940 READINGS IN RURAL ECONOMICS 



and require better housing. More thorough cultivation calls for 

 a larger expenditure for labor or increased employment of ma- 

 chinery. Declining soil fertility may force the farmer to resort 

 to artificial fertilizer. It is possible that these added items of 

 expense may not be reflected in increased production and must, 

 therefore, be wholly met out of an increase in prices. But should 

 such an increase in prices not take place, the additional expendi- 

 tures would have to be met out of the farmer's capital, which 

 must ultimately increase his mortgage indebtedness. That this 

 is frequently the case the history of agriculture affords abundant 

 evidence. A recent writer, speaking of conditions in a certain 

 locality, says the demand for mortgage credit exceeds the supply, 

 owing to the transformation of short-term into long-term loans. 

 Trosien remarks that personal debts tend to become mortgage 

 debts, while second mortgages often arise from the capitalization 

 of unpaid interest on the first. Consolidation of past debts is 

 given as the greatest cause of mortgage indebtedness in Sas- 

 katchewan. In the United States, undoubtedly, no inconsiderable 

 part of the indebtedness incurred through these expenditures has 

 been converted into mortgages ; and this, therefore, may be con- 

 sidered as one of the causes of the increase of mortgage indebt- 

 edness. But the fact should not be lost sight of that during the 

 period under consideration there has been an enormous rise of 

 prices, which has not been taken advantage of to reduce mortgage 

 indebtedness or prevent its increase or to stimulate production. 

 After due allowance has been made for the growing difficulties 

 in the way of declining soil fertility and the like, the fact remains 

 that there has been an enormous expenditure which should be 

 reflected in increased production ; but no such reflection can be 

 discovered. Enormous sums have been spent for buildings, im- 

 plements, machinery, labor and fertilizers, and yet there has been 

 no appreciable increase in the average yield of staple crops ; and 

 though the census is probably mistaken in reporting so slight an 

 increase in the volume of dairy products, owing undoubtedly to 

 overestimation in 1900, if due allowance is made for this fact it is 

 probably true that the increase in dairy products is not commen- 

 surate with the increase in population and farm expenditures. 



