The daily worker. [volume], February 09, 1924, Magazine Supplement, Image 6

About The daily worker. [volume] (Chicago, Ill.) 1924-1958

Image provided by: University of Illinois at Urbana-Champaign Library, Urbana, IL

                
THE FARM CRISIS - -
THERE is perhaps more muddled
thinking on the fanner question
in the United States than on any
other economic problem. And such
thinking is particularly muddled
among the groups that are trying to
bring about a working farmer-labor
combination for political purposes.
This goes for the proletarian ele
ment in the farmer-labor movement,
as well as for the Non-Partisan
League and the Farmers’ union and
other organizations that think they
see an identity of interest between
the farmer and the wage-earner.
Such an identity of interest in part
exists—but not wher.e these groups
think it does. It does not consist, for
example, in any supposed common
motive for reducing the toll of the
middleman.
Where most thinking on the__farm
er Question goes wrong is jn the as
sumption generally made that, some
how or other, the farmer does not get
a fair price for what he sells. Wheat
is worth so much on the farm, and
considerably more when it is sold to
the consumer in the form of bread.
The spread is widely supposed to re-
sheer graft—an unjust exac
tion from the farmer on the one hand
and the consumer on the other.
It is easy to show, without going
into abstruse mathematical calcula
tions, that there is little basis for this
easy assumption. For twenty years
before the war, the prices of farm
products rose faster than the prices
of other goods, and there was a tre
mendous development of agriculture.
These facts cannot possibly be made
to square with the theory that farm
ing was unprofitable because of low
prices for farm products at the farm.
Even if that assumption were not
sufficiently disproved by the greater
pre-war rise of farm products than
of other goods, it would be knocked
out by the record of agricultural ex
pansion. No industry grows unless
there is money in it.
But the present agricultural
emergency is supposed to have
grown out of the war and its after
math. It may be said that if the po
sition of the fanner was all right
in regard to th.e prices obtainable for
his products in the twenty years be
fore the war, it isn’t all right now.
That, in fact, is the diagnosis most
commonly made of the agricultural
trouble. Farmers are going bankrupt
by the thousand, it is said, because
there is a disparity between the
prices of what they have to sell and
the prices of what they have to buy
which puts them at a disadvantage to
other economic groups all along the
line.
If you take the situation as it
stands at this moment, there seems to
be some truth in this statement, but
it is impossible to know the position
of an industry by looking only at the
prices of its products for a single
day, or for a single year. Prices are
always fluctuating in response to
changes in supply and demand. The
only way to find out how one enter
prise stands in relation to another, or
to industry and trade generally, is to
consider the average prices paid for
its products over a term of years.
When we apply this test to agri
culture, what do we find? We find
that farm products bring their natur
al price in the market th.e same as
other goods. Farm products are low
now; but they were high during the
war. Index numbers published by
the U. S. Department of Agriculture
show that in 1914 the purchasing
power of agricultural commodities
was 12 per c.ent above the level of the
preceding year, which is usually
taken as normal in index number
calcu’ations. In 1915 the farm pur
chasing power index was 6 per cent
above the 1913 level; in 1918 t 12 per
ceqt; in 1919, 11 per cent.
There has been a slump since. But
the average from 1913 to 1924 is only
slightly below the par of 1913. All
last ytear the farm purchasing power
index was rising. Indications are
that it will continue to rise for some
time. Over a period of years, the
ups and down in farm commodity
prices cancel out, and an average is
struck that represents a fair ex
change, va.'ue for value, between agri
culture and other groups.
Economic science, as well as statis
tics, enforces this conclusion. One
of the most solidly established laws
of economics is the law of equal pro
fits. This is the truth that, in the
long run, capital and labor invested
in one line of production will earn
profits at the same rate as equal
amounts invested in other lines, a
result brought about by the ebb and
flew of capital and labor in pusauit
of gain. Since profits can only be
realized by the exchange of goods, it
follows that no class of goods can
permanently sell on the bargain
counter.
Does that seem a pretty big dose
to swallow? Try to imagine the op
posite. Suppose some industry to be
earning fabulous profits. Will not
capital and labor be drawn into it
until competition brings the xate
down? Or, on the other hand, can
you conceive of capital and labor be
ing continuously poured into an en
terprise yielding a lower return than
is obtainable elsewhere? You can
not. You cannot explain the tremen
dous flow of capital and labor Into
agriculture in this country in the last
few decades, except on the assump
tion that the operation has been pro
fitable to someone.
Profitable, yes. But for whom?
That is the whole question. When it
is answered, we shall have arrived at
The Farmer and His Troubles
Wm 4 • ast AdH
the true basis for farmer-cooperation,
and shall have done with the false
basis that is generally adopted now.
The farmers of the United States are
not prosperous as a class, and have
not been prosperous as a class for a
long time. How this fact can be re
conciled with the assertion already
made that Agriculture has been pros
perous. The explanation is the same
as the one that applies to the position
of the wage-earner. The wage
earner is not prosperous because he
does not own industry, and the farm
er is not prosperous because he does
not own agriculture.
There is plenty of evidence that
