The Rural Life Problem of the United States Part 2

Secretary Wilson has recently given it as his opinion that land-seekers who pa.s.s by the farms now offered for sale in the western portions of New York State often go further and fare worse. In these relatively low-priced lands, it ought not to be difficult for agricultural communities to establish permanently a rural society worthy of American ideas of progress. But to do this is to solve the problem we are discussing. We have some other aspects of that problem to consider before we can agree upon the essentials of a philosophic and comprehensive scheme for the rehabilitation of rural life--before we can lay down the lines of a movement to give effect to our plan.

The Far Western section has hardly yet emerged from the frontier-pioneer stage, and its rural problem is still below the horizon. I may, however, note in pa.s.sing a few evidences that the people of this section have already shown a very real concern for rural progress. The fruit-growers of the Pacific Coast have, in the cooperative marketing of their produce, made an excellent beginning in a matter of first importance in any scheme of rural development. On irrigation farm lands there has been developed, in connection with the upkeep and control of the water systems, a community spirit which will surely lead to many forms of organisation for mutual economic and social advantage. In the city of Spokane, Washington, the Chamber of Commerce has aroused a public interest in the work of the Country Life Commission which, so far as my information goes, has not been equalled elsewhere in the United States.

The Chamber is republishing the Report of the Commission, for which no Federal appropriation appears to have been made. It would seem to be a not wild speculation that the statesmen and social workers who will first solve the rural problem of the English-speaking peoples may be found in the Far West of the New World as well as of the Old.

I must now conclude the diagnosis of rural decadence by a consideration of what in my judgment is the chief cause of the malady, and so get to a point where we can determine the nature of the remedy. It will then remain only to sketch the outlines of the movement which is to give practical effect to the agreed principles in the life of rural communities.

FOOTNOTE:

[3] _North American Review_, September, 1909.

CHAPTER V

THE WEAK SPOT IN AMERICAN RURAL ECONOMY

The evidence of competent American witnesses proves that there is, in the United States, notwithstanding its immense agricultural wealth, a Rural Life problem. Here, as elsewhere, on a fuller a.n.a.lysis, the utmost variety of race, soil, climate and market facilities serve but to emphasise the importance of the human factor. But this consideration does not lessen the need for a sternly practical treatment of the rural social economy under review. In this chapter, I propose to go right down to the roots of the rural problem, find what is wrong with the industry by which the country people live, and see how it can be righted. We should then have clearly in our minds the essentials of prosperity in a rural community.

Agriculture, the basis of a rural existence, must be regarded as a science, as a business and as a life. I have already adverted to President Roosevelt's formula for solving the rural problem--"better farming, better business, better living." Better farming simply means the application of modern science to the practice of agriculture. Better business is the no less necessary application of modern commercial methods to the business side of the farming industry. Better living is the building up, in rural communities, of a domestic and social life which will withstand the growing attractions of the modern city.

This threefold scheme of reform covers the whole ground and will become the basis of the Country Life movement to be suggested later. But in the working out of the general scheme, there must be one important change in the order of procedure--'better business' must come first. The dull commercial details of agriculture have been sadly neglected, perhaps on account of the more human interest of the scientific and social aspects of country life. Yet my own experience in working at the rural problem in Ireland has convinced me that our first step towards its solution is to be found in a better organisation of the farmer's business. It is strange but true that the level of efficiency reached in many European countries was due to American compet.i.tion, which in the last half of the nineteenth century forced Continental farmers to reorganise their industry alike in production, in distribution and in its finance. Both Irish experience and Continental study have convinced me that neither good husbandry nor a worthy social life can be ensured unless accompanied by intelligent and efficient business methods. We must, therefore, examine somewhat critically the agricultural system of the American farmer, and see wherein its weakness lies.

The superiority of the business methods of the town to those of the country is obvious, but I do not think the precise nature of that superiority is generally understood. What strikes the eye is the material apparatus of business,--the street cars, the advertis.e.m.e.nts, the exchange, the telephone, the typewriter; all these form an impressive contrast with the slow, simple life of the farmer, who very likely scratches his accounts on a shingle or keeps them in his head.

