Holstein and Guernsey associations, asking them if they would be
willing to furnish all of our settlers cows at the same price we
were asking, and deliver them at the same time we were delivering
them; we could not get anyone to accept our offer. We have lost
money right along on our live stock--not a great deal, but a small
amount. So when your informer tells you that they purchase goods
from the company at a fair profit to the company, the statement is
not correct, for we sell no goods to them at all except what goes
with the land. In no case do we buy anything from the settlers, and
in no case do we sell anything to them, except the original
equipment which goes with the original purchase.
The statement that the company's purpose is to reserve large
demonstration farms is laughable, for we only have two
demonstration farms reserved in our entire tract of 60,000 acres.
Those two demonstration farms cover 2,500 acres. Already one
demonstration farm in a colony where we sold practically all the
land has been cut up into small farms and offered for general sale.
The other demonstration farm is in the vicinity of our present
settlement and is not now broken up.
In our oldest colony we reserve not a foot of land there. The
cheese factory which we started we turned over to the co-operative
organization. The warehouse which we constructed we turned over to
a Co-operative Shippers' Association.
There is one thing that your informant is correct on, and that is
that we retain the river shores. We have retained the riparian
rights for the reason that some day we hope to turn this over to a
water-power company and develop hydroelectric power for the benefit
of that whole community. If these river shores were in the hands of
different settlers, it would be impossible for a hydroelectric
company ever to go in there and purchase each farm separately at a
price that would enable it to develop the power.
The contradictions in the above interviews are to be explained by the
settlers' misunderstanding of the company's general policy and methods.
In their eyes everything in the colony belongs to and is managed by the
company, which is quite true at the beginning of the colony, and which
cannot be otherwise at that time. The new settlers know little of one
another, and are ignorant of the local conditions. They lack both
business experience and capital. Therefore, as a rule they are not able
to conduct, either individually or on a co-operative basis, commercial
or industrial establishments at the start. It is therefore up to the
company to see that there is a town, a hotel, a grocery store, a bank, a
creamery, or cheese factory, a shipping office, etc., in the colony.
The fact that the company has interests in, and even controls, these
concerns at the beginning, and that all these business branches work
together, conducting their financial transactions through the same bank,
has led the settlers to believe that everything is permanently owned and
controlled by the company. The settlers in a new colony do not know that
as soon as the success of these business organizations is secure and the
settlers have been assisted to a firmer footing the company will turn
the organizations over to the settlers themselves on a co-operative
basis, as has already been done in the company's oldest colony. It is
the company's policy, as above stated by its head, to specialize in the
land colonization work only, leaving banking, commerce, and
manufactures to others.
COLONY SNAPSHOTS
The writer visited and investigated two colonies of new settlers founded
by the colonization company within a distance of about twenty to thirty
miles from one another. The following field notes taken during
interviews with the company's local officials and the settlers
themselves give a general picture of the conditions of the colonies.
In the first colony, the first families settled about twelve to fifteen
years ago. At that time a logging camp was operating and the country was
covered with standing timber. As fast as the loggers cleared the timber the
land was opened for settlement by the colonization company. Land buyers
were taken into the logging camp, were given meals and sleeping quarters
there, and were taken out and shown their land. About five years after the
first settlers came most of the timber had been cut. The company then
established the village and began settling from that point. The colony has
steadily increased and at present contains about fifty families.
The settlers were Polish. About ten families came from Russia, twenty
from Germany, and twenty from Austria. They left their old country on
account of poverty, political oppression, and compulsory military
service there. Almost all of them had been engaged in agriculture in the
old country. About forty families had been employed in shops and
factories in America before they succeeded in settling on land here;
only about ten families came from Europe directly to the colony, of
which they learned through the company's advertisements in the
American-Polish newspapers and also through the letters of their friends
and acquaintances.
The largest farm is 120 acres, the smallest 20 acres, and the average 80
acres. Most of the farms are still under mortgage, only a few being
cleared of debt.
In the colony and its vicinity are seven schools: six with one room and
one with three rooms. All teachers are native born and all teaching is
in English. The settlers appreciate education. Most of the children are
inclined to farming and will remain in the colony. One fourth of the
adults do not speak English, one half only speak English, and one fourth
speak and write English.
Only a few of the adult male settlers have second papers; about nine
tenths have first papers, while the rest are totally unnaturalized. In
explanation of this fact the company's president stated that it is only
the older men who have not secured even their first papers.
A large proportion of the foreign settlers [he said] secure their
second papers just as rapidly as they can after they locate on the
land. They desire to take part in local politics; they find that
they must become interested in local political affairs if they wish
to have a good system of schools, roads, and gain the other
advantages which both the county and town can give them. They are
also interested in the state politics. All this brings the question
of second papers forcibly to their minds, and in an accurate survey
of the different colonies we are interested in, you will find that
a large per cent of those who have been on the land five years or
more have already secured their second papers. One of the
difficulties which hinder them from getting their second papers
sooner is the fact that they must have some one certify that he has
actually known them for a period of five years. Coming as they do,
strangers from another state, it is necessary that they live among
us for a five-year period before such an affidavit can be secured.
I have had many of the settlers speak to me, desiring second
papers, but they were forced to wait their period before they could
secure them.
Most of the settlers read the Polish newspapers published in America.
Quite a number of families take books from the school libraries; among
these are a few Polish books--stories and histories.
The settlers are of the Roman Catholic faith. They attend a local
church. Their Catholic neighbors of other nationalities attend the same
church. The priest is of the Polish nationality; he cannot speak English
well. He is appointed by the bishop. The settlers would prefer to elect
their priest themselves.
While the houses are of the American type, the interior arrangement of
the living rooms remains that of the European Slavic peasantry--the
bedcover is often fancy handiwork, the walls are profusely covered with
family photographs, pictures of Polish heroes, and magazine
illustrations. However, an honored place is given to the picture of the
President and the American flag. Furniture is placed against the wall
around the room. The premises are kept comparatively clean and in order.
Diet is rather mixed, though the Polish meals and the Polish ways of
cooking predominate. The settlers claim that their housewives are more
frugal than the American housewives in their neighborhood.
There are very few intermarriages; nationality alone is considered a
drawback for intermarriage between a Pole and non-Pole. In cases where
the two people are of different faith, the Church is another drawback.
Family discipline, in respect to the authority of the husband as the
family head, is less strict than in the old country. The settlers
believe that this is due to the American influence. Here the husband has
to consult his wife in every important question and the children are not
so often punished.
The relations between the colonists and the national groups in the
neighborhood are generally friendly and help is given mutually in cases
of need. But there is very little social visiting between the groups,
the difference in nationality being a bar.
The settlers secure agricultural advice from two sources--the company's
adviser and the county agent. They raise wheat, rye, oats, potatoes,
grasses--clover and timothy--while their main income is derived from
milk production.
The products are sold to the local agents; there is no discrimination in
prices. Necessities are bought in the near-by towns, prices being too
high and goods not always suited to the needs of the settlers.
Money is loaned by the local banks at 7 to 8 per cent. This rate, the
company stated, was on short-time, unsecured paper. The settlers, it
maintained, have always been able to secure money on farm mortgages at 6
and 7 per cent.
Economically stronger families compel their children to do chores and
work in the field outside of school time, while poorer and weaker
families, especially those of more recent settlers, often let their
children work even during school time.
The settlers are satisfied with their conditions and they all desire to
remain permanently in America. The only thing they want is an increase
in the number of settlers and further development of their locality.
The second colony[8] visited by the writer was started by the company
the year before (1917). There are now about sixty Polish families in the
colony. Half of the adult male population were deserters from the
compulsory military service in Russia, Germany, and Austria. "Why should
we have served in the armies by which Poland was oppressed!" exclaimed a
settler when asked as to their justification for desertion.
Before settling on the land they all had worked in steel mills,
factories, mines, etc., some five to six years, some longer, but their
experience in Europe had been on farms. While in America they had
learned of the land from the company's advertisements in the Polish
papers. In regard to the settlers' previous farming experience the
company's head said that
our company will not sell land to any settler who has not had some
farm experience. We advise them first to work on a farm
somewhere--either rent it or hire out--until they have gained the
necessary experience to make them successful on their farms. These
people here are not factory workers, but are primarily farmers,
land hungry, who came to this country for the purpose of owning a
home, and only temporarily worked in steel mills, factories, and
mines, in order to secure sufficient money to get the start that
they so much desire.
About ten settlers had gone, at the time of the writer's visit, to work in
Duluth and Chicago. Their families and other settlers were busily engaged
in land clearing. The smallest clearing was 6 acres, the largest 20 acres,
and the average clearing for each farm was 10 acres--that is, about one
sixth of the land was already cleared, but most of the cleared land was not
yet turned. The size of the largest farm was 120 acres, that of the
smallest 40 acres, and of the average 60 acres. In May the company
organized a land-clearing contest among the settlers of its colonies,
providing rewards for the winners. "This was a big event in our colony--the
men pushed the brush for all they were worth," said the company's agent.
The settlers estimated that all of the adult males understand English,
and that about 70 per cent can also speak English, though not well,
while not one can intelligibly write English. Most of the adult women do
not even understand English.
There is no Polish church. Once in two or three weeks a Polish priest
comes. The majority of the settlers do not care about having a Polish
church and school. They claim that their religious sentiment is weaker
in America than it was in Europe.
Their diet is almost entirely Polish. Some families keep their homes
clean and in order; some continue to live in dirt as in Europe.
Relations between the Polish and non-Polish settlers are good, though no
social visiting takes place. Still, they meet and see one another at
the community hall, about which the settlers seemed to be enthusiastic.
In clearing land the settlers have so far applied hand labor almost
exclusively, but in the coming year horse power will be needed. Near the
houses small potato patches and vegetable gardens have been planted.
