The possibilities of well-directed cooperative effort among farmers are well illustrated by what has been done in the field of mutual fire insurance. There are at present nearly 2,000 farmers' mutual fire insurance companies in the United States, with outstanding risks aggregating $6,000,000,000. This enormous volume is carried at an average cost, for the country as a whole, of only 25 cents per $100 per year, and, in individual cases, companies of this kind have furnished high-class protection to their members for half a century or more at a cost of less than 10 cents per $100 per year. This result has been achieved, in part, by the elimination of unnecessary expenses of operation, of the so-called moral hazard, and of many of the physical hazards involved in farm risks.

While the department has rendered much assistance in connection with this form of cooperation, through the preparation of a suggested classification of farm risks and suitable record forms which embody the methods and practices that have proved to be most efficient in conserving farm property and in reducing the cost of insurance, a great deal remains to be done. In many States, cooperation for insurance and credit purposes is as yet little understood or practiced.

PERSONAL CREDIT.

It is generally recognized that one of the problems demanding special attention at this time is that of short-time personal credit for farmers. In the case of a man who has paid for his farm, the supplying of personal credit raises, as a rule, no serious question. In the case of the renter, however, and of the young farmer who is just starting out as an owner, the question of short-time credit is a difficult one. In such cases, credit can and should be based, to a considerable extent, upon character and productive ability. To deny credit to the honest, ambitious, and energetic farmer because he has little tangible security to offer is to lessen the productivity of available capital and to discourage a man who, in the future, should be a land-owning farmer. While the bankers are, in many cases, showing a commendable interest, the need is for a system which will enable the man without collateral to secure funds for productive agricultural enterprises. Without doubt, this important problem should receive careful consideration, and every feasible effort should be made to aid the farmer in obtaining the necessary personal credit.

THE PROBLEM OF FARM OWNERSHIP.

Closely related to the credit question is the problem of land ownership, to the solution of which national thought will, of necessity, be directed during the years that lie immediately ahead. It involves

the conditions upon which men may own the land they till; upon which young men and women, marrying and embarking upon their careers, may acquire homes where their families may be reared, educated, and brought to maturity in the essentials of good citizenship. With the passing of the great public domain, and with it our free lands, the problem has taken on added importance, and to-day represents one of the gravest social and economic questions with which the Nation has to deal.

Considerable work already has been done in this field, but it has not yet been adequately covered. Careful studies are being made of the methods of renting farm land and of improving tenant contracts, which at present are frequently inadequate. They encourage in many instances soil depletion, which, if not corrected, will, in the long run, seriously affect our production. They also encourage itinerancy on the part of tenants and constitute a barrier to community social betterment. The causes of tenancy and what it means to the country must be placed squarely before the American public so that its importance may be generally recognized. If this is to be done, studies of a thoroughgoing nature must be initiated and carried to completion.

PRICE OF FARM LANDS.

The price of farm lands is one of the important factors in the problem of farm ownership. It is estimated that between March, 1919, and March, 1920, the increase in the selling price of farm land and improvements was 21.1 per cent. In the last five years the increase has been 65 per cent. Although the data for the census of 1920 are not yet available, it seems probable that, while the average price of farm land and improvements per acre increased only 20 per cent during the 40 years from 1860 to 1900, the price in 1920 is two and one-half times that of 1910 and five times that of 20 years ago.

In some sections, the net return on the purchase price of farm lands is considerably less than the ordinary rate of return on first mortgages and similar investments. The rental rate of cash leases, also, is frequently less than half the rate of return on mortgages. Studies made by the department indicate that, in certain regions, the recent advance in the price of land has still further aggravated this condition. Such a situation is unfortunate, for it increases the difficulties of a tenant who is seeking to become an owner. If he borrows a considerable part of the purchase price of a farm at from 5 to 7 per cent and then finds that the investment will earn little more than 3 per cent, it will be impossible, in many instances, for him to discharge the debt.

While the increase in land prices is, to some extent, a reflection of the general upward movement in the level of commodity prices, it must be regarded, in part, as an indication of the increasing scarcity of land available for agricultural use. This scarcity is not statistically apparent, for, in addition to the area of improved land used for crops, pasture, and other farming purposes (exclusive of range land), there is nearly an equal area that is potentially available after clearing, drainage, irrigation, or for utilization by dry-farming methods. With local exceptions here and there, however, this land is either inferior to that now in use or can be made available for farming only through heavy outlays for improvement.

AREA EXPANDED DURING THE WAR.

War conditions stimulated an expansion of the area devoted to crops, estimated at 10.1 per cent from 1914 to 1918, or an increase of 3.4 per cent in the per capita acreage. This was effected by utilizing pasture land for crop production and by bringing into use other uncultivated areas. The expansion was particularly marked in the case of small grains. Since the armistice, there has been a reduction in crop acreage. From 1919 to 1920 there was a decline of 5.4 per cent in the acreage of 20 principal crops. Apparently, the reduction has been brought about by returning the land to pastures and by discontinuing the use of the low-grade areas which were temporarily utilized.

