.iS-' [D/^l II HO 141 Lul"*" ""•«««/ Library ,,iJ),S"»Heconomrcs. §tatc ^r re- search work in the Department, which will he in line with their graduate work and which will therefore give an opportunity for valu- a^e service while advanci.ng their knowledge and earning funds with which to proceed with their graduate work, A considerable number sf graduate cf^urses, seminars and conferences are being given in thp. Department at the present time, for the purpose of increasing the efficiency of the workers in the various Tsureaus . With a view to directing specific attention to some of the chief problems involved, some of the methsds that have been worked out far attacking these problems and seme of the fields calling persistently f5r more workers, a series of short articles will fcl- lov7, each devoted to some iaportant phase of Agricultural Economics, 10 ORGANIZATION FOR :PRODUCTICW By G. Vt,^ ^ofater , Acting Chief, Office of Farm i\/Ianagement and Fann Economics, United States Department of Agriculture, The farmer is concerned first of all with the efficient production of crops and livestock. ; He is vitally interested also in markets and prices and must keep the marirets clearly in mind in organizing production. As" a producer, the farmer has to perform at least tv/o im- portant functions — first, that of dioosing profitable lines of production in which ne may emx^loy tne land, laoor, and capital over which he has control, and second, that of supplying effective management wnich refers to the association ana proper apportion- ment of the factors of production. The first step then in farm organisation is to decide what to produce. In some parts of the United States wheat is the leading crop^ In other pav-ts, corn, and in other important paurts-, cotton is the great staple. In such regions the task is not that of choosing a leading crop,. hut that of selecting other crops which can he associated vd.th the principal crops in order to effect a properly balanced and profitable fann organization. '. .- , _ In those tegions where miscellaneous faming has proved most profitable there is usually a greater opportunity to exercise judg- ment in tne selection of crops. Tne crops ..yhich may be grown in any region are, tff- course, determined, laxgely by the climate, soil, and typographical conditions. Sucxi conditions also influence the r^nef. nf production,, wMle distance i'ram market and the -orice v/hich 11 can be obtained are likewise basic factors- in determining v/hich of the various crops can bs produced at a profit. The farmer wiio wishes to make a large profit in the corn belt does not specialize in wheat, nor' would a farmer in the market gardening vicinity be likely to find jPield- crops profitable. As soon as the leading crop is decided upon, the question of the s-uqpplementary crops must be studied — v/hich crops wi31 com- bine well with the chosen leading crop re-la tive to their demand ■for land, capital, and time of the farmer. The problem is to select the most profitable crop and several nwa- competing crops which combined with this crop will prove most profitable for a ser- ies of years. If the crops chosen for the farm are those which are capable of being transformed into animal products, the farmer has an addition- al problem to solve. Will it be more profitable for him to market these crops in their native form, or will it be more advantageous to dispose of the crops by converting them into some live stock product? The solution of this question depends on several special/ cons idera- tions, as the relative prices of crops and live stock products , the distance from market, freight rates, and the trade channels and cus- toms. It is a problem of interest to a considerable portion of the iimerican famiers and one which deserves careful consideration. The exact method to be followed probably can bast be determined by the keeping of carefully planned accounts for a series of years and watching closely the geographical shifts in production, which take place from time to time. 12 If the American fanner, however, is to act intelligently in b-ailding up a profitable farm organization, he must not depend en- tirely upon the knowledge of danestic markets, but must have in- formation regarding foreign production. In the past the farmer has not been forced to interest himself to any great extent in world production statistics. Today however, the American farmer generally is producing, directly or indirectly , for the world mar- ket and for that reason the effectiveness of his farm organization will depend upon his knowledge of world market conditions and the promptness with which he puts such knowledge into practical use. For example, those farmers who are devoting their energies to the production of such products as wool, beef, wheat, cotton, rice^ and, to seme extent, dairy products, must of necessity be keenly interest- ed in foreign competition because the prices of these products are determined by the forces of supply and demand operating in the world market. The farmer is also in need of information regarding costs of producing products in the several competing regions of the world. This knowledge is essential for the purpose of determining to what extent it may be advisable to compete with foreign countries in any given line of production. Farm organization is not a permanent thing. It must be changed from time to time with changes in economic conditions. For this rea- son a knowledge of the potential foreign ccmp-etition, which under proper price stimulus may become effective, is necessary. That is to say, the farmer, in order to be able to adjust his organization frcm time to time, must do so with a full knowledge of the clianges which 13 may take place in the future regarding v^orld production. For ex- ample, the corn belt farmer at the present time is feeling keen com- petition fron South iimerica in respect to" the' production bf- corn and hogs. The question naturally arises, what, if anything, snould be done regarding' farm organization in the corn belt in order to meet such competition? To answer this question properly requires a knovvledge bf the potential corn area in South Jimerica and the rate at which it is likely to be developed. This, together with the study of the probable world needs for- corn, corn products, and hogs, should furnish a basis for judging what changes should be made in the farm organization in the corn belt« The changes which take place 'from time to time in the world's effective consumption are of interest to 'the fam.er in effecting a profitable farm organization. If for any reason the effective con- sumption of a country using our surpluses should be lowered, it is equivalent to over-production in its effect on prices. As an ex- ample of the need of this kind of • information, we may cite the world situation relative to' the cons-urjption of cotton. It appears that the world's cotton supply is about s-ufficient to meet the world's needs, which on the face of it would indicate that a satis- factory price would be paid for cotton. It is- not iiov/ever, the needs which effect the price, but actual cons-umption.- Tne world consump- tion of cotton is below normal because of the decrease in txie p-orciias- ing power of foreign countries. Tne inability of tne world to pur- chase the customary amounts of cotton .ms tended to keep do'/m the price of cotton below that which normally would be expected. lU: The second important ftinction of the farmer is to supply- effective management. The management must decide iipon the nature and amount- of Idnd, lafeor, and capital which shall be employed and the combination and proportion of the various factors of production. Probably the most importai:it thing under this func- tion is determining the size of the farm. On the size of the farm will depend, to a large extent, the amoiint and kind of labor and eq.uipment needed. The size of farm desirable in a field crop region will tend to be larger than that in an orchard or market garden region, and the size of field will vary accordingly. Ex- tensive farming makes certain demands and intensive farming makes different demands, on the time and eqiiipment at the disposal bf the farmer. In each case these demands must be carefully studied in order that the proper adjustment between the various factors' of production may be obtained. The proper size of farm has received thfe attention of agri- cultural writers since ancient times. Considerations and opinions vary greatly. Decisions regarding the size of farm must follow a careful balancing of all the factors involved, such as the use of labor and farm equipment, managerial ability of, the farmer, and the desirability from a social point of view. There is probably no one size of farm which will prove most profitable undpr all conditions. Aftdr determining the crops to be produced and the size of the farm, the question of equipment becomes pressing. Equipment includes fixed capital such as buildings, windmills, well§, and fences, as well as operating capital such as machinery, tools, live- stock, and supplies. How large and how elaborate should be the barn 15 on a given farm? How many silos can be operated profitably on a given n-umber of crops averaging certain sizes, for a given herd o so many head? How muoh shall the farmer depend upon horse power and when and under- what conditions is a, tractor profitable? Perhaps- the- most important consideration in farm organiza- tion has had to do with labor. How nnich of the actual work on the farm should be done' by the manager? Should he- plan to work all day in the fields and in the stable and hire only that part done which he can not accomplish himself ,• or will he find' it more profitable in dollars and cents- to -hire more men -for the manual labor and re- serve his own time andenergies for close supervision; planning^ and further study of his farm, farming methods and agricultural con- . ditions generally? Sometimes it is a question between usin^ the help of growing members of the family, or hirinj^ outsiders and hav- ing the sons free for school or other training. Or it is a question of hiring well-qualified men at high prices or inefficient labor at low wages; or one well-qualified man at a high wage, or two indif- ferent workers at a low rate. Then again there is the question of arranging for the distri- bution of labor among, supplementary or competing crops; in sunny weather and in rain;, in winter and in s\3mmer. The whole question of the treatment of labor, metliods of housing, and wage rates, challenges the most careful study. It is per- haps the great farm' problem of the future as the social conditions in this country and the world change with the passing decades. - Probably at no time in our history has there been greater opportunity for the student in the field of farm or^nization than 16 than there is today. The student who has to ti^apple with the present problems in farm organization must have a broad fundamental train- ing in the principles of economics, in order that he may understand and properly interpret world conditions as they affect agric-alt-ore. Students who have this training, together with practical knowledge of farm life and conditions, are in great demand. In the past it has been tiiDught that the study of general economics was not es- sential to the training of the farm economist, but it should be re- membered that fundamentally farming is not very different fran other forms of business organization. The farmer of today is confronted with practically the same conditions as producers in other lines of activity. For this reason the broad general principles underlying economic- activities and economic forces and conditions which are likely to affect agriculture should become the intellectual property of every student who expects to enter the field of scientific re- search in farm corganization. 18 COST OF PRODUCTION AN D DISTRIBUT IONS By Dr, H. E. Erd^aon, In Charge Cost of Prod-ucticn and Distribution Studies, U. S. Eapartirent of Agriculture. During the past few years there has been an insistent demand for more accurate and coniplete figures on costs of producing and distributing farm products. The demand for cost of production data has coire from those who have been under criticism for asking high prices for their prod- ucts, from those who have been compelled to pay such prices, and from those who have been unable to obtain adequate prices in the markets. Many producofrs have felt that vith a positive knowledge of costs they can ask and obtain "cost plus a reasonable profit", whatever that may mean. In the case of costs of distribution the denand for convincing figures •^[^ -ome largely from producers and consumers who have felt that distribu- tors were taking too wide margins and who believed that something might be done to reduce those margins if they were definitely known and proved to be tmreasonably wide, fi^uch of the discussion on this subject has gone astray oh two points.: (l) The nature of costs ahd their relation to profits, and (2) the use which can be made of siich data, once they are collected. In the first case much of the error has arisen out of a blind faith in averages. The demand has been for a specific figure representing the cost of pro- ducing or distributing some given crop, and this figure has been thought of as an average. As a matter of fact, there is a wide range of costs j and the average is but a point about A'^hich individual costs are scattered. In 1919, for example., the average cost of producing a bushel of spring 19 wheat on a considerable gro^ip of farms was $2.65- Sat the individ costs ranged from $1.10 to $lH.'+0 per Iju.shel . On about ^^$ of the acre- age stiadied wheat was produced at a cost eoual to or less than this average. All of these producers sold at approximately the same market price, which was slightly below the average cost of production. Hence many m^e profits, even though this was a year of exceptionally high costs. This illustrates the relation between costs and profits. Since prices, if we allow for q.uality and distance from market, are about the same for all producers, profit accrues to the low-cost man, whereas the high-cost man suffers loss, or makes a profit only when prices happen to be high with relation to costs. In the long run price.q mast be suffx- ciently high to keep in business enotlgh producers or distributors to supJJly the retiuired quantity of goods or services - In connection with tlie second point the discussion has gone astray largely because of an undue faith in price control, either directly or indirectly. Producers have felt, for example, that if costs were known they might ask and obtain "cost of production plus a fair profit"- Like- wise, cost of marketing data have been considered in connection with con- trol of prices cr margins. Gradually, however, producers and others are coming to see other very important uses of cost data. Four reasons may be given why cost data should be gathered by some impartial agency and \^y business men themselves should be vitally inter- ested in having them collected and made generally available :- 1. A knowledge of costs maices possible a more rapid and more acc-orate readjustment of business operations to meet economic changes. Accurate J. ■.