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growth of co-operation has been that the farmers have turned to it as an alternative to the Dakota Idea." In December, 1922, the State of North Dakota opened a State-owned-and-operated elevator and flour mill at a capital cost of £500,000, part of the State Industrial programme inaugurated by the Non-Partisan League.

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The Agricultural Labour Problem.-Already the permanent class of agricultural labour as we know it in England has disappeared in the States, and where it tends to reappear the recognised problem is how to convert the labourer into an independent farmer. In several States systematic efforts are being made with that purpose. Two such experiments, undertaken in connection with extension work by the State of California, merit some attention, being also one of the few American attempts to stop the drift of land-born people to the cities and bring Americans back to the land." Two settlements were started under special State legislation. Settlers were given 36 years to pay for farms. Communities were organised on a scale large enough to give the settlers the benefit of expert advice, and to enable them to co-operate in carrying out development and in the management of their business affairs afterwards. On land previously unoccupied, 355 families have established themselves. State assistance included the building of the main irrigation canals, and loans for farm development up to the amount of $3,000 to each settler.

The hired man is, however, still to be found on most farms of a large average acreage. He is usually young and unmarried, lives with the farmer's family, and works in the house or field as required. A migratory army of harvest labour makes its appearance with seasonal regularity when the crops are ready in the South, and moves North with the harvest. Details of wages of both these classes of labour have been given elsewhere.

AGRICULTURE AS A SOCIAL SERVICE.

Before considering the farmer's view of agriculture as a privileged occupation, which society in its own interest must protect against the economic laws to which other industries are subject, it is necessary to examine what kind of a life it is for which the American farmer is demanding this preferential treatment.

In 1913, in terms of dollars, the average income of the farmers of the United States for risk, labour and management, after allowing 5 per cent. on their investment, amounted to $444; in 1919 it was $1,446; in 1920 it was back to $465. Expressed in terms of purchasing power, however, the average farmer's income in the United States in 1913 was $444, in 1919 $833, and in 1920, $219. Figures given by Professor G. F. Warren for the State of New York show that a farmer with an invested capital of about £2,000 would make little more than £200 above the business expenses of the farm, as remuneration for his labour and that of the family, in addition to the use of the house and some farm products.

The return per acre to be expected by the American farmer varies greatly with locality and method of farming and costing. One systematic attempt to determine it may be quoted. The State experiment station of Kansas found, through studies covering seasons of all kinds and periods of both high and low prices, that high wheat yields, obtained by the use of most approved farm methods, give the farmer for his labour, after all expenses including rent were paid, a return of between £1 16s. and £2 an acre. When the system of management was such as to give only medium yields, the net return was between £1 and £1 5s. per acre. When the practices were such as to give yields below the average, the net return was only about 88. an acre, or less than the cost of ploughing the land.

The actual size of American farms must also be considered; it is not so great as reputed. Only in two States in the Union-the Dakotasis the average crop acreage more than 200 acres, and only in four other States does it exceed 100 acres.

A recent tour through farming territory of the Middle West, adjacent to the wheat lands, showed that the great majority employed in agriculture in that territory are farmers working farms of 40, 80 and 160 acres. The 40-acre farm provides a bare existence for the family, who are usually living in a house little better than a shed. On the 80-acre farms, housing is not much better; but housing improvement is not the farmer's first consideration; if he can save or borrow money he will buy better implements for his farming. The 160-acre farm, half of it in harvested crops, gives a hopeful prospect of prosperity, and the farmer either has, or is planning to acquire, besides better implements if required, a separator for the dairy, a washing machine, and a wireless receiving set both for pleasure and business purposes. No hired labour was employed on the farms visited, even in harvest time, the farmers helping each other in turn.

Farmers of this type are holding on to their farms during the present depression. The time to leave the farm, if at all, they say, is when farm business is booming, not when it is depressed; and they can see no reason for reducing their output because prices are low, but on the contrary try to increase it. In some cases the farmer has moved his family into the town, where he has obtained temporary employment, and left his farm in the charge of a neighbour for the time being; but this was exceptional. In one case, in Kansas, the farmer had left his 80 acres to be worked by his wife and two boys of 12 and 14, and was himself working in a coal mine for the necessary cash which the farm had not produced.

In demanding security for his occupation as the basis of the economic order, the farmer does not contemplate obtaining for himself any better conditions than those which have been indicated, conditions of hard labour and small returns. And his aspiration is not concerned with any political theory, nor is it the blind demand of an uneducated class; the Federal Department and his own agricultural university, directly and through their agents, have been throwing economic studies at him and he is using them in his own way to develop his own view of a stable economic order. One cannot talk with the Western farmer very long without realising the conflict between his present social conceptions and those of the City man. The farmer will tell you that industrial capitalism, which has had too much power in the past, must accommodate itself to whatever economic consequences will ensue from the stabilisation of agriculture.

