This definition is taken from "Ten Lessons in Thrift," issued by the Treasury Department of the United States Government (February, 1919). The United States Government sent out these lessons because "America to-day stands in the position in which all her economic problems must be solved through thrift … Unless our people gain a deep, sincere appreciation of the absolute necessity for thrift, we cannot hope to hold the proud position we occupy as the flag bearer of nations …" [Footnote: S.W. Strauss, President American Society for Thrift, in "The Patriotism of War Savings" (National Education Association pamphlet, THRIFT, 1918)]
The great war taught us some lessons about the importance of thrift to the nation. The enormous expenses of the war were paid and the armies and the civilian populations of the countries at war were fed very largely by the combined small savings of our people. Nearly 20 million people contributed to the fourth liberty loan, by which almost seven billion dollars were raised, an average of about $350 for each contributor. Almost every one bought war savings stamps, by which about a billion dollars were raised in 1918. Practically all this money came from savings. Enormous sums were also given to the Red Cross and other causes. To do this people saved and sacrificed "until it hurt." The provisioning of our armies and of the needy peoples of Europe was made possible by the saving, in American homes, of slices of bread, of teaspoonfuls of sugar, of small portions of meat and fats.
Thrift, however, is not merely a war necessity. "The time when thrift shall not be needed—needed as vitally as food itself—will never come … Through thrift alone can the rebuilding come—the rebuilding of America—the rebuilding of the world … Thrift is patriot ism because it is the elimination of every element that tends to retard…" [Footnote: S W Strauss, "The Patriotism of War Savings"]
Thrift is necessary both for individual success and for good citizenship. It is only by thrift that the individual may in some measure repay others for the care he himself received during dependent childhood, and provide, during his productive years, for the "rainy day" of sickness and old age. It is by thrift that CAPITAL is accumulated with which to carry on the world's work. The citizen who saves and invests his savings in a home, in business enterprises, in bonds or savings stamps, not only makes his own future secure, but becomes identified with the community and takes a greater interest in it. The thrifty citizen inspires the confidence of the community, and acquires an influence in community affairs that the unthrifty citizen does not enjoy. Finnish farmers in a certain section of New England are said to be able to obtain credit from neighboring bankers and businessmen more easily than many of their neighbors, and to be considered as especially desirable citizens, because of their reputation for thrift and honesty. Thrift is often confused with stinginess and selfish ness. On the contrary it alone makes generosity and service possible.
"Thrift is the very essence of democracy." For democracy means freedom, equality of opportunity, "self-determination." No man is a greater slave than one who is bound and driven by financial necessity. By thrift the mind is "unfettered by the petty annoyances that result from improvident ways." Thrift means providing for the future. There is nothing in the world that will so establish one's faith in the future and that will, therefore, give that freedom of spirit upon which democracy depends, as the wise use of to-day and of to-day's resources.
"Every man must practice thrift and every man must have the CHANCE of practicing it." It is a RIGHT as well as a duty. Before the war it was said that four fifths of the wage earners of our country received less than $750 a year for their labor. Studies in various cities also showed that an average family of five could not maintain health and efficiency on an income of less than from $750 to $1000. Under such circumstances thrift is the strictest necessity, but it is a thrift that means pinching economy and the sacrifice of health and efficiency. It is not the thrift that provides for the future and gives freedom to the individual, the thrift that is "the essence of democracy itself." Every man should have an opportunity to earn a "living wage," which includes an opportunity to provide for the future. Democracy is not complete until that opportunity is afforded.
Thrift, or the good management of the business of living, is shown (1) in earning, (2) in spending, (3) in saving, and (4) in investing.
(1) Since the earning of a living was the subject of Chapter XI, we need not dwell upon it now except to note that a thrifty person is an industrious person—he makes wise use of his time; and also to note that many of those who are now in want, or who, in advanced years, are receiving small wages, owe their condition to a failure at some time or other to make use of the opportunity for thrift. Many people do not recognize the opportunity when it is presented, or lack the wisdom or the courage to seize it. Thrift involves MAKING A CHOICE, and in many cases a wise choice requires courage as well as wisdom. It is a choice between the satisfaction of present wants and the sacrifice of present enjoyment for the sake of greater satisfaction and service in the future.
When a boy in school has a chance to take a job that will pay him wages, he has to make a choice between it and remaining in school. It may seem to be the thrifty thing to go to work; but real thrift is shown by careful choice of vocation, and by thorough preparation for it, even though it requires sacrifices that seem difficult (see pp. 137, 139).
We may note here, also, that physical fitness is essential if earning power, which means power to perform service, is to be fully developed. The "conservation" of health and life is so important that a chapter is devoted to it later (Chapter XX).
(2) After money has been earned, thrift shows itself first of all in the way the money is spent; and many of us have the spending of the money that some one else has earned. Every time we spend a nickel or a dollar we make a choice—we choose to spend or not to spend, how much we shall spend, for what we shall spend.
A lawyer in a small town reports that in one month he made out the necessary papers to enable 75 men to mortgage their homes to buy automobiles.
Butchers say that during the war they more often sold expensive cuts of meat to wage earners who were by no means well-to-do, but who happened for the time to be getting good wages, than to people of larger means. One reason, perhaps, for extravagance in food and clothing on the part of unintelligent people who find themselves unusually prosperous, is that they see no better way to spend their money. Those who find pleasure in books, in education for their children, in travel, in investing money in serviceable enterprises, and in the higher things of life, have to make A CHOICE in regard to what they shall enjoy, and as a rule prefer to sacrifice the grosser pleasures.
People, and especially young people, need a certain amount of sweets in their diet. But when we know that the candy bill of the people of the United States amounts to $400,000,000 a year, that this is almost as much as the total amount spent for public education, that it is about double the amount used to keep Belgium supplied with food for a year during the war, or that it will buy 234 million bushels of corn at $1.70 a bushel, we may well think twice before deciding to spend MUCH money for candy.
The few cents difference in the price of two articles between which we must choose, and the nickels we spend for immediate enjoyment, may seem to amount to very little; but the New York City street railways collected in a year $95,000,000 in five-cent fares, and the Woolworth Building in New York, one of the largest office buildings in the United States, was built from the profits of "5 and 10 Cent Stores." One thrift stamp a week amounts in five years to $65, and 14 cents a day at 4 per cent interest amounts in twenty years to more than $1500. In one of the "Ten Lesson in Thrift," the following "tests in buying" are given:
Do I need it?
