Harvey Baum: A Study of the Agricultural Revolution [Reprint 2016 ed.] 9781512818055

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HARVEY BAUM

H A R V E Y BAUM A Study of the Agricultural Revolution BY

EDWARD

SHERWOOD

MEAD,

PH.D.

Professor of Finance University of Pennsylvania AND

BERNHARD

OSTROLENK,

PH.D.

Director of the National Farm School DoyUstovon, Pennsylvania 1918-1927

Philadelphia U N I V E R S I T Y OF P E N N S Y L V A N I A

PRESS

London HUMPHREY MILFORD : OXFORD UNIVERSITY 1928

PRESS

Copyright 1928 by the University of Pennsylvania Press

Printed in the United Stotel of

America

PREFACE

F

ROM 1912 to 1927 I was the proprietor of a farm

in Bucks County, Pennsylvania.

This farm was

purchased as a home for a growing family.

The

undertaking was, from this standpoint, successful. As a farm proposition, however, in spite of a substantial investment and efficient labor, measured by neighborhood standards, the enterprise left much to be desired.

In

fact, both during the period of owner's operation and of tenancy (eight years for the owner and seven years for the tenants) the farm enterprise showed a substantial loss, both to owner and tenants. In casting about for an explanation of this situation, which was general throughout the countryside, I came in contact with the operations of the National Farm School at Doylestown, Pennsylvania, which, for ten years, had been conducted by my present colleague, Dr. Bernhard Ostrolenk, as a combination agricultural and educational institution.

In connection with the school,

about 800 acres of land is maintained in a high state of cultivation, the work being done by the students.

A

heavy investment has been made in buildings, machinery and equipment, and improved livestock.

In

spite of the handicap of working with unskilled city

boys, the results obtained on these Farm School lands averaged more than double the average showing which could be made by the farmers of the neighborhood. The explanation of this remarkable success was found in the fact that the operations of the Farm School embodied in practice the principles of scientific agriculture, drawn from all available sources, and utilized with ample capital and skilled planning and supervision. The present volume on the agricultural revolution is an outgrowth of numerous conversations with Dr. Ostrolenk, as to the reasons for his conspicuous success compared with the conspicuous failures of his neighbors. It is due to Dr. Ostrolenk to credit him with the accumulation of the material which was drawn upon in the preparation of this book, together with his assistance in its compilation. I am glad to acknowledge my indebtedness to my colleagues, Dr. Karl Scholz and Dr. Lincoln W. Hall, of the Wharton School, as well as to my daughter, Dr. Margaret Mead, of the American Museum of Natural History, of New York, Ν. Y., for valuable criticisms and suggestions in the preparation of this book. E.

Philadelphia, June 12, 1928.

S.

MEAD.

CONTENTS CHAPTER I

II

A S U C C E S S F U L FARMER

PAGE 9

T H E P L I G H T O F T H E AMERICAN FARMER

17

III

T H E A V E R A G E FARMER AND T H E BUSINESS FARMER

25

IV

U N I T COSTS I N A G R I C U L T U R E

45

W H Y FARM PRICES REMAIN LOW

66

T H E PARADOX O F S C I E N T I F I C A G R I C U L T U R E

92

V

VI

VII

VIII

IX

P O L I T I C A L AND C O - O P E R A T I V E FARM R E L I E F

ΙΟΙ

T H E COST O F FARM R E L I E F

124

T H E F U T I L I T Y O F FARM R E L I E F

I39

CHAPTER I

A SUCCESSFUL

FARMER

N Hilltown, Bucks County, Pennsylvania, lives H a r vey Baum, a small farmer, fifty-eight years of age. H e owns a seventy-acre farm of average fertility, overlooking the Neshaminy Valley. This farm he bought fourteen years ago, making a small cash payment and carrying a large mortgage. H e raised a family of seven children, who toiled with him, helped him in caring for a few cows and poultry, growing the usual crops of corn, wheat, hay and potatoes. Potatoes were his cash crop. Because he was thrifty and industrious, and had small expense for the labor performed by his boys, he managed to get along. His yield of potatoes was close to the average of the State, running between 100 and 125 bushels to the acre. H e showed more intelligence than the average potato grower, however, by selling his crop direct to nearby groceries at a higher price than if he had sold it on the railroad siding. At this time Harvey Baum kept no books. From figures furnished by the Department of Agriculture-, we learn that farmers in his situation, growing his average of crops and securing his prices, made 4 p e r cent interest on capital invested, in addition to $300 to $500

I

9

HARVEY BAUM

annual return for their labor. Mr. Baum was close to the average. His principal cash crop, potatoes, before his conversion to the methods of scientific agriculture, cost him about $80 per acre to grow. H e sold his product for as high as $142 per acre in 1920, and as low as $81 in 1922. His profit, therefore, varied from nothing to $60 per acre. Taking his best profit in 1920, on his three acres of potatoes, he made $ 180. The years 1922 and 1923 were disastrous. His boys, by this time, had left the farm, one to work on the railroad, one in a factory, one in a garage, and the fourth in a bank, all well-paid occupations. Mr. Baum had secured average yields, a little better than average prices, and no profits. His labor had been without reward; the departure of his boys had made it necessary to hire help for harvesting, thus further decreasing his income; he was 54 years old; he had farmed all his life, and could show little as a reward for his labor. H e was a typical representative of his class, sober, industrious, a good farmer, a good citizen, a good neighbor, a good husband and father; he was typical of millions of other farmers, epitomizing in his experience and present situation the American farmer. In 1923, Mr. Baum attended the annual Farm Bureau meeting at Doylestown, the county seat. H e heard the usual addresses by the experts of Pennsylvania State College on the methods of profitable farming. There are few subjects on which there exists such a wealth of information as on farming, and there are few departments 10