But most of this city apparatus is due merely to the necessity of swift movement in the concentrated process of exchange and distribution. Such swiftness is neither necessary nor possible in the process of isolated production. But there is an economic law, applicable alike to rural and to urban pursuits, which is being more and more fully recognised and obeyed by the farmers of most European countries, including Ireland, but which has been too little heeded by the farmers of the United States and Great Britain. Under modern economic conditions, things must be done in a large way if they are to be done profitably; and this necessitates a resort to combination.

The advantage which combination gives to the town over the country was recognised long before the recent economic changes forced men to combine. In the old towns of Europe all trades began as strict and exclusive corporations. In the eighteenth and nineteenth centuries new scientific and economic forces broke up these combinations, which were far too narrow for the growing volume of industrial activity, and an epoch of compet.i.tion began. The great towns of America opened their business career during this epoch, and have brought the arts of compet.i.tion to a higher perfection than exists in Europe. But it has always been known that compet.i.tion did not exclude combination against the consumer; and it is now beginning to be perceived that the fiercer the compet.i.tion, the more surely does it lead in the end to such combination.

A trade combination has three princ.i.p.al objects: it aims, first, at improving what I may call the internal business methods of the trade itself by eliminating the waste due to compet.i.tion, by economising staff, plant, etc., and by the ready circulation of intelligence, and in other ways. In the second place, it aims at strengthening the trade against outside interests. These may be of various kinds; but in the typical case we are considering, namely, the combination of great middlemen who control exchange and distribution, the outside interests are those of the producer on one side and the consumer on the other; and the trade combination, by its organised unity of action, succeeds in lowering the prices it pays to the unorganised producer and in raising the prices it charges to the unorganised consumer. In the third place, the trade combination seeks to favour its own interests in their relation to other interests through political control--control not so much of the machinery of politics as of its products, legislation and administration. I am not now arguing the question whether or how far this action on the part of trade combinations is morally justifiable. My point is simply that the towns have flourished at the expense of the country by the use of these methods, and that the countryman must adopt them if he is to get his own again. Moreover, as organisation tends to increase the volume and lower the cost of agricultural production and to make possible large transactions between organised communities of farmers and the trade, it will be seen that the organised combination of farmers will simplify the whole commerce of those countries where it is adopted, and thus benefit alike the farmer and the trader.

This truth will be easily realised if we consider for a moment the system of distribution which the food demand of the modern market has evolved. Agricultural produce finds its chief market in the great cities. Their populations must have their food so sent in that it can be rapidly distributed; and this requires that the consignments must be delivered regularly, in large quant.i.ties, and of such uniform quality that a sample will give a correct indication of the whole. These three conditions are essential to rapid distribution, but their fulfilment is not within the power of isolated farmers, however large their operations. It is an open question whether farmers should themselves undertake the distribution of their produce through agencies of their own, thus saving the wholesale and possibly the retail profits. But unquestionably they should be so well organised at home that they can take this course if they are unfairly treated by organised middlemen.

The Danish farmers, whose highly organised system of distribution has made them the chief compet.i.tors of the Irish farmers, have established (with Government a.s.sistance which their organisation enabled them to secure) very efficient machinery for distributing their b.u.t.ter, bacon and eggs in the British markets. Other European farming communities are becoming equally well organised, and similarly control the marketing of their produce. But where, as in America and the United Kingdom, the town dominates the country, and the machinery of distribution is owned by the business men of the towns, it is worked by them in their own interests.

They naturally take from the unorganised producers as well as from the unorganised consumers the full business value of the service they render. With the growing cost of living, this has become a matter of urgent importance to the towns. In the cheaper-food campaign which began in the late fall of 1909, voices are heard calling the farmers to account for their uneconomical methods, while here and there organisations of consumers are endeavouring to solve the problem to their own satisfaction by acquiring land and raising upon it the produce which they require.

In the face of such facts it is not easy to account for the backwardness of American and British farmers in the obviously important matter of organisation. The farmer, we know, is everywhere the most conservative and individualistic of human beings. He dislikes change in his methods, and he venerates those which have come down to him from his fathers' fathers. Whatever else he may waste, these traditions he conserves. He does not wish to interfere with anybody else's business, and he is fixedly determined that others shall not interfere with his.

