INTRODUCTION The family farm is the classic example of the American smallbusiness enterprise. For generations this institution and the community it supports have held the esteem of all who have known and understood the American heritage. Statesmen, historians, economists, and sociologists have generally agreed that the spread of the family farm over the land has laid the economic base for the liberties and the democratic institutions which this Nation counts as its greatest asset. The great declaration by Daniel Webster still stands as perhaps the clearest and most authentic expression of America's deep-rooted belief in the intimate and causal relation between the family farm and the distinctively popular character of our Government. Our New England ancestors he said * brought thither no great capitals from Europe; and if they had, there was nothing productive in which they could have been invested. They left behind them the whole feudal policy of the other continent. They came to a new country. There were as yet no lands yielding rent, and no tenants rendering service. The whole soil was unreclaimed from barbarism. They were themselves either from their original condition, or from the necessity of their common interest, nearly on a level in respect to property. Their situation demanded a parceling out and division of the land, and it may fairly be said that this necessary act fixed the future frame and form of their government. [Webster's italics.] The character of their political institutions was determined by the fundamental laws respecting property. The consequence of all these causes has been a great subdivision of the soil and a great equality of condition; the true basis, most certainly, of popular government. The advances in technology during the past century have greatly benefited farmers who, with their families, work the land. The industrial revolution has eased the burden of the farmer and rendered his labors more productive. Yet these technological advances have, at the same time, brought a threat to the very institution to whose personnel they have brought so much aid. The threat is this: That with increased mechanization will come increased industrialization of the farm enterprise; that with industrialization will come an increasing concentration of economic power in the hands of fewer and fewer men at the head of great organizations, and an end to that broad diffusion of social and economic benefits that has long been character- . istic of American rural communities. There is foundation for the belief that industrialization is on the increase. The United States Census of Agriculture has been recording the gradual increase in average farm size in America. This is not a result of the disappearance of undersized farms; family farmers on the better lands appear to be particularly vulnerable. Čensus statisics are supported by other information. In those areas particularly suitable to high-value specialty crops, the concentration of land and production into large units has been reported by various agencies and INTRODUCTION students of American agriculture. A committee of the United States Senate has pointed out that within the decade of the thirties the percentage of all farms in California which produce just over one-half the total agricultural production of that State fell from 10 to 6.8 percent, marking a growth in concentration of nearly one-third. It is not without significance as evidence of this trend that at least one group of specialty crop producers has so far changed its character away from that of family farmers and in the direction of becoming industrialists that it has found itself indicted for violation of the antitrust laws of the Nation. The development of large-scale farming has been foremost in California. The influence of Spanish land policy, the monopolization of large areas by early comers after American statehood, the soil and climate favorable to the production of specialty crops, and congeries of other historic and economic circumstances have made California particularly amenable to industrialized agricultural production. But development of this pattern of agriculture, often operated like industry from urban centers and worked by wage labor, is not peculiar to any one part of the Nation. It has been reported in some degree from all sections. Whether industrialization of farming is a threat not only to the family farm, but also to the rural society founded upon the family farm, is the specific subject of the present report. The purpose of this study is to test by contemporary field research the historic hypothesis that the institution of small independent farmers is indeed the agent which creates the homogeneous community, both socially and economically democratic. The present inquiry consists of a detailed analysis and comparison of two communities, one where agricultural operations are on a modest scale, the other where large factory-like techniques are practiced. Both communities lie in the fertile southern San Joaquin Valley in the Great Central Valley of California, where highly developed and richly productive agriculture is characteristic. Limitations of time and resources dictated that no more than two communities be studied. Numerous other pairs might have been chosen which doubtless would have yielded comparable results. The two communities studied here naturally vary in some degree with respect to proportions of surrounding lands devoted to this or that crop, with respect to age, to depth of water lift for irrigation, etc., as well as with respect to the scale of the farm-enterprises which surround them. Controls as perfect as are possible in the chemist's laboratory are not found in social organizations. Yet the approximation to complete control achieved by selection of the communities of Arvin and Dinuba is surprisingly high. Other factors, besides the difference in scale of farming, which might have produced or contributed to the striking contrasts of Arvin and Dinuba have been carefully examined. On this basis the couclusion has been reached that the primary, and by all odds the factor of greatest weight in producing the essential differences in these two communities, was the characteristic difference in the scale of farming-large or small-upon which each was founded. There is every reason to believe that the results obtained by this study are generally applicable wherever like economic conditions prevail. Much of the Cabinet Committee's work is done through ad hoc subcommittees, covering specific problem areas. At the moment, subcommittees are active in the fields of taxation, financing, labor-management relations, and urban renewal. The Committee will continue as a medium for coordinating the activities of the Executive Branch which affect the welfare of small business concerns, studying specific problems, evaluating proposals for measures to assist small concerns, and making recommendations for such measures as proposals are matured. 