CAr ITAL JiL 1 OF' .'OhT Tui. FAR1S Th UiIT, L ;CiLS FROJiC, Oi..tiGO by AL1YftiL VA 1.iiSi A subnit ted to OREOi i in partial fulfillment of the requirements for the degree of ASTER OF SCLiIC June 19O Redacted for Privacy ?rofessor of Aricu1turai iconoxnlcs In Charge of Major Redacted for Privacy He 1nics Redacted for Privacy Redacted for Privacy Dean of Graduate School Typist: flrs, . H, Paul ACA ) The author is particularly indebted to the following persons for their assistance in the preparation of this report. To Professor L L. Potter he is especially grateful for many constructive criticisms, expert counsel, and patience in directin the study; to Professor D. Curtis Iumford he Is iiidebted for suestion 1eac1in study; to ir. G. G, ta to the ebers of the Bureau arid other of Reclarnaton he Is indebted for teehnical and other assistance, willinly given, and for their full cooperation In all phases of the work; to Mrs. . raul ho owes a debt of gratitude for her careful checkirg and preparation of the final manuscript; to the sixty farmers who so generously provided the primaxy data upon based, the writer expresses his deepest which the study is ppreciabIon. .-'- .JiL4L4 t-xn.r ,.1 introduction. a a a a a a a a a a a a a a a a a a a a a I a a nirpose arid Scope. a a a a , a a a a a I a a ,, a a a a a a . a a a. etiou OL tudy. a a a a a a a a a a a a a a a a a a a a a a a a a Description of th Area. Natural. a a a . a a COfldItjOflS. a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a Domestic .ater Supply. Land Appraisal, a a a a a a a,. 11 a 13 a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a. a. **aa*a'sa a a a a a a a a a a a a a . a a a a 26 a a a a * a a a a a a * a a a 'arm8,.,aa,.,...a,.a,a.,.aaa,.a,a.a,a .arac erscs o Anticipated AricLz1t,'1re. a a a a , a ±ro.ress of Land a a a eve1opn:t..,.aa,aa.,as..a. Factors ;ffectiri. the £1OSO.it Capital of Land Development Land JSC a a a * a a a a a a a * a a a a a a a a a a a a a a a a a CCr1U1EtiOfla a a a a a a a a a a a a a a a a a a a a * a Capital Used for tie Development of Farrris...a.aa.. xpenaiture for !aor Items of Investment........ Expinditur&s for Invosicnt on 1arms Grouped by Year Development a ..a aaa.a aaaaaa a. Land j-urchase,.,.,.,.,......,.,.,..,.....a..-a ixpenditurcs for Land 114 16 19 21 22 a a a a a a a a a a a . Irrigation Development 8 9 a a a a a a a a a a a a a a a a a a a a a a Arj..cultural istory. History of Irr.i:;ation Development....... a, Cultural eaturs Size of 8 a 29 30 32 3 141 146 14.9 LeVeloei1taa,..,a a..,, Farm Bu1ld.Lns, a a a a a a a a a a a a a a a a a a a a a a a. a a aa a a a a a a a a a * a a a,'.',' a a a a Resiaence. , , . . Domestic -ater, , achinery aiu . a a a a a a a a a a a a a a a. a a a a a,. a a a ajor Items of ia&inery Cost,.,....,........ Livestock. a a a.. a. a a a a a a a a a a a a a a a a a a a a a,* a a fresent \'alue of :.aor Investnient Summary of Capital Itemsa,aaa. 'JSCdaa a.aaaa. a*a * aa 'a Credit...,,. a a a. a,.. a, a a. a,a a. a a,. aa aa aa a, aaa a a a General Ste tement a a a . a a a a a a a a a a a a a a a a a a a a 61 6s 67 69 71 71 Table of Coritent8--Continued Page 3'oji1'r of All Credit Used,, Croa a aaaaaaaaaaa Clusified b ienti. of a a .a a a Term.a.a.,,, aa iear.a,,.,,.a,,,a., Credit Jsed oy Development SoUrccs of CrCQJ used. a a , a a a a a a a a a a , a a Creci.i.t Lcirccs i'atüd tij ettlersa.a,..,.a,,a,, AtLGudes of et.ers 2owaru ebt and Credit., Adequacy of Creciit. a a , a a a a a a a a a a a.. a a a a a. a a . a Sunmary aLld Conclusions.. . . . . . . . . . . . a aa a. a a a. a a a a a a a a í.-ro.res of .)e'Telori1it., 0 a. a a a a,, a as Cajt1 used, a, asia...., a a, as,..,., as USC of Credit..,.,,,a...,,..,,,,...,a.,,..a,.. Alicabu1ity to Other !ras., .. ... a . .. .. .. 72 73 7 30 bi 88 95 95 97 97 98 App'iiix Table 2.. , . , , . aaa a. . a ... ,,aaa a a a 101 102 dST )F Id3LS Table 1. 2 Page Sixty Far::s Grouped by Year Deve1o;nt Egan Sixty Farms iroupt by iriab1c Acreaos per arm. ....a 7 ,,,........**........ . Size (Irrhe AoreaL;e) of Ownership Uhita Shown j cor 01 roject Office at bend1 .. L ........ 6 ... a Ori.in and previous Fars xpr ieice of Settlers Surveyed.. . -. . . 5 . . . s S S *1*a . . a.. a ae of Irriable Lad trat wa Iriiated. 8 . . . . ,. . . Financial iosition and Capital iccuuu1ation per 10 11 Acre of Thirteen:tuaders... , SiXty Lar's roeci by the iirst Crop 'ear and by the Increase in issets per Irriçab1e Acre.. x)eudztur(s fr :aTor Ite L18 13 xpenditures ;er Irri;;able cre for iaoD Itens of Investmellt..,.,,.a...,..,,a,,...,..,,....., 15 ixpCAei ure for abner than anc a Level opmen t 10 or Items of Investment,... . nxpenditire larm Acreages 3 I6 aa 12 i4 36 of Investient in a a a a a . . a a a * a. a tn.e i)e10 TLCtt 0ILOd. . 31 .. ....... Settlers' Financa1 ?osition and Net Assets, Averae per Irri able 22 29 Total CaLtai ivaiiab1e per irri:abJ.e acre aud tfle rceae cC Irri able Acr,e that was irri.;ated. .. . . . . * . , . . . . , . , . . . * . . , . . * , . Land. Jse. Iercente of Land Levoted to Specified se8. 20 easurci by kercent Deree of Land Deve1opmcnt . , 7 7 J49 .ixty 1arm8 Grouiud by Year a,.,,. a aaa. a,. a.... a.. 50 nvestnient, bct to 1L.3 rioes.,..a, 5]. aor itens of List of Tables--Continued Table 16 17 18 Page Sixt uriIs Cljfied on the Basis of kro- dociint Land Cl;ss . . . . . ,... a Cost of Land Purchase, WCr Farms Grouped by ?redoiiriant Land Class larm. . . a* .* Cost of Land Deve1oT;,it. ity iar1s Grouped 19 redorrinate Land Class per Fari.,..,.,,,,, I Aver.o Cost of ccified S...,, 20 Cost of Farm l3uild 2]. 22 53 by 57 * *4*4*8 *4*44*44444e 8 Cost of iri wc1ITh; ter Fari. ,.., * ., 4,4 Cost of MaIiar, Fifty .ve urvey Farms.,. 58 60 CoLrarjson of Averae Cost of cIinerT and q:ipent for Sixty 'arms Groued by Irri[;able AcrL.t)s . . .. .,aa,a.,. , 6]. 2t Avrc Cost of Tractor Investment.,.,,.,,,., 62 25 63 26 erccrita'e of Farms Jsin Combines and iverage Cost per aohine. . 4*8*4 44 Trucks, Cost pe uchine and per Aarm......,, 27 rercentae of Operators Using Trailers as 23 28 Copared to Trucks . . . . . . .. . .......... Inve'itor,r Value per Farx. of Specified Live- 29 Inventor Value per ?ari of Co:n.mercial and 30 64 65 stock :ntrprises. *04a444 o-Coiiercial Livesc,c Cost er Irrigable Acre of ajor nvestmeiit s as Com?arc to the xrstit 67 alue as 68 3]. Avera.e Total Borrowir¼;s. 8 4 S 4 0 4 0 4 S * 4 8 * a a S S S 4 72 32 Credit Used for to 7iujor IbE:: of Investient 73 List of Tables--Continued Table 33 Credit Classified by Len;t. of Term,0....1.,,, 7)4 314 Average Credit Used per Farn..,,...,.....,,... 7 3.5 AinountsBorvowedbysettiera...,..,.....,..,,. 76 36 I3eginninc 77 Iteis tit was Firnished by Credit..........e. 78 38 Total Credit 80 39 Sources of Credit and Settlers' Preference I Rat iLS . * * * . I *000 0 00 I -- * 0 -, I 82 Settlers' Attitudes Toward Goi ...Further intq Debt in Order to Acquire Specified Items....,. 37 Fifteen "ilandicapped Settlers" Corip&red with ..... ..*.... . ............ ...aa 92 37 14o 141 Assets Deflated to l9L krices...... eroenta;e of the Cost of Major Invest1ertt ae3 Ciasified by Tezn and Source AllSettlers ure I Genera of Central C)re;on.. ... .... Board of Appraisal Land Classification Rules..... 17 I.. ..Y IiL.iGTi:; Ok.i1T u4iT, £$th Oi iIOJ;CT, ORI Groups interested in tLe early and sound development of fars on a new irriLati on project include the governmerit, the project community, and t}e project settlor. The government wishes to assure the ie2ayent of project costs at the earliest practical date arid at the same time promote farming practices that depletion. Wjil protect the project lands from Repayment of project costs can riot beiri until on' point and are making the farms have passed the "bre a net return over costs. If settlers are handica;ped in development by a lack of funds, project development; will riot only be slow but in many cases will also be faulty? There have been indications on some projects that land whic has been irri,ated has not been properly receive the irrigatIon water. prepared to Erosion has occurred on fields irriated down slopes and poor distribution of water is evidenced by uneven crop growth. Lack of capital has often been cited as the reason for these conditions. The project community Is interested in the development Ferri Credit Situation on the Tucumcari £roject, New Nexico, report by i. . Robins, Regional Director, Region , ]iureaii of Reclamation, U.S.D.I. 2 of a sound and permanent type of agricu1t.;.ral economy upon which can be based processin., trisporat on, merchandising and other enterprises, Such an agricultural economy rests upon the financial and social stability of the settlers. If liquidations of settlers and changes in farm ownership are freqient, the entire con.iunity will 3hare in the loss. Individual farm families that settle on the land usually invest all their wn asets in the 'arm nd ascine additional financial obiations in the hope of obtainin: economic securtT and a satisfactory fnily living. rJeither of does not have develop his f;i obectives will be raiized if the settler m:. inyest:iicn.t capital availahl to him to to the point where it will py its own way. Prior to the open.th. of a new irrigation project for settlet a great deal of work and planning has already been done. The irojeet has been tiorou ly invcati,ated fron the standpoint of thysical, en.L:inoer1n., economic, and sociological feaSibility, After th.e feasibility of the project has been investigated and found to be satifactor construction is begun, and shortly thereafter settlement and development ci' individual farms begin. It is with the period of settlement and development of individual faza that this study is concerned. Fur 0 so afid This study was uridertike throu.; a cooperative agreement botween the ire U of Reclamation of the United States Department of Interior and the division of !gricultural iCOflOiiCS of Oregon State College, for the purpose of de terminin the amount and adequacy of thc capital used in the development or faris on the North JIi1 of Le Desohutes Irrigation Project. It is believed that a study of the capital used in the first years of development of farms on the North Unit will be of value to the Bureau of Reclbioo, aid o prosp cc- tive settlers, in the settnt and development of other reclamation projects. It is contei;plated that in the near future large arus of land will be open to set t.iernerit on the Columbia Basin Project in Was ington. Geographic arid climatic conditions in that area are similar to conditions on the North Unib and it l expected that somewhat the same type of agriculture will prevail in both areas. Similar studies are bein conducted on the Black Canyon Project in southern Idaho and on the Rosa Project in southeastern Washington. Development was started on those projects at an earlier date, and under somewhat different economic conditions t)i.an prevailed at the time of the openin of the i4ortn of he Deschutes Project. not was settler a If was Time records. taking in factor limiting a area. one any in concentration avoid to tahen be could care that so ma ownership farm the on taken were records where Farms sotted were development. irrigation present the to prior land their owned who operators froti taken were records no so "sottlers,' new by used credit and capital with concerned is study The home. at found be øould farmer a wherever records taking area project the over drove and map ownership records taking In far. a pre-selected. not was used enumeraors pl 1.) s The (Fiire 19Ij.8. of year crop full the for delivered wos water where Madras of south Unit .orth the of portion that to 11iited was survey the thus year, crop full ore least at for water tion irriga- received had that farms on only takei were kecords 1eclamation. of urea the by enployed rators e.ri1 trained by and writer the by records All 19)4.8 .iovenber, late iii taken were Unit. Nortn the on settlers from obtained wore reords sixty which in wvey a by obtained iere based is study the which upon data primary The Study of iet.hod perspective. broad a from problems deveiopn.cnt and settlement view to possible be should it studies three the of results the Through 7,05. r. II.s. C J(FFERSOPI Co. 5u/f/e Lake PR/NE V/LLE OC/IOCO RESERVOIR 7/6 S. RISE. #?165. 0 k..... R,/7E. 12 3CALt Of MILES L a va Lakes 0 Cu//u, L 0/ce R./4 C. 7.20$. LINITCO STA TE.S DEPARTMENT OF THE INTER/OR BL/REA1 Of RECLAMATION OESCHUTES PROJECT -OREGON 7.2/S. GENERAL MAP apine T22S Davis R.// R/2 O1.SCWLITZ$ Co. R 9 (. I(AMATH CO. DRAPVN: R45. 5USMITTED 7RA CEO: R.4 5. R(COIIMENDE 0r CHECKED ApovEo: .5- 0 23 122986 at Cne e fiL call, no at vas nade to contact him iatr un].ess It was eovenienL to do so. e sixty ftrris included in the survey repre5ent a wide rane of conditions as to size, lar. ciaso, age and experience of operators, crops produced, ete, however, they do have iuch in co.n,n.. All are In t:e curly years of : the period from 19L5 to l9L.8. The average period of develont ior all farn was 2.7 years. velopment coveni. All of the farms have had at least one irriuted crop year and none have had more than three. (7ter ;-ade avail able to the first farms for the crop year l9L6). Vthle there is varIation in land classes between farms, all were started on raw land upon which there had been no previous irrigatIon development, and upon which there were no buildings or fences. The farms were in various steges cf development, Eome having started development. a late s l9c while others began as early as 19L$, so that it was ;ossible to mke an analysis on the basis of years of devoloTant (Table 1). karras havIn, as few as thirti ori1 s :.any as 160 irnigable acres were included. It was thus possible to eX9!ifle faris in various acreai ous (Table 2), The data are analyzed c}iefl by the method of gro'a ing and cross-tabulation. The character of the data does not justify more eXtønive correlation analysis. 7 Table 1 Sixty Parns Gro.ed vy Y.r Deve1oment Bean North Unit, Lesc:ites 2roject xer Cent of i\u.nber of Year Development :ari e:an 7 30.0 18 3'... tne fla I addition to surve, e and LiLjOfiki bion oo . dditio1 in lniview nttive3 of baiñers, id r w.o were wori.ij jfl the area. ODO2 C3L1AS r.)or rouii.d natria1 wi 1h farmers, 1Ierchant2, and federal ,ecies xsiv& use wa aade of u-d annually for the area by the firea of eclanation. )bhor publications were text. iohou used as indicated in footnote Table 2 Sixty Far.'ns or ixr.1ui roaed by Irriab1c Acre es per Farm scnubs l9i4 Acr.i. Cent of Sample Gro L1J 30-- L9.9 50-- u9.9 70-- 39.9 90--119. 