-: 20 cost studies q,uickly show, a man which of his lines pay best, which pay least, which liad best he expanded, and, which dropped. His ability to compare his, costs with those of other men, mar^ of whom have lower costs, may lead him to try to decrease his. o\'vn cos.ts by adopting better methods. Hence a knowledge of costs looks toward efficiency. A general knowledge of costs will tend to eliminate a certain type of unfair competition - the kind which girises out of ignorance of costs and which, through price cutting, .of ten causes, considerable dis- turbance in business. A few years ago,, for exaaiple, a milk company in one of our mid-western cities was started by a group of bus.ine^s men vdio considered the field a fertile one for profits. The compaxiy, be- lieving that competitors' prices were too hi.^, began cutting to a degree which ultimately led it to face bankruptcy. In the meantime its competitors were unable to make any .profits. A knowledge of costs in som.e instances makes consumers more tolerant of such price increases as cost studies seem to justify. Numerous in- creases in milk prices in recent years have been accepted by the pub- lic with scarcely any cut in consumption, after careful investigation had shown that both producers ' and dealers' margins were reasonable in view of existing costs. Producers may, however, over-emphasize this point. The q,uality of the product and the service being the, same, con- sumers will buy where they can buy cheapest, and will not pay a higher price because a thing has cost much if it can be obtained for less. Cost studies will influence price to some extent by the greater promptness with vdaich production can be shifted to meet changed condi- Missing Page Missing Page 23 to their advantage to give cost data tc a government investigator - There are opportianities for men properly trained for this sort of work, in the Federal Department of Agric-ulture, in the various state colleges' and experiment stations, in state bureaus of markets, and prob- ably also in the various farmers* organizations, to say nothing of the almost limitless field in the business world. Tc do cost accounting i.'Tork requires more than merely a knowledge of bookkeeping. It requires a thorough knowledge of cost accounting and burden distribution, as well as a thcrou.^ grasp of economic principles underlying all business. Furthermore, cost accounting requires a keen business judgment often called, coimion sense, without which cost of pro- duction or cost of marketing figures and the analysis of then may be altogether misleading. 2U LAIJID PROBLEMS OF JiBE EEW ERA By L. C. Gray, Ph. D. Economist in Charge, Division of Land Economics, Office of Farm Management and Earm Economics, U. S, Department of Agricialture- Since the day when Abram and Lot fo-ond that ."the land was not able to bear them" and solved the difficulty by each going his separate way, the world has been dealing in one way and .another with the problems of land economics. In certain times and coTontries it has been foirnd possible to adopt the easy solution of the Biblical patriarchs, and we know that the great migrations of history have been due largely to the fact that men have foxmd it neciessary to separate themselves from their kindr§d in the over-crowded lands and to move on to roomier, areas. .. Until about the beginning of the present centxiry the Anerican people were continually solving their land problems by the simple method employed by Dickens' London "bobbie" in dealing with the poor - "moving on". Doubtless there are mai^ who still confidently believe that this method will continue to avail in the fut\are. There is reason to suspect that OTxr national lethargy with respect to the problems of the land may be due to the fact that for a generation we have been deceiving ourselves. Indeed, it is easy to be deceived by considering only some of the facts. It is true that in I9IQ less than half of our total area was in farmas, less than a fourth was improved land, and less than a sixth was In crops. Moreover, as one rides through the country one is struck by the large areas that appear to be either unused or very partia,lly used. Yet, para- doxical as it may appear, we have reached a stage in our development when good farm land has become scarce, and those who recognize the need for a 25 "broad national policy of land econony can, like Gladstone, "appeal to time" as a court sure eventual ly to support their claim. (The accompanying chart will enable us to view the situation in the perspective of a century - part of it in the past, part in the fu- ture.) The necessity of meeting the needs of our expanding population has resulted in an increase in the area of improved land in farms from 113,032,000 acres in I25O to 507,000,000 acres in I9 20. While there has been a great increase in the .total area of improved land in farms, the retiuirement per capita has varied irregularly. In I85O, the improved land per capita was M-. 9 acres. It increased to 5-7 in 1^90' "Since then it has decreased each decade to .approximately 5 acres in I92O —"'one of a number of indications of the increasing scarcity of fsurm land. The fact is that by far the larger part of the area of laiod not yet in farms can never be used for raising crops. Even that part of the natioiial . area which may some day be. employed for crops must be subdued" at heavy cost for drainagCj irrigation, clearifig, or iinJ)rovement of fer- tility. In 1950 we shall probably have. a pojnilation of 150,000,000 people- . If the same number of improved acres per capita is req^uired as in 1920, this means that we mast find somewhere in ou^'x^serve area an additional 2U3, 000, 000 acres capable of beixlg- made- into improved farfn land. As a matter of fact, we shall probably riot be able to "find so large an area capable of being inipro;ved-.at- -a cost which we can afford. 'Pro"bably we shall cut down. our exports o/'farm-'iaroductsv we may import "more '•anless our consumers are -filing, to pay, the ■.-price of a hi'#i tariff wall;" we shall 26 also use oiir farm land more intensively. There are already indications that these economies have been resorted to. In fact, if we do not in- crease the area of improved land per capita more rapidly in the next thirty years than it was increased from I9IO to I92O, we shall have added only about 33 million acres by 1950. and our improved acreage per capita will have declined to approximately U07. Ihatever the methods of adjustment, it is clear that they imply a kind of economics vshichWe have not. been accustomed to in this country - land economics - and, if you please, a type of economist not much in de- mand before - the land economi st . - A bird's-eye view of the broad field of land economics under the changed conditions of the new era shows many particular problems that will require solution. We shall have to select with great care the new areas of reserve land brought into use. We must see to it that the reserve acres not immediately required for crops. are devoted to other productive uses, such as forests and grazing. The opening up of new farm lands in- volves engineering and financial problems of great magnitude . The present methods by which new areas are opened to settlement are enormously waste- ful in money and in human lives. It may almost be said that failure is the rule; success, the exception. We mast have a national policy of settleqient. Then, there are the problems of land ownership and tenancy - problems which will reqiiire the highest wisdom of our nation if our rural life is to be kept sound and wholesome - a solid and safe foundation of national greatness. The organization of the land market is crude in the extreme. T can buy a bond or a thousand bushels of wheat in 10 seconds 27 ty the clbck, but to bviy a small tract of land freqiuently involves an tm- reasonable amount of time, expense, uncertainty, risk, and vexation. ar of this difficulty is due to uncertainties as to land valuation. We are only beginning to try to work out scientific methods for appraising land. We have had almost too many problems in America. We no longer jiamp to our feet and crane our necks when" someone point's out a pro'blem. Yet, I am inclined "to think that here and there a reaider will be stimu- lated to more than usual interest by the national" land problem as it looms before us in the year 1921, and perhaps may respond' to the challenge by undertaking the careful special preparation required for service in this field. 2S FEIC ES OF T£M PB0DUGT5 By Nat C. Murray, Chief Statistician, Bureau of Markets and Crop Estimates, U. S. Department of Agriculture. "Wl^r do most of the daily newspapers publish price liuotations and market conditions of farm products, like grain and cotton and country produce, "but rarely report products of general commerce and manufacture, like coal and chemicals and clothing?" This is a CLuestion freiiuently raised "but seldom ans'^red. A iie'>?apaper man might reply that prices and market conditions of farm products have nader ne'ws interest, but this would be a superficial reply. I can only conjecture the real economic reason. It is a matter of conmon observation that prices of some things change less freq.uently aM less wideiy than do prices of others. Prices for service, such as wages, car fare, freight rates, change less fre- quently than do prices of commodities. Eetail prices generally fluctuate less freq.uently than ^ifcolesale prices. Manufactured products fluctuate in price less than raw ma^terials. Eaw products of the mines fluctuate in price less than do raw prod\icts of agriculture. Prices of some agricul- tural products fluctuate less than others. We may conclude, then, that farm products are the more generally Quoted largely because their prices are more variable. Bat why are faim products so much more variable in market conditions and prices than other products? The ansv/er to this Question seems simple and can be made briefly. Supply or production of farm products is affected 29 largely by the character of the growing season, conditions beyond the control of man, and wMch cannot be forecast very far in advance. ^ en a farmer sows, he does not know vdiether he vdll have a failure or a i bunrper crop. The miner or manvifactijrer can more readily control or regulate his output. Producers of staple farm products are more numerous than those of most other products, thus widening the interest in their markets. The source of supply of farm products is more shifting than other products. Cur coal and iron come from the same' region with little variation one year after another- Our collars come from Troy year after year. But in one year Maine may have a big potato crop to market, and Michigan a shortage: the next year Michigan may have a big surplus and Marine a short- age. This constant shifting recaires a more extensive marketing system for farm products. On the demand side, also, farm products differ materially from other products; they are more perishable, more q,uickly consumed. The same egg or piece of bread and butter can be eaten but once and it is gone. . The same clothes may be worn daily for a year; the same- book may be read dozens of times by. various persons and perhaps fifty years hence. The same house may be occupied for centuries. The demand for farm products which are mostly food products, is uxxiversal. 'We tnast all eat, even the pauper, if he is to live. But we do not all need collars or knives or phonographs or automobiles. Hot only is the demand for farm products uni- versal but it is very inelastic, that is, the poor man demands almost as much as the millionaire and every one wants about so mach but very little 30 more, A mail accustomed to paying 50 cents for his dirjier would probably pay 'a~ dollar if necessary, rather than go without; hut having had one diiiner, might not give 10 cents for a second. Therefore, if production or, rather, supply of farm products exceeds the normal supply only moder- ately the demand for this excess diminishes rapidly, causing general de- pression of prices for the products. On the other hand, if supplies are only moderately below the normal supply the inelastic demand causes the bidding to high prices, for the products offered. As early as the seventh century, Gregory King, of England, reckoned ■that a defect of 10 per cent in the grain harvest vx)uld raise the price 30 per cent, a defect of 20 Tier cent raise the price 20 per cent, a defect of 30 per cent' raise the price 160 per cent, a defect of UO per cent raise the price .2S0 per cent and a defect of 50 per cent raise the price U50 per- cent. This so-called Gregory Kirag law of prices needs q,ual if i cation .under modern conditions, tut it exprer-ses the general ideas that prices of staple farm products vary more widely than do supplies, and more, than prices of other commodities. Most boards of trade or mercantile exchanges keep records of prices of various products in their markets. Some of these, as the Cincinnc.ti Chamber of Commerce, have available price da,ta for fifty years or more. The United States Department of Agrico-lture can furnish farm price aver- ages as of December 1 yearly since l^gC5 for live stock and staple products by States and for the United States. It can also give average prices to farmers, monthly, for many products from I9IO to date. Market prices usu- ally relate to specific grades, as Ho, 2 wheat, middling cotton, but grad- ing is usually done after the product leaves the farmers' hands; therefore Missing Page 32 By Dr. 0. C. Stine. Agricultural EconoJtrd.st, ?