These changes should be instructive to those who would reduce the prices of farm products by bringing into use large areas of new land. It is clear that, if prices had been extraordinarily remunerative to the farmer compared with the returns on capital and labor in industry, we would not witness this reduction of the acreage in cultivation, but, on the contrary, a continued enlargement of it. While war conditions temporarily increased the net cash income of the farmer and stimulated a temporary expansion of the crop area, this was due in large measure to the response of the farmers to the insistent call for more food, particularly wheat and rye, the principal bread grains. It is of no small significance that the contraction in acreage has been most extreme in the case of these crops, estimated at 31.5 per cent for winter wheat, 16.5 per cent for spring wheat, and 22.6 per cent for rye.

Much loose thinking and many wrong conclusions are based on false impressions concerning the profitableness of farming. The increase in farm profits during the war was inevitably transitory. Moreover, measured in purchasing power, they shrank rapidly as a result of the rise in general commodity prices. Owing to the highly competitive character of his business and the lack of organization,

the farmer has had no effective means of preventing the impairment of his profits; his only recourse has been to migrate to the city and change his occupation, a course actually followed by many. In the light of these facts and the fear of a continued decline of profits, it is clear why the tendency to expand the crop area has been suddenly reversed.

LAND SETTLEMENT AND COLONIZATION.

While present conditions do not seem to justify a policy of encouraging and stimulating the extension of the farm area, it must be recognized that some new land is continually being brought into cultivation in certain regions. Moved by the spirit of adventure characteristic of Americans, by the desire to rise from the status of tenancy to the more independent status of farm ownership, by propaganda which portrays to city people in alluring fashion the attractiveness of country life, and particularly by the effective advertising and skillful salesmanship of various kinds of private land settlement agencies, men may be expected to try their fortunes in the development of raw farm land, even in periods when conditions do not favor agricultural expansion and when the net migration to cities is above the normal. It is of the highest importance that these men be enabled to embark in such undertakings with the greatest possible assurance of success, for the failure of one is likely to result in the discouragement of many.

In an earlier period of our history, the development of new agricultural areas was largely the result of the initiative of individuals. At present, it is, to a considerable extent, under the guidance of private agencies engaged in promoting the settlement and sale of land for profit. Whether the methods employed by some of these enterprises are such that private profit is not incompatible with the rendering of important service in facilitating the wise selection of land, in providing suitable arrangements for credit, and in creating conditions favorable to the success of the settlers, can be determined only by comprehensive investigation. During the past year the department has begun a study of the problem. On account of its magnitude, final conclusions may not be available for some time, but enough progress has been made to reveal the fact that numerous agencies, whose volume of business is very great, are preying on the impulse to acquire farm land, and that the results in misdirected investment of capital, futile labor through years of unavailing struggle against hopeless odds, and consequent discouragement and despair, are too serious to be ignored. The comfortable doctrine of leaving the buyer to take care of himself has been discarded in many phases of our national life. Surely, in the settlement and develop

ment of land, the buyer should at least have full and complete information for his guidance.

It appears that under existing conditions, we should not attempt to stimulate unduly the normal rate of settlement, but rather to guide and protect the normal movement along lines which will insure a reasonable degree of success in the development of new lands with a minimum of wasted capital and human effort. It yet remains to be determined whether this purpose can best be accomplished by governmental action, by private enterprise with comprehensive attempts to educate both land-settlement agencies and prospective settlers in the methods most favorable to success, or by private agencies systematically regulated.

LIFE ON THE FARM.

Life on the farm and in the rural community gives rise to problems the solution of which is of vital importance to American agriculture and American civilization. It has been demonstrated that these problems are susceptible of scientific investigation. Valuable studies already have been made by the Office of Farm Management and Farm Economics, and they should be enlarged and others instituted, including especially studies relating to the human aspect of tenancy and landlordism, migration from farm life, population groups, and community planning.

In our country, agriculture, manufacture, transportation, merchandising, and professional service-strong competitors with one another for both capital and workers are all expected to hold their own. The history of agriculture seems to show, however, that farming is in periodic danger of losing its grip on both capital and workmen and of allowing them to slip away into city industries. Statesmen have always viewed with alarm the tip of the scales from farming to industry and from country life to urban life. When the farm loses its balance to the city, the Nation is threatened with a food shortage or with dependence upon foreign countries for essential foodstuffs. But the shortage of food is not the only danger. When American agriculture begins to lose ground, the political stability of the Nation is endangered.

SHIFT FROM COUNTRY TO CITIES.

The returns from the 1920 census are not yet sufficiently complete to make a full statement of what has occurred during the last decade in the shifting of populations between city and country. The reports on somewhat more than one-third of the counties of the United States, however, indicate an actual reduction in the rural population in many counties of New England and New York, in some parts of

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