Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1926-07-03

1915 average production OF cotton
was 14,175,000 bales at an average
price of 12.41 cents per pound, while
from 1921 to 1925 production aver.
aged 1852 900 bales at an average
price OF PISS cents per pound. In
the 1911-1915 period wheat produc-
ton averaged sos, 1856, 900 bushels at
an average price OF SO cents, while
in 1921-1925 the average production
was S04,SS4,000 bushels at S1.111a
average; in the former period corn
averaged 2,754,o000OO bushels at
60.3 cents while, in the latter the
average was 1873 100000 at 69.6
cents. Cattle on farms for 1911-1915
were 37.17S,000 at an average esti-
mated price of 1852 while in the
latter period the annual average was
41,616.OO0 at $26.OS. Hogs on farms
in the first period were 63,151 900 at
an average price of s9.5S per head,
and in the latter 60,41S,00O at $1134
The Surplus Production Myth
From these figures, which elimi-
nate the period that embraced the
war and the early postwar imitation,
II will be observed that, with the ex-
ception of cotton and cattle. produc-
ton has been almost uniform in
the two periods. In no case has pro-
duction anywhere approached an in
crease commensurate with the In
crease in population. So-called sur
plus production is largely a myth
and the cause OF the farmers COM
plant must be looked for In some
other direction 1t must be admitted
that all has not been and is not well
with this industry. After all. what
is the matter with agriculture?
There are a few facts which seem
obvious as a part at least OF the
underlying causes OF the situation
and which suggest something of the
remedy that sooner or later must be
applied
Present difficulties had their in.
ception largely in imitation Of prices
for agricultural products from 1915
to 1920 with consequent large expan-
sion of profits. This led inevitably
with the farmer as with the manu-
facturer to expansion Of plant and
equipment-the requirement by the
individual o! larger acreage and
modern, II not always efficient. ma
chinery. These statements do not
apply to every one because there
are always some who play safely
and conservatively, proved by the
fact that there are millions OF
farmers who have gone through the
recent crisis without any difficulty
and are today prosperous and con-
tented. In fact the complaints to.
day are coming from less than 25
per cent OF the farmers OF the coun-
try and from the hordes of politi'
clans who are seeking to make
capital out OF the situation.
Results Of Imitation and Expansion
With the average and with the
majority OF those who were swept
off their feet by the wave OF pros.
perity through which they were
passing, let us analyzs the results OF
this imitation and expansion. The
farmer operating on land that he
was carrying in his capital account
at value Of, say. 500 per acre, and
who perhaps had loan OF $50 an
acre. suddenly found that. because
OF the increased profits from his
operations. his land had a marke
value OF 5000 per acre and that. II
he had a new tractor and some new
farm machinery, he could greatly In
crease his production. But il he die
that he would need larger barr
and more warehouse facilities. The
chances are that with an Appraisal
OF $500 per acre on his land he In
creased his loan TO 500 per acre
thereby doubling his capital account
and his bonded debt-not out o.
earnings but because Of his abilit,
to effect a clean writeup" OF 10(
per cent OF his plant account.
II he did not effect the doublin:
OF his capital account In this man
ner. and IL his 500 acre farm wa:
clear, he probably bought his neigh
boris farm for 5000 per acre ant
mortgaged both the new and thu
old for 500 per acre. In this latter
case, he increased his capital &C
count $50 per cent.
It is easy to see what this did u
his net percentage OF income. II h
had been able to make per cent OF
his original investment. without an.
allowance Tor the increased cost o
operations which Of course did tax
place. he cut his net income, basel
upon his capitalization. about one
half when he bad completed his ex
pansion program. But more thai
that happened His calculation
had been made upon q price for hi
product which reflected wartime Dc
,mand and buying power OF govern
ment money which were sudden
curtaiied. With demand gone IN