A SUCCESSFUL FARMER

of industry on which valuable information is so completely ignored. Farmers listen to these lectures, but they make no practical application of the information presented. A point here or there, dramatically expressed, may make an impression, but the programs of profitable crop growing, outlined by the speakers, are not followed. In 1923, the address on potato growing was delivered by Professor E. L. Nixon, of State College. There was nothing unusual in his address. It has been delivered by speakers all over the potato-growing country. Professor Nixon outlined the requirements for growing a good potato crop—"good seed, proper soil, regular spraying, and potato mentality." Whether it was due to the clear presentation, or a change in his mental attitude, Mr. Baum was converted. A new vision was opened to him. H e came out of that meeting determined to give the program a trial. Once he had made up his mind, he began his preparations for the 1924 crop with thorough fidelity to directions. Mr. Baum selected a clover sod, plowed it in the fall, and manured it heavily during the winter. There was something of the missionary in his makeup, for he persuaded twelve of his neighbors to co-operate in dividing the cost of a carload of certified Michigan Russet potato seed, which cost $3.85 per bushel. This was nearly four times the wholesale price of potatoes at that time. In former years, he and his neighbors had taken their potato seed from their own bins. H e also persuaded his 11

HARVEY BAUM temporary associates to share the cost of a $220 potato sprayer. T h e following spring, he continued the preparation of his seed bed with unusual care; harrowed it several times, and planted his potatoes as directed, early in May, in rows thirty inches apart, and twelve inches between plantings. H e applied a home mixed fertilizer, containing 12 per cent phosphoric acid and 5 per cent potash, using 1500 pounds per acre, four times the amount generally considered liberal. In former years, he had purchased, in common with his neighbors, the synthetic fertilizers which are soldunder alluring names,such as"Potato Wonder" and "Big Yield," but whose contents fell short of requirements. Mr. Baum was no gambler. H e did not anticipate his good fortune. H e planted only his customary three acres. M r . Baum cultivated five times— the usual practice being one to three—which eradicated weeds and conserved the moisture in the soil, and he started spraying to protect his crop from bugs and blight, as soon as the plants showed themselves. H e continued this spraying weekly, until well into the summer, a total of nine sprayings. Many farmers never spray; three sprayings is considered by most growers as extravagant. T h e average progressive farmer is satisfied with two sprayings. M r . Baum's neighbors had deserted him early. H e had broken every canon of local potato lore. The neighborhood farmer usually manured in the spring, when outdoor work was pleasant, which exposed his crop to 12

A SUCCESSFUL FARMER the danger of the potato scab. H e disked and dragged the land after plowing, perhaps twice, but not five times as Mr. Baum did. Thorough cultivation reduces weed pests and increases yield. Mr. Baum's neighbors planted their potatoes sometime after corn planting, early in June, and not during the pressure of work in early May. Mr. Baum's early planting gave an opportunity for better root development and a more luxuriant growth. Three dollars and eighty-five cents a bushel for seed was an extravagance which Mr. Baum's associates regretted, when they reflected that they could have purchased their seed for less than $1.00 from their own bins. The average farmer bought the ready mixed fertilizer from the local vendor, instead of assembling and mixing raw phosphates and potash. Finally, although spraying was considered a good insurance against blight and insects, it seemed foolish to make a religious rite of it, to keep the growing leaves constantly covered with the home blended Bordeaux mixture. Undisturbed by scepticism and desertions, Mr. Baum followed directions. There was no radical change in his other farm operations. H e carried on these as usual, but concentrated his attention on his potato field. By the middle of July, he realized that something unusual was taking place. The green, shimmering, weedless, luxuriant potato patch contrasted strangely with the fields of his neighbors. His field began to attract attention. Neighbors stopped, visitors came, the country agent inquired 13

HARVEY BAUM what had happened. Mr. Baum continued his cultivation and spraying. When harvest came, his three acres gave 940 bushels of first class potatoes and 100 bushels additional of seconds. H e had averaged 346 bushels to the acre. The yields of his neighbors were also exceptional, but the largest was only 18 0 bushels, the average of the township being 150 bushels, less than half of Mr. Baum's extraordinary yield. The potato crop of 1924 was exceptionally good. Under the pressure of liberal supply, the price for the entire country dropped from a normal $1.00 in previous years to 62 cents. Mr. Baum's neighbors had spent $121 per acre, growing 150 bushels at 62 cents, receiving $93 per acre, a loss of $29 per acre. It was a calamitous year for the American potato grower. Mr. Baum now made up his potato account. His itemized cost per acre was as follows: Rent of land, based on $200 per acre valuation.. $10.00 Seed, 20 bushels, at $3.85 77.00 Fertilizer, 0-12-5 mixture at $17 per ton, 1500 lbs 12.75 Manure, 10 tons 20.00 Spraying nine times 3.65 Plowing, $3.00 per day, man labor; $1.50 per day horse 3.00 Disking, rolling, harrowing 4.50 Cultivating five times 5.25 Digging 2 acres per man, per machine per day. 4.00 Picking, per acre 17.00 $157.15 14