Do I need it now?
Do I need something else more?
Will it pay for itself in the end?
Do I help or injure the community in buying this?
Do you have instruction in your school in home economics that relates to wise spending or buying?
If you do not have such instruction, apply to the home demonstration agent in your county (if there is one), or write to your state agricultural college, or to the States Relations Service, Department of Agriculture, Washington, D.C., for circulars or bulletins relating to thrift in buying food, clothing, etc.
In writing for such material, why is it an example of thrift to ask for ONE copy of EACH publication for your CLASS or for your SCHOOL, rather than to ask for a copy for each pupil?
In what ways is thrift shown by having a class committee write one letter making the request for the class instead of having each member of the class write?
Has any home demonstration work relating to thrift been conducted in your community? What methods were employed, and what results achieved?
Who in your family makes most of the expenditures for the family living?
For what items in the family living is most of the money spent?
What are some of the things that have to be considered in buying food? clothing? house furnishings? books? amusements?
Discuss the topics mentioned in the following statement of "values in buying" (from "Ten Lessons in Thrift"):
Food: nutrition, healthfulness, cleanliness, attractiveness, flavor, quality, price, economy in preparation (of time, strength, fuel, utensils), buying from bulk or in package, buying in quantity or small unit, buying for the day or laying in stores, calculation of portions, calculation of meals, varied diet.
Clothing: design related to material, color, and becomingness; style, durability; adaptability to fine or rough wear, to repair and remaking; suitability to season, health, occupation, comfort; home-made VERSUS ready-made; conditions of manufacture, use of child labor, the sweat shop, the living wage, health.
Make a study at the grocery of the relative prices of articles bought in small and large quantities: for example, laundry soap by the bar, by the quarter's worth, by the box; canned goods by the can, by the dozen, and by the case; flour by the pound, by the 25- pound sack, 50-pound sack, by the barrel; etc.
Make a study of the relative prices of articles in bulk and in package; for example, vinegar by the bottle and by the gallon; bacon in bulk and in jars, etc.
Why may it be economy to buy some food articles in packages rather than in bulk, even at a higher price? Give examples.
Which is likely to be more economical, to buy groceries by telephone or in person? To buy by mail order or at the store in town? Why?
At Christmas time the Park View community center in Washington, D.C., ordered 140 turkeys from a rural neighborhood center in Maryland. The turkeys were brought by the producers to the schoolhouse of the rural neighborhood, taken by a postal service motor-truck to the schoolhouse of the Park View center in Washington, and from there distributed to the 140 families. The city buyers paid an average of 15 cents a pound less than the price prevailing in the Washington markets, and the producers received 6 cents a pound more than the Washington markets were paying.
Why was there a saving to both producer and consumer in the above case? What costs of marketing were cut out or reduced?
What is the "middleman"? Does he perform a real service to the community? Should he be paid for his service? Why? Is it just that the middleman should be "eliminated" by cooperative marketing and buying organizations? Why?
Is there any cooperative buying organization in your community? If so, how has it benefited the community? If not, why? (Consult your parents, your county agent, and others.)
Get publications from your state agricultural college relating to cooperative buying and selling.
Wise expenditures depend not only upon knowledge of prices and qualities, but also upon good management, as in planning ahead. One plan that has been the means of lifting many individuals and families out of financial difficulties and of enabling them to lay by as savings a portion of their income, however small the latter may be, is the BUDGET, which means the apportionment of expenditures according to a plan laid out in advance. No budget can apply to all families alike, but the following illustrates the principle:
House (rent, taxes, insurance, repairs)……………………25%
Food (all expenditures for the table, ice, etc.)……………30%
Clothing (materials and making, repairing, cleaning, pressing, millinery, shoes)……………………………………….13%
Housekeeping (labor and materials for laundry, fuel and light, telephone, supplies, and furnishings)……………………..12%
Educational (school and school books, club dues, church and charity contributions, gifts, books, magazines, newspapers, amusements, medical and dental treatment)……………………………..6%
Luxuries (all items not necessaries and not coming under "educational," such as candies, etc.)………………………4%
Savings………………………………………………..10%
Total…………………………………………………100%
Before a budget can be planned, and in order to know whether it is being lived up to, it is necessary to keep accounts of receipts and expenditures. With such accounts, it is possible to determine where savings can be made under some heads and where, perhaps, it is necessary or advisable to spend more.
Is a budget used in your home? Find out from your parents their reason for using, or not using it.
Could you use a budget in your own personal affairs?
Find out whether a budget system is used by your local government and your state government in apportioning expenditures.
How may we "budget" our time? Is the time you spend in school "budgeted"? Make a daily time budget for yourself.
When is clothing a necessity and when a luxury? [Footnote: This and the following topics are adapted from "Ten Lessons in Thrift."]
When is food a necessity and when an amusement?
When is amusement education and when a frivolity?
When is fuel an item in rent and when current housekeeping expense?
When are club dues education and when amusement?
When is vacation health and when amusement?
When is the theater amusement and when indulgence?
When is rent a necessity and when an extravagance?
[Footnote: From "Suggestion for Home Demonstration Agents regarding Methods of Teaching Thrift," States Relations Service Circular, Dec. 27, 1918.]
(3) The object of thrift in spending is both to get the greatest value for our money now and to insure savings that will provide for the future. Every budget should make as definite provision for savings as for rent or clothing. The purpose of a budget and of accounts is to assure a surplus rather than a deficit. Successful men and women make it a practice always to spend less than they earn, no matter how little they earn, and they cannot be sure of this without planning ahead and keeping accounts. Saving in this way is largely a matter of habit; but it is astonishing how many fail to form the habit. Court records show that out of every 100 men who die, 82 leave no income-producing estates, or that about 85 per cent who reach the age of 65 are dependent upon relatives or upon the community. "Out of every 100 widows, only 18 are left in comfortable circumstances, while 47 are obliged to go to work and 35 are left in absolute want." [Footnote: S.W. Strauss, "The Greater Thrift," National Education Association PROCEEDINGS, 1916, p. 278.]
