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

HOMESTEADING CATALOG
HOME PAGE




    

    
CHAPTER EIGHT
CAPITAL

    JUST what to say about the capital needed to establish a homestead is one of the most difficult matters with which I find that I have undertaken to grapple. Yet it is one question about which I am asked more frequently than almost any other by those who express a liking for the way of living with which the Borsodi family has been experimenting. Before attempting to deal with the matter, however, I think it important to dispel an illusion under which many people who have heard about our experiment seem to labor. Typical of these people is one man, connected with one of our agricultural schools, who assumed that because the houses, land, machinery, and livestock comprising our homestead represented an investment of at least $15,000 (according to his estimate), that therefore the capital with 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 without going 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 upon the tenacity with which even intelligent people maintain conventional illusions that such 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 everywhere were discovering they had erected for themselves, this man still believed that dependence upon investments in stocks and bonds was superior to dependence upon a homestead equipped with livestock, tools, and machinery with which a family could produce a plentiful living for themselves no matter what happened to the business world. If the depression should have taught him anything, it should have made him see that stocks and bonds furnish no one real security. The only possible security in our present chaos is direct access to the opportunity to produce for oneself the essentials of a comfortable living.

    But even if it were true, as my friendly critic believed, that there were such things as secure securities, the point remains 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 stocks and bonds or of investing it in a homestead. Yet it is true that today, after twelve years of slow growth, the homestead does represent a large investment, an investment much greater than the sum at which this critic valued it. It is the way in which we 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 lay hands upon just enough with which to start, then a $15,000 homestead should come ultimately by the sheer development which such a way of living makes possible.

    The question, therefore, is not how to secure $15,000, but how to secure enough with which to start. And enough with which to start can be saved by many families, I maintain, in spite of the inequalities and injustices of our present social system. How much, then, is really needed in the 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, and how 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 quickly eliminated. If the income is very much smaller, the original investment must be larger or the family must be willing to endure a rather Spartan regime until the equipment for producing the comforts of country life is gradually purchased. Our own experience illustrates the principles involved.

    When we left the city, we had as capital only 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-war period. We purchased a place for $4,000, paying down $500, and arranged to pay off the balance in monthly installments of $50. This was smaller than the rent of $65 we 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 to move and get settled in the new place. We did invest $75 in the electric range. But all purchases of livestock, of tools, of labor-saving comforts, had to come out of income. Two things, however, made that income go farther in equipping the homestead than might at first be anticipated. One was that since we spent less than we had in the city for rent and for food, even the first year, we had more money with which to 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 made on the installment plan. One month, for instance, we made all the purchases for our poultry-yard--incubator, eggs and setting hens. The next month we purchased our steam pressure cooker--which cost $25 at that time. Such purchases we made for cash out of what we saved from week to week. When it came to installing our automatic pumping system--an investment which ran into hundreds of dollars--we purchased it on the installment plan and had the satisfaction of seeing it save us enough to pay for itself month by month.

    Yet in spite of the relatively small initial investment and the modest income in the beginning, and in spite of periods of no income or little income after I quit my job to write my first book, the homestead grew steadily and came more and more to represent that large investment which so chilled my skeptical critic. Eventually income began to go up as I cut down the time I devoted to earning money, or perhaps it would be more accurate to say I was able to secure more for my time as I became less and less dependent upon those to whom I 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 equip it as experience had taught us such a homestead should be equipped. This possibility of earning more, by needing to work less, is cumulative and is open to an immense number of professional workers. It is remarkable how much more appreciative of one's work employers and patrons become when they know that one is independent enough to decline unattractive commissions. And of course, if the wage-earning classes were generally to develop this sort of independence, employers would have to compete and bid up wages to secure workers instead of workers competing by cutting wages in order to get jobs.

    That it is possible to start homesteading with even less than the Borsodi family started was demonstrated to my satisfaction by 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 for the unemployed of that city. These victims of the machine age had nothing in the way of income other than part time or odd jobs, and what they were making for their own needs through their Production Units. They had no capital at all with which to start, 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 establish them on homesteads at the minimum of possible investment, and then to furnish them some sort of cash income to meet the expenses for things which they would not be able to produce for themselves. Part-time work for others in business or industry or professional life, and the sale of surplus produce, was expected to furnish an income equivalent to one or two days' work per week for at least one member of the family. With an income of between five and ten dollars per week, I estimated the homesteaders would be able to repay the advances made to them for investment in the homestead and its equipment, meet all ordinary expenditures for taxation, light, fuel, transportation, and purchase essential commodities and articles which they could not make themselves. Eventually, as their homesteads were developed they would attain a higher standard of living than that which they had previously enjoyed.

    Now in determining how much was needed for the initial investment, the food to be produced--which determined the land area--was the deciding factor. A typical dietary for a middle-class family of five persons may be used as a base for this purpose, variations from it increasing or decreasing the investment. A variation toward a vegetarian diet would both decrease the land area and the investment in livestock; on the other hand, a variation toward a heavier meat diet would increase the investment in these directions. The typical diets* used in 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 which it might be possible to substitute in its entirety honey, maple sugar, and molasses--all of this food was to be produced on the proposed homesteads. Only the food items such as coflee, tea, spices, etc., would have to be purchased by the homesteaders. And of course exotic foodstuffs--oranges, pineapples, oysters, olive oil--would have to be purchased, though life could very well be maintained on whatever native foods there were which furnished the same sort of nutritive elements.