A SUCCESSFUL FARMER Machinery charge per acre—depreciation and interest on $710 Hauling Total Cost per Acre. Total Profit per Acre

$157.15 14.00 10.00 $181.15» 140.00

M r . Baum proceeded with the same thoroughness in producing his 1925 crop. The county agent made a careful determination of his results, and reports that he secured an average of 4 2 3 bushels on 51/2 acres, or a total of 2326.50 bushels. This time the potato market was with him. The crop over the country was short; the price rose; he sold his crop at an average of $2.82 per bushel, or a total of $ 6 5 6 0 . 7 3 , from which he deducted 1 It should be borne in mind that his costs had been extraordinarily heavy. The price for potato seed had been excessive for the year, the cost of tools was higher, since he only used them on three acres; they could have been used on twenty acres equally well, thus cutting his tool costs to onesixth the amount allowed. He had allowed himself interest on his land at S per cent, wages for himself, and his hired labor at >3.00 per day, and the cost of his horses as though he had to hire them, a cost which fully covered all charges of maintaining and feeding them. His $420 profit on his three acres was profit in the fullest sense of the word, the sum remaining as a reward for management after all expenses, including his own labor, had been paid. It was profit in the same sense that a dividend of a corporation is profit. This feat becomes the more significant when the small investment and acreage on which it is made are considered. Moreover it was made in a year when it is admitted that the potato prices were fully forty per cent below normal. With every factor of economic production against him, Mr. Baum grew potatoes at a cost of 52 cents per bushel. With a market the most disastrous in years, he made a clear profit, above all expenses, of $140 per acre. By a little arithmetic, it would be easy to figure what M r . Baum's income on ten or twenty acres would be, and the authors of this book would promptly be called book farmers, and their attention be called to the law of diminishing return, so dear to the hearts of economists. But Mr. Baum eliminated all theory from what might happen if he grew larger acreages.

15

HARVEY BAUM a cost of $974 for growing and marketing, yielding a profit of $5586.73, a larger profit in one year than all that he had made in his fourteen years of farming. In 1926, Mr. Baum grew eight acres of potatoes, harvested an average of 362 bushels to an acre, sold them at $2.10 per bushel, and made a net profit of $3785.60. In 1927, Mr. Baum grew 15 acres of potatoes, harvested 6140 bushels, or 409 bushels to the acre, but owing to a drop in the price obtained a gross return of $8200 with a profit of about $5000.

16

CHAPTER

THE

II

P L I G H T OF T H E A M E R I C A N

FARMER

'N 1926 American Agriculture was represented by the following figures: Gross value of farm production

$ 16,316,000,00c)1

E X P E N S E S AND CHARGES:

Deductions for products used for seed and waste. $4,236,000,000 Wages for hired labor.... 1,238,000,00ο2 Operating costs 2,987,000,000 Taxes on operator owned investment 654,000,000 Rent on property rented from non-operators.... 1,042,000,000 Interest on debts to nonoperators 750,000,000 Farmers' wages at $1500 per annum 9,750,000,000s Interest on operators' investment at 5 per cent. 1,590,600,00g4 $22,247,600,000 Total Expenses and Charges $22,247,600,000 Loss

$5,931,600.000

ι Crops and Markets, U.S.D.A., July, 1927, p. 2S2, Table 4. » Crops and Markets, U.S.D.A., July, 1927, p. 254, Table 10. ' Estimated by authors, 6,500,000 farmers at $1500 per annum. 4 Current value of operators' net investment 1926-27, of $31,812,000,000 (Crops and Markets, U.S.D.A., July, 1927, p. 252, Table 6) at 5 per cent is $1,590,600,000.

17

HARVEY BAUM The amount actually received for labor of farmer, his family, and profits on his investment is $5,409,000,000." This allows the average farmer in the United States® $853, or allowing him interest at 4 p e r cent, the total return for his labor, his supervision and planning, and the labor of his family, was $627 for the fiscal year 1926-1927. The foregoing figures are prepared as an ordinary business statement, charging the farm with a labor outlay for each farmer of $1500. Fifteen hundred dollars represents the wage of an unskilled laborer working 300 days a year at 50 cents an hour. Since the farmer works 365 days a year, $ 1500 a year gives him wages of about $4.11 per day. After charging the farm with these wages to himself, and $1,238,000,000 to hired labor, $2,987,000,000 for repairs, feed, fertilizer and replacements, $654,000,000 for taxes, and $750,000,000 interest on his borrowed money, and allowing him 5 per cent interest on his own investments of $1,590,600,000, he shows a loss on his year's operation of $5,931,000,000. If we readjust these figures in the way the accounting experts of the Department of Agriculture usually place them, and give the farmer his actual money income, instead of the very moderate wages allowed him on the above statement, the American farmer receives an average return of $790 a year for his own labor, the work of •Crops and Markets, U.S.D.A., July, 1927, p. 254, Table 10. Add "Consumed on farms for family living $2,531,000,000" with "Balance available for living expense 12,878,000,000." • Crops and Markets, U.S.D.A., July, 1927, p. 253, Table 8.