9 120--l60 .0 Tot o2 71 107 1)43 1$ 9 16 10 25,0 15.0 26.7 100 1. i:j )J TH Natural Conditions interniountain plain The Deschutes area is part c t;hr with th SuIJ:ol.!&iLI: ;f;Ontains, makes up which, (Piure 1). The what; is ,'e;tera1ir known as Central area e.:hraces a number of irrint:oit oroects in addit1n to the Not ,nit, ihi Lc1.......o he Ochoco L:iLion yule And the Central District in of .L Lon District in t ...o i:3e.d-c&ic. :'o. )reon Cenri :c.: irr.Ttion I)1trict wn.. started jr. 1900. ar s eral rnil in itinn to tiL5c J r projot3 in the area. lvel eonfeet abo:re Tie tort;. ;:n.t;, lyIng ly Lns 0,O0O acres of Irri':cle l:1.ac. in a strip ends to nine aiies wid. and thirtr nilev lo::. It in a north-south direction, eset of the Deschutis Fdver In southern Jof rcjn Co:ity. The cl::t. Is that of a . cts arid inbero. ta A.ra. with eol. and Jar:1 su1t1lers. The aveae aicivai precipitat!o is atr ortion faliin . 1 eint inches, the fall and winter mont..s. Much of it is in the for;ii of snov. Surtners are of cleir, sunny characterized by ero ent a alt hox the nihtz; are witi reiative1 cneral1y cool. The averac lcnt:. of tTnc rowing season with the (U? . 9 varies from 130 days in the southrn part of the unit to lIO days in the fency Plains area in the north. Most crops adaptable to northern temperate climates, and not requiring a longer season thaii 130 days, grow readily. The high proportion of cloudless days is conducive to rapid maturity of crops, but occasional late frosts In the spring limit the growth of crops that are susceptible to frost damage. The soil for the most part is a sndj loam of volcanic origin.1 The topography is ent1y undulating, with a number of locally proiiinont buttes scattered throughout the plain rising to various heiLhtS from 300 to i)4OO feet. Agr I oul tu History All of central Oregon was principally a range liveand 9Ql, lioriesteading stock country in the started about 1900, and. by the time the railroad was extended into the area in 1911 most of the land was occupied. 7any of the homesteaders soubt only cheap land for speculative purposes and were not interested in farming. Others who came from farrs i 11stourI and other arts of the idlle Jest were responsible for most of the early dry £armin; activity. "Land Capabilities and Conservation Farming, Desohutes periment Station, Corvallis, Oro,or, November 19)47, Area Central Oreon," Special Bulletin, .gricu1tura1 10 Soon after the arrival of the railroad most o.f the easily tillable land of Jefferson county (where the North Unit is located) was plowed and utilized for wheat and tallow. Much of the rocky and poorer land was hornesteaded and abandoned with little aLtt made at tillage. The years 1910 to 1917 were irnsually moist for that area and good crops of wheat were produced, cuiminatii-g in a bumper cro., in 1913. This crop, to;ether with wr prices for wheat, crejted a good market for land widob was reported to have sold for as much as fifty dollars an acre. Beginning in the early 1920's and coitinuing through the early 1930's, a general process of abandoiment and consolidation of farms took place. Many of the small farms were unable to carry the heavy mortgago load incurred during the lush war years anc the mortgages were foreclosed. Many were too small to be operated on the wheat and fallow system, Other farrs were voluntarily sold or abandoned because they were not profitable under existing conditions. The drought of l93L, followed by dust storms in 193, forced some land out of cultivation, In l931.i. the Resettlemerit Athiiinistration began purchasing marinal land in Jefferson county and set up what is flow known as the Central Oregon Land Utilization Project. This project is now administered by the Soil Conservation Service, It was be11evei that grazing was the best s e for t.e land ilch 11 was taken out of cultivation arid uiuch of it s planted to crestd wheat;rass. About 1UOO acres of the land included in the Central Ore;on Land Utilization kroject lies within the boundaries of thc North Unit arid has been given to World ar II vetera,:is as 1omestads, At one time about LOO farm families lived in the district now cmprisin the North Unit, hrouh the lon' process of consolidation, abandoninent, and overnment purchase just dezcr..bed, only about 1O remained just before the advent of irritation, At the tine of tho present study (November 19)43) there were about O fari faniiiies on the Norti.. Approximately oity per ceut of th North Unit ad been under cultivation prior to the presc;-t irri.atin deve1opme.ib. !ost of that which haY- rj bcen under cultiva- tioa as covered with sagebrush and wa rnther easily cleared. Only a sall acreae, wh1c was covered with juniper, preitea arty cifficult clearin Hisbo r problems. i.,ation Doveioent Construction of water storage facilities for the North Unit was started in 1938 and proceded rapidly until work was halted by an order from the ax' roduction Board in On the recommendation of th ar Food Admiriistration, the WPB order was recinded and work was resumed in 191i.2, 12 The first irri.tion 19)3. eolivered to llj.2 7030 acres were irri water 1r Abo atcd tht ycr. Ij war was evailable to a total of L.3,732 acres of wc 2u,730 acres, or iXty-on per cent, were sten of Tne coLto bLit iI iJnib Is not quite bc No estivated ta the toial rein- bursable coneiru.etion cost to be repaid by the water users will be abuut eleven miU ion dollars or about 220 dollars per o.ere. Because of hi' costs durii.. and fo1 lowia, iwr, this obiI,;e.tlon Is coisitierabIy :±iher than The exstiig coract eLvee.n the 3u;a c lieclaIation requires ica water usr ot car CrOLtd j:tt bo me5i by the bi.i cos an aLLrldatory conrac it is reparnent problc:s iianne lie: :o t I xteii. te x .y;eit period. A stud:: 13 currexiy bei;. co.u. by thc i3re:u c deter nine tiicl ia,)a:j:.nt bilit; t:e tcr 'isors. J'he i.(iU2JJU; 0 riion and nain:,ance chario for the twa dollars and fifty cents for two acre-.'eet of watr, Additional water was available in one-half foot is:creits at two dollars per acre-root up to a niaxiun. o: three feet. cro year 19L wa 13 Gui e utures .hwy The Dalles-Caljfornja north and south coxrnectin oes throuh the project the area with Portland markets arid with important markets in California. area is . The Portland nirt of first iiortance for livestock. Other hiiways forn a direct link with the Wi1lanette Valley which provides a good market for alfalfa hay and other livestock fcds. In addition to hihways, the area is served by railroacs connecting it with distant rarkets for seed crops, potatoes, etc. the iorth Unit is served by fIve towns either within the Unit or located nearby. 950, is the county i.adras, with populatIon of seat for Jeffcrsort county and is located near the center of the Project. Other towns within the Unit are Culver, with a population ot 300, aid Metolius, with a population under 1O. Bend and Redmond are located on the old Central Ore.'on Project In Desohutes county to the south, but arc near enouh to be of service to ehe North Unit. population or 12,OO and edmond 2800. Bend has a Both Bend and Red- mond have thrivixa, lumber izidustrles as well as marketing facilities for a.ricuitural products. The Unit i serviced by four coirniercIal banks, one In the town of Madras, one in I-edniond, an:i two in Bend. The Parers Hone Admini tration has an office in Madras and prcv'Ldes credit to the L.1t of :o;.rcea availab1e There is a kroduction Credit ssoiat;.on located in the area with an office at edonc a Doaiostio iater upj of an adequate doiestic water supply is a serious problem on the unit at the present time. Wells are not feasible beoaue they vo.ild have to e drilled through several hundred feet of inoous rock anc tien with only a small criance of etLn water. The l&c In the CenrzJ. Jregon Irriatien District just south of the North unit, donestic water s.)lie.s are often re- lated to the iri'ition systen. Cisterns and shallow ponds are used extensively. These are fliLd £ro the irr-iatlon ditcies which cirry water at intervals even durinr the winter month3 exresz.:j for this purpose. This srsterr has proven satisfactory in that area where ir1'i;tion water is plentiful. Such a system has not been dcmcd feasible for the North Unit because of the ore lintited supply of irriat1on ater. The sto1dw facilities for the North Unit were deied to perriit the delivery of abo.t 2.4 acre-feet of water per acre to fars. 'Ljle this aiount has been aetermined to be sufficin for an average assort:nent of croj:s where careful irriutio practices are followed, it IS ql stionable if the s.ly will b eou1 to per- uae of irxigat.Lon rter for 11 stoc. and other do.nestic uses. prohle rrigaticn watcr mit ute recenti:r becaus cf ersitcnt lcahs that have be ccvelopin; ii the storae facilities. rior to tne I: ion development, ..ater £r Opal has become even xsiore rings in the Crooe iver canyon wazi puuped up onto t luIns and iLed to the towns of Culver, ietolius, and adras a cli as many of the dry farm hos, This sy is not adequate to serve th needs o1 the. increased iOpu- iator. JltLoiLL the 3ystem is cepable of exar13ion to serve the entii. ortn unit, expansion is seriously hampered by the I1h cost involved. It is to be exccted that livstocIc enter .ses will be delayed tuitil the doi; tic water iroLloa is solved. The Joaid of Itc of the Jef erso atei Con ervancj District equost a. te J.iUruu O hCC.Lauatiofl to tate over the otjc water syLei of the dia'ict and put It- in such condition that an adequate supply of domestic wair can be ftir.::se to all liowners. At the prezei.t Lo (3epteaber lL9) the Bureau o hec1auaton Is studin. the proposal. The coet of rehabilittixig the presit system has been eatimatoa at about 3,Lh.,OOO. If sixty per cent of this amount is allocateQ to the nunicipal users, the balance to r.ral beuefie1ar.. L'O e acre for the en 272 tire 50,000 acres of' the North 'Jnit Operation and riain tenance charges for the st Cli hen stiiaatd ab about r;.t Lon and nia:Lntenance thirty cents per acre per costs would of course be char'ed on the basis of service rather than per acre. be charr:ed to Land Appraisal Before construction of irriation works was begun, land owners within the boundaries of the proposed irri;ntion development entered into an areeient with the Bureau of eclamation establish.in;, a maximum sale price of land to settlers en the basis rad.es of land determined by an appraisal board. The followin: rules were followed by the board of apraisal for the clasluication of lands on the North Unit, Appraised values were established on the basis of dry land use and without repard to potential value of the lands for irri:ation purposes. For the best raw land (Class I), the maxium price was twenty-three dollars per acre. Lower grades of land were priced at lower fiures as follows: Class II, twenty dollars; Class III, fifteen dollars; and grazing land at five dollars per acre. Allowance was made for improvements on the land at the time of appraisal. \1'LIE.AJ.. UO.....L. OiTi iiiW, T]LiS £hOJCT h ar Class I La-rLbie, rust hove smooi. urface with slopes of at least four foUL d uct to exceec fifty feet, to iiü rile. Little, ii air, lvelLi sioulct be rqured, hist1 bu i..a:1e soil of fin sandy loam or silt (a) (d) .u;t bo wac ;ical:j free fror alkali, frust have depth of soil of not less than twenty ciies Lc, Class II Land--iri Class II i&ma shall coal or to all reqiLrc.Louts of Class I lands except1 that such land may be somewhat a to surface toorn:1. c iaLn geutle undulations, will reqoire an outlay of perhaps fitoomn llm'e per are to lOVi and repae fc water arid may have s uokn es six per coat slopes if sarfce iS vu.f amifrm, Class III Land Clas. III lni. shall coa ocm in z;pecI1icatioA o Class .. lorias excet t:e :;u;w1 so.. dotm may be I11 ..e3 OiiC tie jfac;e slo.ie La e ;reat a ten per cent i.re topoora.hj is uuform Jm oct to exceed i've per c.umt aderu ofce r;olr or . wavj. Class IV Land Class IV rej.rosents lands or could ot e irri; no for any reason should L1Cu. it was areed by al]. owners that lands held in excos of the maxjxnun limitation would, not b sold for more than the appraised value under any conditions. Any sales or resales of nor1excess lands were to be subject to the 13 limitation that in the event they sold for more than the apiri ed. rice, at least one malf of that portion of the sel1in- price w.'tich is above the araised value or the land (incremental value) is to be turned over to the irrigation district to be allocated to future construction and operation co the particular piece of land involved, Improvements :ade to, and ,laced on, the l.nd Pollow- ing the ori.inai araisal are avaised at their fair market value at the time of -aprntsal, ireq.ontiy, actual construction costs of snc.i iii. ovnants arc used in determirxin; a fair iarket value. ain.isal made at the present tic of a devc1opc. farm on. the proje would consist of the original value ..1acad on the land and iiipro'Tenon.ts, plus a fa r nrke appraisal or improvements added since the original a nraisal, There are some inequities in the present sysbem of appraisal duo to ,o.oeral fluctuations in land values and to differences in valuations that rnigJt result from conatru- tion of roads, market facilities, schools, or other conveniunces in or near the project area. For this reason, a new sy2ter of appraisal has been approved that will permit a current fair market eval:uition of both land and inprovements at an:T ti, ta.kin.; into account sucb factors as location, schoo1, and other factors, as well as the obliation to the iJrited. States. 19 flue to the fact thst the old .pprai ci stei,, is inclnec. in the exist;1ri contract bet:een te lsnd owners and UnIted states, it Is iossibIe to apply the new systcr. of preisel on the itcrt Unit at tL present. I-evis.ors in the risel procedures w:. U. be considered curir. mendaterr contract neotiatjons wIth. the itrIct, which I Is ex::ccteT will oo er within ttie next ir'r, Size of arrs The siz -effaru pattern up to 19I was restricted by the )3ureau's max!nuii acreae 1iiItations, which specified a maximum of forty irriable acres for each Individual owner, or ei$'htJ acres per family. It became apparent before operations on Individual farm units had Ioressed very far that the fnrm enterprises that were suited to lands of the North Unit required larger acreages. This matter was formally invei!.;'ated with the result that In Septerber l9L, a report entitled "1urL1 Unit Aereagos, florth Unit, X)eschuee kroject," was prepared by the Bureau of heciamation in suport of the presenti- effective lOacre maximum limitation on farm owner&.ips, The Jefferson .ator Conservancy 1):trict, which Is the water or& 3IZGiOfl on the ort UuIt, has attenpted to restrict operatIon on individual units to 160 irri.;able acres or less. This organization has considered it just and p.