Field crops have been started, in a small and primitive way, and among
these oats and feed grasses predominate. The sale of milk is the most
important item of income of the settlers. Dairy farming is the company's
aim in the development of the colony.
In regard to the clearing of land the company emphasized the point that
the land does not all have to be cleared in order to produce.
Cattle are immediately turned into the brushland, and can pasture
upon the brush, the native grasses, and the clover which grows
throughout the entire region. Land which is cleared is used for
winter food products. Summer feed for the cattle, hogs, and horses
comes almost exclusively from the uncleared land. By following
dairying and live-stock raising, the entire land becomes productive
at once, while grain or vegetable farming would mean that only the
land under cultivation would be producing.
The men of the colony seemed to be rather cheerful and hopeful, while
their wives impressed the writer as being somewhat downcast and
self-centered. Several of them said that they have to work much harder
in the colony than in the cities or even in the old country.
[7] H. R. 3274, 66th Congress, 1st Session.
[8] Only those field notes are here quoted which vary from the
description of the first colony.
VI
PUBLIC LAND COLONIZATION
California is the first, and so far the only state in the Union to
undertake the public colonization of land. Its first experiment is very
recent and on a comparatively small scale. Its leaders are ably
utilizing their knowledge of the experiences in public land colonization
in foreign countries such as Australia, New Zealand, the Scandinavian
states, and Great Britain. Although it is impossible to foresee the
outcome, the writer is inclined to believe that the public land
colonization in California will continue to be a success, giving impetus
to similar projects in other states.
THE CALIFORNIA EXPERIMENT
The California experiment and its history may be outlined briefly as
follows: A report of the California Commission on Land Colonization and
Rural Credits made in 1916 revealed the fact that few settlers were
coming to California and that many who had come were leaving because of
hardships created by high prices of land, high interest rates, and
short terms of payment given in colonization contracts. As a result, the
California legislature passed the Land Settlement Act, approved June 1,
1917,[9] for the purpose of
promoting closer agricultural settlement, assisting deserving and
qualified persons to acquire small improved farms, providing homes
for farm laborers, increasing opportunities under the Federal Farm
Loan Act, and demonstrating the value of adequate capital and
organized direction in sub-dividing and preparing agricultural land
for settlement.
The act appropriated $250,000 for a demonstration in state land
colonization, fixing 10,000 acres as the limit which should be bought.
The land might be situated in one or two localities, but not profitably
in more, because of the increase in overhead expenses. To carry out the
provisions of the act a state Land Settlement Board was appointed of
which Prof. Elwood Mead was chairman. The board was organized at the end
of August, 1917, and immediately began the search for a suitable tract
of land. With the advice of technical experts of the University of
California and of other authorities upon soil, irrigation, health, and
various conditions which would affect the success of the colony, final
selection was made of a tract at Durham, Butte County, California.
On May 7, 1918, the land was finally transferred to the state. Prior to
this, however, the land had been subdivided and had been prepared for
farming, a large acreage having even been seeded. On May 15th, 3,421 acres
were offered to settlers, consisting of 53 farms, ranging in size from
3-1/2 acres to 160 acres, and of 21 two-acre farm laborers allotments. The
prices of the farms varied from $875 (above which the next price was
$3,646) to $14,942. The price of the farm laborers' allotments was $400.
The law provided that the value of the former, without improvements, should
not exceed $15,000, and that of the latter, without improvements, should
not exceed $400. The terms of sale were as follows:
Settlers were to pay 5 per cent of the cost of the land and 40 per cent
of the cost of the improvements at the time of purchase, the remainder
of the purchase price to be paid over a period of twenty years with
interest at the rate of 5 per cent per annum. Payments of principal and
interest were to be made semiannually in accord with the amortization
table of the Federal Farm Loan Board.
All applicants for land were carefully considered as to their character
and their fitness for farming. The minimum amount of capital a settler
was required to have was fixed at $1,500 or a working equipment of equal
value. A farm laborer was not required to have any capital, but had only
to pay the initial deposit of $20 and semiannual payments of about $15.
The board reserved the right of supervision of the methods of
cultivation of each settler, of the state of repair of buildings, of
fire-insurance policies, and of other details.
Plans of houses and barns were prepared and the board offered to build
these, or others, for the settler, on payment of 40 per cent of the cost.
An engineer was employed to supervise the erection of buildings and to help
settlers plan the grouping of buildings, orchard, garden, and field. The
board bought material at wholesale and let contracts in groups and in this
way each family was saved much money and valuable farming time.
The board kept the following objects in view:
1. That the settlement become widely and favorably known as the home of
one breed of dairy cattle, one breed of beef cattle, one breed of hogs,
and one or two breeds of sheep.
2. The co-operation of the settlers in buying and selling.
3. The establishment at Durham, or on the settlement, of a training
school in agriculture.
4. The erection in the near future of a social hall owned and paid for
by settlers.
Co-operative action among the farmers and farm laborers was particularly
desired and encouraged. A co-operative stock breeders' association was
formed. Twenty-two acres were reserved for community use, and here it
is hoped that community buildings will be erected.
When the farms were offered for sale there were from ten to fourteen
applicants for each of the improved farms. Four of the unimproved farms
were not applied for and these will be seeded and offered to settlers
later at the opening of the next tract. Every one of the farm laborers'
allotments was applied for. The settlement was made self-sustaining and
productive within sixty days from the date the land was purchased.
As to the racial composition of this colony and the way in which the
method of colonization would affect the incorporation of the different
racial elements in the life of the settlement, the superintendent, Mr.
George C. Kreutzer, made the following statement:
Five of the settlers on the colony are of German origin, two of
Danish origin, two Italian, one French, and all the others are of
either English, Irish, or Scotch origin.
No policy of mixing nationalities was followed. These farmers put
in either a first, second, or third choice for the allotments they
desired, and the board then selected the man best suited
agriculturally for the particular block he was allotted.
Under our system of allotting blocks here the farmers are
particularly concerned in making a success of their farms
financially, rather than socially. We were never confronted with
the problem of having too many of one nationality in the community,
and as we have only fifty-three farms to offer for settlers, it is
not large enough to involve the problem at all. Further than this,
I do not think the problem will come up under this system of
allotting blocks, for the reason first stated above.
It will Americanize immigrants through co-operation and social
intercourse, through the various settlers' organizations necessary
to their social and financial welfare. We have a Stock Breeders'
Association which meets at regular times to discuss live-stock
problems at intervals during the year. They are all on equal terms,
each one buying the land for himself, thus breaking down class
distinction. There will not be the distinction between lessees and
freeholders that we find in the Middle States. Their children will
go to the same school.
This undertaking of California is the only one in the field of public
land colonization anywhere in the country, except for projects involving
soldier settlements which some states have lately begun to undertake.
STATE PROVISION FOR SOLDIER SETTLEMENTS
With the close of the War there began to appear on the calendars of
state legislatures the subject of land settlement provision for
returning soldiers. Up to the time this report was written, twenty-three
states had passed some legislation relative to this need. The following
table indicates in a general way the extent and nature of this provision.
TABLE II
STATE LEGISLATION TO PROMOTE LAND SETTLEMENT FOR SOLDIERS UP TO JUNE,
1919[11]
---------------------------------------------------------------+
| | | Amount of
State | Bill Number| Date Approved |Appropriation
--------------+------------+---------------------+-------------+
Arizona | Senate 89|March 26, 1919[10]|$ 100,000
| | |
California |{Senate 246|April, 1919 | 10,000,000
|{Senate 221|April, 1919[10]| 1,000,000
Colorado | Senate 262|April 9, 1919[10]|
Delaware | House 182|April 2, 1919 | 25,000
Florida | Senate 21|December 7, 1918[10]|
Idaho | House 100|March 7, 1919[10]| 100,000
Maine | Chapter 89|April 4, 1919[10]|
| | |
Missouri |{Senate 355|April, 1919[10]| 10,000
|{Senate 15|April, 1919[10]| 1,000,000
Montana |{House 130|March 11, 1919[10]| 50,000
|{House 170|March 4, 1919[10]| 200,000
Nevada | House 219|March 28, 1919 | 1,000,000
New Jersey | Senate 5|March 26, 1919 |
New Mexico | House 204|March, 1919[10]| 30,000
North Carolina| Chapter 266|March 10, 1919[10]|
North Dakota | House 128|March 6, 1919 |
| | |
Oklahoma | Number 249|March 28, 1919 | 250,000
Oregon | Senate 147|March 4, 1919[10]| 50,000
South Dakota | Senate 255|March, 1919[10]| 100,000
| | | 1,000,000
Tennessee | House 447|April 16, 1919[10]|
Texas | |May 24, 1919 |
Utah |{Senate 79|March 17, 1919[10]| 25,000
|{Senate 80|March 17, 1919[10]| 1,000,000
Vermont | Number 15|March 26, 1919 |
Washington |{House 200|March 18, 1919 | 1,050,000
|{Senate 184|March 20, 1919[10]| 160,000
Wisconsin | Senate 8|February 23, 1919[10]|
Wyoming | Senate 70|February 28, 1919[10]| 5,000
| | | 200,000
---------------------------------------------------------------+
TABLE II--Continued
STATE LEGISLATION TO PROMOTE LAND SETTLEMENT FOR SOLDIERS UP TO JUNE,
1919[11]
------------------------------------------------------------
|
State | Special Note
--------------+---------------------------------------------
Arizona |To aid Federal Reclamation Service in this
| state.
California |Referendum on bond issue.
|
Colorado |No appropriation indicated.
Delaware |
Florida |Appropriating state lands.
Idaho |Conditional upon similar Federal legislation.
Maine |Necessary amount out of remainder of
| reserve land fund.
Missouri |
|Revolving fund submitted to popular vote.
Montana |
|To be drawn upon if necessary.
Nevada |By bond sale.
New Jersey |Appropriation for placement work.
New Mexico |Plus half of certain state rentals and sales.