18

THE PLIGHT OF THE AMERICAN FARMER managing the farm, the labor of his family, and the return on his investment j the lowest wage paid in any major occupation; at least 30 per cent below any other wage group, $325 less than the amount he pays his own hired help. The American farmer is working for 15 per cent less than the amount paid the American farm hand. Not only is he working for this pittance, from which a section hand, a truck driver, or a stevedore would turn away in disgust, but he is employing in the business of agriculture, capital (belonging to himself, exclusive of the $17,000,000,000 which he has borrowed and on which he is paying interest) amounting to $36,800,000,000. On this capital he receives no return. T h e situation here presented is without parallel. H e r e is the leading American industry, largest in capital invested, in value of product, in importance to the general welfare; an industry recognized as the foundation of all other industries; which feeds and clothes the nation; which supplies a large number of essential raw materials, without whose orderly and continuous functioning our national life would be impossible; and yet this supremely important industry pays starvation wages to the men who run it, and gives them no return on the huge mass of capital which they employ. In the organic law of the United States, it is established as a principle of public policy that capital invested in public utilities, those "affected with a public interest," is entitled to "reasonable rates of return." Railway capital, for example, is entitled to 5% per cent profits. Capi19

HARVEY BAUM tal invested in other forms of public utilities—water, gas, telephone, electric light and power—is allowed, by decisions of Commissions and Courts, returns as high as seven, eight and nine per cent. T h e minimum rate of interest in most states, which is applied in the absence of some lower rate fixed by contract, is 6 per cent. T h e large industrials—manufacturing, mining and merchandising companies—although not secured as to their profits, as are utilities, by exclusive rights, expect and generally receive a return of over 10 per cent. Rooted in our fundamental law, backed up by the dictates of common sense, is the proposition that capital employed in the production of commodities necessary to the public welfare, is entitled to a reasonable return. Agriculture is the greatest, the most important, the most essential of all industries. Capital invested in agriculture, so far from receiving a standard rate of return, shows no return. T h e basis of the right of public utility companies to "reasonable returns" is the conviction that, without this return, money cannot be had for necessary extensions and improvements to their properties and services; for extension of gas mains,buildingof powerhouses andtransmission lines, and construction of subways, and that, if these additions to utility plants are not made, the public will suffer inconvenience and loss. Not because of any divine right of capital to a reasonable return, but because capital is indispensable to public comfort and since, without a return, capital will not be furnished, a return is guaranteed. The nature of the guarantee is a per20

T H E PLIGHT OF THE AMERICAN FARMER mission to these natural monopolies—power, light, transportation and water supply companies, to charge rates high enough to yield the standard return, supplemented by exclusive grants to operate in their particular fields, and with safeguards for the public against inferior service and extortionate rates. It is to be further considered that these guaranteed profits are allowed public utility corporations after liberal allowances for taxes, repairs and renewals, a reasonable wage to employees, and a reasonable salary to management. T h e farmer operates an industry whose product is vitally necessary, and there is no public control of the prices which he may charge. If he were able to advance wheat to $3.00 a bushel, and pork to $12.00 a hundred pounds, no one would stop him. But because the supplying of food stuffs is not a monopoly; because each one of the six million, five hundred thousand farmers follows his own wishes as to acreage, offering price, and time of sale, the industry with whose operations the public welfare is most vitally concerned, is not able to demand prices sufficient to yield any return on the investment of its owners. T h e importance of wages that permit a modern standard of living, a standard that includes a comfortable home, modern conveniences, a high school education for the children, some recreation and a moderate accumulation of savings, is universally accepted in the United States. T h e doctrine of a living wage controls public 21

HARVEY BAUM policy, in rate and price regulation, tariff and taxation, labor and welfare legislation. On the farms of the United States is a group of workers, admittedly the most important in the country, men who must have skill to perform their work, men who are not employed in gangs with a foreman, but where each for himself furnishes the driving force that sends him through his daily task} men whose thrift is invested in the industry in which they labor} and yet this great army of workers not only receives no reward for its investment, but sells its labor at a wage onehalf that of unskilled labor in manufacturing or mining. This situation, considered in reference to our National well-being, is significant and sinister. A farm population of twenty-seven millions, considered as a group, receives less than half the amount which is recognized as adequate to maintain a decent standard of living. The children of these farms are denied proper opportunities for education. These families are deprived of proper medical attendance, proper food and clothing. They have no opportunities for travel and recreation. They are forced to a sub-American standard of living, comparable to the living conditions from which our Italian and Polish immigrants have escaped to the larger opportunities of America. In their income and surroundings, our farm population consists of twenty-seven million American peasants. As they contrast their austere life and their hopeless future with the advantages and opportunities which are possessed by city dwellers, 22

T H E PLIGHT OF THE AMERICAN FARMER with the fortunes of their own relatives who have escaped to the city, they are discontented. On the American farm are materials for agrarian revolt such as are present nowhere else in the world, because in no other country are the contrasts between the living conditions of city and country population so extreme. It is unreasonable to expect that this great farming class should continue to live on a scale which is so much lower than that of the rest of the people, without demanding that its condition should be improved. While the farmer is slow to wrath, inarticulate in the expression of his grievances, and firmly attached, by inherited prejudices, to the institution of private property, there is a point of endurance beyond which he cannot be forced. There is a level of poverty at which, when the condition of his family declines so far, he will rebel, and when he revolts, through the large vote which the farmer controls, he may do serious damage. The farmers' representatives today are demanding that railway rates should be reduced at the expense of railway shareholders and railway labor. They are demanding that income and inheritance taxes paid by the rich should be increased. They are demanding reductions of the tariff. They are demanding large appropriations from the Federal Treasury, to be used to buy up farm surplus and maintain a higher level of farm prices. Taken together, the demands of the rural population represent a serious danger to the interests of other classes. It is no wonder that our politicians are fumbling anx23

