UNIVERSITY OF CALIFORNIA COLLEGE OF AGRICULTURE AGRICULTURAL EXPERIMENT STATION CIRCULAR No. 247 June, 1922 COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA* By ELWOOD MEAD, C. F. SHAW, E. L. ADAMS and J. W. GEEGG CONTENTS page Foreword 3 What should be the next step in rural development, by Elwood Mead 5 Existing conditions 5 California needs American settlers 5 Rural development is costly 6 Progress in canal building 7 Closer settlement must go hand in hand with canal building 7 Where settlers are needed 9 Why the state should promote closer settlement 9 Principles which should govern credit to settlers 10 State and national agencies must work together 10 What settlement plans should include 11 The advantages of small farms 11 What credit for land settlement will accomplish 14 The average capital of land seekers 14 The federal land bank 16 The Wisconsin plan 16 Would the Wisconsin plan succeed in California 17 The California state land settlement act 18 Homes for farm laborers 18 The spheres of public and private enterprise in land settlement 19 Land settlement should be kept free from political interference 20 Importance of long-time payments and low interest rates in future land settlement 21 The importance of the three million dollar bond issue 28 Settlers underwrite state loans 29 Rural-minded people long to secure homes in California 29 Selecting land for settlement, by Chas. F. Shaw 31 * A short course in land settlement was given at the College of Agriculture, Berkeley, September, 1921. This circular includes the addresses delivered in that course by Elwood Mead, Professor of Rural Institutions, C. F. Shaw, Professor of Soil Technology, E. L. Adams, Professor of Farm Management, and J. W. Gregg, Professor of Landscape Gardening and Floriculture. Z UNIVERSITY OF CALIFORNIA EXPERIMENT STATION PAGE Capital required by California settlers, by R. L. Adams 39 Importance of capital 39 Capital covers cash and credit 39 Capital needs are variable 39 Estimating and grouping capital needs 40 Cost of building equipment 42 Cost of implements and machinery 45 Cost of work stock and other livestock 46 Cost of minor equipment 47 Estimating possible returns 48 The safety factor 49 Sum to meet living expenses : 49 Income-producing capacity of fully developed lands and plantings 50 Costs and returns during the period of establishing 52 Capital requirements of selected California farms 52 Variations in capital requirements 52 Business selected as typical 54 The diversified farm 57 Twenty acres for deciduous fruit 61 Dairy and hog ranch 61 Two thousand fowl poultry plant 64 Rural planning, by J. W. Gregg 67 Size of the grounds 70 Building site 70 Outline of grounds 70 Driveways and yards 70 Buildings 71 Home Orchard 72 Shade trees 72 Ornamentation 72 CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 3 FOREWORD California made land settlement a matter of public interest and effort when the legislature of 1917 passed the Land Settlement Act under which two rural communities, Durham and Delhi, have been created. This action was taken by the legislature because of the need for more careful study of conditions of soil, climate, and water supply than private enterprise is inclined to make, and for the better organ- ization of the settlers in the state. In carrying out the provisions of the act of 1917, the State Land Settlement Board has employed distinctive methods, the chief points of which are the following : 1. The soil, and the water supply, and educational, health, and market conditions are studied by experts before the land is bought. The size of farms, the kind of agriculture suited to the locality, and the cost of developing a farm are investigated in order that settlers may be given expert advice and direction. 2. The payments on land are amortized and extend over 36!/2 years, with interest at 5 per cent. 3. Settlers are helped to organize for cooperation in development, and to buy and sell as a community. 4. Settlers are loaned money to complete development or to buy live stock and equipment. ; M , I 5. Homes for farm laborers are provided. ■ • ■ " These land settlement methods and policies evoked a widespread, keen public interest. Between January 1 and November 1, 1921, about eight thousand letters, from every state in the Union, were received at the land settlement headquarters at Berkeley. The writers, one and all, expressed the desire to live in California and the belief that the Land Settlement Act would enable them to gratify this desire. A study of these letters revealed the following facts : 1. The innate desire of the American to own a home is as strong today as in the pioneer period, but other matters than land are also regarded as important. Nearly all writers inquire about schools, roads, cooperation, and social advantages. 2. Few of the inquirers have capital enough to buy a farm without more generous credit than is given in private bargaining. The capital of four-fifths of them ranges from one thousand to five thousand dollars. 4 UNIVERSITY OF CALIFORNIA — EXPERIMENT STATION 3. A change has come about in the American viewpoint as to the size of a farm. One hundred sixty acres is no longer regarded as the proper farm unit in California. Few writers ask for more than 40 acres ; about half desire a farm laborer 's allotment. There is urgent need today for a credit system which will provide a longer time of payment and lower rates of interest than private enterprise can afford to offer, and which can be given through state or national aid or through the cooperation of the state and private companies. Many settlers occupying large areas of land in California are interested in such a policy. Cooperation between the state and the federal government would make possible more liberal terms under the Federal Farm Loan Act. What may be done through such cooper- ation is discussed under the proposed credit measure on page 28. The people of California at the next general election will have an opportunity to further state colonization by voting for the three- million-dollar bond issue authorized by the legislature of 1921. Of the proceeds of this bond issue, $1,000,000 would reimburse the state for money already expended on the Delhi colony, and $2,000,000 would constitute a fund toward the next step in state colonization. How this sum may be used to create not one, but several, additional colonies is outlined on page 28. The problem of land settlement is that of relating man properly to the land. The College of Agriculture believes that the working out of this problem is fundamental and that upon this factor more than any other depends the future rural civilization of California. To encourage a wider study and a better understanding of the subject a short course in colonization and rural development was given at Berkeley in September, 1921. ClRCULxVR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 5 WHAT SHOULD BE THE NEXT STEP IN RURAL DEVELOPMENT ! By ELWOOD MEAD EXISTING CONDITIONS California has passed through the first phase of state land coloniza- tion and rural development. This phase was educational. The state colonies at Durham and Delhi are now going concerns. They demon- strate what can be done. The purpose of this paper is to review conditions and discuss the task that lies before us. No country in the world has more to gain from a carefully planned and rapid rural development ' than has California. Great areas of land capable of being irrigated are now growing grain. They ought to be subdivided and made to grow vines, orchards, and alfalfa. Where there is now one family, thirty families could live in comfort. To bring about these changes, large holdings must be broken up. People must be found who will buy small farms. These people should not only be good cultivators, but good American citizens. These changes will not only create a new agriculture, but a new and better rural life. The character, habits, and ideas of those who are to occupy these farms will have a unique significance. They may be of the same ancestry as the California pioneers. They may come from various races of peoples, and so make as great a change as was wrought by the influx of gold seekers, which brought in so many Anglo-Saxons that the early Spanish population was submerged. When the feudal estates of France, Denmark, and Germany were broken up, there was no change in the life or habits of the people, but when the great grain farms of California are broken up, the new owners may be as different from the present ones in race and habits of living as the Anglo-Saxon gold seeker was from his Spanish prede- cessor. CALIFORNIA NEEDS AMERICAN SETTLERS If rural California is to continue American, it must be peopled by American settlers. The farmers must have the education, politi- cal ideals, social habits, and traditions of the American pioneer who made California what it is. This means that they should come mainly b UNIVERSITY OF CALIFORNIA EXPERIMENT STATION from the great agricultural areas to the east of us. Now is the time to insure this result. The subdivision and settlement of the great landed estates affords an opportunity to select the settlers which should not be ignored. Land settlement is not simply a concern of the land owner or of the land salesman. Land is a social and political asset in which all people of the country have an interest. The people who make the rural life of California today will shape the city life of a quarter of a century. The people of our great agricultural valleys will do more than raise crops : they will shape the future poli- tical, moral, and social life of the state. RURAL DEVELOPMENT IS COSTLY So much for the human and political aspects of settlement. There is also an urgent need for a closer settlement as a support to irriga- tion development. Millions of dollars have been invested in reservoirs and canals to water land which is not now cultivated as success in irrigation requires. This land cannot be so cultivated by its present owners; they can not afford to make the improvements; they cannot make the large farm pay. The small farm cultivated by its owner gives the best results in money as well as in political and social condi- tions. Alfalfa, stock, farms, orchards, and vineyards are needed to pay water charges and meet interest on high priced land. In a discussion of how to secure desirable settlers for vacant lands, E. F. Benson, manager of Immigration and Industry of the Northern Pacific Railroad, recently said, ' ' I think there is just one answer : 'Make a place for them/ Reverse the order as heretofore practiced in this country — painting a bright picture of the land far away and then confining our efforts of land settlement to 'mere land selling/ Instead, organize the land owners into helpful and carefully planned community development colonization associations. Make it safe, com- fortable, and attractive for the man with two or three thousand dollars to become the owner of a farm home that will yield a living for him and his family, pay the taxes and interest and ultimately the debt on the farm, educate the children, and provide amusement and social advantages for the women and children especially, make needed improvements for the family's comfort and pleasure, and finally lay up a modest sum for old age. Less than that is not an attractive proposition. More is an unreasonable expectation for the usual and average man. The unusual and extraordinary man can do much more on the farm or elsewhere, but his number is limited. The public welfare is based on the success of the average man and I am assuming a sum of approximately $2000 as his total capital. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 7 "Should you discuss this proposition of helpful colonization devel- opment with almost any western business man or professional man he will very likely start in to tell you how much he thinks of the good old doctrine of personal independence, initiative, and thrift, which he will illustrate by telling of his grandparents, or if an elderly man, possibly his parents. He will tell how they labored and saved and sacrificed, denying themselves not only all the luxuries but many of the comforts of life, perhaps breaking down their health, and how they won, educating the children and acquiring a comfortable com- petence for old age, and all of this without any help whatsoever. But the answer to such men is this : The hardships and privations which your parents suffered is probably the reason why you are not travel- ing that road. And another reason is that the cheap lands available for settlement a generation ago are all taken. Too few people are following the example of their ancestors in the development of farm homes on our vacant lands." PROGRESS IN CANAL BUILDING The last report of the State Water Commission shows that the state has 68 irrigation districts created under the Wright act. Of these, 25 have been organized during the last three years. Hundreds of thousands of dollars have been spent in surveys and in the employ- ment of experts to make sure that the reservoirs and canals which are to water these districts should fulfill their purpose. Everyone realizes that this preliminary study and organization had to precede construc- tion, that the whole undertaking had to be thought out to its finish before the first shovelful of earth was turned. In addition, the state exercises a supervision, and will not permit bonds to be issued or sold until the feasibility of each project has been established by its experts. CLOSER SETTLEMENT MUST GO HAND IN HAND WITH CANAL BUILDING Other countries long ago learned, and we are beginning to learn, that providing water for irrigation does not create irrigated agricul- ture. Unless there are settlers to cultivate the land and money to improve farms so that water can be used at a profit, an irrigation canal is a liability. The situation in scores of districts, not in Cali- fornia alone, but all over the arid West, is well stated in a letter, recently received, about the plight of one district : The District had been bonded for about $ ■. Funds gave out before water was made available, and, as a result, water assessments became delinquent and interest on bonds was not met. Without water there was no hope of making the District solvent, so former bond holders came forward with a second issue and an adequate water supply was provided. UNIVERSITY OF CALIFORNIA EXPERIMENT STATION This did not end the difficulty. The greater part of the land is uncleared. Its owners are unable to meet the heavy assessments made necessary on account of the financial burden being thrown on a few and accumulating. Instead of water costing $2.00 or $3.00 an acre, it costs nearly $9.00 an acre. In order to promote settlement and development, the land owners of the District organized and optioned a part of their holdings to the extent of 6000 acres and agreed to accept a second mortgage as payments were made to clear up back taxes and accrued penalties. These owners agreed to accept $30.00 an acre for the land and out of that to pay up the penalties and back taxes. In some cases this amounts to $30.00 so that the owners would receive nothing. On this basis it would cost over $200 an acre simply to put a 20- acre farm in shape for a settler to live on it and begin its cultivation ; and the question is, where is that $200 an acre to come from. Later on it will be seen that only a small fraction of the worthy and indus- trious people who want to get farms in California have this amount of capital and this raises the question, should there not be some way to raise money for the improvement of farms through the issue of tax-free securities, as we now raise money through the sale of tax-free irrigation district bonds to build works for providing water. It will take hundreds of millions of dollars to improve the small farms under existing and proposed irrigation districts so that the tens of thousands of people needed to cultivate these farms can live on them. The relation of settlement and of financing settlers to irriga- tion development is shown in the situation of the Madera irrigation district. Of the 350,000 acres in this district, over 200,000 are held in tracts of from 1,000 to 60,000 acres. These large areas are all grain farms, and before irrigation can be installed, the surface of the land must be smoothed off. The cost, together with the cost of the distributing ditches will be not less than $50.00 an acre. The owners of these large tracts of land cannot raise this money and it will be unprofitable for them to try to cultivate the land in large holdings. Few people can irrigate large areas at a profit — irrigation pays only on the small farm. Subdivision and closer settlement must therefore follow on the heels of canal building. The plans for this cannot wait until water is ready. This area will provide homes for 10,000 families; ten thousand new houses will be required. Plans for building homes, buying farm equipment, organizing these settlers to work together for business and social ends must be worked out in advance. Circular 247 J colonization and rural development in California 9 WHERE SETTLERS ARE NEEDED Few realize the extent of irrigable land awaiting closer settlement and the necessity for early action in making it ready for the people waiting and wishing to make homes on it. There are, in round num- bers, 3,000,000 acres of land, in the 68 irrigation districts already organized in the state. They include Madera district with 350,000 acres, Merced with 200,000, Glenn-Colusa 103,000, Honcut-Yuba 50,000, Corcoran 48,000. Surveys and plans have been completed, or are nearing completion, for the formation of large additional dis- tricts. The Iron Canon project has 300,000 acres, Kern Delta 400,000, Klamath-Shasta 100,000, Mendota 87,000, Suisun 41,000, West San Joaquin 208,000, and Yolo 50,000. The federal government is pre- paring plans for irrigating 300,000 acres above the present Imperial irrigation district. The old, the new, and the proposed districts have a total area, in round numbers, of four and one-half million acres. We have an admirable scheme for financing the construction of works. We have greater need for a credit scheme for buying and improving the small farm. Aid and advice in choosing a farm and credit to insure its prompt and prosperous development is the key to future agricultural development in this state. WHY THE STATE SHOULD PROMOTE CLOSER SETTLEMENT Think what it would mean to California if the million acres of land included in what is known as the Miller and Lux Estate, the great tracts of land belonging to the Kern County Land Co., the 60,000 acres of fertile land belonging to the Sutter Basin Co., and the tens of thousands of acres belonging to the Natomas and other companies were all closely settled by American farmers, owning their own land and living in their own houses. On these properties where irrigation works have already been built and on the part of the land that is fertile and suited to intense culture, a hundred colonies like those at Durham and Delhi could be created, and if those colonies had homes for farm laborers and were peopled by educated, intelligent, patriotic American citizens, we would have a rural life in California that would be the envy and admiration of the rest of the country, and we could cease worrying about the importation of cheap farm labor or the alien ownership of land. 10 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION Other countries with far less at stake than California have found out that it pays to have the government plan rural development, and to help worthy landless people to become farm owners. Our study of land settlement as a public problem should include the methods and experience of other countries. Much can be learned from a study of the colonization associations of Germany, which secured such won- derful results between 1906 and 1914. We want to know how the land mortgage banks help Danish farm buyers to borrow money up to 90 per cent of the cost of the farms. We want to know what Aus- tralia has achieved by lending postal savings to settlers at 4y 2 per cent. Such information will certainly help immensely in developing our policy in the United States. It may lead to the adoption of these policies in the United States. PRINCIPLES WHICH SHOULD GOVERN CREDIT TO SETTLERS The farm buyer must have capital enough of his own to give him a stake in the enterprise and to insure the state against loss. He must have character, industry, and thrift. If he has no experi- ence, he must have more capital. To permit an unfit man to spend his money and time trying to pay for a farm is not kindness. The chances of failure are too great. The authority which deals with settlers must have the power to exclude all who do not seem qualified to succeed. Settlements should have land enough to provide homes for not less than 100 families. The overhead expenses are too large if the number is smaller. It takes numbers to make cooperation a working success. Group settlements can create communitiy reputations for products and thus be able to secure special markets and in a measure fix prices. Moreover, the people of this country are dissatisfied and discouraged by a rural life in which there is no community spirit. They want to live where the people work together, plan together, and play together. Community development will draw here the very best of the rural- minded people of moderate means from the eastern part of America. It will make rural California American in the best sense. STATE AND NATIONAL AGENCIES MUST WORK TOGETHER We must make a larger use of the Federal Land Bank. I hope we will decide to follow Australia's example and use postal savings as a source of credit for the farm buyer. Germany spent $400,000,000 