&- to rio-; tLon ha war unit D ha c ot oril'' b; aL$o opexa- ici iijait. 19L3, diviiiot o1 h) a: unit 8 tb. JH1t been virtually ec.lot&d o thu it wa 31ZC i'or the Table .LL_L: sibL to (L.i 3). 3 3ize (Irri;ab1e Acr;e) of Ownershij. Jnit Shown by Iecor of i'rcjcct )ffice t Ecnd, Orejon, iot.h Unit;, Leschutus roject, 19)4b Cent 19 9 20.0--39.9 9 .9 60.0--79,9 80.o-. 99 loo.o--159.9 160.0-..29.9 Total A 31 107 0 Source. 17 04 2 9L. 20 127 U 03 Total irriable acreao o Note: f iotal ) 100 O8E un ),000 0 ieI1:imary u.ri1t, cono.aic 1cport and aient roject; bureau of 1, iorth Unit, Lescute ieciamat..on, Boise, Idaho. It 1$ Indicated in Table 3 that twenty-two per cent of the farm a rship units haci ies than forty irriable acres and that thirty-five per cent had less than sixty irriab1e acres. an.g of the ma1l units were purchased under the old aere.e limitation. Others ere purchased as part-tLue farms £or the towns of Culver, acrLs, and Mto1ius. It is to be noted that these are farr. ownership units t1i' . the project ifice :ti units :; cEth t::L ovr: tc ZC ;;ct necess.r r co±ncdc vIt v-ery reccrds at t.he tatef idicatc that lior o!, th. h other setti:r:. in conjicton 2rOjOCt :tur. it IS .tin unit will econe stabicri, ...owcver, lized at et-ee. ty and 100 i this is ..ae1: 511 estImat( Ofl coditio;.i that exist at the proSan. time. \r*.S@VCXI Of 2:t; units are s on aS havinE over 160 irrijable. acres, The; are ferris that had not been entirely t L. op sub-divided at tht tine the bu1ition W&S :iade. They must he rduce.. to ownerships not exceein: 160 irr.Lable acres before 1rriatjon water will U e delivered. Charactertstis of Settlers The Norti Unit attracted settiers from a wide area. AlthOUth many of hei caine from dry fare in the immediate ares and from the Ui?la;n.ette Valley, a large nurthor were from ostab1is.e6. irri.ted areas, especialiy from southern Idaho an estcrn 0rcjn, and had had considerable experience on Lrri.LateJ farms (Table ). Only four had no f&rmiri.. cxerinci a all. UJveu c ee from tie southern rat IJ1SIflS area, especially frn Kansas, and had no irrigation experience. Te vcri. inr tLc srvcy ias thtrt3'-rJn Tbe vCra.. fsni1 for ctticr i Lfl tiLE Table :ror per 3.2. tud:y 1 Oriin and Previous 1?ar iericnceof Settlers Surveyed Nc.rt Area or of Oriin iO rccct Unit, L;.1:L .cil Settlers Oregon: Citri CrEon Wi1laiette Valley .Cç0fl Other Ogoii Vale Owbe e E.outhrn iaho California Ud- t Totals 2 2 7 I C) 3 11 11 2 2 OO 32 2 3 3 3 1 2 1 2 10 1 Ariticiated Agriculture ia;i factors nro It difficult to anticipate what crops will prcdoninnrte on the North iJnit under mature con dition$ L&scd : conditions which existed in l9I8. aiiy settlera are experinting with specialty crops such as veotable seeds, strawberry plants, and lettuce, in an attcrnr to determIne what enterprises are 1ikel to s Cceec, Other settlers are concentrating on clover seed production In order to take advantae of the favorable p rice situation that exists for that crop at the present time. ix. end App lieclamation, of Bureau Interior, of Department States United Project. Desohutes might program four-year The \Jnit, Iorth acrea;es unit Farm crop. clover the establishing to incidental grain small some with rotation clover-potato four-year a in produce could farr! crop cash The typE;s. two practical be mi.:ht it acreagea larger the For and farms crop cash are They the combine to farms. dairy suggested. are types two sone prepared has College, State Oregon sestIons the for programs cropping Unit) North farms time full For for of Specialist Crops Farm tension i Jackman, . Ft. r. reported. acreage the of cent per six about potatoes and cent per forty about for aceouned Leguies 19148. in furnished was water whien on acreae reported the of cent per fortyfive ahot occupied Cereals 1. Table Appendix, in presented are 19148, in fur;.iished was water whIch to Unit North tbe of portion and Crops irriated entire the for acrea;es alfalfa. and clover for crop nurse a as used was grain the however, cases, these of many in l9L6. in grains Only produced farms entire instances, small some In definitely. in- persist to expected be may condition eed-free situation price favorable bhe Neither the nor attractIve. cially espe- seed clover of production the make development of period cr1y this in Jnit ortn the on conditions Weed-free 23 be sot up ifl the following rotation: 1st yr--grain (clover sdn t:he s tubbic) 2nd year--clover rd year--clover th year--potatoes It may be observed that the above rotation calls for about fifty per cent leunes, twentyfive per cent grain, and about twenty-five per cent potatoes. It was sug;:ested that the dairy farius should be about equally divided between hay and irriated sture, and any grain needed above what is produced as rse crops should be purchased. If the fan has more than ei;hty irrigable acres it is possible to combiri& dairy and cash. crop fanithg. However, on farms of less than eihty acres, if one tries to keep cows and row cash crops too, he limits the dairy enterprise to a small uneconomic unit arid he automatically limits his cash crops to smaller fields and less economic units. A number of irrigation projects in the upper Deachutos Valley were started between 1901 and 1905. The early crops were grain arid alfalfa, and sonic potatoes. It was not until the als1k-potato far!ii1i, system was developed in the late 1920's that farnin, becane a good business on these projects. Befre that time, it was speculative, 1nd was low-priced, and chan.;es In ownership frequent. On these projects, of Which the Central Orcon Irri:ation District o, alsike or ed clover d potatoes are tc casi. crops on fs ron forty to eiIt'y acres. Fans of oihty to ióO acres .a.ally incluO a livestock entrirLse, often dairy cows, siieep, or beef. Turkey production is also important. 26 -rr rr - L,. The developmcnt of an irrigation project and ind1 vidual farms on a project may be a continuous and neverending process, or it may be short and abortive, depending upon the potential that exists and the feasibility of the project. On a well-conceived project it is reasonable to expect that improverLent and progress mlht go on Indefi- nitely. Penporary buildins, machinery, ud facilities will be re4aced by items of a more permanent nature. Farm practices will be modified to meet cbaning conditions. Some practices first adopted in the urency o: getting the land under irrigation will be abandoned and replaced by sounder methods which will pronote the project and agriculture from a long run point of view. In the first years of developmeot, however, the im- porbt thing is to get the new farms on a paying basis they are making a net return above costs, and where further investments are not imiediately necessary. This wher means that the irrigable land will be irrigated and actually producing crops a.td the settler will have workable buildings and machinery. it nay not mean that the settler has everything he desires to have, or should have from a socioloeal standpoint, but if the farm psses the "breakeven" pojnt arid is making a profit, a better home, better 27 livestock, and finer rchinery and equiment can be provided out of the farm oarnins. ?rior to that time the farm will require substantial investments of tunds not made from the farm. It such funds are not available, develop- ment will be slow and it is likely that the settler will be liquidated without ever setting his farm to the profit stage, In addition to the availability of investment funds, a number of other factors will tend to influence the rapidity with which farms are brou.ht to the profit stage. These include enral economic conditions, fanri size, physical condition, of the land, demand for adaptable crops, and the ability of the operator to do a wide variety of work and to husband his resources. In the present study there are certain factors that can he used as indicators of the degree of development. .erceritae of the irri2.able land that is irrigated is a measure of land development. From a long run point of v such a measure is not without limitations. Land may be irriated that has not been properly prepared to receive the irrigation water, roaultin.; in costly erosion, poor crops, waste of water, and inefficient use of labor and capital. In the early stages of development, however, these limitations have loss significance. As has been pointed out, the iuportant thing is to get the land irri.. sated and into production so that the farms can carry themselves fnanoially while further development is made. 28 Changes in the value of settlers' assets may be used as an incuction of the financial proL.;ress made by set- tiers. The period 19L45-l9LfJ was ode of rising prices and inflation. This fact ahould be kept in mind when evaluating the changes in the value of asset2 owned by settlers on the orth Unit. Some of the increase may be the result of inflation in values, especially in land values. Throughout the following analysis care has been taken to calculate the increase in the value of land as a separate factor when analyzing chanèes in the value of settlers' assets. Not all of the increase in the value of land may be attributed to inflation. A discussion of this point is presented in a subsequent section of this report under the heading, Capital Accumulation. Percentage of irrigable land that is devoted to specified crops may be used as a general indication of the degree of development. As indicated in a previous section of the present study, it is expected that legumes and row crops will predominate on North Unit farms, occupying perhaps as much as seventy-five per cent of the irrigable acreae, Sniall grains are expected to decline to a position of minor importance as the development of land proceeds and will be used principally as a nurse crop for legumes. 29 Froiçress of Land Development Land development, measured in terms of percentage of irrigable land that was irrigated in 19148, has been rapid. (Table 5) All farms surveyed, covering an average devel- opment period of 2.75 years, had eighty-eight per cent of the irrigable acreage per faxn. irrigated ifl Those 19148. that began development in 1945 had an average of ninetythree per cent of the irrigable acreago in by 1948. This rapid development of land was possible because relatively involved in pre- little labor and little cash outlay were paring the land for irrigation. Moat of the land. had been Table 5 Degree of Land Development Measured by Percentage of Irrijable Land that ias Irrigated Sixty Farms, North Unit, Desehutes Project Year Devclopnent 5e'an 1945 19146 1947 19148 Al]. farms Number of Farms rrigab: er % Ir gated Irrig c re a Farm* Cro ted Year 16 914 18 21 69 67 75 78 93 5 71 80 83 60 81 71 88 92 81 78 *Averaged b dry farmed prior to the present irrigation development. Thi1e some of the topography is rolling to steep, little leveling was done and few costly structures were used to 30 the land unIer irri, ation. It i reco.;nized th much of the laid.: being irigated will require additional leveling and terracing. In iany cases ir!tLon struetures have been made of untreated native luber and will have to ho replaced in a short while. Some settlers have not provided for drops or check dartis, but rely on large boulders placed in ditches at interv1a to check the vel- ocity of irriation water. On the average, settlers irrIgated about seventy-one per cent of their irrigable acreage the first crop year (Table 5). It should be noted that the first crop year does not necessarily coincide with the year In which development began. Irrigation water was delivered to the first farms in the spring of l9Ló, whIle manj of the settlers began development in l)). Some of the farris which wore first irrLated in 19L1.ó received the water too late that year to do .uch good, This will, In part, account for the conparatIvely low percentage of the land that was irritated on farms on which development was begun in 19)4S and l9t6. Factors Affecting the Rate of Land Development Aside from the physical condition of the land, prob ably one of the most iraportant of the fi.ctors affecting the rate of land development is the total amount of capital 31 to the etlor, Table ois the relationship beten bhe perceL1tae of irzitable larAd tiat was irriated per farii in 1)143 and te total anont of' capital that was avallab1 available to the settler. Total caf;ai available i the value of beginning ases, plus ron-farm iIlcomo, plus all borrow :L:, S No va1ut has been calculated for farm earnings Table 6 Total Capital Available per Irriable Acre and the ereontage of Irrigabie Acreage th&t w irrigated Fifty-five Farms, North Unit, Dosohutes Project Year Development .umb e r of Farms Be ).914: 90--l00.0, irrigated 70-- 9.9% irrigated irrigated 90--l00.O irrigated rO-- U9.9, irrigated 11 Under 70.0% 19146: Under 7O.O; 19147: 90--lO0.0 70 b).9: Under 70.0,: * irriated lrriated irrlated irricated Average Capital Available per Irriable Acre* Dollars 206 137 *-- 13 223 176 10 14 7 260 231 220 Total capItal available is the value of the operators beginning assets, plus any off-farm income, plus all borrowings, averaged by farms. for the period. To compensate for differences in farm sizes, total capital has been calculated on the baia of irrigable acres per farm. The time factor has been compensated for in part by grouping the farms by the year development began. Other factors that will have an ifl- fluence but are not cot:. Manner in tc1 for which the capit.a1 .n Table 6 is used. Land class (pirsical ond:tfon of the land and topography). Experience and uative ability L. ii 1V:LC1j.Ul initiative of of tlers. roup indicated ifl eacL ievelopmcnt the oertor. in Pable 6, set- tiers with over ninety per cent of their irrlable land irrigated In l9L3 had re capita]. available to them than did those wish less than ninoty per cent ir'igatec1. There was a wide variation between farris in the rlation to total capi tal and pe rcorltaLe of lend irrigated iLIdiCatir.i: the t factors other than total cital had an important bearing. It seems that iiiot of the settlers had enough capital available to them to pernit rapId development. This being io, factors other than capital that affect the rate of developnent took on greater weiht than would have beexi true if there ha3 been a serious shortae of capital. kre sent Land Use Ereaent land use will be considered on the basis of irriable acreae with the folloi, use classifications: now crops (including potatoes, ve;etables, .rdiis, etc ) miali rain (othor tha nur!e crrp). I, Irr1o.ted pasture Idle irrip,able land Practically all of the land (ievOtec to row crops ws used f or potatoes, with a few acres in such specialty crops as head lettuce, radish seed, turnip seed, onions, and strawberries. ajng snail rans includes Land classified only land that was zeoce pcc1fioaliy for the small grain crop. It does not includ.e grain that was planted as a nurse crop for lctes as such lanc has been Included under the classification 'legumes." .. all .raThs Include wheat, barley, oats, rye, and a small acrea:e of corn, ost of the small grain was wheat and barley. gunes have been classified as hr and seed. lracticallv all of the leguno hay was aiflfa with a very small acreage of red clover. Seed legumes Include ladino, alike, red, and white dutch clover, An average of fifty per cent of the irrigable acreage of all farms surveyed was used for production of legumes in l9t.6 (Table 7). This acreage was divided almost equally between hay and seed. Farms upon which development was started in l9L and l9I6 had about sixty per cent of the irrigable acreage in legumes with about ten per cent more 314 hy than seed. The percentage of irrigable acreage devoted to snail rauns declines as the period of development lenthena. Almost fifty per cent of the irrigable acreage was used for small rauns on raras in the first yar of development as compared to about twenty per cent on farms that 5tarted development in l94. Table 7 Land Use. Percentae of Land Devoted to Specified Use ixLj Far1Ls, orth Uni, DC3CkiUtes project 1eveiopment l7hô All farms Leumes Srr.a1l Row Iri.ted iasture i: die r Dry .xrains Gros 3.3 2.3 26. 