operation, and the incidental expenses pertaining to the ownership
of an automobile.
Conditions during 1910-5, unforeseen in the beginning of that period, favoured investors in agricultural land and in farm improvements. Values doubled and in some instances quadrupled during 1910-20. And many of those who borrowed to make such investments were enabled during 1915-20 to repay in what were called “thirty cent dollars,” because inflated prices made currency redeemable in gold seem worth less than before. Indeed many farmers thus repaid not only the capital they had borrowed, but also their small floating debts, so that when deflation began in the summer of 1920 they could face without fear the inevitable hard times, in which economic readjustments must be made.
Unfortunately not all farmers were safe. Some, because of local crop failures or other unavoidable circumstances—and others, more numerous, because they had yielded to the spending craze that swept the country in 1918 and 1919—found themselves in the summer of 1920 possessed of much property, both real and personal, some of which had been acquired at war-time prices, but heavily indebted and with credit exhausted. It was largely owing to their difficulties that during the decade the mortgaged indebtedness of farmers so largely increased.
The Internal-Combustion Engine as an Agricultural Factor.—In the decade ending with 1919 there was a great development of the internal-combustion engine and adaptation of it not only to the labour, but also to the health, comfort and enjoyment of the American farmer. (See articles: Internal-Combustion Engines; Tractors; and Motor Vehicles.) It came to be used directly in the automobile, truck, tractor, pumping plant, electric lighting plant; for cutting silage, grinding feed, shelling corn, threshing grain, sawing wood, operating spraying machines and fruit-grading machines; and for many other power purposes. The internal-combustion engine, generating current, also indirectly operates the washing machine, the electric iron, electric fans, the vacuum cleaner, electric heating pads, and (through small portable motors) serves for separating milk, churning, meat grinding and many other household purposes.
A general farm of 150 to 200 ac. growing fruit, a small dairy herd, some truck and general farm crops, was no longer considered well equipped unless it had all the facilities above mentioned and perhaps a milking machine also, if the dairy herd was large. Seven separate internal-combustion engines and an equal number of small electric motors probably would be needed for all these purposes. Such a plant undoubtedly would be a good investment if it were judiciously selected and bought at a fair price, provided always that (1) the farm and the system of farming were adapted to the use of a tractor, (2) that the farmer or some member of his family had the necessary mechanical skill to see that this equipment were properly operated and kept in repair, (3) that the capital of the farmer was sufficient to provide such a plant, and (4) that the income of the farm was sufficient to support such a plant without seriously interfering with the other requirements of the family and the farm business.
Seldom, if ever, are all the above-mentioned conditions fulfilled, but the measure in which they can be approximated will determine the advisability of the purchase of all the above-mentioned equipment, except the automobile. This must be considered apart, for, although any part of a full farm equipment may be misused, the extent to which the privileges conferred by the automobile may be abused is almost without limit. The choice of the make of automobile is a simple matter, so far as mechanical construction is concerned. The buyer gets about what he pays for in any standard make. It is the use to which the car is put rather than its quality which makes it advantageous or harmful. Whether it will contribute to the efficient handling of the farm is not the only question. If the car is used chiefly to take the family away from home and to encourage waste of time and money, then it is a poor investment.
Automotive Statistics, for 1921, published by the Motor List Company of Des Moines, Iowa, states that 3,243,051 automobiles are owned by farmers in the United States. As already mentioned, the increase in the mortgaged indebtedness of the farmer-owned farms of the United States from 1910 to 1920 was $2,286,538,362. If those 3,243,051 automobiles cost $705.06 each, which is a fair estimate, they would nearly equal in value the amount of the increase in mortgaged indebtedness between 1910 and 1920. This correlation is accidental; no one believes that those 3,243,051 automobiles were bought with money secured by executing mortgages aggregating $2,286,538,362 upon farm property. It is nevertheless probable that some of the purchase money would have been better used to pay off mortgages.
