ments in the first column gives the
cash balance of $1,706. The farm income, $2,055, is obtained by adding
to the cash balance $349, which is the annual increase in the capital.
The labor income is obtained by subtracting from the farm income the
interest on the capital at five per cent. The amount of capital is
determined by dividing by two the sum of the inventories at the
beginning and end of the period.[C]

It will be noted that the gross receipts, the expenses, the farm
income and the labor income on these actual farms are all more closely
related to the capital invested than the size of the farm. Thus, on
the 30 farms with a capitalization of about $13,500, the average
yearly receipts were about $25 an acre, while on the 28 farms with a
capitalization of about $8,300, the average yearly receipts were about
$16 an acre. Likewise on the high-priced farms the labor income was
approximately $10 an acre, while on the lower priced ones it was about
$7.

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[B] Obtained by dividing by two the sum of capital at beginning and
end of three-year period.

[C] For further details see Hunt, "How to Choose a Farm," Chaps. X and
XI.

CHAPTER XII

GRAIN AND HAY FARMING

An important and primary factor in the production of all wealth is
labor. Aside from the professional and domestic classes, the people of
the world devote themselves to three forms of work: (1) Changes in
substance, or natural products; (2) changes in form, or mechanical
products; (3) changes in place, or exchange of products. The second of
these forms of work gives rise to manufacturing; the third, to trade
and commerce. Under the first sub-division two classes of natural
products may be recognized; first, what, for want of a better name,
may be called chemical products, such as ores, coal and salt, from
which are derived mining and the metallurgical arts; and second, vital
products, or, in other words, vegetation and animals. It is work
applied to the production of vegetation and animals that gives rise to
agriculture. Agriculture is labor applied to the production of living
things.

KINDS OF AGRICULTURE

The industries which deal with the production of living things may be
divided, theoretically, largely on the basis of the character of the
results, but to some extent upon the nature of the activities
involved.

{ Grain