
A careful study of the facts now available shows that many
forces are in operation, some making for dependent tenants
others for independent landowning farmers.

Another example of the historical study of economic forces is
afforded by the sheep industry in the United States. Between
1840 and 1850 there was a decHne in the number of sheep kept in
parts of Vermont and in the eastern part of New York, but the
marked change was in Ohio and Michigan, where there was a
great increase. The tendencies were the same in Vermont,
New York, Ohio, and Michigan, between 1850 and i860, with an
important beginning of the sheep industry in Texas, California,
and Oregon.

The decade from i860 to 1870 brought a reaction in north-
eastern Ohio and the beginnings of the concentration of the
sheep industry of Texas in the dry lands of the South. Both
of these movements continued during the next decade. By
1880, Vermont had almost ceased to be a sheep state, and the
sheep of New York were but a handful in comparison to the
number in 1840, but the beginnings of the new industry in the
Rocky Mountain states were already important in Colorado,
Wyoming, and Montana. During the next two decades the
development of the sheep industry in the mountain states con-
tinued, but between 1890 and 1900 a marked decHne is shown in
California, Texas, Wisconsin, Michigan, and Ohio.

When the maps for 1840 and 1910 are compared, it becomes
evident that during the seventy years the sheep industry made a
complete shift with the exception of a few counties in Pennsyl-
vania and Ohio, so far as the concentrated centers of production
are concerned. By reading the agricultural papers of this period
one finds many references to these changes. A well-known
Merino breeder of Vermont in one decade is heard from in the

424 AGRICULTURAL ECONOMICS

next decade from California where he is in the same business.
The method of driving sheep from Ohio to Texas is described
and in fact the student who has the time and abiH'ty can easily
reconstruct the whole movement of the sheep industry, from the
days when Vermont and New York led in this industry to the
present day with the Rocky Mountain states in the dominant
position.

The story is only half told, however, until it is explained. To
explain these changes it becomes necessary to write the history
of the expansion of American agriculture. The competition of
the various farm enterprises has played an important part. The
result of this competition is determined by geographic factors.
Topography, climate, and nearness to the market are important
examples.

In Vermont, New York, northeastern Ohio, and in Wis-
consin, wool growing was driven out by the dairy industry.
This is indicated by contemporaneous literature. Statistics of
the dairy industry were not collected in 1840, but the milk
production statistics as shown by the census for 19 10 indicate the
presence of this industry at the latter date in the regions which
were in the earlier decades important centers of the sheep in-
dustry. The economic principle involved is simple. Wool
is durable, dairy products are perishable. The value of wool
per pound is much greater than milk and has often been greater
than butter and cheese. The dairyman at a distance from
the market for dairy products cannot compete with the one near
the market so well as the shepherd in the distant hills and downs
can compete with the wool grower near the center of population.

Beef cattle replaced sheep in Texas, the development of agri-
culture and fruit growing by irrigation was an important factor
in CaHfornia, and tariff legislation played an important part in
forcing out the sheep in Ohio and Michigan during the nineties.
A careful study of the operation of competitive forces, with and
without artificial price levels, enables the student to discover the
workings of the economic laws which have wrought the changes.

The geographical method. Farming in the various regions of
the United States shows a high degree of diversity. In one region

METHODS OF STUDYING AGRICULTURAL QUESTIONS 425

corn, oats, hay, pasture, dairy cows, and hogs, constitute the
principal enterprises combined upon the individual farm. In an-
other region the combination is the same with the exception that
more emphasis is given to corn and hogs, and beef cattle replace
the dairy cows. In other regions the livestock is unimportant
and special crops as wheat, cotton, or cane, stand out as the
dominant enterprise, while in still other regions, the grazing of
cattle or sheep becomes the principal enterprise.

These variations in farm organization are due to differences
in soil, climate, labor supply, market relations, etc. The expla-
nation of differences in t^-pes of farming, so far as they are due
to differences in environment, is the purpose of the geographical
method.

The geographical method may be illustrated by comparing
the distribution of spring wheat, barley, and oats. These crops
are usually counted competing crops. They occupy the same
place in the system of crop rotation and they would require the
attention of the farmer about the same time of year in any given
region. A study of their distribution shows a remarkably
distinct division of territory between these crops. In Minne-
sota, for example, wheat growing extends east to a line drawn
north and south through Northfield. East of this line barley is
the dominant spring grain crop. In Wisconsin, barley produc-
tion is concentrated in the east central counties noted for their
high-grade barley for brewing purposes.

