AGNES C. LAUT May 15 1922


AGNES C. LAUT May 15 1922




WHEN you come back to the farm factors, too high overheads and too low returns, with their various sub-divisions to which the farmer ascribes his failure to make sufficient profits to anchor him permanently to the land, you are in a realm of just as great controversy as on wages and freights.

And through that thicket of controversy there is only one golden thread to lead you, the thread of the Golden Rule, the Golden Rule of facts, which teaches you more and more as you grow older that you prosper yourself, just in proportion as you help your neighbor to prosper. It is not only

good religion but it is good trade. Let us consider some of the factors in this controversy, interest charges, wages, taxes, equipment costs and middleman’s leaks. Take interest charges first. I know, legally, interest charges run from 6 to 8 per cent. Against that, no farmer.has even a spasmodic impulse to kick. I know hundreds of farmers in the West, who would gladly pay 12 percent, this year if they could get the money and it is a good thing they can’t; for by the time the debt now contracted would mature for payment, interest charges would be down, values deflated still more, and the debt would remain at the old inflated value. All the banks of the world expect interest charges to decline in the next two years, that is why sound investment houses are advising the purchase of long term bonds at high interest because every bond house in the world is so certain bond rates are going to decline.

How the Farmer Suffers

'T'HE farmer is driving against time to beat the fall rains and get his crop to market. Debts are on his heels like wolves. He has to get money to get in the winter supply of coal, or to get more credit at the local store for flannel underwear for the kids. Necessity is behind him with its maw open. He can’t stop. He needs an extra double box wagon to get his grain to the elevator; or an extra binder to get the grain cut before it shatters, or the rains come.

On the implement agent’s little green or red book of prices in New England, the wagon is listed at $100 to be charged the farmer, the binder at $240 (8 foot)? On the Soldier Settlers’ list at wholesale, the prices are $202 and $310. On the farmers’ list retail in the West, the prices are, plus freight and agents’ commission, $237 and $338.

I am not discussing the fairness, or unfairness of these figures. I am setting down the facts as to prices paid.

The agent knows the farmer is desperate. He can’t wait and he is in debt—“heels over head”—as the agents will tell you. The man is what is called a "doubtful loan,” or “long credit.” On top of the usual price is slapped $25 or $35, and a lien,-or chattel mortgage, or crop claim taken against the note; and on top of this excess price, the farmer is charged 6 to 8 per cent. He is really not paying 6 or 8 per cent. He is paying 25 to 35 per cent, plus the 6 or 8 per cent.; and I know of one case, where a poor foreigner was charged 10 per cent, andin signing the note deeded his farm to the creditor, if the note were not met. Fortunately, the decent banks heard of this case, and went after the shark with talons of law. The last I heard of the sharper, he had crossed the border with more haste than grace.

I am not saying that “a bàd loan,” or “a long credit,” should not give security; but I am saying that in a succession of bad years, no farmer, not. the best on earth, can pay those rates and survive.

Or take a real estate case. A farmer has bought a place on the instalment plan. High wages, the slump in prices, and bad weather leave him unable to meet his instalments —he must lose his place, or re-arrange the loan. As his improvements—fencing, house, barns, in many cases up to the value of $10,000 on a 160 acre place—equal more than twice the value of the loan, he looks about for a new loan to liquidate the old one. On a bad year, the real value of the place at $50 an acre has fallen to $30 or $20, below the face value of the first loan, on which he has paid some instalments.

He goes out for a loan of $5,000 that cover his present indebtedness. He told the face value of the land is now $30 an acre; and mortgages should not ceed two-thirds on the best, half on medium land. His instalments already paid improvements to the extent of $10,000 then stand to obtain only half of $4,800; and needs $5,000. He is then told that slump in farm prices is a bear on the money market. If he finally, as a great favor, secures the loan it will be for $5,600 at 6 8 per cent., but, asa guarantee of good faith

that he will stick, he is asked to pay down $600 in advance; and the $5,000 or $5,600 goes on bearing interest to maturity.

