crop insurance: risks, losses, etc. 3 
late spring frost followed by drought causing his crop to be a total 
failure. Finally, in the territory where Z is farming, climatic and 
other conditions prove highly favorable during the greater part of 
the season. Until within two weeks of harvest time, Z figures that 
he has a 35-bushel crop in prospect. At that time, however, a hail- 
storm passes over his farm and destroys 60 per cent of his crop, re- 
sulting in an actual yield of 14 bushels an acre instead of 35 bushels. 
Limiting consideration to the returns for the single year and speak- 
ing this time first in terms of actual income rather than prospective 
income, farmer X, who grew and harvested an 8-bushel crop, had 
neither a profit nor a loss. He reaped an amount which at the price 
received was equivalent to his entire costs chargeable to the season's 
crop. On the other hand, farmer Y, who, because of frost and 
drought reaped no harvest whatever, suifered a loss equivalent to his 
entire expenditure of labor and capital chargeable to the year's 
operations. Farmer Z, with his 14-bushel yield, in spite of the 
damage to his crop by hail, realized a profit. 
If, however, the matter is considered from the point of view not of 
actual income but of prospective yield and income, as was done in 
the first illustration, the situation changes. Had it not been for 
drought, excessive heat, untimely frost, hail, or some other cause 
or combination of causes, X, Y, and Z would each have reaped a 35- 
bushel yield. In a certain sense, therefore, all may claim to have 
suffered loss. This becomes more apparent in the case of farmer Z, 
who had in immediate prospect a 35-bushel yield when he suddenly 
suffered a 60 per cent damage by hail, in consequence of which he 
claimed a loss of 21 bushels an acre. He actually reaped a harvest 
of 14 bushels an acre, while his cost of production was only the 
equivalent of 8 bushels an acre. Nevertheless, if Z had carried hail 
insurance on his crop he would have been entitled to indemnity, under 
the prevailing plan of settlement, equivalent to 60 per cent of his 
insurance an acre. It must be conceded, therefore, that Z suffered a 
recognized form of loss, even though the loss related to wheat in 
prospect rather than to wheat already in existence and in spite of 
the fact that his hail-damaged crop yielded him a material profit 
over and above his cost of production. The fact that the loss or 
damage suffered by Z on his crop was sudden and spectacular does 
not make it materially different from the losses or damages suffered 
by X and Y. In each case it was wheat in prospect and not wheat 
in actual existence that was lost. At the time of planting the pros- 
pects of a perfect yield may have been equally good for each of the 
three men. The prospects of X were early reduced by certain natural 
causes ; those of Y were entirely eliminated also in the early part of 
the season; while those of Z continued good until near harvest time, 
when they were suddenly reduced. 