North Carolina|Commission appointed to report.
North Dakota |Twenty-five dollars per soldier per month
| in service.
Oklahoma |For loans to land settlers.
Oregon |
South Dakota |
|Bond issue.
Tennessee |No appropriation indicated.
Texas |State credit for land settlers.
Utah |
|Bond issue.
Vermont |
Washington |Revolving fund for state Reclamation Act.
|For land settlement.
Wisconsin |Commission appointed to report.
Wyoming |
|For loans to land settlers.
------------------------------------------------------------
In more than half the states the laws refer to Federal legislation, in a
few cases specifying that the appropriation shall be contingent upon a
national appropriation. Several states signify their approval of
co-operation with Federal provision, but make no appropriation for the
work. The largest appropriation in the form of a bond issue for popular
approval of $10,000,000 was passed by the California legislature.
Similar provision was made by Missouri, South Dakota, and Utah to the
amount of $1,000,000. Nevada arranged for the borrowing of $1,000,000
for "reclamation, improvement, and equipment of lands ... for soldiers,
sailors, marines, and other loyal citizens." Washington appropriated a
revolving fund beginning with $1,050,000 and eventually reaching
$3,000,000 to create a state Reclamation Service.
In spite of this evidence of awakened interest in soldier settlements,
many such projects have died before any real attempt could be made to
put them into practical operation. This is to be explained as follows.
The projects in a number of cases were products rather of sentiment than
of logic based upon experience. War-time patriotism created a desire to
give some sort of reward to men fighting for the country's cause. "Let
us give to each returning soldier a farm--a ready-made farm!" was heard
throughout the country. Whether we had enough land, or economically
available land, for millions of farms was not always asked. Many of the
project-makers turned to our swamps, deserts, and cut-over lands filled
with stumps and debris.
The easy-flowing imagination of these people, especially of the city
type, made out of these lands new farms, flourishing gardens, meadows
and fields burdened with crops waving in the winds. How much it would
cost, whence would come the money and energy to create such a miracle,
and how much time the prosecution of the plan would require was not
asked. Would not our returned soldiers, who already are matured men, be
in their graves before their desert and swamp farms gave a living to
their cultivators? Still more strange was the common notion that all
soldiers, even the crippled, were eager to settle on land--that all
wanted land and all were fit to be farmers!
As the product of mere fancy, such sweeping soldiers' settlement
projects were bound to die a natural death. And yet they have not been
without value. They created lively discussion, and called attention to
our land problems, especially to the reclamation and colonization of
unused lands by the people who want land and are fit to be farmers and
to do hard land-pioneering work, be they returned soldiers, native
farmers, or newly arrived immigrants.
THE RECLAMATION ACT
The Federal Reclamation Service was established by an act of June 17,
1902, ch. 1093, 32 Stat., 388.[12] This act provides that the moneys
received from the sale of public lands in the Western states, with the
exception of the 5 per centum reserved by law for educational and other
purposes, shall be set aside in the Treasury as a _reclamation fund_ to
be used for the construction and maintenance of irrigation works for the
purpose of reclaiming arid and semiarid lands in these states.
Authority to conduct the reclamation work is placed in the hands of the
Secretary of the Interior. He is given authority to withdraw from public
entry the lands required for irrigation works and to restore the
withdrawn lands to public entry when their use for such purpose is over.
Under the authority conferred upon him by the act (Section 4, and
Opinion Assistant Attorney General, April 16, 1906, 34 L. D., 567) he
may enter into contracts for the construction of irrigation works or
construct such works by labor employed and operated under the
superintendence and direction of government officials.
The Secretary is authorized to give public notice of the lands irrigable
under such project, and limit of area per entry, which limit shall
represent the acreage which, in the opinion of the Secretary, may be
reasonably required for the support of a family upon the reclaimed
lands; and of the charges which shall be made per acre upon the entries,
and upon lands in private ownership which may be irrigated by the
waters of the irrigation works. The charges shall be determined with a
view to returning to the reclamation fund the cost of construction and
shall be apportioned equitably.
It is provided that in all construction work eight hours shall
constitute a day's work and no Mongolian labor shall be employed (32
Stat., 389). No right to the use of water for land in private ownership
shall be sold for a tract exceeding 160 acres to any one landowner. It
is provided that the reclamation fund shall be used for the operation
and maintenance of irrigation works and that when the payments required
by the act are made for the major portion of the lands irrigated the
management of these works shall pass to the landowners.
The Secretary of the Interior is authorized to acquire any rights or
property for reclamation purposes by purchase or by condemnation under
judicial process, and to pay from the reclamation fund sums needed for
that purpose. Within thirty days, upon application of the Secretary of
the Interior, the Attorney General of the United States shall institute
condemnation proceedings. The Secretary of the Interior is authorized to
make rules and regulations for carrying the provisions of the act into
full force and effect.
In the seventeen years since the passage of the Reclamation Act the
surveys, examinations, and construction authorized by it have proceeded,
and to-day, according to the report of the Secretary of the Interior
for 1919,[13]
the service is in a position to deliver water to about 1,600,000
acres of irrigable land, covered by crop census, of which about
1,120,000 acres are now being irrigated. Besides this storage water
is delivered from permanent reservoirs under special contracts to
about 950,000 acres more. The projects that have been undertaken
have been planned to provide for an area of about 3,200,000 acres.
A number of bills have been proposed for enlarging and extending this work.
PROPOSED FEDERAL LEGISLATION
The Department of the Interior has prepared a draft of a bill providing
rural homes for returning soldiers. Copies of the bill were sent to the
Governors for consideration by various state legislatures.
The bill is based on the principle of co-operation, according to which
(1) the state provides land, acquiring it by purchase or by agreement
with the present landowners whereby the latter turn their holdings over
to the state for a reasonable price gradually paid to them out of the
returns from the settlers, and (2) the Federal government advances money
for reclamation through irrigation, drainage, and clearing, and for
preparation of the land for immediate farming through the providing of
buildings, implements, seeds, live stock, etc. The total cost of the
land and improvements, with interest at 4 per cent on capital invested,
will be repaid by the settlers during the course of, approximately,
forty years by an annual payment of 5 per cent of the total cost.
A bill was introduced in Congress by Senator Myers (S. 4947, 65th
Congress, 2d Session) in October, 1918, and backed by the Department of
the Interior, which provided for a survey and classification by this
department of all unentered public lands and all privately owned unused
lands for the purpose of finding out what lands can be reclaimed and put
to productive use by returning soldiers who would like to settle on land
and engage in agriculture. After such an investigation the Secretary of
the Interior was required to report to Congress and to propose a plan
for the settlement and cultivation of such lands.
There were two bills (S. 5397 and H. 15672) introduced by Senator W. S.
Kenyon of Iowa and Representative M. Clyde Kelly of Pennsylvania,
respectively, which, among other features, made possible development of
rural districts. Although differing in details, the bills both appropriated
$100,000,000 to be expended in providing employment primarily for returning
soldiers. This was to be done through the authorized public construction
work, or through the organization and extension of useful public works, in
the development of natural resources. Only in localities where the
Secretary of Labor reports extraordinary unemployment to exist shall public
works be carried on from this fund.
The House bill provided for the building of new post roads; for the
transfer of war material no longer needed by the army, the same to be
used for the construction, improvement, and maintenance of the post
roads; for supplementing the public school equipment where public school
buildings are or shall be designated as postal stations, for the use of
the construction service; and for other purposes. The bill provides for
the establishment of motor transport and postal routes; for the
organization of a system of marketing facilities for the collection and
delivery, through the postal service and public school buildings, of
farm products from producer to consumer; and for the construction of any
authorized public work.
In addition to these more indirect ways of opening up the country the
bill carried specific provision for promoting and conducting
land-settlement colonies, as well as provision for logging or milling
operations, contingent upon a continuous yield of timber, so that the
forest communities would be permanent. The provisions of the bill were
to be carried out by an interdepartmental National Board of Public
Construction, which would organize a body of workers, known as the
United States Construction Service.
Since the bill carried the reclamation and technical land-improvement
work, the only question might be, is there any need for this to be
carried on by a special Construction Service? Would it not be a
duplication of the work of the already existing Reclamation Service of
the Department of the Interior? Would it not be economical and otherwise
proper to increase the staff and other working forces of the Reclamation
Service to the extent of the proposed reclamation duties of the
Construction Service?
Representative E. T. Taylor of Colorado introduced in the House, February
15, 1919, a bill (H. R. 15993) providing for employment and the securing of
rural homes for returned soldiers and for the promotion of the reclamation
of land for cultivation under the direction of the Secretary of the
Interior. Short-term loans to settlers were provided for. This bill
contains a good land-development plan, except that the Reclamation Service,
Department of the Interior, ought not to be burdened with colonization work
and with loans to settlers. Colonization work ought to be the duty of a
separate body, and the extension of credit to settlers naturally belongs to
the Farm Loan Board, Department of the Treasury.
Representative Mondell of Wyoming introduced in the House, May 19, 1919,
a bill (H. R. 487) providing employment and rural homes for returned
soldiers through the reclamation of lands under the direction of the
Secretary of the Interior, who may, for this purpose, acquire by gift,
purchase, deed in trust, or otherwise, the necessary lands for soldier
settlement projects and, for the same purpose, may withdraw, utilize,
and dispose of by contract and deed suitable public lands. An
appropriation of $500,000 is proposed.
The plan in this bill for the acquisition and reclamation of unused land
is a strong one. Equally commendable is the provision for safeguarding
the settlers' holdings against speculation, for the selling, leasing, or
mortgaging of the land by settlers requires the approval of the
Secretary of the Interior. The bill requires that the Interior
Department, through its Reclamation Service, acquire and improve lands,
colonize them, and make loans to settlers. It would seem a more
efficient plan to make a division of these various duties. The
Reclamation Service should acquire and improve lands for settlement,
while the colonization work and the extension of loans to settlers would
be made the duties of other public authorities, as pointed out below.
