Milford chronicle., 1921-02-25
THE PESSIMTSTTC FARMER"

Wide publication has been given to
a statement by Roger w. Babson to his
business clients in which he COM
ments on the farmers "pessimistic
state of mind" When interviewed re-
garding Mr.. BabsOns statement,
President J. R. Howard of the Amer
ican Farm Bureau Federation said:
''Mr. Babson says that the farmer
is much better off than before the
war. The evidence does not show
that the farmers position relative to
the laborer, the capitalist, or the sal
aried worker is better than before.
The price indices prepared by the Bu-
reau of Labor Statistics show that the
/ farmers product reached at their
highest point 246 per cent of the 1913
level, while the weighted total for all
commodities reached 272 per cent of
farm product prices had declined 80
per cent, whereas, the decrease over
the highest point on all commodities
was only "a per cent. These facts do
not show that the farmer is better off
relative to other members of society
than before the war.
"Mr. Babson blames the Department
of Agriculture, the agricultural col
leges, the farm press, the oranges and
politicians for upholding the farmer
in wrong ideas on the cost produc-
ton. Undoubtedly the farmers ideas
upon cost of production have been
wrong in the past. He has overlooked
the depreciation and other factors of
cost and has arrived at cost of produc-
tion estimates considerably lower
than they should have been. AS a re-
suit he has been willing to pay high
er price for land than it's actual pro-
ductive capacity justified. 1t is well
know that the average return on farm
lands before the war was not over
or per cent. Agricultural colleges
are pointing out the proper basis for
calculating production costs and in
few instances do they endeavOr to
justify land values based upon the
temporarily high earning power of |
the last or 4 years. The sound think
ing farmers deprecate the imitation of |
farm land values. Farmers were no |
more responsible for the recent land |
boom than were the local bankers and |
the real estate promoters. Statistics
show that 20 per cent of the increase
in value of farms bought and resold
during the boom went to residents of
towns and cities.
ut has not been shown that the
business man figures his capital in a
manner entirely different from that of
the farmer. The large number of
stock dividends issued by industrial
and mercantile concerns during the
last year or two have represented an
effort to -crystalize temporarily high
earning power. Railway executives {
N endeavoring to fix valuation for
rate making purposes under the Gov
ernment's guarantee return were I'M
willing to base valuation on original
cost, but were determined to have re-
placement value considered.
The implication in Mr.. Babson's
statement is that if the interest on al
eyed inflated values in farm land
we're ignored that the farmers po-
jition would be satisfactory. The
lVerage increase in farm land values
Turing the last or years is prob
IDLY not over 25 to 35 per cent. In
owa, where the land boom was most
pronounced, the increase amounted to
70 to 35 per cent, or about $65 per
lcre. Present prices of farm crops (
n many instances are insufficient to ]
'ay for the other items in cost of pro-
luction, ignoring rent altogether. Ac- Y
ording to the Department of Agricul- ]
ure, the price of corn paid to produc- 7
rs in my own state on December 1 t
vas AZ cents. On December 1, 1918, j
o months before the war broke out, I
he price paid to producers was go q
ents. IL