The centers where oat production is concentrated are found
farther south. Central IlHnois and north-central Iowa stand out
as regions where oat production holds a highly important place
on the farm.

That climate is one factor in determining this division of
territory is obvious from the nature of the division. These crops
differ in their demands for moisture as well as in their require-
ments with regard to temperature. Soil differences are said to
play an important part in this division of territory. The rela-
tion of the barley regions to barley markets is in itself suggestive
of another geographic factor wh'ch should be considered.

This study might be carried further by the use of charts of

426 AGRICULTURAL ECONOMICS

the various other enterprises which are complementary or sup-
plementary to the group of competing crops. Such maps would
show the spring wheat region to be a flax region and the oat
regions to be corn regions, etc. This method followed out com-
pletely with maps of livestock, as well as crops, would show the
type of farming in any agricultural region.

The maps showing the type of farming should be accompanied
with maps showing the topography, the soil, the length of the
growing season, the temperature during the growing season, the
rainfall, the market, the agricultural population, the manufac-
turing population, the mining population, etc., all of which help to
explain the types of farming in terms of geographical differences.

The statistical method. The statistical method stands for
quantitative study. Much of our knowledge of economic
forces corresponds to qualitative analysis in chemistry. The
force is noted but not measured. The statistical and ac-
counting methods look to the measurement of forces, thus
putting the work on a quantitative basis. In the treatment of
every subject and in the use of all other methods, all data which
lend themselves to counts or measurements should be treated
statistically.

There are specialists who devote themselves to the collection
and the tabulation of statistics. Their finished product is raw
material for the agricultural economist.

Sources of statistical data. There is no one greater source
of material for the student of agricultural economics than the
reports of the federal census. They contain the only comprehen-
sive source of material from which it is possible to ascertain
the type of farming in every section of the United States. This
gives the basis for the study of comparative agriculture, which is
one of the best methods of gaining knowledge of the economic
forces which determine the actions of farmers.

Not only the type of farming, but also the economic status of
the farmer is shown by the census for every county in the United
States. Both the white and the colored farmers are divided into
seven classes, based upon the relation they sustain to the land
they cultivate.

METHODS OF STUDYING AGRICULTURAL QUESTIONS 427

The census reports give the data on which to base historical
studies of the changes which are taking place in the type of
farming and in the status of the farmer, as well as a basis for
comparative study at a given time.

The first agricultural census was taken in 1840. This first
census of agriculture was a crop and livestock census. In 1850,
general farm data were added and other improvements have been
added each decade since.

In 1880, tenure statistics were added. Thus the basis for
studying changes in the type of farming extends over a period
of seventy years and the data for studying changes in the status
of the farmer are available for thirty years.

Too little use has been made of these valuable materials in the
past. Two methods which the writer has found useful in the
utiHzation of these statistics may be mentioned :

The system of mapping already illustrated providing a chart
with close gradation of variation in density for each fact pre-
sented in the census, puts the materials in form for ready com-
parisons both historical and geographical. Not only does the
series of maps show the changes in the localization of each line of
production through a series of years, and show how the territory
is divided between the various hnes of production at a given
time, but indicates also the way in which the different Hnes of
production are combined in a given district, thus showing the
type of farming in each district.

The tabular method can also be used to advantage in compar-
ing types of farming. A table indicating the proportion of the
improved land in farms devoted to each crop shows the ultihza-
tion of the land. The character of the crops, and the relation
between the numbers of livestock kept and the amount of feed-
able products produced gives a clue to the way in which the
products are utilized, whether sold in their original form as a
product of the field, or used as a basis of the livestock industry.
While a series of maps based upon quantities of product can be
made to cover the seventy years, maps showing crop acreage,
which is a better basis for determining the utiHzation of the
land, cannot be made for the decennials prior to 1880.

428 AGRICULTURAL ECONOMICS

In making use of the census materials, the original statistics
by counties are of first importance. The descriptive material
which describes the quality of the statistics is next in impor-
tance. The text which is intended to supplement the statistics,
while useful, is of less permanent importance then the detailed
statistics.