House Bill No. 3274, introduced by Representative Knutson, May 27, 1919,
proposes to create, in the Treasury Department, a National Colonization
Board with local colonization commissions, for the purpose of providing
capital for the development by land colonization of the agricultural
resources of the nation, affording certain privileges to soldier
settlers. The commissions approve and charter private colonization
companies and recommend applications for loans after seeing all the
provisions of the act have been complied with. The commissions are to
include the directors of the district land bank.
The main aim of the bill is to standardize private land colonization
companies to a certain degree, to facilitate the extension of credit to
them, and to make loans to soldier settlers. The Knutson bill in meeting
these needs is a comprehensive one. It deserves the closest attention of
Congress. Would it not be advisable, however, to attach the
administrative machinery for credit extension outlined in the bill to a
division to be created in the Farm Loan Board, with separate
colonization credit funds, and to leave the regulation and licensing of
the private colonization companies to a separate body as outlined below?
Senator Thomas J. Walsh of Montana introduced in the Senate, August 20,
1917, a bill (S. 2812) which was passed by both Houses and reported from
conference for passage in February, 1919. The bill provides for the sale or
lease of coal, oil, and other mineral lands on the public domain. The
leasing clause of the bill is weakened by the provision, "unless previously
entered under Section 2 of this act." The public coal lands would be
"entered," sold into private ownership, which means the loss of public
control over these lands and the methods of their exploitation. However,
the bill if passed would be a step forward in the sense that it would
increase opportunities for investment of capital and employment of labor,
which would result in the increase of the coal output so much needed.
The only step so far undertaken by Congress in the direction of land
colonization is the appropriation of $200,000 for an investigation by the
Reclamation Service, Department of the Interior, of lands outside of the
existing reclamation projects. The measures needed are waiting for action.
In regard to the available land for acquisition, reclamation, and
colonization, several projects are proposed by the above-quoted bills
and by various Federal departments. The principal projects are as follows:
1. Agricultural:
a. Logged-off lands in the North Middle Western
and Northwestern states.
b. Irrigation of desert lands in the Southwestern
states.
c. Drainage of swamp lands in the Southern states.
2. Forestry projects; permanent colonies for logging,
milling, and reforestation of logged-off lands in the
Northwestern states.
3. Colonization projects for an intensive cultivation of
lands around smaller growing towns.
4. Colonization projects in Alaska for developing various
extractive industries.
Action of some sort is eminently desirable in this country, especially
in view of the fact that other countries have already taken steps to
these ends.
PROVISION IN OTHER COUNTRIES
The settlement of soldiers on land has been a problem much considered in
all of the warring nations. Although the plans are just only being tried
out for the first time in many cases, they are suggestive of the trend
that land-settlement laws are taking.
In 1918 a law was enacted in France "providing for the acquisition of
small rural properties by soldier and civilian victims of the war. It
provides in part for 'individual mortgage loans to facilitate
acquisition, parceling out, transformation, and reconstitution of small
rural properties of which the value does not exceed 10,000 francs.' The
loans are to be made from the agricultural lending societies at a rate
of 1 per cent, with a term of twenty-five years. Advances for
improvements are provided for and a special commission is appointed to
administer the law."[14]
In the United Kingdom, as well as in the majority of its dominions and
states, acts providing for land settlement for ex-soldiers have been passed
or formulated. Large sums of money have already been appropriated for the
purchase, improvement, and development of land. In some cases the crown
lands are to be used and in other private lands are to be bought. Table III
indicates some of the general provisions of the legislation.
Over $133,000,000 has been appropriated and in two Australian states
alone 2,060,000 acres have been set aside. The size of the individual
holdings varies from 10 to 160 acres.
In some cases the land is given outright, in others the settler must
help bear the cost of surveys and improvement. The third plan is that of
a lease, usually with an option to buy, varying in different states.
Whatever the terms of settlement are, in most cases the ex-soldier can
meet his obligations because of the easy terms by which he can borrow
money from the government. Although the maximum amount is limited, the
rate of interest is low in most cases and the term of years, with one
exception, twenty years or more. Although some farming experience is
required, in almost every law, there is provision for a demonstration
farm. Here the prospective farmers can learn scientific farming, usually
getting paid for their work in the interval.
TABLE III
SOLDIER SETTLEMENT PLANS FOR UNITED KINGDOM AND PROVINCES[15]
------------------------------------------+
|
|
|
|
Country Act |
------------------------------------------+
Dominion of Canada[16]| August 29, 1917 |
----------------------+-------------------+
Ontario | No. 150, 1916 |
| |
----------------------+-------------------+
British Columbia |6 Geo. V. 59, 1916 |
----------------------+-------------------+
New Brunswick |6 Geo. V. 9, 1916 |
----------------------+-------------------+
Australia | 1917 Conference |
----------------------+-------------------+
New South Wales | No. 21, 1916; |
| amended, 1917 |
----------------------+-------------------+
Victoria | October 22, 1917 |
| |
----------------------+-------------------+
Queensland | 1917 |
| |
| |
| |
----------------------+-------------------+
South Australia | 1916, 7, Geo. V. |
----------------------+-------------------+
New Zealand |6 Geo. V. 45, 1916;|
| amended, 1917 |
----------------------+-------------------+
Tasmania |Geo. V. 20; 1916-17|
| |
| |
----------------------+-------------------+
United Kingdom |6 and 7 Geo. V., c |
| 38 |
----------------------+-------------------+
Union of South | 1912; amended |
Africa | 1917 |
| |
| |
------------------------------------------+
TABLE III--Continued
SOLDIER SETTLEMENT PLANS FOR UNITED KINGDOM AND PROVINCES[15]
------------------------------------------------------------------------+
| Aid Given |
|-------------------------------------------------+
| | | |
| Maximum | | Interest |
Country | Amount | Time | Per Cent |
----------------------+-----------------+-----------------+-------------+
Dominion of Canada[16]| $2,500[A] |20 equal payments| 5 |
----------------------+-----------------+-----------------+-------------+
Ontario | $500[B] | 20 years | 6 |
| | | |
----------------------+-----------------+-----------------+-------------+
British Columbia | [C] [B] | 20 years | 5 |
----------------------+-----------------+-----------------+-------------+
New Brunswick |$500 to $1,500[B]| 20 years | 5 |
----------------------+-----------------+-----------------+-------------+
Australia | [C] | [C] | [C] |
----------------------+-----------------+-----------------+-------------+
New South Wales | $2,500 | Lease | 2-1/2 on |
| | | capital |
| | | value |
----------------------+-----------------+-----------------+-------------+
Victoria | $2,500 | 31-1/2 years | 6 |
| | | |
----------------------+-----------------+-----------------+-------------+
Queensland |$2,500 buildings;| 40 years; 25 | 3-1/2 to 5; |
| $3,500 | years; 10 | 1-1/2 on |
| equipment |years; perpetual | capital |
| | | value |
----------------------+-----------------+-----------------+-------------+
South Australia | $2,400 | 21 years | 4 |
----------------------+-----------------+-----------------+-------------+
New Zealand | [D] | | |
| | | |
----------------------+-----------------+-----------------+-------------+
Tasmania | $2,500 | 21 years | 3-1/2 to 5 |
| | | |
| | | |
----------------------+-----------------+-----------------+-------------+
United Kingdom | | | |
| | | |
----------------------+-----------------+-----------------+-------------+
Union of South | $1,250; $25 a | 3-1/2 years to | 4-1/2 |
Africa | month to | 7 years. | |
| families | | |
| | | |
------------------------------------------------------------------------+
TABLE III--Continued
SOLDIER SETTLEMENT PLANS FOR UNITED KINGDOM AND PROVINCES[15]
------------------------------------------------------------------------+
| | Acres Assigned |
| |---------------------------------+
| | | |
| | |Individual|
Country | Appropriation | Total | Holdings |
----------------------+---------------+----------------------+----------+
Dominion of Canada[16]| $2,910,000 |Certain dominion lands| 160 |
----------------------+---------------+----------------------+----------+
Ontario | $5,000,000 | | 100 |
| | | |
----------------------+---------------+----------------------+----------+
British Columbia | $500,000 | | |
| annually | | 160 |
----------------------+---------------+----------------------+----------+
New Brunswick | | 20,000 | 10-100 |
----------------------+---------------+----------------------+----------+
Australia | $100,000,000 | | |
----------------------|---------------+----------------------+----------+
New South Wales | | 1,500,000 | |
| | | |
----------------------+---------------+----------------------+----------+
Victoria | $11,250,000 |500,000 wheat-growing | |
| | plus irrigated lands | |
----------------------+---------------+----------------------+----------+
Queensland | $50,000 | 560,000 | |
| | | |
| | | |
| | | |
----------------------+---------------+----------------------+----------+
South Australia | $220,000 | 10,000 | |
----------------------+---------------+----------------------+----------+
New Zealand | $3,000,000 | 270,000 | |
| | | |
----------------------+---------------+----------------------+----------+
Tasmania | $750,000 | | 100 |
| | | |
| | | |
----------------------+---------------+----------------------+----------+
United Kingdom | $10,000,000 | | |
| asked for | 60,000 | |
----------------------+---------------+----------------------+----------+
Union of South | [C] |Lands purchased not to| |
Africa | |exceed $7,500 for each| |
| | settler who provides | |
| | one fifth of price | |
------------------------------------------------------------------------+
TABLE III--Continued
SOLDIER SETTLEMENT PLANS FOR UNITED KINGDOM AND PROVINCES[15]
-------------------------------------------------------------------------
| | | |
| | | |
| | |Demonstration|
| |Training| Farm |Capital
Country | Tenure | Needed | Provided |Desirable
----------------------+-----------------+--------+-------------+---------
Dominion of Canada[16]| Free grant | Yes | Yes | Yes
----------------------+-----------------+--------+-------------|---------
Ontario | Patent given in | Yes | Yes | Yes
| 5 years | | |
----------------------+-----------------+--------+-------------+---------
British Columbia | Free grant | No | |
----------------------+-----------------+--------+-------------+---------
New Brunswick | Free grant | | Yes | Yes
----------------------+-----------------+--------+-------------+---------
Australia | | | |
----------------------+-----------------+--------+-------------+---------
New South Wales | Perpetual lease | Yes | Yes | Yes
| | | |
----------------------+-----------------+--------+-------------+---------
Victoria | Purchase in | Yes | | Yes
| 31-1/2 Years | | |
----------------------+-----------------+--------+-------------+---------
Queensland | Perpetual lease | | Yes | Yes
| only | | |
| | | |
| | | |
----------------------+-----------------+--------+-------------+---------
South Australia | Perpetual lease | | Yes | Yes
----------------------+-----------------+--------+-------------+---------
New Zealand | Lease 66 years, | | Yes | Yes
| or freehold | | |
----------------------+-----------------+--------+-------------+---------
Tasmania | 99-year lease; | Yes | Yes |
| or purchase | Yes | Yes |
| after 10 years | | |
----------------------+-----------------+--------+-------------+---------
United Kingdom | Lease | Yes | Yes |
| | | |
----------------------+-----------------+--------+-------------+---------
Union of South | Lease for 5 | | Yes |
Africa |years and option | | |
| of purchase, | | |
| with 20 years | | |
| to pay | | |
-------------------------------------------------------------------------
[9] Senate Bill No. 584, chap. 755.