I am not saying that with farm values down on both land and crops, the lender is not justified in getting all the interest he can in advance, or on maturity. I am just setting forth the fact that under these circumstances the farmer is handicapped by extortionate overhead charges in interest; and such practices are behind the urge for much of the banking legislation pushed by farmers. The way to prevent foolish banking legislation by the Farm Party is to purge the loan business of these secret and illicit practices. ; • . jr'

The Bank’s Position

THE question may be asked why, in such cases, farmers don’t go to the legitimate banker, whose bank’s

interests are bound up with the prosperity of the locality. They don’t, first, because many are ignorant and poor and don’t know how. This is especially true of the foreigner, with whom the land sharks do this most iniquitous business. And they don’t, second, and this applies particularly to last year, because so many of the old managers who were in sympathy with the farmers’ hard stress, were shifted and replaced with new managers to act as collectors of outstanding accounts, rather than as expanders of a business already over-expanded. Their instructions were to bold down, reef down, collect; and the new men did not know local conditions. Also riotous radicalism, which hard times always produces, frightened these newer, younger men into caution; but the caution threw the borrower more completely into the hands of the “loan shark.”

The Added Tax Burden

COME now to taxes as part of the farmers’ too high overhead, whether these taxes are direct property and school assessments, or invisible taxes in tariff, that raise the cost of what the farmer buys. I have nothing to say as to whether the property and school taxes are too high. I only know in one section, the farmers had not a dime to pay those taxes, whether they were big or little; and to keep the schools open in that province, the Government had to carry them to the extent of $150,000 for three months for teachers’ salaries alone.

I know in two other sections, one extremely far north, the other right on the Southern border, schools are closed for the first time since those sections were opened. They are closed in one section because of the abandonment of the farm areas. They are closed in the other section because the farmers have not a dime for taxes.

When you come to invisible taxes in the shape of tariff you have opened a veritable Pandora box of disputes; and you have the ablest men in Canada champions on both sides •of the dispute. In practice, there is practically not an out-and-out free trader left in the world to-day.

War Debts have to be paid. Revenues have to be raised. How are they to be raised? It is in answering that question the Pandora box opens.

The lower tariff party, of whom Mr. Fielding is the greatest exponent living, say if you raise the tariff high, you deter imports and therefore decrease revenue. You defeat the very object of the tariff, which is revenue.

Against Mr. Fielding, stands one of the ablest expon-

ents of protection living—Mr. Meighen. He urges that we must build up our manufacturing and consuming population as fast as we build up our farming population; so the farmer will have his consuming markets at home as well as abroad—Canada a sélfsustained, and self-contained empire.

There is the controversy, old almost as the hills. But to the farmer it seems like Hobson’s choice in implements—high prices, part of his too high overhead.

Farmers Not Set on Free Trade

PERSONALLY, as far as I could learn, I do not think the Í farmer cares one stiver for the old rallying cries of protection, or free trade. He voted in the last election, from Winnipeg to the Rockies, straight farmer; and the farmer wants cheaper implements as part of the cheaper overhead ; and as proof of the fact that he is entitled to them, he presents these figures, which I have given more fully in the Financial Post.

Price Soldier Price Canadian Price to U Settlers in the farmers in West Canadian West. Freight Freight not preFreight i repahi. not prepaid, paid. retail wholesale. Mower 65—$ 75 $ 97—$108 $104—$124 Binder .... 200— 240 276— 310 261— 338 Wagon .... 100 20a— 206 188— 237 Sulkyplow.. 80 108— 120 108— 130 Drill ...... 150— 165 205— 253 219— 276

Now I have not a word of comment to pass on the facts. They are part of the reason profits don’t anchor a huge population down to the land in Canada.

The Great Opportunity

WITH the threatened shortage of grain the world over next year, if the Canadian farmers were given half a chance to balance intake with outgo, they could pull themselves out of debt in a year; and be on Easy Street to begin life afresh on deflated values in a New World.

When you come to middlemen charges as the greatest leak in farm profits, you come to the centre span in the bridge over which civilization to-day is tottering.

Nór are the middlemen to blame. Get that clear! The thing has just “growed” like Topsy.

Our grandparents grew their sheep, sheared their wool, washed and carded it, spun and wove and made it into warm winter clothing for the family.

To-day, all but the growing and shearing of the wool has moved from the country to the city. All the wages incidental to the process—from the shearing to the making of flannel shirts and suits for the family—have been drawn from the country to the city, leaving the country so much the poorer and the city so much the richer.

Our ancestors grew their own flax, hammered, pounded and separated the fibre, spun it, wove it, and made shirts, linen sheets, dresses, pillow slips, in the same way. To-day all but the growing of the flax has moved from the country to the city; and all the wages for all this work have been drawn away from the country to the city.

Yet the same story could be told of hides for shoes and harness; of oats ground for porridge and breakfast food, of soap, of sugar, of corn products, of meat and vegetables and fruits.

