The Rural Life Problem of the United States / Notes of an Irish Observer

by Sir Horace Curzon Plunkett

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 advertisements, 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 competition began. The great towns of America opened their business career during this epoch, and have brought the arts of competition to a higher perfection than exists in Europe. But it has always been known that competition did not exclude combination against the consumer; and it is now beginning to be perceived that the fiercer the competition, the more surely does it lead in the end to such combination.

A trade combination has three principal objects: it aims, first, at improving what I may call the internal business methods of the trade itself by eliminating the waste due to competition, 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 quantities, 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 competitors of the Irish farmers, have established (with Government assistance which their organisation enabled them to secure) very efficient machinery for distributing their butter, 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 associative 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 assume 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 coöperative creamery, for example, the chief contribution of a shareholder is in milk; in a coöperative 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 associations are federated for larger business transactions, but these are governed by delegates carefully chosen by the members of the constituent bodies.