State census reports, the annual reports, and more recently,
the Year Books of the United States Department of Agriculture,
and the state agricultural reports contain valuable statistics.
Market reports in trade papers and in reports of boards of trade,
etc., provide statistics of use in the study of prices. While
these various sources are not all that may be desired, the student
will find that anything he can do for himself in the collection and
tabulation of statistics will be but a drop in the bucket in com-
parison with the data available in these sources which have
been prepared by the statistician. Since he is so dependent
upon these sources of material, it is important that the agricul-
tural economist be in close touch with the agricultural statistician
who is preparing these source books.

The use of market statistics may be illustrated by a study of
the relation of the price of corn to the supply and price of hogs.
The causes of the high prices of hogs on the Chicago market
in 1 9 ID can best be understood by studying the history of the
hog and corn industries as shown by the market statistics.
When the statistics of prices are studied it is an undeniable fact
that hog prices were higher in 1910 than they had been at any
other time for a long series of years, as shown in Figure 23.

The general theory being accepted that this rise in price must
be due to some change in the conditions of supply or the condi-
tions of demand, the student should proceed to study the con-
ditions of supply and demand. By charting the supply of hogs
on the Chicago market month by month, the fact becomes clear
that during the years 1909 and 1910 the supply of hogs was un-
usually short. The price of hogs was unusually high during
the same period. Little time is required to make the inference.
But what was the cause of the shortage of hogs ? One may pro-
ceed to formulate hypotheses which may be put into the form

METHODS OF STUDYING AGRICULTURAL QUESTIONS 429

of questions. Has some pestilence ravaged the hog lots of the
country ? Has there been a failure of the crops which are used
as hog feed? Corn being the principal hog feed, we may ask,
has the demand for corn for other purposes been unusually

Figure 23. — Relation of the price and supply of hogs to the price of corn

at Chicago.

The price curves are so drawn that when one bushel of corn produces 10 pounds
of pork, the amount which the hog price curve rises above the corn price curve
represents the net returns from the extra labor of breeding and feeding. In 1906
and 1907 there was a large profit in feeding corn to hogs, while in 1908 there was
a loss. The figures on the margin represent the monthly high price of corn in
cents per bushel ; the monthly high price of hogs in tenths of cents per pound and
the monthly receipts of hogs in tens of thousands.

great? These conjectures as to the cause of the scarcity of hogs
leads to the charting of the Chicago price of com.

During the years 1906 and 1907 the price of hogs was very
high in proportion to the price of corn. The supply of hogs
was relatively short during the early part of the period, but by
the beginning of 1908 the supply of hogs on the Chicago market

43° AGRICULTURAL ECONOMICS

reached an unusually high mark. During the year 1908 the
corn price curve held steadily and appreciably above the hog
price curve. On the assumption that a bushel of corn is required
to produce ten pounds of pork, this meant a loss on the corn as
well as on the time employed in feeding ; ten to one is the price
relation in the chart. The distance which the curve showing
hog prices rises above the curve showing corn prices shows the
return for labor in feeding. In 1908 this was a minus quantity.
This condition had not existed during the prior fifteen years.
Early in 1909 the curves were close together, but the corn price
was downward, while the hog price was unusually high. Early
in 1910 hog prices started down.

So soon as the situation as to the price of corn and hogs and
the supply of hogs after 1907 is impressed upon the mind, it is
hard to keep from making the inference that because hogs were
fed at a loss in 1908 many farmers ceased to breed hogs in the
usual numbers. The facts indicate that whether it was lack of
breeding or some other cause the supply of hogs in the country
was short, for so high a price for so many months would certainly
stimulate shipments if marketable hogs were to be found.

The next fact requiring explanation is the high price of com
in 1908. A glance at the curves shows that during the greater
part of the year the hog price was quite normal, but the corn
price was abnormally high.

The receipts of corn on the Chicago market in 1908 were
34,000,000 bushels below that of the previous year, and the
lowest they had been since 1895, with the exception of the years
1901 and 1902 when the receipts were low and the price high
owing to the short corn crop of 1901. But why this shortage
in receipts of com on the Chicago market in 1908?

