Page:Walter Renton Ingalls - Current Economic Affairs (1924).pdf/59

Rh farmers are wholly capitalists whose income is derived from the use of their capital plus their own work. Economically they are in the same position as the merchant who owns a shop and stock of goods and occupies himself in the merchandizing thereof. The town worker, excepting the merchant and others who use their own capital, derive their income from wages, which spring from the use of capital that is owned by others.

This broad distinction between agricultural workers and town workers is far from being precise, but it is convenient and gives rise to no misunderstanding. Of course, the worker for wages in a factory may possess some shares of stock in the company that owns it and thus be a capitalist. Even the president of a company may theoretically be merely a wage earner, but the chances are of course that he will be a capitalist through the ownership of stocks. On the other hand a large class of farm laborers are purely wage earners.

Whatever be the kind of farmer his income is derived from the sale of his products, less the direct cost of producing them. The direct cost of production includes the labor that he has to buy, the materials that he has to use, and finally the labor and material that he must apply in order to maintain the fertility of his land and the upkeep of his buildings, live stock, machinery, fences, ditches, etc. He must set aside moreover something for refunding his machinery and live stock, for in spite of proper upkeep they will eventually have to be replaced. In keeping his accounts the farmer should give himself credit for the subsistence of himself and family from the farm and also should take cognizance of appreciation or depreciation in the value of his land. Out of the margin between