Wise buying means saving money; and so does the wise use of what we buy. It is said that an American ship can be distinguished from the ships of other nations in harbor by the flocks of gulls that hover around to feast on the food thrown overboard. Whether this is true or not, Americans have a reputation for wastefulness. It has been called our chief national sin. It is said that a family in France can live in comfort on what an American family in the same circumstances ordinarily throws away. An average load of garbage in New York City has been shown to contain fifty dollars' worth of good food materials.
Investigations by the Food Administration showed that there is enough glycerine in a ton of garbage to make explosives for 14 shells, enough fat and acid to make 75 bars of soap, and enough fertilizer to grow 8 bushels of wheat. It is said that 24 cities wasted enough garbage to make 4 million pounds of nitroglycerine, 40 million cakes of soap, and fertilizer for 3 million bushels of wheat. On the other hand, 300 cities produced 52 million pounds of pork by feeding their garbage to hogs.
The Department of Agriculture has shown that the waste of a half- cup of milk daily by each of the 20 million families in the United States would equal in a year the total production of 400 thousand cows; that one ounce of meat or fat saved daily would in a year mean 875 thousand steers, or a million hogs; and that if 81 percent of the whole wheat were used in bread instead of 75 percent, the saving in a year would feed 12 million people. During the war our government organized a campaign for the salvage of "junk," and the total amount collected had a value of 1 1/2 billion dollars. The school children of Des Moines, Iowa, are reported to have gathered and sold two thousand dollars' worth of waste paper in one week, and those of many other communities obtained similar results.
Every successful business man is constantly vigilant to discover and remedy waste in his business—waste of materials, time, and effort. Many of the most valuable products in certain industries are "by-products,"—that is, products produced as an incident to the main industry and from materials that otherwise would have been wasted. In the manufacture of gas from coal, for example, important by-products are coke, tar, and ammonia. There has been great waste in the lumber industry, but now practically every scrap from the tree may be used. In the Forestry Products Laboratory at the University of Wisconsin, a process has been discovered of producing from 15 to 25 gallons of wood alcohol from a ton of sawdust—and sawdust has many other uses. These are only illustrations. Scientists and inventors, many of them employed by the government, are constantly at work finding uses for waste products.
Wastefulness is found in great variety in farming activities. For example:
Why plant seed only 60 or 70 per cent of which will germinate when, for a few dollars extra and a little work, seed may be procured that will average 90 to 95 per cent in the germination test? Why purchase or cultivate a worthless crab apple tree or a hybrid when Rome Beauty, Northern Spy, or Grimes Golden, and other standard varieties of apples may be secured for a few additional cents? Why feed and care for a "scrub" pig, calf, or colt when it will bring at maturity only half or two thirds the price of a thoroughbred? … It is not thrift to invest money in second-rate products.
Some farmers are so careless … that they do not husk their corn in the fall but leave it standing in the field until late winter or early spring. By this time the fodder is somewhat decayed and unfit for feeding purposes. Possibly a third of the corn has been eaten by the birds, a third of it has rotted, and a third of it remains in a damp and moldy condition. … Many boys could make good wages by going over the corn field at cutting time and collecting the ears lying on the ground. … Often a farmer will cut down his hay, paying no attention whatever to the reports of the weather bureau … Apples shaken from the trees by the wind decay on the ground …
The bearings of mowing machines and reapers often suffer excessive wear because the owner neglects to keep them properly oiled. Often a wheat drill, a mowing machine, a threshing machine, or an engine is left out of doors for a whole year, or for several months after the farmer has ceased to use it. A good piece of machinery, if judiciously used, properly lubricated, and put away in a dry place, may last from ten to twenty years, while the life of such machinery will only be about half as long without proper care. If a wooden handle rots loose from its fastenings it is an indication that the handle has not been thoroughly dried after it has been used. Tools rust out very readily if they are not kept dry and thoroughly oiled … So careless are some farmers that hoes, shovels, mattocks, wrenches, saws, and axes are thrown down in the field or woods to lie there until it is again necessary to use them. It often takes hours to find an article thus misplaced or thrown aside. It is economy of time to know just where to find everything on the farm. [Footnote: The Teaching of Thrift, by H. R. Bonner, Assistant State Superintendent of Schools, West Virginia, pp. 22, 23.]
The topics on page 180 from publications of the States RelationsService of the Department of Agriculture are suggestive:
Preventing loss of food in the home:Suitable food storage places and equipment.Essentials of a good refrigerator.The care of winter vegetables and fruit.The care of perishable vegetables and fruit.Prevention of spoilage of milk, meat, and fish.Preservation of eggs.Care of bread and other baked products.What should not go into the garbage pail.Good cooking and attractive serving.Failure to use perishable food promptly.Failure to use left-overs completely.Failure to use all food materials (fats, meat and fish bones, etc.).Leaving small portions of food in mixing and cooking dishes.Lack of accurate measuring and mixing, so that food is not palatable.Allowing food to be scorched or otherwise spoiled in preparation.Providing over-generous portions in serving.Failure to eat all food served.Preventing loss of food in the market:Sanitary display cases for food.Prevention of "sampling" and handling of food.Food protection in food carts and delivery wagons.Proper care of milk.Proper care of meat and fish.Prevention of cereal products from deterioration.Protection of fruits and vegetables.The care of bread and bakery products.Careful selection of food.Following are special points which might be discussed:The well-planned house.Saving steps by better arrangement of equipment.Lessening work by systematizing it.Menu-planning for lessened work in preparation.Household lighting.Labor-saving equipment in the laundry, the kitchen, and the sewing room.Labor-saving devices for house cleaning.Leading a simple life.
Apply to your home demonstration agent, or write to States Relations Service, for publications relating to thrift in food, clothing, fuel, etc.
(4) Thrift involves a wise use of savings. They may be invested in a home, a wise use because of the satisfaction that a home produces. If the home is well located, well built, and well kept up, it will probably also increase in money value. Savings may be invested in machinery for farming, manufacturing, or mining; in a stock of goods to be sold at a profit; in houses or office buildings to be rented to others; or they may be lent to others who pay interest for their use. In all these cases money represents CAPITAL—capital being the machinery or tools and other equipment with which wealth is produced.
Capital is brought into existence in only one way—that is, by consuming less than is produced. If one has a dollar one can spend it either for an article of consumption, say confectionery, or for an article of production, say a spade. He who buys a spade becomes a capitalist to the amount of a dollar—that is, he becomes the owner of tools. The process is precisely the same whether the amount in question is a dollar or a million dollars. [Footnote: T.N. Carver, "How to Use Farm Credit," FARMERS' BULLETIN 593, U.S. Department of Agriculture, p. 2.]
