CHAPTER III 

 QUESTIONS OF PRINCIPLE 



IN view of the extension of the work of investigating 

 farming costs in the United Kingdom it is very important 

 to secure uniformity of method and general agreement on 

 certain questions of principle, so far as is possible. In no 

 other way can a proper basis of comparison be established, 

 and standard results achieved. " Reference has been made 

 already to the wide divergences of opinion on vital questions 

 exhibited in the work of continental and American investi- 

 gators, and an effort should be made, while this field of 

 research is still practically unexplored in this country, to 

 bring about a general agreement on essentials. In this 

 chapter some of these questions are raised, less, it should 

 be remarked, with the object of answering them than with 

 that of initiating the consideration and discussion of them. 



Valuation. In making valuations of goods produced on the 

 farm the basis must be, in every case, the cost of production 

 of the matter concerned. Under no circumstances must the 

 market price be allowed to exert any influence, or serious 

 misconceptions may result. The worth of any article to 

 the farmer is the amount which it has cost him to produce 

 it, and the time to introduce the market value into the 

 account is at the moment when it is sold, and not until 

 then, so that the farmer may be in a position to make 

 a comparison between the value to him, as shown by his 

 books, and the value on the market as shown by the price 

 realized. Thus he is able at once to appreciate the results 

 of his management. If market values are introduced at 

 intermediate stages in the process of production the whole 

 basis of comparison is lost, and thus the farmer is deprived 

 of the only reliable means by which to estimate the success 

 of his policy, and by which to determine his future actions. 



The common practice of basing farm valuations upon 



