V'
The news in this publi
cation is released for the
■ press on receipt.
. tHE UNIVERSITY OF NORTH CAROLINA
NEWS LETT
Published Weekly by the
University of North Caro
lina for its University Ex
tension Division.
M4Y 3, 1922
CHAPEL HHX, N. C.
VOL, Vm, NO. 24
Editorial Hoard i B. C. Branson, 8. H. Hobbs, Jr., L. R, Wilson. E. W. Knight, D, D. Carroll, J. B. Bullitt, H. W. Odum. Entered as second-class matter November 14,1914, at the PostofBce at Chapel Hill, N C., under the act of August 24, 1&12.
STATE-AID TO FARMEKS
State*Aid to Farm Ownership in
Denmark and New Zealand was pre
sented by Mr. S. H. Hobbs, Jr., of the
'Rural Social Economics Depar^ent,
University of North Carolina, at the
last regular meeting of the North Caro
lina Club. This paper will be printed in
full in the Club Year-Book to be issued
in the early'fall. We are presenting a
few /of the points brought out iri Mr.
Hobbs’s paper.
In Denmark
Farm ownership and small-scale
farming are the economic basis of Dan
ish life. A civilization is molded large
ly by the type of land tenure that pre
vails. Hereditary landlordism means
ultimate political reaction. Where the
masses own the land, hope, freedom,
and ambition prevail. In Denmark
the farmers have been moving into*
land ownership for sixty years. Farm
tenancy has decreased from forty-four
percent to less than ten percent during
this period.
Denmark, be it remembered, is one-
fourth the size of North Carolina, with
about a half-million more people. Farm
tenancy in its worst form exists in Bel
gium, and that would be the case in
Denmark except that the farmers have
brought about their own economic free
dom through education and cooperation,
with the moral support of the state.
•The state actually gives nothing. The
farmers do it for themselves, with state
supervision and guaranty up to a cer
tain point.
Tenants as well as landowners re
ceive cheap credit in Denmark. State-
aid to tenants had its beginning in a
law passed in 1875 for the creation of
credit banks which received aid from
the state, whose object was to assist
men to purchase small holdings of land.
Other laws were passed in 1899, 1904,
and 1909 by which the nation entered
on a still larger program of lalfid dis
tribution. A would-be farmer who
measures up to standard requirements
and who can furnish one-tenth of the
purchase price can borrow the other
nine-tenths, but not more than $3,200,
from the state. The first five years
the borrower pays only the interest at
four percent. Then the loan is divided
into two parts—two-fifths • and three-
fifths. On the two-fifths the farmer
pays five percent, one percent being to
retire the first two-fifths of the debt in
46 years. He pays only interest on the
remaining three-fifths until the two-
fifths is retired. Then he retires the
three-fifths in a similar manner, the
whole loan being repaid in about 98
years. There have been few foreclo
sures and the state has suffered no loss.
Credit Unions Help
For the farmer who owns land cheap
■credit is provided through twelve dis
trict credit unions, each operating in its
own section of the country. Loans
have been made on 236,000 farm prop
erties and there are only about 250,000
farms in Denmark. The money is se
cured by selling bonds or notes which
are bought and sold on the stock ex
change the same as any other merchan
dise. The farmer executes a mortgage
against his farm which is accepted by
the credit union, which in turn issues
notes to him which he can dispose of
anywhere. The farmer pays whatever
interest the notes bear plus sixty-five
Hundredths of one percent. One-half
of one percent is to retire the loan in
sixty years. The state gives no direct
aid, but guarantees the bonds up to 4
percent. A reserve fund of $20,400,000
has been built up and the few losses
are made good out of this fund.
In New Zealand
In matters of social legislation to aid
all classes of people New Zealand has
gone further than any other country.
Nowhere in the world had land become
so concentrated in the hands of a few
people. Only 14 percent of the white
people owned land in 1890. There were
684 owners who held an average of 17,
800 acres each. The land legislation of
New Zealand was designed to break up
large estates and to make it possible
for any settler, town or country, to
own land or, wjiat amounts to the same
thing, to lease it from the state for
periods of 33 years or more with per
petual right of renewal. Lands are
disposed of by the state for cash, for
25 years with right of purchase, rent
five percent, or for 66 years with per
petual right of renewal, rent four per
cent of the land value, minus all im
provements.