[10] In co-operation with the Federal government.
[11] Compiled from manuscript given to the author by the Department of
the Interior.
[12] Federal Reclamation Laws of the United States. House Committee on
Irrigation of Arid Lands, 66th Congress, 2d Session, Washington, D. C.,
1920; chap. v, pp. 13-50.
[13] Reports of the Department of the Interior for the fiscal year ended
June 30, 1919. Washington, Government Printing Office, 1920; vol. 1, p. 96.
[14] _Work and Homes for Our Fighting Men_, U. S. Reclamation Service,
1919 (pamphlet).
[15] Tabulated from table compiled by United States Reclamation Service,
Work and Homes for Our Fighting Men, 1919, p. 20-21 (pamphlet).
[16] From Canada comes the news that at the end of January, 1921, 20,000
soldiers have taken farms, and that 42,000 of 59,000 applicants for land
grants have been declared qualified and will soon get the land. Although
the men have 25 years to pay off their land debt, several hundred have
already paid in full. The Canadian soldiers have received 2,000,000
acres of farming land in government soldiers grants.
[A] Security required.
[B] In addition to Dominion advance.
[C] Amount not specified.
[D] Sufficient for clearing.
VII
A LAND POLICY
Most of the land-reform programs, beginning with those of the extreme
conservatives, _laissez-faire_ theorists of various schools, and ending
with those of the extreme radicals, anarchists, and socialists of various
leanings, are primarily concerned with the question of land ownership.
WIDE RANGE IN PROGRAMS
These programs might be, in the main, classified as follows:
I. Private land ownership:
A. Large-scale ownership, subject to no public interference.
B. Small-scale ownership, limited and regulated by
public authority.
II. Public land ownership:
A. Secured by
1. Confiscation, by revolutionary action.
2. Purchase, by land bond issues.
3. Taxation, by the single tax.
B. Forms of public ownership:
1. Nationalization; national ownership. In the
United States it would be Federal ownership.
2. Provincial ownership. In the United States it would be
state ownership, and in Switzerland canton ownership.
3. Municipalization or communalization; land
owned by cities and communities in the rural districts.
4. Nobody's ownership; free to all, except that the
public takes the ground value (irrespective of
improvements) through the single tax, from the land users,
which practically means a disguised form of public
ownership, or at least a condition very near it.
C. Methods of use:
1. Parceling the public land into homesteads of
one-family size, and reselling these to the
cultivators on the basis of individual fee simple.
2. Giving the homesteads to cultivators on the
basis of perpetual leasehold.
3. Public cultivation, either direct or through
communes or co-operative associations.
Comparing these programs one with another and with the existing
conditions, one reaches the following conclusions: All the programs tend
to treat the land problem merely as a question of ownership. Each favors
a specific form of ownership almost as an all-inclusive remedy for
defects in social relations so far as they depend upon land cultivation
and land use. The argument is based upon reasoning, a mere logical
calculation, and on what the authors of the program desire. The existing
conditions and tendencies are much more varied and complex than they
seem to appear to the land reformers.
First, there is nothing new or untried in these programs, for almost all
the advocated forms of land ownership are already existing side by side.
It seems that no one single form is able to remedy the defects in the
land situation. We have in this country national (Federal), provincial
(state), and municipal or communal ownership, with small-scale private
ownership predominating. We also have special land taxation, as, for
instance, in certain cities that tax unimproved land higher than
improved land. These existing forms of land ownership are competing with
one another. The forms which allow more efficient cultivation, result in
greater social stability, and are based on social justice will be the
winners in the march of the economic and social progress of the country.
The bold claim of Marxian or German Socialism that large private land
ownership, erroneously identified with cultivation on a large scale, is
going to prevail through absorption of small private land ownership is
rapidly losing ground. The small landowners are able to enjoy, through
co-operation, all the technical advantages of large-scale cultivation,
retaining as well the advantages resulting from individual initiative and
efficiency. There is a marked movement toward co-operation among the small
farmers the world over. In Denmark it has developed to the highest degree.
Second, mere land ownership is only a part, though a vital part, of the
problem. Many other important things have to be considered.
If a man has land, but lacks capital or credit, he is unable to make
economic use of his land. If he has both land and capital, or credit, or
in other terms purchasing power, but lacks access to sources of supply
in which to buy seeds, breeding stock, and implements, he still is
unable to make use of his land. If he has at hand all the needed
implements, seeds, and stock, but lacks knowledge and experience in
farming, he might entirely fail in his enterprise. Even if he possesses
the necessary knowledge and produces grain, milk, beef, and other
agricultural products, he must have a market for his products, be it a
domestic or an international market. This involves transportation
facilities, trade organization and regulation, tariff, and other forms
of organized international relationships, economic and political.
Moreover, land cultivation requires social stability, security, and
order, for an investment in land improvements must wait long for its
returns. If a man does not know who is going to harvest his fields, or
who is going to get the product of his toil, he will be disinclined to
sow anything. A striking illustration of such a state is the case of the
western provinces of the Russian Empire, where the battle lines for
several years were surging back and forth. First the Russian monarchy
collected the farm products, then came the Germans, then came the civil
warfare. When there is no security for a land cultivator, neither for
his products nor his very life itself, there can be no production. There
is land enough and there are cultivators enough, but the population
starves because of unsettled political and international conditions.
PLENTY OF LAND
In considering the land situation as it exists, it is true that the
ownership of land or, rather, the access to land, is of primary
importance. The question arises, Is there enough land in the United
States for all citizens who desire to become cultivators?
The Secretary of the Interior, Mr. Lane, states[17] that more than
15,000,000 acres of irrigable lands remain in the hands of the United
States government. There are between 70,000,000 and 80,000,000 acres of
swamp and overflowed lands in the United States of which about
60,000,000 acres can be reclaimed for agricultural purposes, and there
are about 200,000,000 acres of cut-over or logged-off lands which are
suitable for agricultural development.
Although it might be questioned how much of these unused lands are
economically available under normal conditions--for no rigid
investigation has been made--still the fact remains that unused
lands--swamps and deserts, cut-over and burned-over lands--are being
continually improved and taken under cultivation by private and public
effort. Not one land improvement and colonization company visited by the
writer complained of lack of land. All the companies seemed to want more
settlers and more credit. This fact indicates that there is economically
available land in our country, and probably plenty of it, for a normal
process of reclamation and colonization.
PUBLIC REGULATION OF LAND DEALING
In the field investigation, the main questions of immigrants desiring to
settle on land seemed to be where to find land of the "right kind," and
how, in acquiring it, to avoid being cheated by private land sellers.
The questions as to whether there was land available and what its price
was were of minor importance. In many cases the immigrants had been
employed in war industries and had saved money enough to buy a farm, but
they were unable to decide where to settle and what kind of land to buy
because they feared land sellers. Their experience with these agents
had awakened an almost universal fear of private land dealers.
To facilitate the access to land, the private land-dealing trade must be
put upon a higher level. There must be Federal legislation regulating
land dealers doing business in two or more states, state legislation for
dealers doing business within one state only, and municipal legislation
for the land dealers doing business within the city limits only. Through
co-operation of these governments uniformity of such legislation can be
secured and maintained so far as various local conditions and
peculiarities allow.
Such regulative legislation should aim at doing away with
misrepresentation and frauds in land dealing. As an effective assistance
in the enforcement of the laws all private land dealers should be
licensed, interstate dealers by the Federal, state dealers by the state,
and city dealers by the city governments. By refusing or recalling
licenses a considerable number of land sharks--get-rich-quick charlatans
in the real-estate business--can be sifted out of the trade and the
necessary confidence on the part of land seekers can be secured.
According to a report made in 1916 by the Committee on State Legislation
of the National Association of Real Estate Boards, a sentiment was then
growing in most parts of the country favoring the enactment of laws for
the regulation of real-estate brokerages under state authority. This
sentiment is still growing, and the secretary of the association says
that realtors in several states continue to introduce bills in their
legislatures with the belief that it will be possible to pass them.
In only one state has such a law passed. The state of Wisconsin enacted
a law in 1919[18] which provides for the establishment of a state
real-estate brokers' board consisting of three members, at least two of
whom are real-estate brokers in the state, appointed by the Governor.
