the principles of farm organization. It is easily seen that if one farm family who now manages twenty-five acres of land can be made to manage efficiently over fifty acres that one-half of the present farm population of the South will be sufficient to farm the present crop area. Increased efficiency in farm organization will thus tend to reduce rural population, but to increase greatly the income of those who remain. This will permit a larger proportion of the population to be employed in city industries. The increase in these industries will in turn broaden the market for farm products and thus justify increased production per acre on the land at present under cultivation, and this increased production must come about mainly in response to increased prices or decreased cost of production.

One of the strangest anomalies which has developed in our studies of farm organization is the fact that so-called accurate farm bookkeeping is exceedingly deceiving. The farmer who undertakes to keep books finds that the books do not tell him the truth, and he quits because he loses confidence in them. This point can be well illustrated in the case of farm poultry.

The office of farm management has, in some cases, kept an accurate record of all the labor, feed, supplies, etc., expended in maintaining a flock of poultry on the farm. In nearly all cases the results show that the poultry products have cost more than the farmer received for them. In one case a very efficient farmer in one of the North Central States, who maintained a large flock of poultry, found from an accurate record that the eggs during a certain year cost him twenty-five cents a dozen while the average selling price was twenty-two cents. The farmer did not know how to find where the trouble lay, but he did know that there was something wrong with the bookkeeping. When the results were shown him he remarked: "Well, I know I made these records accurately, and these eggs have cost me more than I got for them; but I couldn't buy eggs of the quality of those we have consumed on the farm this past year. I shall continue to keep my poultry." The trouble with the bookkeeping was this: this flock of poultry had been charged with about three hundred hours of labor at fifteen cents an hour. They had been charged with certain materials used in the construction of houses and runs and with the time consumed in putting these materials in place. They had been charged market prices for all

their feed, and so on. Now the fact is that nearly every hour of time spent on this poultry was time that would otherwise not have been profitably employed. Most of the material used in constructing and repairing the quarters was waste material lying about the place. A large part of the feed was material that, if the chickens had not been there, would have gone to waste. The fact is, this farmer made a profit out of his poultry, and the books did not represent the facts in the case.

It is even possible for a farmer to make a fair income when every industry on his farm, if considered separately by the usual methods of bookkeeping, would show a loss. Take the dairy farmers of New England, for instance. When we keep books against the average herd of dairy cows they show a loss, because we count the time put upon them at current rates of wages. But the fact is that many farmers, if they didn't have these cows, would spend most of the time for six months in the year with their feet against a hot stove. But with the cows to look after they can make enough above the actual cash expenditure to pay themselves, say seventyfive cents a day, all through this winter period. This represents just so much added to the farmer's income, and this industry, which the ordinary methods of bookkeeping show to be a losing one, is actually the foundation of the farmer's success, though it must be admitted that under such circumstances his success is rather meager.

It is impossible to approximate the annual saving to farmers in this country that would follow the adoption of ideal systems of organization for their farm business, for two reasons: in the first place, we do not know the facts concerning present conditions except for a few limited regions where farm management surveys have been conducted; and in the second place, such reorganization would require considerable change in the relative area of crops and in the numbers and types of farm animals, and no one can predict what the results of such changes would be. It is safe to say, however, that establishing suitable types of farming everywhere, making every farm either large enough or intensive enough (where permissible) to furnish full employment to its owner and the working members of his family, securing the largest yields consistent with profit, and introducing such organization of the farm business as to give the maximum utilization of the land, labor, and equipment of

the farmer, would have a most profound influence, not only on the standard of living on American farms, but on the supply of labor for other industries. The above-mentioned example of more than doubled output and income for a southern farm family is exceedingly suggestive.

THE SCIENTIFIC STUDY OF MARKETING

BY SELDEN O. MARTIN,

Harvard University, Cambridge, Massachusetts.

The words "scientific" and "principles" are much heard in business today, in its practice and especially in its teaching. Some years ago it might have been proper to discuss the possibility of teaching business and the existence of principles in business. Time has answered both queries. Business is being taught and principles of business are being disclosed.

Business principles are sometimes confused with business saws. "Early to bed and early to rise" and "Save your pennies," or even "Goods well bought are half sold" could by no stretch of the imagination be called business principles in the scientific sense of the word principle. Scientific connotes a basis of organized knowledge, and principle connotes at least a fairly definite relation between antecedents and results. On the other hand, such generalizations as--the nearer an inventory is to its raw material stage the better basis of credit it is, or, when stock-turns are fewer depreciation cost is apt to be greater,—are nearer our understanding of principles.

When enough precedents of marketing are accumulated to show that with some facts ascertained as to whether an article is a specialty or a staple, what its unit of sale is, what its capacity for repeat orders is, and so on, certain broad policies as to the methods of marketing this article can be laid down, then certainly an approach is being made to an organized body of knowledge. And if it is possible to go still further in the field of marketing and in the division known as retailing, show by inductive study that one of the first rough tests of efficiency in a retail store is the annual sales of the average salesperson and still further establish that at present in the retail shoe business in a city of more than 100,000 population this annual average should be about $10,000 and furthermore that the rent should not exceed 5 per cent and can be reduced to at least 3 per cent of the net sales, then indeed there is being provided a still more definite body of knowledge from which principles can be be established.

The two great divisions of business are the making of things and the buying and selling of things. These are the central activities-production and marketing. The other functions of business, for example, accounting, banking, transportation, insurance, are functions auxiliary to these central activities-important, most important, but auxiliary.

In the field of production, of course, the body of knowledge is on the whole better organized and more precise. The various systems of management relate more to production than to marketing. Though a vast field for research, marketing has had comparatively little scientific study. It has not seemed particularly susceptible to scientific study. It abounds in the human equation. This does not mean that much ability has not been expended on this field not only in studying and inciting demand but also in recording performance. Map and tack systems, quotas and bonuses, selling costs and carefully prepared statistics of various kinds have for a considerable period been employed by the most progressive selling organizations. These internal statistics have also been accompanied by external statistics affecting and reflecting market conditions. But in the last analysis, the figures finally used in marketing, however obtained, are based on the law of averages, frequency, or proportion; the standards set, no matter how carefully and specifically adjusted, are in the last analysis averages, modes, or proportions and apply en masse rather than in detail. Again this does not mean that these data are not regarded as most valuable, as, indeed, the later statement of research work will show. A great problem in marketing is to get down beneath the law of averages and types. Production is so much more specialized and standardized, so much more precise than marketing that it is possible, given certain facts of material, dimension, and design, to set a maximum time for the performance of a certain specific operation. The appliers of scientific management have, furthermore, shown the possibility of determining a minimum time for this operation with conditions continuing the same and of prescribing the means whereby this minimum time need not be exceeded. In other words, the scientific manager in production can not only tell William Jones how long he should be in machining a certain part, but can furnish him with the best feeds and speeds to employ in doing the work in the time specified, and if the methods and time apply in Philadelphia