Prelude to the First Edition
1. Flight from the City
II. Domestic Production
III. Food, Pure Food, and FreshFood
IV. The Loom and the Sewing-machine
V. Shelter
VI. Water, Hot Water, and WasteWater
VII. Education--The Schoolof Living
VIII. Capital
IX. Security versus Insecurity
X. Independence versus Dependence

HOMESTEADING CATALOG
HOME PAGE




    

    
CHAPTER EIGHT
CAPITAL

    JUST what to say about the capitalneeded to establish a homestead is one of the most difficult matters with which Ifind that I have undertaken to grapple. Yet it is one question about which I am askedmore frequently than almost any other by those who express a liking for the way ofliving with which the Borsodi family has been experimenting. Before attempting todeal with the matter, however, I think it important to dispel an illusion under whichmany people who have heard about our experiment seem to labor. Typical of these peopleis one man, connected with one of our agricultural schools, who assumed that becausethe houses, land, machinery, and livestock comprising our homestead represented aninvestment of at least $15,000 (according to his estimate), that therefore the capitalwith which I began the experiment must have been $15,000. "With $15,000,"he wrote me, "I would not need such a homestead in order to make myself independent.Invested in stocks and bonds, that sum would furnish a comfortable living withoutgoing to all the trouble of producing everything for one's own use on a small farm.For most people who desire independence and security the problem is how to get the$15,000 not what to do with it after they get it."

    It is an interesting commentary uponthe tenacity with which even intelligent people maintain conventional illusions thatsuch a letter was written to me after the collapse of the securities market in 1929.In spite of the collapse of the houses of cards which buyers of securities everywherewere discovering they had erected for themselves, this man still believed that dependenceupon investments in stocks and bonds was superior to dependence upon a homesteadequipped with livestock, tools, and machinery with which a family could produce aplentiful living for themselves no matter what happened to the business world. Ifthe depression should have taught him anything, it should have made him see thatstocks and bonds furnish no one real security. The only possible security in ourpresent chaos is direct access to the opportunity to produce for oneself the essentialsof a comfortable living.

    But even if it were true, as my friendlycritic believed, that there were such things as secure securities, the pointremains that in the beginning there was no $15,000 invested in the Borsodi homestead.Certainly I was never confronted with the alternative of investing $15,000 in stocksand bonds or of investing it in a homestead. Yet it is true that today, after twelveyears of slow growth, the homestead does represent a large investment, an investmentmuch greater than the sum at which this critic valued it. It is the way in whichwe started out to live, not the fact that we had the capital before we left the city,which explains our possession today of a fairly well-equipped home. If one can layhands upon just enough with which to start, then a $15,000 homestead should comeultimately by the sheer development which such a way of living makes possible.

    The question, therefore, is not howto secure $15,000, but how to secure enough with which to start. And enough withwhich to start can be saved by many families, I maintain, in spite of the inequalitiesand injustices of our present social system. How much, then, is really needed inthe beginning? That depends in most cases on two things: what sort of income from"jobs" the family can depend upon while it is establishing itself, andhow much it is willing to endure in the way of hardships for the first year or two.If the income is an average "white collar" salary, hardships can be quicklyeliminated. If the income is very much smaller, the original investment must be largeror the family must be willing to endure a rather Spartan regime until the equipmentfor producing the comforts of country life is gradually purchased. Our own experienceillustrates the principles involved.

    When we left the city, we had as capitalonly the small savings which we had managed to accumulate in spite of the "accidents"which periodically prevent savings accounts from growing as they theoretically should.In addition, I had a salary of $50 per week --not a very high one for the post-warperiod. We purchased a place for $4,000, paying down $500, and arranged to pay offthe balance in monthly installments of $50. This was smaller than the rent of $65we had been accustomed to pay in the city even when interest and taxes are included.After paying for our place we found ourselves with hardly enough cash on hand tomove and get settled in the new place. We did invest $75 in the electric range. Butall purchases of livestock, of tools, of labor-saving comforts, had to come out ofincome. Two things, however, made that income go farther in equipping the homesteadthan might at first be anticipated. One was that since we spent less than we hadin the city for rent and for food, even the first year, we had more money with whichto make investments in equipment than we would ordinarily have saved out of salary.The other was that the investments in the more expensive equipment could be madeon the installment plan. One month, for instance, we made all the purchases for ourpoultry-yard--incubator, eggs and setting hens. The next month we purchased our steampressure cooker--which cost $25 at that time. Such purchases we made for cash outof what we saved from week to week. When it came to installing our automatic pumpingsystem--an investment which ran into hundreds of dollars--we purchased it on theinstallment plan and had the satisfaction of seeing it save us enough to pay foritself month by month.

