196 PRINCIPLES OF RURAL ECONOMICS 



without throwing out a word of caution. Every careful observer 

 of agricultural conditions and practices in America will have 

 seen cases of overinvestment in expensive tools and machines. 

 While these cases are not so numerous as those of the opposite 

 description, that is, of a niggardly use of labor-saving imple- 

 ments, yet the consequences are about equally bad. To buy 

 expensive implements without a very careful consideration of the 

 saving to be effected on the one hand, and of the cost on the 

 other, is unbusinesslike and spells ruin, as many a farmer has 

 found by bitter experience. The undiscriminating buyer almost 

 always underestimates the cost side of the account. The interest 

 on the first investment is very easily calculated, but it is the 

 smallest item in the cost. Repairs are not so easily calculated, 

 and they mount up rapidly, more rapidly than the inexperi- 

 enced farmer, or the farmer who is not in the habit of keeping 

 careful accounts, usually anticipates. 



It is a notorious fact that farm machinery deteriorates very 

 rapidly, and the cost of deterioration will surprise any farmer 

 who has not kept accounts over a period of years. According 

 to investigations carried on by the Minnesota Experiment 

 Station over a period of five years, the average annual depre- 

 ciation of farm machinery was 7.3 per cent. The estimates 

 vary with different implements, from 4.89 per cent for farm 

 wagons to 10.03 P er cent for corn binders. Therefore the 

 farmer needs to calculate very carefully before buying an expen- 

 sive machine, to make sure that he has use enough for it to give 

 him a safe margin of profit over any probable cost in the way 

 of interest, maintenance, repairs, and deterioration. He must 

 be able to see pretty definitely just where he is going to get his 

 money back ; that is, where he will save enough in his wages 

 bill, if he is an employer of labor, or where he will increase the 

 product of his farm enough to recompense him for his outlay, 

 with a safe margin of profit to cover possible miscalculations. 



