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downwards as upwards in the next score of years or so, the economic arguments in favor of tenancy are exceedingly strong if not altogether convincing. (1) Under such circumstances the farmer who insists upon holding the title to the land which he tills must either go deeply into debt, or understock his farm, or both. To underequip the farm means poor agriculture; and a heavy debt hangs like a millstone around the neck of a farmer when land values are not on the increase. The tenant farmers of England have had a far more pleasant time since 1873 than the small landowning farmers whose holdings were encumbered with debt at that time. (2) The ownership of land throws upon the farmer all the responsibilities of the speculative entrepreneur, and other things being equal — if they can ever be regarded as equal it is desirable for the man of small means to avoid these responsibilities. The tenant system offers a means of insurance against some of these risks. (3) Such insurance becomes all the more advantageous and encumbered ownership all the more disadvantageous because of the well-known fact that land yields a net return, year by year, lower than almost any other form of property. Part of this is due to the social prestige of landownership and part to the fact that over very long periods the small annual profit on land is likely to be compensated for by an increase in the selling value of the land. Under such circumstances landownership is partly a luxury and partly a method of saving, usually for the descendants and heirs of the saver. Both factors conspire to make land a poor investment for the man of small means. He cannot afford luxuries, on the one hand, and he must find a business calling, on the other hand, that yields him a quick return. (4) And finally, it must be noted that the question of tenancy is not like the labor problem which has developed in the factory industries. The tenant is not a wage earner. He may be as independent as the manufacturer who hires the land, buildings, and possibly the machinery with which he works. The problem of tenancy, therefore, has no necessary relationship to the problem created by the existence of a class of permanent wage earners. The small entrepreneur still holds the field in agriculture, all over

the world. The question is simply whether he shall hire his plant or own it.

Notwithstanding the fact that tenant farming may go hand in hand, as it does in England, with good farming, and notwithstanding the desirability of reducing the speculative risks of an industry which is at best much too uncertain, the problem can never be settled on economic grounds alone; and if we add to the economic virtues of ownership its social and moral advantages, the final verdict must be rendered against tenancy. Ownership not only spurs the zeal of the farmer, dignifies his occupation, and inculcates a love of the soil which nothing else inspires in so great a degree, but it gives the farmer a stake in the political game, steadies him, and thus improves his citizenship. It is perfectly plain that ownership cannot be enforced upon a people that are not prepared for it. And it is equally obvious that the virtues which go with ownership may and often do degenerate into vices: the peasant proprietor's love of the soil occasionally becomes land worship, his thrift avarice, his conservatism blind fear, and his industry cruel, — he drives himself and wife and children at a pace that would put the sweater to shame.

But we are not advocating the extension of landownership through state aid. We simply call attention to the desirability of fostering those qualities which lead to the diffusion of ownership and are in turn strengthened by ownership; and we maintain that the American people at present are in no danger of excessive thrift or of the sordid materialism of peasant proprietorship at its worst. The tendencies and the dangers are almost all in the opposite direction. If, in the next fifty years, the farmers of the Middle West become predominantly tenants, it will not be because tenancy is economically and socially superior to ownership, but because the farmers of that district have not had the thrift to save and the ability to adapt themselves to more intensive agriculture. And the step will be backward, not forward. The popular instinct which in this country causes an increase of tenancy to be regarded with distrust is a sound instinct.

A minor disadvantage of tenancy is found in the fact that tenancy, when it becomes predominant, raises difficulties that can only be met by constant State interference. Short leases, with no indemnification to the tenant for the improvements which he has made, lead to rack-renting, exhaustion of the soil, and class hatred between landlords and tenants. Long leases, on the other hand, afford insufficient protection to the landlord; because when prices are high the tenant thrives and pays his rent promptly, but when prices fall rents go unpaid and the landlord has no real redress. In England the situation has been met by a system of short-time leases together with compensation to the tenant a legal obligation which the landlord cannot escape by "contracting out" - for any improvement made by the tenant whose value he has not exhausted. Neither party can abrogate a lease without a year's notice, although by mutual consent this may be reduced to six months. This system permits rentals to be adjusted frequently as prices change, rules out excessive competition, protects the landlord, and warrants the tenant in making any improvement required by good farming, since he knows that, if the landlord orders him out, he can collect on his departure the actual value of improvements made by him, whose benefits he has not had time to reap. In practice, the incoming tenant usually pays for the unexhausted improvements, and disputes are settled by arbitration. Under this system, "the relation between landlord and tenant is very satisfactorily arranged, the farmers are, as a rule, contented with the present system, and the fields of England prove that landownership on the part of farmers is not essential to good agriculture." 1