As to how this is to be done he has not yet made up his mind. Until recently he thought that a tariff on agricultural products would give him what he wanted; experience has proved that to be illusory; his official economic advisers, even under a Republican administration, are convincing him that it could not be otherwise in a country which produces a surplus of foodstuffs. But the political power of the farm is growing, and its exponents are not likely to leave it unused. The tariff having failed him, the American farmer may insist upon trying some other form of subsidy, such as an export bounty on food produce, for he knows that he exports four or five hundred million bushels of grain every year to Europe, and that the price obtained for that grain is the determining element in the price of grain at home.

But, whatever economic experiments his political representatives may adopt, the revelation of his own ability to organise for business purposes is to-day uppermost in the American farmer's mind as a means of improving his position.

APPENDIX XI.

EXCERPTS FROM AN ARTICLE ON AGRICULTURAL DEVELOPMENT IN THE UNITED STATES DOWN TO 1910. By J. L. COULTER of the Division of Agriculture, U.S. Census Bureau, in the (Harvard) Quarterly Journal of Economics, November, 1912.

The expansion in Agriculture during the twentieth century will be marked in contrast to the expansion during the nineteenth century.

During the last century the great movement was to the West-the ordinary course was to locate a piece of land which required comparatively little labour to bring it into use, claim it, and convert it into a farm. The movement during the twentieth century will be along four distinct lines, each different from the movement of the nineteenth century. Briefly, the first of these will be to make farms out of land not now in farms by draining wet places, irrigating dry places, pulling stumps, moving stones, and the like. The second will be to improve the woodland and other unimproved land now in farms. The third will be to put into active and more constant use the land already reported as improved. This means the elimination of summer fallow and better utilization of other land reported as improved but not accounted for in the report of specific crops. The fourth will be the movement towards more intensive cultivation, better farm methods, and better organization of the farm work.

Now the four movements which I have indicated above as possible and, indeed, as necessary, if the food supply of the United States is to be maintained at its present level during the twentieth century, have already begun. But they are so much slower than the increase of population that agriculture has fallen far behind and is at the present time falling further and further behind.

When the old movement stopped, when the frontier had disappeared. when the people commenced to say to themselves that there was practically no more free land, they turned their attention more and more towards other activities. They turned to manufacturing, to transportation, to the trades, and to the professions. During the first ten years of the present century, the number of farms in the United States increased 10.9 per cent. This was clearly due to the splitting up of many large farms; since the amount of land in farms increased only 4.8 per cent. Further, this increase of 10 9 per cent. in the number of farms accounts very largely for the increased acreage of improved land in farms (15.4 per cent.) as also the increased acreage of land in crops (9.9 per cent.) In contrast to the increase in the number of farms, the increase in the rural population was 11.2 per cent. It would appear that the increase in the population of towns and villages with less than 2,500 inhabitants was not much greater than the increase in the number of farms. In contrast to this comparatively small increase in the number of farms and in the rural population, the increase in the urban population amounted to 34-8 per cent. With these facts before us, it is easy to see that agriculture had reached practically its limit in 1900 so far as following the old method of expansion was concerned, and also that the four movements to which I referred had not gotten well enough started to keep pace with the increase in population which is rapidly concentrating in cities.

The most important group of crops is the general group designated as "cereals." Considering this as a whole, we find that whereas there was an increase of only 1.7 per cent. in the number of bushels produced there was an increase of 79 8 per cent. in the value. Clearly the increase here is due almost entirely to the increase in the value per bushel, not to any material increase in production. Turning our attention now to individual cereals, we find that the increase in the quantity of wheat produced was 3.8 per cent. whereas the increase in the value was 77.8 per cent.

The hope has been, and I believe I may say that the belief has been, that agriculture was increasing rapidly, if not keeping pace with the increase of population. The people of the United States have been more than willing to supply the Department of Agriculture, state agricultural experiment stations, and a great variety of agricultural schools, colleges, and lecturers with all of the funds necessary, believing that all of this pointed towards a larger production of goods as a basis for the food,

beverage, and clothing supply of our people. Hundreds of millions of dollars have been expended for this purpose. It may seem that this expenditure has been in. vain, since the average production of agriculture has not increased. But without it, doubtless there would have been far-reaching decreases due to depreciation of the soil and failure of the farmers to maintain the average production secured when they first took charge. It is not my wish or purpose to discredit these agricultural agencies and institutions, which have been faithfully at work for over half a century. I believe thoroughly in the work which they are doing, and in the high purposes which they have in mind. But hitherto the proportion of the effort expended by these agencies which has reached the actual farmer is comparatively small, and the amount absorbed by the farmers and put into practice even smaller. In other words, the work up to the present time has largely been experimental, or learning by experiment what ought to be done. Principles have then been taught in institutions to people who in turn have in mind the teaching of people to teach still other people. Up to the present time almost all of the work has been teaching various persons to teach; it has not been teaching the farmers to produce. Though hundreds of millions of pages of literature have been distributed among farmers, only a small percentage has actually been read, and only a small percentage of that read has been put into practice. It has taken almost all, if not all, of the education which has reached the farmers to date, to prevent any downward movement in the quantity produced per acre of land actually cultivated.