■ 5. Dept. of AgriCTaltTire A study of the history of agricultural organization, production, and prices reveals the operation of economic laws in rela.tion to agricul- ture. It helps us to understand such a crisis as we are nowr passing throu^ and to plan for making the proper readjustment. We have had such, crises tefcre. T^ars have ali.vays distiarhed the normal coiu-se.of things. Tt has al\'vays he en difficult to readjust after a war. We ought to be ahle to foresee and to prepare in advance for the solution of margr of the problems that arise out of such disturbances. To make the proper xeadjustment now vre need first to understand clearly the present .sitToation. We mast review the conditions of our cvn agricuLture and that of other countries. T^e must revie-.v the conditions of our markets, both foreign and domestic. Then ttirn on the light of history. What 7 fTfTT-TiTT: AT. GEO O af-PHY By Dr- 0. E. Baker, Agri cultural Economist, Office of Farm Management and Earm Economics, U, S. Department of Agriculture. Geography was defined by Webster as "the science of the earth and its life." But as science has advanced and scientific investiga- tion has become more intensive and specialized, the various fields of study formerly included in geography,- geodesy, physiography, meteor- ology, ecology, anthropology, etc.,- have been recognized as separate sciences, and geography has. become to a constantly increasing extent the study of the relations of haman soci sties to their physical en- vironments. Even this field is so vast that further division has be- come necessary', and there are now well recognized sciences of economic gsogra.phy, of social geography, and of political geography. Agricultural geography is primarily a branch of economic geo- graphy; but as it must investigate the influences of climate, soil, and other physical factors upon rural social life and conditions, it becomes a branch also of social geography; while the imposition of tariff duties and similar legal acts by rations or states compel it to consider the facts of political geography. Agricultural geography, in other words, studies those interrelationships bet^ween the physical con- ditions and the economic, social, and political situation which explain the distribution and development of agriculture. It is a broad field of study, whose principal purpose is to afford information that the leaders of American agriculture may find useful in directing national agricultural policy. It also aspires to serve its sister sciences in 37 the field of agric^xLt^u^al economics, namely, land economics, labor economics, farm finance, fam organi.zation, agric-olt^oral markets, and country life studies, by providing them with data and descriptions of the basic physical conditions and ir^luences in any area or situation being surveyed. Indeed, agricultural geography is not only a nexas between the natural and the social sciences, in their agricultural as- pects, but it even includes, of necessity, a part of each of these sciences. It is the synthesis of these sciences in their interrelation- ships. The follo'-ving diagram may help to make clearer this field of agricultu.ral geograpliy. Agricultural geography is, accordingly, a part of land economics. The section of Agricilt-'jral Geography of the Office of Farm J&nagement cooperates with the section of Land Economics in investigating the ex- tent and physical characteristics of the arable land of the United States, both present and potential. It is especially concerned with the use of land iinder different physical, conditions, - of arid larids for irrigation, semi-arid lands for dry-farming or pasture, drainable lands, cut-over lands, hilly lands, etc. Agricultural geography is concerned not only with the extent of the arable lands, but also with the intensity of their cultivation. Production in the United States is being increased at present mostly by the more intensive use of the land already in crops. Betrreen IQCQ a^d IQI3, according to the census sta-. ti sties now available, the acre&ge of farm land in the humid eastern half of the country (in ^'*iich over nine-tenths of our agricultural prod- ucts are raised) decreased 1? million acre*, and even the improved land 38 2 million eicres, whereas the area in crops increased 23 million acres, principally at the sacrifice of past-ore land. The trend has been to- ward the Ecore intensive utilization of the more fertile or favorably- located land and the less intensive utilization of the less fertile or favorably located land,- for forest in most cases. An article entitled "Arable Land in the United States" which appeared in the I913 Yearbook of the Department of AgricT-ilture, illustrates this aspect of the work of the section of Agricultural Geography. Agricultural Geography is similarly a part of Labor Economics. Farm labor differs fxsm factory labor- in that it mast be performed at a certain season of the year. The labor req,uirements vary also with the crop or system of farming, and these vary with climatic and soil conditions. The demand for farm labor in different parts of the coun- try depends in a large measure, therefore, upon the geographic condi- tions, and can be forecast orJ-y upon. the ba-.sis of a kxicwl&dge of these conditions. An article entitled "Graphic Stanmary of Seasonal Work on Farm Crops", which appeared in the I917 Yearbook, illustrates this as- pect of the work of the section of Agricultui-al Geography. Likewise Agricultural Geography is a part of Farm Organization. The crops grovm, the caltural pra&tices and rotations used, the kind and amount of livestock kept, in brief, the farm practices and systems of farming are largely determined by the geographic conditions. The section of Agricultural Geography stands ready to supply the section of Farm Organization with data on the geographic conditions in different parts of the country, in order that areas selected for survey may pos- 39 A a'^A it endeavors sess geographic unity or diversity, as may be requarea, ana to assist in interpreting the influences of these geographic conditions upon the farm practices and systems of fanning, hoth those existmga present and those that may he proposed. An illustration of this aspect of the geographic ^TOrk may be found in an article published in the 1919 Yearbook entitled "Systems of Farming in the Cotton Belt. The marketing and consvimption of agricultural products have geo- graphic aspects, as well as production. Agricultural Geography is, therefore, a part of Marketing Investigations. The natural resources and potential as well as present agricultural production of foreign countries is of significance to American agriculture because of the com- petition of these products of foreign countri«s with our own, not only in foreign markets, btit even within the United States. The "Geography of the World's Agriculture," a publication issued in 1912, and the "Cotton" section of the Atlas of American Agriculture, illustrate this aspect of the work of the geographic section. Lastly, AgricultToral Geography is a part of Country Life Studies. America is a land of immigrants; and the geographic distribution of the Scandinavians, Germans, or other northern Europeans, the Japanese, the Negroes, and the Mexicans, has as mach agricultural significance, per- haps, as the distribution of the different kinds of soil or zones of climate-. Likewise, there are vast differences between various portions of the United States in the kind and degree of normal educational at- tainments, of religious progress, and of social organization. Agricul- tural Geography cooperates with Country Life Studies in assembling and mapping data dealing with these geographic differences in our rvxal population. Such a study is to "be fo-und in the "Eiural Population" section of the Atlas of American Agriculture. AgTicuitiXL-al G-eography. therefore, is an intricate field of study, and offers to students in the agriciiitural colleges a broad op- portunity for research. To be fully prepared for this work a man should have farm experience, a knowledge of agricultural theory, such 4s an agricultural college course affords, have takren courses in com- mercial geography, climatology, and physiography, with some field study, have worked on the soil s^xrvey for at least a season, and should. possess a firm foundation in both general and agricultural economics. To the few who are likely to undertake this rigorous and prolonged preparation, the section of Agricultural Geography hopes to be able- to afford opportunity to work under the iaiiasi;ally favorable conditions and with the nation-wide facilities which the United States Department of Agriculture provides. By V. N. Vplgren, In Charge Farm Financial Relations, Office of Farm Management and Farm Economics, United States Department of ' ■■ Agriculture. Credit is essential to most farm development. In order to make his labor profitable, the farmer in many instarices needs more land, more buildings, more live stock or more equipment thauihe is able to purchase with his accumulated savings. To secure these added aids in production may mean the difference between failore arid success. Not having the cash with which to buy, his only method of obtaining what he needs is by means of credit. Farmers need two kinds of credit,, long-time or mortgage credit and short-time or personal credit. Both fields. are receiving increasing atten- tion by the Federal Department of Agriculture, The distinction between these two kinds of credit rests on the nature of the security and en the period of time involved. Long-time or mortgage credit is based largely upon land and improvements which have practically been made a part of the land. Short-time or personal credit rests to a far greater extent upon the character, ha-bits, and productive ability of the individual. Such, tangible security as the farmer can offer for personal credit is not of the sane substantial nature as is the security for long-time credit, but can easily be removed or be lost through fire, disease or accident. Mortgage credit, of course, carjnot be extended to any one unless he has real estate to pledge as security. Personal credit, however, is frequently extended to the man with little or no tangible seciurity, but with the personal qxialities of honesty, energy and ability. In fact, the development of a -given coiimunity -depends in no small degree/ on the extent to which the capital available, fbrv^ersonal loans is put into the hands of the individuals viho will make the most effective use of it. Often it is' the man' with' very meager equipment and facilities whose productivity is most increased by a given amount of added equipment. If the local hanker is interested in the development of his community from a social standpoint as well as ftrom a knowledge that his own business can develop only as a result of the economic advancement of the community in which he operates, he will make it his special business to see that the capital or credit that he controls reaches those whose productive capacity will be most increased by the credit he extends. The lack of material security for personal credit may be offset to a certain extent by faithf-ul adherence to sound business practices based on principles of honesty and frankness in dealing with others. Many a farmer and tenant lacks the credit standing that he should command not because he is actually dishonest, but merely because he is careless in meeting his Wsiness obligations. If he finds himself unable to repay a Iban at the exact time it falls due or if he is busy with other matters, he is inclined to wait until he is ready to pay without even taking the trouble to explain the situation to his creditor. In other instances failure to secure a loan or to have an old loan extended may be due to a refusal or neglect on the part of the farmer to give full and frank infor- mation covering his existing financial status. If farmers would more generally adopt the practice of offeiing a statement of their assets and liabilities when a loan is sought, as business men usually do, they vmvld improve their credit standing at the local bank. Another essential in maintaining a high credit standing is to con- duct operations along lines that involve as little risk as possible. Farmers often take large chances of loss, and often losses occur from causes which are entirely/ within the farmer's control. Planting of un- tested seed, failure to treat seed against certain easily-preventable diseases and failure to inoculate animals against certain diseases are among these controllable causes. Again, many a farmer has risked and lost his credit standing, as wellas his accuiiralated savings, by staking all on a single crop, making it possible for any one of a large variety of causes, such as drought, excessive moisture, frost, hail, plant disease, or insect pests to wipe out the results of an entire year's work. Insurance is another a,id to credit status. If this protection is available on reasonable terms, it is Mghly desirable that the risks in- volved in agriculture as well as those involved in manufacturing and mer- chandising should be shifted from the shoulders of the individual to an insurance company. By thus pooling the similar risks of many individuals the losses experienced become fairly uniform from year to year and can be met by a relatively small contrihation in premiums or assessments from each of the persons izisured. Life insurance, as vrell as property insur- ance, can be used by the man of good reputation for honesty and ability, to improve his credit standing. U6 FAEMER Mormmns md mahketing By Dr. B. H. Hibbard, Professor of Agricultural Economics, University of Wisconsin, During the past half-century we have had in America some half- dozen attempts to bring the farmers of the country into big, general organizations. In most of these movements it has been the hope of the leaders to bring enough farmers into the group to constitute a commanding position in either the political or the economic sphere. In every case there has been ostensibly a. combination of the two purposes, but always it has been the economic program that has been the goal, the political manifestations being but a means to an end. Farmers seldom plan to go into politics except as a protest against legislation which they view as inimical to their best interest, or in order to initiate legislation for themselves which no one else seems disposed to provide. Without a single exception the farmer movements have directed their energies toward marketing. At times this has taken the form of an attack on the transportation situation, but it has always been . because of the vital, connection between transportation and marketing, and not because of a, wider interest in the subject. While all farmer movements have centered their efforts on some phase of marketing .they .have done, so in widely differing ways. For example, the G-range launched a broadside attack on the middleman system. Included in the middleman group as they viewed it were not only hi merchants but very proniihently transportation agencies. Even mantifacturing was brought within the general program in the effort to narrow the spread between producer and consvimer as they understood the terms. From their point of view producers included the laborers'' in" the extractive industries only. Political action was, on the part of tie Grange, incidental. Their primary plans centered oh the cooperative control of marketing m a comprehensive sense. Very unlike the plans of the Grange were those" of the Farmers' Alliance. ~ In the minds of 'the latter the trouble with the farmer lay not so much in the immediate affair^ of 'the market, ' as in the more fundamental questions of money, banking, land, and credit.' As a means of carrying but the program it was definitely decided that the only hope was through politics. This was because of ' the belief that so many'ills have grown out of bad legislation. In order to carry the 'day i't was decided that • a third party was needed, and in the political campaigning the whole Alliance movement lost its identity. The subsequent movements, the American Society of Equity and the Farmers' Union, attempted the sam.e erid in a way differing from both the Grange and the Alliance. Both of these organizations, "the Ei^uity and the Union, manifested great faith in the principle of fair price. The first effort was to induce farmers to hold produce