The Director of Immigration, Department of Agriculture, acts as
secretary to the board. The latter issues licenses to the real-estate
brokers and salesmen doing business in the state. An annual license fee
of ten dollars from a broker and five dollars from a salesman is
required. License may be refused or revoked by the board for
misstatement in application, for fraud or fraudulent practices, for
untrustworthiness or incompetence in real-estate business.
The board receives complaints against any real-estate broker or salesman.
It may conduct hearings and investigations, subpoena and compel the
attendance and testimony of witnesses and production of documents, books
and papers. The board shall, from time to time, publish the names of
licensed real-estate brokers and salesmen, with information as to when each
license expires. The publication shall include the names of those
real-estate brokers and salesmen whose licenses have been revoked at any
time within one year prior to the time of the issue of publication.
This Wisconsin Real Estate Licensing law has been in operation a year.
Mr. B. G. Packer, Director of Immigration, and secretary to the Real
Estate Brokers' Board, gave to the writer the following information in
regard to the results of the operation of the law so far.
This law requires registration of all real-estate brokers and salesmen
doing business in the state. In the past there was no way to tell who
they were or where located. The license is good for one year, and
thereupon a new application must be made. This gives the board a check
on the dealer's operations the preceding year. The board requires him to
cite all legal actions arising out of his real-estate business whether
he was plaintiff or defendant.
It is a common practice with some dealers to take a judgment note for
commission which can be entered up without process and execution levied
against the property of the defendants. The defendant can open up the
judgment and put in a defense if he can show misrepresentation and
fraud. This year, when several applicants applied for new licenses, the
board found this condition and the licenses were refused.
The applicant for license must show affirmatively that he is trustworthy
and competent. In the past the state took no pains to find this out. The
licensing board operates as a poor man's court of redress in
transactions arising out of the land business. In the past the
purchaser's remedy was a more or less satisfactory suit at law.
The licensing board can make investigations and hold hearings on its own
motion. In the past the initiative had to be taken by the party claiming
deception.
Last year the board granted licenses to 4,600 brokers and salesmen,
denied 20 applications, revoked 2 licenses, and has at present 60
hearings pending on applications for licenses in 1921.
The Wisconsin license law does not reach the owner who has worthless
land to unload upon an unsophisticated purchaser. Besides this, the law
has other limitations. But nevertheless it is a step ahead.
Pennsylvania, the Southern states, and cities in many parts of the
country have required a license fee or an occupation tax from
real-estate men, but such laws do not regulate, because, as the
above-mentioned report states, "no matter how high the fee, the usual
run of licensing or prosecuting official will not use his authority to
establish moral standards." Furthermore, "in New York and most Northern
and Western states, even the slight check of the occupation tax is
absent and there is no formality to be observed in entering our
profession by any person, no matter how unreliable, irresponsible, or
incapable, and whatever his record."
After agitation covering a period of twelve years, the real-estate brokers
of California succeeded in 1917 in having enacted a law for the regulation
of real-estate brokerage. In 1918 this law was declared unconstitutional by
the Supreme Court, on the ground that insurance men were exempted by the
wording of the act and that such exemption made the law discriminatory.
The Real Estate Commissioner of the state gives the following synopsis
of the law:
The act "provides for the issuance of licenses to two classes of
persons--the broker himself, who, in addition to taking out a
license, is required to put up a bond running to the state of
California, and the salesman, who is defined as one in the employ
of a licensed broker and ... is not required to put up a bond." The
act is administered by a Real Estate Commissioner appointed by the
Governor. Upon petition to the Real Estate Commissioner appointed
by those aggrieved in their dealings with brokers or salesmen, a
hearing is provided before the commissioner, and upon proper
showing the petitioner may be granted the privilege of suing the
broker on his bond.... There is also a provision for the filing of
complaints against brokers and salesmen concerning their conduct
and, upon investigation, if found guilty, the commissioner is
empowered to revoke their licenses. The law provides a heavy
penalty for a broker--a fine of $2,000 or a prison sentence of two
years--and in the case of corporations, a maximum fine of $5,000.
The fees for licenses are, for brokers, $10 per annum, and for
salesmen, $2 per annum.
The operation of the law appears to have been extremely successful and
to have been heartily indorsed by the public generally and by all the
reliable real-estate dealers and salesmen in the state. The Real Estate
Commissioner gives the following picture of the results of the law
during the eight months it was in force:
1. It gave the realtors faith in each other, each being under bond
and licensed by the commissioner with power of revocation in case
of violation of the law.
2. It increased the confidence of the public generally in the
realty business, for the law afforded the public a ready and
inexpensive means of redress in case of wrongdoing.
3. During the eight months, some sixty complaints were filed with
the commissioner, and all were adjusted without even a formal
hearing up to the time the law was thrown out, March, 1918. Some
twenty-five hundred dollars was returned to defrauded purchasers
through appeals to the commissioner.
4. The deterrent effect of the law on wrongdoers will never be
known, but must have been far-reaching.
5. So satisfactory was the law that the public, the bankers, and
especially the realtors, are preparing again to present to the
legislature during the winter of 1918-19 a more carefully worded
law governing the realty business.
One of the services rendered by the Department of the Real Estate
Commissioner was the issue of a directory of licensed real-estate
brokers and salesmen in the state. The first copy was published October
1, 1917, and contained about four thousand names, as well as other
material such as maps, laws, and legal opinions, designed to be of
practical value to all realtors. It was intended that this directory be
issued quarterly and be distributed to licensed brokers, with a
subscription price to others of one dollar a year. The commissioner
regarded this directory bulletin which bound together in fraternalism
the real-estate men of the state, as only one of the many possibilities
of extending valuable aids through his department to the real-estate
profession, and so indirectly to the agricultural industry.
Although there have been attempts in other states to secure legislation,
so far they have been unsuccessful. In essentials they have resembled
the California law, although differing in details, such as amounts of
bonds, fees, and penalties. In Minnesota, several years ago, the State
Immigration Commission was instrumental in introducing a land-regulation
bill which was killed by the efforts of the land dealers.
In 1914 the Executive Committee of the Real Estate Association of New
York submitted for the consideration of the association a bill for the
licensing of real-estate brokers and the creation of a real-estate
commission. In 1916 a bill similar to this one was introduced in the
legislature of the state of New York, but failed of passage. In Texas a
bill was approved by the Texas Realty Association, but was not enacted
into law. In addition to efforts for legislation in the states there
have been national recommendations.
The Committee on State Legislation of the National Association of Real
Estate Exchanges in 1913 reported on a bill for the regulation of the
real-estate business. The main provisions are as follows:
A State Board on Real Estate Licenses shall be established, consisting of
five members, all real-estate men, appointed by the Governor, and having
its headquarters in the state capitol. Every person engaged in the
real-estate business shall apply for a license to the board. The applicant
shall present proof that his standing is above reproach and that his record
for honesty and fair dealing is clear. The applicant shall file a
satisfactory bond in the amount of $1,000, conditioned on the faithful
performance of any undertaking as a real-estate broker, the bond to be
renewed with each renewal of the annual license. The fee for the license
shall be $10 for each dealer, firm, or corporation, and $2.50 for each
salesman, the fees to be, respectively, $5 and $1 after the first year.
Licenses shall expire each year. The board shall have power to revoke at
any time any license where the holder thereof is guilty of gross
misrepresentation in making sales, etc., or of any other conduct which, in
the opinion of the board, is opposed to good business morals. The board
shall investigate all complaints; it shall have power to subpoena
witnesses. Any person violating the act shall be fined not less than the
compensation or profit received or agreed to, and not more than four times
that amount, or be imprisoned not more than thirty days, or both.
The Legislative Committee of the Interstate Realty Association of the
Pacific Northwest has proposed a real-estate license law for the state
of Washington, the main provisions of which are similar to the others
already quoted.
Although there has been no successful state-wide provision, in Portland,
Oregon, an ordinance licensing real-estate brokers was approved in 1912,
including the salient features of the proposed state laws. Application
is made to the city auditors, with proof of the applicant's good
standing and square dealing. The Council Committee on licenses has power
to revoke or withhold, and penalties are provided for.
As an example of the occupational tax law applying to the real-estate
business, the law of the District of Columbia may be mentioned. The
District of Columbia (1914) has a law imposing a license tax of $50 per
annum on real-estate brokers or agents. The assessor of the District
said that the fee was not large enough to restrict character of trade,
and that the payment of the fee was the only qualification for a license.
A PUBLIC LAND EXCHANGE
In addition to the need for honest dealing there is everywhere felt the
need of bringing farm sellers and buyers together through a public
agency. Certain states, in co-operation with the Federal Department of
Agriculture, have made provision for doing this. For this purpose an
office is created similar to a public employment office. It aims to
provide the farm sellers and buyers with more or less reliable
information without cost to either side.
In the state of Maryland the Extension Service of the state college, in
co-operation with the Federal Department of Agriculture, has worked out
a farm-description blank for farm sellers. The blank contains questions
in regard to the location of the farm, its size, distance from
communication lines, and inhabited places of various sizes and market
facilities, its soil, its fences, buildings, water supply, ownership,
price, and other points intended to show the condition and value of the
farm for sale. The office distributes these blanks among the county
agents, from whom the farm sellers secure the blanks. The county agents
forward the completed forms to the main state office, which periodically
publishes the collected information for farm buyers.
This information is available to farm buyers for the mere asking. Anyone
can see, in the state office or in the published volume, the blanks
describing in detail the farms for sale. In this way they can be
directly connected with the seller of the selected farm, without agents
or advertising cost to either side. Thus misrepresentation can be
avoided to a certain degree. The Extension Service, however, does not
enter into any financial arrangement or give any guaranties. Aside from
the information contained in the filled forms, it gives information of a
general character concerning the agricultural possibilities of the state
and of various sections and localities in it. At present the Service is
particularly interested in locating the returned soldiers.