    Yet in spite of the relatively smallinitial investment and the modest income in the beginning, and in spite of periodsof no income or little income after I quit my job to write my first book, the homesteadgrew steadily and came more and more to represent that large investment which sochilled my skeptical critic. Eventually income began to go up as I cut down the timeI devoted to earning money, or perhaps it would be more accurate to say I was ableto secure more for my time as I became less and less dependent upon those to whomI sold my services. That made the development of the place just that much easier,and made it possible for us to start building the "Dogwoods" and to equipit as experience had taught us such a homestead should be equipped. This possibilityof earning more, by needing to work less, is cumulative and is open to an immensenumber of professional workers. It is remarkable how much more appreciative of one'swork employers and patrons become when they know that one is independent enough todecline unattractive commissions. And of course, if the wage-earning classes weregenerally to develop this sort of independence, employers would have to compete andbid up wages to secure workers instead of workers competing by cutting wages in orderto get jobs.

    That it is possible to start homesteadingwith even less than the Borsodi family started was demonstrated to my satisfactionby the studies I was retained to make by the Unit Committee of the Dayton, Ohio,Council of Social Agencies in connection with the establishment of homesteads forthe unemployed of that city. These victims of the machine age had nothing in theway of income other than part time or odd jobs, and what they were making for theirown needs through their Production Units. They had no capital at all with which tostart, except the things they had managed to hang on to in the way of furniture,utensils, and personal belongings. Plans had, therefore, to be made, first to establishthem on homesteads at the minimum of possible investment, and then to furnish themsome sort of cash income to meet the expenses for things which they would not beable to produce for themselves. Part-time work for others in business or industryor professional life, and the sale of surplus produce, was expected to furnish anincome equivalent to one or two days' work per week for at least one member of thefamily. With an income of between five and ten dollars per week, I estimated thehomesteaders would be able to repay the advances made to them for investment in thehomestead and its equipment, meet all ordinary expenditures for taxation, light,fuel, transportation, and purchase essential commodities and articles which theycould not make themselves. Eventually, as their homesteads were developed they wouldattain a higher standard of living than that which they had previously enjoyed.

    Now in determining how much was neededfor the initial investment, the food to be produced--which determined the land area--wasthe deciding factor. A typical dietary for a middle-class family of five personsmay be used as a base for this purpose, variations from it increasing or decreasingthe investment. A variation toward a vegetarian diet would both decrease the landarea and the investment in livestock; on the other hand, a variation toward a heaviermeat diet would increase the investment in these directions. The typical diets* usedin the studies I made for the Dayton Homestead Units was as follows:

Bread, cereals, baked goods

750 pounds

Vegetables and fruits

3,000 pounds

Butter, lard and other fats

250 pounds

Sugar, honey and other sweets

250 pounds

Meat and poultry

500 pounds

Eggs

200 dozen

Milk

1,200 quarts

* Since this study was made, the Bureau of Home Economics of the United States Department of Agriculture has made the following dietetic study. The "adequate diet' of the table might be called a "city" diet; the "very liberal diet suggested," a diet for homesteaders.

SUGGESTED FOOD BUDGETS FOR FARM FAMILIES
YEARLY SUPPLY FOR A FAMILY OF FIVE

 

UNIT

Adequate diet
recommended
when most
of food is
purchased

Very liberal diet
suggested when
there are good
resources for
family food production

Flour, cereals lbs.

1130

400

Milk gal.

360

400

Potatoes, sweet potatoes bu.

14

10

Dried beans pk.

5

1

Tomatoes (citrus fruit) bu.

5

10

Dried fruits lb.

85

75

Other vegetables and fruits lb.

365

1400

Butter, other fats lb.

200

165

Sugar lb.

180

200

Lean meat, poultry lb.

250

620

Eggs doz.

80

145


    

    With the exception of sugar--for whichit might be possible to substitute in its entirety honey, maple sugar, and molasses--allof this food was to be produced on the proposed homesteads. Only the food items suchas coflee, tea, spices, etc., would have to be purchased by the homesteaders. Andof course exotic foodstuffs--oranges, pineapples, oysters, olive oil--would haveto be purchased, though life could very well be maintained on whatever native foodsthere were which furnished the same sort of nutritive elements.