off the" market until a proclaimed price was offered. On one or two occasions the comniftee- made prices were about what the market vi^ould afford and so were obtained. Us Later efforts, in which a sifostantial advance was attempted showed the weakness of the system and it was given up. Now these societies act as a guide and inspiration in the formation of cooperative marketing companies, nearly all of which are centered aroijnd some one commodity. The present societies thus have become agencies for fostering real effort at more economical marketing. Another recent fanner movement, with little faith in voluntary cooperation, attempts to strengthen the effort by bringing the state into the marketing arena as owner and operator of terminals, mills, packing plants and banks. In a community in which the agricultural population predominates it may be made to appear that such a plan would result in benefit to the farmer. In all other sections » and that would mean the major part of the country, the farmers would be in the minority and the success of the undertaking would depend on the cooperation of other groups, pres-umably the laborers, with the fanners. Thus far the efforts made in this direction are not very encouraging. These farmer movements represent efforts to take care of the farmers' marketing needs by providing a ready-made program, and furnishing the main inspiration and means from headqtiarters, for carrying it into effect. In the meantime, especially during the past twenty years, a large number of cooperative marketing companies have grown up, mostly local and largely independent of the farmer movements. Prominent among these are the fruit marketing companies, the cooperative elevators, the cooperative live stock companies and chesse and butter ccnipanies. True, some of t s companies named were- fostered "by a general society, but that they woui have developed in much the same manner and in the same territory, • if lef to local enterprise, is not apparent. Finally comes the American Farm. Bureau Federation with a -hig- over- head organiza^tion. At first glance it may seem to be much like, the earlier farmer, movement s . It soon becomes evident, however, that tne means of accomplishing the end, namely, more economical marketing, are quite wilike, those .of the earlier movements. Tobegin with, the Farm Bureau is undertaking to organize on commodity lines, .providing separate management for each separate field of effort. This gives the overhead organization much less to do directly with -the .detailed work of marketing, that being left v/ith the several groups. The work of the Btireau is to give form and encouragement to the various comtBodity groups, and in addition, and especially, to look after the farmers.' interests politically. The plan is to represent .the farmer in Congress anS. bring about needed legislative- action. Thus far the work of this kind has been done on a strictly non-partisan basis. The significance of fanner m.ovements in relation to the marketing of farm, products may be s-umma.rized by calling attention to the several ways which have been tried. The first program was an attack on the middleman, wioh the hope of farmer ownership and control of a large part of the middleman process. The second effort centered in politics. 50 The third was at first an attempt to control prices throiogh the procla- mation of fair prices, later an attempt was made at marketing on conmodity lines. The fifth was a trial at state ownership and control of marketing machinery. The most recent farmer movement is an attempt at the federation of distinct, separate, fi>.rmer groups, with organizations corresponding to the commodities to be handled. At the same time the central organization ■undertakes to handle all political matters bearing on the affairs of farming, to serve as a guiding force in the expansion of cooperative marketing, and to conduct investigations with the hope of gaining information needed as a guide in further development. The employment of trained men; the organization of marketing companies on definite lines of service to be performed; the constructive as opposed to the destructive program - these characterize the latest development in a faimers' marketing movement. Much excellent marketing organization has grown up outside of farmer movement influence. Much of it has been inspired by farmer movements . It now remains to be seen whether or not the farmers are ready to support, and use, a widespread general organization which has the possibility of providing the guiding principles and inspiration needed by the groups directly in charge of the marketing work. 52 MA HKETING M JITCTIONS , By Dr. Theodore Maoklin, Professor of Agricultural Economics, University of Wisconsin. The Marketing' of farm products- represents one essential part of economic activity. It is in reality, part. .of production just as surely as farming is a part »f production. The farmer produces visi- "ble physical ccamodities. Much of .-fche-^woxk done,, "by the marketing systein represents -e(Hnpara;tively invisible -^hough necessary services. Concretely it means the rendering of no less than eight types ef such services. ■ ' : Assemhling : When the farmer- leaves his products at . the elevator, • the- creamery, or the local, store, he dees not realize that the middleman' who receives them hegins- to render^the service of assambling. The fact is that this middleman and great numhers of others are obliged to perform this service in some form «r another. There are at least three kinds of assembling necessary in the general marketing of farm products and each kind plays an inportant part in economical operation. -The first kind of assembling provides adequate quantity of business to make possible econcanical operation, the second provides adequate variety of products and the third provides •under a single business management sufficient orders for goods. The assembling pf cream for the manufacture of butter represents concentration of a single product, as provided for in the first class, and furnishes an illustration of the importance of 'this service. Although many dairy farmers of a community may milk twenty cows, produc- ing eleven pounds' of batterfat, each day, it will require the butterfat 53 from a large area to swPlV a profitably conducted creamery. The biiyer who assembles small purchases into' carload shipments of pota- toes, livestock or hay perfoms a similar service. Obviously consmers do not purchase inmense quantities of a single product. . They do not. .buy sxigar, potato or meats to the ex- clusion of all other products. On the other hand their needs lead them,.to purchase small quantities each of a large variety of products. One. middleman may handle one of these products exclusively in order to get it economically from the separated farmers to the separated retailers, but. it requires a. retail middleman to get the products in the. desired small, .q-uantities^ J;o the ultimate consumers. Sometimes the .distance, or the difficulties that intervene between these two kinds of assembling are so great that brokers supply the necessary connecting, links and thus we have the third kind of assembling - provide adequate orders. Assemhling saves freight expense, reduces operating costs and when successfully done reduces costs all along the r.oute from producer to consumer. Grading : The service of sorting products into gro:ups of uni- form kind, quality, and size is known as, grading.. Standardization establishes the peraanency of these grades. It means that the given grade shall contain the same quality .of article each day, week, month or year. Standardization malses it possible for people to learn what a given grade is and gives them confidence that in selecting a particu- lar grade of article the same quality may be obtained in subsequent purchases. To consumers this service facilitates selecting and 5U purchabirig and enablds other savings which increase demand. For middlemen it lesssens the voliane of waste product to^he handled and therehy reduces marketing cost. . Finally, the farmer benefits be- cause increased demand gives him a large market > which cbmbined with the lower costs of marketing all along the line, rewards him with better prices Or larger sales, either of which should mean greater return for the same farm. Grading also makes possible ade- q-uate financing and provides a safe basis for warehouse receipts. Packaging : Farm products differ greatly in size and shape, ia perishability and bulkiness. Practically all of them require packaging in one form or another, either to facilitate handling or to prevent excessive shrinkage or waste. Almost the only examples where packaging is not required in the marketing of fann products aa-e the shipment of ..liv-estock "ty carlcuda and car-lot shipments of grains, potatoes, sugar beets, cr similar bulky and relatively nonperishable articles. Hay must be baled before shipment and baling constitutes a form of packaging. Milk must be confined in cans. Poultry requires crates, wool must go in bags, cotton into bales, eggs into crates, and so on through a long list of goods. Moreover, each successive middleman may find' it necessary to change or repaclsage goods because the quantity of products in containers of wholesale size may have to be broken into smaller and smaller lots to meet the consumer's demand for small daily purchases. Packaging facilitates handling, reduces freight cost, saves storing cost, prevents shrinkage and spoiling, preserves caiJied goods, and of ten. serves to increase price and satisfaction. 55 . . P.rQjes3.i ng: . H&gardl&ss of; whether processing is •'brought ahout by fanners or by aiddleman, the ■seryics-lSs essential for .three fijndameintaX reasons; a,1) It is ec-ijnomiaaj. . to 1-ja.ve- raw materials converted into finished prodiiot-s,..-... (2). Eponsmical di^stribu'tion requires reduction of bulk to; ^thf^ n^i&iSius?.-. in relation: to value, (3) .It. is economical to. consecCve -the- surplus' ou-tput of flush producing, seasons for cons uirpt ion during pe riods. when. CTorrent production falls below, consumer -needs.,.. {To p:royide. consumers with req.uisitej kinds, quantities, atid £Lua.iities,.,o.f fo0d.. and -clothing thrq-jghout .the year jriecessitaves ;-p.r-o,css;si;ng.. For farmers -••the. service is .equally important beea,use. it- -stabilizes prices by prevent- ing alternating glut and ui:idp_rsi:5>ply upon. ina;i3s-'ets. An example ,of the con^^ersion -of- rav/- aa-teriais into finished products is, the prod\icbJ.on .of steak ai;).^ chops: d&rjanded' by th©". con- sumer from the livestock producad by; the fa^Tuer. Ihe . separation of milk into -^kimmilk f or retention on the farm and butterfat for siifP^snt to. a distant. creamery illustrates, the economical "reduction of bulk, whilg the ..whole canning industry. is built x^on the third I).rinciple of conserving the surplus . output .during fliish producing seasons. . , . , - . Tr^g.porting: .All farm products which are:- not coriSXmed on farms require local transportation of cne kind or another, either to local, markets or to shipping, points.- rPor.all commodities in excess of local .requirement^, transportat.ion-.from- country points to terminal markets is essential. Because farmers and consumers generally have relations with concerns engaged in transporting ccinnodities over 56 local or long distances, they have considerable knowledge and ap- preciation of the economic iaiportanc© of thi? service. As a nile, the pTitiic knows far more about transportation in its various phases than it knows about other intermeciiaries and their services. St oring : From ancient times the storing of food has been a , mark of the- degree of civilization. Barbarians have lived from hand to mouth through countless ages while civilized man has laid up against the day of natural scarcity a reserve from the periods of plenty. From the time that Joseph xvas made ruler over the food- warehousing system of Egypt to the present day, the service of storing has become increasingly inportant in the progress of econcEiic life. Properly conducted, storage adjusts the supply to the con- sumer's needs, tends to stabilize marketing operations and prices, makes possible regularity of manufactvired output, and is a valuable aid- to convenience in marketing. Financing : Credit is necessary in narketing, to make it possible for farmers to finance their operations from the time that crops are matured until the essential marketing services are render- ed by middlemen, and to enable middlem.en to financ© their operations from; the time paynent is made to farmers for raw materials until the finished coranodities are pa,id for by consumers- Fr&ducers of all kinds with either unused tiae or unsold commodities have need of the service of financing. V/ithout the cash or credit which f inane- ing provides, both commercial farming and narketing are utterly im- possible . 57 The service of financing, if adequately rendered, provides capital in such f cms and q-uantity as expeditious and efficient operation of the business of marketing requires. Permanent capi- tal represents real estate, "buildings, machineiy, office equipment, and. all permanent facilities for- transacting and housing the busi- ness or storing. its raw materials and finished products. Circulat- ing capital includes the money required to pay for supplies of raw materials haadled or stored,^ to meet operating expenses, and to cope with unforseen problem.s confronting- th6 business, including the stor- age of such finished goods as may be required to stabilize prices and marketing. Distributing: To cater to the large variety of food wants of a community of consumers • requires that grocers carry on their shelves hundreds of varieties of fobd bi'oughti together from all parts of this country and from other lands. Thus in tracing the origin of each of the products which the city consumer buys it is found that coffee comes from Brazil; tea" from China, India, cr Jdpjn; sugar from Cuba; ■ spiqes' and bananas from tropical lands; oraages, raisins and other fruits from California; grapefruit from Florida; apples from the Northwest; cantaloupes from Colorado; pea- nuts^ sweet- potatoes, and- many vegetables from the Southern States; rice frcm Louisiana and Texa,s; flour and ■''Aieat from the Dakotas Minnesota, Kansas, and Nebraska; and so the list of special produc- ing regions might be continued almost indefinitely. If th? service of distributing raw ma'fe'rials produced on farms and the finished commodities created from them were discontinued 58 for one month in winter, millions of people in the United States would be starved and frozen to death. IThat the marketing system which constantly averts this kind of catastrophe is not comprehended by the public is the chief reason for the current widespread con- demnation of middlemen and marketing. That the system of marketing is far from perfect is evident but the reasons can be explained only ly careful investigation showir^ the nature of practical conditions and problems. To conprehend the problem of marketing requires a knovvledge of basic facts. These eight kinds of services, then, constitute the necessary marketing functions. Not all of them are necessary to each market- ing transaction and in some cases fanners or groups of farmers, or consumers ur groups of constmers, perform some of these services for themselves but this performance does not eliminate the function. 