LEADING FEATURES OP THE WHEAT INDUSTRY 215 



relieved the most serious effects of the greatest depression 

 the country has ever passed through, and was instru- 

 mental in changing the whole aspect of rural life. Prior 

 to this, two lines of policy were open to the farmer. He 

 had to be either a cultivator, or a pastoralist herding 

 relatively few sheep for the sake of their wool. Now, 

 however, there is a middle course. It is expedient and 

 often necessary to combine these two formerly separate 

 lines of action into one, now that the freezing industry 

 is established. Thus arose the system of ''mixed farm- 

 ing," under which pastoral and agricultural pursuits are 

 carried on together. The relative advantages of this 

 system have been discussed in Chapter III., and men- 

 tioned in other parts of this work; but an interesting 

 line of discussion from the point of view of organisation 

 at once suggests itself. 



Under this system the farmer 's interests are two-fold ; 

 he is combining two lines of action which are independent 

 of each other, from the point of view of immediate 

 profits, and yet are so connected that successful co- 

 operation will greatly enhance profits on the whole. The 

 question then arises, what principle controls the farmer 

 in his attitude to these two lines of action? What factor, 

 or set of factors, guides his choice of the relative extent 

 to which he will follow out these lines of action ? 



The farmer, again consciously or otherwise, is being 

 guided in his actions by certain economic forces, and is 

 working in accordance with a principle which is an 

 indirect deduction from the predominating economic 

 force of self-interest. Each occupation will be pursued 

 to the point to which any further energy spent in it will 

 produce a relatively smaller rate of profit than that 

 obtained by the last unit of energy spent in any other 

 occupation. This is the principle of equi-marginal returns, 

 and it is to this principle that we must look if we would 