Advances to Settlers
Long-term loans are advanced to set
tlers who own first-class lands. The
loans are solely for productive purposes
and range from $125 to $13,000. A
mortgage is taken on the leasehold or
freehold and the buildings thereon. The
loans run for 37 y^ars, the debt being
amortized in 73 equal half-yearly pay
ments.
Six Great Principles
Other countries have land, income,
and inheritance taxes, but no ojhar
country except Switzerland has any
thing like so strong a. home ownership
law as that of New Zealand with its six
great principles:
1. Exemption of improvements, live
stock, and personalty. There is entire
exemption c'’ ?''! imp’’ovements on land
from taxation both for state income tax
and land tax. Np man is taxed for his
expended laboi', for thrift, for any im
provements mi’de pn a^^y land. Since
' this feature has been in effect the new
j buildings erected and improvements
'made have bceniwiprecedented.
j 2. Exemptiv.1. of small pre^party
I owners who be embarrassed by
I the tax. Less than 20 percent of the
' freeholdeis pay a state land lax. The
rest pay no state tax of any sort, but
all pay local taxes on real estate.
I 3. Deduction of mortgages In pay-
1 ing taxes on land. If a man has a
. mortgage against his land, he deducts
I the amount in listing his land for tax-
' ation. ' The man who holds the mort
gage pays an income tax provided his
income is high enough.
No tax on incomes unless they
are above the average level or labor
line. I
5. Inheritance and succession duties.
The inheritance tax runs all the way
from two and one-half percent on the
first $3,000 with $5,000 exemption, to
ten percent on estates valued at $100,
000 or more.
6. Graduation of taxes to restrain
monopoly and to conform more closely
to the rule of payment according to a-
bility, which is the fundamental equity
in taxation.
Graduated Land Tax
The graduated land tax is for the
purpose of preventing great estates,
and of breaking .up those already in
existence. The tax is on the land value
alone. It begins on estates worth $26,
000, where the tax is very low, and in
creases until it is 13 times as high on
estates worth $200,000. The graduated
tax is increased by 60 percent in the
case of absentee owners. This tax fea
ture makes it almost impossible for an
absentee owner to hold large estates
out of productive uses for a speculative
rise in value.
The government of New Zealand is
in the land business for the benefit of
the people. It purchases estates, di
vides tAi^m and sells or rents them for
long terms with perpetual right of re
newal. The state gets 4 percent rent
al on the unimproved value of the land,
the renter paying no other state tax.
The state has suffered no losses. Qn
the other hand it makes a profit of a-
bout a half-million dollars yearly. The
state makes a profit while any person
can own land or lease it and pay less
than anywhere else on the face of the
earth. The state provides cheap long
term loans for productive improve
ments.
In North Carolina
All of which is in sharp contrast to
this and every other state in the
Union. In most states the taxation
systems encourage land speculation.
In every state all improvements
are listed for taxation. We pen
alize the man who improves his
land, builds homes and equips his farm
with livestock and machinery. We en
courage the holding of land out of use
for speculative rises in value. In this
state we have 23 million idle acres, idle
for farm purposes, and 43.6 percent of
our farmers are tenants. Two-thirds
of our town and city people live in other
Released Week beginning May 1
KNOW NORTH CAROLINA
The Public Welfare Job
Mrs. Clarence A. Johnson
The Legislature has said there are
too many people in our state who are
socially sick and too many others ex
posed to infectious social evils, ct/id
unless social physicians are provided
who can. diagnose the trouble and
assist in curing our social ills, the
state will continue to have an in
creasing number of persons afflicted
by dependency, deliquency, and
neglect, constituting a great finan
cial and moral burden. Consequently
a plan was made whereby each county
might have a superintendent of pub
lic welfare who would be a social
specialist at the service of the peo
ple. The Legislature has given
superintendents of public welfare
some known specifics to be admin
istered for the cure of our social
ills. As in the practice of modern
medicine, the emiihasis is placed on
preventive rather than curative
measures, and the child and his needs
taken as the starting point.
