The Daily Worker Newspaper, February 9, 1924, Page 6

THE FARM CRISIS pi HERE is perhaps more muddled thinking on the farmer question in the United States than on any other economic problem. And such thinking is particularly muddléd among the groups that are trying to bring about a working farmer-labor ecmbination 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 whers these groups think it dees. 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 *,uesiion goes wrong is jn the as- sumption generally made that, some- how cr other, the farmer does not get a fair price for what he sells. Wheat is werth so much on the farm, and considerably more when it is sold to the consumer in the form of bread. The spread is widely stepposed to re- prg#- ent 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- pansicn. 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 farmer was all right in regard to the 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 oa economic groups all along the ne. 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- pris; stands in relation to another, or to industry and trade genera'ly, is to consider the average prices paid for its products over a term of years. _ When we app'y this test to agri- culture, what do we find? We find that farm products bring their natur- al price in the market the 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 cent 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, 12 per cent; 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 year 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 cance] out, and an average is struck that represents a fair ex- change, vaiue 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 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 een an result brought about by the ebb aad flow of capital and labor in pursuit 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 rate 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 A Hornet’s Nest. 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,- 060,000 from Jan. 1, 1922, to March 1, 1922, and in 1922 more than 2,000,- 1000 persons moved from the farms to | the cities, | “But we must distinguish between the farmer as an individua!, and the economic enterprise which he works. It does not follow, because the farm- ers have 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- perted by the census in 1920, the average interest return was 6.1 per cent; and the return was consider- 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 pienty of evidence that the farmers are not prosperous, Ac- cording to the census, farm mortgage debt increased from $6,330,236,951 in 1910 to $13,775,550,013, or 117.6 per cent; in the period from 1890 to 1910 it increatwd from $3,064,923,165 to $6,330,236,951. Doubtless much of this money was borrowed for invest- ment purposes; but that it did not produce much profit for the farmer is shown by the fact, as reported by the secretary of agriculture, that in the fifteen wheat states alone more than 108,000 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- amounts invested in other lines, a ferance of their creditors, 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 se@urity, 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 my large capital. Always going on, ss is speeded u in times of crisis, 6 It is common knowledge that the principal cause of failure in business is insufficient capital. Thus in the week ended Jan. 17, 1924, 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 than less than $50,000 capital, 33 had | than $100, | aed only 4 hed lees than $500,000. That has been smu annette PA TET EC CECE EEO Net eEettitnteeeem ne tanethtieetniment <epieettaaaaiCmetEetEeS 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- i of the man that supplies the capi- al. rig op | this fact in mind should save the farmer-labor movement from serious mistakes. One error it should guard against is the effort, growing naturally out of the price-theory of farm 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 t capi- 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 thousands 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 it, is with the true proletarians, These men can be logically united with labor in an attack on the 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 wn, My own strength never failed me. y, there was the tinfe 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 went till I ended up A man-of-all-work in Spoon River. Thus when I got the water-tower cleaned, And they hauled me up the seventy feet, I 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- ke Soan ov I jown, down, down, lun, 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.” The Farmer Tells His Tale of Woe.