iods, the shrinkage in weight, although not necessarily in
plant food, may be as much as one-half.

The estimate of what the inventory should be at the beginning and end
of the year is not so simple a matter as it may at first seem to be.
The purpose of taking the inventory is twofold: First, to determine
whether the inventory has increased or decreased, and second, to
determine on what amount of capital interest is to be calculated. For
example, one must carry forward each year seed for the next year's
crop. Feed must be carried over to feed live stock until other food
becomes available, and there must be money on hand with which to pay
for labor unless there is a cash income from the sale of products
sufficient to care for the labor bills.

In the case of the farm under consideration there is a young orchard
of about one thousand trees. This orchard is not bringing in any
income, but there is a constant expenditure of money on it, and a
constant increase in its value. While, therefore, it decreases the
cash income it increases the farm income and the labor income. On the
other hand, it increases the interest charges because the plant or
farm is increasing in value. How much will it increase in value? In
some sections it is customary to consider that an orchard increases in
value $1 per tree per year. If this is a correct estimate, this
1,000-tree orchard will increase the value of the farm $1,000 a year
until it comes into full bearing. The farm under consideration was
purchased two years ago for $9,500. On the assumption just stated, at
the end of 15 years from date of purchase this farm should be worth
$25,000, at least $15,000 of which will be due to a 30-acre orchard.
This is at the rate of $500 an acre for the orchard itself.

In order to bring out some of the phases of the inventory more clearly
the following classification of items is given below:

INVENTORY

A. PLANT.

The real estate, 200 acres at $60 per acre.
The live stock.
Work horses and breeding stock.
Machinery.

B. MATERIALS.

Seeds, potatoes, oats, maize, wheat.
Feed, hay for cattle and sheep, silage for cows, maize for
pigs.
Growing wheat, 8 acres at $6 per acre.
Live stock, calves, lambs and pigs.

C. SUPPLIES.

Hay and oats for horses.
Money for current expenses.

In estimating the inventory at the end of the year, a deduction should
be mad