386 



THE AGRICULTURAL NEWS. 



Decembek 6, 1913. 



But even in natural science investigations them- 

 selves the law of diminishing return exerts an 

 influence. To-day the most fertile fields have been 

 well worked and are exhibiting signs of exhaustion. 

 Agricultural research, like agricultural production, has 

 been extensive rather than intensive, and with the 

 same amount of mental effort less can be obtained 

 to-day than could have been some fifty years ago. 

 Scientific research is becoming a business, and an. 

 expensive business. Hence it is that the United 

 States' expenditure on its Department of Agricul- 

 ture has risen from S.S,00(),000 in 1S9S to nearly 

 §25,000,000 in 1913, and that for agricultural educa- 

 tion and research in Great Britain, the State has 

 voted £300,000 annually. Instead of a reduction 

 in expenditure for purposes of research, it will be well 

 to accustom ourselves at once to look forward in the 

 future to a continual increase, if progress is to be 

 maintained. 



It will be convenient here to turn to quite another 

 aspect of the law, namely its consideration in regard to 

 the commercial investment of capital. Little reflection 

 is necessary to see that in agriculture, the conditions 

 surrounding the investment of money are diametrically 

 opposite to those obtaining for commercial undertakings. 

 In any productive business we may regard capital and 

 labour as being applied in doses. In agriculture, the 

 return to the first few doses is generally small and 

 a greater number of doses may get a larger pro- 

 portionate return; but sooner or later (assuming 

 that there are no improvements in the art of 

 production) a point will be reached after which 

 any further dose will obtain a less proportion- 

 ate return. It will be understood that the return 

 to capital and labour of which the law speaks is 

 measured in aviount of produce raised independently 

 of an)' changes that may meanwhile take place in the 

 price of produce, though if we wish to draw deductions 

 from the law, external conditions must of course be 

 taken into account. 



In the manufacturing industries the reverse occurs. 

 Generally speaking, each successive dose of capital and 

 labour brings in more than a proportionate return. In 

 other words, the law of increasing return operates. If 

 this tendency existed in the case of agriculture we 

 should find cultivators giving up all but a very small 

 plot of land and concentrating all their capital and 

 labour on it. By so doing they would save nearly the 

 •whole of their rent 



Strange to say, a widespread attempt to move in 



this direction is in operation at the present day. The 

 concentration of capital in central factories and the 

 organization of small holdings are really unconcic:)Us 

 efforts to defeat the law of diminishing return. 



The great work that has been done in Denmark 

 and France in connexion with intensive agriculture 

 and co-operation affords a striking example of this 

 fact. There one finds capital and labour invested 

 per acre that would be ruinous in Canada and 

 Australia. In a country like Denmark we have what 

 may be termed 'industrialized' agriculture, and the 

 marginal dose of capital — to use a technical term — is 

 farther removed from the first dose than is the case on 

 larger properties in big countries where extensive 

 rather than intensive agriculture prevails. 



In the cultivation of land, the improvement of its 

 natural productive value so that it will stand increased 

 doses of capital is one thing, and the provision of this 

 capital another. Moreover thei-e is the (piestion of 

 labour. The greater the amount of capital expended 

 per acre the greater will be the energy required to 

 make io bring in a reasonable rate of interest. Both 

 these requirements are met in a well organized commu- 

 nity of small holders where systems of co-operative sale 

 and credit exist, and where each man is interestedly 

 industrious. Under these conditions the law of 

 diminishing returns is strained to the utmost. 



At the other extreme we have central factories. These 

 render it possible for the growers to cultivate on a more 

 intensive scale and less fertile land than would be the 

 case if each had to expend time and money uuon 

 manufacture and transport individually. With the 

 concentration of every effort on to the land itself, the 

 o])tinium ccnnlitions are obtained for the remunerative 

 investment of capital. Under the most favourable 

 agricultural conditions however, the investment of 

 capital is always limited by the law of diminishing 

 return; but such capital has the advantage of being 

 generally safer than much larger sums that may be 

 sunk in purely commercial concerns, the success of 

 which are frequently dependent upon agricultural 

 supply, and upon the integrity and the personalities 

 of those who are responsible for its management. 



According to Mr. J. 1!. Jackson's report on the London 

 drug and spice market (see \). 399 of this issue), the month 

 of October opened with a generally depressing tone, which 

 has continued throughout the entire month. The sales have 

 been uninteresting, and prices show but very little change 

 from those of last month, the only exception being an 

 increase in the price of native Jamaica Sarsaparilla, and 

 a decrease in that of Grey Jamaica, 



