398 



SCIENTIFIC AGRICULTURE 



August, 1922 



tention. I must recall here the fact that 

 agriculture is a business which shows wide 

 variations of results from year to year, and 

 these results are not within the control of 

 the farmer. A good crop one year may be 

 followed by several years of poor crops and 

 by even an occasional total failure. The 

 reasons for these will be at once apparent 

 to those who are familiar with farming 

 operations. The changing seasons, the 

 numerous pests, the recurring alternations of 

 too little and too much rain-fall, the late 

 frost in spring or the early frost in autumn, 

 the devastations of hail, and other circum- 

 stances are too well known to need more 

 than mention to anyone who is acquainted 

 vtrith all parts of Canada. Farming is a 

 highly speculative enterprise. Ocasionally 

 several good years together will seem to more 

 than overbalance the poor years, and then 

 come the very opposite conditions when a 

 succession of bad years will almost paralyze 

 the agricultural interests. This being the 

 nature of agriculture, from the fluctuating 

 character of which we have no knowledge as 

 to how to obtain relief, it is necessary for 

 us to ask with the greatest seriousness, what 

 are the financial effects secured by borrow- 

 ing capital in a business of this kind? 



In order to put this matter in concrete 

 form I have introduced the accompanying 

 table. A, B, C, D and E represent five farm- 

 ers, each having the same amount of land 

 and of the same fertility. Each farmer has 

 the same ability and all have equal capital 

 investment, namely, $12,000. A is the only 

 farmer who borrows no capital for the 

 year's operations. All the others are bor- 

 rowers, B using $650 for the year's opera- 

 tions, C $1,500 for the same time, while D 

 and E borrow $3,000 and $5,000 respectively 

 for the year's use. I think a study of the 

 table will make clear the following conclu- 

 sions from it, namely, that the financial 

 effects of borrowing are: 



1. — To greatly increase the profits of 

 normal and good years. 



2. — To accentuate the losses of poor years. 

 It will be noted also that the greater the 

 amount borrowed the greater will be the 

 profits in normal and good years — provided 

 the amount borrowed be not in excess of the 

 farmer's ability to use it properly — and the 

 greater will be tlie losses in poor years. 



Do good years and normal years exceed 

 the poor years? If so, a farmer of ability 

 may be able to use some borrowed capital to 

 advantage. Do poor years exceed the nor- 

 mal and good years? If so the net result 



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