land consequent upon advancing land values; but tenancy is almost certain to increase as land values advance, unless the American farmer learns how to get a living from smaller holdings. And land values are increasing with almost startling rapidity. In the four years 1911-1915 the value of improved farm land in this country increased over 25 per cent. When land goes to $200 an acre, the average young farmer can neither save enough nor command enough credit to buy a farm of 160 acres and equip it properly. We shall have either more tenancy in the older sections of the country, as time passes, or smaller farms and a different type of agriculture. As stated above, the latter change would probably do more good than harm in the end. Our only fear is that the American farmer may not adjust himself to it rapidly enough.

And it is doubtful whether we ought to derive comfort from an increase in the proportion of owners as shown in Section B of Table II - when this increase results from an exodus of the agricultural population to the cities, which must itself be regarded with grave apprehension. Some writers explain away the increase of tenancy by dividing the agricultural class into three reservoirs, owners, tenants, and others (presumably laborers), and assure us that the swelling volume of the middle reservoir is due to an increasingly rapid flow from the labor reservoir to the tenant reservoir, rather than a decreasingly rapid flow from the tenant reservoir to the reservoir of owners. But what about the flow from the labor reservoir to non-agricultural occupations? And how much of the diminution of ownership in trade and manufactures should be charged to the same movement of population from the country to the city? It is a condition, not a theory, confronting us, and when we start to explain this condition, it is not permissible to halt midway in the explanation.

Farm Labor and Earnings. It is not difficult to understand the "exodus from the farm" when we consider the demands which farming makes on the industry and managerial skill of the farmer, the lure of city life, and the relatively small amount of cash which the farmer has at his command. The labor and drudgery of farm life are steadily being lightened, the income of the farmer has risen rapidly in late years, and as a recent writer tells us," it is probably true that the farming population of the United States, consisting as it does of more than thirty

million people, has a larger average income per family than any other equally homogeneous group of individuals of anything like the same size anywhere in the world." But when taxes and interest on indebtedness are paid the average farm family has little actual cash to spend on amusements, and a careful estimate made by the same writer for the year 1909 "shows that after all the expenses are paid the average family has $724 of net earnings, of which $322 was earned by the capital invested in the farm, and $402 by the labor of the farmer and his family. These $724 of net earnings were received by the family in the following manner: $303 in cash, $35 as fuel, $125 as rent, and $261 as food furnished by the farm." 1

There can be no doubt, however, about the improvement in the conditions and wages of farm labor. The movement of farm wages since the Civil War is described statistically in Table III, following. From this it appears that farm wages were higher in the last year for which statistics are available than ever before, if we properly discount the inflated currency in which wages were paid in 1866, 1869, and 1875. Moreover, the testimony is practically unanimous to the effect that the increased use of farm machinery has not only reduced the hours of labor, but has diversified and lightened the toil of the farm hand. Added to these evidences of increasing material comfort is the reassuring fact that the farm hand retains, in a large degree, his superior social position. The native white farm laborer usually eats at the same table with his employer, shares his social diversions, and in general mixes in the same social class on terms of approximate equality.

There is room, however, for much improvement. The hours of labor are long in the country, — 10 in winter, 12 in summer, 13 in harvest season, according to our latest information, and, except on a very small number of farms, there are two or three months in the year when the laborer cannot secure full work. "The able-bodied, industrious man desirous of employing his full vigor continuously finds a limitation in the average

1 E. A. Goldenweiser, "The Farmer's Income," The American Economic Review, vol. vi, pp. 46, 48.

TABLE III

WAGES OF FARM LABOR IN THE UNITED STATES FOR SPECIFIED YEARS

1866-1915

(Wages expressed in paper currency for the years 1866, 1869, 1875)

condition of farming. Seed time and harvest make busy their respective periods, but whenever the frost of winter or the drought of summer suspend the activity of vegetation, there will be an interval in the work of the cultivator." 2

1 See Crop Reporter, vol. xiv, No. 3, and Monthly Crop Report, vol. ii, No. 3. Broad averages are particularly unsatisfactory in dealing with the wages of farm labor, and the reader should regard this table not as an exact exhibit of money wages, but as a compendious method of describing a movement the details of which are beyond the scope of this treatise. For more adequate discussions, see Bulletin, No. 26, Miscellaneous Series, and Bureau of Statistics, Bulletin 99, U. S. Department of Agriculture.

