TEN days after being discharged from the army, in October 1919, I began farming here in southeastern Wisconsin, stocking and equipping this 240acre farm for the diversified agriculture of this region. I have had horses, cattle, hogs, sheep, and chickens during the entire period. Except for changing from strictly dairy cows to dual-purpose shorthorns my general farming-plan has remained the same. I bought all stock and equipment at peak prices. In addition to the usual yearly loss common to farmers the last three or four years, my first eighteen months saw a sixty-per-cent shrinkage in the value of my investment.
Naturally I have been intensely interested in the various proposals to make farming a profitable business proposition. But most of the proposed remedies are ridiculous and many are vicious. Properly labeled, they would be known as agencies or legislation for the aggravation of agricultural problems. Proposed by visionaries and politicians, they run counter to the law of supply and demand, attack our natural allies, depress our mental attitude, and increase our tax burden.
If one accepted at face value all he hears and reads, he might conclude that the trouble with agriculture is shortage of production. Help for farmers as expounded by politicians and some educators usually resolves itself into a scheme which would increase output. Price-fixing and subsidies are essential parts of many of the cure-alls, but their proponents ignore the fact that American farmers never, even when short-handed during the war, have failed to keep the market supplied.
Over two years ago Babson mentioned that none of the conferences called to solve the problem of agriculture pointed out the real trouble — ten per cent too many farmers. That surplus is disappearing and with the disappearance are coming better times. City papers speak of the increased millions to the farmer as a result of the recent sharp advances in grain and hog prices. However, it is not long since the same papers emphasized huge production as a sign of the farmer’s prosperity. But the present turn for the better is due to a shortage, not a surplus.
In spite of the surplus of farm products, the federal government has been using millions of tax money to cause still greater production. To push irrigation and drainage projects in regions far from markets at a time when more food is not needed is no aid to farmers or to the United States as a whole. Such undertakings are a valuable means of distributing political patronage and, like most paternalistic propositions, the profit is for the few, the burden is on the many. The government should let waste land alone, at least until there is sufficient market for products from land now under cultivation. Even then the government need not interfere, for if the venture is sound from the business standpoint private capital will undertake the enterprise.
The federal government is copied in this misuse of public funds by state and county units. County agents, demonstration farms, experiment stations, expensive equipment and personnel, all have aided in the uneconomic oversupply of farm products. I am not arguing for the abolition of all of these offices, but like most active farmers I believe that there are far too many of them even for prosperous times, and that in the last three years they have done us more harm than good. This phase of our trouble has received little publicity because many of the people claiming to represent farmers are holding political jobs which should be abolished. The millennium will arrive before any number of public officials will give up their sinecures voluntarily for the public good.
Many of the schemes propose not only to help us overproduce but to ignore the market. In some instances it may be a potential market, which, it has been pointed out, was one of the causes of Henry Ford’s success. The people of the United States could afford and wanted an inexpensive automobile. Whether Ford had lived or not that want would have been supplied. From the standpoint of the producer, a buyer is as important as something to sell. Economy of production helps not at all if there is no market. Businesses other than farming, by means of advertising or curtailment of production, or both, keep the market in condition to receive the output.
Our advisers have failed to help us because of the naïve assumption that agriculture comes first. I challenge that statement. In modern civilization none of the essential industries comes first. They come abreast. The total collapse of any great industry — such as mining, transportation, banking, and agriculture —would wreck civilization. The argument that production of food is all-important applies only to a primitive people. The farmer is in distress, not because he is hungry, but because he is unable to get a fair proportion of the advantages of civilization.
Disregard of natural markets and, even worse, the creation of artificial markets are no less illogical than the attitude we are encouraged to have toward our natural allies. Consider the railroads. Some reformers would make farmers prosperous by lowering freight rates. To begin with, it was paternalistic legislation in 1917 which helped to raise them. Blithely forgetting the results of the Adamson law, some people argue for more interference. Even government ownership and the transfer of freight charges from the direct users of transportation to the taxpayer appeal to many. Of course cheaper transportation, if economic, not artificial, would be beneficial. Yet it must not be forgotten that to certain regions transportation costs act as a satisfactory tariff. Two years ago there was a milk strike of the producers of the Chicago dairy district, comprising the region in northwestern Indiana, northeastern Illinois, and southeastern Wisconsin. While all dairymen within the area do not send milk to Chicago, all are affected by Chicago prices.
Although we had a fairly close organization of milk-producers the strike was not won, — a compromise was made, — partly because the railroads had tank cars ready to import milk from northern Wisconsin and even from Iowa. We thought we owned the Chicago market, but the efficiency and comparative cheapness of express service gave farmers hundreds of miles away enough of an interest in the market to prevent our control. Our loss was their gain. The lesson of that strike for us is the folly of encouraging Iowa to go into dairying.
Meat-packers are the subject of much expensive investigation. They and modern stock-raisers are mutually dependent. The packers’ part in the handling of meat is highly efficient. If not, why is it more profitable for a butcher to buy local cattle and sell them in the Chicago or Milwaukee yards and then get his dressed meats from the packers in these places? Most of us are familiar with the attractive advertising of beef, pork, and lamb by the big packers. They are not doing it for the benefit of us who raise stock, but, in so far as a surplus of meat is removed from the market, we benefit..