The corn crop of 1907 was less than it had been for the two
preceding years, but with the exception of 1905 and 1906 the
crop of 1907 was the largest reported. The shortage of the corn
crop of 1907 under that of 1906 was only 11.5 per cent, but
the receipts of hogs at Chicago during the period when the
bulk of the hogs which had been fed 1907 corn were marketed,
indicate that out of this relatively small corn crop of 1907 an

METHODS OF STUDYING AGRICULTURAL QUESTIONS 431

unusually large number of hogs were fed, leaving a relatively
short supply for the market. Before drawing conclusions, how-
ever, other factors need be carefully investigated to make sure
that other important forces were not operating simultaneously.
These facts are presented in this form in order to illustrate this

Graphic RtPRtSEMTAiioN of Prices or Livestock rttos on the Milvmaukei; Teed Market

TiM£ BrMcwTtti AA/o By YtA/rs <

FiGXTRE 24. — In the winter of 1916 and 1917 many dairy farmers were im-
pressed with the idea that it would pay well to buy feed in the summer
and store it for use in the winter. A study of this chart should make one
better able to judge whether the conditions of the feed market in 1916
and 191 7 were normal or exceptional. This is given to illustrate the way
in which statistical study may be used in giving a broader basis for pass-
ing judgment on a question of this kind.

well-known method of putting statistical data in such form that
their relations are easily comprehended.

The experimental method. The experimental method may
be used to throw light upon many problems in agricultural
economics. For example, in order to carry on investigations in
intensity of culture, this method must be employed. Some of
the data essential to the analysis of the economic problems of the
farm can be secured by keeping records upon farms under the
management of intelligent farmers with whom it is possible to

432 AGRICULTURAL ECONOMICS

cooperate. By this method, the problem of combining comple-
mentary enterprises in such a manner as will keep the labor and
equipment employed as nearly continuously as possible and in
the lines of production which will prove most profitable, can be
worked out in a manner fairly satisfactory. Furthermore, the
contact with the farm under conditions of normal commercial
agriculture gives validity to the results secured and gives the
opportunity for developing a system of records which may ulti-
mately be used by an intelHgent farmer in determining what to
produce.

Wlien one turns from the question of what to produce to the
question of how it should be produced, the problem becomes one
which requires controlled experiments. The major economic
problem relating to the question of how to produce the articles
decided upon, centers in the question of the proportions in which
the factors of production shall be utilized, the best-known phase
of which is the problem of intensity of culture. This is a ques-
tion regarding which agriculturists, economists, and farmers have
theorized for centuries, but regarding which no adequate ex-
periments have been carried out. In the theoretical analysis of
this problem, the point has been reached where experiments are
essential to further progress.

The proper degree of intensity of culture must be determined
for each farm, and the result will change with variation in the
wages of labor, the cost of equipment, and the price of land.
The first step toward progress in this line is the discovery of a
method of experimentation which can be appHed upon any farm
without state aid and without endangering the profits of the
farmer.

Experiments with a series of plots with varpng treatment are
valuable for ascertaining physical and biological truths, but it
is doubtful if they are of use in the field of economics for the
simple reason that while the laws of economics which determine
the proper degree of intensity of culture are of general applica-
tion, the conditions are so variable that the proper degree of in-
tensity on one farm is not necessarily the proper degree on
another. Plot experiments on the intensity of culture would

METHODS OF STUDYING AGRICULTURAL QUESTIONS 433

have no practical value therefore except for the farm on which
they were made. Plot experiments are too expensive for the
practical farmer, hence some other method must be contrived.
It is highly desirable that a method of ascertaining the proper
degree of intensity of culture be discovered and taught, but any
attempt at teaching more than the principles involved and the
methods of their application is folly, for what is right for one
member of a class of one hundred students, or one out of an
audience of farmers, may be the wrong thing for many of the
others.

Differences in the soil, in the value of the land, in the efficiency
of the farmers, and in facihties for marketing make differing
degrees of intensity of culture necessary. Any method of
ascertaining the most profitable degree of intensity on any farm,
to be of general use, must be so planned that its appHcation will
not endanger the profits of the farm. Some process of gradual
adjustments suggests itself as most Hkely to succeed.

The foregoing discussion is not intended as a complete survey
of methods appHcable to the study of economic problems in
agriculture. The aim has been simply to describe the methods
in common use at the present time. No one method is fa-
vored above another. All are needed in securing an intensive
and a comprehensive view of the economic forces which affect
the farmer.

