Subsistence HomesteadsPresident Roosevelt's New Land and Population Policy
THUS spoke Governor Franklin D. Roosevelt of New York in January 1932 at the completion of the Regional Plan of New York, putting into words a philosophy he had long cherished of a practical kind of regionalism which would bring producers and consumers together not in a city market, but on their own acres of farmland or rural village. A little over a year later, the former governor, the new president of the United States, with the aid of Congress established the machinery whereby his theories regarding a better way of life could be tried out. Indeed the most important development in connection with the present back-to-the-land movement is the fact that the present administration has committed the government to a new land and population policy.
On the negative side likewise the administration's legislative and administrative measures indicate that it is opposed to the old policy of increasing the numbers engaged in the acreage given over to commercial farming, as well as to the further development and concentration of population in industrial centers. The establishment of subsistence homesteads is, however, one of the positive indications that we are actually on the eve of a new land and population policy.
PERHAPS the only reason why the significance of this action on the part of Congress has not been generally recognized is because the putting over of other sections of the NRA, the AAA and the PWA has occupied the major efforts of the powers-that-be thus, for the time being, completely dominating the picture. But the Subsistence Homestead Division of the NRA is at last beginning to function and inasmuch as the President has stated that it is not only a major policy of his administration but a primary purpose of his life to put into effect a workable back-to-the-land movement, there is every reason to believe that even larger funds than these already available will be appropriated for the purpose. Under these circumstances, we may well ask what is "the way of living" toward which this new land and population policy points?
How better could an answer be found than by reviewing the history of the first project to receive a federal loan, the Dayton Homestead Unit; for since it was selected from nearly three hundred applicants for a loan, it is reasonable to assume it embodies the principles toward which the government policy is directed.
Under the leadership of Elizabeth H. Nutting and Virginia Pierce Wood, executive secretary and chairman respectively of the Character Building Division of the Council of Social Agencies in Dayton, in the fall of 1931, groups of unemployed and partially employed families in ten sections of the city were organized into so-called "Production Units". This in an attempt on the part of the Council to develop a more constructive program of relief than that to which the city Welfare Department was limited by law. The aim of each unit was primarily to manufacture for the group's needs, and secondarily to barter a portion of their products for raw materials which they were unable to produce themselves. Though in this they differed from most self-help, barter organizations, i.e., in their emphasis on production for use, their unusual success from the start must be attributed rather to the outstanding leadership which spurred them.
But excellent as the plan was, helpful as it was in supplementing meager incomes, the limitations inherent in it prevented its even attempting to take its membership completely off relief. And in the last analysis that was the real problem. The difficulties were simple. Distribution and overhead costs, the inability to grow or manufacture their own material in the city, and the necessity of paying rent for headquarters and individual residences made it impossible for the members to secure enough for their labors to make them self-supporting. Indeed if the units were charged fully with all that was donated to themrent, land for gardens, tools, implements, materials and suppliesthe virtual impossibility of their ever breaking even is self-evident.
As consultant economist to the Unit committee (a group of public-spirited men and women appointed by the Council of Social Agencies to sponsor the activities of the DACPU) it was my privilege a year ago to point all this out and to outline a future program. My suggestion was that a plan be developed for moving groups of families (some members of whom would have work in the city though inadequate to meet the families' needs) to the country within commuting distance of the city, each group of families to live on a "subsistence homestead" where their chances of making themselves independentpartly through production, supplemented by wages from those who worked in the citywas possible. This plan was adopted and members of the Production Units were encouraged to move into the country as rapidly as possible.
Dayton, Ohio, it should be remembered is an industrial city of about 200,000 population. Well-known products made in the city include National cash registers, Frigidaire refrigerators, Delco electrical appliances. Demand for these products has been hard hit by the depression. Last winter some seventy thousand persons (fourteen thousand families) were on relief. At this writing there are about fifty thousand persons on relief, with the numbers steadily rising. This winter promises to be as bad if not worse than last. A still larger number are on the verge of being forced on relief by the final disappearance of their savings, or are kept off relief only by earnings insufficient to maintain a decent standard of living or by going deeply into debt. The majority of relief families seem to be capable, hardworking-people normally self-supporting.
