4 ANNUAL REPORTS OF DEPARTMENT OF AGRICULTURE. 



public would be benefited through more stable production and there- 

 fore more stable prices. 



There were substantial reductions in freight rates on farm prod- 

 ucts during the year, but rates still remain far above pre-war levels 

 and constitute a heavy burden on agriculture. In the case of some 

 crops grown at considerable distance from the large consuming 

 centers freight rates are now prohibitive or so nearly so as to make 

 crop readjustments imperative. If this condition should continue 

 industrial readjustments must follow, our manufacturing centers 

 gradually being shifted westward toward the great agricultural sur- 

 plus-producing regions. In the case of some crops, notably fruits 

 and vegetables, the higher freight rates tend to benefit eastern 

 farmers at the expense of western and southern. In the case of the 

 coarse grains and hay, however, the finished product of the western 

 farmer is to. some extent the raw material of the eastern farmer and 

 the advance in freight rates hurts both. 



The cost of labor is one of the largest elements which determine 

 the price the farmer must pay for what he buys, whether it be trans- 

 portation, fuel, implements and machinery, clothing, or what not. 

 The success of industrial labor in holding most of the gains in 

 wages secured during the war period and the two years following 

 accounts for a considerable part of the higher prices the farmer is 

 now paying for what he buys. Wages of men working in organized 

 industries, including transportation, remain at 50 to 100 per cent 

 above pre-war levels and are perhaps within 10 per cent of the high 

 level of 1920. These wages are carried into the price of the things 

 produced. The farmer's income on the other hand is down to or 

 below the pre-war level. The farmer benefits when there is full em- 

 ployment for labor and when wages are good, because the wage 

 workers can then buy freely of farm products. There is a limit, 

 however, beyond which consumption is not increased, and as wages 

 advance beyond this point they add to the cost of the things the 

 farmer must buy and thus increase his own cost of production with- 

 out in any way enlarging the market for what he produces. 



The depreciation in the currency of European countries and the 

 general economic depression existing there tends to narrow the 

 outlet for our surplus crops. During 1921 we exported large quan- 

 tities of agricultural products, especially' those products which were 



