The Nonpartisan Leader Newspaper, December 8, 1919, Page 8

B i o " il {! " The more of such indi- AT R N e A S S AR AT " investigation are, pos- { and dealing with every 3 Production Costs Department of Aér-iculture Undertakes Scientific: Study of Costs on Farm ; ’ p Washington Bureau, . Nenpartisan Leader. 2 IE ARE going to learn, as nearly as -science and- common sense can determine it, what the real cost of producing.a bushel of wheat, a bushel of corn, a pound of pork; a pound of beef, and many of the other units of food products. upon the American farm. Doctor H. C. Taylor, chief of the office of farm management in the United States department of agmculture, is in general charge . of this job. In immediate charge of the cost-production investi- gations is F. W. Peck, formerly cost accountant in the college of agriculture of the University of Minnesota. Doctor Taylor has asked congress for $250,000 to carry on this work durlng the next fiscal year. Meanwhile he is going' ahead with such small funds as are available, to demonstrate that the costs of production can, for all practical purposes, be determined, and that it is worth while for the government to determine these costs. “We have adopted a plan for finding the cost of production which is more nearly perfect than any that has ever been used,” said Doctor Taylor the other day. “The professors of farm manage- ment in the state agricultural colleges are sending to us for it, to use in their class work. I believe that we have now found the man, in Mr. Peck, who is best equipped to carry on these studies success-- fully. We have the full and hearty support of the' secretary of agriculture in what we have under- taken, and we have al- ready established the necessary contacts for .co-operation in securing data.” % > Three methods of cost sible. First is the secur- ing of actual records of cost, kept by the farmer item of farm work and business transactions. . gion can be surveyed in the following year: vidual cost-accounting is available, the more ac- curately can other meth- ods be checked. ‘The second method is the survey, made by a competent investigator. This permits a great many farms to be brought into the study, r’tarms of all classes, and regardless of the keeping -~ of detailed accounts. The survey is madé at the end of the crop season, so that if the results-are in any district abnormal, a more representative re- The third method is the questionnaire, sent out, by mail as a rule. It permits the collectlon of a great nfass of testimony from a ‘Wwide' afea, and if only a few. questions are asked the results are generally worth while. The thect costs that are to be charged up to a farm enterprise are: -Labor—human, ammal me- chanical; materials—seed, fertilizer, twine, sprays and feed and bedding for stock; cash—-lnsurance, taxes, selling, threshing, veterinary, breedlng' fees; investment—depreciation of investment in live- stock and interest on investment in livestock. 3 & Indirect co{r,e ‘include the use of mechamcal equlpment—c arges for use of labor, cash and ma- ‘ferials and investment in this equipment; use of buildings, with similar charges; use of land and land improvements; special charges, such as ma: or assembled under the other indirect cost headings. “Human labor, as a direct cost of farm production, #- 'ig defined 'in this way in Doctor Taylor’s plan:. 4 ' “The rate for man labor charges should be deter- mined by computing the cost of wages, board and other perquisites for both monthly and daily labor, : : mcludmg the services of the farmer for labor and i~ supervision at>the rate that another man could 4 be hired to take his place. ‘The total sum divided ; by ‘1I:he tglotel ‘number of hours gives the 1i-ate. e te N nure, lime, breeding males and perennial crops;. general expense or overhead—Ilabor, cash and in- vestment charges that can not be charged direct . large amount of labor is hired at a rate consider- ; ably higher or lower than the average rate, such labor should be charged at the actual rate paid, - rather than at the average rmll_l_abor for the year.” Charges for horse labor and for mechanical Ia- bor are handled in thé same reasonable fashion. The hourly rates for work stock, where none are ;hired, are computed by finding the cost of keepmg and caring for the work stock through the 'year, the amount of depreciation or increase in value, etc. And the cost of materials is made to cover.the cash cost, the freight and the tost of handling. Charges for farm improvements and implements are figured upon intefest on the investment, de- ° preciation, upkeep, repairs, taxes and insurance. This_cost is apportioned to each part of the farm enterprise in which it is emiployed—in other words, the implements and buildings are a cost in pro- ducing certain. crops. On land and land improvements, the official in- quiry proposes: “Land charge covers the value of .the use of the land, including drams, fences and irrigation sys- tems The charge is made up of interest en invest- ment, taxes, upkeep of drains, ete. : “In determ)mng the interest item, both land val- ue and “interest are involved. ' Prevailing local prices of land, exclusive of the buildings, should be taken as the land value, and the -prevailing rate of interest: at which money may be borrowed on well-secured farm loans as the interest rate. “In determining costs and returns to tenant and landlord;- the actual terms of the contract should be considered. It is desirable on tenant<farms that the records be' so kept as to show separate state-. ments-for landlord and tenant and a combmed statement for the entire farm.” —Copyright by Harris & Ewing. One