Some Remedies for Our
Social Ills
1. The Child.
(1) Every child between the ages
of seven and fourteen shall be in
school the length of time school
holds in the district in which the
child resides.
(2) Children under fourteen years
of age shall not work in certain
enumerated occupations that are con
sidered detrimental t;o’their physi
cal and moral development.
(3) Dependent, neglected, and de
linquent children under sixteen years
of age shall have special care and
protection.
(4) Wholesome amusement shall
be provided and commercial amuse
ments regulated.
2. The Adult.
(1) The causes of distress shall
be investigated, the poor looked
after, and the county poor funds
carefully administered.
(2) Paroled persons shall be un
der supervision.
(3) Employment shall be found
for the unemployed.
(4) County institutiorls for the
poor and the delinquent must be re
gularly inspected and conditions re
ported to the proper authorities.
The County Superintendent of
Public Welfare is on the trail of all
socially indisposed people. The dose
that he prescribes for their cure may
not be very pleasant in the taking,
but it will mean in the end a clean
er, purer, more wholesome life for
many of our people. —Mrs. Clarence
A. Johnson, State Commissioner of
Public Welfare.
values, same year.
But thirty-second from the top in
per-worker crop values produced in the
census year— a subject that was treated
in the University News Letter 'April
26, 1922.
Today we are ranking the counties of
the state in per-worker crop values.
See the table elsewhere.
An effective farm system makes it
possible for a reasonable portion of
farm wealth to stick to the palms that
sweat it out, and it must be based on
diversification by land-owning farmers.
North Carolina is great in the pro
duction of gross and per-acre crop
wealth; but we are weak as water in
the retention of it in farm areas.
And farm wealth-retention is even
more important than farm wealth-pro
duction.
A look into our weakness in this par
ticular will be given by the tables in
early issues ranking the states of the
Union and the counties of the state in
accumulated wealth in farm properties
per country inhabitant. We produce
enormous crop values from year to year,
but we rank only 41st in the per capita
accumulation of farm wealth.
Scotland Stars
Scotland far and away led the state
in the pdr worker production of crop
wealth in 1919. Her average was $2,-
716 per worker; which was more than
‘ twice the average of the country-at-
, large, more than $500 beyond Greene,
I her closest competitor, nearly three
^ times the average of, the state, and
, more than nine times the average of
, the six lowest counties fn the list—
Jackson, Wilkes, Swain, Dar^, Graham,
and Avery.
Seven-eighths of Scotland’s crop
wealth in 1919 was produced by non
food crops, mainly cotton, and almost
exactly four-fifths of all her farmers,
white and black, were croppers.
But does farm wealth produced under
these conditions mean the retention and
accumulation of wealth in the farm re
gions? The cream of it accumulates in
the trade centers,* but do the farmers
themselves possess it?
If so, then Scotland on a per capita
basis would easily be the richest farm
county in the state., And she is near the
top; in this particular, only five coun
ties stand above her.
Alleghany Stars
But curiously enough, her farm wealth
per country inhabitant is only $182
greater than that of Alleghany—a coun
ty of home-owning, food-producing
farmers who do not raise a pound of
either cotton o"^ tobacco, or too little to
mention.
' Alleghany is near the bottom in crop
wealth production, but is near the top
in per capita farm wealth-retention. She
is not the richest farm county in North
Carolina, but on a per capita basis only
eight counties make a better showing.
And Avery is at the bottom in per
worker crop values, but she stands a-
bove SO counties in per capita country
wealth in farm properties.
Alleghany, you see, is not a crop-farm
ing but a livestock-farming area in the
main. Her annual production of crop
values is small, but her farm wealth lies
in farm lands, buildings, cattle, pigs,
sheep, and poultry. The farmers handle
little money, but they live in a land of
milk and honey, peace and plenty.
