lative Assembly of Victoria, Australia, to pass a series of "Closer Settlement Acts" having for their aim the breaking up of the larger holdings and the placing of the smaller farms in the hands of actual owners. These acts furnish land to the settler on what was intended to be liberal terms. The settler has thirty-one and one-half years to pay for his land, his annual payment (principal and interest) being 6 per cent. And when he makes improvements, the Government advances him a loan to the value of sixty per cent of his improvements; likewise he secures liberal advances for the purchase of stock. The Government, in carrying out these Closer Settlement Acts from 1904 to 1914, in the dry, irrigated area, bought some 87 large estates, containing a total of 468,188 acres. The original payment for these lands was about $30.00 an acre, but the additional "loading" on this cost, due to various expenses, brings the cost price up to $35.00 an acre. These lands were divided into some three thousand, three hundred and seventy-six allotments for sale to settlers at cost, on the liberal terms named above. To quote from the Government's Report on the administration of these acts: 5 "The whole design of the Closer Settlement Legislation as may be gathered from its apparently liberal terms of repayment, is to enable men, experienced and able in farming pursuits, but possessed of limited capital, to get on to their own holdings, and stay there. The conditions imposed by such legislation, however, often defeat its own purpose." The report exposes some very interesting conditions, the most important of which may be profitably reviewed here. Wheat growing is mainly relied upon by the settlers on these allotments. And, oddly enough, the farms have proved too small for profitable wheat growing. The average size of the wheat farm in certain quarters is 300 acres, and the least area on which a satisfactory living at wheat-growing can be made in this region is given as six hundred acres by the settlers. Again, in carrying out the acts, some unsuitable land was unloaded onto the State at a good price. This land is known as dry-farming land, and hence suited only to cereal growing and stock raising. During the investigation carried on by the committee making this report, the chairman of the Settlement Board was asked in effect, "Can a man live on three hundred acres of land suitable only for wheat-growing (that is, which does not permit of combined wheat growing and dairying Report from the Sub-Committee of the Cabinet on the Administration of the Closer Settlement Acts. Victoria, Melbourne, Aus., Feb. 3, 1914. or grazing) at $40.00 per acre, which land will only carry one 'wool' sheep to the acre?" His answer was disconcerting. He said, "I do not think so." Settlers in this region impressed on the committee that the least area on which a satisfactory living at wheat growing could be made was six hundred acres, or, twice the average size allotment held by settlers. Hence the result of many years of experimentation in "closer settlements" in the dry area of Australia proved that small holdings are not a success under certain conditions; that larger holdings must be encouraged under certain circumstances; and that in any event the size of the holding should be governed by such economic conditions as the nature of the soil and climate, the product of the soil, and the relation of this product to the wide question of supply and demand. In New Zealand the farming industry is receiving the closest attention. At the 1916 meeting of the New Zealand Farmers Union, held at Wellington, among the important matters discussed was that of the adoption of more effective measures for preventing the increase of larger holdings of land, it being considered detrimental to the development of the country in general. The Problem in the United States.-Two classes of our people are enthusiastically advocating the "Back to the Land" movement. Many of these accept the forty-acre farm unit as the ideal. These two classes are the editors of our city papers and the "High Cost of Living" sufferers, also city dwellers. To the city dweller, one cure for the high cost of living is cheap food. But while cheap food would be good for the city, it would be bad for the farm. Conversely, dear food is good for the farmer, since he has it to sell, but bad for the city man. The problem is a complex one. The metropolitan editors usually say: "Be independent. Be good citizens. And by quitting the city for the farm, you will become both." Such a readjustment of our population, should there be any considerable drift to the land or development of small holdings, would demand a serious consideration of these economic problems: (1) Subtract labor from the city. This would decrease the output of what? If this shift would merely decrease the production of brass jewelry, artificial flowers and feathers, gewgaws and luxuries, a gain to society rather than a loss would occur. Such a change in consumption would doubtless be welcome-if it could be effected. (2) Add labor to the land. This would increase the output of what? More of the staple crops corn, wheat, cotton, etc.-are not wanted. Additional labor thrown into competition with the farmers now engaged WHAT ARE LUXURIES? 41 in the production of these staples would simply lower the earnings of all thus employed to a meager subsistence level. In fact it frequently happens now that there is an overproduction of these crops, resulting in hardship to producers, and in little or no benefit to consumers. The testimony of LeGrand Powers, before the United States Industrial Commission at Washington, in 1899, is especially interesting in this connection. Question: What have you to say in regard to the decline in the price of agricultural products in the last, say, thirty years? Powers: There has been a very large decline at points where the price is affected by the cost of transportation; there has been a less decline in points from which that transportation has carried the produce. There has been a decline, but small, in articles that have not been overproduced; there has been an enormous decline in the articles whose production has increased faster than population Question: That holds good in all farm products, grains, cotton, etc.? Powers: I believe that that principle in general applies to-day the same as it did two hundred years ago. Question: The capacity to consume, by purchase or otherwise, has as much effect on prices of products as the question of overproduction or underproduction? Powers: That comes in as a factor slowly modifying prices. With certain articles it has far greater influence than with others. The amount of bread which a man can eat, the number of pounds of breadstuffs, including wheat, corn, oats and all others that we use for human food varies but little. We may change the form of it, but the number of pounds a human being eats is substantially the same. He may substitute cornmeal or oatmeal for wheat, but the number of pounds consumed will be substantially the same. The general proposition is not true to so great an extent with articles of food that may be called luxuries. The rule governing the consumption of strawberries or Čalifornia oranges or pears or fruit is quite