    The production of 4,750 pounds of various foods, 200 dozen eggs, and the 1,200 quarts of milk above listed would require from three to five acres of land. A homestead of this size would make it possible to raise not only the food for the table, but the feed for the livestock, the livestock consisting of 25 laying hens and 25 cockerels or capons (raised from 75 chicks); two grade or pure-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 probably sold), and two hogs raised from pigs purchased each year. The bees, of which there ought to be three or four hives, would, of course, feed themselves. A considerable number of variations in this livestock scheme are possible without materially changing the land area needed to raise feed. Turkeys, ducks, and other fowls may be added or substituted for some of the chickens; sheep raised in place of hogs; a cow used instead of milch goats. The cow would require more land than the goats; the addition of sheep or an increase in the quantity of hogs would also increase the area of land needed for grain and pasturage. The area devoted to the orchard and the kitchen garden would have to be large enough to supply about 500 quarts of vegetables and fruits to be canned and preserved for winter, or to be dehydrated if that method of food preservation is preferred.

    On a three-acre homestead, about one and a half acres of the land would need to be put in grain for the goats, hogs, and chickens; 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 for the corn or wheat for the family's cereals. This means about two acres for field crops. 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, all its food could be raised on this one acre of land. On this general plan, three acres would 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 therefore suggested that the Dayton Homestead Units should consist of 160 acre tracts laid out for between thirty and thirty-five homesteads of three acres each, with the remainder of the land for common use.

    Upon the basis of the land area and food program above outlined, the investment needed to establish a homestead was calculated as 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 added about $120 for groceries and feed for use during the first six months after movement to the land. Assuming that the homesteading started in the winter or spring, within six months production would develop to a point so that no further outside purchases would 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 be laid out for the homesteads, and were to be known as Homestead Units to distinguish them from the Production Units already established by the unemployed in the city itself. In the Homestead Units the group activities and cooperative manufacturing carried on by the Production Units in the city might be continued to whatever extent the individuals in each group desired. The whole tract of land would be owned by the 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 were not suitable for use as community buildings, they would be gradually altered for this purpose. The pasture, wood lot, and community buildings would be owned by the unit as a whole and used by the individual homesteaders under rules and regulations established by the group. Tractors or horses, trucks, and heavy agricultural implements might also be cooperatively owned. Grain farming might be carried on by some units cooperatively, 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, the balance between collectivism and individualism swinging in whatever direction experience and 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 its own orchard and berry patch, and become in this new and modernized setting almost as self-sufficient and independent as were the pioneers of the country a hundred years ago. Trades and crafts were expected to develop and selling and bartering of produce of which individual homesteads had a surplus, but no such emphasis was to be placed upon this as to force a trend toward large-scale production.

    The plans looked toward the building of permanent and beautiful homes. Construction was to follow lines developed by Ernest Flagg for the building of beautiful and inexpensive small homes. The high cost and wastes involved in building cellars was therefore to be avoided. While building the first wing of their homes, the homesteaders were to commute between Dayton and their new homes, though some of them might camp out, more or less, if the farm buildings on the site made it practicable to do so. As soon as they were on the site, they were to begin to garden, to build their own furniture in their own workshops, to weave 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 machinery and appliances used to reduce drudgery to a minimum. The crushing burdens of elaborate water and sewage systems were to be avoided by the use of individual automatic pumps and individual septic tanks.

    Dayton, which is this year establishing its first homestead units, is demonstrating what can be done with very little cash even by unemployed families. But that an individual family can establish itself on a homestead with an even smaller cash investment than provided for in the Dayton plan was demonstrated to my satisfaction by a case with which I happen to be personally familiar. This family consisted of a man, wife, and boy eight years old. The man had 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 home in our section. One day he came to me with a project for building a road stand on a plot of land belonging to me. He had, however, no capital with which to buy the land and barely enough money to equip a stand. He asked for a lease on the lot, with the privilege of buying it if he managed to make a success of his stand. I gave him the lease for which he asked, and this is what happened:

    He went to a local lumber-yard and secured a large quantity of building material on credit. With this he first built a small stand, and equipped it to sell icecream, drinks, and the usual line of roadside refreshments. While his wife took care of the stand, he built a four-room house on the back of the lot, though the interior was unfinished at the time he came to me and told me that the lumber-yard was pressing him for money. I discovered that he had gone ahead and built the house, expecting that the stand would earn enough not only 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 arranged a mortgage for him with the building and loan association from the proceeds of which he paid for his lot, paid for the building materials for which he was already in debt, and then purchased enough materials with which to finish his home. His road stand 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 periods when he worked to meet his loan payments, to keep adding to his homestead, until he finally had a substantial house, a garden and chicken-yard, and found himself living at a level of comfort and security which he had never before enjoyed.

    Now if a family with virtually no capital and 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 with some capital and more earning power to do so. What such a family needs--in addition to courage--according to our experience is enough capital for the down payment on the purchase price of a place and enough cash to pay for such materials and equipment as 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 them not only to pay for their place but to develop it into a substantial and comfortable home, is not difficult to demonstrate on the basis of our own experience.

    Assume that we are dealing with the problem 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 with an income of $2,500 a year--approximately the income with which we worked our first year. 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 homestead increases gradually, and does not go as far toward self-sufficiency as is planned for the Dayton experiment, the family budget after moving to the country would look something 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 spent for taxes and upkeep on their own home and that paid out in rent in the city. In the 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, the workshop, and the laundry, substantial savings are possible on clothing and other expenses. A fund of about $1,250 is therefore made available for investment in the homestead and its equipment, provided the family does all of its own work. To whatever extent servants are employed, this fund is reduced. In our own case, we much preferred to spend a part of it for help and to make our investment at a slower rate than to try to put so much into "saving" and take so much out of ourselves.

    Surely I have said enough about the problems involved to make it clear why it is so difficult to answer the questions which are asked us about how much capital is needed for establishing a homestead in 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 needed is just one part of an equation in three terms, of which the other two are the income upon which the family can rely, and the degree to which the family is willing to endure pioneering.




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

HOMESTEADING CATALOG
HOME PAGE