All this is a part of civilization’s complex, part of its price; but you must not blame the farmer for thinking the complex is getting a little too heavy for his back, when he gets barely a tenth of the final price of grain products, barely a third the final price of milk products, barely a fourth the final price of butter products, barely an eighth the final price of beef products, barely a fourth the final price of raw apples, and so on down the scale to the vanishing point on wool and hides.

Civilization’s complex has come to the point where we have to do something and do it quickly, regarding markets, transportation and distribution; or civilization’s complex is going to crack. The weight is already too heavy for the farmer; and that means less food produced. And the weight was already far too heavy for the city consumer

long before the War; and that means less buying of food and the backing up of food on the farmers unsold at any price, which ¡3 the case to-day from Athabasca to the Rio Grande, and Atlantic to Pacific.

“It isn’t the agitator I fear,” said one of the wisest provincial premiers Canada has ever had, to me last year. “In fact the roaring professional agitator may be a good thing for us in the long run. The real danger is not there. The real danger lies in the facts of the case—returns are too low to the pro-

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ducerforhimtokeepon producing and living is too high for the average earner; and those facts are making men and women “stless with things as they are; and that is a good thing too, if we can find the remedy and we’ve got to, or see civilization—”he didn’t finish the thought in his mind; but you can.

The producer is not going to be Atlas with the world on his back any longer. The back is beginning to heave. It is not that the middleman is a sinner to be crucified. It is not that he is unnecessary. Itisnotthat he is not just as essential as the producer. It is just that there are too many of him compared to the number of producers.

THE remedy is so simple we haven’t found it. It has been on our doorstep, and we have been looking up in the air for a big “Ism.”

It is for the farmers to do what they did in the days of our ancestors. What? Roll back civilization’s complex? Split co-operation up into individual units again? Unfortunately, or fortunately, you can’t roll back anything in this world. It has never been done since time began.

The farmer has to become what he was in the days of our ancestors—the farmer has to be his own middleman. And that this is already on the horizon, one example will make plain.

The Dairyman’s League of the Eastern states dates from a few years before the War; but it has changed milk prices from le and 2c a quart to the farmer to 5c at least and 7c at .highest. But have not these increases been passed on to the consumer? They have, indeed. That is what is forcing the farmer to become his own middleman.

He thought to solve the problem of too low returns by the collective bargaining, which labor had embodied in the Unions; but the increase was passed on to the consumer so heavily surcharged with intermediary costs—pasteurization, distribution, bonuses for competitive salesmen on commission——that the price to the consumer in the big cities mounted to 16 and 17c for ordinary milk, to 25c for the milk with the highest percentage of butter fat; and this increase reacted in less demand by the consumer. The consumer went on strike and began doing without, or buying only half as much milk per family. Long as the War lasted, the back kick was

not felt, but when the war stopped, superfluous milk began to back up on the farmers’ hands unsold, though there were just as many mouths eager for milk in the big cities. Cattle values slumped to half their value during the war; so the farmer recognized the next inevitable step—he must be not only his own collective salesman, he must be his own distributor.

THE Grain Growers of the West are another example, though weather and slumped prices have combined to make this a hard year for them; but they have not yet become their own distributors and salesmen in foreign markets. The inevitable will force them to the same next step. As to fruit and vegetables, the commission ring still holds the gates of the country consumer; but prices will force united action among the apple growers and vegetable producers of the East, just as they have forced it in the West, and placed Western products on our Eastern tables, while Eastern products lie rotting in orchards.

There will besqueals, loud ones—atthese changes. There are now, straight from the pocket nerve. The loudest squeal just now is we are headed straight for a great producers’ food trust, that will starve us or squeeze us to death on prices.

He could sell milk at 6 to 7c a quart year in and year out, potatoes at $1 a bushel, apples at $3 to $4 a barrel, wheat at $1 to $1.50, wood at $6 to $8 a cord, beef at 16c a pound, veal at 12c to 14c, eggs at 30c a dozen, butter at 25 to 40c— he could sell at these pricesyearinandyear out, and grow rich beyond the dreams of avarice doing it.

The consumer in the average city of over 100,000 is to-day paying 12 to 25cformilk, $1.40 to $3 for potatoes, $12 to $15 a barrel for apples, $8 to $16 a bushel for wheat and corn products manufactured in small containers and so on.

Is the consumer going to squeal if these prices are cut from half to two-thirds? If he is, it will be a paean of glorias; and he will order more and eat more than he has for ten years.