different. Their consumption may be increased enormously, and such increase may exert but a little influence in decreasing the consumption of these other things. As showing something of the power to increase the consumption of food luxuries, I will mention the fact that Minneapolis, as a center of consumption and distribution of the Northwest, shows a doubling of fruit sales every three years for the last few years. Population has been doubling once every fifteen years, but the sales of fruit double every three years, or eight times as fast as population. A certain portion of the relief of agriculture must come from an increased consumption of these things, which represent relatively a large amount of labor. The increased demand of our people in the United States for these luxuries represents about as much for the farmer as our increased exports. Thus, note canning, which represents one phase of this business. It began about 1865 or 1870. Now the amount of fruits, vegetables, fish, and meat that is consumed in cans in this country is very great." What are Luxuries? The "luxuries" mentioned by Mr. Powers are now looked on as necessaries, rather than as luxuries, particularly the California oranges. The 1914 report of the general manager of the California Fruit Growers' Exchange, 6 U. S. Industrial Commission Report, Vol. X, p. 186. G. Harold Powell, has this to say on the consumption-overproduc tion problem: "During the past few years the Exchange has increased the per capita consumption of citrus fruits by advertising. The population of the United States has increased 21 per cent during the past decade. The consumption of California oranges increased 74.6 per cent during the same period The citrus fruit crop of California increases 255 per cent from 1895 to 1900; 71.7 per cent from 1900 to 1905; 10.9 per cent from 1905 to 1910; and 48.5 per cent from 1910 to 1914. The production will increase rapidly in the future, the acreage having increased 128.9 per cent in the last decade. The in FIG. 6.-G. Harold Powell, Manager of the crease in shipments of citrus fruits from Florida and California have more than doubled in the last decade. The exchange organizations have, therefore, an obligation, not only to sell their fruit wisely from year to year, but to develop a distributing and selling system and an advertising policy at the same time which will cause consumption to keep pace with the increase in production. Only through the stimulation of consumption in this way can the future financial stability of the two-hundredmillion dollars invested in the California citrus industry be assured. When production exceeds consumption, then the investment of the grower is jeopardized There are certain features of the California industry to which the exchange members must give serious consideration. They relate to the increase in production and to the future stability of many investments... The solution of the problems outlined will depend primarily on a large increase in the per capita consumption of citrus fruits and the ability of California to meet successfully the competition of Florida oranges and grapefruit and of Italian lemons. There are a few leading fundamentals which the California industry must recognize if it meets these problems successfully. There must be an improvement in the average standard of the fruit that leaves the state, both in grade and in keeping quality. This makes it imperative to develop the manufacture of the lower grades into by-products. There must be an improvement in the care of groves so that more fruit of higher quality may be produced per acre; and in the handling of the fruit so that decay and other preventable losses are eliminated.. Fruit of good eating quality only can be shipped in the future, if the industry is to maintain its integrity with the consumer. The distribution of the oranges and lemons must be uniform throughout the year. . ." (Fig. 6). This lengthy quotation from the manager's annual report has been given to illustrate the significant fact that a great industry can be conducted in such a way as to improve the product from year to year, and at the same time make this product cheaper to the consumer and bring more to the producer. And the whole TESTIMONY OF PROMINENT WITNESSES 43 process has been perfectly simple. Advertising has widened the market. The widened market has made possible certain largescale, coöperative processes in production and marketing and a standardization, whereby all possible wastes have been eliminated. This has left more income to the producer of the fruit, and a smaller cost for a better orange to the consumer. It has produced "savings," not "profits," as the coöperators term it. Concerning the standardizing of the product and the advertising of it, the manager above quoted goes on to say: "Primarily, the function of our advertising is to increase the consumption of citrus fruits. To do this it is necessary to have a brand around which we can build our advertising arguments. This brand is the consumer's protection. It is his guarantee as to the quality of the fruit. In other words, we want him to feel that all he needs to know about an orange or lemon is that it is "Sunkist." We must make the consumer realize that the name "Sunkist" on an orange or lemon means just what the Sterling mark means on silver. Our advertising will create in the minds of the consumers a public consciousness of the food value of oranges and lemons. This can only be done by maintaining the highest possible standard of quality, for unless an article has quality, it cannot be successfully advertised. The permanent prosperity of the citrus industry depends on getting a sufficient number of people to use oranges and lemons, and this can most thoroughly and economically be accomplished by giving the public the reasons why they should use them and suggesting to them the various ways in which they can be served. Advertising is not a mysterious thing. It is simply telling the people the truth about the thing we have to sell and telling them through those channels in which they have confidence and to which they are accustomed to look for information and guidance." The foregoing discussion is given at some length to illustrate the truth that an increase in production is good for the farmer where an increase in demand keeps pace with such increase in production, but that an increase in the production of staple crops, where demand is stationary, is bad for the farmer. Testimony of Prominent Witnesses.-The bonanza farm of the West and Northwest is a wheat farm. It stands for specialization. The small farm, on the other hand, is generally used for diversified farming. In industry the trend of modern times is towards specialization. In farming there are two discernible tendencies, the one towards specialization on the large farm, the other towards diversification on the small farm. The advantages of these two are open to debate. Doubtless local conditions must be the deciding factor in either case. Volume X of the Industrial Commission Report quoted above, contains the following digest of testimony, pro and con, on the advantages of the small farm, as given by practical farmers.7 7 Report of Industrial Commission. Vol. X, Washington, 1901, pp. CXCVI-CXCVII. |