These estimable qualities make agricultural organisation more difficult in Anglo-Saxon communities than in those where clan or tribal instincts seem to survive.[4]

Now it is fair to the farmer to admit that his calling does not lend itself readily to a.s.sociative action. He lives apart; most of his time is spent in the open air, and in the evening of the working day physical repose is more congenial to him than mental activity. But when all this is said, we have not a complete explanation of the fact that, by failing to combine, American and British farmers, persistently disobey an accepted law, and refuse to follow the almost universal practice of modern business. I believe the true explanation to be one that has somehow escaped the notice of the agricultural economist. Those who accept it will feel that they have found the weak spot in American farming, and that the remedy is neither obscure nor difficult to apply.

The form of combination which the towns have invented for industrial and commercial purposes is the Joint Stock Company. Here a number of persons contribute their capital to a common fund and entrust the direction to a single head or committee, taking no further part in the business except to change the management if the undertaking does not yield a satisfactory dividend. Our urban way of looking at things has made us a.s.sume that this city system must be suitable to rural conditions. The contrary is the fact. When farmers combine, it is a combination not of money only, but of personal effort in relation to the entire business.

In a cooperative creamery, for example, the chief contribution of a shareholder is in milk; in a cooperative elevator, corn; in other cases it may be fruit or vegetables, or a variety of material things rather than cash. But it is, most of all, a combination of neighbours within an area small enough to allow of all the members meeting frequently at the business centre. As the system develops, the local a.s.sociations are federated for larger business transactions, but these are governed by delegates carefully chosen by the members of the const.i.tuent bodies.

The object of such a.s.sociations is, primarily, not to declare a dividend, but rather to improve the conditions of the industry for the members. After an agreed interest has been paid upon the shares, the net profits are divided between the partic.i.p.ants in the undertaking, to each in proportion as he has contributed to them through the business he has done with the inst.i.tution. And the same idea is applied to the control of the management. It is recognised that the poor man's cooperation is as important as the rich man's subscription. 'One man, one vote,' is the almost universal principle in cooperative bodies.[5]

The distinction between the capitalistic basis of joint stock organisation and the more human character of the cooperative system is fundamentally important. It is recognised by law in England, where the cooperative trading societies are organised under _The Industrial and Provident Societies' Act_, and the cooperative credit a.s.sociations under _The Friendly Societies' Act_. In the United States (I am told by friends in the legal profession), the Articles of a.s.sociation of an ordinary limited liability company can be so drafted as to meet all the requirements I have named. Most countries have enacted laws specially devised to meet the requirements of cooperative societies. However it is done, the essential of success in agricultural cooperation is that the terms and conditions upon which it is based shall be accepted by all concerned as being equitable in the distribution of profits, risks and control. It then becomes the interest of every member to give his whole-hearted support and aid to the common undertaking. To accomplish this, it is necessary to explain and secure the acceptance of a const.i.tution and procedure carefully thought out to suit each case. It will be readily believed that a.s.sociations of farmers which will meet these conditions are not likely to be spontaneously generated; hence the necessity for a plan and for the machinery to carry it through.

In this matter I am here speaking from practical experience in Ireland.

Twenty years ago the pioneers of our rural life movement found it necessary to concentrate their efforts upon the reorganisation of the farmer's business. They saw that foreign compet.i.tion was not, as was commonly supposed, a visitation of Providence upon the farmers of the British Islands, but a natural economic revolution of permanent effect.

Our message to Irish farmers was that they must imitate the methods of their Continental compet.i.tors, who were defeating them in their own markets simply by superior organisation. After five years of individual propagandism, the Irish Agricultural Organisation Society was formed in 1894 to meet the demand for instruction as to the formation and the working of cooperative societies, a demand to which it was beyond the means of the few pioneers to respond.