If these northwestern counties,
Avery, Watauga, Ashe, and Alleghany,
ever develop efficient schools, and mark
eting facilities in highways, railroads,
and motor truck service, they will sud
denly become the richest farm counties
east of- the Mississippi. Nothing is
surer than that.
people’s homes. Is there nothing we
can do to remedy the growing evil?
Other countries have solved the prob
lem. We must do likewise.
As one remedy we propose anew tax
ation system, a compromise between
New Zealand and our present system.
The Progressive Land Tax we propose
is (1) low rates on improvements, high
er rates on land, and still higher rates
on land held out of productive uses for
speculative rises in value, with a maxi
mum tax on land held out of use by ab
sentee landlords, (2) with exemption
or low rates on small properties while
occupied and operated or used by
owners.
CROP VALUES PER WORKER
Fifth from the top of the column in
gross crop values produced in 1921.
Ninth from the top in per-acre crop
CROP PRODUCTION PER FARM WORKER
Ba^ed on the 1920 census, covering the year 1919. The averages result from
dividing the gross values of all crops by the total number of farm workers in
each county.
The average for the state was $1,054; for the United States $1,347.
Thirteen counties excelled the average for the country-at-large, all of them
in the cotton-tobacco belt, Scotland leading with $2,716, followed by Greene,
Edgecombe, Hoke, and Wilson in the order named—all of them producing more
than $2,000 per farm worker.
But in accumulated wealth in farm properties per country inhabitant, the
order changes. See the table in an early issue of the News Letter.
W. H. Atkinson, Washington, D. C.
Department Rural Social Economics, University of North Carolina.
Rank
Counties
Average
Rank
Counties
Average
1
Scotland
.... $2,716
61
Onslow, k
$861
2
Greene
2,164
52
Caswell
860
3
Edgecombe ........
2,065
;53
Tyrrell
849
4
Hoke
2,020
54
Lincoln
826
5
Wilson
2,003
65
Moore
809
6
Pitt:
1,969
66
Pender
806
7
Robeson
1,942
56
Rowan
806
8
Lenoir
1,910
58
Iredell
799
9
Nash
1,760
59
Stokes
779
10
Martin
1,5^7
60
Gates
777
11
Richmond
1,557
61
Guilford
762
12
Jones
1,536
62
Catawba
752
13
Johnston
1,620
62
New Hanover
752
14
Wayne.
1,461
64
Surry
725
15
Beaufort..
1,408
65
Montgomery
719
16
Craven V
1,376
66
Orange
711
17
Chowan
1,360
67
Durham
.... 705
18
Pamlico ^
1,339
68
Davie
686
19
Duplin
1,318
69
Alamance
676
20
Cumberland
1,309
70
Yadkin
662
21
Halifax
1,304
71
Stanly.
.,... 652
22
Hertford
1,272
72
Davidson
644
23
Anson
1,251
73
Chatham
629
24
Harnett
1,232
74
Rutherford
601
25
Columbus
1,202
75
Brunswick
576
26
Bertie
1,167
76
Polk
665
27
Vance
1,149
77
Alexander
660
28
Sampson
1,138
78
Randolph
500
29
Washington
1,134
79
Haywood
463
30
Franklin
1,077
80
Caldwell ...
437
31
Currituck
1,072
81
Alleghany
436
32
Wake
1,069
82
Madison
432
33
Granville
1,060
83
Buncombe
424
34
Cleveland
1,068
84
Transylvania
410
35
Perquimans
1,049
85
Clay
398
36
Camden
. .. 1,035
86
Burke
386
37
Carteret
1,024
8-7
Macon
380
38
Pasquotank
1,018
88
Yancey
' 368
39
Gnhfirrns
1,010
89
Hpndersnn.
39
Northampton
LOlO
90
Ashe
....
335
41
Bladen
1,003
91
Watauga
331
42
Hyde
999
92
Cherokee
330
43
Mecklenburg
998
93
Mitchell
321
44
Lee
958
94
McDowell
314
45
Person
948
95
Jackson
309
46
Rockingham
944
96
Wilkes
300
47
Union
938
97
Swain
294
48
Gaston
920
98
Dare
292
49
Warren
911
99
Graham
283
60
Forsyth
890
100
Avery :...
263