HARVEY BAUM iously after some solution to the problem whose menacing significance to the property interests of the nation they are beginning to appreciate/ T Exception may be taken to the comparison between living conditions in country and city. The fanner is supposed to enjoy advantages almost priceless: abundance of pure air, pure water, fresh fruit, eggs and vegetables, and cheap fuel. The city dweller has none of these things. As a matter of fact, the farmer's advantages are limited to fresh air. His water supply is often contaminated. So-called modern conveniences, now the universal blessing of city life, are almost unknown in the country. Fruit and vegetables demand an amount of time and labor which the farmer cannot afford, at the time it must be expended. Eggs and chickens are usually sold to apply on the store bill. Cheap fuel is wood—and this only in the East—and wood is a very unsatisfactory fuel, requiring constant attention. Nothing can be more desolate and cheerless than a wood-heated house on a cold day. Farmers lack skilled medical attention and nursing service, which are almost free in the city. The rural school does not compare with the schools of cities and towns. Opportunities for social contact are few. In spite of the automobile, farm dwellers suffer from the curse of loneliness.

24

CHAPTER III

THE

AVERAGE

FARMER

AND T H E

BUSINESS

FARMER

HE figures which show the plight of the American farmer are average figures. They are the consolidated returns of the entire industry. This industry is carried on by six million, five hundred thousand independent business men. Each one of these men is supreme in his own little domain. H e "hires and fires," buys and sells, plans and plants, harvests, sprays and feeds, as seems good to him. No one can boss him, manage him, indicate to him in any compulsory fashion the road to high yield, good quality and good profits in his business. These six and a half million small business men, although their gross earnings foot up to a gigantic total, are individually insignificant. Their farms are small. Their employees do not equal their own number. The average size farm 1 which they cultivate is only 145 acres, and their average investment, including the value of land, buildings, machinery, livestock and current assets, and without deducting any money which they owe is $12,000.

T

Observers of business conditions agree that the small business man, operating with a limited equipment and 1

Statistical Abstract, 1925, U.S.D.C., p. 583.

25

HARVEY BAUM personally conducting all departments of his business, is fortunate to earn, in addition to a fair salary, any return on his investment. The chief reason for his poor success is himself; his ignorance of the requirements of his situation, his inability to keep abreast of the times, his unwillingness to accept suggestions for improvement. Because large business is able to hire superior men who do not labor under these disabilities, it is successful, and the small business man in every line, by the competition of the large concern, is being swept away. The growth of the large chain store enterprises, manufacturing consolidations, and utility holding companies, illustrate the fact, now generally accepted, that small business cannot succeed in competition with large business. In agriculture we are not, as yet, faced with competition between large and small industry. It is an open question whether the methods of large industry are applicable to agriculture. The interested attention which must be given to crops and animals, the necessity for close personal supervision of every detail of operation in order to obtain the best results, may always require in farming the "eye of the master," the interest of the owner. Big business may never occupy the field. W e are not, however, at this time, interested in this question. Our present concern is with the fact that in agriculture, a small minority of operators, of whom Harvey Baum is an example, make large profits, although the majority, whose operations are reflected in the composite statistics of agriculture show a colossal failure. In this contrast be26

AVERAGE AND BUSINESS FARMER tween the successful few and the unsuccessful many, we may hope to find a solution, even though a negative and so a depressing and immediately discouraging solution of the agricultural problem. Everyone familiar with any rural section knows a few farmers who are prosperous. The signs of their prosperity meet the eye. Their buildings are painted; their fences are in repair; their crops stand thick on the ground; their fields are clean; their livestock is wellcared for; they are known to their neighbors as prosperous, frequently as "lucky" farmers. Compared, however, to the total number of farmers, the successful farmers are few. Probably not more than one in eight can be described as prosperous. These men show in their experience and methods, that agriculture, on our present level of prices, is not a hopeless, decadent industry. I f only this business is carried on with proper equipment, and with the same energy and intelligence which wins success everywhere, the profits of agriculture are comparable to the profits of any other industry. The prosperous farmer, indeed, considering the scale of his operation, is far better off than the small storekeeper or mechanic. The Department of Agriculture, in 1926, made an investigation of the business of 15,000 farmers, and received detailed reports from 13,475 of this number. The average size of these farms was 315 acres; the average amount invested was $16,380, and the gross in27

HARVEY BAUM come to the farmer, including a return for his labor and profit on the capital which he had invested, was $ 1,113.2 The Department has prepared a classification of the returns from which we can establish the proposition that agriculture, when properly carried on, shows large profits. The result of this classification is shown in the accompanying chart and in Note 3. 1926 13,475 315 $16,308 1,113 Per cent 2.29 5.59 3.59 5.46 9.05 14.09 22.10 26.43 8.56 1.69 1.25

* Number of reports Size of farms, acres Value of farm property Net result per farm Proportion Obtaining >5,000 or more 3,000 to 4,999 2,500 to 2,999 2,000 to 2,499 1,500 to 1,999 1,000 to 1,499 500 to 999 Oto 499 0 to -499 -500 to -999 -1,000 or more

An examination of this table shows that 2.29 per cent of the total, or 308 farmers earn an income of $5,000 or morej 5.49 per cent earn from $3,000 to $5,000; and 3.59 per cent earn from $2,500 to $3,000. Out of the total number of 13,475 farms reporting, 1,547 showed a labor income of over $2,500. Nearly 12,000 showed a labor income of less than $2,500. We are not concerned at this point in our discussion with the 12,000 remaining majority of farmers com» Crops and Markets, U.S.D.A, July, 1927, p. 255. • Crops and Markets, U.S.D.A, July, 1927, p. 255, Table 12.

