226 PRINCIPLES OF RURAL ECONOMICS 



I. FUNDAMENTAL PROBLEMS, OR PROBLEMS OF INVESTMENT 



The fundamental questions to be decided by the farm manager 

 concern, first, the manager's relation to the land, that is, his 

 tenure ; second, the type of agriculture to be undertaken, that is, 

 what kind of products to produce ; third, the scale upon which 

 he shall undertake the production, that is, the size of the busi- 

 ness unit which he shall undertake" to manage ; and fourth, the 

 equipment to be used and the proportion in which the various 

 kinds of equipment are to be combined. The third of these 

 questions has to do in part with the law of proportion as 

 stated in the last chapter. 



The problem of the relation of the farmer to the land is of 

 perennial interest not only to the farmer but to the economist 

 as well. Is it better for the farmer to own his land, to rent, or 

 to work on a salary ? If he rents, is it better to pay cash rent 

 or a share of the produce, or a combination of both ? 



Ownership or tenancy. It has generally been assumed as a 

 matter of course by American farmers that it is better to own 

 the land upon which they work. Aside from the merits of this 

 theory, there are at least three purely accidental factors, having 

 nothing to do with the efficiency of agriculture, which have con- 

 tributed to the support of this practice. The first is the fact that 

 the land policy of the federal government has, at least since 

 1841, put the ownership of the land in the first instance directly 

 into the hands of its cultivators. The second is the fact that 

 over the greater part of the country, and during the greater part 

 of our history, land has tended to rise in value. This rise in 

 value has been considered as a part of the profits of farming, 

 and every shrewd farmer has put himself into a position to get 

 this increment of wealth. He could secure this increment, of 

 course, only by owning the land. The third factor in the prob- 

 lem has been the lack of an intelligent system of leasing land. 