INDEX

Ability, variations in, 103-113; to

control men, 1 10 ; to explain, 108 ;

managerial, 160.
Accounting method, 408-421.
Accounts, farm crop, 416; live stock,

418-420.
Acquiring land, means of, 215-237.
Agricultural depression in England,

effect on landownership, 312, 313;

of 1875, 317.
Agricultural economics, defined, 5-7.
Agricultural holdings act, 340-344.
Agricultural imports classified, 72-74.
Anderson, James, 310, 326.

Bakewell, Robert, 308.

Banks, 178.

Barclay, Captain, 246.

Bonuses for hired laborers, 175.

Branson, E. C, 387.

Business institutions, 395.

Business men, grasp of economic forces,

406.
Buying, neighborhood, 393.

Caird, Sir James, 75, 310.

Capacity, 79; defined, 116, 117;
grades, choice of, 126, 127; illus-
trated, 1 18-123; of cows, 97, 98;
of machinery, 95, 96.

Capital, 93; and crop selection, 52;
value, 206. See also Equipment.

Capitalization of land rentals, 205,
206.

Carver, T. N., viii, 139.

Cash tenancy, 257; reasons for pre-
ferring, 301-304; regulation of, 302,
303; in England, 323-351-

Census, U. S., 387, 388.

Cheese, federation of producers, in
Wisconsin, 364.

Choice of crops, 43-S3; as affected by
rent, 51 ; under changing conditions,
SO.

Choice of live stock, 60.

Choosing a farm, 127-130.

Clubs, farmer, 393.

Colored tenants, 263 .1

Commercial agriculture, 22, 23 ; advan-
tages, 27-29; disadvantages, 26, 27.

Commission, country life, 381, 384,
38s; milk, 367; price, 366, 376, 378,

379-

Community, action, 38; business, 392.

Compensation for unexhausted improve-
ments, 335-344-

Competing crops, 44-47 ; relative terri-
tory available for, 48-50.

Competition between live stock and
crops, 58.

Cooperation, no, 363, 364.

Cooperative credit, 179.

Copyhold tenures, 305.

Com, 44; competition with cotton, 48;
competition with sugar beets, 49;
markets, 57 ; price, 429.

Cost, and price, 38-42 ; farm products,
366-3y9; of labor and crop selection,

52-

Costs, disagreements regarding, 368;
joint, 369; specific, 372; specific
vs. comparison of profits, 373 ; varia-
tion in, 39, 367.

Cotton, 40, 44 ; belt, tenancy in, 267 ;
competition with com, 48; farms,
size of, 155, 156.

Country life, 242, 380-404; movement,

384-

Credit, 226; cooperative, 179; systems,
effect of, 183, 184; systems in foreign
countries, 181-183; sources of, 178-
185-

Crop accounts, 416-418.

Crop competition, general principles,
44-50.

Crop selection, and character of fanner,
52 ; and cost of labor, 52 ; and supplies
of capital, 52 ; soil basis, 52.

Croppers, 298-300.

Crops, cheaper marketing through live
stock, 55 ; choice of, 43-53 ; com-
peUrive, 44; competition with live
stock, 58; feedable, sold, 56; fer-
tilizer value of, 54-56; method of

435

436

INDEX

comparing profits of, 46; new varie-
ties, 90 ; rule for choosing, 47 ; sup-
plementary, 44; usually fed, 54;
usually sold, 54 ; variation in value
of, 87; what should the nation pro-
duce, 68-78.
Curtis, Charles F., 54.

Dairy cows, specialized types, dual

purpose, 60, 61.
Dairy industry, 59.
Darwin, evolution, 114.
Demand, elasticity of, 37; for goods,

34; stability of, 37; imevenness of,

187.
Diminishing returns, 92, 132 ; depressing

effect of, 92.
Distribution, illustrated, 201, 202; of

labor, 45-
Diversification, 43.
Dry farming, 90.
Duty, 17.

Economic, capacity, 79; efficiency, 80;
ideals, 68-71; ideals, individual and
public, 70, 71; pohcy, 75; pro-
ductivity, 84.

Economics, and farm management, 10,
11; defined, I ; goods, 31 ; individual
vs. narional point of view, 11, 12; of
live stock, 54; relation to other
sciences, 7-10.

