400 FARM MANAGEMENT 



the cost of producing each of the crops, including the 

 labor supply, the interest on investment and other 

 similar expenditures that affect the final result, and the 

 probable net profit that will be returned. Large farms 

 may likewise be organized into departments and ac- 

 counts kept with the cows, the pigs, the grain crops, 

 the garden, and similar enterprises. The business 

 statement at the end of the year will then show which 

 lines have been most profitable and will enable the 

 manager to drop out those that are unprofitable. 



INVESTMENTS 



On no other one thing does financial success rest 

 so strongly as on wise investments. One may pay so 

 much for a farm that it will be impossible to produce 

 revenue enough to meet the operating expenses and 

 pay even the normal interest on the money invested. 

 Again, one may invest in a farm which will produce well, 

 but for the product of which there is no available mar- 

 ket, and the business is consequently operated at a 

 loss ; or the farmer may invest so much in the farm it- 

 self that not enough capital is available for operating 

 the farm well. A medium-sized farm well operated will 

 pay greater profits than a large one poorly managed. 



Farm machinery is looked upon as one of the means 

 of reducing the cost of production, in that it saves man 

 labor and enables the farmer to handle large acreages ; 

 and yet many farmers are driven out of their homes by 

 the foreclosure of mortgages given for farm machinery 

 for which they had little use. Too often farmers pur- 

 chase machinery because a neighbor has it rather than 

 because carefully made calculations show that it would 

 be a profitable investment. A safe rule is to buy no 



