AGRICULTURAL ECONOMICS 



as there are different grades of farmers to use it 

 and different grades of uses to which it may be 

 put by a given farmer. In order to get a capital 

 value that will correspond more or less closely to 

 the market value of the various forms of capital- 

 goods it will be necessary, therefore, to arrive at 

 the competitive price which will be paid for the 

 use of a given capital-good during the series of 

 years of its usefulness, and then find the present 

 value of the series of incomes, in the same way as 

 has been done in the case of land. But since it 

 is not common in this country to let horses, tools 

 and machinery to farmers for a hire, this method 

 of capitalization is less practical to the farmer 

 when applied to capital-goods than when applied 

 to land. 



The cost of producing the machine or the horse 

 is an important element in determining the price 

 which must be paid for it in order that it may be 

 produced. On the other hand, the usefulness of 

 the machine or the horse to the farmer forms the 

 basis for his estimating whether or not he can 

 better afford to pay the market price or do with- 

 out them. It may be true even that the capital 

 value of the instrument, when calculated on the 

 basis of its usefulness to a given farmer, may be 

 greater than its market value and yet it might be 

 unprofitable for the farmer to buy the particular 

 horse or machine, because other means of securing 

 the same end might prove more profitable. 



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