28

AVERAGE AND BUSINESS FARMER

S h a d e d p o r t i o n r e p r e s e n t s p o r t i o n of f a r m e r s r e c e i v i n g less t h a n $2,500 p e r a n n u m p e r f a r m . U n s h a d e d p o r t i o n receives o v e r $2,500 p e r a n n u m . D i v i s i o n of I n c o m e of 13,475 f a r m s .

29

HARVEY BAUM prised in the lowest income class. We know that their situation, at the present level of prices, is difficult, if not hopeless. They cannot earn living wages. Their capital is entirely barren of profit. We are here concerned, however, with the 1,500, or, for the entire country, a possible 747,500 of 6,500,000, 14.47 per cent of the total, who are successful. These 1,500 farmers are typical of the farmers who are earning a return on their investment and ample wages for their labor. These successful farmers are found in every section, in every branch of farming. They operate under the same controlling conditions that generally obtain. Their prices are higher than the prices obtained by their neighbors, only to the extent that the quality of their potatoes or apples or milk is superior and their marketing methods more efficient. Their land is the same. They receive the same amount of rain and sunshine. They are equally exposed to the impact of world conditions, as, for example, in the fluctuations of the world's wheat harvest. They pay the same freight rates, the same taxes, the same rates of interest on. borrowed money. In all respects save one, they are on the same plane as their disconsolate neighbors, but in that one respect lies the explanation of the farm problem and its solution. This relatively small number of farmers carry on their business with intelligence. They avail themselves of the plentiful supply of carefully tested information which is constantly pouring out from the experiment stations, available to everyone, as to the best 30

AVERAGE AND BUSINESS FARMER methods of agriculture, and they succeed because they use this information. The success of this minority depends upon two factors, first, their own superior methods, which enable them to get large yields from their acres, and large returns from their animals, and second, upon the fact which we shall have present occasion to discuss in greater detail, that eighty-six out of every hundred farmers, because they do not use these methods, produce small crops, and obtain from every department of their business poor returns, and because farm prices have been kept high enough to enable the majority to exist. The good farmer, in other words, prospers at the expense of his inefficient neighbor. H e succeeds because they fail. If all, or a majority, obtained yields of 300 bushels of potatoes per acre, or 30 bushels of wheat, or 75 bushels of corn, it would be impossible to maintain even the moderate prices which farmers now receive. Prices would be seriously depressed and profits, no matter how great the crop yields might be—and in fact, because of these high yields—could not be made. As the situation stands, however, the small minority of farmers, by efficient management, obtain yields which show them substantial profits over their costs of production, while the majority labor along on the imminent brink of ruin. The importance of this conclusion is our reason for presenting in detail, the contrast between good and bad farming, between the methods of the business farmer, and the methods of the average farmer. 31

HARVEY BAUM

While the development of the industrial arts accrues to the benefit of society as a whole, and is profitable to those who promptly adjust themselves to the new methods, this development brings suffering to those unable to take advantage of the changed conditions. When the power loom was first introduced into England, there was a large group which, because of tradition, location or inheritance, continued their work with the hand looms, while the new factories were pouring their products into the markets. The result was decreasing prices for the product, a gain for society, but starvation wages for those who continued with hand looms. Professor Edward P. Cheyney, in his "Industrial History of England" speaking of this period, observes "There was no doubt of England's wealth and progress —she stood before the world as the most prominent and successful nation in all material respects. Yet a closer examination into her internal conditions shows much that was deeply unsatisfactory. The period of transition from domestic to factory system of industry was one of unrelieved misery to the great masses of those who were wedded to the old way, who had neither the capital, the enterprise, nor the physical nor mental adaptability to attach themselves to the new. The hand loom weavers kept up a hopeless struggle in the garrets and cellars of the factory towns, while their wages were sinking lower and lower, until finally the whole generation died out." An agricultural revolution is in progress in the United States, from which many thousands of farmers have 32

AVERAGE AND BUSINESS FARMER reaped large profits, yet our examination of the industry has shown a deplorable situation among the vast majority of those engaged in agriculture. There is suffering and misery for those who are wedded to the old ways. There is over-production at high unit cost. T h e industrial revolution had its genesis in the Napoleonic wars of 1796-1815. T h e agricultural revolution received its main impetus during the W o r l d W a r . No series of laws could stay the progress of the industrial revolution. It is doubtful whether the agricultural revolution can be hampered by law. The exploitation and development of land had been the chief means of increasing crop production prior to 1890. T h e revolution in farm machinery which accompanied the Civil W a r was mainly confined to harvesting machinery. Beyond this, there was little improvement in agricultural practice. Soil analyses, seed selection, improved livestock, spraying, scientific feeding, were to come later. Aside from a few machines, farming was carried on as it was in the middle ages.4 By 1890, the total value of all farm implements in the United States was still less than one-half billion dollars. It had risen to $750,000,000 by 1900, and by 1910, it had mounted to one and a quarter billion dollars, a slow rate of growth corresponding to the increase of acreage. By 1920, however, the value of farm implements had more than doubled, reaching a figure of more than three and a half billion. From an investment of 76 cents 4

Statistical Abstract, 1925, U.S.D.C., p. 584.