Two decades of steady development have confirmed the soundness of the original scheme, and a brief account of agricultural cooperation in Ireland will be of interest to any reader who has persevered so far. The conditions were in some respects favourable. The farms are small and their owners belong to the cla.s.s to which cooperation brings most immediate benefit. The Irish peasantry are highly intelligent. They lack the strong individualism of the English, but they have highly developed a.s.sociative instincts. For this reason cooperation, an alternative to communism,--which they abhor,--comes naturally to them. On the other hand, the ease with which they can be organised makes them peculiarly amenable to political influence. In backward rural communities the trader is almost invariably the political boss. He is a leader of agrarian agitation, in which he can safely advocate principles he would not like to see applied to the relations between himself and his customers. He bitterly opposes cooperation, which throws inconvenient light upon those relations. We are able to persuade the more enlightened rural traders that economies effected in agricultural production will raise the standard of living of his customers and make them larger consumers of general commodities and more punctual in their payments.

But in the majority of cases the agricultural organiser finds politics in sharp conflict with business, and has a hard row to hoe. So, while we have advantages in organising Irish farmers, we have also, largely owing to well-known historical causes, to overcome difficulties which have no counterpart in the United States or England.

Nevertheless, we managed to make progress. We began with the dairying industry, and already half the export of Irish b.u.t.ter comes from the cooperative societies we established. Organised bodies of farmers are learning to purchase their agricultural requirements intelligently and economically. They are also beginning to adopt the methods of the organised foreign farmer in controlling the sale of their b.u.t.ter, eggs and poultry in the British markets. And they not only combine in agricultural production and distribution, but are also making a promising beginning in grappling with the problem of agricultural finance. It is in this last portion of the Irish programme that by far the most interesting study of the cooperative system can be made, on account of its success in the poorest parts of the Island. Furthermore, the attempt to enable the most embarra.s.sed section of the Irish peasantry to procure working capital ill.u.s.trates some features of agricultural cooperation which will have suggestive value for American farmers. I will therefore give a brief description of our agricultural cooperative credit a.s.sociations.

The organisation was introduced in the middle of the last century by a German Burgomaster, the now famous Herr Raiffeisen. He set himself to provide the means of escape from the degrading indebtedness to storekeepers and usurers which is the almost invariable lot of poor peasantries. His scheme performs an apparent miracle. A body of very poor persons, individually--in the commercial sense of the term--insolvent, manage to create a new basis of security which has been somewhat grandiloquently and yet truthfully called the capitalisation of their honesty and industry. The way in which this is done is remarkably ingenious. The credit society is organised in the usual democratic way explained above, but its const.i.tution is peculiar in one respect. The members have to become jointly and severally responsible for the debts of the a.s.sociation, which borrows on this unlimited liability from the ordinary commercial bank, or, in some cases, from Government sources.

After the initial stage, when the inst.i.tution becomes firmly established, it attracts local deposits, and thus the savings of the community, which are too often h.o.a.rded, are set free to fructify in the community. The procedure by which the money borrowed is lent to the members of the a.s.sociation is the essential feature of the scheme. The member requiring the loan must state what he is going to do with the money. He must satisfy the committee of the a.s.sociation, who know the man and his business, that the proposed investment is one which will enable him to repay both princ.i.p.al and interest. He must enter into a bond with two sureties for the repayment of the loan, and needless to say the characters of both the borrower and his sureties are very carefully considered. The period for which the loan is granted is arranged to meet the needs of the case, as determined by the committee after a full discussion with the borrower. Once the loan has been made, it becomes the concern of every member of the a.s.sociation to see that it is applied to the 'approved purpose'--as it is technically called.

What is more important is that all the borrower's fellow-members become interested in his business and anxious for its success.

The fact that nearly three hundred of these societies are at work in Ireland, and that, although their transactions are on a very modest scale, the system is steadily growing both in the numbers of its adherents and in the business transacted is, I think, a remarkable testimony to the value of the cooperative system. The details I have given ill.u.s.trate the important distinction between cooperation, which enables the farmer to do his business in a way that suits him, and the urban form of combination, which is unsuited to his needs. The ordinary banks lend money to agriculturists for a term (generally ninety days) which has been fixed to suit the needs of town business. Thus, a farmer borrowing money to sow a crop, or to purchase young cattle, is obliged to repay his loan, in the first instance, before the crop is harvested, and in the second, before the cattle mature and are marketable. Far more important, however, than these not inconsiderable economic advantages are the social benefits which are derived by bringing people together to achieve in a very definite and practical way the aim of all cooperative effort--self-help by mutual help.

