necessary to complete financial success, yet over-capitalization in this regard is of frequent occurrence. This is a common mistake of the gentleman farmer. Farms frequently sell for less than the cost of the buildings. It is difficult to draw the line between utility and personal gratification. Often the latter gains the ascendancy. While perfectly proper for a summer home, this should not be permitted in a business investment.

Buildings that are used for only a short time in the year demand most careful scrutiny. The annual charges for interest, depreciation and insurance must then be apportioned to the one purpose for which they are used, and therefore the charge per day or week may be unusually heavy. When this expense must be charged

Fig. 174. Buildings that would represent over-capitalization in one of the capital-groups if they were on an ordinary farm.

to a single crop, as in the case of tobacco sheds, the cost should be carefully considered in estimating the net returns from the crop. Buildings deteriorate and involve constant expense for repairs and risk from fires. Changes in the scope of operations often render the structures unsuited to new needs, thus involving financial loss. The policy should be carefully determined and the needs thoroughly studied.

Fences exact a heavy toll on many farms. While this is more properly a fixed expense, it is distributed over a period of years, and therefore may be considered in connection with the equipment. Careful study of the arrangement of fields, the plan of rotation, and abolishing fences not absolutely indispensable, will, in many cases, greatly reduce this charge.

Trees and plants form a very considerable part of the investment on fruit farms. Their value is difficult to determine, but may often surpass the value of the land itself. On such farms, the planting represents the most important part of the equipment. Its cost will depend much on circumstances, being governed by the locality, the type of planting, and the system of management pursued. A cost of fifty to one hundred dollars per acre is none too much to expect for bringing orchard fruits into bearing. If interplanting with vegetables and small-fruits is practiced, the return secured from them may equal or exceed this cost.

Fig. 175. A not uncommon example of undercapitalization. The result of a lack of analysis of the relative expenditure to be put into crop production and into buildings.

Implements. Teams.

Implements of improved pattern are more and more forced on the attention of the progressive farmer. The increasing complexity of the labor problem, and the difficulty of securing satisfactory or even unsatisfactory labor, may force the farmer to buy implements which otherwise would be unprofitable for him to own. Mechanical equipment which will replace unreliable human agents is steadily gaining in favor. If labor is available, several factors should be considered before determining on the purchase of a machine. The first of these is the cost of doing the given work by its aid. This cost is made up of a number of items, some of which may be easily overlooked. First comes the actual cost of the operation, as compared with the cost of doing it without the implement. To this must be added the charges which the ownership of the machine involves. This includes interest on the investment, depreciation in value due to use, accident, or improvement in the same type of implement, making it less efficient than newer models, the cost of repairs, storage and risk. The expense incurred in a change of machines made necessary by important improvements, may form a heavy item of depreciation. These

items must be apportioned to the amount of work done. While such fixed charges may be light, if apportioned to a large number of units of work, they may be so heavy as to rule out the machine at once in the case of a small business. The amount of work to be done is often, therefore, the most important factor to consider. It is then necessary to know what the machine is likely to accomplish under average conditions and what its probable lifetime and depreciation will be. A further important factor to be considered is its efficiency, whether the implement will do as good or better work than can be done without it. With such implements as the cream separator, this is the determining factor; with others, the efficiency may be practically the same with or without the machine.

It is significant to note that in the figures cited on the preceding pages the most profitable farms do not show a corresponding increase in the amount invested in teams and tools. The proportion is less on the profitable than on the unprofitable farms, though the total amount is more, since the capital invested is larger.

Teams involve a heavy expense for maintenance. It is a phase of the equipment that needs careful watching. Some saving may be effected at times in the cost of keeping by a careful study of rations, but this cannot be great. The important factor to be considered is the percentage of efficiency of teams kept, that is, the proportion of possible working time during which they are employed. A team which works only half the time that it might work, doubles the cost per hour for all work in which it is employed. No more horses should be kept than can be employed to advantage; then the work should be carefully planned to provide for as continuous use as possible. There must always be some idle time, but a study of the problem may greatly reduce it. A report which is before the writer shows that of two teams employed on the same farm, one worked 230 hours, the other 163 hours, during May, one of the busiest months. In August the same teams worked only 149 hours and 137 hours respectively. The cost of keeping these teams is about $25 per month. The actual team-work cost, therefore, from 10.8 cents to 18.2 cents per hour. The efficiency of the team itself is also to be considered. The most expensive team is not always the most efficient, but it is poor economy to use a team too light for the work in hand, or one that is not sufficiently well-fed to enable it to accomplish the full amount of work demanded. Depreciation in value represents a large part of the cost of keeping teams. The more expensive the animals the greater this charge becomes. For farm work it is often more profitable to buy cheap horses than expensive ones. In some cases they are really more effective in such work than high-priced, nervous animals, which must be carefully watched and guarded.

Working capital.