Every business requires capital, some more than others. Farming requires more capital to-day than formerly because of the increased use of machinery. The necessary capital must either be saved by the person who wants to use it, or borrowed from others who have saved it.
The advantage of borrowing is that one does not have to wait so long to get possession of the tools and equipment. One can get them at once and make them produce the means of paying for themselves. Without them the farmer's production might be so low as to make it difficult ever to accumulate enough with which to buy them. With their help he may be able to pay for them—that is, to pay off the debt—in a shorter time than it would take to accumulate the purchase price without them. That is the only advantage of credit in any business, but it is a great advantage to those who know how to use it. [Footnote 2: T.N. Carver, "How to Use Farm Credit," FARMERS' BULLETIN, 593, U.S. Department of Agriculture, p. 2.]
Credit is simply a person's ability to borrow and depends upon the confidence that others place in him. This confidence depends on his reputation for honesty and his known ability to repay. A man, as a rule, has to HAVE something—land or property of other kind— that he can offer as security before he can borrow much. It is for this reason that thrift is essential to a man's credit—thrift and honesty.
There is no magic about credit. It is a powerful agency for good in the hands of those who know how to use it. So is a buzz saw. They are about equally dangerous in the hands of those who do not understand them. … Many a farmer would be better off to-day if he had never had a chance to borrow money at all, or go into debt for the things which he bought. However, there is no reason why those farmers who do know how to use credit should not have it.
Shortsighted people, however, who do not realize how inexorably the time of payment arrives, who do not know how rapidly tools wear out and have to be replaced, or do not keep accounts in order that they may tell exactly where they stand financially, will do well to avoid borrowing. Debts have to be paid with deadly certainty, and they who do not have the wherewithal when the day of reckoning arrives become bankrupt with equal certainty.
On the other hand there is nothing disgraceful in borrowing for productive purposes. The feeling that it is not quite respectable to go into debt has grown out of the old habit of borrowing to pay living expenses. That was regarded, perhaps rightly, as a sign of incompetency. … But to borrow for a genuinely productive purpose, for a purpose that will bring you in more than enough to pay off your debt, principal and interest, is a profitable enterprise. It shows business sagacity and courage, and is not a thing to be ashamed of. But it cannot be too much emphasized that the would-be borrower must calculate very carefully and be sure that it is a productive enterprise before he goes into debt. [Footnote: T. N. Carver, "How to Use Farm Credit," p. 2.]
Even though a farmer be thrifty, industrious, and honest, the conditions of farm business are such that it has not always been easy for him to borrow capital. Here again cooperation helps. In some of our states the law permits the organization of CREDIT UNIONS. The members are farmers of a neighborhood or district and, therefore, are acquainted with one another. Each member must buy shares of stock, which provides a certain amount of funds. The union may also receive deposits of money, paying interest on them as a savings bank would do. This increases the funds and also encourages thrift on the part of the farmer. Idle money, or money that might otherwise be spent unwisely, is thus made productive. In some unions, as in Massachusetts, children are encouraged to deposit their small savings, and in some cases half the capital of the union is made up of such small savings deposits. From these funds loans are made to members of the union on reasonable terms, provided they are to be used for productive purposes. The union may also borrow money from the bank in town on the COLLECTIVE CREDIT of its members for the improvement of agricultural conditions in the neighborhood.
Similar aid to the farmers' credit has been given by the national government through the Federal Farm Loan Act of 1916. This Act created a Federal Farm Loan Board in the Treasury Department, and twelve Federal Land Banks, one in each of twelve districts into which the United States was divided for that purpose. Through the organization provided by the board and the banks, a farmer may now borrow money on more favorable terms, but only on condition that he agrees to use the money for the purchase and improvement of land or for equipment, and to engage in the actual cultivation of the farm for the development of which he desired the money.
The provisions of the Federal Farm Loan Act afford an excellent illustration of how government promotes citizen cooperation. The government does not lend the money to the farmers; it merely provides the machinery by which the farmers may cooperate among themselves, and also secure the cooperation of investors in all parts of the country, to obtain capital necessary for the proper development of the land. As a rule the farmer can borrow money from the land bank only by being a member of a local "national farm loan association." His dealings with the bank are through this association. His membership in the association gives him better standing and secures for him better terms than he could get if acting separately. Moreover, the money that the bank lends to the farmer comes from the farmers who belong to the association, and from investors in all parts of the country, who buy shares of stock in the bank and bonds issued by the bank on the security of the farmers' land and equipment. The whole scheme is one of cooperation which would be impossible but for the legislation, financial support, and supervision of the government at Washington.
It will be seen then that much of the capital that a farmer uses is borrowed, and is made up of small savings of other people—some of them his neighbors, others in distant places. The same is true with respect to the capital used in all other businesses. The enormous capital of railroads is derived chiefly from the savings of millions of people, some of whom buy shares of railroad stock directly, but most of whom deposit their savings in banks or other institutions which, in turn, lend it to the railroads or invest it in their stock. The farmer or the school boy who has a savings account in a neighboring bank thus may become a partner in various business enterprises of the country. His dollars or dimes, added to the dollars and dimes of many other people, are used to buy machinery and tools and materials, and to pay labor. Because of the service performed by his savings he receives interest on his money.
There are many opportunities for young people to invest savings in productive enterprises,—perhaps more in rural communities than elsewhere. The different kinds of boys' and girls' clubs illustrate the variety of channels through which money may be both earned and invested. As soon as a boy invests a little money in a pig, or a calf, or garden tools, he becomes a capitalist to that extent. It is to be hoped that not many have the experience of the boy described in the following lines: [Footnote: Read by R.H. Wilson, in an address before the National Council of Education, N.E.A. PROCEEDINGS, 1917, p. 133.]
Johnnie bought a little pig with money he had earned,He named her Nell and fed her well, and lots of tricks she learned.But Nellie grew to be a sow, had piggies quite a few,Then father up and sold them, and kept the money, too.
Johnnie took a little calf as pay for hoeing corn,He loved the calf and the calf loved him as sure as you are born.The calfie grew to be a cow, as all good calfies do,Then father up and sold her, and kept the money, too.