Efficiency, 39, 80, 92, 117 ; and choice
of land, labor and equipment, 198,
199; causes of variation, 105-113,
123; defined, 116, 117; efiects of
variations in on rents and profits, 194 ;
grades, choice of, 124-126; of cows,
97, 98; illustrated, 118-123; varia-
tion of in men, 103-105 ; variations
in, 193-

Ellsworth, H. L., 250.

Ely, Richard T., viii.

England, a land of tenant farmers, 323 ;
decline of landowning farmers in,
305-322.

Ensilage, valuation of, 411.

Equipment, classified, 93-95 ; improve-
ment of, 96-98; increasing new
supply, 100; quality of new supply,
100; proportion to use, 149-151;
valuation of, 210-212.

Exchange value, 34. See Value.

Expenditure, 414.

Experimental method, 431-433.

Factors of production, discussion of,
land, 79-92; equipment, 93-101;
labor, 102-115; combination of grades
of, 116-131 ; compared, 115.

Fair price, 375.

Faithfulness, in.

Family, farm, 157; rural, 390; the unit
in agriculture, 103.

Farm, accoimt, 408; credit, 178-185;
enterprises, correlation of, 62-67 ;
equipments, 93; family, national
attention centered on, 383 ; home,
157 ; houses classified by tenure and
age, 264, 265 ; household, 389 ;
household, problems of, 390; labor,
52, 168-177; laborers, number of,
172-173; Ufe, reorganization, 389;
Ufe, social side of, 380-404 ; machinery,
95 ; management, viii, 29, 297 ;
organization, 43-167 ; management
problems, 62; minimum size of,
158, 159; ownership and age of
farmer, 264, 265 ; ownership and
tenancy, 251-269; property classi-
fied, 94, 95 ; work, analysis of, 63-
67 ; work, planning of, 62-67.

Fanners and middlemen, 357-365;
the issue between, 360.

Farmers' clubs, 392.

Farmers, energy limitations on, 162-
164; tenant in U. S., 238-250; train-
ing needed, 7.

Farms, classified by area, 155; operated
by managers, 267 ; operated by
owners, 253 ; operated by tenants,
254; size of, 154-167.

Federal Farm Loan Act, 183, 184.

Feed, prices, 431; records, 418.

Feeds, fertilizer value of, 54-56.

Fetter, Frank A., 205.

Fluctuations in values, 36.

Free land, 215.

Future outlook, depressing, gj; op-
timistic, lOI.

Galpin, C. J., 380, 387.
Geographical method, 424-426.
Gift, 221.
Grades, established, 38.

Habit, IS, 107.

Hamilton, Alexander, 216.

Hay, 44; prices, 429; valuation of, 411.

Help, 105. See Labor.

Hired man, goal of, 176, 177.

INDEX

437

Hired managers, 256.

Historical method, 421, 434.

Hoag, E. J., 380.

Homestead Act, 218.

Honesty, 272.

Horse breeding regions, 60.

Household, farm, 389.

Human basis of production, 102-115.

Human wants, 102.

Ideals, economic, 68-71.

Immobility of funds, 187.

Imports, agricultural, classified, 72.

Improved land, 82, 84, 87 ; means of
increasing supply, 87-91.

Increasing and diminishing returns
illustrated, 135-147.

Increasing returns, 132.

Inheritance, 221.

Institutions, educational, 394; Govern-
mental, 400; health, 400; religious,
398; social, 397.

Insurance companies as lenders to
farmers, 180, 181.

Integrity as source of income, 232.

Intensity of culture, 134-149, 432 ; and
share tenancy, 146; four stand-
points, 134.

Interest in one's work, iii.

Interest, the rate of, 185-189; differ-
ences in, 187-189; why paid, 185, 186.

Inventories, 408, 409.

Iron law of wages, 199.

Irrigation, 87-89.

Joint costs, 369.
Jouzier, Etienne, 5.
Judgment, 107.

Kerrick, L. H., 26.
Knowledge, 108.

Labor, 45, 52 ; and tenancy, 258, 294 ;
demand for, 173 ; improved quality of,
lis; indirectly productive, 62;
methods of paying, 174; proportion
to use, 149-151; records, 419;
required on wheat, 99; saving
machinery, 172; supply of, 113-115;
which to employ, 113.