Recently I have noticed an unusual amount of advertising of milk by manufact urers of bottles, paper straws, breakfast foods, and baby foods. These manufacturers, in the interests of their own business, find it desirable to emphasize the value of a farm product. They may not be our personal friends, but certainly they are our allies.
I do not suppose the Metropolitan Life Insurance Company is particularly favorable to dairymen. For all I know, it may be classed with Wall Street, which is supposed to be plotting against us farmers continuously. But not long ago I saw a full page in the Atlantic Monthly, paid for by the Metropolitan, urging in the interest of health and longevity greater consumption of milk. Compare this with the fact that at 11 A. M. at a local farmers’ institute in my neighborhood we were given a lecture on the value of dairy products, and at noon, by the same management, we were sold lunches in which was oleomargarine!
From the standpoint of the producer, food is valuable, not according to the calories and vitamines it contains, but according to the demand for it. Middle service, whether performed by middlemen or by ourselves, transforms a food value into a market value.
The general agitation against middlemen is not so great as it was several years ago. Instead of fight ing them and looking upon them as robbers — I don’t say they never are — we are beginning to look on them as a middle service and an agency which assists in creating a market value for our products. One valuable result of coöperative selling is the realization that there is a middle service and that it is expensive. When we join a ‘coöp’ we think that now we are about to overcome our production losses by making the middleman’s profit. At least that is the way I felt, and naturally I was disappointed when the prospective profit turned into an actual loss. In the coöp to which I belonged we learned that middle service in regard to milk costs more than production.
One of the panaceas widely advertised is that of diversification. How long, by the way, since we were told that this is an age of specialization for farmers as well as for other people? Diversification depends upon a number of factors, including climate, soil, and, most of all, markets. Of course, practically all farmers should have their own milk, meat, eggs, poultry, garden stuff, and fruit. There are few who do not. I spent the fall of 1907 harvesting and threshing in Nebraska, Iowa, Minnesota, and the Dakotas; at that time the farmers there supplied themselves with these foods. I belonged to one threshing crew near Bristol, South Dakota, which trailed a cow behind the cook car when we moved.
The theory behind diversification is the utilization of wasted time, power, and equipment. However, if you have raised a product for which there is no market you have merely been taking exercise. And I have yet to hear that we farmers need more exercise. Profitable diversification depends largely upon allies — that is, manufacturing centres. We had more strawberries this year than we could use. Cash value was created for the surplus by the proximity of cities. The comparatively better condition of the farmers of this state is due more to Wisconsin’s urban population than to all the farm advisers — and, I might add, in spite of the politicians. However, the jobholding farm advisers of this state take the credit to themselves for the difference. They tell us that it is their advice which has prevented us from collapsing completely. Yet the great majority of commissions have been created within the last twenty-five years; while from the old account-books I find that this farm has sold steers, hogs, milk, eggs, and poultry since 1882, and that it always has been a diversified farm. In late years this region has begun to receive income from additional crops like cabbage, beets, and cucumbers. The variety of soils in this state is a factor in forcing diversified crops. In addition, Wisconsin has manufacturing centres, the markets for diversified products. It is not due to commissions and boosters that New York and Wisconsin are great dairy-regions. In and near both states are great cities. The dairy cow sticks close to the places where her products are used.
The Northwest is adapted to small grain. The Dakotas are not close enough to cities to receive large amounts of farm income from milk and other products which require a quick route to the consumer or from crops like potatoes which cannot stand high freight-rates. Diversification will increase in the Northwest as industrial centres move in that direction. And one big thing for farmers to remember is that factories which create our markets and which help carry the tax load are influenced in their choice of a location by the attitude of a state toward them. Natural advantages may be overcome by penalistic taxation resulting from paternalistic legislation.
No matter where a man farms, and no matter what he decides to raise and sell, he should realize that he is assuming the hazards of a business. State and federal government should recognize this also and not penalize him for succeeding, or reward him for failing. One of the evil consequences of the paternalistic advice, sympathy, and legislation with which we have been showered is the tendency to believe that our salvation lies in more paternalism — to believe that deficits should be made up in the form of ‘loans’ or subsidies. Recently a neighbor told me that he cannot hang on much longer; he cannot pay taxes and interest. His remedy is in legislation of some kind. He is a victim of circumstances and, like millions of others, does not want to accept the hazards of his chosen business. He has noticed that unions and teachers’ organizations seem to have been successful in forcing the government to guarantee financial security of their members. He has seen them set aside for a time the working of supply and demand. So he ought not to be censured for assuming that a paternalistic government and a benevolent president — toward farmers — could assure prosperity.
Some time ago a banker who deals with farmers and knows the financial stress told me that the commiseration shown farmers was doing real harm. He summed up the case in this way: ‘The farmer has heard so much about his troubles, about being a victim, about being a poor farmer, that he has settled down to being a poor farmer.’