6o MAEKET INSPECTION.- 0? fEElSEABLE PRODUCTS- By Wells A. Sherman, Specialist in Charge, Rriiit and Vegetab,le Divisibn , . , Bureaii of Markets and Crop Estimates, U; -.S. D^pattment of Agricplture. Inspection of perishables at the market is sought by the. shipper thkt he may know the condition of the goods if they arrive unsold. It is, sought by the city buyer or receiver when he feels .that the goods received are for any reason less valuable than he had a right to.ejcpec.t. ■Market inspection is not sanitary inspection, nor quarantine . inspection nor regulatory inspection. Market inspection is a service rendered to aid in merchandizing the goods inspected. ■ , If this service is to be of real value it must be technically efficient and thoroughly impartial. Public sentiment in Anerica will credit none but an official agency with a combination. of these quali- ties. Therefore, Congress author.ize3 the Department of Agriculture to sell the services of men trained for this purpose, in the principal terminal markets of the country. With the service thus instituted private enterprise has made no effort to compete., The inspection of meat animals and their products by the Bureau of Animal. Industry has nothing .to -.do ^vith establishing relative market values of those found whole some.. The official "purple stsimp" appears. alike on fat and lean carcasses ^.^^ich may \'-ary by 50 per cent in mar- ket value per pound. .--•••■ Inspection under the Food and Drugs. Act establishes no relative values. An article condemned under that inspection must- be taken off the market. Articles to pass that inspection need only to be prepared 6i and labeled in accordance .-dth certain fixed Ife^l. requi'renients . Inspection under the Food Products InspectionLaw, however, may involve any fact, condition," or quality which affects value. It may invoked "by any party interested in or having custody of the products. It is forced upon no one. A fee is charged which approximately covers the cost -of the service and a certificate is issued setting forth m detail all the facts discovered which affect the value of the goods. Congress has niade this^ certificate prima facie evidence in all United ?;tates co-irts as to the true grade, quality or condition of the products when inspected. As a restdt the certificate is usually made the basis of settlement out of court. Market inspection , may be desired to determine grade, quantity, quality or condition, or two or more of them. Ftandardization of perishables is maihing rapid progress. L; rger and larger volumes of fruits and vegetables are offered or contracted for on the basis of grade. When deliveries are made the receiver, if the market is declining, is anxious to secure a concession from the con- tract price and will often challenge the grade of the goods on the slightest pretext. The boxed apple croJ> of the Northwest and a large part of the potato crop are sold on grade. The volume of these products is enormous and the number of honest controversies over the question in grade is large. The question of quantity may be raised on account of breakage, slack or improperly filled packages, excessive shriiiage caused "by evapo- ration or decay, or caused by pilfering en route to market. 62 Inspections for cuality usually involve grade "but are often fe- quested on products for which, no grades are establisned. The contro- versy or coinpliaint may involve maturity, color, froshriess, flavor, odor, texture, free'^ing or any factor vvhich "by injuring the character of the product tends to rsduce its market value. In^-ppc-t-non for condition is likely to he asked when perishahles arrive with many pacliages broken and the contents of the car disarranged and injured by rough handling on the road. Improper loading and the use of frail containers are frequent reasons for arrivals in bad machani- ca,l condition. General deterioration, however, may result from defi- cient refrigeration, improper ventilation, delays in transit, freezing, general disease infection and maxiy other causes. The economic value of the inspection service is due to the fact that it expedites and renders safe transactions based upon standard grades and also provides expeditious machinery for the impartial deter- mination of the facts upon v^^ich prompt settlement can be based in cases where the goods delivered are not exactly what tha parchaser had a right to eapect. In many cases also fault may lie 'Tdth the coJiEion carrier, and many of the railroad companies are making the inspection reports the basis of judgment in cases where Ipss and damage claims are filed by the shippers of perishables. The service has also a moral value -^^ich is even greater than its economic value. In a great majority of cases the receiver holds the lAfoip hand in any dispute ■:«hich he may have mth the shipper of perish- ables. Vnsn goods are bought "f . o. b. usual terms" the price is agreed upan in aavance l5ut the goods are paid for after inspection and approval on arrival. Wli&n the purchaser has not seen the goods "but has bought them from, a distant shipper on description, good faith on the part of the shipper requires that he accept these conditions. If the market declines while the. shipment is en route the purchaser may face a finan- cial, loss .in the acceptance of the goods and. in this case has a. strong inducement to .find: some grounds upon which to reject the shipment or demand a reduction in the stipulated price. When such a rejection or claim for allowance is no'v made in any of the principal markets of the country the shipper can demand Government inspection and the certificate will show whether or not the claim of the buyer was well founded. • Tiiis means that the dishonest rejector is soon exposed and finds it difficult to do business with the 'vide-awake shipper. As a result the number of unfair rejectioas has .been- materially decreased- since the inspection service was instituted because through this impartial, agency even the unprincipled members of the trade are being shovna that honesty is the best policy. The Department of Agriculture has been called- -upon to inspect more than 20 different perishable .commodities since the inauguration of this service ani the work is proving a wonderful field for- the .further education of the best men who enter it. Gk VLAEKET MCT'S SERVICE AW THFORMMIOK , By F. A. Wheeler, Specialist in Charge, Market Information, Bureau of Markets and Crop Estimates, U. S. Department of Agriculture. How and when shall T sell my potato crop? Wljere can I "buy large quantitieg of eggs and "butter and how mach shall I pay? How are the markets for fruits and vegetables, livestock and meats, grain and hay, cotton and ^vool? The axls^ve^ to these and similar questions asked every day is Know Your Markets. Under this slogan the Department of Agriculture is making vigorous efforts to place the market news and trade information in its possession ivithin the reach of all sellers and buyers whether they be farmers, dealers or ultimate consumers. To do this, the men engaged in the neivs service must get out into the heart of the large producing areas and must get into the heart of the large markets. They must know at first hand, farmers and farm methods; they must know dealers and dealers' methods; they must know their commodities thoroughly; and they must ]aiow the chan- nels through which these products usually pass from the producer to the consumer. They must know how to meet people, how to meet all kinds of people, and how to gain the confidence of both the selling and the buying end of the markets. It is true that the Department of Agri- cultxire has well established contacts with the large shippers, the transportation companies and the large receivers, but it is the market reporters who are actually on the job each day, who must 65 keep these contacts in working order. Methods of collecting, interpreting and disseminating this market information necessari- ly differ for differeat classes of ccranoditiea« Fruits and Vegetables: - It is i^i the case of froiits and vegetables that the work act-oally reaches out into the heart of the farming co^aitry. iSach year dioring the shipping season of 18 important fruits and vegetables field men are stationed in many of the large commercial producing areas. These men report to Wasning- ton by v;ire, daily, as to q.Taality, condition, local biding demand and prevailing prices. By an arrangement with ^7^ transportation lines, including steam and electric roads, boat lines, and express companies, the Bureau of Markets and Grop Estimates receives daily reports of car- lot movements of 3^ important crops. During the fall, when carlot movements are at their height, as many as 300 telegraphic reports of this nature are received daily, each covering % railroad division* Meanwhile, market reporters en the large markets are sending in to Washington reports of receipts and visible supplies, quality, con- dition, prices, and the prevailing tone of tlie markets. These reports from UnB field and frcm the markets are ccmpiled, interpreted and distributed within a few hours by telegrapn from Washington, back through the field and market stations, so that the tcmato shipper in Mississippi and his canpetitor in Texas have this full report as promptly as the dealers on tne large markets. With such information the producer can deciae intelligently when and where to snip his products and the dealers know wliat is in 66 the market and on the road. These field men us-ually begin opera- tions in the far South in the winter and spring and follow the crop north. The stravi/berry reporter may begin nis work at Hammond, Louisiana, in April, move on to the Ozarks in May, and reach the Hew Jersey region in Jiine, Another strawberry reporter may have begun in Florida, reported next at Chadburn, North Carolina, and been available for the Delavi/are region at the same time the other reporter reached New Jersey, In 19 18 the fruit and vegetable division had 32 permanent market stations and 71 temporary field stations located in Uo States. Thirty-eight farm commodities were reported upon and 23,000,000 daily bulletins issued to some 125,000 producers, shippers, and produce dealers. But because of tne curtailments of congressional appropriations for tiiis work, these maricet reporting activities were subsequently contracted, and during the past year tne number of per- manent mar-3t stations was ih and of temporary field stations h2. The number of subscribers for the daily reports totaled J'^ ,000 with a proportionate reduction in the number of reports issued. A weekly summary of carlot shipments is also sent to a special list of sub- scribers composed largely of transportation officials, members of the trade, eaucational institutions, and others interested in such statistics. A weekly article featuring, the leading news developments of the fruit and. vegetable maricet is also issued on Friday afternoons and distriDuted to press agencies trirougn tne press service of the Department of . Agpriculttire, This review is prepared for general readers and is used by numerous important newspapers that do not pubjisn tne 67 more technical market revie-^JS. A tnorthly review is similarly pre- pared, going to about 50 periodicals and press associations, and ap- pearing in ne'wspapers estimatad to liave an aggregate circulation of 600,000 readers. Livestock and Meats: - The news service on livestock and meats is conducted on a somewhat different basis. Here the market is the thing,- and all the wrk centers around it- The service at Chicago, the great live stock center, will serve as an illustration. Here an avera-e of $3,000,000 of "business is transacted every "business day and, ercowyt for temporary local conditions, prices at most of the other live stock markets throughout tiie United States are based largely upon prices prevailing at this markat. Beginning at U:30 a.m. every day at the Chicago office, a representative of the Bureau of Markets and Crop Estimates, tele- phones the office of every railroad entering Chicago and receives a statement of the number of cars of each kind of live stock expected to arrive at that m^ai-ket during the trading day. To this total is added the number of carloads that arrived during the night, ''''ith this information and his knowledge of the kinds of live stock shipped from the various sections of the country at that season of the year and of the number of animals usually loaded in a car, the Bureau representative is enabled to estimate closely the nuiCbsr of each class of animals that will reach the Hxarket for that day's trading. Both the demand and trend of prices are governed to a considerable ex- tent by this advance estimate of supplies and for that reason it is essential not only that it be as accurate as possible but that it be 6s available at the earliest moment compatible vvit-h sucn accuracy. For this reason, a preliminary x'eport of estimated receipts is re- leased at 6 a.m., central standard time, and at 7 a.m. is followed by another report which incorporates any changes made necessary by information received subseq.uent to iss-uance of the first estimate. About 11 a.m., central- standard time, another estimate is issued indicating the number of heaa of eacn class of stocix expected to arrive in time for the follov/ing day's trading. Naturally, this advance estimate of receipts is not so accurate as the estimate cover- ing the current date out through the cooperation of railroad officials and through an increase in the nuifoer of s o or ces of information, the Bureau has been able to so perfect its machinery tliat the percentage of error in all of these estimates is being rather steadily reduced. These estimates are of interest and value to all branches of the trade and are particularly appreciated by eastern ouy^rs who place orders for live stock on western markets ai: wnich the Bureau has offices. As the market opens at S a.m., tne Bureau's rexjorter must be on the job before that hour in order to "feel out" both buyers and sellers and sense the probable trend of the day's trade, in addition to noting the early transactions v^hich must, be put on the wire, in the form of a "hog flash", by 8:30. At 9:10 a.in. another brief re- port showing the condition of the ho^ mar^cet at tnat hour is sent out. The Bureau rej^resentatives cover tne cattle, shfceo and lamb markets as well as the hog market. At 10:30 a.m. a detailed report is dispatched giving trade and market conditions as tney pertain to cattle, hogs, and sheep, together v/ith aetailed quotations on the b9 various classes c;nd gradas of Q^ca species, Ti.e closing report for the day is released between noon and 2 p.m. and covers any changes m trade conditions or prices which may have occ-arred after 10:30 a.m- Brief swuaries of the day's trading are also prepared for the various press associations v^hich carry them to both afternoon aiid morning news- papers throughout the country. More cet ailed statements covering con- ditions in the various ra^^rkets are prepared daily, mmeo graphed, and mailed to those having use for sucli information. Weekly reviews covering a seven d?