aiding land settlement between 1906 and 1914. England spent $550,- 000,000 between 190'] and 1913 in converting the Irish peasant into CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 11 a land owner and good farmer. California has larger opportunities and more to gain from closer settlement than either of these countries. California will gain as much from an enlightened settlement policy as has Australia, where, in the last 18 years, three and one-half million acres of land have been bought by the government from private owners, subdivided, and sold in small farms to actual settlers. The State of Victoria, Australia, borrowed $110,000,000 from the state savings bank to promote closer settlement and other rural development. Writing of this, one of the state officials says: "The feeling is that there could be no safer investment for money lodged in the govern- ment bmik. The savings bank either advances this money direct or purchases debentures and there is no doubt but that this method has been very satisfactory from all points of view." WHAT SETTLEMENT PLANS SHOULD INCLUDE Future rural development must be planned. The settler must not be left to shift for himself after he has parted with .his money as a payment on land. His success must be a continuing obligation of some one ; either the state or the private colonizer. One of the best statements of the principles which should govern colonization is given in the 1919 report of the Royal Colonial Institute of Great Britain : 1. That settlers shall be placed on the land in groups or communities rather than as isolated units;* and experience has shown that in general terms the group should consist of at least 200 holders if the full economic advantages are to be secured. 2. That the settlers should own their farms rather than hold them as tenants. 3. That access to capital should be provided. 4. That complete arrangements should be made to provide the settler with expert guidance from the outset. 5. That co-operation should be encouraged. 6. That a system of organized transport is essential to the success of the com- munity. 7. That the community spirit should be encouraged so that the settlers can build up for themselves a strong community life. THE ADVANTAGES OF SMALL FARMS Nearly half the farms in Denmark have less than six acres. A majority of these are homes of farm laborers and factory workers. They do not have large incomes but they have a happy, comfortable life. There is a great field in California for this kind of settlement. Note: The group system in no way implies communism. 12 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION Thousands of families in the east, who have a small income, could get more out of life on a two-acre farm in California and live more securely and healthfully on their income than they can in an eastern city. In cooperation with the Farm Bureau of Madera County, we have been gathering information about the return the resident and the non-resident owner gets from the large grain farm and the return the settler gets from his small irrigated home. We have a few examples of a larger income from ten acres of vines or alfalfa than from the rental of 1000 acres of tenant-grown grain. The average return from one acre of irrigated land was equal to the average return from 35 acres of grain land. The owner of the irrigated farm lives better and has better social advantages. Life on grain farms is lonely. Families are too widely separated. Where there is a family on every 20 or 40 acres there is human inter- est, social contact, and fun. The children get together to play. The parents work together. In the Madera district alone, much money can be saved to settlers by giving them expert advice in planning and building their houses, in buying stock, and in laying out and planting their fields. Plans ought to go farther. There . ought to be community centers, oppor- tunities for recreation. There ought to be tennis courts, baseball grounds, and swimming pools. The field for rural planning is broad and inviting, and the results of this planning, if carried out, will change and improve rural civilization in California for the next thousand years. The best engineering talent is employed to design irrigation struc- tures. Why not use educated taste and experience in planning houses and helping to locate the orchards, gardens, and fields ? The whole world goes to England to study and admire the Garden City at Letchworth. We can, if we only will, create something still finer and larger here because nature gives us so much more to work with. More than that, we can achieve fine things at less than the cost of the mediocre . results which are obtained by leaving settlers to straggle in and struggle alone. Settlers will bring a large part of this money. The more we do to help them make this a district which shows comfort and beauty in its homes, the better will be the settlers who seek entrance, and the more money they will bring. If each settler has a capital of $5000, they would bring to the Madera district alone a total of $50,000,000. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 13 Fig. 1. — Headquarters of a grain ranch within the boundaries of the Madera irrigation district. Note the absence of verdure or vegetation. Fig. 2. — Home on a twenty-acre irrigated farm in the Madera district. 14 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION WHAT CREDIT FOR LAND SETTLEMENT WILL ACCOMPLISH Forty years ago agriculture in Denmark was demoralized. The farm laborer and the farm tenant were moving to the cities or to other countries. Denmark as a country was threatened with national bank- ruptcy because of the collapse of agriculture. Today rural Denmark is one of the most contented and prosperous agricultural districts in the world and it is to a large extent due to a credit policy which enabled the Danish farm laborer and tenant farmer to own his home and the land he cultivates. To do this, the government bought and subdivided land, and sold it to settlers on 75 to 90 years' time on the payment of 10 per cent of the cost of the completed farm, with interest from 3 to 4 per cent. A similar transformation has taken place in Ireland by the purchase of the land and its sale to its former cultivators on 68 years' time with interest at 3 per cent. In Australia the settler has from 31 to 36 years to pay for a farm. He pays 3 per cent of the cost in cash and must have a capital of $1500. Under the California plan, the settler is given 36y 2 years. He needs no capital in the purchase of a farm laborer's allotment, but must have not less than $2500 capital to buy a farm of 20 acres or more, and the interest payment is 5 per cent. There has been some criticism of the Land Settlement Board because it would not take intending settlers without capital, or less capital than $2500. Unless the Board is prepared to lend settlers money to complete the improvement of their farms, they cannot make a successful start with $2500.* Studies made by the Experiment Station of the University of Wisconsin showed that it takes from $4000 to $6000 to equip a 40-acre dairy farm in the cutover lands of that section. A barn, house, and other small buildings cost $3000; fences $300; horses and harness $600; cows, pigs, and chickens $1200; implements and machinery from $500 to $1000. Later on in this discussion there will be given a summary of the cost of developing 20 farms at Durham which shows that outside of the cost of preparing the land for irrigation, these settlers have spent an average of $7437 in the improvement and equipment of each farm. THE AVERAGE CAPITAL OF LAND SEEKERS The records of the Land Settlement Board and studies at Wiscon- sin show that there are comparatively few farm buyers with money enough to improve and equip a farm. Nearly all must borrow money, See article by E. L. Adams, p. 39. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 15 Fig 1 . 3. — Community Center at the Durham State Land Settlement. Fig. 4. — Community Hall on the Delhi State Land Settlement. 16 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION even if no payment on the land is required. Homeseekers with plenty of money usually buy improved farms. They do not want to do pioneer work on a 40-aere unit. A majority of those who apply for farms under the Land Settlement Act have less than $2000, but the number with from $3000 to $5000 is large. A smaller number have from $5000 to $10,000, and not one in a thousand has more than $10,000. This agrees with the experience of Wisconsin. Under the credit system there, a settler can "get by" who has $2000 capital, but the majority of those who apply have less than $500. What we must work for is a colonization scheme that will take care of the family otherwise qualified who has from $3000 to $5000. THE FEDERAL LAND BANK When the Federal Farm Loan Act was passed, it was believed it would be used by the tenant farmer to help him in becoming a land owner. Experience shows that its provisions are too conserva- tive to be of much aid to the landless farmer of limited capital. The third annual report of the Federal Farm Loan Board showed that one loan in 12 was used for buying farm land. Later investigations by the U. S. Department of Agriculture showed that two-thirds of the tenant borrowers were landless. Nearly 60 per cent of all land bank loans are made to pay off mortgages ; 9 per cent to pay other debts. Investigation shows that the Federal Land Bank has not always loaned 50 per cent of the value of the land. The average is about 43 per cent. The land banks are not to be criticized for this care. We want a larger loan, but we do not want the bank to lose money or worry over payments being made on time. We must work out a plan to make larger loans secure. It can be done because it is done in Australia and Denmark. It cannot be done where each settler is left to shift for himself. THE WISCONSIN PLAN Wisconsin has tried to meet this credit need through a Rural Credit and Land Mortgage Act, under which colonization companies can issue bonds secured by the land to be settled. Before these bonds can be sold the State Commissioner of Agriculture has to certify (1) that the land is fit for agricultural purposes; (2) that it is available to settlers, that is, near enough to marketing points, with good roads, etc.; (3) that the plan of land settlement is in the interest of the settler; (4) that the payments are amortized. Unless these four con- ditions are fulfilled and certified to by the State Commissioner of Agriculture the securities cannot be accepted under the Land Mort- CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 17 gage Association Act. By reason of state supervision there is a saving of interest charges of one-half or three-quarters of one per cent. If the bonds were issued directly by the state instead of being merely supervised by the state, an additional one per cent