Land, 79-92; and stock share system,
293 ; clearing, 89-91 ; improved, 82,
84, 87 ; supply of, 87-91 ; in farms
operated by tenants, 255 ; location of,
83 ; not in farms, 87 ; ownership and

age of farmer, 259-261 ; policies,
403 ; principles of valuation, 204-
210 ; capitalization of rent of, 205-207 ;
qualities of, 81-83; quality of new,
91 ; settlement, 220, 239-241 ; im-
improved, 87; uses of, 79; variation
of, 79.

Landowning farmers in England, decline
of, 305-322.

Land tenure, in United States, 215-269;
forms of in United States, 270-284;
in England, 323-351.

Land values, 83, 241 ; and social
standing, 210; causes of increase in,
207-209 ; effect of character of people
on, 209; fluctuations in, 312; specu-
lative, 213.

Landlords, and tenants in England,
323-351; character of, 273; in
United States, 267-269.

Law of increasing and diminishing
returns, or of variable proportions,
132-135-

Leases, covenants found in Norfolk
farm leases, 347-351 ; for long terms,
effect on agriculture, 329-331 ; objec-
tions to, 331, 332 ; three years to three
years, 333, 334; what they should
contain, 273-284.

Legislation, agricultural, 404; road,
402; rural, 401.

Live stock, accounts, 418-420; as supple-
mentary enterprise, 58; competition
of on farms, 58; competition, sheep
and cows, 59; condense crops, 55;
economics of, 54; kind to keep, 59;
valuation of, 412.

Loan associations, 183.

Location, 83, 129.

Longworth, N., 246.

Luxuries, 71, 72.

Machinery, 95 ; capacity of, 95, 96 ;
economy in utilization of, 159; valua-
tion of, 413.

Mail routes, rural, 402.

Malthus' theory of population, 113, 114.

Man, as end, not simply means, in pro-
duction, 102; his function as pro-
ducer, 103.

Man labor, distribution of, 45.

Managerial ability, 160.

Managerial function, 103.

Managers, hired, 256.

Marginal utility, 36.

438

INDEX

Marketing, 30; direct sale, 352-355;
farm products, 353-365; sale to and
through middlemen, 355, 356; the
farmers' problem, 20-30, 352.

Markets, primary, 57.

Marshall, William, 311, 327.

Method, of study, 405-433 ; accounting,
408-421; experimental, 431-433;
geographical, 424-426; historical,
421-424; statistical, 426-431.

Middleman, fair charges for services of,
360; the farmer and, 357-365.

Mill, J. S., 27.

Miscellaneous work, 62.

Money as reason for working, 13.

Monopoly, 32.

Moral standards, 130.

Mortgage, 3go.

Motives, 13-1Q.

Movement, tenancy to ownership, 266.

Municipality, new types of, 403.

National farm loan associations, 183.
Negro, tenants, 257, 260, 263, 266;

slaves, 262.
Neighborhood, 3QI.

Neighbors, no, 3gi ; character of, 130.
New agriculture, the, in England, 306-

308 ; effect of on ownership and

tenancy, 324, 326.
New crops, stimulating introduction of,

76-78.
Noxious weeds, 275.

Oat markets, 57.

Organization, theory of, 40; farm, 43-

167.
Ownership of rented land, 267-269.

Partnership property, 293.

Patriotism as motive for working, 16.

People, character of, 87 ; classes of in
agriculture, 102.

Physical productivity, 84.

Piece work wages, 176.

Plan, adherence to, in.

Planning, rural, 403.

Plot, experiment, 423.

Plunkett, Sir Horace, 380.

PoUcy, national, 75.

Pope, Essay on Man, quotation, 14.

Population, agricultural, 102 ; census of,
387; growth of, 91, 92, 96, 113-115;
movement to city, effect upon land-
ownership, 222, 223.

Precipitation, 86.

Preemption system, 217.

Prices defined, 35; fair, 375; fixing,
366-379; of corn, 429; of hogs, 429.

Prices, and crop selection, 50 ; causes of
change, 51; effect on choice by con-
sumer, 378; feed, 431; relative, 48.

Pride as motive for working, 14.

Primary markets, 57.

Productivity, 80, 84 ; per man, gg.

Profit, 46 ; basis of comparing, 46 ; per
acre, 47, 417; per dollar of expendi-
ture, 417; per hour of man labor,
46; sharing, 175; Walker's theory
of, 193; comparing by farmers, 378;
forces determining, 193-203 ; rela-
tive, 417 ; total farm, as basis of price
fixing, 371.