    The production of 4,750 pounds of variousfoods, 200 dozen eggs, and the 1,200 quarts of milk above listed would require fromthree to five acres of land. A homestead of this size would make it possible to raisenot only the food for the table, but the feed for the livestock, the livestock consistingof 25 laying hens and 25 cockerels or capons (raised from 75 chicks); two grade orpure-blooded Swiss goats with their four kids each year (two of these kids, the bucks,could be slaughtered and added to the meat diet, the does being raised and probablysold), and two hogs raised from pigs purchased each year. The bees, of which thereought to be three or four hives, would, of course, feed themselves. A considerablenumber of variations in this livestock scheme are possible without materially changingthe land area needed to raise feed. Turkeys, ducks, and other fowls may be addedor substituted for some of the chickens; sheep raised in place of hogs; a cow usedinstead of milch goats. The cow would require more land than the goats; the additionof sheep or an increase in the quantity of hogs would also increase the area of landneeded for grain and pasturage. The area devoted to the orchard and the kitchen gardenwould have to be large enough to supply about 500 quarts of vegetables and fruitsto be canned and preserved for winter, or to be dehydrated if that method of foodpreservation is preferred.

    On a three-acre homestead, about oneand a half acres of the land would need to be put in grain for the goats, hogs, andchickens; about a quarter of an acre into alfalfa, soy beans or some similar crop,and a half acre reserved for pasturage. A quarter of an acre would be needed forthe corn or wheat for the family's cereals. This means about two acres for fieldcrops. The remaining acre would be all that was needed for the vegetable garden,the orchard, the barnyard, the flower-gardens and lawns, and the homesite itself.Indeed, if the family were content to live exclusively on vegetables and nuts, allits food could be raised on this one acre of land. On this general plan, three acreswould be all that would be needed, while five acres would be a generous allowance.If a common pasture were made available, the three acres would be ample. I thereforesuggested that the Dayton Homestead Units should consist of 160 acre tracts laidout for between thirty and thirty-five homesteads of three acres each, with the remainderof the land for common use.

    Upon the basis of the land area andfood program above outlined, the investment needed to establish a homestead was calculatedas follows:

Land

$250

Buliding materials for first section of home

300

Materials and equipment for other buildings

50

Well and pump

75

Tools and implements

25

Livestock

75

Seeds, plants, trees, etc.

25

Sewing and loom room

75

Preserving and kitchen equipment

25

Total

$900

    
    To this investment there was addedabout $120 for groceries and feed for use during the first six months after movementto the land. Assuming that the homesteading started in the winter or spring, withinsix months production would develop to a point so that no further outside purchaseswould have to be made for this purpose. The total investment would therefore be around$1,000 per family. But not more than $350 to $400 of this would have to be in cash.

    Farms of about 160 acres were to belaid out for the homesteads, and were to be known as Homestead Units to distinguishthem from the Production Units already established by the unemployed in the cityitself. In the Homestead Units the group activities and cooperative manufacturingcarried on by the Production Units in the city might be continued to whatever extentthe individuals in each group desired. The whole tract of land would be owned bythe unit; title to the individual homesteads would be based upon perpetual leases,thus preventing speculation in land. If the farm buildings already on the tract werenot suitable for use as community buildings, they would be gradually altered forthis purpose. The pasture, wood lot, and community buildings would be owned by theunit as a whole and used by the individual homesteaders under rules and regulationsestablished by the group. Tractors or horses, trucks, and heavy agricultural implementsmight also be cooperatively owned. Grain farming might be carried on by some unitscooperatively, just as the city units produced clothes, bread, and other goods cooperatively.As much or as little communal life as the group desired was thus provided for, thebalance between collectivism and individualism swinging in whatever direction experienceand inclination pointed. Each family was expected, however, to build its own home,poultry-house, cow-shed, and workshop; to cultivate its own garden, and set out itsown orchard and berry patch, and become in this new and modernized setting almostas self-sufficient and independent as were the pioneers of the country a hundredyears ago. Trades and crafts were expected to develop and selling and bartering ofproduce of which individual homesteads had a surplus, but no such emphasis was tobe placed upon this as to force a trend toward large-scale production.

    The plans looked toward the buildingof permanent and beautiful homes. Construction was to follow lines developed by ErnestFlagg for the building of beautiful and inexpensive small homes. The high cost andwastes involved in building cellars was therefore to be avoided. While building thefirst wing of their homes, the homesteaders were to commute between Dayton and theirnew homes, though some of them might camp out, more or less, if the farm buildingson the site made it practicable to do so. As soon as they were on the site, theywere to begin to garden, to build their own furniture in their own workshops, toweave cloth on their own looms, and to make their own clothes on their own sewing-machines.Electricity was to be brought in for both light and power, and domestic machineryand appliances used to reduce drudgery to a minimum. The crushing burdens of elaboratewater and sewage systems were to be avoided by the use of individual automatic pumpsand individual septic tanks.

