306 AGRICULTURAL ECONOMICS 



Horses usually do little work before they are three years old, and do 

 not do full work until about four years old. For work animals, the 

 depreciation would, therefore, average about 10 per cent." He points 

 out also that the death-rate among pure-bred and highly graded 

 cattle is higher than among common stock. Since the average period 

 of usefulness is not longer for the former than for the latter class, the 

 yearly depreciation is considerably greater. He estimates it at 4 per 

 cent for $40 cattle, 10 per cent for those having a value of $100, 12 per 

 cent for those worth $200, and 13 per cent for those worth $300. The 

 cost of feed and care and the interest charge in these latter cases 

 would also be larger, but such stock " usually gives very much higher 

 returns. ' ' EDITOR. 



E. The Accumulation and Conservation of Capital 



96. THE SERVICE OF CAPITAL AND THE MEANS OF 

 SECURING IT 1 



BY T. N. CARVER 



There is no mystery about credit or capital. Capital consists of 

 tools and equipment, though sometimes we speak of it as though it 

 were the money necessary to buy the tools and equipment. Capital 

 and land are the factors which call for investment by the farmer. 

 Thus the large use of capital in farming has come because of the 

 invention of agricultural machinery. When farming was done with 

 few very simple tools, most of which were made either by the farmer 

 himself or by the local blacksmith, capital did not play a large part 

 in agriculture. Another way of saying the same thing is that it did not 

 take much money .to buy all the equipment the farmer needed or 

 knew how to use. The purchase of land was the only thing requiring 

 much money, and land, in this country, was either free or very cheap. 

 Therefore, there was very little money required to start in agriculture. 

 At the present time, not only is the price of land rising, but the equip- 

 ment of a farm requires more capital because of the increased use of 

 improved machinery. This is likely to increase more and more as 

 the years go by. 



Capital is brought into existence in only one way that is, by 

 consuming less than is produced. If one has a dollar, one can spend 

 it either for an article of consumption, say confectionery, or for an 



1 Adapted from Farmers' Bulletin 593, pp. 1-2. 