Progress, effect of on distribution of
wealth, 201, 202.

Property, 94.

Proportions of factors of production,
132-151.

Quality of new land, 91.

Rainfall, 86.

Receipts, 414.

Religion, 17.

Rent, amount to be paid, 279; and

profits, 190-203 ; conclusions drawn

from theory of, 198, 199; fluctuations

of, 51 ; time of paying, 282 ; and land

values, 204-208.
Research, cooperative, 387 ; methods of,

405-433-
Ricardo, David, 116, 190; theory of

rent, 192.
Risk, 43, 188.
Roads, country, 385.
Rogers, J. E. T., 103.
Roosevelt, President, 381-383.
Rural, investigations, 384; hope, 381;

routes, 402.

Sanitary conditions, 129.

Savings, 225.

Scarcity, 31, 32.

School problems, 394, 395.

Scully estate, 268.

Self-control, 108, 109.

Self-sujQ&cing, agriculture, 20-23 ; nation,

76.
Selling, neighborhood, 393.

INDEX

439

Share tenancy, 2S5-301 ; the one-fourth
system, 288, 289 ; the one-third system,
289, 290 ; the two-fifths system, 290,
291 ; the one-half system, 291-300 ;
the two-thirds system, 301 ; when
preferred, 286, 287.

Share tenant, 146.

Sheep regions, 59.

Sibley estate, 26S.

Silage, 44.

Size of farms, 154-167 ; ancient beliefs
regarding, 166, 167; and size of
families, 158; and tenancy, 258;
cotton, 155, 156; effect of weather
on, 156; effect of profits illustrated,
161; factors limiting, 165-167;
socially considered, 164, 165 ; wheat,
15s; in England, 318.

SkiU, 106.

Slaves, in i860, 262.

Small farmers, disappearance of in
England, 318.

Soil, character of, 128.

Specialization, 43 ; in production, 24.

Specific costs, 372.

Speculative values, 213.

Spilhnan, W. J., viii.

Standardization, 38.

Statistical method, 426-431.

Substitutions, 37.

Sugar beets, competition with com, 49.

Supplementary crops, 44.

Surveys, community, 387 ; farm manage-
ment, 407 ; health, 387 ; rural, 385,
386 ; social, 386.

Tarpleywick farm, 414, 416, 417.

Taxation, 234, 277.

Tenancy, and age of farmer, 259, 261,
264, 265 ; as stepping stone, 271 ;
forms of in England, 323-351; in-
crease in, 1880 to 1890, 256; in
United States, 238-304; in United
States prior to 1880, 238-250; in
United States since 1S80, 251-269;
is a certain amount a good thing, 270 ;

percentage of in 1880, 252; share m.
cash, 285 ; sources of information,
238.

Tenant-right, 340.

Tenants, farms operated by, 254;
colored, 263. See Tenancy.

Tobacco, 44; price control of in Ken-
tucky, 41.

Topography of United States, 85.

Townshend, Charles, 306, 307.

Trade mark, 38.

True, A. C, 224.

Trust company, 180.

Tull, J., 306, 307.

Type of farming. Central Illinois, 56.

Unimproved land, 87.
Unit of organization, 159.
Utility, 33, 36.

Valuation, basis of, 409; of ensilage,
411; of equipments, 210-212; of
hay, 411; of live stock, 41s; of
machinery, 413.

Value, 31-42; of a tidy farm, 275. See
Land values.

Village, problems of, 388.

Wadsworth estate, 246-249.

Wadsworth, James, 248.

Wages, 169-172; iron law of, igg.

Wages system vs. tenancy, 258.

Walker, Francis A., 193.

Wants, I, 102.

Warren, G. F., viii, 159.

Weeds, noxious, 275.

WTieat, 44; farms, size of, 155; labor
requirements in producing, 99 ; prices,
40.

Wisconsin cheese producers' federation,
.^64.

Wool, 59.

Work, concentrating attention on, 109 ;
habit, 107 ; miscellaneous, 62 ; work-
ing to schedule, 109.

Printed in the United States of America.

J-c.

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Tl 1, / 1 '

CAYLORD

miNTEDIN U.S.A.

HDlUll

Ti+2 Taylor, Henry Charles

1919

Agricultural economics

Hill nil II

12

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