226 AGRICULTURAL ECONOMICS 



both ends meet, and still others — and ordinarily this class 

 includes the vast majority — who are able to make an extra 

 profit because of their superior ability. 1 



This differential gain, or profit due to superior ability, is the 

 condition which, even where gift and inherited wealth are 

 insignificant, makes it possible for farmers to accumulate wealth 

 and to become the owners of farms. It is true, certainly, 

 that the more efficient may live much better than the least 

 capable, or marginal farmers, and thus the habits of life may 

 reduce the power of the more efficient farmers to save from their 

 profits. But the condition which gives rise to this differential 

 gain certainly makes it possible for the more efficient tenant 

 farmers to buy land. 



The greater the number of those who have gained a degree 

 of efficiency above that of the marginal farmers and the greater 

 the difference between the degree of efficiency of the majority 

 of farmers and that of the marginal farmers, the greater is the 

 differential gain which will go to farmers as personal profits, and 

 the better able they will be to become landowners. On the other 

 hand, the more homogeneous the farmers who supply the market, 

 that is, the smaller the number who have gained a degree of 

 efficiency above that of the marginal farmer and the less this 

 degree of difference, the smaller is the total differential profit 

 and the less able are tenant farmers to accumulate sufficient 

 wealth to buy farms. 



Credit. It is a common practice in the United States for 

 farmers to borrow money to invest in land. When a young 

 man has saved enough money to pay some share, say half or 

 two-thirds of the price of the farm, he borrows the remainder 

 and makes an investment, a mortgage being given to secure the 

 loan. This enables the farmer to buy land much sooner than 

 he could if he were required to save the entire amount before 

 making the purchase. Where the rate of interest charged is 

 not too high, it is often more desirable to pay interest than to 

 pay rent ; for the difficulty of adjusting the relations between 

 the landlord and tenant is in this way removed, and the farmer 



1 For details on this point see Chap. XII. 