33

HARVEY BAUM per acre for machinery in 1890, the amount rose to $3.76 per acre in 1920. The introduction of the tractor is the most conspicuous illustration of this mechanical revolution. There were few tractors on farms in 1910. In 1920,5 229,332 farms reported tractors, and in 1925, that number,had been doubled. More important now than the increasing investment in machinery were the new forces that came into operation as a result of agricultural education. Beginning on a large scale about,the end of the century, agricultural colleges began to turn out large numbers of trained men whose plans led back to the farm. Hundreds of agricultural high schools were supplementing this education, and both were doing effective extension work among the older generation of farmers. But the new farmers resulting from this training probably came into most effective leadership on the farms of America in the years immediately preceding the World War. Unit costs of production were a vital issue with these men. They studied the needs of markets and adjusted their production in accordance with those needs. They were able to interpret market reports. They had scant patience with individualistic traditions of agriculture, and were willing to merge their business with the commodity co-operative organizations that were rapidly getting a foothold. Above all, these business farmers followed the methods of the new agriculture in soil preparation, seed selection, spraying and cultivation, and proper selection of live6

Statistical Abstract, 192S, U.S.D.C., p. 602.

34

AVERAGE A N D BUSINESS FARMER

stock. This group dominates the silent revolution that is going on in agriculture. Its members, even at present prices, produce at low cost and make profits. While they may not object to government fixing of prices or the various government subsidies proposed, they do not demand assistance. They are doing quite well without it. As the number of these efficient farmers increases, by increasing production and depressing prices, they are bound to bring greater hardships on the farmers who have been unable to change to a business basis. A few contrasts between the methods of business and "average" farming are illuminating. An important feature of successful farm management is the provision for steady, profitable employment of labor, both hired labor and the labor of the farmer himself. It is one of the largest items in the cost of production, a cost which has greatly increased since the World War. Labor on the average farm is wasteful and expensive. The ordinary grain and corn farm demands an excessive amount of labor in the spring, for preparing the land, and for seeding. There follows a dull period, during the first part of the summer, when labor is not fully employed. A large amount of labor is needed for the harvest, after which the demand again declines. A full supply of farm labor during the spring means idle labor in May and June, and in the fall and winter. Such labor is very expensive if engaged for the year, even at low monthly wages, especially since farm wages have doubled in the past seven years under the influence of high wages paid in 35

HARVEY BAUM other industries. Seasonal labor is expensive when paid by the day, and is frequently not available. A group of farm laborers will not remain in a neighborhood where its members, for nearly half the year, lack employment. There is an itinerant harvest labor group that moves from South to North with the ripening of the grain, but it is usually not available for early spring work. The lack of labor is largely responsible for the slipshod methods of farming pursued in the important work of preparing land for planting. The business farmer on the other hand plans his farm operations to employ his labor steadily and profitably throughout the year, supplementing it occasionally during the harvest period. H e so plans his crop succession that operations for planting and harvesting follow each other. H e avoids the error by which the work piles up at certain periods. Thus, he plans his haying, his corn cultivation, the types of grain he grows, in such a way that, with reasonable weather, he has steady work from spring to fall. H e practices a crop rotation carefully worked out to suit the availability of his labor. The early spring is given over to preparing soil and seeding grain, followed by planting corn in the latter part of spring. Then comes corn cultivation with haying, interspersed with grain harvests, which fill the end of summer, finishing with fall plowing and corn harvest. The business farmer even adjusts the size of the fields and the amounts of his crops to conform to these requirements. If he finds that his plan of work permits an unemployed 36

AVERAGE AND BUSINESS FARMER period, he plans an extra crop to utilize that period. T h u s in Eastern Pennsylvania, between the grain and hay harvest, which ends August 15, and corn sileage harvest, which begins about September 10, there is an idle interval of three weeks. On well managed farms, in certain sections, provision is made to employ this time by planting small peach orchards whose harvest comes at that time. Five acres of peaches, without the employment of additional labor, may add $2,000 to $3,000 to the annual income of the farm. Other farmers have found a few acres of potatoes, sweet corn, or other special crop, profitable employment for this period. T o keep labor employed in the winter, livestock production supplements crop farming. Farmers in Eastern Pennsylvania keep dairy cows for this purpose. H e r e again a special adjustment is made to conserve spring and summer labor. It is the practice to breed the cows to calve in the fall, thus giving their maximum milk flow in fall and winter, bringing up their declining yield with the spring pasture, and allowing them to go dry in the summer. Cows so bred need less attention when the farmer is most occupied with out-door work, and demand the greatest attention in the fall and winter for milk production and care of calves, when out-door work is over, and the farmer is able'to care for his dairy. U n less their breeding is controlled, cows will breed to calve in the spring, and give the maximum milk flow during harvest. T h e large majority of cows in the United States are so bred today. T h e result is not only a loss to 37