11, 20,7 3 ,O , ') 11.3 13,3 --- 2.6 19 0 22.0 25.3 2),7 27.1 S3 13.3 ha Seed 3ô.9 cii' b7 dividing ci roui by the ac Farmed t 3L,! '.6 3.6 6.0 8.3 ch 1t.n calculated c otei t tho ue L the cec c ou,p. ia'1. aort.ae ir Land devoted to row crops shows a . Lile liht but not appreciable increase as the period of dove1ojiet lengthens. Row crops involve a great deal of labor and caiital both in establiahin the crop and in land preparation, so it can be expectec that land devoted to suoh crops will increase ftluch more slowly than is true for the iiore extensive crops such as alfalfa and clover, Land used for irri.ated pasture shows a slow rate of increase with the is theiün' of th development period. The slow rate may be attributed to the lack of caitalfor farm buildings, favorable prices 1or leuzre hay arid seed, lare amount of capital neecLed for 11vetock, or any other Including of a numhez 'f factors or combination of the lack of domestIc water develont. çital Accumulat Ion tost of the settlers included in the present study experienced a substnn.tial increase in assets (Table 8). 14uch, but not all, of the increase was the result of the increased value the settlers placed on their land. The present value of land was based entirel.r on the setti eatates and there was a wo LvUrCiCC ol. o:n:on as to what the land was actually worth. fifty to 3C0 liars pe iia . cu n.om istiiaates cr for siiiiJ.r lands. In this early period or develojmieit settlers have little historical data or eye'ience upon which to base estimttes of land value. It will be noted from Table 8 that settle's who took their first crop in l9! were ;iach more conseivatie in thoir land evaluation than were the settlers on farms fir3t cro;))ec in l9L7 arid l9t3, A part of the Increase ifl land value is the result of actual expenditures nade for soil preparation, establishing crops, fertilization of the soil, etc. Sonic of the in crease can be justified as a value for the operator's time and labor on the land. Althou;'h it is impossible to tell how much, some of the Increase in the value placed on land may be a capitalization of future earnings. It i8 of course, possIble that the settlers' estimates of land values were low rather than higi, however, it 18 believed that such was not the case. The attitude of settlers In enorai was one of optiiiism and high hopes, Table 3 Settlers' Financial Position and iet Assets, Avera.e pr Irriable Ae Sixty Farms, North Unit, Desehutes .roject First Irri'atod Crop Year 19 Number ol' iarus iabie Acres or ercexita. e d ovember 19L8 ret inclt *based 60 23 Dollars in assets Increase due to land: Increase exclusive of land All Farms 2 Farm Asots, iovemberI)!4.8* 13eginni:i: as.ts IAcrcJse i ass.ts Debt, 12147 12 Dollars 3D 2L 91 1,7 3d 119 2 12L1. 131 1) 2 119 I Dollars 282 107 17 86 iô 8]. 33 8 2L3 110 173 61 112 79 33 on settlers' estimats. Bezinning assets are equivalent to beginning net worth In that none of the settlers indicated any debt in the beginning. Iricreaz, .in net assets duo to the increase In value pieced on 1nd. The ca1eulaton LB ade b s.ietracting the purchase price of land from present value. 37 Beginning assets (Table 8) include all of the settiers' household and farm assets as well as their cash balance and presents what is believed to be a fairly accurate picture of the settlers' beginning net worth. Assets as of November l9L8, however, do not include any cash balance the settlers might hive, nor do they include the value of crops, feed, seed, etc on hand at the time of the survey. In iany cases enumerators were unable to get the figures for settlers' cash balances for l9L8 so liquid assets for i9LiU have been omitted in all cases ifl Table 8. No attempt was made to determine the inventory value of feed, sed crops, fertilizer, etc. any o.t the FI[A clients had undrawn balances on their development ions and these balances have been included as assets. As a group, the war veteran homesteaders had a lower capital accumulation, oxc1is1ve of the increase in land values, than did the avere of all settlers in the same crop year group (Table 9). These homesteaders had beginning assets considerably below the average for all farms in the sane crop year group but they were well provided with fands by the Farmer's Home Administration. Total borrowings, avorain:; between iJ..,000 and 1.16,000 per farm, are to be amortized over a forty-year period. The horiesteadere valued their land considerably lower than did the aver&e settler on all farms in the same crop 30 year group. Fro tiLe dra presertlj available it i im posablo to say wret.rer t.le land is in fact of a 1owe value, or whether the homesteaders rrc :ore conservative in their cti'nabes of iaxid value, Accoriu to lmid clas 8ificttin used by the heclamatlo Buroau, the homestead Table 9 Finaucia]. Position and Caçital Accumulation per 51c e o2 Ti oi o North 1init, Desehutes Project Number of Faris Irriçab1e Acres per Farm ?erconta:e irri;ated Assets i'ovenber l);1c Beginning ass ts Increase in assets Debt, flovember 19148 Net increase in asts Increase due to land Increase exclusive of land 0 100 L7 Dollars 3O So 102 88 Dollars 2(2 914 1146 168 131 73 37 0 -10 219 'Based on settlers' estimates. **Begininr assets are equivalent to beLir1nin neb vorth in that none of the settlers indicated any debt in the be;inniu. Ther also include the appraisal value of 1nd. Ineretse in asset values due to the increase in the value of 1an calculatect by subtractin:: the appraisal value of land from present value, lands are about equal to the avera.:e of land on all farms Some of the homestead lanci was covered with Juniper anu brush, however, the cost of land development surveyed. was only about three dollars more per irrigated acre than 39 the averac for all aru, a.I I - r ir.t dollara per s concr1iat..Lc-. tX1LI c1Dj ..., .. .. - .. .. ..Oict . acre on n -- O .. ---- aia tc acre as ozsbl-. cost of lund dG- Ithe ay.. -netcen :.c: he 03 &. s0c&t.L. :.t-:. O. 7i1$. eecausc. of .ta.: jQi t ion.. t ii fact the tuate3 of the value of land n re too 1c CO;. to all frns, the net gain :n assets, as shown in Table 9, on icmesteaas will also be too low. There so' to be little relationsiip between the iroreas-' in vcrtt, exclusive of the irtrease in land value, and the value of be socs, total borrowi or beinnin aLets plus borr iLUB (.able 10). in Table 1 the Xtr farns survcjed have been rou.ped tue first .irr.i.;atcL. crop jear ana eCn crop iar OU) was dIvided into thirds a oLnc to the .ijerea value of assits. It would seem that tero are factors other than beinnin.; assets and borrowjn that have an important in- fluence on the fI:iancial pro.ress of seitiera in the early years of development. The type of crop produced probably had an important influence on caita1 accumulation, The are tndicat... a. a. 1 t as asoeiited witth n wa true 1cr ioit oth: cL.DJi3. Table 10 Sixty Far;-is ..jed. b:j i. 1ir t (op {r auI by the Iiri,ah1 cre orth Uiit, Desciutes Project Net iir3t Irri;ated 12L6: Lower 1/3 Middle 1/3 Uptr 1/3 19Li_7: Lower 1/3 ct1e 1/3 1/3 I 9143: Lower 1/3 Middle 1/3 Upper 1/3 iflO1OU.3e 3 o rrow in Dollar Lollars 1)0 lIars se -12 7 79 -30 ..,. S 163 73 56 1us orrow :Li1.S Dollars 213 53 121 87 1614 73 33 72 914 -30 102 1146 i_u 6 93 125 32 100 J.' 2 61 dcr.as L.3 103 92 136 L.6 Irriated 814 75 2(0 1314 35 78 52 82 *Increase In the valuL. of assets exclusive of: the incroase in tie value placed on land. m tT' f-F , Ii ha been thoin In prevIou 'r of ithe rresont study tha h the develonnent of North U J. b rapid eventyone pe cent cd the Ir: a farn 'var' Ir ezi in the fir irL ect crop year and per cent of the irri;abIe ab o'. all after waEr r cial pro:re :i have deyi.s G: .Lty to rt.c:L ;Le point in rd o the 2i fiit The (Li.) farm buildi f&rms 19 rn_ ar, :cL i;j other land develor;ierit, (3) ditcl: ture, i'r erc includes caitai for: (1) l:;n: of , j.t ;reo years Lu OOd, r. ued vcloacut ITe1IU and Ion struc. Icies tic water, (7) machinery and equinent, and (3) liveock, The above It,rn have been designated a the flV B S tinen Ite and will b given partIci1ar co.sidraLlm In the foliowi analysis. In ad(itiou to tbe items specfied abovc, on wriich cctailcd were atiered, t;:iere are other capital needs that mu8t be net, but on wi.ich data of a less detaIled nature wore gathered, These other items include capital for farm operations, estabil shnieri.t of per ennial crops, and tbc support of the operator and h ramily durin: the doveloomeut period. The average total opital, in addition to farm earnthat was .sed to hrin.: iiorth Unit farrs to ho pros Ci te of develomcnh irriablo acre. Th as abt 206 dollars per was determined in the follow- iris manner: Sotipg beg! in. net assets li0,0O L1i non-iarrn income Avae total borrown li,uO 80 Average total capital öo.00 It should be noted tnat even nonr farms of the size arid iri the same development year grau, there was considerable variation in thc amount of capital that was used to roach a siijlar de;ree of dovlonont, It is be- to eami, ciore other than capital that affect the ra of dovelopent bu.t it seer;is apparent that mana;ement is important, yond the scope of thIs It is believed that the total amount of capital in dicated (*.. 206 uer irri.:a acre) ciosol approxImates what was roqirci to put farms on a production basis. Ave in: total borrowings over a period of years to determine the amount 01' caital that was provided by credit presents a problem of duplication. In a period of four years one borrower may have received a loan of 4Yo for one of the years. His borrowings will total 4L,ouo for the period, however, ho has had the use of an average of only 1000 a year. Anotner borrower may have received a loan f p)O0 for a period of four years. His borrowL;s will '43 also total '4OOO for the eriod but he h h&:1 bhe use of CDO a year. Averae total hci cis for t sixty fnrms surveyed includes souie of the duplication just described. I3tjcnuse of a number of factors it is believed that the duplication is not so larje as to rü.tly rniL. g in the total amount of caital ti.at was :rovided by credit. The average e period of development for all farms was about 2.7 years. About seventy-five per cent of the farms had a development period of three years or less. The efi.ect of duplication is further reduced by the fact that eighty-nine per cent of the total credit was contracted for periods of over one year. Of this y-nine per cent, about half was for over five years. Most of the credit as used on farms on which development was started in 19)46 or later. Average total borrowings for the sixty farms surveyed amounted to about eighty-five dollars per irrigable acre, however, the average debt at the time of survey stood at sixty-one dollars per irrigable acre. The best average figure on capital tIat was supplied by credit would be the largest amount of debt that settlers had at any one time. It is believed that such a figure would closely approxinate the ei:bty-five dollars per irrigable acre indicated for avero total borrowings. The averaEc debt for the fourteen farms that wore first cropped L 244 in l918 was about e1htrsix dollars pr irriab1. acre. This figure seems to bear out the a imption that average total horrowtny for all iis ay be tcken as repreenta tive of ap1tal pilid h credit. While all of the 1tem for whIch a capital need has been Indicat re ieceary to et ens into prothi.tion., it Is 'xenditires f'or the eiJi; ma vestment It.eis that this study is prImarily concerned, They are the expendItur have to be made In order to get the farms up to the point of production. The amount of capital that was required for the major investment items on North Unit far:as was found to be about ló8 per irrigable acre. The amount varied somewhat with the year In which development was started and vith the size of farm. This amount provides for land purchase and the initial prepara- tion of the land for irrigation. It provides f or initial family housing and some housing f or machinery and livestock, provision is made for the essential farm iaehiner and some livestock. It will not provide for the cost of eatablishin crops nor will it provide for family living, ib1i the amount of capital specified a settler' can reasonably expect to et his farm up to the point of producing cr'ops, he will have necessary machinery with. which to do it, and he will have a place to live. Most of the amount Indicated (i per izigable ac Will b ' a i;t1or do evt1 i-.nt in t] ipt ftt ::.yth not hv the ex.i;L'e LD.r1t to start wIth he will bv; t' have a. reyed etlrs borrooT ouce of u4y. )n rrw Usthout f1ft-fIve dollars pe ir rigable aee for the major invest:nnt; Items (about thirty three per c o the ct). 