=iy period are similarly prepared and distributed. The Bureau covers several of the more important middlewestern live stock markets and also maintains offices in three large meat consuming centers c-long the Atlantic sea,board; Boston, New York and Philadtlphia. At these eastern points Bureau representatives are on the whole- sale meat market o^ 6:30 akin. At S o'clock each man telephones his office a single- sentence report of trade conditions as he found them. These are put on the leased wire as early "meat trade flashes". At 9:30 'tiie reporter returns t» his office and files a more detailed re- port dealing with the various classes and gr»des of fresh meat. Fol- lowing this he files a report quoting v^fholesale prices prevailing on that day. In addition tothis daily marktt information, each Bureau rep- rtesentative obtains daily reports shov.in^ the nui%ber of carcasses of western dressed meat unloaded at his i^articular mar:.:et. He also obtains frcm the w>ioIes:alers and commission merchants a daily report of the nuifibe-r of country dressed carcasses received. From tlie City Health Department i^e obtains weekly reports of the number of animals slau^rhtered 70 locally \inder city inspecljion. i'rom tiie Biirea-ii of Animal Industry iie receives similar reports showing tJae mimQer of animals sla-a^;ihtered Tinder Federal inspection. In tnis uanner tne Biireau of Markets and Crop Estimates maintains an accurate current record of tne availa"ble meat supplies in each of thssse cities. For purposes of comparison, a meat reporting office is also maintained in Chicago, Other Special Services : - The news service for dairy and poultry products has been worked out along somewhat different lines and the cot- ton, grain, hay, feed and seed news services have their own character- istics. Then there are services during certain seasons on other products such as honey and peanuts. All of these services have the same primary purposes, chief among them being the regulation of the flow of farm products to meet the demand. An \inderstocked market) in one place and an overstocked market somewhere else with resulting variations and fluctuations of prices is hardly conducive to tne best economic and financial welfare of the Nation, and with abuhdant sup- plies in the aggregate there is no good reason why such a condition should exist. General Mevi/s Services : - How to make this information available to the scattered, unorganised farmers and dealers is a problem that has engaged especial attention during the pafjt years. Thu leased wires are of great value in collecting news and in (iOtting it back in compiled form to market centers but they cannot reach remote rtj^ions. Aaiong methods devised to fill tais purpose we ncsi.,havfci The Market Reporter, a weekly market magazine that carries articles of 71 timely value on supply, demand, trci-nsportaticaa, marketing prac^-ic and credits, and margr related subjects, together with weekly and mont - ly sTommaries, and tabulated statistics accompanied by interpretative text. We have a macketgram service through which are released repor s of 1,000 words s-ummarizing national market conditions and prxces on the leading agricultural ccmmodities. These marketgrams aim to present to the reader, almost at a glance, a pict^ore of the market- ing situation- They are issued every weekday except Tuesday and cover tne markets for the week ending on day of issue. They are carried over the leased wires to hrancxi offices v/here they are im- mediately released to farm papers, other publications, oanks and other central institutions that have requested them. Naturally the greatest popular interest prevails regarding the radio market news service, for its possibilities seem boundless and its limitations are as yet uncharted. At present market reports simi- lar to the marketgrams are sent broadcast several times each day from 7 large ./ireless stations owned by the Air Mail Badio Service and covering a band of territory approximately oOO miles wide and reaching from coast to coast. Systematic methods of receiving and utilizing this news by wireless are being worked out officially by several states, and many large institutions and private individuals are receiving and posting. the news. Each news service has be=in developed with certain definite aims in view whether the service b© specialized or general. If we can reach a point where- the chief producing areas of our farm products and the chief markets for them can be covered adequately for a period of years 72 and where we are properly supplied with definite, current information regarding foreign supplies, competition and demand, and if this in- formation can be placed promptly in the hands of all who need it, we shall have taken a long step toward the goal of a rational, "balanced agriculture. News service work cannot be done in office hours and in swivel chairs. It nearly always means early morning hours and often means ld.te hours at the end of the day. It means lively interest and enthusiasm on the part of all its workers if it is to reach its highest efficiency- IJhere are many opportunities for students with an adeq.uate agricultural and econcraic backgroxind, for in addition to the Federal work, the State departments of agriculturti and bureaus of markets are organizing market news work for their States. Much of the field is still undeveloped and much expansion and progress mist take place during the next few years if viSt the farirs of the United States are normally producing considera"br./ more cotton, wheat, pork, tobacco, and certain other products than can be consumed by our present population. So long as that is true a market mist be fotind elsewhere for the surplus and the degree of prosperity of the farmer vail correspond to the price for which he is able to sell that s-urpius in other countries. " An efficient utili'^aticn of labor, land and equipment is as neces- sary in agriculture as in industry if the cost of producing farm products | is to be kept at a minimum. Vfhen such a full use of our farm production facilities results in a sui-plus it would seem to be to the interest of the nation as a whole for the farmer to have a profitable outlet for it, or so many of the marginal producers will drop out as to create the possi- bility of a real shortage in years of small yields. A plan or policy which provides a satisfactory market for a surplus in good years might be considered in the nature of insxirance for poor years. ■the prices of our staple products are in a large measure world prices. The price that a farmer in a particular commonity gets for a product, like i^eat, of which more is produced than, can be consumed in 76 the United States, is determined largely by world conditions of supply and demand. The price that he gets may be materially influenced by a large or a small crop in Australia, in the Argentine, in India, or in Canada. Europe is the principal market for the surplus farm products of the world and it is in European markets that ail of these countries in- cluding the United States are seeking to sell their surplus. If the Argentine crop or the Australian or the Canadian crop is short then Europe nust buy more from. America. Therefore, the price of wheat and other similar commodities, 'vhich are widely grown, is determined to a large extent by relation of 'the demand in Europe for such commodities to the supply in surplus countries. Knowledge of world conditions is essen- tial to intelligent marketing. Under normal conditions the dem.and for staple agricultijferal prod- ucts remains rather coristant vdthin a certain price range. The supply, however, is usually much more variab?.e because it is influenced by fac- tors outside of the control of the producer - Since the %TOrld war, however, not only has there been the usual variation of the supply, but the demand factor has also been very un- certain, largely because of the unsettled conditions in Europe. The instability of the money of many European countries has interfered greatly with the normal movements of trade. When money sho'vs a tendency to decline in value in an importing country tliere is likely to be a keen demand, -wfcile "on the other hand when it is rising in Value the demand ceases temporarily, the tendency being to live on the existing stores and buy as little as possible in the hope that it will take fe^ver marks, francs, lira or kroner to pay for the iiiirorted goods later on. In addi- 77 tion to causing irregolarities in the flow of produots the fluctuations in the exchange and the decrease in the value of money in many of the European countries Mihich import large q.uantities of farm products has operated to maike American- grown products too ejqpsnsive for such cothi- tries and has forced them to seek their supplies in countries xvhose cur> rency is less valuable. That such large quantities have been purchased from the United States during the past year has been due to short crops else^jdiere and to the ahncrmally low levels reached by farm prices in this country. Other factors also influence the demand, such as ■unemployment. In England, which has been cne of the largest importers of American farm products, -anemployment has been so great as to cause a marked decline in the total porchasing po-jver of the people, thereby curtailing the demand for our products, particularly meat. For some years the conditions, especially in Europe, 'vill be sub- ject to radical changes, both in supply and demand. If the American farmer is to adjust his production to meet these changes he must have the fullest and most carefully-analyzed information. Agriculture is not an industry that caji be quickly adjusted. Information as to what is taking place throughout the ^-rorld nnist be kDovna as far in ad'vance as possible. This involves a careful and continued study not only of Euro- pean conditions, but also of the conditions of suj^ly ard. possible future supply in countries whose products compete with ours in European asarkets, and even in our own markets. Note for example the rather extensive im- portations into the United States of Danish butter, Chinese egga and New Zealand lamb in recent years. TS In normal times prices of products are a fair index to the re- lation of supply to demand, and aid in adjusting production to demand, but with the chaotic conditions no^T prevailing it is necessary to have much more complete information than merely present market prices if intelligent plans are to be made for future production. Cne does not have to go far, therefore, to see why the American farmer is so vitally interested in and is demanding foreign crop and market information. If he is to produce efficiently and profitably he must know conditions not only at home, but in all exporting or competing countries, as well as the factors and influences affecting the demand in the importing or deficit countries. For years the United States. Department of Agricijlture has been gathering and publishing information concerning crop production in foreign countries, and some years ago maintained a regular representa- tive in Europe to gather infcnnation. Ui.til recently, however, this work has consisted largely of the compilation of official reports of foreign countries received by mail through the Consular Service, the International Institute of Agriculture, or direct from foreign countries, in exchange for reports from the United States. Naturally there has been delay in the publication of such reports. Much of the information therefore has been of historical rather than direct commercial value. Arraaigements have recently been made, however, to develop a foreign crop and market information service. Important information is received by cable and wireless as well as by mail from agricultural ex- perts of the Department of Agriculture abroad, the International Insti- tute of Agriculture, and from the Americar. Consuls arid co32iercial 81 It is evident, therefore, that .legislation must be preceded hy research and stiady and that thte admirii&tration of laws already passed must take into consideration-.theeconOTic principles involved and mast be based on a sound knowledge .of .tfis' business involved. Research woi'k of the Department of Agrictdture has been ex- ceedingly useful to Congress in foiroulating national agricultural legislation, as well as to the officials of the Department in the administering of them. It is work fraught with great interest and with great responsibility. Laws now in existence may need altera- tion or extension; new laws may be needed; and the enforcement of the law brings many problems to the surface. This is true primarily because the Departm9:it is not interested sinply in the enforcement of laws but in the estaliishing of economic justice. Agricultural Laws in Force : -Federal laws now in force that have to do with agriculture "include the grain standards act, the meat inspection act, the food and drugs law, the cotton futures act, the standard container law, food products inspection law',' laws relating to plant quarantines, and numerous others, and now we' have the grain future trading law and the packers and stockyards act recently passed by this Congress . Each law is based on many years' study and research and each requires constand current study if it is to be wisely enforced. The cooperation of the industry is essential to the best results* Educa- tional work is often. a large part of the successful administration of a law and sometimes education works both ways to the end that agri- cult-ural laws or regulations under them are amended to meet more fully Missing Page Missing Page 82 certain economic conditions or certain conditions in the trade. For exanple, the cotton -futltres act and' the regulations under the grain standards act have "both heen amefided'as a result of continued study of the law in-actual operation. ~''' F ending Agrici'.tural Lggislaticn :~As most agriculttxral students fenow, there ig an apparent conifil6t''^etween some of the existing Feder- al and State, laws regarding" agricultural' cooperative associations. The reasons for these alleged conflicts cannot he reviewed here, Ijut the resTolt is that f-urther legislation is pending, both in Congress and State legislatures, designed definitely and clearly to confer'such freedom, ciri cooperative organizations of agriculttiral producers as may he necessary to" enable them' to "accomplish their legitimate objects. .Such f-urther legislation involves many questions. If coopera- tive agricul t-ural effort is to receive separate consideration arid at the same time be -j.ii;stified by sound economics and public policy, should membership extend beyond the producers of the products handled? Should business for nonmembers be permitted? Should otherwise competing or- ganizations be allowed to federate, and, if so, for what purposes, to what extent, or without limit? Sho-uld prices be agreed upon, set, or fixed, and, if so, how and under what conditions? What distinctions, if any, should be made between stock and nonstock cooperative organiza- tions and between methods of financing them and distributing accumilat- ed assets? Should they be permitted to attempt to control production? In these and other respects, v/hat are proper lines of demarcation, if any, between agricultural producers and other producers, and how are they justified? Other pendi-ag legislation gives rise to similar ques- tions, all involving study and close thought. 