Labor is the one factor in the business that is most frequently lacking. Few farms are utilized to their most profitable capacity. The labor problem deserves much careful study. Among the farms previously mentioned, those which show greatest profit generally show also the largest outlay for labor. To urge that the farm should be utilized to its full capacity does not mean that every farm must be turned into a truck farm in order to employ more labor. It does mean that enough labor should be provided to make full use of the farm in the type followed. Greatly increased cost in the care of the crop and greatly diminished returns, due to the lack of labor to do things at the right time, are an almost constant experience on many farms. The cost of tillage in any hoed crop may be more than doubled by a few days of neglect; the returns at the same time may be cut in half. The margin whereby one man's production exceeds the cost of his services cannot be large. To develop a large and successful business demands that such margins from the labor of a number of men shall be combined. The margin itself must first be assured. Ready money is in constant need, to pay for labor and to conduct the regular operations of the farm. Thousands of farmers are hampered for the lack of it, and lose each year far more than the interest charge would be on the capital needed for this purpose. Money is frequently needed to embrace special opportunities in the purchase of stock, equipment or supplies. The annual charge for feed and fertilizers can be greatly reduced by buying in quantities at favorable seasons. Sometimes it may be necessary to hold a product to avoid an unfavorable market; this practice can easily be carried to excess, involving the idea of speculation, but there are other times when it is simply good business policy to do so. Money to provide for extra labor when needed may be doubly well-invested, avoiding neglect and increased cost.

In conclusion, it may be said that the forms of capital that need most careful guarding are those less stable forms of circulating capital, beginning with ready money, and those phases of the equipment or business for which it is most likely to be needed. Permanent forms of invested capital are less likely to be neglected. The greater the competition, the greater, as a rule, will be the demand for working capital.

gate $1,600 to $2,000, leaving a net income of $2,000 to $2,400, out of which would have to come interest, taxes, repairs and betterments.

In new regions.

In the newer sections of the country, notably the Dakotas and the Canadian Northwest, grain-farm

The average yield for the past decade for the wheat-belt of Canada has been about twenty bushels per acre, but the Dominion experiment farms are demonstrating that it is possible by good farming, and leaving the land fallow one year in three, to secure a yield of forty bushels. With equally good farming the investment in the wheat-belt would doubtless prove

the more satisfactory if considered from the standpoint merely of net profits.

It must be kept in mind that all the preceding estimates are for the man with ample capital, who desires to bring his farm to a high state of efficiency in the shortest possible time. Every year,however, it is demonstrated that a man beginning with scanty working capital, either as a renter in the corn-belt or as a proprietor in the newer sections, can accumulate a competency. In farming, as in other callings, it is, after all, the man and not the equipment that counts.

Fig. 176. Grain-farm in the Saskatchewan valley, Western Canada, in which capital is chiefly in land.

ing can be undertaken with a much less outlay of capital. In the Dakotas it is estimated that there are approximately twelve million acres still open to homestead. In the wheat-belt of the Canadian Northwest there is quite as much. A part of these are first-class lands, which have not been taken up because of the distance from railway and market. The cost of a quarter-section homestead is nominal, consisting of filing and entry fees. Land, average in quality and in location, can be bought for ten dollars per acre. In the wheat-belt it is considered that a farmer to occupy fully his time should have not less than a half-section of land. On the basis of the half-section, the investment for land will be $3,200. The cost for permanent improvements and working equipment will not be greater for a halfsection in the wheat-belt than that figured for a quarter-section in the corn-belt. In addition to the above, there must be added the capital required to bring the land from the prairie to a state of productiveness. The cost from the prairie to the first crop of wheat in the elevator is estimated at ten to twelve dollars per acre, when the work is done by contract. Some large landowners, who operate their farms by hired labor under their personal supervision, figure this cost as low as seven dollars per acre. If we take this latter cost at an average of ten dollars per acre, the working capital required to bring the half-section to the point of making returns will be $3,200. This charge should be regarded in the nature of a temporary loan to be repaid with the first crop. The cost of the second crop is figured at about four dollars per acre, and of succeeding crops at about six dollars.

THE EQUIPMENT AND OTHER CAPITAL
FOR A GRAIN-FARM FROM AN ONTARIO
POINT OF VIEW.

By W. C. Good

Grain-growing is now rarely the exclusive practice of the Ontario farmer. The opening of the great prairie districts, with their abundance of cheap and fertile land, has forced the farmer of eastern Canada to combine with the growing of grain for sale other agricultural industries, through which his relatively high-priced land may give to him better returns than if he made grain-growing his main or only source of income. In the West, there are still great unbroken areas covered by the remains of plants of countless seasons. For the most part, little labor is needed to make this land fit for wheat-growing. Timber is either absent or scrubby, stones are rarely troublesome, and the surface is generally fairly level. Moreover, the land can be purchased for a very small sum, and the equipment necessary for beginning operations is simple in the extreme. For these reasons, and others, the western farmer can afford to ignore, for the present, such questions as the depletion of the soil, the utilization of by-products, and the like.