Our cooperative movement, taken as a whole, is to-day represented by nearly one thousand farmers' organisations, with an aggregate membership of some one hundred thousand persons, mostly heads of families. Its business turnover last year was twelve and a half million dollars. In estimating the significance of these figures, American readers must not 'think in continents,' and must give more weight to the moral than to the material achievement. As I have explained, the cooperative system requires for its success the exercise of higher moral qualities than does the joint stock company. Once a cooperative society becomes a soulless corporation, its days are numbered. It requires also the diffusion of a good deal of economic thought among its members, and this, also, is no small matter in the conditions. The most striking fact about this work in Ireland is that while in its earlier years organisation consisted mainly in expounding and commending to farmers the cooperative principle, we now find that the principle is taken for granted and the only question upon which advice is needed is how to apply it. The progress of agricultural cooperation depends largely on the character of the community; its commercial value may be measured by the extent to which it develops in the community the mental and moral qualities essential to success.[6]

In agricultural cooperation, Ireland can claim to have shown the way to the United Kingdom. Ten years ago, after the Irish movement had been launched, the English rural reformers started a movement on exactly the same lines, even founding on the Irish model an English Agricultural Organisation Society. An Irishman, who had studied cooperation at home, was selected as its chief executive officer. Five years later, a Scottish Agricultural Organisation Society took the field. Both in England and in Scotland the chief difficulty to be overcome is the intense individualism of the farmers, and perhaps some lack of altruism.

The large farmers did not feel the need of cooperation, and where the natural leader of the rural community will not lead, the small cultivator cannot follow. Whether the same difficulties have prevented any considerable adoption of agricultural cooperation in the United States, it is not necessary to inquire. It is certain that the underlying principles approved by every progressive rural, community in Europe have not so far exercised more than an occasional and fitful influence upon the rural economy of the American Republic.

If I have given in these pages a true explanation of the deplorable backwardness of American farmers in the matter of business combination when compared with all other American workers, those who take part in the movement which is to provide the remedy will have set themselves a task as hopeful as it is interesting. Americans as a people are addicted to a.s.sociated action. I have seen the principle of cooperation developed to the highest point in the ranching industry in the days of the unfenced range. Our cattle used to roam at large, the only means of identifying them being certain registered marks made by the branding-iron and the knife. The individual owner would have had no more property in his herd than he would have had in so many fishes in the sea but for a very effective cooperative organisation. The Stock a.s.sociation, with its 'round-ups' and its occasional resort to the Supreme Court of Judge Lynch, were an adequate subst.i.tute for the t.i.tle deeds to the lands, and for fences horse-high, bull-strong and hog-tight. But then we were in the Arid Belt and the frontier-pioneer stage; we had no politics and no politicians. I must return, however, to the less exciting, but I suppose more important, life of the regular farmer, and consider his efforts at organisation.

Instances can be multiplied where the cooperative system has been adopted with immensely beneficial results; but in too many cases it has been abandoned. On the other hand, Granges, Inst.i.tutes, Clubs, Leagues, Alliances and a mult.i.tude of miscellaneous farmers' a.s.sociations have been organised for social, religious, political and economic objects.

From my study of the work done by these bodies, the impression left is that almost everything that can be done better by working together than by working separately has been at some time the subject of organised effort. But these manifestations of activity have been fitful and sporadic. They were commonly marked by some or all of the same defects--mutual distrust, divided counsels, ignorance of what others were doing, want of continuity and impatience of results. Many organisations, after winning some advantages,--over the railroads for instance,--fell into abeyance or even out of existence; others lapsed under the enervating influence of a little temporary prosperity, such as a few years of better prices. The truth is, American farmers have had the will to organise, but they have missed the way.[7]

The political influence of the farming community has for this reason never been commensurate either with the numerical strength of its members or the magnitude of their share in the nation's work. It is true that the Federal Department of Agriculture, appropriations for Agricultural Colleges, some railway legislation and other boons to farmers, are to be attributed to the efforts of their organisations.