interest would be saved. : jijj I One Wisconsin colonization company has sold and settled about 130,000 acres financed in this way. This company does nearly every- thing that is done under the California Land Settlement Act. It buys the land for from $6 to $8 an acre and sells it for from $25 to $35 an acre. The difference between the buying and selling price is divided as follows : ten dollars is charged for overhead, five dollars for services, that is, for building roads, giving prizes for agricultural contests, paying the salary of an agricultural superintendent or advisor, and furnishing seed. The remainder is set aside for profit. In other words, the company aims to help the settler get started through advice and supervision at a cost of $15 an acre. After the first payment, which varies with the size of the farm bought, no payments of either principal or interest are required for three years. During the three-year development period, the company often lends the settler from $300 to $500. At the end of the three-year period, the settler begins to pay 6V2 interest on the purchase price of the land and 1 per cent additional for amortization, making 7% per cent in all. As soon as the settler has his land cleared and im- proved, its value increases so that he can sell a mortgage security under the State Mortgage Act before referred to and pay off the colonization company. Wisconsin gives service as well as credit. The Wisconsin companies build houses, buy stock, plan towns, create community centers, and give prizes for the best work in clear- ing and the best crops grown. The manager of the largest of these schemes has suggested to large owners that the organized colonization companies take preferred stock for the cost of the land, with a 50 per cent bonus of common stock, so that if a profit was made in the colonization, they might receive one-half of the extra profits. The colonization company handling the land would receive the other half. WOULD THE WISCONSIN PLAN SUCCEED IN CALIFORNIA I do not believe this plan would operate successfully in California. The price of land is too high, the cost of improving a farm is too great, the amount of money involved is too large, and the rate of interest is too high. The bonds sold under the Wisconsin Land Mort- gage Act now have to pay 7 per cent interest. We must work out a plan where the rate of interest does not exceed 5 per cent. 18 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION THE CALIFORNIA STATE LAND SETTLEMENT ACT I take it that all are familiar with the provisions of the California Land Settlement Act. Under it, the state buys land, subdivides it, determines the relative value of the farms, and endeavors to fix the prices of these farms so as to make all of them equally attractive. The land is sold on 36y 2 years' time. The interest is 5 per cent, the yearly payments on principal are 1 per cent, so that the settler by paying 6 per cent a year owns his farm free of debt in 36V2 years. The state places in each community a practical advisor. It can loan to approved settlers up to $3000 to help them out with their development. The making of these loans is, however, entirely optional. In fixing the price of land, enough is added to the purchase price to pay for irrigation works and for other improvements that the state agrees to make, to pay the salary of the superintendent, to pay all expenses of keeping books, and other overhead costs. The amount of this overhead is not greatly above that charged in Wisconsin, but the amount cannot be fixed with the same certainty because these prices are usually fixed before irrigation development is completed and because there is included in the California plan provision for loans, and every loan adds to the administration expense. HOMES FOR FARM LABORERS The homes for farm laborers provided for in the California Act are something new in American rural planning. But they are here to stay. We have only just begun to dimly realize their value. The number of farm laborers employed in American agriculture is as great as the number of farm owners. If democracy means anything, the family of the farm laborer ought to be able to live under as good conditions as the artisan in the city and he ought to have a place in rural society that gives to his family a feeling of independence, comfort, and self-respect. That situation does not result when the farm laborers live in bunk houses and their families are separated from them. The California Land Settlement Act enables the farm laborer, or any person who lacks capital but is willing to work for wages, to buy anywhere from half an acre to five acres of land. He is helped in the same way as the farm buyer in making improvements and there is greater competition for farm laborers' allotments than there is for farms. Circular 247] colonization and rural development in California 19 The 28 farm laborers ' homes in the Durham State Land Settlement are the most attractive part of that settlement. One of these settlers has already made and saved money enough to buy a 10-acre place and has let his 2-acre allotment go to another laborer. One has saved enough money to buy 15 acres when the land now under lease at Durham is put on the market, but he does not intend to leave his 2-acre farm allotment. That is to be his home. In other words, the influence of the farm laborer's home is to keep people on the land. The children of the farm laborer of today will be the farm owners of the future. THE SPHERES OF PUBLIC AND PRIVATE ENTERPRISE IN LAND SETTLEMENT This brings up a question as to whether planned rural develop- ment can be carried out by private enterprise or must continue to be regarded as a public matter. The answer will depend in some meas- ure on the kind of settlement that is being considered. The work of the realtor who acts as an agent in buying and selling farms or small subdivisions of land, does not have a public character. It clearly falls within the domain of private enterprise and this alone is a broad field of action. But the colonization of areas large enough to make more than 100 farms, large enough to create organized communities, large enough to pay the salary of a superintendent and the expenses of administra- tion, present questions difficult of solution by private enterprise. They can, I believe, be best carried out as public enterprises. First of all, because private enterprise works for profit. There is little pros- pect at present that colonization of large areas can be made to pay a satisfactory return as a business enterprise. Land costs, the need for generous credit, the need for expert advice and direction are against the business success of colonization. Some of the foremost advocates of private enterprise recognize this and say that it is the duty of the state to do the following things for private colonies: 1. The state should make soil maps and reports of the land to be colonized. 2. The state should make demonstrations of the best methods of clearing land or of preparing it for cultivation. 3. The state should show the settler what crops to grow and how to grow them. 4. The state should build roads through the settlements. 5. The state should help create a social and recreational life. 20 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION If the state does these things, colonization becomes a public matter, even if the land is sold by individuals or corporations. Under this plan the state would do things that brought no money return while private enterprise would look after the business end. California now has a better arrangement than this. The cost of advice and direction is paid by the settlers. The element of profit is eliminated. State settlements will draw more people than private enterprise. The expense of securing the right type of settler is greatly reduced. We made settlement of the public lands a government enterprise. All recent great achievements in land settlement and planned rural development in other countries have been government enterprises. Only the government has the resources, the continuity of action needed to people and develop the great areas of land which await development in California. The state can do this work at less expense than can private enterprise. Benefits come to the state from rural development which private enterprise cannot share. Among these are increase in revenue from taxes, increase in business, and increase in desirable people. All these things benefit the state directly and are of sufficient importance to justify insuring a large expense to bring them about. LAND SETTLEMENT SHOULD BE KEPT FREE FROM POLITICAL INTERFERENCE The Land Settlement Board of California has been efficient because it has functioned like a corporation. It had on its board of directors four men of exceptional business ability, Mortimer Fleischhacker, E. S. Wangenheim, Frank P. Flint, and Prescott F. Cogswell. These men are equipped by experience and character to manage any corpo- ration, yet they gave their services to the state. Land Settlement ought to continue under this board or one of like character. It might be enlarged to include other men of business ability. It might be well to include an irrigation engineer, one or two men of agricultural knowledge and experience, and one man who would have the viewpoint of the farm laborer. Operating in a much larger field, the administrative organization would have to be increased. That would be the principal change from the board as it has functioned. There is no reason why such a board cannot be kept free from politics. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 21 IMPORTANCE OF LONG-TIME PAYMENTS AND* LOW INTEREST RATES IN FUTURE LAND SETTLEMENT I believe the time is coming when every American state will pass laws to promote farm ownership and check the increase in tenantry. To do that the length of time to pay for a farm and the rate of interest must be made such as will enable the payments to be earned out of the soil. "How is the settler to pay for a farm when he has to sell some of his crops for less than it costs to raise them?" asks E. S. Benson, Industrial Manager of the Northern Pacific Railroad. Mr. Benson is one of the most able and experienced leaders in the development of the northwestern part of this country. His question is one we must face and solve before we can honestly advise men to go in debt for farms. European countries have come to the conclusion that in order to pay for a farm a settler must be given from 40 to 90 years' time and that the interest rate must be somewhere between 3 and 5 per cent. Comprehensive studies made by the U. S. Department of Agriculture and described in an article entitled, "Do Farms Pay For Them- selves?" was published in the Journal of Farm Economics, Volume II, No. 4, October, 1920. The author of this article, Dr. Geo. Stewart of the Utah Experiment Station, summarized the farm income and capital of 5700 farms. These were divided into 26 different groups located in 22 states extending from New England to Utah. He took the whole income from the farm, deducting nothing for living expenses of the family, and then determined whether it was sufficient to pay for a farm in 10, 20, or 30 years in amortized payments with interest at 5, 6, 8, and 10 per cent. The results of these studies show that farm buying where the interest rate was above 5 per cent was a failure and the income of only a few farms was sufficient to pay for the farms in 10 years with the interest rate at 5 per cent. Summed up, farm buying was a safe undertaking only when the time was at least 30 years and the interest rate at least as low as 5 per cent. When the interest rate was raised to 6 per cent, only one group of farms out of the 26 produced crops of sufficient value to meet the payments and leave any surplus for the support of the family, and the surplus to support the family of this single group only averaged $6 a year to the farm, which is not a living income. At 8 per cent farm buying was a failure. Not one group out of the 26 had a surplus left for family use. On the contrary, there were yearly deficits in the different groups ranging from $67 in New York to $4438 in West Central Illinois. 