83 Other Roads to Legislation i-Niitn3rof.s other lie'lds lead to the consideration .i:pSS Jj.opular .bat it." is thar-^Jaasis* of adjusting production, to the market .conditions and is necessary; if agriculture, is to -be:- profitable-, whethejr; the' marketing is dca:je:.-co-;-.I 28 opsratively or as a private 1116.8 rtaking. Furthermore, the study of i^rHiet demands leads not only to the adjustment of production in quan- tity and quality to suit the market, bit it leads to proper grsiding and packing, both of v/hich are important steps in the proper market- ing of many classes of products. Thoughtful study of the matter will lead to sane viev;s of where cooperation will improve the system of naarjceting and prepare fanners for cooperation, when desirable', tj^ imking clear to them the part they must, themselves, play if cooperative marlceting is to suc- ceed. This same educational work will point out where state and fed- eral regulation may prove the better means of improving marketing con- ditions. The general rule in dealing with the marlsting question should be to educate but not to agitate, to show the conditions of success and the causes for failure in cooperative marketing, but neither to xirge people to cooperate nor to taks the lead in the organization or operation of cooperative compaxiies. The same aid should be available for cooperative and private Tondertaking. The objectives are ef- ficient marketing and fair prices, ' The problems of farm orgairizati cai cc-nnot be segregated from the problems of marketirg because of ■cheir intimate relation and because the fanner is at present more interested in marketing than in farm man- agement. Ne-tTorally the f aimer would prefer to have the market adjust- ed to his system of farming, rather than to adjust his farmiiig to the conditions of the market. The plan of having one or more jointly paid extension special- ists, dealing with both farm management and marketing problems, lodged in close connection mth the college department of Agri ciil tural Econanics, 89 functioning as a part of the state extension system, drawing upon the results of research both state and federal, should probahly he tne cen- tral feature of the extension -vork in agricxiltural economics. This extension service centering at the agricultural colleges should be supplemented bgr an adequate crop and market news service. The cooperation in this is developing between the federal Department of Agricult\ire and the state Departments of Ag^riculture or Bureaus of Markets, The federal departm-snt is collecting crop and market news in the competing countries and on the iinportant riarkets. This infor- mation is fur-nished to the state departments of agriculture from which it is distributed ly radio and by circulars throughout the states. In -addition to this, market statements are prepared "q^r the federal depart- ment xor the press from day to day. The interpretation of this news in t^rms of what the farmer shoiild plan to proiuce in the coming year and when he should sell the crops he has on hand is and should be left to the farmer. The more conpletely the economic extension rrork of the colleges has been done the more satisf actor il;y" vn.W the economic facts presented in the news service be -understood and the more successful will bs the farmers in adjusting their productipn to denands of the mar- ket. The extension service of the college, combined Vifith the market news service, should in a few years clear up some of the mis-understanding which is so common today on economic questions, and give a more intelli- gent basis for the efforts v^hich have for their goal "Better farming, better business and better living." THE SOCIOLO&Y OF ?ABM POPUIiATIONS 9° Dr. C. J. Galpin, In Charge Farm Life Studies, Offioe of Farm Maiiagement and Faxm Economics, U. S. Department of Agric-oltiare. Is there a live job in the field of rixral sociology? 'What is the demand for men and womeii who have studied the ins and outs of the farm populations of America and of foreign countries? How will the job compare with the strictly economic jobs in country life? I will try to answer these questions so that college students who vash to sell their energy and influence where they will tell the most, may have a fair clue to the opportunity. I. Let us look briefly at the field of farm population science and try to assess its national value. You will recall that the tii^ee great economic factors in the agricultural industry are land , capital and man ^ labor and management). T will at once yield a high place to that body of exact knowledge which gives an understanding of the factor lan d and of the factor caTitel . I will not say that the national ser- vice iin:apped up in the sccnomist's attention to land and capital is in- ferior to any service. Bat I do call attention to this fact; the factor man is one of the three fv.ndamsntal factors, and therefore is essential. And my contention is this, that the factor man , whether considered in units of man labor or man max\a.<^ercent . is so complicated by the mental, spiritual, idealistic and social aspects of man's nature, that this factor can not be understood sufficiently for utilization in economic theory or formulae without as critical a study as that given to land, 91 on the one hand, or capital on the other. The scientist, in other words, will be as unsafe in ass'jniing the scope of the m& factor as in assuming the scope of the land factor. The fact is that all too macli hitherto have econoiTiic theorists set up a hypothetical, mythical unstudied man factor to go along with the studied and fairly well understood land and capital factors. The resulting formulae have therefore been defective. Not until the man factor has received by all the College, State and Federal agencies the scientific study given to the other factors will the agricnoltural Industry receive well-balanced formulae based upon thorough- going economic research. In fact, whatever doubt exists in the minds of the iimerican people as to the future or the continuing progress of our farming industry revolves, in my estimation, about the farm popu- lation (the man factor ) rather than about agricultural land, plants, animals, and mechanical aids to farming. This doubt arises because the population engaged in farming is as yet in many respects more a mystery than wheat, cotton, cattle, money, credit or transportation. I say it is a live man's job to give a part of his life and energy to unraveling the mystery in the farm population factor. The nation waits for light on its farm people. And the nation will honor the man and the woman, do not doubt it, who make a contribution here. II. To carry this matter a little further let me answer the question, which is on your lips, "What are some of the blind spots in our knowledge of farm population?" T am sure yov. are saying to me in your mind: "If scientific knowledge of the farm population is absolutely needed in order to utilize our scientific data on land, cattle, plants, credits, and mar- 92 kets, you can tell us, if yoti are indiling, in what respects the exact toiowledge is needed, " I vdll therefore enumerate some of these hlind spots and indicate what, I ■believ3, is hanging fire in the solution of farm econonsy: First, the health of farn populati on group.s, upon which depends not only the ability to produce, hut \*.ich controls in great measure that important element, agricultural morale, - content, courage, vim, self-respect, prestige; second, sb abi^^ity of farm poxrulation g roups without w'hich the acc-unnilation of economic and social surpluses within the agricultural industry itself is at a minj-imam; third, migration from farm occup ation and farm life , either as an overplus or as an underplus,- a factor about which, much is said, little is known, but about which re- volves the critical qiiestion of a fexm population too large, too small, or too depleted in the major human qualities of economic prosperity; four th , t:rpes of poTnilation g:ronps engaged in various types of agricul- ture , (with respect to characteristics racial or conservative or social), - an element which is concerned in the fine adjustment of the producer to the product, upon which depends not only an economy of production but also a social economy of contented workers; fifth, the stand ard s of a farm popglation in respect to (l) livin g (;vhat is tnovm as the pl^sical standard of living), (2) cultural -nrivilege (including accessibility to institutions of culture, information, recreation), (3) political privi - lege (esjiecially in reference to appliances of local government), - standards which measure the divergence of privilege and statTis of the farm popilation from, or approximation to, the privilege an^ status 01 93 other .American population classes; sixth, ^^Tr-pnei ^^.^nn a-nri f.haracteris- tics of farm •&oTyjJatlon (crcwps vi th respect to tenure statu s { 1 ator er s , tenants, owners) upon a knowledge of which depends, not only the adjust- ment of labor supply to production hut also the economic promotion of members, of one status group to the next and *he replacement of one type of population group by another type; seventh, -ps ygholoey and ideals of •pQ-pulati on groups , upon a kno^i-ledge of which depends the scientific ad- justment of the agriculttiral extension work of the Nation, as well as the rapid progress of the cooperative movement in spirit and in tech- nique. III. Let me no-v answer the inq,uiry whether scientific research is feasible in regard to the man (farm population) factor. First, let me remind you that the Federal Census Bureau issues a decer^nial report on Population, - a report gained by scientific methods. In the I920 Census, "Farm Population" for the first time re- ceives consideration. It is hoped that a volume on Farm Population vriU eventually be put out by the Census Btu-eau. This speaks well for the feasibility of scientific method in arriving at the composition, characteristics, and relations of our farm population. Second, let me recall to your mind that Roosevelt's Country Life Conn^ission in igOg urged in its report that scientific studies should be made of the life side, i.e., population side, of country life. This counts for something especially as Dr. Liberty Hyde Bailey, a horticul- turist and scientist, was the distinguished chairman of the Committee. 9U Third, it is q^aits possible, ii' necessary, to name certain col- lege and Federal bulletins of a research character in regard to farm populations which have received recognition from eminent sociologists and economists as contributions to the science of farm econoi^y. i"'o-aTth, many statistics! measures of population (characteristics and relations) have be^n vvcrked out and are available for use in statis- tical study: the farmers' stendarcls of living are measurable; the farmers' major instit-utions aj:e easily graded and scored; the farmers' local goverrjnent is deiscribaole, msasurable, and can be evaluated. ?ifth, erperimentaoion, even, is possible under certain condi- tions, and within certain limits. For exanrple (not to go far into this aspect) agreement can be made by a responsible agency like the college, with a certain farm population group, (viz., so many contiguous farm families possessing a certain group characteristic, such as race or type of agriculture or trading agencies in coirmon) for the introduction of some grov.p practice, institution, or enterprise, calculated to react strongly on the group. The practice, institution or idea introduced will be -under specification and control. The results and reactions may be notedand studied, as in a baby beef feeding experiment. IV. T^fhat sort of positions are open this year and next for those who tal-re major courses in rural sociology? Assistants, instructors, and professors are being calleci for, in State agricult-'oral colleges to teach, to make researches, and to do extension work, in regard to farm popula- tion. Other universities, colleges, and normal schools have teachers 95 vfco give courses in rural sociology. Some 5OO teachers in the United States ars giving whole or part time to teaching "riiral life," "rural sociology," "rural orgardzation," or "rural social problems." The population aspect of the agricultural industry is coming so rapidly to the front that future oo-urity agents, home demonstration agents, and workers with hoys' and girls' farm clubs, will undoubtedly be expected to take farm population courses. The agricultural economist in the Federal service will fall short of full preparation for his work without courses in Farm Population, - simply because the economist must stop using a supposititious man factor in farm economy. It is planned that Farm Life Studies, a section of the Office of Farm Management and Farm Economics, U. S. Department of Agri- culture, will afford, as the years go ly, an -unsurpassed avenue into farm population studies. A year or two spent in this part of Federal service should be a splendid preparation for a college or university professorship in rural sociology. In my estimation the young men and women who, in the next ten years, select their major in rural social science, -"dll find themselves in demand, much as those students who, a generation ago, selected the field of economics for a career, and aftenvard found that they had selected most fortunately. -0 0- 96 T HE STAimAEDI ZATIOW QV ?APM -PTJOT^tTrTO By H. W. Samson, Specialist in Standardization, Bureau of Markets and Crop Estimates, U. S. Department of Agriciiltiire, In recent years the marketing and distribution of farm prod- ucts have been subjected to the most careful study not only by econo- mists in this field but by leaders in finance and industry. It is therefore significant that practically every plan looking toward the improvement of conditions emphasizes the need for standard grades. Broadly considered, the purpose in establishing such standards is to facilitate trading. Farm products pass through margr hands in moving from the centers of production to the world's markets. Many are contracted for future delivery and a large part of the business is transacted at long range. It is essential that there be a common language to insure muttial understanding between bxiyer and seller. The use of standards also contributes toward cheaper and more effective distribution ais the specifications are based on certain definite req.uirements of the trade. The actual grading of the various products on this basis is an important factor in the reduction of waste, both economic and physical. The manufacturer finds it unneces- sary to order ten thousand pounds of wool to insure his receiving five thousand of the quality he requires and the dealer in fresh fruits and vegetables is not required to sort out and throw away produce which might have been used profitably in a by-products plant but which is not suited to the demands of his particular trade. 