Paternalism as revealed in our educational system is resulting unfortunately. Control of the schools is no longer entirely local and professional boosters have begun to reform us through our children. There has been much talk of fitting children for farm life — implying that their fathers and mothers have not been so fitted. The phrase ‘ruralized education’ is used. I dislike the phrase. It means class education. Quite aside from the fact that not all country children will — or ought to — remain on the farm, the present tendency to use time in rural grade-schools for so-called agricultural subjects seems to many of us undesirable.
Education in elementary schools should be broad for a country child, the same as for a city child. Breadth is not secured by emphasizing from the grades the details of one’s life work. Education which assumes what a child’s occupation is to be is most undemocratic. Occupational education is inevitably narrowing, yet the great need is a public that recognizes the interdependence of all groups.
We farmers have been led astray in this matter of schooling by a lot of zealots. We read frequently that the education of the country child is inferior to that of the city child. The reformers who state this — people for the most part interested in education as a commercial proposition — point to the one-room school, the poorly paid teacher, and the short school-year. However, they do not try to prove that the children who have remained on the farms have ever fallen down on the job of production or that those who have left have been unable to compete successfully in business or professional work. Some of our reformers forget the advantages of disadvantages.
There are those who deny that paternalism is destroying self-reliance and others who argue that government interference does not increase our trouble and that eventually government aid will be a cure-all. But everyone agrees that taxes are too high. All candidates for office announce a determination to lower them. Even the very officials who have assisted in the creation of jobs, commissions, and so forth, bewail the lot of the farmer taxpayer. We learn that the thing to do is to elect men who will lower the price of things we must buy and also force the manufacturers of these articles to pay more taxes. Most tax-reduction schemes are merely tax-transference.
Taxes on farm property in this region are absorbing over half of the net rental value. Consequently land values are decreasing. Ownership of land, instead of being an asset, is becoming a liability. Between 1900 and 1922 expenditures of the State of Wisconsin rose from $2,997,155 to $32,191,049 per annum.
We need to re-recognize the function of government and the purpose of taxes. Recently in this county a special meeting of the county board was convened for the purpose of considering an appropriation to be distributed as loans to certain farmers who had not carried insurance and who had suffered severe losses in a windstorm. (Taxpayers effectively protested and prevented the appropriation.) It is and should be the privilege of any man to carry or not to carry insurance. If it is to be paid from taxes then it becomes compulsory. In a conversation with an instructor of one of our state normal schools I mentioned the fact of the special meeting as indicative of the local trend toward paternalism. To my surprise this teacher of teachers thought that there was nothing wrong in using public money for such a purpose. His concern was with the men who disbelieved in insurance until too late rather than with us who believed in it beforehand. I asked if the use of county money for such a purpose did not mean that the county would become eventually an insurance company. As we continued the discussion it appeared that he believed in increasing the functions of government.
Taxes so low as to hamper the logical and original functions of government prevent appreciation of property. On the other hand extra services and illogical use of government funds cause rapid depreciation of property. If a farm were not complemented with adequate schools, roads, police protection, and so forth, it could not reach its normal value. But if schools, roads, and police protection are increased beyond the ability of the farm to maintain them, and if a host of advising and interfering public officials also are added to the farm’s burden, then the farm depreciates rapidly.
Many years ago I asked my father why the United States was so foolish as to sell land to pioneers for $1.25 an acre when everybody knew it would go up in value. He replied that public land yielded no income, that not until a settler made the land produce did it have more than a potential value — that a combination of land and government resulted in no tax income, but a combination of land and private enterprise resulted in the creation of wealth, assistance to the government, and that the assistance was in proportion to the success of the individual.
Near by is the county demonstration farm, of about 120 acres. It was bought before the war. Various owners paid taxes on the land in this farm from the time it left the possession of the United States — in the thirties or forties — until it was bought by the county. All this time it had been creating wealth for its owners and had assisted in carrying public burdens. Since it has been used as a model farm not only has it ceased to help carry the public burden, but the farmers of other land must carry the interest on its investment, its insurance, its taxes, and make up its annual deficit. For the year ending November 1, 1922, interest on the value of the farm, added to insurance, taxes, and $2115 deficit, meant that the taxes of about twenty farms its own size were required to carry it! Of course if such misuse of public money were only occasional the increase in taxation would not be felt. But where many other institutions having no logical place in a democratic government are added, and when care of the unfortunate is so elaborate as to make it worth while to be criminal or indigent, the total cost takes tax money which should be used on the farms for washing machines, lighting systems, and so forth.
There is no group of people who would benefit so much by the elimination of public servants, offices, and paternalism in general, as farmers. We are an industry — I almost wrote the industry — in which it is impossible to add our taxes and other overhead to the price of our products. Probably prices of articles we buy will never come down materially until we lighten the general expense of governing. This is not argued by those who have the most time for speech-making and writing, those who are holding jobs which make the unbearable taxes necessary.
We need help in the retrenchment of public expenses. As for the other sane remedy — well, very few classes know more about thrift and wise management than the American farmer.