As such a public agency system is of comparatively recent origin and has
not had time to develop, it is impossible to judge with certainty its
future possibilities. In theory the operation of the system seems to be
an easy matter, but in practice it is complicated. The farmers who
intend to sell their holdings have to be informed of the work of the
office, and equally the farm buyers have to be acquainted with the plan.
This involves education of the farmers by an extensive advertising
campaign, which requires time and expenditure of public money. However,
there is a real need for such a public agency and the results of the
attempts to establish and develop it have been encouraging.
It would be desirable that the states which have already established or
will establish such public agencies should co-operate with one another
through the Federal Department of Agriculture and, with the assistance
of the latter, should organize a central office as a clearing house.
Nation-wide advertisement should be made by the central office for all
the states in co-operation. In this way the farm advertisements would be
made more effective--unnecessary repetitions, and the expenses connected
with these, would be avoided. Through interchange of experiences a
uniform system might be established. Such a central office, in
co-operation with the Immigration Bureau, Department of Labor, should
inform immigrants who desire to establish rural homes of the various
farm opportunities.
RECLAMATION A SEPARATE FUNCTION
Up to this time both public and private efforts have been applied to the
reclaiming of unused lands, rendering valuable service to the progress
of the country. There ought, however, to be no question whether
reclamation work should be a public or a private enterprise. If a
number, and even a large number, of the private land-development
companies have hitherto mined in the pockets of their land buyers
instead of in the land itself, this has been largely because of the lack
of any public regulation of private land-improvement companies. However,
a number, perhaps a majority, of the companies have improved their land
and have secured settlers who have made a success in the cultivation of
the improved land. Therefore it would be a grave mistake to abandon or
even to repress private enterprise in land-development work. It should
be encouraged by the extension of public credit through the land
companies and by putting their business under public supervision.
Where considerable areas have to be reclaimed, involving large expenditures
and a long period of waiting for returns, public reclamation is preferable.
Although reclamation and colonization work are closely connected and
dependent upon each other, still there is a marked difference. It is one
thing to plan and irrigate a desert area and quite a different thing
successfully to populate the irrigated land. The first is mainly a
technical enterprise, while the other deals mainly with human beings. The
people who direct and prosecute reclamation works--civil engineers and
other technical experts--might not be good colonizers. The duties of the
latter consist in selecting suitable settlers, directing their
land-cultivation work, and organizing and directing the community life of
the settlers. On the other hand, colonizers, trained agriculturists, and
community workers might not be able successfully to conduct reclamation
works. Therefore these two fields ought to be recognized as distinct and
provided for separately.
Almost all the proposed plans of land settlement fail to make such a
distinction. They propose that the same public agency should acquire
land, improve it, and colonize it. The same is true in regard to most of
the private land-improvement and colonization projects. They plan to
improve land and at the same time colonize it, which too often consists
merely in securing land buyers and leaving the latter, after they have
made their initial payment, entirely to their own fate.
Private land-improvement companies doing business in two or more states
should be brought under the jurisdiction of the Federal Reclamation
Service. They should be licensed, their projects approved, and their
general methods of business regulated. Private companies doing business
within state or city limits should be regulated by state irrigation or
drainage district authorities, with whom the Federal Reclamation Service
should co-operate in every possible way.
In order that the Federal Reclamation Service may be extended and
expanded to meet the growing demands, further legislation must be passed
by Congress. Liberal appropriations are needed both for the acquisition
and reclamation of unused lands of different classes, as well as for the
increase of the staff and working forces of the Service. The bills under
consideration were discussed in Chapter VI. The bill introduced by
Representative Mondell of Wyoming effectively provides for this service.
A COLONIZATION BOARD
The word "colonization" suggests the following: populating a given
unused area of land suitable for cultivation, according to a plan
covering the selection of people, the cultivation of the land, providing
credit and markets, instruction in land cultivation, planning,
organizing, and directing of community life in its numerous branches,
such as co-operation for various purposes, education, recreation.
Colonization work in the modern sense is a new, delicate, and complex
field, for it affects all sides of human life.
There is a wide difference of opinion the country over as to whether
colonization should be a public affair or be left to private initiative
and effort. Those who favor private colonization claim that public
colonization is wasteful, uneconomical, that it puts a new burden on
the taxpayers, and savors of Socialism. Those who favor public
colonization maintain that private colonization companies in the very
nature of their endeavors work for their own profit, considering the
settlers' interests and public welfare of secondary importance.
Colonization results must not be counted only in the terms of money, but
also in the terms of social value to the community and to the country.
Again the writer has to call attention to the fact that both public and
private colonization is going on side by side all over the world. In
certain foreign countries public colonization is predominant, while in
this country the reverse is true. Only the state of California has
undertaken public colonization as an experiment on a small scale, and so
far with success.
It would be advisable that both public and private colonization go on,
one competing with the other and learning from the other's experience.
Private companies must be regulated and licensed by public authorities,
and public credit should be extended to them. All this requires that the
colonization work be organized on a nation-wide scale.
To meet the national need there should be established an
interdepartmental Federal colonization board with the following duties:
(1) To make community plans. This would involve the location of
settlements, their roads and building sites; plans for division of land
into farms; plans for erection of farm buildings; plans for town sites
and buildings as colony centers, parks as playgrounds, etc., all to be
surveyed and put in working shape by the Reclamation Service, Department
of the Interior.
(2) To select suitable people for settlement on the lands acquired and
improved by the Reclamation Service, with the preference to be given to
former soldiers.
(3) To distribute the selected immigrant settlers of non-English mother
tongue, including soldiers, having in mind the need of mixing different
races with the native settlers so as to facilitate the process of
incorporating all into American life.
(4) To plan and organize the economic life of the colonies. This means
the introduction of, and instruction in, farming and methods of
cultivation suitable to the land, climate, and other conditions
surrounding the colony, the organization of buying and selling
co-operation in the colonies, provision of markets, etc.
(5) To plan and organize the educational, recreational, and general
community life of the colonies--schools, libraries, lectures, games, etc.
(6) To regulate and license or charter private colonization companies.
Among the policies of the Colonization Board a very prominent one should
be a proper distribution of the immigrant settlers. Owing to the lack
of any public plan or measures for the distribution of the immigrants in
the country in the past the results have been astonishing. The Little
Polands, Italies, ghettos, Germanies, and others in our great industrial
centers are well known, though the word "Little" is not applicable in
every case. It is especially inapplicable where the compact immigrant
settlements exceed in numbers the largest cities of their home
countries. For instance, according to the last census figures, there
were in the city of New York more Italians (including their children)
than the population of Rome, more Germans than in Cologne, about as many
Irish as the population of Dublin and Belfast together, and about three
times as many Jews as there were in the British Empire.
All this is already known to the public at large. What is not popularly
known is the fact that there are foreign provinces in the agricultural
sections of the country. There whole counties and even a number of
neighboring counties are populated by immigrants of the same race and
nationality. Such provinces have become self-sufficient; they have their
own towns, their own schools, churches, industries, stores, select local
public officials of their own nationality, speak their own tongue, and
live according to the traditions and spirit of their home country.
These traditions and this spirit are kept alive by their schools,
churches, and libraries, and by the absence of any direct contact with
American customs and traditions. From such localities came a
considerable number of the American-born drafted men who could not
speak, write, or even understand English.
Such foreign provinces in the rural sections of the country are principally
found in the North Middle Western states and Western states. When the
writer, during his field investigation, arrived in such localities--for
instance, in the southwestern part of North Dakota--he found that the
townspeople, business men, and public officials, as a rule, understood
English, but spoke German or Scandinavian among themselves. In talking with
any man in the street the writer had to resort to the man's mother tongue,
while the farmers back in the country, as a rule, did not speak English at
all. Yet many of them were born in this country.
On the whole, the impression of the writer was that the larger the rural
immigrant colony, the less it showed evidences of American influences.
This was quite apparent in regard to the Slavic and especially the
Polish colonies visited by the writer in a number of states.
The immigrants already settled in large colonies of one nationality cannot
be redistributed, but they can be reached by other means, one of which is
an efficient public-school system, which is dealt with in later chapters.
Measures should be undertaken for the distribution of the new immigrant
settlers so as to avoid their congregation in large colonies of only one
nationality. The experience of private land dealers and colonization
companies shows that it is not wise to settle a single immigrant family
among native settlers or the settlers of another nationality. Such a
family becomes lonesome and sooner or later leaves the settlement.
Therefore the immigrants must be settled in groups according to their
nationalities.
The question is, how large such national groups must be in order to keep
the settlers in the colony and at the same time to avoid their becoming
clannish and remaining untouched by American influences for a generation
or a number of generations. The observation of the writer and his
interviews on this question with the people engaged in colonization have
led him to the conclusion that such groups ought to be of from five to
fifteen families each, settled in the same neighborhood among either
groups of other nationalities or native settlers.
Such distribution of the immigrant settlers in smaller groups is favored by
the immigrants themselves. As a rule, they are eager to learn American ways
as soon as possible, and usually accede with alacrity to distribution,
provided no violent compulsion is used and they are directed to land where
they are able to make a success by their investment and toil, without being
cheated or exploited. The writer discussed the size of a rural immigrant
group of the same nationality in a number of the immigrant colonies. The
settlers, even the Russian sectarian peasants, believed that if there were
not less than five families in one group no loneliness would be
experienced. If there were no more than ten or fifteen families there would
be no danger of their becoming clannish and self-sufficient, for they would
of necessity have to deal with other groups and intermingle with them for
both business and social purposes.
A rigid selection of settlers on the basis of their ability to farm and
to stay on the farm is of prime importance. Among the applicants for
farms in new colonies there are three main classes of people, each
distinct from the others: (1) those who have experience, knowledge, and
otherwise ability for land cultivation and the capacity for sticking to
a job. These should be selected and will contribute to the success of
the colony, which ultimately depends upon the settlers themselves; (2)
those who are hunters for easy pickings in the way of a piece of
property or for an opportunity for safe investment or for speculation.