19. "SMALL BUSINESS AS A SOCIAL INSTITUTION," BY KURT MAYER, SOCIAL RESEARCH, 1947, PAGES 332-349 [From Social Research, 1947, pages 332-349] SMALL BUSINESS AS A SOCIAL INSTITUTION (By Kurt Mayer) The feeling that all is not well with small business has been growing in this country for more than 60 years. First expressed in legislative acts in the growing West, an early awareness of the danger of emerging monopolistic power swept across the States and found national expression in the Sherman Antitrust Act.1 But it was not until the depression of the 1930's that small business problems really took the spotlight. During the depression years the plight of small business became a real problem of the survival of the individual enterprise, and since then public discussion of small business problems has remained with us in a rather persistent manner. This is clearly reflected in the large amount of legislative activity. Several hundred bills concerning small business have been introduced in Congress; a score of these have been enacted into law, among them the well-known Tydings-Miller and the Robinson-Patman Acts. Many more bills have been debated in State legislatures and a number of them have also found their way into the statute books of nearly all the States. Congress has further manifested its concern by the creation of special committees to study small business, and other governmental agencies have likewise given recognition to the existence of its particular problems. The Department of Commerce has a special Small Business Division, while during the war we had the Smaller War Plants Corporation. The Federal Trade Commission is actively interested in small business problems, and an impressive amount of evidence has been taken by the Temporary National Economic Committee, created in 1938 by President Roosevelt to investigate the concentration of economic power. A good deal of the discussion that has occurred since the subject first came into prominence has been carried on in an atmosphere charged with emotion, and has been marked by much excited argument and many wild conclusions. Two diametrically opposed points of view stand out in the debate: (1) It is argued by some that the public discussions of monopoly have been characterized by loose talk and hysteria, and that small business is much better off than the public 1 See O. P. Hopkins' foreword to "390 Bills," U.S. Department of Commerce. Economic Series, no. 37 (June 1943). INTRODUCTION SUMMARY OF FINDINGS 5 Certain conclusions are particularly significant to.the small businessman, and to an understanding of the importance of his place in a community. Not only does the small farm itself constitute small business, but it supports flourishing small commercial business. Analysis of the business conditions in the communities of Arvin and Dinuba shows that (1) The small farm community supported 62 separate business establishments, to but 35 in the large-farm cominunity; a ratio in favor of the small-farm community of nearly 2:1. (2) The volume of retail trade in the small-farm community during the 12-month period analyzed was $4,383,000 as against only $2,535,000 in the large-farm community. Retail trade in the smallfarm community was greater by 61 percent. (See figure and table, pp. 83 and 81.) (3) The expenditure for household supplies and building equipment was over three times as great in the small-farm community as it was in the large-farm community. The investigation disclosed other vast differences in the economic and social life of the two communities, and affords strong support for the belief that small farms provide the basis for a richer community life and a greater sum of those values for which America stands, than do industralized farms of the usual type. It was found that (4) The small farm supports in the local community a larger number of people per dollar volume of agricultural production than an area devoted to larger-scale enterprises, a difference in its favor of about 20 percent. (5) Notwithstanding their greater numbers, people in the smallfarm community have a better average standard of living than those living in the community of large-scale farms. (6) Over one-half the breadwinners in the small-farm community are independently employed businessmen, persons in white-collat employment, or farmers; in the large-farm community the proportion is less than one-fifth. (7) Less than one-third of the breadwinners in the small-farm community are agricultural wage laborers (characteristically landless, and with low and insecure income) while, the proportion of persons in this position reaches the astonishing figure of nearly two-thirds of all persons gainfully employed in the large-farm community. (8) Physical facilities for community living-paved streets, sidewalks, garbage disposal, sewage disposal, and other public servicesare far greater in the small-farm community; indeed, in the industrialfarm community some of these facilities are entirely wanting. (9) Schools are more plentiful and offer broader services in the small-farm community, which is provided with four elementary schools and one high school; the large-farm community has but a single elementary school. (10) The small-farm community is provided with three parks for recreation; the large-farm community has a single playground, loaned by a corporation. |