Yet, as compared with the influence exercised upon National affairs by the farmers of, say, France and Denmark, the American farmer has but a small influence upon legislation and administration affecting his interests. What better proof of this could be given than the absence of a Parcels Post in the United States? The whole farming community are agreed as to the need for this boon to the dwellers of the open country, and yet they have not succeeded in winning it against the opposition of the Express Companies, because it is merely a farmers' and not a townsmen's grievance. And not only political impotence, but political inertia, result from the lack of organisation. The state of the country roads--one of the greatest disabilities under which country life in the United States still suffers--is as good an instance as I know. Congress has shown itself well disposed towards the farmer, but not always so the State governments, and the good intentions of Congress on the roads question are largely nullified owing to the failure of one-third of the States to establish highway commissions, or make other provision for expending such amounts as might be voted to them by Congress. Here, as in the cases of the transit and marketing problems, we see the need for a strong, central, permanent organisation, fitted alike to direct local or promote National action; an a.s.sociation capable of securing the legislative protection of the farmer's interests, and an organisation fitted to further the business side of his industry. In fact, this need is urgent, and a cooperative movement of National dimensions should be established to meet it. Had such a movement been started after the War, or even twenty years later, the American farmer would be in a far stronger position to-day, and much misdirected effort would have been saved.

I have now tried to explain the weak spot in American rural economy. It may be regarded from a more general point of view. If we were considering the life of some commercial or industrial community and trying to forecast its future development, one of the first things we should note would be its general business methods. No manufacturing concern with a defective office administration and incompetent travellers could survive, even if it had an Archimedes or an Edison in supreme control. I cannot see any reason why an agricultural community should expect to prosper while the industry by which its members live retains its present business organisation. I have urged that as things are, the farming interest is at a fatal disadvantage in the purchase of agricultural requirements, in the sale of agricultural produce, and in obtaining proper credit facilities. Whatever the cause--and I have set down those which I regard as the chief among them--American farmers have still to learn that they are subject to a law of modern business which governs all their country's industrial activities--the law that each body of workers engaged in supplying the modern market must combine, or be worsted at every turn in compet.i.tion with those who do.

I do not much fear that this general principle, overlooked, perhaps, because it was too obvious to be worth enforcing, will be disputed. I hope I may gain acceptance for my further contention that the inability of American farmers to sustain an effective business organisation has been due simply to the fact that the not obvious distinction between the capitalistic and the cooperative basis of combination suitable to town and country respectively was missed. For it will then be clear why, in the working out of Mr. Roosevelt's formula, better business must precede and form the basis of better farming and better living. The conviction that in this general procedure lies the one hope of solving the problem under review accounts for the otherwise disproportionate s.p.a.ce given to that aspect of rural life which is of the least interest to the general reader.

I shall now attempt to determine the principles which must be applied to the solution of our problem. Those who have followed the arguments up to this point will have a pretty clear idea of the general drift of my conclusions. The subst.i.tution in rural economy of the cooperative for the compet.i.tive principle, which I have so far advocated as a matter of business prudence, will be seen to have a wider import. This course will be shown to have an important bearing upon the application of the new knowledge to the oldest industry and also upon the building of a new rural civilisation we must provide for the dwellers of the open country a larger share of the intellectual and social pleasures for the want of which those most needed in the country are too often drawn to the town.

FOOTNOTES:

[4] I should expect the negroes in the Southern States to be very good subjects for agricultural organisation. I have discussed this question with the staff of the Hampton Inst.i.tute in Virginia--a fine body of men, doing n.o.ble work. The Princ.i.p.al, the Rev. H. B. Frissell, D.D., whose judgment in this matter is probably the weightiest in the United States, and his leading a.s.sistants, both white and coloured, are of the same opinion.

[5] Where capital is, in rare instances, subscribed by persons other than farmers, it is usually invested less as a commercial speculation than as an act of friendship on the part of the investor, who in no case exercises more control than his one vote affords.

[6] Readers who are sufficiently interested in the rural life movement in Ireland will find a full description of it in my book, "Ireland in the New Century," John Murray, London, and E. P. Dutton, New York.

[7] Mr. John Lee Coulter contributed to the _Yale Review_ for November, 1909, an article on Organization among the farmers of the United States which is a most valuable summary of the important facts.

CHAPTER VI

THE WAY TO BETTER FARMING AND BETTER LIVING