HARVEY BAUM the farmer who finds himself pressed with additional cares at a time of the year when he is already burdened with outside work, but an over-production of milk in the spring, while in the fall, when the cows go dry, there is a scarcity. By the middle of October, milk consuming areas feel this scarcity, and prices rise sharply, only to fall again when milk becomes plentiful in the following spring. The planless farmer here loses in every way. H e has plenty of milk when the price is low, and none when the price is high; he has the care of cows and calves in spring and summer when he is too busy to do them justice, and his dairy is "down" in the winter when he has most time to care for it. The business farmer, with his cows freshening in the fall, not only has uniform employment for his labor, but his product comes to the market when it receives top prices. The dairy profits of the business farmer are measured not only by the differences in prices received for the total product, but also by the differences in cost. His costs are lower since his winter labor is cheaper. H e has opportunity to be more attentive, and hence observe the finer points in care and feeding, which results in increased production. The value of manure as an aid to crop production is not fully appreciated by the majority of American farmers. It is usually permitted to wash out and oxidize in the barnyard. A large percentage of its valuable elements are thus lost through neglect of very simple precautions in storing. The annual estimated loss of crop 38

AVERAGE A N D BUSINESS FARMER

producing elements through neglect of manure, reaches a quarter of a billion dollars. The simple device of a concave, concrete manure pit, costing about $50.00, with occasional leveling and packing, would prevent losses that would add hundreds of dollars in additional yields on any farm. Recent introduction of heavier tools, especially in connection with tractors, has measurably improved the preparation of the soil for seeding. Plowing is deeper and the methods of disking, harrowing, and rolling leave the seed bed in better shape. Even today, with tools that merely require adjustment for thorough soil preparation, there is a general lack of understanding of the value of even, deep plowing to increase crop and eradicate weeds. There is a gain wholly out of proportion to the differences in yield, and in labor to keep crop free from weeds, between a field thoroughly prepared, and one prepared in a slipshod way. Seed selection is another field in which remarkable progress has been made. The Pennsylvania Experiment Station has developed a variety of corn known as the Lancaster Sure Crop Corn. It is a corn well adapted to a short growing season, which will mature even before an early frost, and yields a maximum of return. It requires thirteen to fifteen ears of corn to plant an acre. A bushel will plant from five to seven acres. The cost is around two dollars a bushel, 20 cents an acre more. Such seed has yielded from five to twenty bushels more per acre than the native seed. The same soil, with the 39

HARVEY BAUM same preparation, cultivation, and the same harvesting costs will, by the use of seed costing twenty cents per acre more, yield three to fourteen dollars in additional value of product. Here is an investment which pays several hundred per cent. We might assume that every corn grower in the state is planting this corn. On the contrary, the amount of seed corn carefully selected and tested, that is planted, is very low. Not over ten per cent of the farmers test their seed corn by germinating grains from each ear before planting, to say nothing of buying proven seed. The usual process is to select ears from the bin, the standard being the hazy notion of the farmer of what constitutes a good ear. The corn may be too large to mature in the vicinity; the kernels may not be of a shape and uniformity to allow uniform planting; it may be dead from frost or late maturity; the subsequent yields, secured often with great labor and pains, will show all these deficiencies. The story of neglect of seed corn may be duplicated for wheat or any of the other grains. The differences in yield between home-grown seed potatoes and certain carefully selected varieties, are very great. The cost of proper seed is so small compared to the result secured, that the neglect of seed selection by ninety per cent of the farmers is hard to understand. The application of a few pounds of nitrogen to apple trees, or a few pounds of potash to potatoes, or a few pounds of phosphoric acid to corn, or a combination of 40

AVERAGE A N D BUSINESS F A R M E R fertilizing materials compounded according to advice secured free from the experiment station, will often give results out of proportion to the costs. The application of lime often makes the difference between a crop of clover hay or a crop of weeds. H e r e again is shown an amazing apathy of farmers toward the adoption of tested advice. There is no gamble in the use of fertilizers. T h e farmer is sure to get back what he puts in, and a small investment per acre is likely to bring large returns. At one time, spraying potatoes was regarded as insurance. Spraying, it was believed, prevented the growth of the blight, but the opinion also prevailed that there were years when he who sprays will get no better crop than he who does not spray, because it was not a "blight year," and none of the potatoes would be affected. T h e same argument was advanced for some of the fruit sprays, and most farmers still hold this view. These opinions, along with most of the grandfathers' maxims, have been discredited. There is no year in which apples will not suffer damage from the coddling moth unless timely and proper sprays have been given. Unless sprayed, peaches will show rot and fungus diseases. Without spraying, potatoes cannot be produced free of the blight, which punctures the leaves and reduces the growth of the crop. Spraying has ceased to be a mere insurance; it is as essential for crop production as cultivation. Without spraying, most crops, subject to these pests, will be reduced below their possible yield at least fifty per cent in quantity and more in quality. 41

HARVEY BAUM The same disregard for sound technique characterizes the production of animal products. The average farmer labors the whole season, and produces crops of hay and corn. These crops are stored in mow, silo and stack. Their production represents toil and investment. T h e crops are then fed to animals that will give no return for the feed consumed or for the labor and care spent on them. There are literally millions of cows that do not pay for their keep. They are known as >J3•».ο>> •^ gQas·υ25"Όο--ο J3 C ä 'Ε !Ε '.ζ "«Γ .? ."2 ."2 Η ίU Q Q 5Q>."2> Ή 3-3 § ε ä ä ä S S Ö S J J3 " »X* οο" q" Γ-Γ C «2 N ^ ^OloOs -κ cuCLiCLCUCXOKP. Ν1ΛΗ irf»— O v ^TcT 0\ PO ä υc2υ cν? υH |Π >1 JM >4 99 α. g g£ §

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