2

The work of the farmer is

Marketing of Farm Products. not finished until he has successfully sold his produce. Comparing the price received by the farmer with the retail price of the same produce, many critics have complained that the intermediate distributive process is wasteful and expensive. But careful investigation of the necessary costs of marketing does not indicate, on the whole, that our distributive system is so inefficient as to call for complete replacement. Improvement of present methods, and not revolution, seems to be the proper solution.

On the other hand, the marketing system is manifestly defective at many points. The farmer himself is responsible for some of the most costly defects. He frequently does not show sufficient care in producing the exact varieties of products most in

1 H. C. Taylor, The Decline of Landowning Farmers in England, p. 61.
2 The word "distributive" is used in the popular sense in this chapter.

demand, or in sorting and crating them for market after they have been produced. Goods are carelessly and dishonestly packed; there is sometimes a dearth of buyers and sometimes a monopolistic agreement among buyers at country points.

There is also room for improvement in the transport of such goods from the country buying point to the wholesale markets. Many railroads do not have a sufficient supply of refrigerator cars and lack facilities for handling perishable goods. A sufficient number of cars is frequently not provided just when they are most needed, there are many avoidable delays in transit, and frequently great difficulties in adjusting and paying claims for damages. Generally speaking also, railway tariffs favor through traffic at the expense of local traffic and are thus partly responsible for the concentration of manufactures and population in the large cities, preventing that diffusion of people throughout the country which would furnish a large number of small local markets.

Among the wholesale dealers, particularly the commission houses, there is also room for improvement. Fraud and sharp practices have been common in the past. Well-organized and convenient markets have not been provided, there has not been enough inspection or publicity, and where the goods are disposed of at auction collusive agreements have frequently existed between particular traders and the auction company itself.

There is no simple or general remedy for these conditions. In order to secure good country markets, coöperation among farmers has proved successful and probably offers the logical and best way of disposing of farm products at country points. Coöperation has also been used successfully in the marketing of perishable goods, and here the commission system has been partly replaced by associations of farmers or growers such as the California Fruit Growers and Shippers Association, which maintains auction rooms in eastern cities and sells its own products directly. The Southern California Fruit Exchange in a few years reduced the cost of marketing California fruits from 10 per cent to 3 per cent of the selling value.

The coöperative marketing association and the intermediate

trader who buys from the grower and sells to the retailer have in common two points of superiority over the commission system. They replace the lukewarm interest of an agent by the care and solicitude of an owner, and by shipping in large quantities they are in position to obtain much better rates from the railways, to say nothing of the other economies effected by handling goods on a large scale. The coöperative marketing associations have also effected great economies by carefully studying prices in the various markets and distributing their consignments so as to get the highest prices prevailing at the time. The independent trader, however, can select the most available market even more successfully than the coöperative association, and speaking generally we do not expect to see the commission house displaced by a coöperative machinery which transfers products direct from the farmer to the retailer. An intermediate mechanism is probably necessary. It is a logical and probably an economical manifestation of the division of labor. The actual purchaser or trader, however, will probably slowly displace the commission man; and there can be little doubt that the farmer has gained enormously by the substitution of the trader for the commission house in the marketing of the great staple products. The trader comes almost to the door of the farmer with constant bids for his grain. He is an expert in railway rates, is in constant telegraphic communication with the great markets of the world, and handles products in such large quantities as to reduce intermediate expenses to a minimum. Occasionally, as has sometimes been the case with the great line-elevator companies, he works in conjunction or in collusion with the railways, overbidding the small grain dealer, and forcing the railways to grant rebates on the large shipments which he commands. Even in this case, the farmer gains by the size and efficiency of the middleman (though the small dealer may suffer) because part of the economies effected - even those effected by discriminative railway rates will come to him in the long run. Cases of monopolistic oppression are theoretically possible when there is only one buyer and one railway who are in collusion, and the farmer is deprived — because of high rail

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