THE first Homestead Unit was organized in the spring of 1 1932. A farm of 160 acres, purchased for $8000, was divided into thirty-five three-acre plots, fifty-five acres being reserved for community pasture and woodlot, commons and public roads. Thirty-five families immediately took possession.
The homesteaders themselves are a cross-section of American society, ranging from families of professionals (architect, teacher, engineer) to tradesmen and white-collar workers (grocer, bookkeeper, clerk) as well as craftsmen and laborers (carpenters, bricklayers, plumbers). They include men and women over fifty with grown children, some of whom join their parents in purchasing the homestead, as well as young couples without children. Two young people in fact married on the strength of this opportunity to build a home of their own.
The background and attitude of one family while perhaps not typical may be regarded as symbolic of the entire group. The family consists of the parents in their early twenties and two young children. The fathera man with a good work record at the National Cash Register Company where, however, employment has been unsteady-and the mother, a trained nurse, have gone at the task of building a homestead with the spirit and determination of pioneers. Together these two, unaccustomed to manual labor, did not hesitate to swing picks in an effort to speed up work on the foundation of their home. I saw them industriously at this work one Saturday afternoon holiday at a time when the man happened to have some work at the cash register factory.
A FEATURE of primary importance in the Dayton plan is the system of land tenure. Title to the land and the original farm buildings, used for community purposes, invested in the Homestead Unit as a whole. Separate plots are then leased to each homesteader on annual terms fixed by the Unit in accordance with the relative desirability of each plot. Leases are automatically renewed each year though there are provisions for terminating them at an time. If terminated by the Homestead Unitas they may be for violations of the provisions of the leasethe buildings and improvements on the plot may be sold by the homesteader or disposed of if he fails to find a purchaser upon an appraisal determined by arbitration. On the other hand the homesteader has title to all improvements upon his plot, and may sell his property at any time to anyone eligible to become a member of the Unit. In other words, title to land rests in the community which creates the land value, and title to improvements in the individual. Under this system the holder of a plot is practically compelled to use it or abandon it to some one else who will. This, I believe, obviates the danger which has wrecked innumerable idealistic communities as well as commercial real-estate developmentsthe danger that the original owner will merely leave the plot unused awaiting an opportunity to sell it at a profit after an increase in value.
The ground rents collected from the leaseholders furnish the community the income with which to pay taxes levied upon the property, interest payments, payments upon the principal borrowed in order to purchase the land, and any other community expenses.
How this first Homestead Unit has been financed is no doubt the question arising in the reader's mind. Enough funds were raised locally at the outset to acquire possession of the land, to repair the old farm buildings, to purchase a tractor, and even before any building operations began, to enable the families selected to plant gardens, buy milk goats and establish flocks of chickens. Thus production of their own foodstuffs was started. Later a loan of $50,000 was secured from the Subsistence Homestead Division of the Department of the Interior in addition to a grant of S30,000 from the Federal Emergency Relief Administration for the revolving fund needed for working capital to all the units ultimately to be organized.
THE financial plan adopted borrows freely from approved business practice. Loans are made by the Finance Committee of the Unit Committee. Loans are made first to the Homestead Unit itself for the purchase of land and farm buildings; for materials for roads, tractors, construction machinery, and everything else the community as a whole requires. The Homestead Unit tan incorporated membership corporation, with membership limited to the homesteaders) repays these loans over a period of 15 years, with interest at 5 1/2 percent. Since the government loan to the Unit Committee is made at 4 percent, the Unit Committee has a differential of 1 1/2 percent to cover clerical expenses. If this differential produces a surplus, the government has the right to require either that the surplus be used as a reserve or that the interest rate be reduced.
Individual loans are made at the same rate of interest, amortization varying with the nature of the loan, however. All individual borrowers receive passbooks in which the amount of their loans is charged and payments and "deposits" are entered, through the use of "checks" they pay for materials, equipment and supplies previously paid for through actual loans. Thus all transactions are cleared through the Finance Committee while "barter" of labor and commodities is made possible in terms of "money" to each other.
