CAPITAL-GOODS AS A FACTOR IN PRODUCTION 287 



87. THE PROPER APPORTIONMENT OF CAPITAL OUTLAYS 1 

 BY L. W. ELLIS 



Successful farm management presupposes a proper relation 

 between the various factors of production. The study of farm equip- 

 ment was undertaken for the purpose of determining from the study 

 of successful farms the relationship that should exist between invest- 

 ments in land, improvements, live stock, machinery, and tools. The 

 farms from which data are embodied in this report are probably above 

 the average type in the character of the proprietors, method, and 

 equipment, yet they are not necessarily examples of exceptionally 

 successful management. Of the 21 farms studied, 6 include dairying 

 as the principal enterprise, i is devoted largely to feeding sheep, and 

 2 others place greater emphasis on the feeding of cattle than the aver- 

 age farm, but in no instance are the equipment and management 

 those of a highly specialized type of farm. They represent, on the 

 whole, the most common type of farm to be found in the state. 



First we will examine the present distribution of investment as 

 shown by the inventory. The appraisement of the value of perma- 

 nent improvements was extremely difficult and the values given must 

 be accepted with due allowances. In this study the building values 

 are a compromise between the cost of equipping the farm with similar 

 structures, less a proper amount of depreciation, and the sale value of 

 the buildings as suggested by comparing the values of land with and 

 without buildings. 



It can safely be said that buildings represent, not only the most 

 expensive class of farm equipment, but the least negotiable. Leaving 

 out household buildings, the remainder on the farms studied shows a 

 much greater variation in investment per acre than any other class of 

 equipment, and a greater variation in percentage of the total invest- 

 ment than land, water supply, live stock, or machinery. Fences, 

 artificial drainage, and water systems may often be dispensed with 

 wholly or to a great extent; hence they are scarcely comparable with 

 land, buildings, live stock, and machinery as regards the relative 

 investment. 



One of the most important phases of a study of farm equipment 

 is the determining of the relation that should exist between buildings 



1 Adapted from "A Study of Farm Equipment in Ohio," Bulletin 212, Bureau 

 of Plant Industry, United States Department of Agriculture, pp. 7-53. . 