Now, Johnnie loved his little pets, but father loved the pelf,So Johnnie left his father's farm and struck out for himself.Said Johnnie's pa, one summer day, "I often wonder whyBoys don't like life upon the farm, 'the city' is their cry."
"It always will be strange to me," continued Johnnie's pa,"It only goes to prove, though, how ungrateful children are."When Johnnie heard what father said, he gave a bitter laugh,And thought of his empty childhood and of his pig and calf.
Savings may be deposited in savings banks, which accept small deposits and pay compound interest, usually at a rate of 3 per cent or 3 1/2 per cent. Such banks operate in accordance with state or national laws to protect the depositor against loss. Many schools conduct school savings banks. The pupils bring their small amounts to the teacher or to some pupil acting as "teller," the collected funds then being deposited in some bank in the community. These school banks promote habits of thrift and afford experience in business methods, besides bringing into use in the world's work many small amounts of money that would otherwise be lying idle or spent unwisely.
In 1910 Congress established the Postal Savings System under which any post office may be a savings bank. Any person over ten years of age may deposit money at the postal savings bank in amounts of from $1.00 to $25.00, receiving from the postmaster POSTAL SAVINGS CERTIFICATES as evidence of the deposit. Provision is made for savings accounts of less than a dollar by selling POSTAL SAVINGS STAMPS at ten cents each, ten of which may be exchanged for a dollar certificate. Two per cent interest is paid on postal savings, but savings certificates may be exchanged for POSTAL SAVINGS BONDS, bearing interest at the rate of 2 1/2 per cent.
The purchase of Liberty Bonds or Savings Stamps and Thrift Stamps is a good investment and a patriotic act. The money raised in this way is used for the national defense and for reconstruction after the war. The Savings Division of the United States Treasury Department carries on a campaign of thrift education. Among other things, it promotes the organization of savings societies and thrift clubs, because thrift is a habit which is encouraged by the example and cooperation of others. In Randolph County, Indiana, for example, each consolidated school has its thrift club, and over 75 per cent of the pupils are members. One of these schools sold over $11,000 worth of thrift stamps, and others sold from $1500 to $3500 worth. Savings societies exist among the workmen of many industries, and employers report that these have increased the purchase of homes, and have resulted in a saving of materials and tools because of the habits of thrift established.
Among the many other agencies to promote thrift we shall only mention BUILDING AND LOAN ASSOCIATIONS and INSURANCE. The purpose of building and loan associations is to help people of small means to purchase or build homes. Insurance affords a particularly good illustration of organized cooperation. The PREMIUMS paid by thousands of policy holders produce a large sum of money, part of which goes to pay the expenses of the insurance company, but most of which is invested in enterprises that cause the amount rapidly to increase. Out of this fund the occasional losses of individuals are paid. Life insurance is a good form of investment. It provides for the future of the family of the insured in case of his death. By the ENDOWMENT plan the insured may himself receive, at the end of a specified number of years, all that he has paid in premiums together with interest.
During the war our national government itself insured the soldiers against death or injury. This was known as WAR RISK INSURANCE. At the end of the war the soldier had the privilege of converting the war risk insurance into a regular form of insurance, still provided, however, by the government itself. One of our states also, Wisconsin, sells life insurance to its citizens.
As we proceed with our study we shall encounter other aspects of thrift in various chapters. As a nation we may be thrifty or unthrifty in the use of our resources (see Chapters XIV and XV). Thrift is as essential in our "community housekeeping," which is carried on by government, as in our homes and business. But we can hardly expect thrift to become a national characteristic unless it first becomes a personal habit.
Are you a capitalist? If so, explain in what way.
What forms does the capital take with which your father does business?
What capital does an Eskimo have? the American Indians when the country was first settled?
Do you belong to a thrift club? Would it be desirable to organize one in your school? Confer with your teacher and principal about it. Write to the Savings Division, U.S. Treasury Department, Washington, D.C., for literature regarding organization.
Is there a credit union, or a savings association, or other organization to promote thrift in your community? If so, find out how it operates.
Write a story on the subject, "What my five dollars may accomplish after I put it in the savings bank, before it comes back to me with interest."
Why are people willing to accept a lower rate of interest from a postal savings bank than from an ordinary savings bank?
In LESSONS IN COMMUNITY AND NATIONAL LIFE:
Series A: Lesson 6, Capital.Lesson 13, U.S. Food Administration.Lesson 14, Substitute foods.Lesson 15, Woman as the family purchaser.Lesson 21, Borrowing capital for modern business.Lesson 22, The commercial bank and modern business.
Series B: Lesson 7, An intelligently selected diet.Lesson 22, Financing the war.Lesson 23, Thrift and war savings.
Series C: Lesson 7, Preserving foods.Lesson 8, Preventing waste of human beings.Lesson 14, The U.S. Fuel Administration.Lesson 16, The Commercial Economy Board of the Councilof National Defense.
Write Savings Division, U.S. Treasury Department, for materials; especially "Ten Lessons in Thrift," and "Teaching Thrift in Elementary Schools." Both of these contain lists of readings.
The Post-Office Department has publications descriptive of the postal savings service.
Farmers' Bulletins, U.S. Department of Agriculture, relating to thrift.
Federal Farm Loan Act, How It Benefits the Farmer, Farmers'Bulletin 792.
See references in footnotes in this chapter.
Dunn, THE COMMUNITY AND THE CITIZEN, Chapter XIV, "Waste andSaving."
The local public library, the State Library, and the State Agricultural College, will doubtless furnish lists of references and perhaps provide materials.
The United States Bureau of Education will send list of references.
If you wanted to buy a farm, what facts would you investigate in regard to land and location?
What farm in your neighborhood comes nearest to meeting your requirements in these matters? Explain fully why.
Make a sketch map of a farm in your neighborhood, preferably one upon which you have lived, showing as nearly as you can the boundaries, the position of highlands and lowlands, marshes, timber, streams, etc. Also the position of house, barns, bridges, roads, and other important features.
Did the features of the land indicated on your map determine the location of the buildings? of the roads and bridges? the kinds of crops raised on different parts of the farm?
Should the surface features of the land be taken into account in determining the position of the house and barns in relation to each other? Why?
Has the character of the land influenced the life of the farmer's family in any way? Explain.
Directly or indirectly, geographical conditions affect every aspect of community life and help or hinder us in satisfying all of our wants (see Chapter I). Their influence is chiefly felt, however, in their relation to the economic interest of the people; that is, in relation to earning a living and the production of wealth.