22 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION As a result of these studies Dr. Stewart reached the conclusion that "average farms are not earning large enough total incomes to buy the farms in twenty years at normal interest rates. The farms of a few regions can do so in thirty years with a small cash balance left for family expenses. Living would even then have to be frugal, to say nothing of amusements and social life. Education of the boys and girls in another town, even one at a time, is almost out of the question. In the great agricultural states of the mid-continental region not a single area as a whole can pay for its farms and even have enough money for necessities, to say nothing of education, pleas- ure or charity. Other areas, except in the North Atlantic region, are but little better off. The farms seem over-capitalized. The dice are loaded against the untrained man with small capital and moderate ability, who wishes to become a farm owner. Is it surprising that tenancy continues to increase?" During the last year the Division of Rural Institutions has made a study of many individual farms and it has the records of the settlers in the state settlements at Durham and Delhi. These records show what it has cost to improve and equip farms and what has been the gross income from the beginning. At Durham where the land has now been settled three years, con- ditions have become stable enough to show fairly well what is the earning power of a well-managed farm under present disheartening price conditians. Recently R. V. Wright, Farm Management Special- ist in Agricultural Extension of the University, went over the books of 20 farmers at Durham. He has made a tabulation of their financial status which is given below. His records are worthy of study by every colonizer in California because there is nothing theoretical about them. They are actual results obtained under more than ordinarily favorable conditions. Of course, it should be understood that Durham is still in the development period ; that the orchards are not yet in bearing, and that, because of this, the incomes of these farms will continue to increase for the next five years; but the development at Durham is far ahead of that of the average settlement of its age and the incomes are proportionately larger. ***** 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 23 24 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION Farm business summary for 20 farms, Durham State Land Settle- ment Colony, fiscal year ending October 1, 1921, by R. V. Wright:* TABLE 1 Farm Business Summary Farm Allottments Size of Farm Used for Crops Acres Irri- gated Alfalfa Yield per A Value Crops Fed Income Farm No. Crops Sold Live- stock Total Income 1 2 56 265 30 34 47 34 48 37 33 48 23 60 37 80 38 30 30 40 37 24 42 80 18 29 43 28 19 38 24 37 19 40 26 27 19 16 25 19 29 18 34 40 18 14 27 34 16 33 24 37 19 40 26 27 19 16 25 38 34 18 5 4 6 4 4 4^ 4 6 8 4 4 $1080 1150 610 480 720 1330 430 1075 340 814 590 670 350 420 840 245 50 290 1335 240 $1202 $2026 2860 1480 $3228 3050 3 4 200 36 400 75 750 620 270 2150 86 5 6 7 8 9 200 2650 760 3260 688 3380 1516 4204 250 10 1860 1980 2025 2080 11 2400 12 510 242 140 18 560 560 2875 13 4 2 6 6 4 292 14 15 16 680 1280 1595 3349 650 17 18 120 1860 2486 1720 621 2499 19 4 3200 20 2490 Ave. 51 29 27 4.7 $ 652 $ 242 $1362 $2030 Farm Management Specialist, Agricultural Extension Division. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 25 TABLE 2 Fixed Capital Value Operating Capital Farm Farm Value Buildings (except house) Dwelling House No. Equipment Livestock Horses Supplies 1 $17000 $1845 $2300 $1148 $1720 $ 300 $1310 2 37710 2925 4500 3890 4860 150 1300 3 11560 1456 2300 1182 679 300 706 4 13065 1675 3000 1878 574 555 1400 5 13485 850 1250 725 645 30 300 6 13431 2704 400 586 2385 350 900 7 12734 1400 350 414 1130 100 857 8 12690 12851 2400 1200 451 1655 2937 425 310 400 940 9 1800 530 10 12300 2500 1800 500 2010 450 600 11 9172 996 1620 654 1601 400 340 12 20300 2915 100 1485 2945 500 1470 13 11700 250 1200 84 394 80 190 14 32343 1450 7750 2052 1510 550 1425 15 10367 980 2750 1382 1510 250 865 16 10999 400 275 1655 362 150 1345 17 11212 795 450 450 430 75 130 18 13950 1480 1710 480 2140 200 800 19 14000 2400 450 1162 2265 400 1625 20 6613 340 4100 1350 1859 2070 Ave. $14847 $1548 $1897 $1159 $1621 $ 257 $ 955 26 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION TABLE 3 Inventory Value Increase Decrease Total Amount Credits Total Amount Expense Farm No. Beginning of Year End of Year Net Farm Income 1 $7098 10790 4030 7860 3600 10951 3956 7038 5740 6060 5310 7640 2008 12860 6451 3060 2000 6810 9962 4883 $6763 13125 4323 9082 3800 11627 6880 7480 6010 6710 5576 9415 2198 14487 7745 4787 2330 8155 10672 5168 $325 $3228 5385 2443 1208 888 4056 4440 4646 520 2730 2666 4650 482 3222 4643 1777 951 3844 3910 2775 $1700 3257 1206 300 435 2027 2335 3177 380 1650 1829 2780 415 2832 3455 890 580 2025 1012 2460 $1528 2 2335 293 1122 200 676 2924 442 270 650 266 1775 190 1627 1294 1127 330 1345 710 285 2128 3 1237 4 908 5 453 6 2029 7 2105 8 1469 9 140 10 1080 11 837 12 1870 13 67 14 390 15 1188 16 887 17 371 18 1819 19 2898 20 315 Ave. $6405 $7316 $ 940 $325 $2923 $1720 $1181 Note. — In determining the Total Income as listed in Table 1, the actual income from the sale of farm products, such as hay, dairy products, eggs, wood, etc., was included, but not the income from any source outside of the farm busi- ness, such as labor. The Total Amount Credits as listed in Table 3, was determined by adding the Total Income as listed in Table 1 and the increase in value of the inventory as listed in Table 3. The general increase in the value of the inventory is due to increased value of the dairy herds, which are as a whole larger than at the beginning of the year; the new equipment added and the general addition of new improvements on the colony. The inventory as listed in Table 3 includes the value of all buildings (except the house), all other permanent improvements, the equipment, the livestock and the supplies on hand. Depreciation on improvements, equipment and livestock was taken into consideration in determining the value of the inventory at the close of the fiscal year. The inventory does not include value of land. The Expenses as listed in Table 3 include all operating expenses and all capital expenditures for new improvements, new equipment and additional livestock. The expenses also included taxes and interest payments on the amount of principal still due the State Land Settlement Board, but not the payments on the principal itself. No personal household expenses were listed. The Net Farm Income does not show the increased value of the land, due to the development of the individual farms and the general development of the com- munity. This may conservatively be estimated at $1000 per farm for the past fiscal year. Neither does it give credit to the farm for the value of the family living received from the farm, which is estimated to be on an average of $600. The above tabulated summary and statement of Mr. Wright's con- clusions might be supplemented by the following: CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 27 The average income of these settlers of $1181 is considerably more than enough to meet the amortized payments under the 36 % year plan, but if the payments were not amortized and extended only over the usual period of ten years, there would not be a single settler who earned enough to meet his payments. Mr. Wright also went over the accounts of four of the farm laborers, which were intended to be typical of all the farm laborers. The results are shown in the sum- mary given on page 28. Attention may be called here to the fact that the average net income of the farm laborer was $1061, while the average net income of the farmer, with an average investment of nearly $15,000 in a farm, was only $120 more. This shows that the farm laborer is rela- tively better off than the farm owner. It also explains the constant tendency toward smaller farms, that can be cultivated with the labor of a single family and paying out money for extra help eliminated. That, however, is not the whole story of these farm laborers ' allotments for, of the $1061 net income, nearly one-third came from the sale of products of their two-acre allotments. The income from these allot- ments is now only a fraction of what it will be in a year or two because nearly all of them have been planted with fruit trees which are just coming into bearing. The income from the land, the income from labor, the small expenses of the farm laborer, all show the value of this innovation. It does not show, however, the social importance of this change to the farm laborer. When we are planning the rural community of the future, it will be a great mistake if we do not recognize the farm laborer and his family as something more than a mere instrument for cultivating crops. We must consider him as a citizen. We must consider his family as the potential farm owner of the future. The wives and children of the farm laborers at Durham take part in all the games and social activities, besides helping to furnish labor for cultivating the fields and saving the fruit of the surrounding farms in the period when emergency help is required. The demand for farm laborers' allotments at Durham and Delhi shows that the American farm laborer will not desert the farm if right living conditions are made possible. It shows also that the farm laborer and his family will do all kinds of farm labor if he can have a home in which comfort, independence, and self-respect are made possible. 