Farm Labour.—Mention has been made of the changes in farm wages during and since the World War. The changes in the price paid per day or per month, or in the index numbers, ought to, but do not, fully represent the changes in the costs of units of labour performed. Before the war most farm labourers were willing to give 10 hours of faithful work for a day's pay. The migration of labour during and after the war, by reason of enlistment or employment in cities or in large manufacturing plants, brought many farm labourers into contact with men who preach inadequate work as a duty. Many of the farm labourers were demoralized, and near large cities it became almost impossible to get an honest day's work at any price. For this reason although the figures in the present article indicate that the price of labour is about 50% more than before the war, the actual cost of labour is from two to three times as much as it was. This is a factor of great importance in all readjustments of the cost of farm products.
Farmers and Consumers.—There was little in the agricultural outlook in Dec. 1921 to encourage the farmers to plan even normal production in 1922, for corn was then selling at from 19 to 28 cents on the farms of North and South Dakota, Minnesota, Nebraska, Iowa, and Kansas; much of the 1920 crop remained unsold; and nearly all farm products were selling at much lower prices than in 1913, although both labour and the commodities the farmer had to buy were much higher. It was evident that farmers must retrench in every practicable way, hiring as little labour as possible; reducing the scale of farm operations as nearly as possible to the point where the farmer and his family could do all the work. They must burn corn or any other agricultural product for fuel, whenever the farm price of that product fell below the cost of equivalent coal, wood, gas, or oil—after adding to the price of such fuel, at the railway station or waterside, the cost of hauling the fuel to the farm and the agricultural products from the farm.
Much could be done toward reducing cash outlay by making each farm produce as much as possible of the food for the family. Much, also, might be accomplished by a system of community exchange. With good roads, automobiles and trucks every farm family should be provided with virtually all necessary food products without expenditure for products, freight or middleman's profit.
In respect of food this generation by reason of the ease and rapidity of communications and country road transportation is better able to develop community self-sufficiency than any previous generation. If there were a demand for home spinning and weaving machinery on a large scale, as there is on a small scale, for home knitting machines throughout the country, homespun clothing again would take its place on the farm. As has been said already, good roads, rural mail delivery, the telephone and the internal-combustion engine have removed practically all but one of the objectionable features which drove many from farm life. That objection is that farming does not yield as large a revenue in proportion to the capital invested and the intelligence, business ability, and enterprise possessed by the farmer, as do other business or professional careers. This must cease to be the case, or American farmers will not continue to produce food and clothing for the rest of the population.
There has been and will continue to be much discussion and agitation of this subject in the public press and on the floors of Congress. Some legislation had already been enacted by 1922 for the purpose of helping the farmer, and further measures were in prospect. It is doubtful whether any real headway can be made in solving the producers' problem until there is an actual and very severe shortage of food in the country. When this occurs, the farmers will obtain fair prices for their products, and may then be able to resume the operation of their farms at full capacity, and to take up the great agricultural problem of the future, which is the adaptation, adjustment and development of the fixed agricultural area of the United States, so that it may continue indefinitely to meet the constantly increasing demands of an increasing population.
- (E. C. C.)
III. Finance
The movement of public expenditures and receipts in the United States during the decade 1910-20 presents as its most important aspect an instructive contrast between conditions of peace and those of war and readjustment. When the decade opened, education was the largest expenditure, taking all divisions of Government into account; and the financial operations of the state and local Governments were twice as large as those of the national Government. Expenditures, taxes and public debt, it is true, had all been increasing for some time both in the aggregate and per capita; but the wealth (expressed in money) of the country had more than doubled between 1900 and 1912, the average rate of the general property tax had decreased between 1902 and 1912, the Federal debt per capita was decreasing, and Federal expenditures per capita were lower between 1910 and 1914 than in 1908 and 1909. There was, of course, constant protest against rising taxes and “extravagant public expenditures,” but the total tax burden was probably increasing less rapidly than wealth or income, and this was certainly true of Federal taxes. War changed all this. Education and the developmental functions yielded first place to military activities; Federal finance threw into the background state and city finance; reduction of the aggregate debt ceased and in less than two years of war the interest charge of the Federal Government alone had become greater than the entire cost of running the Federal
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