    Dayton, which is this year establishingits first homestead units, is demonstrating what can be done with very little casheven by unemployed families. But that an individual family can establish itself ona homestead with an even smaller cash investment than provided for in the Daytonplan was demonstrated to my satisfaction by a case with which I happen to be personallyfamiliar. This family consisted of a man, wife, and boy eight years old. The manhad made an indifferent living for many years as a chauffeur in and around New York,and when out of work came to live with his parents, who had a small country homein our section. One day he came to me with a project for building a road stand ona plot of land belonging to me. He had, however, no capital with which to buy theland and barely enough money to equip a stand. He asked for a lease on the lot, withthe privilege of buying it if he managed to make a success of his stand. I gave himthe lease for which he asked, and this is what happened:

    He went to a local lumber-yard andsecured a large quantity of building material on credit. With this he first builta small stand, and equipped it to sell icecream, drinks, and the usual line of roadsiderefreshments. While his wife took care of the stand, he built a four-room house onthe back of the lot, though the interior was unfinished at the time he came to meand told me that the lumber-yard was pressing him for money. I discovered that hehad gone ahead and built the house, expecting that the stand would earn enough notonly to enable him to buy the lot but to pay for the materials he used in building.To straighten out the tangle into which his over-optimism had led him, I arrangeda mortgage for him with the building and loan association from the proceeds of whichhe paid for his lot, paid for the building materials for which he was already indebt, and then purchased enough materials with which to finish his home. His roadstand folded up and disappeared the next winter--it never did make very much money.But in spite of this disappointment, he managed to earn enough during the periodswhen he worked to meet his loan payments, to keep adding to his homestead, untilhe finally had a substantial house, a garden and chicken-yard, and found himselfliving at a level of comfort and security which he had never before enjoyed.

    Now if a family with virtually no capitaland having to rely mainly on the earnings of occasional periods of work as a chauffeur,can establish itself in a country home, it ought to be possible for families withsome capital and more earning power to do so. What such a family needs--in additionto courage--according to our experience is enough capital for the down payment onthe purchase price of a place and enough cash to pay for such materials and equipmentas cannot be purchased on credit. For the rest, they must rely upon their incomes.But that a modest income, especially during the first few years, will enable themnot only to pay for their place but to develop it into a substantial and comfortablehome, is not difficult to demonstrate on the basis of our own experience.

    Assume that we are dealing with theproblem of a family having enough capital for the first payment on a suitable place,enough cash with which to equip itself at least as well as we were able to, and withan income of $2,500 a year--approximately the income with which we worked our firstyear. Such a family living in the city would spend its income about as follows:

Rent

$600

Food

800

Clothing, etc

500

Other expenses

600

Savings

?

Total

$2,500

    
    Assuming that production upon the homesteadincreases gradually, and does not go as far toward self-sufficiency as is plannedfor the Dayton experiment, the family budget after moving to the country would looksomething like this:

Taxes and upkeep (in lieu of rent)

$100

Food

400

Clothing, etc.

300

Other expenses

450

Available for investment in the homestead

1,250

Total

$2,500

    With the family producing its own shelter,instead of renting it, there is a saving of $500 a year between what would be spentfor taxes and upkeep on their own home and that paid out in rent in the city. Inthe case of food, a cut of 50 per cent is possible the moment the garden, the orchard,and the chicken-yard contribute to the family larder. Between the sewing-room, theworkshop, and the laundry, substantial savings are possible on clothing and otherexpenses. A fund of about $1,250 is therefore made available for investment in thehomestead and its equipment, provided the family does all of its own work. To whateverextent servants are employed, this fund is reduced. In our own case, we much preferredto spend a part of it for help and to make our investment at a slower rate than totry to put so much into "saving" and take so much out of ourselves.

    Surely I have said enough about theproblems involved to make it clear why it is so difficult to answer the questionswhich are asked us about how much capital is needed for establishing a homesteadin the country. Whenever I am asked the question I always think of that old poser,Which is the most important leg of a three-legged stool? The amount of capital neededis just one part of an equation in three terms, of which the other two are the incomeupon which the family can rely, and the degree to which the family is willing toendure pioneering.




Prelude to the First Edition
1. Flight from the City
II. Domestic Production
III. Food, Pure Food, and FreshFood
IV. The Loom and the Sewing-machine
V. Shelter
VI. Water, Hot Water, and WasteWater
VII. Education--The Schoolof Living
VIII. Capital
IX. Security versus Insecurity
X. Independence versus Dependence

HOMESTEADING CATALOG
HOME PAGE