7 The term 'expenditures' as ervics od p ere eara tI value I doca not include the value of the o::,cr.tor's time and labor, In cases of homeeteads, the value of land is included as a purchase even thouh the homesteaders dId riot have to pay for their land. Thirteea of the far.r:s rveyed 'Rerc homesteads. of goods rc}.ased, iThe average expenditures for eve1r: pe.'Iod riajor lteas of in- re prrseted in aot of the ite s \vill he d.L scused u.ider its separate hdin, in the fo11c'ing ectior.s. Tab:Le 11. Table L1 ditures for a3or Itcns of Lavesient in tLe J.evelopme't ?eriod Sixtj Fares, Nort Unit, D chutes kroject .vg ixjicrid. Avg It em tc re e r F a rnL Dollars Land purchase 2273 li).3 Land velopinent Irrlation systeai i5L. Farm buiieitks Residence Donetic ';atcr Machicery and Livestock er Irrib1e 2772 13U L oil at' S J. . 10.70 0,32 2$.b3 1.27 3'33? Totals 112 10.5.1 I 25 93 .o11 ars of Total Invest. 2. ;L4. 1.]. 1.90 3.36 3)i.13 1.70 20.1. 65.75 39.1 57.97 100.0 13 90 1.0 The average expenciture per irrib1e acre as calculated by divIding averar,e casn cost per farm by the average irriat1e acres per farm. L7 It will be noted that real estate purchase and de velopment accounts for about fifty-tbro per cent of the total exeriditure for the major investment items. Chattels accout for about forty-seven per cent. Mack..nei.7, residence, and land purchase are the bid: teri. aecoLu ing for over three-fourths of the total. tveraLe cost, or exeriditure, per irriab1e acre" is uaeü extensively throwhout the followiuL: tabulations and discussions. The calculation is made bi divdin the cost or expenditure per farm or group of farms by the 1rriable acres for the frn or group. Such a calculation allows no value for non-irrigable lad., h.wcver, it is believed that the farms re purchased primarily for thei..potential irrigation value and that any nonirid,ble land ineluied in the purchase was inciaental, it is recon.zeci that the non-irriabl land i riot entIrely without value. In the recent years of ooc. :;ois ure suply dry land. wheat has produced about fifteen bushels to the aec, a.,d on non-ai es improved pusur cultivated land native t have beer good. Nt has iioc there jble, It is urj c lai ces,fui in ficiub use of nachi;r; and la.ic aa ve ived .Lat any hy P rcton with Le irr.L ate best be a ovn te years k-ev iLion. n sni units uits will at ivent :ocal farm incrs wit the mnc jfl th arms u size (Tab 12) It will b th sia11est acr ge group had or2ly a 1ittl over half as grei an investaient as d1 tiose in the next larger farm group, whereas, the expei:iditur s for the other groups are f:.j'V fairly do e toether. Iot of the griat difference in the smallest group is due to the low investnt in buildings. Table 12 Jxpenditures for liajor Items of Investrent Sixty Farms, iorth Unit, Desohutes Froject rriguble Irri.:ab1* crease Acres Group ier Frri 39- :9.9 50- o9.9 70- 39.9 36 62 90-119.9 120-luO.0 All Farms Total Inves per I Fea1 ocr .Parm gable Acre Ltate Chattc1 Dollars Dollaré Dollars Dollars 3,295 ,357 7,751 11,272 3,)5' 143 9,L.02 8,573 19,082 17,975 178 127 61 7,163 6,)6o 13,623 168 77 107 ô,119 7,310 12,115 13,963 187 195 131 cal estate includes the items: land, land development, irrigation system, domestic water system, and all buildings. 'Chatte1s include machinery and livestock. Farm dwellings were small arid inexpensive and other farm bui1dins were almost ion-exjstent, 149 eiitures for Thvstrriont. Do o:a ai:s (rou9d b Zear oi Bean Ia Because of the higher degree of development attained, and the longer period of time in which. they had to make use of ca?ita1, It miglt be expected thI the settlers who began development in 1945 would have uad nrnre development dollars through 1948 than did those who began at a later date, Such was not the case (Table 13), Settlers who Table 13 :xpend±tures per Irrigable Acr& for ajor Items of Investment Uxt IL'r (}r by Year Develojrnent North Jnit, Dosehutea kroject Year r)eve Land pureLase Land development Irrigation system Farm buildin.s Residence Domestic water Machinery Lives; o ck Totals Dollars 24.40 12.25 1.95 7.65 2o.21 3.90 12.10 153.41 Dollars 2.)5 12.10 3.0 6.45 36.0 3.10 62.75 11.20 l3.1., Dollars 32.31 12.17 1.85 9.10 36,00 1,85 66.50 7.25 167.03 9 Dollars 17.60 1.75 7.35 55.00 2.65 69.80 20 xpenditure er irr1rab1e acre is calculated by dividing the total cost for the group by the total irrigable acres in the group. started in 1945 had used an average of *153 per irrigable acre through 19h as copared to ;2O8 for those who started in 1946. 9 13T p3OU q O'IB.& oçUM UT BW IOJ TT pOZB BM OO WX&J u w9q 9A'3T. WT WQW1.AUT IUO JQ zoj p ptrri pOUTWT1E uq 9L 99 L iTt1I U9) 19ct pU'8( JO OO 8T U1'O1A9 ouqO e O3 9T qRj u c 09 101 1 iL! tL tE t1 06 09 1). 6 p, 91 oot t16 zXZ7 çw I tt3 BTjJ.i wo'3 t! 3OZt ..r:oQ c;o1cj II Q ix-:c; 1T 'ptIT -pin t.iiJ zro 9j6t t.iTuOTJ JO Tc UTTOZtd eq-çod. o o XOTZd O.1 ?t UiUTti' 8crbGpB trø unbqt o pu UT :3J TOT . -r ..i... f4V-) O ucT cq T ZQ)(T coa t1TU eqZXi !:q vt a po.xnd O 'TP nA-..)4yp V B rt J1J c.q 111 :D.Xj p)q.OU Jo 1p U@PT$'tt oç .1W XOJ p;uco UT UT Iø: u ;t;Iw[ ot :c)o ttti T.. et xoJ ; ;o eIzOL1 pEQTUT UT 51 investment per irrigable acre for iu other than land how little change between farms fal11a Il the various development year grous. This wou1 eei t3 indicate that the balh of' the jnvestucnt on all firs vaS niade during the first deve1oDnlen year, Settlers on faris surveyed expended between 129 and 16)4 dollars per irrigablo acre for iajor investment items in the first development year. This expenditure was in addition to the cost of land and in addition to expenditures for crop production end family living. Table 15 Expenditure for Major Items of Investment, Other then Land, Adjusted to 19)43 rioes Sixt; Farms, 1orth Jnit, Dcschutes xroject Your Development Beran 1 9L 19 19)47 19)48 Total iend1tures or Irrigable Acre Doll ars 129.01 137.70 13)4. 7. 163,70 Cost Adjusted 19)ii Prices* Dollars 167.71 lô3.61 l4: .52 1c3,70 d by Oregon arm Costs Prices Index prepared by the Agricultural ie monies tension Service, Oregon Sta e College (Sendix Table 2). Ad j The cost of residence for the 19)48 group has been materially increased by the fact that four of the five farms included in the group had Farm Ownership loans from the Farers Home Administration. One of the stipuw latlons for suh a loan is that the borrower must erect what trac .i hone, '10 bJ ;i; ?EI as an i faria hv1n knee lcaa3 woru built by con- j at an aveac cost of aou jOJ, tor )r)vidin ti was aLL he ltbor, On ftr o; ao o: ho labor ersLL" banns, a by tfle Dj or lfl hG costr'nctioji coniacrablj ios that the ind1eaoá 1.. even for dwell ins coiab'l to the ::IL Land The per acre cost of land purchase definitely influenced by the ar.lsai ncd y the 3xwi of Reciama calculated tion. The avere cost of land fo all far on the bal o totn.i .cao (Ta;lc II) ic 1 within the of the Bireau's a..:raisa1. The cost per irrigahie acre, vr, was consierabLy hLhcr as 1a been inrang dicated 1:-n t:e previous ecion. In Table 16 all survey farms have been grouped by the predoinant land class per farm. Far;s having fifty per tho iriiible ac1; in a pare.Lcuiar land cent or :iOr class were tub ifl that class, If the land was divided about eq-tally between two classes, Lh farm was grouped with the lower class. Farms equally divided between all classes were grouped in the iiiddle class. UTTTJ UIJ3J UC eq;Jrç JO SoO xoqçt tqp q oq. P8L TT O3 9!OZOJ GOUTV 'JO GT1JJ CJTp o. fOJd e uTvo '.ptw. £TsrtoTLIcT -qns o sves 'droz3 c pdo w xoj ieL pu x rc. OfAØP JO potid OJQ UT 2UTTTJ 9UiiJ .1OJ O00T BWtJ LOT i TV (01 ( L TO 0' 0 i1 I L'ctt 6L xe r1x J1d wx gOXO f Jo X3r TT?IO ptn3'I JO PH'c{ çox J0 'yi: tq.xo t) ptr1 tITtOPJ PTJTZTD UO Xd 91 oqt Trb 'POLTT)a a T n; uo JC T[tO PtT IXOJ J?X. 'oTthO) 7ti)3U UT po'J JO eT JC' TO T OU o;JCJv1T in th C1a3! iT (Tabi:', 17) I p'?rCT rj.4 IL i t t Thct 1 ie to t1 ii:i. of yic,n-i ri bie 10 a a Wfl3 .Liicated in Table 16, Table 17 Cost of Li.nd iLrcjase edo..ii.iant ar1d Clas orti Unit, De3c!.utes .Lroject D:Jcd b A i1e Dollars ,t. "7 2e 2' '3 2222 Cost o farm, per os t 3l.3O 2 cias irc.uue all r cn of the lrri;abI land in th The 1aii DoUars 20,39 vin over fil1y ccfied c1ss. land per fan divided b 1;t1 icroa; per 1ai pr far:i dvideã b: lo acr.ae Expenditures for Land Devment The item 1and development" inciude ueL operations on the 1a-iu as are c&sary to r it for rr;atidn. The iroparuton nay incuue reiiiova.. of natural rowtn rou:h 1evelin, f.n1sh 1eve1iri, &nd terracin. since most of the land of the iorth Unit had been cultivated prior to the present irr ati.on aeve1opmnt, there was a 2_) little :1 cx o wt !' 1r1d ev' fo 1 :wtt e;crr fc1 1cve1i. iioint do :-r. Mox u::kde:' ok!' the i"n- n!1ahlc nrc ra1uc Laid c17e1':ie-nt cost ri.;lr ho ..Lndi7id1.ai OpC1..C:3, as Ai &ue i;0 (O5t Of vevo, ial 1.i.i devei.nt. fro srst has bO.fl inin some Caces tha cost of cluded in iaid devolo2nient where oporator tre unb1e to j3 e srate o';s. hen faras are grouped br lard la'i (Table 18) it is seen that there is a wide differe.ie betwer the land classes in the. cost of development, The difterence in the cost of de lopniat of land 011 farms falli,; in he vanous classification groups tray be mainly attributed to two factoz (1) the differce in the hysioal chanacteristics of the land in the different o.Lasses, and (2) cie difference in the time d,evo) ict was started. As was pointed out in e previous ctcr. headed Lund r-urohase, most of the farms falling in the ii:',ri r land classcs were purchased at an earlier date than tnose purchased in the lower class. Settlers developin. farns in the lower land class not only had more difficult land od1tiofl to overcome, but wore also cperatiri; in a period of higher costs (Appendix Table 2). so The item "irriation system" includes the coat of such items as ditching, pipe, flumes, check boxes, and other irrication structures. The averac coat per trri ated acre was found to be about 2.20. Addn. he cost Table 18 Cost of Land Deve].o,pment Sixty Farms Grouped by Predominate Land Class per Farm Noith Unit, Leschute Project Land Class Farms 3: Ii III All Farms 0 Cost pr izable Acre 214 Doll ars 9,19 12.12 17.31 60 114.17 8 28 Cost per Dollars rriated Acre 13.00 21.146 16.142 of the irrigation system to the cost of land development for all farms, the average cost per irLated acre of land development was found to be 13.62. Farm Buildins Farm buildns, exeludIn residence, had an average expenditu-o of .:C73 or all farms in the study. The amount expended ran;ed from no dollars to 1000 per farm, There was only one farm wIth far:n buiic.i eosdn as much as OOQ. This included '14O0 for a joato cellar which is considered to be not typical for this period of develop ment, xc1uding this unusual item, the average cost for O C)f(' tUO.XJ PJTTfl.X .!tUO JO et 1r1 UT UZZDAUT uGqs-çx-uou PVOTPUT TflO,f E)'T3(ZO tX9tJO ej; td 'WJJ " BJ9M U TM 'dflO1I oT3 666 £t$ 6t-o 'uTptplq oe .q pro T 'WJtJ I8d up-Tnq 1SWttJ T!U JOJ W11133 JO øO 99Z9A ot Jt) 99S pq eUTtOT1 Gfloq xrno 99t srttoa B; Lit PE çn 1OD 'cufl ço UTPITn TLJLJ pajoed JO 6t SO3 1TIIA qr;j G3 LIaTJ Ot Q pt4 °T" PL 'tQ Ott .xao .XBd Gqt9pUOO JO r3xr Qq 'WJflj UOA9S tUO LTO PUThDJ TI1 qori AZflS uo punaj sJupnq wazj LTA} t3fl.PTATPTIT J0 otpu IZA cD3 6t 9tq 'Wfl3J 'p)UOqUU £TflOTAId TIT Pfl.Un Gt 2Upr3CB TITtT ZJJ UO pUTLCJ tT't1 O ii OO Et 'JO '5 4JTJ 1IJ JO uO OO T xj tqpfln% LkWJ cm U)C] PTT'T Jo OUTTI UQ oq oq. tZ?J ttB JO 58 2b 20 Cost of Farm Bt1dius Zty Farms Grouped by Irri;ab1e Acreage per Farm Noith Jnit, Desc.ut;os .frujeo b ab.e Avera Group 30 t9.9 1rriab1 . Acrace 36 5070- '9.9 399 133 )4 36 62 77 107 90-119.9 Cost vere Cost e: Irx'ible Acre "er Farm Doll are Dollars :1:; .08 7.3)4 99:) 12.97 8 18 120-1ô0.O 1)43 617 )4 .31 All Farms 0 00 678 8.36 Eesidencs The cost of the farm dwe11in, for all farms ran:e from 00 to 7500 with an avera:e of 2772 per farm. he all farms are 8rouped b irrigablc acreaea (Table 21) it is seen that th smaller farms had the Table 21 Cost of Farm Dweliin per Farm Sixty Farms Grouped by Irrigable Acreages Nort} Unit, Dechuto Project Acreare Group 0- ,0- c9,9 70- 89,9 90-119.9 120-160,0 All Farms iumber of Fars 15 9 16 10 10 10 Total Cost Dollars 1138 2522 2156 t1.O90 2938 2772 lowest cvcJt L1 j\/ OE' [Ei..i; . cor.red a high Dercentae The 20-119,9 ae:c of FHA "Fari )wierhip' loans whie preVL.) CCti MUd, WhLOh 1ndicJec COEt of houin. -ee c'.i ussed in a t1E Q AJ: tiO tü raise the heu feri.s were ci1in.ted, the cost was found to be about .:2L)40 for the 0 Jorrestic Latcr The tern ao.ue. tic . bei Oci c(.) LC5. 11cij 1ivtook war ac distinfacilities for ho.chcLci uished from "irrjation water." The low investment cost liste( for this item (Table 11) indicates a lack of development rather than a low cost source of supply, The problem of a domestic water supply baa been diøuSed in a previous section under "Description of the Area." Machinery and Machinery and equipment includes the fui1y autoxiio- bile as well as all machinery used in operation of the farm. In a few cases fa2'mers had brourrht sco pieces of machner with them and in almost every ease the operator had femily automobile at the time of startin. In such esos the items ye been included as cash investments during the development period. The assurption is that . 