2 J. H. Blodgett, "Wages of Farm Labor in the United States," p. 25. Bulletin, No. 26, Miscellaneous Series, U. S. Department of Agriculture, p. 25.

1

Furthermore, the best evidence obtainable supports the conclusion that while "skilled labor, owing to its contact with machinery and the influence of education, has attained increased efficiency," "unskilled and irregular labor has lost much of its former adaptability and value to the farm." Worst of all, there is rapidly developing a class of migratory or casual agricultural laborers who drift from city to country and back again, who have no ambition to establish themselves permanently upon the land, and yet teach the farmer to rely upon their assistance, and debase the real standard of living of the laborer who adopts farming as a serious occupation, and looks forward to the acquisition some day of a farm of his own.

Farm Indebtedness and Agricultural Credit. The favorite instrument by which land ownership is achieved in this country is the farm mortgage. As shown above, 33.6 per cent of the farms in this country were mortgaged in 1910, and this proportion had increased from 28.2 per cent in 1890. But this is not in itself alarming. The ratio of mortgage debt to farm value was only 27.3 per cent in 1910 as against 35.5 per cent in 1890, and the owner's average unencumbered equity per farm increased from $2200 in 1890 to $4574 in 1910. Moreover, the proportion of mortgaged farms in the latter year was higher in Iowa and Wisconsin than in any other states, although agriculture is particularly flourishing in these states. Statistics collected in 1890 indicate that nearly 65 per cent of mortgage indebtedness of farms is contracted for the purpose of buying the farms, from 15 to 20 per cent for stocking, equipping, draining, and improving farms, while probably not more than 5 or 6 per cent represents losses, household expenses, and "unproductive consumption." The farm mortgage accordingly is not necessarily a bad thing. It is "a mere business venture" and in this country has proved a successful venture in a surprisingly large proportion of cases.

If farms are operated more efficiently by their owners than by tenants or hired managers, it is obviously desirable to get the title to the farm into the hands of the farm operator as soon as 1 Final Report of the Industrial Commission, p. 92.

possible. For this purpose some use of credit is usually necessary. Credit also must usually be used to secure the proper amount of farm machinery, stock, and other equipment. Agriculture today has become a highly capitalized industry, employing in this country, it is estimated, about twice as much capital as the manufacturing or factory industries. And the indications are that the average farmer at present cannot secure, or at least. does not employ, enough circulating capital. Studies have been made of the earnings of farmers classified according to the amount of capital employed on each farm; and these indicate that, after due deduction for interest upon all capital employed, the remaining net income varies directly with the amount of capital employed, until the latter reaches $25,000 or $30,000. The New York studies indicate that farmers working with less than $5000 capital earn less than the ordinary farm hand in the same vicinity; and that in the districts covered, the average farmer cannot earn a fair return for his labor unless he has the use of from $10,000 to $20,000 worth of capital. The figures in question are possibly affected by the probable fact that it is the better class of farmers who are enabled to obtain the larger amount of loan capital. But whether this be the fact or not, it is obviously desirable that the farmer should be able to secure whatever amount of capital is necessary, at the lowest practicable cost.

At the present time credit facilities are not adequate in many rural districts. Recent statistics collected by the federal Department of Agriculture, for instance, show that the average rate for interest and commissions on farm mortgage loans exceeds 7 per cent in twenty-five states, and rises as high as 1O per cent in New Mexico, Montana, and Wyoming. This is the average rate, and there are presumably many instances of very much higher rates. The average commission which it is necessary to pay to the middleman or intermediary exceeds 2 per cent a year in certain districts of North Dakota, Oklahoma, and North Carolina. The average rate for interest and other costs on loans to farmers on personal security exceeds 10 per cent in twenty states and rises to 15.6 per cent in Oklahoma,