Extracts from an article on

APPENDIX XII.

THE COURSE OF AGRICULTURAL INCOME DURING THE LAST
TWENTY-FIVE YEARS IN THE UNITED STATES.

BY DAVID FRIDAY, President of the Michigan Agricultural College, in the
American Economic Review-Supplement, March, 1923.

The man who has farmed continuously for the last fourteen years has enjoyed throughout that entire period an average price for his product which was, relative to the prices of all commodities, as favourable as that which existed in 1913. The man who sold his farm after reaping the increase in prices which occurred between 1914 and 1919 is fortunate indeed. Conversely, anyone who purchased his farm and equipment at the prices which prevailed in 1919 and 1920 must be in sore financial difficulty. The great mass of our farmers have neither sold nor bought farms; they have owned and operated the same farms throughout this entire period and for many years previous. These men have, on the average, enjoyed a more favourable price situation during the last decade and a half than they did during the ten years from 1900 to 1909. And those were conceded to be years of prosperity.

For the last two years the situation has been less favourable. This is due to a fundamental fact concerning agricultural production which arises out of the nature of that industry. Agriculture, unlike most industries, does not decrease its productive effort or its output when demand decreases and prices fall in times of general depression. The reason for his failure to reduce production is that the farmer is not only capitalist and entrepreneur, but the principal labourer of his enterprise as well. The additional labour is furnished for the most part by members of his own family. Because of this fact he is in no position to cut down costs by dismissing his labour, as is the manufacturer. He would lose more by reducing production on his individual farm than he could gain by the rise of prices. So agricultural output continues at the full during depression, while manufacturing and mining decline. In such a situation

it is quite natural that the prices of farm products should fall more than those of most other commodities.

All conclusions concerning agricultural income drawn from an examination of price data must be corrected for another factor. Income is the product of prices multiplied by output. The output per person engaged in agriculture has not remained stationary during the last quarter century. The statistics of Edmund Day and Walter Stewart show that agricultural output measured in physical units has been almost 40 per cent. higher on the average since 1914 than it was in 1900. The number of people who produce these commodities has not increased by more than 10 per cent. The output per person is, therefore, fully 25 per cent. higher than it was two decades ago. When this corrective factor is taken into consideration, it becomes clear that the income of the farmers of this country from 1914 to 1922 inclusive was approximately one-third greater per farmer, measured in terms of actual purchasing power, than it had been in the decade following 1900. It is this growth in income which is primarily responsible for the increase in the value of agricultural land and buildings from less than $17,000,000,000 in 1900 to over $66,000,000,000 in 1920. When this fact of increased productivity is taken into consideration, the purchasing power of the average farmer, even in 1922, is greater than it was in that earlier decade.

Undoubtedly there are many farmers whose experience does not square with the course of agricultural income here set forth. There has been much real distress in agriculture, and there is still a great deal of it...

Those who have suffered during recent years fall into several broad classes. First of all, there is the man, usually young, who bought land, live stock, and equipment at the unusual prices which prevailed from 1918 to 1920. He misjudged the course of prices, and he must pay the financial penalty, as must every business man who does likewise. But in every such case a corresponding gain has accrued to the farmer who sold the land and the live stock. This whole upward movement of prices was aided and accelerated by that large group of country bankers in our western States who are in the business of land speculation. One seldom meets a banker from that State where the increase in land values was largest who does not boast that he is a farmer. Inquiry usually discloses the fact that he merely owns several farms; he is not a farmer, but a land speculator. For him there is no use for bank credit more to the public interest than to devote it to mortgage loans on farms. In this manner the prices of agricultural land and buildings were supported at a preposterous level by the use of bank credit. The subsequent decline in prices, the inevitable aftermath of war, has left a crop of retired farmers and of bankrupt purchasers.

Another class which suffered loss consists of those who bought cattle, sheep, and hogs for feeding purposes in the early part of 1920. After feeding them with grain which might presumably have been sold at a high price to one's neighbours, who were likewise feeding animals purchased at big prices, the stock was often sold at no more than its original cost. ...

There is a certain amount of financial distress confined to specific geographical areas. Anyone who is acquainted with the situation in North and South Dakota and certain parts of Minnesota and Montana, with their one-crop system of agriculture and their frequent crop failures, must realise that this geographical area will normally be in a state of distress except when a succession of fairly favourable years lifts them out of the Slough of Despond. What many of these sections need is not so much price stabilisation or easier credit. They need diversified farming, or, in extreme cases, railroad tickets to agricultural sections where the chances of success are more promising.

And, finally, a large group-very large indeed-is in distress because of sheer inefficiency, because of an utter failure to profit by the advances which the application of science has brought to agriculture. Their costs of production are entirely too high..