60 the items of machinery and equipraent brouht to he project by the sebtier-s are es2ntiai and would be purchased in- medIately If be operator did riot .ready have ti.aem. On the average, settlers bout-it. the greatest part of their machinery du.r.L; t irst year of development (Table 22). Settlers on surveyed hd becweeri 34OO 7000 invested in Tmachinery ana equipment in the first year of development. The amount varied. considerably with and the size of farm. Table 22 Cost of Machinery, Fifty-five Survey Farms Worth Unit, Deschutes Project Length of 30-09.9 li0-1ô0 70-109,9 Period of No, of .vg Cost Avg Cost AvC Cost !omentw Farms 'er Farm er Farm er Farm Years Lollara Dollars Dollars 2 21 18 16 3399 3)411 3563 814 5582 6332 6797 5899 3009 *Tho period and 3.9)47. of development Includes the years 19)45, 19)46, The survey covered only five farms which had started development in 19)43. The avera. rigable acreage for iCSC five farms was 33.0 acres rid the average cost of :rach1nery per farm vias 57914. Farmers operating on the smaller farms had to purchase about the same kinds of maciiery as those on the larger acreages but were able to keep coats down somewhat by using more second-hand equipment and In some cases they were able to use smaller machines. Settlers on the smaller iI1v ffli elso made yt't :&( wor;i-id traH ers nst-T. xten,ivo use of f: . In mv Ii. r ;v fT Totel ...0 the size of faxu In ec (N.1c 23). ITovver, the 1n vestentcer Ir1,cab1 acre is less on the larger farma. Table 23 Conip2.rison of Avera: e Uost oi for 1xty Far:js Qrcuped h i.ort Irri .ab 1 e Acre age Grou iL Avera Iri;..ab1e r Fart: ncres 30- )9.9 7O-9.9 90-119.9 120-160.0 1a.1or Items , 10E cninery and :.;quipnent Irri,ab1e Acrca i-LojJet; Averag Aver a e Cost Cost per Irrigable cre 1.;o11ers 3L07 Do]4ars per Irm 77 107 , rcLi 3 ost Tractor. The .rogt frequent, thou?U not always the moet expensive, item of macLinery wa tc farn tractor. Nirietysix per cent of all fareis survyeL had at ic.st one tractor and five of the larger farms had two. I1ost opera tors considered two traetor iecesary for AarvestiIi: clover seed. One tractor Is used to arid rake the clover while the other is ued to pull the coubirie which with a w,,lrow aL:.J.r farn t far -:'3 to worr to in i.h; harves elover thus ;:kLn it unncos3ar fa eae ositor oo have nope one tractor, i. t. T)1 214 iS Ln tCi CjZb fe fr±s in E1V) the vtrious irrgabie aoreae ces, All ece four Thrma ha at least one tractor, Of the four farms tLjt were zit out trac'or, two used Jorses and two hired TabLe 2. Avere:e Cost of Tract2 lnvosnenb k4orth Jnit, )OSCIUbe3 ioject All Survey Thr. s Arrayed bj Ir :b1 Ace Groups Io. of Cost pr Coc 4croeje Gro E'm 30.. !;9.9 15 13 1123 973 9 7 1385 1077 1t.73 1560 1032 1T73 1515 15140 2 JYe Trectors 70- 39.9 90-119.9 120-160.0 16 10 10 10 10 15 Sixty Farms 60 61 Mabine ])oliars Farm Dollars 15ó0 2300 their rac.tor work. The five farms havin. more than one traot are in the group hav1ri over 120 ir.dab1e acres. The tractor cost for all faras survoye was found to b 0 per farm or 1515 ;e CQS;iflC. far.L 81Z cu cofo:.nes were a .aehii iaificani iom for all out were foand icsb frequently on farms 63 having over severity irrigable acres. Sixty per cent of the farms surveyed had an average investient cost of coithines at 1579 per riaokiine (Table 25). Most of the machines were the one and two-man trpos with a wiridrow attachment for harvestin., clover seed. Table 25 Percentage of Farms Usim Combines and Averege Cost per Machine zty Farms, North Unit, Deschutes Project rrigable Acreage Grou Number of 30- L9,9 15 >9.9 70- 39.9 90-119.9 120-160 .0 All Farms F arms er Urcu 53 9 Average Cost per Machine Dollars 138)4 I I Avert.e Cost per Farm Dollars l2L 738 16 33 63 10 70 10 1913 13)43 80 1)493 1197 60 60 1579 9)47 Truck Investment. surveyed used trucks, r of .-er Cent 0 Farms with Combines _) 969 Sixtythree per cent of the farms rntin.;. an averac investment 1108 per truck (Table 21). The avere investment per truck showed considerable variation between fare and between gros of farms with no evident corre1atio,i between the size of farm and the amount invested per truck. The average truck investment for all farms, however, shows a definite relationship between the size of farms and the amount of money Invested ifl trucks, the smaller averaging óLf farn and. the 1rgcr fars wi well over 700 per farm. Th dIfference in the ave a:ThD.iflt invested per farrc Is due to the diference in the nunbe: frnis using trucks in the varIous size groups. It will be notee from Table 26 tiit ninCtr per cent of thc farrs in the 1arer acrea..e groz had trucks whereas less than fifty per cent Lad trucks in t1 cnailer acreage group. under ) PC . Table 26 Trucks, Cost per Machine and Per Farn SiXty :'rs Grouped by Irrigable Acreages rorth Unit, Deachutes roject Irri ;ub 1 Acreae Number of er Farm Farms 30- L9.9 50 O9.? 70- 39.9 90-119.9 15 120-.160.0 16 10 10 AU. Farms 60 9 korcentage of Farms sint Truck Investment per Farm Average Triek Investment si Truck8 All Farms Dollars LioUara 1270 L4 56 90 90 63 97 1236 1036 3J 593 725 977 795 702 Trailers were found on seventy-three per ceri of the farms In the lowest acreage group as copared to thirty per cent of the larger farms. Trucks wre found on fortyseven per cent of the smaller farms as comoared to ninety per cent of the 1arer farms. Moreover, operators on the snaller acreages used trailers extensively in lieu of trucks, whereas, on the larger farms trailers were used in addition to trucks (Table 27). 65 The sial1r farms, raking use of riorc two-wheeled trailers and hocmade four-wheeled contrations, had a lower investment per trailer than did the lar,er farms. The 1rer farms made more extensive use of the conmercially built rubber-mounted farri waons, Table 27 £ercente or 0pertors Using Trailers as Compared to Trucks, U1 Survey Farns Grouped by Irrigable Acreages rri;able Number Acreae of Farm 30- .9.9 15 69.9 70 89.9 90-J.9.9 120-160.0 All Farms 5Q 9 16 10 10 60 iarm agofls and Trailers Trucks 73 3' 30 90 90 6L. Livestock The item "livestock" (Table 11) represents an attempt to determine the actual cost of livestock purchases without includjn the value of natural increase, The records in this respect, however, were not complete and some estinating was necessary using livestock inventory as of November l9L8 as a basis. It is believed that the figure 1128 for livestock indicated in Table ii might be high rather than low. It was possible to judge original numbers 66 quite accurately but increases aur.1 dc creases in value through price cLn,es, sales, growth, deabh 1oses, etc arc difficult to ju. The fol1oi.iu,; nr.r,r of livegtock enterprises is b d. on livestock invc:itory as It stood at the t.iie of the survey (Nove:nher l9), All values are settlers' estimates. Fifty-six of the sixty fax-as surveyed had. one or more livestoci enterprises with an average value nf '1153 per farm (Table 2). Table 2S Inventory Value per F&r of Specified Livestock interprise8 Sixty Farms, North Lfljt1 Desohutes roject Jinter rise Dairy Beef Poultry No. of Farms Average Va: _pjr Farm ue 1) ol lars S3 6 19 All livestock 60 L S Value 6314 2 21 16 ;3 U Other £er Cent of Tota 1153 100 Most of the sot t.lers had livstook pr1iiarly for home use, however, many of the ent6rprises were large enouh to be classified as Ucormerea1 (Table 29), The. twenty commercial aairy fama had an avera e of ó.7 dairy unimal .ini;s, The six coAaercia1 beef farms ha about 13. beef anuaul unLt. i.a.ry aniaais dcotn for over sixty-e.aht 67 per cent of the total livestock investment on farms with less than even.ty ii'riable acres as compared to about fifty per cent on fariis of over seventy acres. All the commercial beef enterprises were found on farms with over seventy irri;able acres. Table 29 Inventory- Value per I?arm of Commercial and on-Coir:ercial Livestock nterprises Sixty Farms, North TJnit, Descutes ?rojoct Cor Enter rise Dairy Beef Hogs oult Other No. of Farms Value Farm Dollars 1338 22o 2 Fon.Conmaercia 14o, of 8 C 14 3141 -a- Value Farm 1) oil ar s 33 312 30 36 19 ii.LL U *Far1s havin; three or more animal units in dairy or beef, over i/ A/u £i.1 hoas snd over 1 A/u in poultry are con- sidered as comnercial producers. The followin, livestock numbers were used as coij1'LsiiL; one anlirmi unit: one dairy cow, two dairy hifers, three dairy calves, 100 chickens, one beef cow or heifer, five sows an ten Ththor livestock was corprised almost entirely of horses. lr'esent Value of Lia or Investment Items At the time of survey (Noeiber 19148) settlers valued most of the major investent item2 eons1erab1y higher than the indicated cost of the items (Table 30). rfte average cost of the major items of investment was found to be about 68 1Ô8 per irriable acre. Settlers' placed the present an incrcae ot eihty- value of the same items at eight dollars per irritable acre. Table 30 Cost per Irriable Acre of iajor Investment Items as Compared to the Prosint Values as stirnated by the settlers Sixty Faris, .ort Jnit, Desciutes project Present Averae Cost Land purchase and Dollars developmcnt Farm huiidixis liesidence Machinery and iquipment Livestock Totals 36 66 Value* Dollars Increase Dollars 123 79 1.!. 1 8 0) -1 lu resent value is the value as estimated at the time of survey (i4ovember l9L8) by the settlers. Development includes land levelin etc and irri;ation system, Ftesidence Includes the farm dwelling nd the domestic water system. Most of the increase was in the value placed n land. Whether or not this increase is justified is beyond the scope of this study, however, as has been pointed out previously, at least part of the increase miht be justi Lied on the basis of labor and capital used in cultivating the land, establishing permanent crops etc. It is believed that the present value as indicated is not far out of line with actual market value. 69 Suiar7 of Caita1 tTheci capital uod per irriable acre for' the developmenb of i1 far was abon 2O6. Of this ota The ave major items of investand operations. ment and the balance was for family liv xpenditurcs for the major invczmerit it.es were as amount, about lóC r t:-. an f011ows: Avg per Farm rea1 Estate; Doll ars Land and developmont Buildis Totals Chattels: aeiinery Livestock Total Investment Items Acre Doli&r8 3,57k; 7, 332 66 LOO 60 &23 163 1.123 Tot a is Avt; per Irriabie i.achinery, farn dwell iii, land purchase, and land development are the largest investment items and account for eighty-five per cent of the total investment. Total investment based on iri able acreagea was inhich the investment was made and fluericed by the ye by the percentage of the total acrca,c ha as iriiuble. xpenditures for land dovelopmeii were influenced by the physical condition of the land. The expenditure per irrigated acre on fariiis with predoninately class I land 70 wa about 1O.&O as co;ipsrd. to 2l.O rot f: la III land, coat for fari buildL:i. other than residence :ras about 6CO per farri. Fari buildin other than the dwelljn were almost non-existent on farms with 1e83 than fifty Th irri;ablo acres, xpendituc. for dweUin:s aver ec1. about; 27O0 er farm. This aveI-e was !ifliencod soie/!:ab br farn dwellIngs on t;hirtee T1IA fans wLioh hat. an averare re3idence cost of about -.Q() per farni. ;ost of th cxpenditurc' for machinery, avera1ng about 3O0 per farm, werc iuC in the firt year of development, 11racc:rs, eonfcina, and trucks account for the bulk of the iainery exe'idiures. 7]. :TtP General Statemexit For puroaes of this analysis, credit Las been divided into two main cat cries. "Investient credit," rie1udes all crdt that: was used for the major ims of investment. "Other credit" will iflCli all credit used for pitroso2 other than prmaie±t invstn.t;nt, such as crop podtcion, family liv ;ersoüal use, It is with 1uvos;:iont crLdit that this tudj is primarily concerned and other credit will be tread in en incidental nanner. However, there is no intention to imply that creait other than fo investment is of little inaportence. it is recognized that other credit holds en exti'emely ii4ortaut, and often cz'itical, position in the economics of farming. Credit has been further divided into cate;ories on the basis of length of tex'i. Short term credit includes all forms of credit, such as notes and accounts, of lss than one year's duration. Intermediate tertn credit tkez in all credIt, comracted for tCis of one to five years and long term includes all eredi contracted for over five years. Soi credit wets found to have no specified raurity date and hen been classified as indefinite term credit. Such credit wa. usually provided by friends or relatives of the settler, or In soe cases by the original owner 72 of th liri SwnLar. of Credit Jed Credit was used by e1;hj-eiht per cent of the settiers in amouxita froi less tji:.i lO() to a u as 2O,OOO or Cirm. A swmiur of ti avera$e borrowings is presentod in Table 31. TaLle 31 .Avee Totu.1 !rrowir Sixty Fari.s, i'ortd Jnit, Dose ILE!1 Invstc.t credit cr iar Dollars Project I ab 1 .cre Do Other credit Toti. crodit *Avx years, total horrowins include some duplIcation by Investment credit is credit used for the major items of invest:-n. *V*ttOther credit" was used for operations, famIly living, crop roduction, etc. About sixty-five per cent of the total credit wan used for the major Iterris of investment and about thirtyfive per cent for crop production etc. It is in "other credit" that ±ost of the duplIcation by years Is found. About thirty-three per cent of the cost of the ma;Ior investment iteis was provided by credit (Table 32). About 73 sixty-three per cent of the investment credit was used for land purchase arid real estate development with most of the balance going for machinery. About forty-eig1t per cent of the average cost of buildings was provided by credit. This figure was influenced considerably by the fact that 100 per cent of the building cost on the thirteen FHA farms was provided by credit. Table 32 Credit Used for Lhe Major Items of Investment Sixty Farms, orLi Unit, Desehutes Project erCent per Cent Coat per red it redit* of Tota1 Farm Lollars Land Land development buildings Machinery Livestock Tot 2273 1302 510 358 172]. 13,ó23 i5 5332 1128 l3ç9 2 22 2b ,- 1-' . 33 *Percentage of the cost of the item that was provided credit. *Credit used for each im s a percentaj.; of the total investment credit. Credit Classified by Length of Te Intermediate term losna were the most frequent tTe used and accounted for over forty-six per cent of the total borrowings (Table 33). The average period covered by intermediate term loans was 2.65 years with most of the loans falling at either end of the one to five year range. 