the farmers are not prosperous. Ac
cording to the census, farm mortgage
debt increased from $0,330,236,951 in
1910 to $13,775,550,013, or 117.6 per
cent; in the period from 1890 to 1910
it increas'd from $3,064,923,165 to
$6,330,230,951. Doubtless much of
this money was borrowed for invest
ment purposes; but that it did not
produce much profit for tfie farmer
is shown by the fact, as reported by
the secretary of agriculture, that in
the fifteen wheat states alone more
than 168,000 farmers have since 1920
lost their farms or other property
thru foreclosure or bankruptcy, while
more than 122,000 have lost their
property without legal proceedings
and nearly 373,000 are retained in
nominal possession only by the suf
ferance of their creditors.
Forty per cent of the farmers of
South Dakota are bankrupt, accord
ing to the secretary of agriculture;
and 42 per cent in Colorado, 50 per
cent in North Dakota, 51 per cent in
Wyoming, and 62 per cent in Mon
tana. Farm values dropped $13,000.-
000,000 from Jan. 1, 1922, to Mqgc?i
1, 1922, and in 1922 more than 2,000,-
000 persons mov.ed from the farms to
the cities.
" But we must distinguish between
the farmer as an individual, and the
economic enterprise which he works.
It does not follow, because the farm
ers hav.o not prospered, that agricul
ture has been unprofitable, any more
than the existence of slums in a big
city proves that the industries of
that city are losing money. The truth
is that the capital invested in agri
culture has been well paid. On the
$13,775,500,013 of mortgage debt re
parted by the census in 1920, the
average interest return was 6.1 per
cent; and the return was consider-
A Hornet's Nest.
ably higher on the vast unreported
volume of chattel and crop mortgages
and collateral and personal security.
Probably the borrowed capital invest
ed in farming has regularly paid up
ward of 10 per cent. Considering the
security, that is a handsome return.
Farmers are unprosperous as a
class because they do not own the
capital used in agricultural produc
tion. As agriculture grows more and
more complex, it takes more and
more capital to run it. This neces
sity steadily weakens the farmer’s
position as an independent producer,
as a member of the petty bourgeoi
sie, and forces him down to a peas
ant status. He is a victim of the
same process by which small capital
generally has to make way in pro
duction for large capital. Always
going on, this process is speeded up
in times of crisis.
It is common knowledge that the
principal cause of failure in business
is insufficient capital. Thus in the
week ended Jan. 17, 1924, according
to Bradstreet’s, out of 525 business
failures in the United States, 379 in
volved concerns having less than
$5,000 capital, 81 were failures of
concerns with less than $20,000 capi
tal, 28 of the defunct enterprises had
less than $50,000 capital, 33 had less
than SIOO,OOO, and only 4 had less
than $500,000. That has been the
story of business failures for years.
It is also the story of agriculture
failure, —for the individual farmer.
By ANALYST
Agriculture, capitalized by the mort
gage corporation, the banker, and
the lender of personal credit, rolls
up big profits for the owners of the
money invested; it tends to show
diminishing returns year by year for
the actual producer. It may be well
to emphasize again what has already
been shown, that the cause of this
unequal division of rewards is not
fundamentally a question of prices
for commodities. The fundamental
trouble is that our whole economic
system is organized,'not for the bene
fit of the producer, but for the bene
fit of the man that supplies the capi
tal.
Keeping this fact in mind should
save the farmer-labor movement from
serious mistakes. One error it should
guard against is the effort, growing
natijrally out of the price-theory of
farjn depression, to unite all farmers
with the wage-earners in a political
movement. Farmers do not fall into
a single economic class. They are
divided among themselves into groups
according to their command of capi
tal.
In many states a large proportion
of the farmers are true entrepre
neurs. They own their farms and
their machinery of production, large
ly because they or their forbears
were on the ground before the pres
ent era of large scale capitalist pro
duction developed.
In other states, where the lure of
cheap land induced of men
to start farming on a shoe-string,
not ten per cent of the so-called
rarmers are free from the domination
of outside capital. They are victims
of the fact that the growth and con
centration of capital is making in
dependent production as difficult in
agriculture as in industry. Their
place, if they only knew u, is with
the true proletarians.
These men can be .logically united
with labor in an attack on {he capi
talist system. But a blanket appeal
to all farmers, which ignores the
fundamental economic distinctions
among them, and attempts to base a
farmer-labor struggle on the myth
that exploitation takes place thru
manipulation of commodity prices, is
useless because unsound in principle,
and dangerous because it tends to
hide the true cause of both agricul
tural and industrial poverty.
MICKEY M’GREW
By EDGAR LEE MASTERS
It was like everything in life:
Something outside myself drew me
down,
My own strength never failed me.
Wny, there was the tiirfe I earned
money
With which to go away to school,
And my father suddenly needed help
And I had to give him all of it.
Just so it wont till I ended up
A man-of-alf-work in Spoon River.
Thus when I got the water-tower
cleaned,
And they hauled me up the seventy
feet,
1 unhooked the rope from my waist,
And laughingly flung my giant arms
Over the smooth steel lips of the top
of the tower—
But they slipped from the treacher
ous slime,
And down, down, down, 1 plunged
Thru bellowing darkness.
“Revolution in itself is no abstract
principle, but a material historical
fact, growing out of class, antagon
ism, out of the violent subjection of
one class by another.”
r " 1 —" ■■ i ■.
The Farmer
Tell* Hia Tale of Woe.