28 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION TABLE 4 General Summary Farm Labor Allotments Showing the Investment and the Net Income Size of Lot Income Expenses lot Business Lot No. Sale of Products Outside Labor Total Net Lot Income 1 2 3 4 2 2 2 2 $160 150 853 125 $1323 1125 600 1050 $1483 1275 1453 1175 $425 156 312 248 $1058 1119 1141 927 Ave. 2 $322 $1024 $1346 $285 $1061 TABLE 5 Fixed Capital Operating Capital Lot No. Lot Value Buildings (except house) Dwelling House Equip- ment Live- stock Supplies Remarks 1 2 3 4 $400 400 400 400 $140 325 740 470 $1100 1300 1500 2000 $ 50 100 237 735 $ 70 24 365 362 $ 75 15 100 60 Ditch tender Odd jobs Rented some land Odd jobs Ave. $400 $418 $1475 $280 $205 $ 62 Note. — The Expenses for Lot Business as listed in Table 4, include the operat- ing expenses, such as feed, taxes, insurance, repairs and interest paid on the prin- cipal till due on the land. No personal household expenses are included. The value of the family living received from the lot, in the nature of vegetables, fruit, livestock products and rent would average about $450 per year. The summaries of the above allotments are typical of the situation on the labor allotments at Durham State Colony. THE IMPORTANCE OF THE THREE MILLION DOLLAR BOND ISSUE The need for long-time credits and the need for a low interest rate makes the vote on the $3,000,000 bond issue to continue state land settlement authorized by the last state legislature (1921) a matter of importance. If this bond issue is ratified, it will at once return to the state treasury the $1,000,000 advanced by the preceding legisla- ture to complete the state settlement at Delhi and will leave $2,000,000 with which to create new settlements. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 29 If this fund of $2,000,000 should be used as previous funds have been, it would serve to create only a single new settlement. But if used to guarantee the prompt payment of principal and interest on loans made by the Federal Land Bank and deferred payments to land owners, then it can be made to serve as a basis for three or four settle- ments to start with and if the payments of these settlers are made promptly, it can be used for a revolving fund for an indefinite future development. Such an arrangement is not experimental or new. It is a common European practice. It would give a social value to the Federal Farm Loan Act that can be acquired in no other way, and would be another step along the road of planned rural development which this country must travel. SETTLERS UNDERWRITE STATE LOANS We have spoken of the state funds being used to underwrite the money advanced by the Federal Land Bank and to the former owner of the land, but strictly speaking this is not correct. That money is underwritten by the settler. The settler's capital and the settler's industry underwrites all that the state does. Under this plan, the capital provided by the state would underwrite nothing except prompt payment of interest. If there were a failure anywhere, the first person and probably the only person to feel it would be the settler himself. His capital and his work is the foundation of the whole financial structure, and if the settlers are wisely selected and the land suitable for closer settlement and sold at a proper price, as it almost certainly would be under this system, there is no reason why twenty land settlements ought not be as solvent and successful in California as are the thirty or more similar settlements in the State of Victoria, Aus- tralia, or the 296 similar settlements in Germany, which were in exist- ence when the war broke out. RURAL-MINDED PEOPLE LONG TO SECURE HOMES IN CALIFORNIA The next question is, where should settlers be sought ? The answer is, first of all, at home. California should provide for her own people. "We should create openings for the young men and women who love rural life and want to start out on a farm of their own. The Austra- lian states give special opportunities to the graduates of their agri- cultural colleges and farm schools. We ought to do the same thing. We also want to make broader opportunities for the tenant farmer. When we go outside of California, the people to whom our lands will 30 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION make the strongest appeal are the tenant farmers between our eastern boundary and Maine. In the Middle West are thousands of people of moderate circumstances who long to come here. During the last eight months the State Land Settlement Board has had thousands of inquiries from this type of people. The Santa Fe Railroad has 5000 inquiries on file asking when the next state land settlement in Cali- fornia will be thrown open. As I said earlier, rural-minded persons in every section of the country hope to end their days in California. We must aid in the fulfillment of their hope, and not exploit it. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 31 SELECTING LAND FOR SETTLEMENT By CHAS. F. SHAW In the Durham Land Settlement Colony, two adjacent allotments were sold, one for $77 an acre, the other for $200 an acre. Each pur- chaser is satisfied with his purchase, each convinced that he secured his farm at a fair price, yet there is a difference of $123 an acre in the cost ! The selling price of the allotments varied from $250 an acre to $25 an acre, there being 38 different acre-values shown on the adver- tised list of prices, yet no settler has complained about either the actual or relative price of the ranch he purchased, that the price was too high on the basis of its producing value, or as compared with other tracts in the colony. This remarkable situation is due to the fact that the land was sold, in so far as it was possible to determine it, for the actual value of the soil making up each particular allotment or ranch. The valuation of each allotment was derived from a careful, scientific study of the soil, together with the use of a map showing the location of each kind or variation of soil. Each soil type or phase was studied by experts who appraised its agricultural possibilities and determined on a fair price per acre. The acreage of each soil was multiplied by its acre value, and the sum of all these determinations showed the combined or total selling price for the entire area. Had this figure been too low to cover the original purchase price of the land plus all the expenses of subdivision, including overhead, estimated selling costs, supervision for the period of amortizing payments, etc., it would have been necessary to have made an increase in the appraised value of each soil type, but fortunately, the total amount was sufficient, though barely sufficient, to give the sum needed. With a definite valuation for each type of soil it was relatively easy to set a fair acre price for each allotment. The area of each kind of soil on the allotment was measured, multiplied by the acre valua- tion, and the amounts thus obtained added, and divided by the number of acres in the allotment. The acre price of each allotment, as thus determined, does not represent the value of any one kind of soil, but the average value of the soils making up the allotment. The problem 32 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION of final evaluation of each allotment was not quite so simple, however, as the more distant and inaccessible allotments had to have their values reduced, and those better located increased in proportion, an endeavor being made to equalize through the selling price the inequali- ties in location or accessibility. To reach these final values, much hard work was necessary. A conscientious study of each tract was made by two or three men who approached the problem from different angles. The results are so gratifying that they amply repay the effort. Contented colonists, well satisfied with their purchases, insure the success of the colony. The same method, modified to suit different conditions, is being used at the Land Settlement Colony at Delhi, and the results, we hope, will be as happy as those at Durham. The lands here are being evaluated on a comparable basis, although the variable topography, in its effect on irrigation, has an important bearing on the final value of the land. The kind of soil and its productive capacity will deter- mine the size of the farm allotments, the topography, on irrigated farms, will determine their shape. The broken lines in the diagram (Chart I) show the selling price per acre for the allotments at Dur- ham, and for those offered thus far at Delhi. The height of the curve above the base line shows the price, while the horizontal length of the line on any price level shows the number of farms at the given price per acre. The varied soil conditions at Durham are reflected in the varying prices and the few farms at any one acre value, while the smoother lines of Delhi price shows the influence of the much more uniform soil conditions. The results described could not have been obtained without accu- rate knowledge of the soils to be sold. The need of careful and accurate surveys of the water supply, available reservoir and dam sites, canal locations, and other engineering features, has long been recognized, but usually little or no attention has been paid to the soil on which the water is to be used. An accurate surveying and map- ping of the soils of the proposed colony is as necessary as any of the other work of subdivision and should be the basis, with the topo- graphic survejr, of the laying out and evaluating of the allotments. This careful study of the lands, and the establishment of selling prices on the basis of the actual value of each allotment, is a relatively new step. Yet it is an old basic principle in any merchandising ; silk shirts are sold at silk shirt prices while cotton shirts are priced on cotton shirt values. One price for shirts, be they silk or cotton, would bankrupt any merchant who should attempt to sell on that basis. Yet Circular 247] colonization and rural development in California 33 many land-selling operations, many subdivisions and colonies have been put on that "one price" basis, or on only a slight modification based on obvious differences in soil or location. The results of such a method of valuation are an underpricing of the good soils, making them very attractice bargains ; and an overpricing of the poor soils, making them correspondingly undesirable. The purchasers of the good lands soon pay out and secure title, while the purchasers, if there are any, of the poor land soon fail and move away. The result is that the operator or the original land owner has on his hands, * os : OS T^ r^ t-( rH rH >l e^ : r< u o o o o o o io o o o £ 03 o o o 00 O ^ 00 lO CO O « o> a OS rJH Ttl i-H rH rH >> m : _, Sh O o O o o o io o o o ^ > 05 05 OS TJH rHH rH rH o o o O O O iO o o o •B « o o o oo o tjh oo »o CO oo £ 05 05 os ^^ H rH w >> e© : o o o O O O lO o o o •5 S o o o 00 O ^ 00 iO CO £ £ OS C5 05 HH ^ rH rH 1 >, 6© o o o o O O O to o o o 2 •£ « o o o 00 O ^* 00 to CO a o £ 05 © OS rjH TjH rH rH Ph ^ >> . €# 8 o o o o o »o o o o ^ s o o OC O ^ 00 to CO €© OS C5 H H H rH O o o O O O to o o o 5 s o o o 00 O Tin 00 to CO 3 2? OS OS a> Tf Tfrl rH i—< ^ >> G@ O O O to O to o "2 * 00 O IN 00 CM »0 HH Tfl rH rH O CO c co Ci C OJ O O O to O O to "2 « CM CO IC G5 Oi OC I> 00 O O 00 O CQ CN & t^ r-H CC to cc Tjf T(l H r-i m T— I ^ O 00 tO tJH c 00 CO c 00 c OC O to O O O to to "S s o oo co oo oc tjh t* CM rH » 00 Oi i— 1 CO r- CO i— i CO (N 0C CM CO >> m i-i t*) r^ S* 13 / — V o <6 . +2 co o 3 „ CO cu o3 ; O co : 3 § ; £ c3 '_ S 6 1 frt a Eh +- p a | 1 S T 11 r -*3 : ■+» a f;2 c I.IJ i t M H ^ c 1 56 3 j 3 3 d ii \ i \ I 3 ,£ i SQ 3 a. o c : t &* 1 1 J c i i C -t- .? i| «*. 