Every step that man has taken to make his relations with the land permanent and definite has been a step of progress in civilization, as when, for example, the savage hunter became a herdsman, or the herdsman an agriculturist. We live to-day in an age of machinery, which is a result of turning to our use the metals from the depths of the earth and the power derived from the forces of nature, as in the application of steam, electricity, and the explosive force of gasoline. Many have had a part in this work of establishing relations with the land: explorers; scientists who have discovered the uses of our varied mineral and vegetable resources and how to make the forces of nature serve us; engineers who have built our railroads and bridges and tunneled our mountains. A most important part has been taken by those who win their living directly from nature's resources—the woodsman, the miner, the farmer; and the service of the farmer has been especially great in giving stability to our community life.
Those American Indians were most civilized who had developed agriculture to the highest point, because this meant a settled life. If we recall the story of the colonization of America we shall remember that it was not successfully accomplished by the gold hunters and fur traders who came first, but only when those came who, as farmers, began to cultivate the soil. Later, as the population moved westward across the Alleghenies into the Mississippi Valley and on to the Pacific Coast, the hunters and trappers were the scouts who found the way, while the real army that took possession of the land was an army of farmers.
Did the American Indians who formerly lived in your locality lead a settled life? Why? Were they agriculturists to any extent? If so, what do you know of their method of agriculture?
Of what pastoral peoples have you read? Why was their life more settled than that of hunting peoples? Why less settled than that of farmers?
Why were settlements by gold hunters and fur traders likely not to be permanent?
Do you know of important mining towns that have had a brief life?
The story of how individuals acquired the right to own land is an interesting one, but too long to be told here. The right has long been recognized and protected by government. If your father owns a piece of land he doubtless has a DEED for it, containing an accurate description of the land and giving him title to ownership. In each county there is an office of government where all deeds are recorded—the office of the recorder or register of deeds.
The record of every piece of land is thus kept and is open to examination by any one. If a man wishes to buy a piece of land he will go to the office of the recorder and find out whether the title to the land is clear. Only by so doing may he be protected against error or fraud.
Since lands are likely to change hands a number of times, and since men frequently MORTGAGE their lands as security for loans or other indebtedness, thus giving to others a claim to their land, it is sometimes a tedious and difficult task for a buyer to trace the record back and to be sure that the title to the land is clear. It sometimes requires months. There are lawyers who make a business of examining the records and making ABSTRACTS OF TITLES. This involves expense. Besides, there is always the chance that a mistake may be made somewhere. For this reason some states have adopted a plan known as the TORRENS SYSTEM of land transfer, from the name of the man who devised it in Australia.
Under the Torrens System the government itself, through its proper officer, may examine the title to any piece of land. The land is then REGISTERED, and the owner is given a certificate as evidence. If a mortgage is placed on the land or if it changes hands the transaction is recorded on the certificate and in the office records. A mere glance at the record of registry or at the certificate is sufficient to ascertain the title to the land. Thus time and expense are saved; and moreover the government gives its absolute guarantee to the owner or buyer as to his rights in the land.
The Torrens System is in use in some form in fourteen states of the Union, in the Philippines and Hawaii, and in various other countries of the world.
When settlers began to occupy the lands west of the Alleghenies, many of them laid claim to tracts without much regard for the claims of others. Boundary lines were indefinite. Where surveys were made they were often inaccurate. Much confusion resulted. Disputes arose that frequently found their way into the courts and dragged on for many years. The government sought to put an end to this state of affairs, and in Thomas Jefferson's administration a survey was begun to establish lines by which any piece of land might be located and defined with exactness.
The government survey was begun by establishing certain north and south lines known as PRINCIPAL MERIDIANS. There are twenty-four of these, the first being the meridian that separates Indiana from Ohio, while the last runs through the state of Oregon. At intervals of six miles east and west of the principal meridians were established other meridians called RANGE LINES. A parallel of latitude was then chosen as a BASE LINE, and at intervals of six miles north and south of the base line were established TOWNSHIP LINES. These township lines with the range lines divide the country into areas six miles square called TOWNSHIPS. A township may thus be located with reference to its nearest base line and principal meridian (see diagram I).
Since meridians converge as we go north (look at a globe), the townships are not exactly square, and become slightly smaller toward the north. To correct this, certain parallels north and south of the base line were chosen as CORRECTION LINES, from which the survey began again as from the original base line.
Each township is divided into SECTIONS one mile square, and therefore containing 640 acres each. These sections are numbered in each township from 1 to 36 as indicated in diagram III. Each section is further subdivided into halves and quarters, which are designated as in diagram IV.
This government survey has been made only in the "public lands" (see below, p. 197). It is still being carried on by the General Land Office of the Department of the Interior. In 1917 more than 10,000,000 acres, or nearly 16,000 square miles, were surveyed. In that year there still remained unsurveyed more than 900,000 square miles of public land, 590,000 of which were in Alaska and 320,000 in the United States proper. In the original thirteen states along the Atlantic seaboard a similar survey has been made, but either by private enterprise or under the authority of the state or county governments. Massachusetts has recently spent a large sum of money in a new survey of the state for the purpose of verifying and correcting doubtful boundaries.
Has your father a deed to the land you live on? If so, ask him to show it to you and explain it. How is the land described?
At the first convenient time, make a visit to the office of the recorder of deeds in your county, and ask to have some of the records shown and explained to you, preferably the record of the property you occupy. Where is the office of the recorder? (A visit of this sort should be in company with the teacher or parent. A class excursion for this and other purposes may well be arranged for.)
What is a MORTGAGE? An ABSTRACT OF TITLE? (Consult parents.)
Is the Torrens System in use in your state?
Is your state a "public land state"?
From the deed to your father's land, or from the records in the recorder's office, or from a map of your county showing the survey lines, locate the land you live on, as indicated in the accompanying diagrams.
In what section and township is your schoolhouse?
Are there still any "public lands" in your state?
Are the boundary lines of farms in your neighborhood regular or irregular? How does this happen?
Do you know of any boundary disputes between farmers or other citizens in your community? What machinery of government exists to settle such disputes?