74 Most of the intermediate term loans were for production, machInery purchase, arid land develort. .hIle lonterm loans accounted for aimost as much of the total borrowings as did the intermediate loans, the! C re only ei:}teen such buns as compared to ninety seven intermediate loans. ThIrteen of the eighteen longterm loans weie FHA forty-year development loans to war veteran hoiesteaders. ost of the short term loans were used for the purchase of feed, seed, harvestiu.), end other current expenses. Table 33 Credit Clussified by Lenth of Term Sixty Farms, North Unit, Descb.utes Project Term of No. of Borrowins Total Loans A) oil ara Long Internediate Short Indefinite All credit Average pr Loan Average 2939 3158 Dollars 17o,360 191,276 23,105 L3 18 23,;1 5 6 97 17 13 9798 1972 1297 1822 ).JJ4,42a 100 145 --- 46 per Dollars Farm* 385 395 6850 *Average per farm is calculated by dividing total borrowinge by the nuiber of farms surveyed which was sixty. Indefinite term credit was furnished by settlers' friends and relatives and in sorcie cases by the original owners of the land. Most of such credit was used f or land 75 purchase and famiir i1V1fl. Cre.d1 ar Deve1oot:en Ts.d throuh 12!.5, were less amoi set Total borrow it a:.id 1 LC) than for those tiers who be e1onent in ttlers who began beginnLg in / 'T C.l4 1('). able 3)4). cr ccii used a total deve1oinent in up to jrbr 19)47 and l9L , scc wbile those startii: devel ' L1,391 rsectivey. It has Table 314 Aver;e Sixty Far;i Year Development i3ean Averac '1ota1 Credit ocr Farm Dollars XI;. it. Descruts roject Credit er Farm Dollrs ' -1i t'-1 Ji 8009 6J3b. 680 Used ;er Farm ;vera, 7;; 3 13 1, C 91 All Faris rc clitI 2 9L!. 2 U ve ra;eU Credit £Jer Farm Dollars Eer Cent 1flVC stlnent Credi" 317)4 2376 81 0 -- 73 2)41 63 tage of total credit used for investrtent, been rioted that durIng the se perIod (1 ) farm coats rose by about thirty per cent so that the dollar borrowed in 19)48 would purchase only seventy per cent as much as it would have in 19L5 (Table 2, Apondix), The chan:;e In the value of the farm dollar will account for ao q J UT BTtt uo-xepçUOO OUT U9t ex' Ji1OP WIJ ouzoO UQTJTL'TS T1T°- t(6I UTç tTt.Q I)i It1 UT U14 CI p r13qq. ss' .IOMQJ UOV OTMp UJO O1 $6t 'O .IqWOM Tb 2UTPW3q.nO cTh o w Gw11'aJ JO XE)WU *t;jc £q petA9M g1 o q qq. Mj r xotd JouoTb oto poioiJoq poprij3u uic.00Aap srj ou j0 'i3 LtflOUT)3 £6t o;99 LLt( OTAOP 2IJ Ø4. UI Ei t6J'oi 160 tt to1 T 6O0? 6ç0 c 7( I t6c1 a6t 1c 619 U.0TA0([ 4IFt')A 0 fl'0oc !q oocoAr roi ttOE wmiCo-EAoa &t1idi T0 TTP t;roT CT tTYO I qL 'UOTtlpOXC por qçpoxo (Totto pmT. croTmxoO xcJ OO 33U pTu lr:43GAttT rT1Tttc oIT tiril. zat Jo tj Jo AOO O4 rnou C1Y. tq trç P)/-TO 9t6T pin m ct- Jq P' TP('° OtT JO i0OMOtT 'OUO4X0JJTP )Lj4 JO qrnc!. SOW 9flOQ 9L 77 rcniped by the various ycars Lhose ztrtin6' developnent in 19145 be&innin assets for farms deve1onent artd, for as comned to abo had assets valueo. ien asset va1ue.s for years 19147, and 7OO for l9t. deflated to 19L values, it is seen subsequent to 19145 that the disparity is much. greater, The smounts of credit used in the 19147 and l9LC development year groups were influenced by the heavy borrow- ins oi t rteeri war veteran honosteaders fcuJ only in those roupz. It has been nated n rovious sect.ons of this study that the homesteaders had beinnin assets of lower value than the average of other settlers and their horovins were heavier. 1L .ssets LefiaLed to 29"L k'rices Deve1ouvien1 ie,an ? '- h o North Jnit, Deschiftes Project nniu ear Development i3ean 1)L 1214 1 9L7 1i s Leinning rs S3614 7223 7993 7lo onvertd from 3re-;o T a le ..tndx 0± Ore goi. Farm Dollar Value 100.0 91.5 '(7. Adjusted Value of Assets Dollars OJU9 3230 52140 farn costs prices ind6x (Appendix A comparison of the total amount ended for the various instmerit items, and the percentage that was 78 credit, reveals that it was in inve tment torns involving great deal of labor that bhe ;rcat:s credib svin; was made on farms which bean develoiment in l9t5 (Table 37), Table 37 Percentage of the Cost of MaJor Investment Items that 7as Furnished bj Credit Fifty-five Farme, North Unit, I)eschutes Project Year Development Be:an Item l21j6 Crcdit' Land purchase Land development Irrigation system Farm builci1ns Residence DomestIc water Machinery LIvestock Al]. Investment 21 Per Cent Credit C ext 23 30 29 37 L9 7 7 00 12 7]. 20 28 ye farms on which develo1.ment was started in i9I.8 have been o.1Itted eoase of the s ilness of t.L roup. Percentao o the cost of tie item that was provided by credit. For the cost of major investment iteeis see Table The first irrijation water was not delivered to the Unit until the sprIng of 1914ó so settlers who began development prior to that date had more tine for development of land and farristeads. It seems likely that the earlier settlers made greater use of their own labor whenever possible. It will be noted from Table 37 that iteus such a land. 79 purchase ad ciiriury sbc'ed cc arat1v1: le s 'anje In a land de the a::Lou!.i; of cr&.It ustd tai J.d s i: e credit used In land p....rchaoe increasa froi nineteen per cent in 19J4 to twenty-nine veloprrient and per cent 191. 7 as co.:pared o an increase Ir per cent credit for land develoient in l9L5 fou.rteen to ei;hty seven per cent in l9L7. Farm building credit increased fron seve per cent to sixty per cent, and resideilce from twelve per cent to seventy-one per cent for bhe sare period. The percenta;c of credit used for machinery inthree periods. vestment held relatively stable f Anot.aer factor that probablr had considereble Influenee on the amount of credit used in the various years was the availability of credit, The Far::ers Honie dninis tration did not actively c olle into the credit picture until i9!.7. Other orodit institutions and Individuals area until Irrigawere re1ucint to provide credit tion water was actually available and cro.i productioii under way, Variation li-i non-farm income between the ;roups does not seem to be 1are enough to affect reatly the difference iii the anount of credit needed. Settlers starting development in l91 had. a non-farm income of about r:323 per year, as coniared to )7 per year for the l9!.6 group, arid ;U6 per year for the l9J..7 group. Most of the non- Go farni 1ncc'Le for the year ).97 and nuch of it for i96 wa in the form overnrnent payients for on.. thojoh-traiLng of ar voteran, wLecas mo3t of the :w.farm income und in the l9L.5 develoment rOUi was for off-farL labor aid custom farni work. ources of redi Credit used by settlers on the North Unit was principally from three sources: the Farmers lIo:e Adminis tra tion, coimereial banks, and private individuals. Small aniount credit were £urni.hed by the local Production Credit Association and others (Table 38 Table 38 Total Credft jsod Ula2sifiá by Tex; nd Source Sixty Fars, North Unit, Desohutes rojeot o1 a Long Inter- me ii ate Short Unclasi fled 80,65 Banks )thers' 3,00 Dollars Dollars Dollars Dollars Dollars 17,200 t.9,O99 16,011 L2,53L. 800 13,138 2,81S 3,32S u31 ---- ----- 176,366 191,276 23,10 23,681 rivate individuals includes credit from merchants most of which W8 interiediatu 1ncI. snort tern. 0thers include tae of Oreon, )overx1ent approved veterans' loans, and some open accounts. All of the sixty frcis surveyed used a total of 81 $4.l4,L.28 ifl credit, over fifty-seven ocr cent of Which wi furnshec. y ne iarmer rioriio iLcn1istraio.. rivate irsdividuals, which includes :nerchants, provIded over twenty per cent of the total crit, and coerciai banks about per cent of the long term crdit nd forty per cent of iu interniediate teri croit fr.isbed by tEe t:titf-five per cent of the Intermediate credit S furnisuci by uks and about twenby-two per cent vas stled by private dividualo, iot o ere ucrehants, spciallj LjleSlXtCei: ee.xt. merit deal-rs. Over Comic.rcial banks providod the bulk of the or tr credit, with the CA arid archanb coaimg in for a cosiderable ortion. Crudit Sources 1-aed J ,1O rs In order to deternlie the preferred sources of credit used by settlers, all of those !ntercd were asked to indicate the sources of credit used o give thorn a numerical rating, A ratin: of one as ;iven the most desirable, the next preference, etc. Banks were mentIoned. t::irty-cight times as sources of credit used, while the Farmers JJo;,:e Administration was mentioned thirty-one times, and private individuals seventeen times (Table 39), Accordin.; to the nwierica1 preferene ratings given by borrowers, FHA loans were by far the -for por ceit of the settlers most popular. Abot e ratiti.. of cut. Onl; oanization a preference three. ivc it a ratin :ave t: who had used FHA ioan 6.L. Table 39 Sources of Credit settlers' krefer eice hatlu Fift-t.rce Farl, .ortL Unit, Descute; 'roject ouree .redit 339 FIIA £rivate 17 2 State 0.0 2 Sovon frrL5 used tabulated. 2N.unber (0.0 10 PCA 31j.2 9.7 23. 30.0 20.0 0.0 29.0 6.14. 17.7 30.0 rcdit so only fifty-thre& farms were oi users totals iore than the nuiiber of settler borrowers because soiie used ior than one source. 3 Calculated b dividirib he nwifLer of users by the nwnber of farms using credit (3), 14 ree tage is calcuPreference rating given by usera. late by divicu. i, the number of tir-'ics rdtec a each pOS..L'. tiofl by the nuber of users. Of the settirs who had used bank credit, about thirtyseven pex cent gave banks a preference ratiag of one, and twentythirtyfour per cent gave them a ratiri of nine per cent rated bantks in third place or lower. Irivate individuals were mentioned seventeen times as sources of credit, with fifty-rune per cent of the users giving them a first choice rating. The Proauction Credit Association :efercnee b th ten settier have v<:y pr cenU rated it a first choice and thirty pr cent ;av it sec: i..sed :b;, 11A s first Sixteen of the ett,lei's choice gave "low rate of ntcret" as bhelr reason. Ten listed !lt. tarn" c the nain r3oi for tb for E were: : p :rference -.ait eople, liberal, a;d canvenieiit. J ntu; we o: too mud... red. t : O s . .tnu that could be flU liIit Ofl thC SOW too CIO.. borrowet na too low. It bould be natet. that there were oni five unfavorable coL 1IaULL, Of s their referrad source of credit, fly e save as their reason o et 1ic;uey." the Four said ti.i lik. the ;:;rsoal re1atiore. bank, and fou: said they eforred banks because they wore fast, Gnfavo.bl co.i.ents on hank credit were: short tern, three; hltt intcrct, three; fast foreclosure, three; refused loans on oo security. and one said Princ .i.ai. co;..;ents on private individuals as sources of credit vre io1 rao" a lon term," One mentioned it as the only tjc. available. Tcre ore :no unfaverable COHJii:.11tS .cjnt ecerit elation La on the Proouction Credit nSSO 2t (i PfedrtL good bttin, low rate, snd cod for productIon and livestock financin. is believed that the prefc:-: ratIngs of oredit sources as Indictd in Table 39 are cite realistic and fairly accurately describe the attIt of settlers in the 11 It I area, true that so.:ro sett:Lers had used onlj one source of creIt and had listed It as first choice with no basis for coarson, On the aver e, ...OWOSTe t:i1.OXe were two sources of credit listed far. Lor three farms on whIch eredit teed a i3 so rces o credit rere mentioned, i also bO ; ¶C. .0 all of the sources of crodlt, do I, ond in no cannot t of c.t.. ..t et,iers rsuonsoz to r questions couoernin credit s ourece were probably biased to a considerable ic,roe by tb? particular credit use they had in rind at the t line, AttItd etlersTowa! 3?eb and Credit The attitu e of borrowers toward going irit debt, and their concept as to the proper use of crodt Is of prirae importance in debtorereditor rels ti onhips ?roiessor L L. ioter, the wrjer present a.vior and former tnstructor in ArIculturi conomcs, has ol ten nde tc 8tatement: 'Iu the begInning, the interests of the lender and the borrower arc identical," The lender wishes to make a Sound loan which will be paid back w.tLi interest, and the borrower ishes to roe ye a loan, h1cn n.e can i;:est in. his :i:n,rise at a t, n'i vtifci.i he can pay back with I 'st out of th: fro;.: the L.ivetment. It is only .hE;n one or both of the parnh involved err n judent as to the so .n css of the Invetnent of tbe loan 'that. diforcic s arise If the inve.s h.1t is not soad it. t both parties, l:ier loses all or part of the loan and the borowor io5u bnø terrisc plus hi own ino '.;'jot. Ait.ude Ueeari, debt a wide variat.L,on ore not willin O;C indicated that they would ootret debs for t were willi.ng to a anne f.:iwc.'iai (j1jj. 2 cO oes but sett;Ier on the 1h,rth Jnit;. Into a&'t for ULJ 1rpos.. So inc; Items, .. any, they vronl in deot to acqre, aria to ; a oreid ttat a settler go nerd n ner.tcaily from the most; to the least ur.;ont. The ost ur';ent wec J.ven a ratin of one, next a ratmn of two, etc. vtr ud ln .e 'odirn dairy barn k'o.Lle education Lor children xlectr!city placed In 'the hone loc trio Tract or he one 1L'JU C House beyond mIniu 'or herd tb and. decency 36 It was assumed that there was a need for the item. Definition of what constituted a houo beyond what was necessary for health and decency was left pretty much to the individual, however, if the person questioned had no idea as to what the minimum might be, it was su,gested to him that the basement houses or "North Unit Specials" used by some settlers ii.ht be considered a minimum, The "North Unit Special's is a cocbination dwell1ri', and machine shed which will be converted to full use as a machine shed when the permanent dwellin': is erected. It is recognized that the items are not comparable or in the arnourtt of money required C or either as to purchase. Nevertheless, It is possible to t some ifl dication of the settlers' concepts of how borrowed money can be most profitably used. Answer to the questions Indicate that, in general, settlers have considerable understanding of the elements of sound financing for farm deveiopmnt (Table 40). Locus for productive purposes were given a hig. priority. Ninety-six per cent of tt.ose interviewed justified loans f or tractor purchase. Sixty- eight per cent gave loans for tractor purchase a priority rating of one. Debt for electricity was justified by ninety-two cent, but only twentysix per cent gave It a rating of first importance. a:y settlers expressed the opinion 87 that electricity, while not absolutely essential, wa the cheapest and most efficient servant on the far and would soon pay for itself both in CO! fort and service. Table L.o Settlerst Attitudes Tcv.ar oin: Further into Debt in Order to cq.re Sifid Items ortz Unit, Desehutes 2rcject It em & over tractor le otricity Runriin wati Modern dairr .7; plwiibing Rofriraor Colleo or c.Ildren 68 26 i6 3. 