These should be avoided as the plague; and (3) those who are not suited
for rural life and heavy toil on the land, mostly city people who dream
of changing their life for improvement of their health in the country,
for an independent life, or for an easy-going life, of fresh air,
sunshine, flowers, and birds. Such people are not able to make a success
of farming and should be avoided. These classes of applicants are found
among immigrants as well as among natives, soldiers, and civilians.
How important the selection of settlers is for the success of
colonization and settlement on land is shown by the close scrutiny of
prospective settlers made by the agents of modern private colonization
companies and also by certain state immigration officials. They ask an
applicant about his supply of money or credit, about his experience,
about his past in detail, his habits, his inclinations, and his
aspirations. They judge him by his appearance, his physique, and his
health. He is also questioned about his family life; special attention
is given to the attitude of his wife toward rural life, her past
experience, the probability of her being satisfied and able to stay
permanently on the farm and carry the heavy burdens of a farmer's wife.
Finally, the prospective settler is warned of the existing conditions in
the colony, of the heavy toil and the difficulties, and of the long
period of waiting which must elapse before he can enjoy the results of
his investment and labors. Selection made in this way will guarantee
the success of a colonization enterprise, be it public or private.
EXTENSION OF PUBLIC CREDIT
A last measure which is extremely important and must not be overlooked
in any planning for land settlement is the extension of public credit to
settlers through the Federal Farm Loan Board. This, of course, applies
not only to the settlers in the colonies established by the Federal
Colonization Board, but also to those of private colonization companies
regulated and chartered by the Colonization Board, and to individual
settlers. There must be certain safeguards against loss. To accomplish
this there could be established a settlers' credit division in the
Federal Farm Loan Bureau, with a special land colonization credit fund.
A similar plan was proposed in the bill introduced by Representative
Knutson, May 27, 1919.[19]
Some such provision is indispensable in any comprehensive land policy,
and should secure a place in legislative enactment.
CO-OPERATION INDISPENSABLE
No amount of legislation or smooth-running administrative machinery can
provide, however, for one of the most fundamental factors in modern
small-farm production.
Every colony of small farmers nowadays needs to provide for co-operation
among its members. There is no other way for them to enjoy the technical
advantages of large-scale farming in the buying of seeds, stock,
fertilizers, tools, machinery, and other necessities at wholesale
prices, in the selling of farm products at the best prices; in the
establishment of creameries, etc. The buying of necessary costly
machines, such as stumping machines, tractors, threshers, headers, is
beyond the financial power of an individual settler. Even should he be
able to acquire them, he cannot use such machines to their full capacity
on his small piece of land. But in co-operation settlers are able to buy
the heavy machinery and to use it to its fullest capacity. Mutual
insurance and credit established through co-operation are another
substantial assistance to the success of the settlers.
[Illustration: THIS SETTLER STARTED TEN YEARS AGO WITH NO MONEY]
The co-operative buying and selling organization of a Finnish farming
colony in upper Michigan which the writer investigated in detail proved
to be a great money saver to the settlers. The enterprise has grown from
a small undertaking into the largest business organization in the town,
with its great warehouse overshadowing the railroad station. In the
beginning the surrounding native farmers and townspeople were hostile
toward it. They both feared the competition as well as the broader
results of an undertaking of "foreigners," led by their "demagogic
leaders." Its former opponents have radically changed their attitude,
and many are joining the organization. They find that co-operation means
voluntary, concerted, and co-ordinated action for the common advantage,
and that it is not contrary to the American spirit.
One of the leaders of the Finnish co-operative association explained
that the defects of the local private stores served as the first
inducement for the settlers to establish a co-operative store.
The private stores usually set arbitrary and high prices on the
goods, which are often of poor quality and limited variety. As a
result, a co-operative store among our settlers was established. We
found that the association, in its meetings and activities, served
as a school for the development of mutual understanding and
fellow-feeling among its members. In the direction of
Americanization our co-operative movement has done much good
already. Its success has made the native farmers respect us. A
number of them have already joined our association. Should our
enterprise grow wider it may be expected to unite the farmers of
different nationalities, immigrants and natives, into one community.
The interviews of the writer with the native farmers fully substantiated
these statements of the Finns. One of them said that when the Finnish
settlers came the native-born people did not expect much good from them.
They were looked upon as strange intruders, entirely ignorant in
farming. But as time went on they made good not only as farmers, but
also as business men in their co-operative buying and selling
association. They were found to be good, sober, and industrious people.
The co-operative movement was apparent in northern Wisconsin, where
numerous co-operative creameries have been organized among the settlers
of various nationalities. The carrying of milk to the creamery results
in the regular meeting of settlers every day; business meetings and
other activities of the association afford opportunities for the
settlers to get together and work together. In addition to this the
immigrant settler, as a member of the co-operative association, comes
face to face with the wider business world--banks, railways, commission
merchants, manufacturers, market conditions, price fluctuations, etc. As
an individual producer he comes to know the larger problems involved in
marketing his product and his vision and understanding broaden.
Almost all immigrant settlers interviewed on the subject of co-operation
were in favor of it. "Co-operation helps us!" were words often used in
answer to the question why they favor co-operation. This "help" should
not be understood in the material sense only. Co-operative action,
though it begins in economics, extends to and ends in the creation of
ideal, socio-psychological values. The co-operator works and fights in
the spirit of solidarity. He satisfies his wants through concerted
action. His psychology is more complex and his aims become higher than
those of a private individual.
Co-operation is a child of necessity. It cannot be created by outside
suggestion or mere preaching. When there is a need and conditions are
favorable the co-operative movement comes into being. Unquestionably the
need for co-operation is greater in the rural districts than in the cities,
and yet the rural conditions in many respects make the development of
co-operation more difficult. The main obstacles, according to the rural
co-operators themselves, consist in the lack of business connections and
markets, in the absence of knowledge of efficient business methods, and in
credit difficulties. It is hard to find an able and trustworthy business
manager for a co-operative store in a village.
Notwithstanding all difficulties, the co-operative movement among
farmers and especially among immigrant settlers has lately begun to grow
with extreme rapidity. For instance, in 1917 in the state of Wisconsin
there were agricultural co-operative associations in the following
numbers: 380 creameries, 718 cheese factories, 98 feed and produce
associations, and 124 live-stock concerns.[20]
One of the first difficulties in the way of establishing a co-operative
association is its incorporation proceeding. Most of the states up to this
time have had no special laws covering co-operative associations. In such
cases they have to be incorporated under the laws relating to private
companies or those covering charity and public-welfare associations.
A number of states have enacted laws for the promotion and protection of
co-operation among farmers. The Wisconsin law, Chapter 368, Laws of 1911,
makes provision for the establishment of organizations conducting business
on the co-operative plan. No member is allowed to own shares of a greater
par value than one thousand dollars. No member is entitled to more than one
vote. Dividends on the paid-up shares are allowed to be no more than 6 per
cent per annum; 10 per cent on the net profits has to be set aside as a
reserve fund. When this has accumulated up to 30 per cent of the paid-up
shares, 5 per cent goes to the educational fund to be used for teaching
co-operation. One half of the remainder of the profits has to be paid as a
uniform dividend upon the amount of purchases of shareholders and upon the
wages and salaries of the employees, while the other half has to be paid to
the nonshareholders on the amount of their purchases.
In case of productive associations, such as co-operative creameries, or
elevators, dividends have to be paid on raw materials delivered. In case
an association is both a selling and productive enterprise, the
dividends may be divided on both goods purchased and material delivered.
All concerns which do not comply with the provisions of the above law
are prohibited to use the term "co-operative" as a part of their
corporate name or the designation of their business.
According to the Nebraska law, Senate File No. 88,
the words "co-operative company, corporation, or association" are
defined to mean a company, corporation, or association which
authorizes the distribution of its earnings in part or wholly on
the basis of, or in proportion to, the amount of property bought
from or sold to members, or of labor performed, or other service
rendered to the corporation. A co-operative concern has the power
"to regulate and limit the right of stockholders to transfer their
stock, and to make by-laws for the management of its affairs, and
to provide thereon the term and limitation of stock ownership, and
for the distribution of its earnings."
The California law, Civil Code, Secs. 653M to 653S, provides for
organization of agricultural, viticultural, and horticultural
co-operative associations which shall not have a capital stock and shall
not be working for profit. Each such association shall determine by its
by-laws the amount of membership fee, the number and qualifications of
members, conditions of voting, the methods of business, and the division
of earnings.
There is no question that every state must have special legislation for
co-operative associations quite distinct from that relating to private
business concerns. A co-operative association must have the legal power to
regulate and limit the right of shareholders to transfer their shares, to
make by-laws for the management of business, to limit the share ownership,
to decide on the proportion and method of distribution of its surplus
earnings. It must limit dividends on shares to the prevailing rate of
interest and provide a certain percentage for a reserve fund until the
latter has accumulated up to a certain proportion of the capital invested.
A part of the remainder should be retained for educational and other
social-welfare purposes, the rest proportioned to the amounts of goods
purchased, products contributed, or services rendered. The co-operative law
should provide for one-member-one-vote. Irrespective of the number of
shares owned, or the goods purchased, or the products contributed, or the
services rendered, only one vote should be granted to each member.
Aside from such legislation, each state, as in New York, should have a
special office with adequate forces for the advice and direction of
farmers and settlers who desire to organize a co-operative association,
as well as for those who have already established such an association
and are meeting with difficulties.
[17] _Reclamation Record_, Department of the Interior, Washington, D. C.,
July, 1918, p. 306.
[18] Wisconsin Statutes, Chap. 656, Laws of 1919, Sect. 1636-225.
[19] See chap. vi.
[20] _Bulletin No. 182_, May, 1917, Agricultural Experiment Station,
University of Wisconsin.