THE FARMER'S CAPITAL 881 



States this represents from 40 to 50 per cent of the total capital. Larger 

 farms generally have better houses, and have only 5 to 10 per cent of the 

 capital in the house. This to a less marked extent applies to the other 

 buildings on the farm. 



In the same way the investment in machinery and in work horses is 

 relatively less per unit of area as the farm increases in size. This holds up 

 to about 300 acres in extent, beyond which it becomes relatively small. 



Capital Related to Labor Income. — In previous chapters the impor- 

 tance of farming on a scale sufficiently large to provide an adequate labor 

 income has been pointed out. The size of the farm is measured both by 

 extent and by capital invested. The importance of having sufficient 

 capital, as an owner or as a tenant, to farm on a scale that will bring a 

 satisfactory income has been emphasized. Under-capitalization limits 

 decidedly the possibilities of the farmer. Investigations in many parts of 

 the country show that in a general way the average labor income is approxi- 

 mately in proportion to the capital invested. Doubling the capital gen- 

 erally doubles the farmer's income. For this reason, one may purchase a 

 comparatively large farm, make a living from it and pay for it out of the 

 farm proceeds more easily and in less time than he could pay for a very 

 small farm under the same conditions and with the same initial capital. 



Capital Related to Type of Farming. — Types of farming that require 

 the minimum of land usually require more capital in other forms, so that 

 the investment required to bring a suitable labor income does not differ 

 materially in different types of farming. With restricted capital, one had 

 best engage mainly in grain farming or the production of truck crops. 

 With plenty of capital, one will generally succeed best in a long term of 

 years by giving considerable attention to livestock. Livestock farming 

 calls for equally as large an investment in land, while the stock and build- 

 ings to shelter them increase the investment. The risk is also increased. 

 These disadvantages, however, are more than counterbalanced by better 

 distribution of labor, the better maintenance of soil fertility and increased 

 returns. 



Investigations of hundreds of farms in New York State show that 

 farmers with less than $7500 in capital secured two-thirds of their receipts 

 from cash crops, while those with more than $20,000 in capital secured 

 three-fifths of their receipts from livestock. By examining those having 

 less than $15,000 in capital, it was found that those having the greatest 

 receipts received four-fifths of their income from crops. 



Farming with Small Capital. — One with small capital or heavily in 

 debt should avoid types of farming that require much time for returns. 

 Among such types are orcharding, timber culture, the rearing of horses and 

 other classes of animals requiring several years for maturity. One should 

 avoid purchasing pure-bred stock or making extensive improvements 

 when money is scarce. Debts will more quickly be cancelled by devoting 

 one's efforts chiefly to cash crops. 



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