of the vessels turned out by the Emergency Fleet corporation of the Umted ‘States shipping board.. Incidentally it may be ‘mentioned here that the ' office of: farm management is investigating the wave of speculation in farm lands which has struck- the 'state of Iowa especially. Records of more than a thousand transfers of farm land in Iowa are now in the hands of Doctor Taylor’s representatives in the .field, and a report will be made which may awaken the victims of this hallucination to- the . actual productive values of farming land in Iowa . ‘and elsewhere, It is an open secret that the de- partment looks with-amazement and apprehension: upon some of: the prices, running above $500 per acre, that have been paid: for goil upon which corn . and wheat and hogs are to be raised. Congress: has been asked to provide a fund of $250,000 for the productlon-cost studies. This item will be submitted’ in the budget for the coming fiscal year. Some‘ of the money. ought to e,made,- avallable, by special provision, ag soon in the sprmg as the bill becomes law. Dactor Taylor promises that during 1920 he will‘be able to publish some valuable prelxmmary figures on the cost of operat- : ‘ing a farnmi enterprise. The whole inquiry will take years, if it is faithfully carried_ out to. cover all of < $he chief farm products in the country.: - “It should always be borne in mind,” says Doctor. Taylor, “that a competitive price for a farm prod- “In that: case there is need: for control of prices, and when' vuct -may not at all times be a fair prlce. pnces ‘are’ to be controlled we- must know what is the cost of production of: the article in question.” “That is a mild statement of the fact known to all wide-awake farmers, that almost all prices ‘are ar- ,tlficxally controlled, and generally by special inter- .. ests.’ Once the farmers are able to show what they expend in producing a. bushel of wheat,: aphzt:idred- _ interést in mere The Nat1on 'S Shlps . Big Tonnage to Be Ready Next Summer to Carry Farm Produets to Forelgn Markets o Washlngton Bureau, Nonpartisan Leader. TO November 8, 1919, there had been delivered to the United States. shipping board a “total of 1,593 new ships, built at its order, and with a deadweight total of 8,764,908 tons. On that ‘day the merchant shipping 'of the United States had reached a _total of about 19,000,000 deadweight tons, ag compared with 31,000,000 tons for the merchant shipping of the entire British empire. And Uncle Sam has still under way, to be completed and put in commission by the end of 1920, some 4,000,000 tons more. -So that we shall next year have 23,000,000 tons of merchant ships to carry Amencan crops and American manufac- tures, and to bring foreign products*home to Amer- ica-in exchange for the thingsiwe produce. This is the almost fabulous story. of the ship- building program which was planned in the years just before the European war, and was made pos- sible of achievement by the necessities of war. Today it is the hope of a starving Europe and the best safeguard of the future of Amencan agrl- culture. Congress -is trying to dispose of the more than' 1,400 good ships that are now*under: the control of the shipping board.: The house of representa- tives on November 8 passed the Greene bill, which instructs the board to.sell, as soon as practicable, all of these Vvessels. The wooden ships, which are } not well- adapted to the ocean-carrying. trade, are . ‘to be sold to ‘whoever < may wish to__buy—-wheth- er ‘American. or foreign. The steel ships must be sold to ‘American citi- zens.- All of the fleet must be sold, and the purchase price must be fully - paid =~ within 15 years., The 'board will re- . quire a payment down, in each case, of about 26 per cent, and will there- fore hold a three-fourths interest in each of the ships when it ‘goes -out upon the ocean to earn . for its private operator the money with which to pay for itself. During the past five years there have been many instances in which a ship has paid for itself in four voyages, due to the freight rates that could be charged in time of submarine peril. Now that the war ‘is.over, and millions of tons used by the navies are returned to mereantlle service, the earnings are reduced: Yet the shipping experts are agreed that the next four years, - at least, will be highly profitable for cargo carriers that have efficient handling and qulck loadmg ‘and “unloading. Contrary to popular belief, the slnpping board did not operate any merchant slnps during ‘the war, - nor has it operated any, since the armistice, for - public ‘account. From the very outset private op- eration was made the policy. ' An inter-allied com- mission had general charge of the shipping between © America and Britain and France. This commlssmn co-operated with the shlppmg board in seemg ‘that “private shipping companies were given. ‘ships, under . government control, to be operated for ‘private ' profit. - This arrangement was. called- “allooatxon,"_ : which involved either a lease or a ‘sharing of profit “'between the government, which owned the ship, and - the company which operated it under government.:‘ supervision. - But no experiment in pubhc operatlon‘- of publicly owned 'ships’ was made, s This was in contrast to the policy of publlo op- _eration of ‘publicly owned ships of ‘the Panama Railroad company’s - line between the canal and. .~ New York: Tt was algo in contrast with the gov- “‘ernment’s direct and profitable entry into the busi- ‘ness of marine insurance, which kept marine “in- - surance rates down to a fraction of what they had been until Uncle Sam got into the: game - “Now that the. war. 18 past,