At the close of the Revolutionary War, the territory of the United States extended west as far as the Mississippi River. That part of this territory which lay west of the Allegheny Mountains had been claimed by seven of the thirteen states that formed the Union; but soon after the war they ceded these western possessions to the United States, having received a promise from Congress that these lands, which were largely unoccupied at the time, should be disposed of "FOR THE COMMON BENEFIT OF THE UNITED STATES." They thus became PUBLIC LANDS; that is, they belonged to the people of the nation as a whole. The common interest in these public lands was one of the chief influences that kept the thirteen states united under one government during the troubled times between the close of the Revolution and the adoption of the Constitution in 1789. As time went on, the public lands of the nation were increased by the acquisition of new territory, [Footnote: Louisiana Territory was acquired in 1803, Oregon in 1805, Florida in 1812 and 1819, Texas in 1845, California and New Mexico in 1846-48, the Gadsden Purchase in 1853, Alaska in 1867.] Of the 3,600,000 square miles comprising the United States and Alaska more than three fourths has at some time been public land; but of this there now remain, exclusive of Alaska, only about 360,000 square miles, much of which is forest and mineral land, unsuitable for agriculture.
To turn this great domain with all its resources to the fullest service of the nation has been one of the greatest problems with which our government has had to deal. In the early part of our history various plans were tried by which to secure the occupancy and development of the agricultural lands by farmers, until in 1862 the first Homestead Act was passed by Congress.
About 10,000,000 acres of the public land were given to soldiers who fought in the Revolution and in the War of 1812 in recognition of then-service to their country. About 60,000,000 acres were later given to veterans of the Mexican War.
Until the year 1800 the plan in use for the disposition of the public lands was to sell large areas to colonizing companies, with the expectation that these companies would find settlers to whom they would sell the land in small quantities at a profit. This was not successful, as actual settlers found it difficult to get land they wanted at prices they could afford.
From 1800 to 1820 lands were sold in small areas ON CREDIT. Many bought more than they were able to pay for, and much land so disposed of had to be taken back by the government.
In 1820 a third plan was adopted: That of selling land for cash in any quantity to any purchaser. This led to speculation, individuals and companies of individuals buying recklessly, without intention of actual settlement, but with the purpose of selling again at a profit. This brought on a financial panic in 1837.
Then followed the "PREEMPTION" plan, by which actual settlers could "preempt" land (get the first right to it) by merely taking possession and paying a cash price of $1.25 an acre.
The Homestead Act of 1862 was an extension of the preemption plan; but instead of paying a cash price, the settler could acquire the land merely by living on it for a period of five years (now three) and paying fees of about $40.00.
The Homestead Act, like earlier laws, made a direct appeal to men's desire to earn a living, to acquire property, and especially to own homes. It has been modified from time to time, but in all essentials it still remains in force and provides that any citizen of the United States who has reached the age of twenty-one, or who is the head of a family, may acquire a farm on condition of living upon it for a period of three years, cultivating the land and erecting a dwelling, and paying to the government a small fee. The size of the farm that he may so acquire varies according to the nature of the land, but the usual homestead on good agricultural land is limited to 160 acres.
The purpose of the government has been to encourage ACTUAL SETTLEMENT in order to secure the development of the nation's resources, and for this purpose to allow each settler enough land to enable him to support a family in comfort. It was decided that 160 acres of GOOD FARM LAND was enough.
Some portions of the public land, however, are less productive than others. Where the rainfall is slight and where irrigation is impracticable, and yet where crops can be raised by the "dry farming" process, the law allows a settler to take 320 acres.
A settler may also obtain 320 acres in the "desert lands" of some of the western states. These lands may be made productive by irrigation, but the settler must construct his own irrigation system. Originally 640 acres were allowed in such lands, but the amount has been reduced to 320 acres, and the Commissioner of the General Land Office now recommends (1916) that it be further reduced to 160 acres.
In those parts of the desert region which the government has already reclaimed by irrigation, thus making the land extremely fruitful, the amount usually allowed a settler is from 40 to 80 acres.
There are regions where the land is suitable only for stock raising and for forage crops. Here Congress has decided that 640 acres is a fair amount for the support of a family.
Lands that are valuable for their timber and mineral resources are disposed of on different terms, but on somewhat the same principle.
At the close of the war in 1918 a plan was proposed by the Secretary of the Interior to secure the occupation of land by returning soldiers. Since the lands suitable for farming in their natural state have practically all been disposed of; the plan contemplates the reclamation of arid and swamp lands, and of land from which the forests have been cut but which are still covered with stumps. It is proposed that returned soldiers shall be employed by the government in the work of reclaiming the land, and that those who desire to become farmers may buy their farms in the reclaimed lands at a reasonable price, and with a period of thirty or forty years in which to pay for them. The Secretary of the Interior said: "This plan does not contemplate anything like charity to the soldier … He is not to be made to feel that he is a dependent. On the contrary, he is to continue in a sense in the service of the Government. Instead of destroying our enemies he is to develop our resources." Much of the land whose reclamation by and for returning soldiers is thus contemplated is not now public land, but is lying idle in the hands of private owners.
The state of California has recently enacted a law known as the Land Settlement Act, which provides for "a demonstration in planned rural development." "Its first idea is educational, to show what democracy in action can accomplish." Under the terms of this act the state acting through a Land Settlement Board and with the cooperation of experts from the University of California, has purchased several thousand acres of land at Durham, in Butte County, which it sells to settlers on easy terms. It also lends money to settlers for improvement and equipment for the farmers.
The California Land Settlement Act is significant, because it eliminates speculation, it aims to create fixed communities by anticipating and providing those things essential to early and enduring success.
Another feature is the use it makes of cooperation. The settlers are at the outset brought into close business and social relations. It reproduces the best feature of the New England town meeting, as every member of the community has a share in the discussions and planning for the general welfare. This influence in rural life has been lacking in new communities in recent years. In the great movement of people westward with its profligate disposal of public land, settlement became migratory and speculative. Every man was expected to look out for himself. Rural neighborhoods became separated into social and economic strata. There was the nonresident landowner; the influential resident landowner; the tenant, aloof and indifferent to community improvements; and, below that, the farm laborer who had no social status and who in recent years, because of lack of opportunity and social recognition, has migrated into the cities where he could have independence and self-respect, or has degenerated into a hobo.