3 . D 1 c It 3 T i ! t a ! 1 > h a i 1 1 ! 1 1 -5 c ; t: a ! a a c 3 p -c p s 1 t: a a a ft a : o CO 73 co i .s H " 11 cu 5 1 E- i i i c ) o CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 59 IQ o o >o to o © © o O to rH to 00 CD T^ o a © © CO TH i—i CD 1> 1— 1 CO "tf co ^tf CO 1— 1 ^H CO to o . © to to o o g © © © © 1— 1 i—i to 00 CO Tf o o l> T^ © c rJH CO © r- rr © •laced by operating placed by and ma- T3 6 02 02 d & X 0) 03 •6 o g~ orkstock (rep gs (covered in , livestock (re , implements bfi T3 d ol +3 c3 d 2 +2 o 13 d o '3 bB ep w uildin pairs) stock) 03 £ P-, o 0) d 11 d d , o o +3 -(-= 02 02 03 o to as * 03 : "tf t^. CO t-H 0) a to Tt< 00 I-H >> oq CO + CO -fl <-■ a o 1— < T^ ■5 cS T^ tN O a> c3 to Tt< CO >-h >> «} CO ■+ ■<* - 0) a o OS to ■C s T* ^ co a 21 o3 to CO •> WJ >> QQ co 4 ^ - 1 o to <* ■£ 5 tH oq oo 2 o3 to > OQ co 4 to - 03 o ^ os 5 d a ^h t^ CO £ 2 o3 to (M CO o 1 >> m CO 4 to - — (h 03 a c r^ c o 5 * rJH O 2 63 to > CC 1 w 4- to 0* 03 a c r^ l> •£ « r* cc tM o £ ~i to oc >> m CO 4 to - 03 c a A Tt h- c ■S «S to 0! a- CO tr: * _l fc-c o o o o o o c CO CO ^ * tO iO Tf o o o T* os o: w 2 t-h tO O GO O to os GC >J i— 1 l— 1 CO 4 to o o o o o c co cc CO to to o o o c a OC 00 CM CM ^ 00 o t> CO GC 00 i-H * <* Tt !>> ^~ «o to T3 c 03 03 «3 £ 03 Q, X 03 1=1 03 03 * 2 03 03 03 03 a 2 s-< p 03 10 03 03 I cc % > x. a o3 o 'B V 1 +3 .& '3 03 fit r r/ o 3 > "5 c CO ^ 03 '- S cr 0. a c a > § 1 -o 03 "+H C 03 r . cc i a — C. h cc d 33^|&^ _ c3 •? "s 03 •53 sa c oj o £ c § 0 00 N i-i to CO i-H 1-1 >> CM CM _1_ b- 33 T O i-h O O t-h O O 00 O CM to CM OS O O 00 Tt« « iO CO N h h i# N Tfi 1H >> CM CM _|_ b- O CO O O CO O tH b- O CM to «0 CM O b- Oi CO o IO00NHN tHH CO 1-H >> CM CM J_ b- O i— I O O i— 1 O i-H i-H t— 1 "5 « o in io oo io o »o b- b- CN > CM CM b- b- > CM CM b- j3 fc< O i-H O O i-H O i-H 'HH 5 cS O CM to tH i-h O i-h CO O 0> «: oonm co o co b- --I >> cm cm b- 6© O t-H O O i-H O t-H CO •£< ej O O to b- CM O CM (M 05 >> tO 00 b- CM CO O CO tH CM CM b- CO m OOSOOOiOOi CM 5 s O ^ to O Ci CM b- O o 00 £ "O N OS CO H^ KJ 03 i-H w >> CM t-H t^ €>% Ph O TffOO i*NN CO ■5 « O »0 >0 CO CO O C5 0 CO 05 CO tj< O i< i-H 1 >> CM tH tH CO C5 O O ©tH iO CO •5 £ OS ^O CO O »0 Tf C5 « £ »0 N CO N O CO CO ^ >> e© i-H cm _p th COOOOOi-Hi-H i-H -^ ca to O to CO t-h O Ol Tt< & £ o oo n co oo a o J >> i-H t-h CM > y-t CM CO 1 lO to o O to b- CM 00 "2 « co o oo th co a cm 4s oj 00 CO CO 00 > CO i-H i-H OS M O CO * >» 'c B -2 CD L CD •^ CD CO CD stment ating it >nal ite head it 1 needs, ints needs b ulative ars a CD h o ococo3^o) r— c p- c E- PS « O r> T3 > NaON^MOlffl J3 COOCOi-HlOCDl-dH i-h (N > NOiOWOOWOCO rd COOcOcNiOCOfiO i-i > t^OiOCO(MCOT-Hi— i J3 COOCOcNCOcOicO i-h > NffiOOtDMINlN > CO O CD CO b- CO iC Jl i-i (M (M l> i> h CO Q CD lOOOOiOCDOsic o >i NOOOO^MOM OOCCONCOHiC H Ph -G CO i-i C> t^OiOtMOOCOT^i- COOOOTjHOiCOCOTl- -G i-h (N (N b- m h c3 *OOOOuocOOil> >> NOiOOlNCOQOCC COOcOrtHOOCOi-iC -G i-i <# * O O O O CO CO oc >> OOOOiCO^N T3 O CO lO i-h CO rtl oc i-h (N N JLCC S3 OOO^^O^Tt >> 0©OiOr)<^0(N 73 ©OOOMNCDhci; > OOOCOONNCl CO CO O CO t^ M (M CO CO i-h -rfl tF rt +^ CO 5 e3 CD & <-t-H CO o s W Eh c 'a 43 PI -t-s o JC a G a £ a: a. > P 1 1 c ) p c a. 1 C 1 £ a s- a. -D a C P- ■3 c s 1 > I S3 © a § i > '3d S S3 bC + Oh «*1 64 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION The land is purchased at $200 under terms of one-tenth down, interest at 6 per cent only for two years, then balance in eight install- ments, with interest at 6 per cent on deferred payments. The • summarized findings are given in the table immediately fol- lowing. This business shows a gradually ascending need for capital from the third year on to the eighth year, when the receipts exceed the needs by a few dollars, which applied to the total gradually reduces the amount invested. The greatest need — $7623 — occurs in the eighth year. After the eleventh year, the initial investment can be reduced by applying sums heretofore set aside for land payments to the invest- ment. If this be done, the business can be ultimately liquidated. The 2000-foivl poultry plant. — Two thousand laying fowls is con- sidered by commercial poultrymen to be about the right sized plant for a family farm. The capital requirements of such a plant are indi- cated below. Land is taken at $600 per acre without improvements, purchased under terms of one-sixth down and the balance payable in five annual installments, with interest at 6 per cent on deferred pay- ments. The table shows the capital needs by years and their probable reduction from possible receipts. In starting, the plant is equipped with 1000 laying fowls, and in early spring 2700 day-old chicks are purchased, which, after allowing for mortality and roosters, should furnish the second 1000 pullets. The purchase of laying fowls takes place as soon as the buildings are ready. For the purpose of this example, the purchase of fowls is considered to take place October 1, building operations having started the previous July 1. TABLE 13 Summary op the Cash Requirements for a 2000-Fowl Poultry Plant (10 acres) Item Periods 1st year 2nd year 3rd year 4th year 5th year 6th year Investment Operating Personal Overhead Total Possible receipts Net needs by years* Cumulative needs Time and amount greatest need $8103 2581 1000 441 12125 2500 9625 9625 9625 $1000 4491 610 381 6482 8106 + 1624* 8001 $1000 4516 610 321 6447 8106 + 1659 6342 $1000 4516 950 261 6727 8106 + 1379 4983 $1000 4516 750 201 6467 8106 + 1639 3324 $1000 4516 750 141 6407 8106 + 1699 1645 C A plus (+) sign indicates receipts in excess of needs, to extent of figures shown. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 65 The poultry business, a farming industry of relatively small acre- ages and quick returns, makes the best showing of any of the four types of farming presented. The greatest need for capital occurs during the first year, from then on being gradually reduced with surplus earnings available beyond the yearly needs of the business. After the sixth year moneys previously paid upon land installments and interest on deferred payments becomes available for more quickly reducing the initial investment, so that, with data as used here, the business can pay for itself in approximately seven years. Discussion of the findings. — The tables show capital needs to meet land payments, improvements, construction, equipment, personal ex- penses, replacement charges, and interest requirements during the period of development. Another step is needed to determine the justification for embark- ing in any of these businesses, to test the soundness of the contemplated investment. This is summarized below to show : (a) Greatest capital needs. (6) Returns after land is paid for and business fully estab- lished. (c) Necessary expenditures after business is fully established to meet operating, personal and replacement expenses. (d) Market value. 1 ' Market ' ' value is made up of ' ' productive, "" home ' ' and ' ' poten- tial values. ' ' By ' ' productive value ' ' is meant that amount of which the net returns represent the usual percentage of profit demanded of any business. By "home value" is meant the value of the property for use as a home. The "potential value" takes into account any future increase in the value of the property. The total of these three gives the market value. Note that interest on operating capital is not included in our cal- culations. A just charge for this can be added. TABLE 14 Summary of Capital Bequirement Findings (Figures in round numbers for ease in making comparisons ■) Business 40 acre diversified farming Gross Gross returns capital after land needs to is fully establish paid for $6,800 $3,500 Necesary needs after business is fully established $2,000 Market value (estimated) $16,000 20 acre deciduous fruits .. 7,900 2,500 1,750 14,000 30 acre dairy and hogs .... 7,600 2,600 1,850 16,000 10 acre poultry 9,000 7,200 5,500 15,000 66 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION Limitations of average data. — Caution should be exercised in attempting to make generalizations from the data here presented. A recognition and understanding of the principles involved and a work- ing knowledge of the method of studying capital requirements con- stitute the real values to be drawn from a perusal of this material. Each suggested proposition should be tested out with data applicable to the property and to the individual so that the outcome properly determined will decide the merits of the contemplated ven- ture, according to the specific conditions, desires, capacities, and requirements of all involved factors. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA 67 RURAL PLANNING By J. W. GBEGG In this great state of California, so abundantly supplied with resources and natural beauty, it would be reasonable to expect that every phase of rural life would be found developing in its own ideal environment. In many sections of California these natural resources have not been conserved, and in other parts men have not attempted to create that landscape wealth so essential to their health, happiness, and prosperity. Our forefathers in New England, even while facing problems involving their very existence, did not neglect the develop- ment of their home grounds nor the improvement of their towns, as the beautiful old Colonial gardens and stately American elms so eloquently testify. Not until the struggle for independent national life began, did the evidence of this love for gardens and well developed home grounds begin to wane. Later, as the next generation began to move into the west, the rancher, the truest home builder in the Nation, found himself in a new, undeveloped part of the country, possessed, often, of little but his most personal belongings, yet he found time for the beautifying of home environment. Sometimes, years of toil brought improved economic conditions, and what had been considered useless luxuries were recognized as most valuable factors in the upbuilding of the individual home and of the com- munity. Times change, the old order of things in rural life is giving way to the new. Ideas and practices which only a few years ago were thought to apply only to the large city or to be possible for the man with capital, are now found to be just as applicable and just as neces- sary for proper rural development. The value of city planning is now generally recognized because people have learned that "it is the practice of doing things right" in city building. Rural communities have just as much need to grow and progress along right lines as our cities. Good business for the city is good business for the country. Agriculture is a big business^ and a well organized and developed country life must inevitably help to make it a profitable and attractive business. Civic art, which is but another name for "the practice of securing the maximum of utility combined with the maximum of beauty" has never been held in very 68 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION high esteem in the country districts as a whole, and little or no thought has been given to the value of convenience and beauty as they materially affect the community or the life of the individual. The average farmer has paid little attention to the economic value of time as a factor in the successful operation of his business. Nor has he thought seriously of the value of attractive buildings and home grounds in promoting his reputation and prosperity, and even the health and happiness of his household. The country town has often been slow to profit by the best examples of city planning, with the result that the growth of the rural center has been slow and misdirected. Business interests have not been encouraged or protected; residential areas have never been defined nor their growth made orderly and attractive. Serious traffic and transportation problems have always existed in the small rural town, but their logical solution has seldom been attempted. Parks, play- grounds, community centers, and even the public school, the real seat of American sovereignty, have all felt the blighting influence of apathy. American life today, be it assembled in the form of city, town, or rural district, is composed of many diverse elements, which need to be coordinated and brought together into one harmonious whole, in order to function properly for the best interests of all. Rural planning is far from being a mere study in landscape archi- tecture or the superficial steering of a community into an agitation for more beauty. In its careful analysis of the problems affecting land values, business in general, and the assurance of permanency and growth, it concerns the pockets of every citizen. Every business man is interested in reducing expenses and in perfecting an organization that will most efficiently govern the operation of his business: and that is rural planning, the application of sound business principles to the organization and life of a community. The elimination of waste is the world's greatest scientific problem today. As the farm home, so is the community. The importance of this truth and its vital relation to the wealth and happiness of the state cannot have too frequent emphasis. In establishing a farm home, plans and specifications are just as necessary and essential at the beginning as they are in building a house or developing a city or a town. As the utility, convenience, and beauty of a structure are made possible by the thought and skill of the architect, as expressed in diagrams and blue prints, so only can the greatest utility, convenience, and beauty of the entire farm grounds be obtained by the builder first creating in graphic form the landscape and design of the home to be. CIRCULAR 247] COLONIZATION AND RURAL DEVELOPMENT IN CALIFORNIA GO Let us first consider, then, ' ' Design, ' ' which in architecture means "plans and specifications," and if possible lay down a few general rules to guide us in planning more convenient, more healthful, and more beautiful country homes. As one writer on the "Rural Home" has very appropriately said, ' ' The city may furnish hotels and board- pLA N : DELHI TOWNSITE Fig. 9. — Townsite of the Delhi State Land Settlement. ing houses and places to eat meals and sleep nights, galore, but to my mind, the word 'home' is associated only with the green fields and bright flowers and whispering trees and singing birds; it ever and always recalls the orchard, the meadow, the deep tangled wildwood." These general rules will not give a stereotyped appearance or same- ness to all grounds designed by them; on the other hand, they may be applied with all the elasticity needed to include both the extremes and means in variety and shades of taste, as well as in amount of improvement. As, for example, you might select one thousand modern 70 UNIVERSITY OF CALIFORNIA EXPERIMENT STATION city houses, all with kitchens, dining rooms, parlors, halls, bedrooms, and bathroom built according to general architectural rules, yet no two alike. Size of the grounds. — The size of the grounds should be com- mensurate with the size of the farm, i.e., with the farm's needs and requirements. A half-section stock farm should have larger grounds, more yards and buildings than a ' ' forty " -or an " eighty. ' ' For the smaller farm a five-acre plot might be sufficient, the larger would need more. Building site. — The general topography of the land should be carefully surveyed. A slightly rolling elevation should be chosen if possible, so as to give perfect drainage and sanitation, and the building so placed that the drainage from the stables and corrals does not run toward the house. A site should be chosen comparatively near the highway, unless some elevation, trees, or other natural features make another location preferable. An east or south frontage is usually best. Outline of grounds. — For convenience we will consider the farm grounds as made up of five elements : driveways and yards, buildings, water system, orchard, and flower and vegetable gardens. Between these elements there should be a proper relation and balance, both with respect to each other, and with respect to the topography of the building site. Driveways and yards. — After locating the house, a spacious drive- way or open court, which might be called the farm yard, is the next element to be determined. It is the essential, central element and ratio factor, giving proportion to the whole, and making possible a symmetrical and harmonious arrangement of the buildings, and especially an arrangement convenient for handling that routine of so-called "chores," which on the average farm occupies from one- fourth to one-half of the farm labor. This open court may be varied in shape and design — square, rectangular, L-shape, or oval — according to the taste of the builder. It should be well drained and may be graveled all over or the center put in lawn or alfalfa. The driveway from the main road leads into it and from it lead the minor drives and lanes. The house-yard or lawn should be placed on one side of the main driveway, fronting the highway and extending back as far as the open court. It should be spacious ; as one writer has said, ' ' a half acre is not too much." Here may be grown flowering plants, trees, shrubs. Adjoining the house-yard should be situated its necessary corollary, the small fruit and vegetable garden, and back of these is a very suit- able location for the farm orchard. The other necessary farm yards, CIRCULAR 247] COLONIZATION AND RURAL. DEVELOPMENT IN CALIFORNIA 71 such as cattle yards, feed yards, and hog yards should be placed on the other side of the grounds, in the rear of their respective buildings. Last, but not least, every yard should be thoroughly and stoutly fenced. The farm, as well as store or shop, needs ' ' a place for every- thing, and everything in its place. ' ' As Mr. Eugene Secor in a paper entitled "A Plea for the Farmer's Front Yard," has most aptly written, "Pigs and peonies don't agree. Cannas and cattle cannot be raised on the same lot. Horses and horticulture should be studied in separate inclosures." Fig. 10. — Farmstead layout Allotment No. 38, Durham State Land Settlement. Buildings. — The modern tendency favors more and separate build- ings to the combination of all in one or two large ones. They should be grouped about the farm yard, or open court, with due thought for convenience, sanitation, and harmony in appearance. The house should be toward the rear of the lawn and comparatively close to the * ' farm yard. ' ' On the opposite side of the open court, facing the main highway, may be placed the largest and most attractive barn. On the barn side would naturally come the other barns and sheds for housing the stock ; at the end of the court, perhaps, the granaries and machine sheds, and on the house side the chicken yards and water system. 72 UNIVERSITY OF CALIFORNIA — EXPERIMENT STATION The buildings should by all means have some system of alignment : they should not be "sown broadcast" about the yards. Home orchard. — The home orchard should occupy the sheltered nook of a wind break, where summer's heavy winds are broken and where the yearly mantle of fallen leaves gives a mulch and adds humus to the soil. Shade trees. — Shade trees should be large and should practically surround the whole farm grounds ; very light on the south and east, but massive on the north and west, or the direction of the prevailing winds. The grove should form the background for all the other farm yard factors, and give to them a setting dignified and beautiful in verdant bas-relief. The extreme west and north should be walled with at least two, or better four, rows of evergreens. The deciduous trees are not suf- ficient protection as a windbreak when that protection is most needed. The trees should be placed far enough back from the buildings to allow plenty of sunlight and ventilation to reach the buildings and yards. Ornamentation. — A general rule for ornamentation as expressed in the words of a notable landscape authority is, "Study the most satisfying scenes in nature and try to inject the spirit of them into the immediate out-of-doors you call your own. Adapt walks and drives to the contour of the landscape, and buildings to their respec- tive locations and environment." The same author has well said of the planting of trees and shrubs: "We violate the artistic sense of proportion when we fill a small lawn with large growing trees, or ornament a large tract with only shrubs. The large trees are too heavy for the lawn, except when used sparingly, while shrubs are just right when used in abundance. For the large grounds shrubs alone are too light. It takes the generous use of trees to give the richness and weight needed. ' ' Such ornamentation, supplemented by a restful color scheme for buildings and fences, and a general orderly appearance created by good maintenance will do much to make rural life attractive and satis- fying.