20 18 22 36 36 iL'. -- Life insurance Hous e beyond ruin imum 26 12 A rating of one was ien foi' items of first urgency, for second, etc. All ratina beyond two were grouped under three and over. w0 While debt for housing beyond minimum requirements was justified by only twenty-four per cent of those interviewed, conveniences ithin the house wore given more justification. Seventy-tour per cent said they would go in debt for running water and modern plumbing in the However, only sixteen per cent gave it a rating of one while thirty-six per cent indicated a ratirg of three or lower. Debt for an electric refrigerator was justified by fifty-two per cent but no one gave it a first priority and only eighteen per cent gave it a position of second house. imorane . .Lle no qustLon s uk'u cc. rnLi debt for land and operations, many volnteered tho informa- tion that they would justify such debt, giving it a high priority. They recognized that they were losing money in lack of productive ea.aoity on irriable land wiich was not in production because of lack of development funds. ny indicated that the prime objectvo in the first years of develo)ment siould be to get all irrigable land into produe tion before giiing axuch attention to oier devel opnnt features, Adequacy of Credit Tne foilowi question was asked: "Have you ever been handicapped by a lack of credit on this farm?0 Fifteen of the setiiers interviewed answered "yes," forty-five, or three-fourths, answered "no, The avera;e amount of credit used by farmers answering yes was 52l) 1er farm as compared to 7Oó for those answerin no. There were only seven settlers out of the sixty interviewed who did riot use credit at all. Two of those who used no credit were group who answered yes to the above question. Thos0 answering that they were handicapped by a lack of among tne credit were asked to explain. Following is a suinary of answers given: 89 (5s for \thich Crdit ieeded Number of heLis Build in Farm operations Livestock urehase hach±ner purcia8e 1ives bock focdin:; Development of lurid Purchase of more land Total Only one settler desired credit for purchase of more land, which he apparently needed. Ho was a man about forty-five years old, with two children, and he ws trying to operate on forty acres. He had used no credit at all since coming to the project in l94. One of the settlers who expressed a desire for credit for building purposes was operating cm 1ó irricable acres of which 138 acres were irriatsd in 19)48. jle had purchased in 1914.3, beaan development in i9)4, ud irriat ed sixty acres in 19)46, wbich wa the first yar wa- cr was available. lie had a d ili vhicii cost :200 ad o1 farm buildirs at a cost of seventy-fivb doUar. i man had received four loans, tota1in .97OO, one of whIch was ;320O for land purchase to run five /ears. Ihe obher three loans weie one year operating 1oais receied in 19)46, 19)47, and 19)43. His total indebtedness at the time of the survey (1oveiber i)48) was L.7OO agJ.nst total assets valued at .4LOOO. The other settler who i cated uee. .'or building 90 credit, began development of eihtr irrible acres in 1914.7 and had irrlated fifty-five acres in i9L.8. He had o buildiri,s other than hi dweliiii, this he valued at This settler had received three loans in the two years for a total of 33 of which :2L.00 was still out- standing. All three loans were five-year terni loans. It is interesting to note that, exceçt for the three cases just utlind, the .reatot need ex.ressed was for short and intermediate ter: credit to be used for farm operations, livestock purchase, and nacdlnery. The four settlers who earessed a netd for livestock credit had an avero of eic;nty-two irri acres per Thrn of wi1ch about ret:-f1ve aros were l9iJ. They had total aE:ots valued at over .2i,C3O averitr farm, ith an arerge debt of pr farii. One :ia. no cbt at all and .iad not borrowed si:;o coning to bhe project. He 8tato;, OWeVei, that he ai triei borrow for 1ivetoc cinory but was reied. C in his previous location. All fo of thoe ftne had land capacity and fara buildings ca.le of hand1ia,. more livestock. The four settler3 said needed more credit for machinery purchase Inid total assets valued at over 2l,3O3 per frn and an average debt of r LU1 hea developnent prior o 19L7 on an avtr of had borrowed from the ThA and from 91 eig.rty irritable acres per farm, They had an aveao of per farm invested in machinery for which :iL6 in credit had been used. It is not iiossible to know circumstances our- rounding the requests by settlers for credit, however, present information seems to indicate that all of the set tiers surveyed in the present study, who expressed a need for more credit, were in a position to use it to advantage and had sufficient security and productive capacity to justify a loan. however, it should be noted that the gratest numbor of settlers indicated a shortage of the very type of credit that is able. üneraliy most readily avail Fourteen of the eithteon settlers w.o said that they had been handicappd by a lack of credit exressed a need for short and intermediate tez credit for operations, machinery, and livestock. Competition among lending agen- cies for this typo of lending is keen. Commercial banks, the ?roductjon Credit Associations, and many merchants, especially implennt dealers, are anxious to extend credit of this type where they can do so on a sound basis. Vhile the indicated value of assets on farms was high, the yaluos were the settlers own estimates which could be siderably different from the estimates made by con- the lending agencies. As a group, the settlers who said that they had been 92 handicaped by a lack of credit usd less credit than the average of all settlers. A c;arison of their records with the records of all setlers fails to show there they were retarded in develoirnent. The beginning ats ind average borrowings were lower for the settlers who said that they had been handicapped. They had about the same percentage of their land irri;;atec as did a J. settlers, however, their increa::i in aasets as sewhat ies (Table 1\J Table !4 ndicnpped Settlers Compared with All Settlers Fifteen .1orth Jnit, Deschutes iroject Al iuinber of farms Settlers and ic app ed Settlers Irri:ab1e acres Percenteirrijated 7 Average nuniber cro' - 4. ..t. ..em Assets November 19L3 Beginning assets Increase in assets Debt November 19248 Net increase in assets Increase due to laxid Increase exclusive of land Dollars 283 hG 173 112 33 Dollars 28 99 l9 L9 110 30 30 .ers whc said that they had been handleupped by a lack of credit. Based on settlers' estimates. 'qnivalent to beginning net worth. A statement by a settler that he has been handicapped by a lack of credit does not register the intensity of the st1e.;it, no does it indicai;e Lhe wnie he be.ieved th he was naudicapped. ieii.Lier 18 a siai,eent that a settler was not handicapped by a lack of credit conclusive evidence that he was not retarded in the development of his farm, It is quite possible that some of the aettlerz who expressed hO desire for .iorc credit could have progressed ;iore rapidly if they had used more. It is also possible that some of those who used credit extensively could have done as well With loss. On the whole, an analysis of the records of the sixty faz'ms surveyed fails to show &ny si::nificaab group of settieis who were seriously retarded ln the developmLnt of their farms because of a lack 01' credit. There were only ten faris in the entire study on Wuich less t'.an seventy per cent of the irrigable acreage as irrigated in l9L8. Half of these ten far:is were ainon the fourteen that were first lrriated in l9t8. Two of the ten had less than forty irrigabie acres and were opei'attd by settlers over sixty years old who were primarily interested in a place to live In retirement. One of the ten farms with less than seventy pei cent irrigated was operated in conjunction with a 300-acre dry wheat farm so the operator was not devoting full time to his irri:able acreage. None of the C ar;.as first irrigated in l914ô had less than seventy per cent f tie iriab1 aii rrLtQd by 19$, group in r-iec fr ta &s x' he .r Tiii study was undertaken throuh a eoopeiativ- roe- mont bebween the Bureau of HecJ.anntion and ti'e Division of Agricultural ±ccnomics of Oregon state College, to determine the anowb and aUequacy of capital i.sed for the de veiopzient of farn on the Nortt UnIt of the Desohutes flec±aiatio:ri ro:ject, Proiress of Develooment T.te rr.r: beeTI riid secet;-oiui firs ; c;o &Ii1C IL..[L f devolo,n t of individual frn has sixty f:1x.1s lLCh S ).C3. ,.. - o irri. .d AU. ........................ i1 cf cLyil avaiib1e to Or rear th irri.-: ble laL ital available L.0 3arted V or cent o avt _1 an .1. cent of the ir':.. .ii I934 fa I y fa':. I..., i.i .... . OC..aLtL .Vit.: t1er n. iad an e acre I ------- t;et&i e.o.J) In each deve '1 iLh over nineiy per cent ef d in U). had nore total capwith under ninety id wide veriation In the per cent irriateu, Ti'e total capital available and the !r1bi of iiriblc n I .;L3 i:idieti.i: that actor8 Ii land that other than total avaiLb1e capibal ::c.:re :;.portant. i?inancial jrc res5 has also been ood The sixty an average increase of thirtythree farir surveyed dollars per ±rr1.ahic acre in the value o:C aset, Thi is cxclLve of t.ie increase i te vai:e lteed incr SOeC 3: fee on :n.. .f on I v: aid. xilizer on hand at :e ti: cf ributed mainly to two This rapid poress maj e factors: (1) Favorable physical condition of the land and (2) an adequate supply of capital. Another factor that probably had a considerable influence was the previous experience of the settler3, A].]. but four of the settlers had previous farm experience and over half had previous prices and ready markets for irri;ation experience. agricultural products wore favorable economic factors. Most of the land had been farmed prior to the present irrtation development and comparatively little labor or cash outlay was required in getting it irrigated. The average expenditure per irrigable acre for land and irril3 .30. This figure should not be gation development taken as the cost of preparing n acre of round for irrigation, however, it is beU.eved to closely approximate the cost. It is likely that ii the early period of developnent, some of the expenditure for land development was 9.7 made on ln ncb t lrri at tha time the sii us 'Jsed The averao total capital used on the sixty farnis surveyed wa about :2Oô per 1rriable acre. Of this amount about e:Lhty-oi'hb dollars waa used for real estate purchase and deveioprnnt w'.:.ic; Includes land purchase, land development, irri.:atiori syst:ii, and buiidiri;s. About ei.Lty dollars per irr:;ale acrc ws us1 for cnatteis which include machinery and livetcck, Real estate and chattels to,ether account for about l3 Jer lrrigable acre, The balance of the 206, or auout tbirt-el1 dollars per Irrigable acre, was ucd for family iivin, crop production, and other expenses not included in real estate chattels. Use of Credit per cent of the ttl had used credit at ac're time tuin the period covered. !mourits borrowed per farm r froi 1635 than lJO to as mucia as ;2u,OOO. The averrc borrwins totaled about eighty-f 1 e thllars per lrri,able acre of .hich sixty-one dollars was still outstand.in at the time ci' survey. Fortr-3Ix per cent of El .. 98 the credIt was borrowed Thr terms of f- oe to fic years. Forty-three per cent wa .ic. terri oreIb for an average of thtrttwo years iractica11y the ntir. aouxit of lonT i or it, as i:) lied by the Tariors o.ie inj:rUatrat..on to war vetorai ho.atoaers in :to form of fortr-7tar farm ownership loans. One-fourth of the settlers saId that tie had baoi handioarsi br a laok o credit. n aiaTLyss of records fails to svi tba tha'r were striousl.cr retarded in the develomen of their faris The 'ha icapped" at lers bad about the same nuiber of acres irriated in 1148 as did the avera:.;e of all faris. The fin.ctal pro..ross of the "handieaped' settlers was only sli.:htly less than for settlers, The analysis fails to 5117 siuIfIcant group settlers who were seriously handicapped in the develop- ment of their farns by a lacic of caital. A' licabi .t to Othe éroes The findiri;s presented in this study may be considered as representative of the sixty farms surveyed. The data y be used as a uide to the capital requirements for the development of newlr irrigated farms in ot.er areas having similar climatic and crop'ing conditions 3eforo the data are applied to other areas, jJ however, co:uUderatio mst be givi t any i;sieal eoo..r1c ondftions tt dIffer 'rc those pecilw to the farms 1r1rJe- an to tI-ie e1.o: czred by tbe snriiey. ¶jjj )i1j5jCal conditi cC th ]anj ('ìatral growth an4 t,ora) will iv rtait bear. the hi'..s factor .::t3t on bo speed aa the st of land dev ))1lte taken into oteL nsi1erion .hi bh t:L: to f the North Jnit. Fr exii1e: the ter- rain of the Plains area o the bL Ja.L; rollIn than that of the area oyered b; the survej, All of the Agenc:T flame area was in wheat and fallow prior to the present irri;at:.: n deveicpmcnt o that no clearing of natural :;rowth necearj, A ea1l oart of the area surveyed was covered with saebrush and Juniper ithich tended to i:crease the cost of land d evelorient, Chances n the pricer of buildins, farm machinery, fara labor, fwily liv.1n, etc vIll have to be taken into account when ap1y±n the uata to a later period, xrices for farm products have an Important influence on the aiount of outs:tde ctLital that IS needed. The aount in dicated as the t;ct;ai capital reqnirerent (:;206 per Irrigable acre) is in additIon to fo.r: earn If the prices for farri products re down &n the costs eai:a about the sme, It will an that riore outside cajItal will h. needed to meet the rcq.ircirLeiit, i the 4..2L.1 1) e;0 ifl it C) ze ,... J. J ., o' O L.:2 b .c 11 .he CjQ.L&s :)e sixty £i' sixveyec hv ai o ct o1 ,,eir land irrited, they ble buii.zs, and 3OLLe Li estoe. The faci CciiCCflS ud firther ±ns.nt. of OUC2L.0 funds s.Lould not be neoaS Op1dt. cases, 1over, tho froxi ius a need Thr orees otc .r th fai. Tables I and 2 101 North Untt, escuts iro c..rtion of 191.8* Per Cent of o&;cL te.ag cal Barley 0i Ce A1f.Lfa Ci 0i-ier 2 17 112 cd fa kiay 3oo$ 120 ; 3111 0tv ha 3rJ s c edi I C Totai and Fori. :e ii' 12 3 11 .$ 31 Row Cr'o: r0 o t'CS Oner row crs i.oi.ai Row Crops 0ther Laid Jse &oi1-i. Fallowed land cro 232 820 3 rat reported Tot.1 Less thwlicated areas cult'tLn Less fallowed iuid Thtal 100 :rr: 'Comi1ed iroi Crop Y±ei. ort for 19Lä, North Unit, Desehutes £ro1eet, Bureai. of Reclariation, iJ.D0I, ** A eors1derabie ounv, of 1a ia fora W.jiCii provC. S t, been £O Of eior inc1ded ir order to reduce the iiuiToer of di1icated C aoie. 102 Table 2 0re,ori Far Costs, crlces index, Compiled b:r tt A ;ricu1tur.t1 coj.lo1 (oi.Lee ureofl S 19 0 126 l)LLJ. 1 3 .2 1LL1 1' 1 )Li. 3 207 226 19t!5 23', 1J10 100 11: .nsion Servic 60 0 '7L 176 1 L; 6 l917 2 jfldCX adjui t0 t; p&X'2.J .LflQX .:LV6fl a costs oe. )t OJL 1LOi costs with and t).reo.C1 labor