97 The prcbxem of standardization is a national and international one and although much progress has heon made in the past hy local agencies, the actual adoption of tmiform grades has been acconiplished throxigh the U. S. Department of Agriculture. At present specific authority to proiiiulgate national grades has been for two crops only, cotton and grain. Ihe establishment of Federal grades for cotton grew out of the need for a uniform standard on which to base contracts for future delivery. For several years previous to the passage of the U. S, Cotton Futures Act the Department had conducted extensive investiga- tions in the cotton grcrjiring states. The records show that in one season over 35,000 saaples were collected in 70 typical marists. These were assembled and graded in Washington, D. C. In addition, the D^artment had copies of proposed International standards, of the old Liverpool standard, and of local standards from various markets in the. South. A study of this material eniphasized the fact that there was no standard for American cotton which was accepted by or acceptable to, the cotton trade as a whole. In 1914, nine grades of upland white cotton, including types from all parts of the producing belt, were promulgated by the Secre- tary of Agriculture under the provisions of the Cotton FutTores Act , as the official cotton standards of the Uaited States. These have since been adopted by all of the spot markets as a basis for quota- tions and their use is compulsory in the settlement of future con- tracts on the exchanges. 9S Standards for tinged and stained cotton were promuLgated voider tixfe same act in 1916. In 1918 standards for grade and length of staple were promul- gated for Sea Island and American Egyptian cottons. Today Federal standards both for grade and staple have been adopted "by all the important cotton trade organizations incliiding cotton exchanges, and shippers and spinners associations. Grain grading has developed over a period of 70 years. For the greater psirt of this time the utmost confusion existed in the trade because there was no -uniformity. The leading grain producing states had grades and in addition many Boards of Trade and Chambers of Com- merce adopted their own grades and controlled the grading of incoming and outgoing shipments. The diversity of opinions regarding moisture content indicates the nature of the difficulties which were constantly arising. This factor is of great iciportance in grading grain for upon the degree of dryness more then anything else, depends the keeping qioality in storage and transit. The terms then in use such as dry, reasonably dry, damp, and wet were susceptible of various definitions and meant one thing to the bnjyer and another to the seller. Investi- gations of the Department showed that hard winter xvheat showing 15 or 16% moisture was being certified as dry, with the result that com- plaints were coming from grain exchanges and ikmerican Consuls in Euro- pean coiantries to the effect that wheat from the United States was ar- riving in a heated, musty and damaged condition. 99 In 1916 the U. S. grain standards Act was passed providing for federal supervision of grain inspection and grades have since been provided for shelled com, wheat and oats and tentative stand- ards for milled rice are also in general iise. Iftider the general authority to investigate the marketing and distribution of fstrm products, standard grades have been prepared and recommended for a large nvunber of products incliading most of the im- portant fr\iits and vegetables, wool, butter, cheese, meats and live- stock. Tentative standards are soon to be published for certain types of hay and miicki work of an investigational character has been done on other crops. In general those who are engaged in the actual marketing of farm products are familiar with the economic benefits of standard grades. Attention has already been directed to their value in connec- tion with contracts for futiire delivery and as a basis for sales at long range. Much more mi^t be added regarding their usefulness in reducing waste in transit and storage, ia stabilizing the market by furnishing a basis for reliable and adequate market information and in eliminating fraud and deception practiced not only in preparing the products for market but in trading. The problem of today is one of education. The consuming public and the trade axe both in need of enlightenment but more than either, the faricer. He has regarded his business, as production solely and must be shown that a grasp of the theory and practice of marketing is a necessary part of his equipment. 100 Production problems are certainly as important as ever, perhaps even more important, but the demand is not so much for greater quantity as for better quality. It has been the common observation of those engaged in marketing all classes of agricultural products that where no standards are recognized the tendency of the trade is to pay a flat price based on the average value. There is certainly scant encourage- ment in this practice for the man who sacrifices yield for quality. Conversely, trading on a q^uality basis is the greatest stimulus to better methods of production, and definite, uniform grades are the means to that end. There are many other marketing fxoictions which re- quire consideration. There must be organization, advertising and salesmanship but all of these will fail to show results unless backed up by a standardized product. FI M).4MENTALS OF C00PERATIV5 M.aRKETING Abstracted from an Address given before tlie United States Department of Agricuxture, ty C-. Harold Powell, General Manager, C5alifornia Fr-uit Growers Exchange, on Oct. 6, 192I. The hreaJcdown in the machinery of distribution during the last few years has meant that our agricultural crops have not been marketed under conditions that would permanently maintain the pros- perity of American agriculture. When conditions are prosperous, when the producer is making a fair return, he is not particularly interested in cooperation. When conditions are adverse and he does not receive for his product a return that pays him a profit over costs of produc- tion he begins to think about marketing and the economic system sur- rounding his business. For he gets just that proportion, and no more, that his marketing machinery permits him to receive. Then it. is that we have keen interest in cooperative marketing. The danger is that in the fever and excitoTQcnt of seeking a remedies farmers may be drawn into/ cooperative movement without ade- quate coniprehension of the fundamentals to its success. It is these fundamentals that we must study closely before proceeding with coop- erative endeavor for there is no place in the farmer movement for pana- ceas and miracles. There are no formulas of cooperation, no forms of contracts, no short-cut ways throu^ which can be brought about that basic, in- ternal spirit in man that makes them believe t.iat working together is the wise way to work out their individual and mutual and industrial -103- problems. This is a matter of growth; a matter of evolution; a matter of progressing step by step out of abtndance of experience- Organiza- tions prcmoted from the top do-^ by public-spirited men in the inter- ests of the producers are likely to topple of their own weight- A cooperative association xs one in which the members form an agency through which they coad^^ct thcdr cwn b^osi-ess for their greatest mutual advantage- To be cooperative, it must oe formed of producers exclusively and managed by them, and the benefits must be returned to them in the proportion of the pa,tronaga cf each. The r^apital recessaxy to create the agenqy and its facilities rhould be contributed by the manb'ers in proper si on to t:.ie use whi. cL each mat js of it. The capital contribution of each r.ember should b.? kept projira&siveTy proportioned to the individ-ual -uses or sMpnient? or pi:ir -.bases cr other vse'^ .tisde by the agency as nearly as this Jiay be done. To be successful, a cooper ati-'e rac^rjihont aust bo founded upon economic necessity. Any farmer movement that is foimfied upon enthusiasm or altr-uism or excitement is likely to fall by fc-io v; j^^side. TheTe mtist be some vital problem such as inadeq-uate transportation, under- development of market, overproduction, too high overhead ccstf:, before ai^ associa- tion of producers., may be expected to endure periaar.Oi.'it"'.y. A cooperative organization is formed by the proi".'-.t!r-s for the purpose of handling their mutual problems- Therefore, their participa- tion in the organization should bo proportional generally in capital contribution, to the uses which they make of the orgemization. In voting pcwer the finest evidence of mutual trust, of confidence which men have in each other, is to consider each other as eq.ual. The principle of one-man-one-vote is fundamentally sound, and it greatly promotes the spirit of confidence and mutual trust. The next test thing is to make voting power proportional, not to the capital contributed, hut to the uses which the man makes of the organization, through his shipments, through his purchases, or through whatever unit may be chosen as a measurement. A contract, particularly in the early days of organiaation, may he an essential for success. The producer is naturally aja Individ^ ual. He is not used to working with his neighbors; he is likely to be led off by the representatives of competitors; he needs a steadying in- fluence. The contract, stj^iies this steadying influence, and it helps to keep that member in the organization in the face of adversity when he has to meet adverse conditions. The contract probably shoxild be for a long term, but every contract ought to have a cancellation privilege by which the men who are dissatisfied, who feel that the organization is not working correctly, should be permitted to get out. The dissat- isfied man in a cooperative organization is better on the outside than inside, and any contract which holds men together against their wills in a cooperative organization is unsound. Contracts should have a liqui- dation damage clause. In case a man pulls out he should pay to the asso- ciation the expense which the association has had to incur to take care £ jjis business that year. Aa organization must be able to make prepara- 4- -on for the future, to plan its business for a year, to enter into con- a-ts to employ men, which it cannot do uuless it has a stable organ- ization- -105- The success or failtire of many faraers orgaa:ii2atlo2is depends upon the management of the organization. The xaanagement and the executive power, rests in a board of directors, and' the Will of thetoard of ' directors is usually transmitted through the maxiagement. The success or failure of a cooperative organization may depend primarily vpbxi the breadth of vision, the cOTarage, the independence of the Board flf Directors, and the man whom they enploy ^- The Booxd of Directors and the managtoent must wbrk and consult together. It fortifies the mind of any man who is responsible for a piece of work if he has available always the judgment of his asso- ciates. Wo organization is strong if the different units develop inde- pendently, if one is not based on the work of the other, if they are not walling to give and take. Sales methods and policies are important. To be successful, of co^irse, there must be standardizsation of the product. There should be standardization of harvesting methods in the case of perishables be- cause the keeping q,uality in transit usually dspeads iipon the handling in harvesting. Therefore there must be phjisi cal handling by the associa- tion." Tliere are things that the individual caniiot do for himself that the association may do for him. Therms must be uniformity of distribution. The only continuous, safe, economical method of distributing aJiy product is founded upon regular supply. There must, of co-urse, be information* Perishables, for instance, fluctuate hourly and the organization cannot sell unless it knows the local s\;g?ply, the world supply, the cars rolling, the competitive conditions of the market, the financial conditions, and -lo6~ all sucjfe factors. Ihere must be a sales organization, not. always capa- ble of handling all sales, but capable ,of giving all the information available that relates to svg'ply and demand. Publicity and advertising are not to be, overlooked, , A friendly attitude on the part of the con- smer is essential, for the consumer is king. The man who determines whether the business will be successful is not in the wholesale trade. or retail trade, it is not the producer, or the member, it is the man who uses the product* In fact, the success of a cooperative marketing association depends upon cooperation all along the line in relation to the public at large. The farmer cannot work out his problem alone; he is inti- mately tied x^ with the trade; he is intimately tied 15) vyith transpor- tation; he is intimately tied up with banking; and he must approach his problem with a view to working it out in cooperation with our present econcanic and social system. The distribution of financial risks is a fundamental princi- ple. During the past few years any industry that depended upon a few men to go to the banks of the country and borrow enough money to finance original purchase and distribution could not prosper because they could not get the money. If original distribution can be handled through Icxonr dreds or thousands of men, the risJis v/ill be distributed. If merchants can buy the product when it reaches the market for what it is worth, in- stead of buying on a speculative basis, they can finance their operatipns on a daily, instead of on a yearly basis and are relieved of a great fi- nancial strain. -107- An organization to be permanently successfia must be developed from the social standpoint as well as from the business standpoint- To disregard this fact in or^nization is to miss that spark within the in- dividual which makes him a permanent cooperator. Each member sho-uld be a stockholder with locf-1, vital, breathing contact with his organization. The cooperative movemeijit, to be successful, must be founded primarily upon small groups of mtn who are neighbors; who have a ccmmon problem; who know each other; w*io have confidence in each other; who are close to each other and close to their primary business; who trust each other and belong to the san.* churches, same boards of directors, the same schools; who are int