At Durham, for the first time in American land settlement, the farm laborer who works for wages is recognized as having as useful and valuable a part in rural economy as the farm owner. The provisions made for his home are intended to give to his wife and children comfort, independence, and self-respect; in other words, the things that help create character and sustain patriotism. The farm laborers' homes already built are one of the most attractive features of the settlement; and when the community members gather together, as they do, to discuss matters that affect the progress of the settlement, or to arrange for cooperative buying and selling, the farm laborer and his family are active and respected members of the meetings.
From maps in school histories study the claims of the seven states to western lands.
What is the Ordinance of 1787?
Make reports on the circumstances connected with our various territorial acquisitions.
From whom did the colonists get the right to the land in the original thirteen colonies?
Do you know anyone who has ever taken up a "homestead claim"? If so, learn how it was done.
If possible, get a description of a "land lottery" and a "land rush" in newly opened public lands.
Get all the information you can about the plan to provide land for the soldiers, referred to above. Do you think this is a better plan than that of giving land to soldiers outright? Why? Is your state likely to cooperate with the national government in carrying out this plan? How?
The policy of the government of disposing of the public lands to individuals has of course been of great benefit to the latter; but we should not lose sight of the fact that the national well-being is the first consideration. As the Commissioner of the General Land Office said in a recent report (1916), "Every acre of public land disposed of under this line of legislation is AN INVESTMENT, the profits to be found in the general development of the welfare of the nation at large."
It has been no simple matter to administer our public lands, and mistakes have been made. Sometimes the interests of individuals have not been sufficiently safeguarded. Many settlers have suffered serious loss, and many promising communities have failed, through the taking of homesteads in regions of little rainfall, as in western Kansas and Nebraska. The government now seeks to protect homesteaders against such errors by distinguishing carefully between lands suitable for ordinary agriculture and those suitable only for dry-farming and stock-raising, by informing prospective settlers in regard to the facts, and by allowing larger entries in lands of the latter classes. Another mistake was made in allowing many of the first claimants to stock- raising lands so to locate their claims as to acquire the exclusive use of the only available water supply for miles around, thus making useless other large tracts. This might have been avoided by a little foresight.
On the other hand, the land laws have sometimes been abused. Large quantities of public land have fallen into the hands of speculators whose purpose is not to develop its resources, but to make a profit from the increased value of the land due to the efforts of others. Immense areas of land have thus been withheld from production, or have been made to produce to a limited extent only, to the great loss of the nation.
In the days of transcontinental railroad building, large tracts of land were given to the railroad companies by the government, with the expectation that they would dispose of it at reasonable prices to settlers attracted by the new transportation facilities, and would use the proceeds in railway development. In fact, however, large quantities of this land have been held in an unproductive state for speculative purposes.
An illustration of this is the case of the Oregon and California Railroad land grant, made by Congress in 1869 and 1870, and comprising more than 4,200,000 acres, most of which bore a heavy growth of valuable timber. "This railroad grant … contained a special provision to the effect that the railroad company should sell the land it received to actual settlers only, in quantities not greater than one-quarter section to one purchaser and at a price not exceeding $2.50 an acre. By this precaution it was intended that in aiding the construction of the railroad an immediate impetus should also be given to the settlement and development of the country through which the road was to be constructed."
After selling some of the lands according to the terms of the agreement, the railroad company ceased to live up to these terms and sold large bodies of the land to lumber interests, thus putting a stop to the development of the region in the way intended by the government. The government brought action against the railroad company, the outcome of which is that the government has bought back from the company at $2.50 an acre all of the lands of the grant which remained unsold, amounting to about 2,300,000 acres and valued at from $30,000,000 to $50,000,000.
These lands are being classified "in accordance with their chief value, either in power-site lands, timber lands, or agricultural lands," and are to be disposed of accordingly. The timber will be sold separately from the land, and the land will then be opened to homestead entry.
By this arrangement the railroad company gets for the land all that it was entitled to under the terms of the original grant. In addition, provision is made for the payment to the counties in which the land lies of the taxes which the railroad company has not paid. As the lands are sold, the proceeds are to be divided between the state and the United States, the state receiving 50 percent, 40 percent being paid into the general reclamation fund of the United States (see Chapter XIV, p. 213), and 10 per cent into the general funds of the United States Treasury.
(From the Report of the Commissioner of the General Land Office, 1916, pp. 46-49).
This is a striking illustration of how our government, acting through Congress, the Courts, and the General Land Office of the Department of the Interior, has sought to obtain justice for all parties concerned, and to fulfill the original purpose of securing the development of the land in the interest of the state and the nation.
Something like 133,000,000 acres of our public lands have from time to time been turned over to the states, the proceeds to be used for the promotion of public education, for the construction of roads, and for other purposes (see Chapters XVII and XIX). In some cases these lands have not been used altogether for the purposes for which they were granted. School lands have sometimes been sold at a nominal price to individuals who have reaped the profit, whereas the lands might have been so administered by the states as to have brought large returns for educational purposes. In some cases, state officials have made unwise investments of the funds derived from the sale of the lands, thereby losing them for the use of the state.
The control, or "monopolizing," of the public land by large holders is said to be one of the causes of increasing tenantry (Chapter X, p. 116); for as the available supply of desirable farming land is diminished, the actual home-seeker is driven to take less productive lands, or to purchase from the large holders at a higher price. The more recent land laws limit the amount of public land that an individual may acquire to an area sufficient to enable him to make a comfortable living for a family (see above, p. 199). They also exact from the homesteader an agreement that he will actually occupy and cultivate the land.
The responsibility for the defects in our methods of administering the public lands rests in part upon our governmental representatives, who have not always dealt wisely with the extremely difficult problem. But it rests also upon each individual citizen. There are those, be it said to our shame, who deliberately seek to defeat the purpose of the laws and to appropriate to their own selfish uses the lands which belong to the nation as a whole. There is one division of the General Land Office in Washington known as the Contest Division. Before it come, not only the ordinary disputes that are likely to arise between rival claimants, but also cases of alleged fraud and violation of the land laws. In the year 1916 MORE THAN 12,000 CASES OF ALLEGED FRAUD WERE ACTED UPON, AND NEARLY 12,000 OTHER CASES AWAITED ACTION AT THE END OF THE YEAR! But the responsibility comes much closer home than this. Many of us who would not think of violating the law have failed to appreciate the value of the gifts that nature has given us, and have apparently been "too busy" to inform ourselves as to whether or not our public lands have been administered solely for the purpose to which Congress devoted them just after the Revolution. This, like every other matter of community interest, requires team work.