Amortization of the loans varies from one year to fifteen years, repayable in weekly instalments. An essential principle of the financial plan is that the maximum instalment shall be kept low enough so that even at the present level of industrial and business activity it will not be difficult for the homesteaders to meet their payments. The estimated maximum individual loan sufficient to enable a family to make a modest yet adequate beginning at homesteading after allowance for rising prices, is $1000. If a family does not require the maximum loan, payments will average not more than $15 to $18 monthly including ground rent. But even if the maximum loan is taken, estimates indicate that instalments will not exceed $27.50 monthly the first year, and by the third year they should drop to about 512.50.
Loans for eight different purposes are provided for the homesteaders: for housing materials, well, plumbing and heating, barn materials, agricultural implements and tools; domestic workshop equipment, such as pressure cookers, sewing machines, looms, lathes; livestock, seeds, plants, trees; groceries for the family and feed for the livestock while the first crop is being grown. Few loans have had to be made for the last purpose.
It should be noted that there are no provisions for loans for labor for construction, this because homes must be built by the homesteaders though not necessarily by specific occupants. In fact in selecting the families for each unit, all trades and professions needed not only for building but for the development of a rounded community life are represented. The first unit includes an architect and engineer as well as carpenters, bricklayers, electricians, plumbers and even teachers and social workers.
The system is simple: As the homesteaders work on House Number One, they are paid or "credited" for the work they do by checks drawn by Homesteader Number One. They "deposit" these checks with the Finance Committee, and when they come to build their own homes, they "pay" their neighbors for their work with the credits thus established. This method provides a flexible system for the ~barter of labor; it makes it possible for those working full time to turn in cash in place of labor to the Finance Committee.
Two very important considerations make this method a fundamental part of this plan of "colonization." First the, spiritual, or if you prefer, the educational value of having the homesteaders create and build their own homes and their own community. No matter how perfect the ready-made homes of architects, such homes could never furnish the satisfaction which the homesteaders secure from moving into homes which they themselves have visioned and actually erected, even though the Finance Committee requires that plans be submitted before loans are made and even though they may have employed architects to assist in their preparation. A more practical benefit is that this plan enables the homesteaders to establish a substantial equity in their property from the outset without making a cash down payment. Within a single year, fully a thousand dollars worth of labor will have been put into building each house and developing each plot. Thus an equity, probably of more than 50 percent, is created behind the government loans, the bulk of which has gone into land and building materials. Since the farm land and raw materials are transformed into a community with roads and finished houses, the security is adequate.
And here is where we may examine the national implications of the first Homestead Unit. In making the application for a loan we emphasized the point that while the experiment with the thirty-five families was well worth while, even more important was the fact that an industrial city such as Dayton was prepared to experiment with enough units to test out the social effects of large-scale subsistence homesteading, for plans have been worked out for establishing units involving between 1750 and 2000 families as the goal for the first year.
Homesteading such a large number of families near one city will make it possible for the whole country to see what the effect of homesteading will be upon employment, labor, social and relief conditions in industrial cities. With the cooperation of the manufacturers in the city, it will be possible to draw accurate conclusions as to the effect of the changes in employment conditions both upon the homesteaders and the workers remaining in the city. With the assistance of the relief authorities and the educational institutions, it will be possible to draw similar definite conclusions upon the changes in standards of living and social conditions traceable to homesteading. And with the assistance of the merchants of the community, the experiment on such a scale will furnish a definite answer to the questions constantly raised about the purchasing power of homesteaders and the type of merchandise for which this new way of living will create a demand.
These arguments evidently so impressed Dr. M. L. Wilson director of subsistence homesteads, and his advisory board the they urged the Committee to get additional units under way a rapidly as possible, a separate loan to be made to each as organized As a result, in addition to the original Homestead Unit, two of the original Production Units are now organizing for the purpose of establishing themselves on homesteads, while a group of German Americans, some of whom had lived in the garden homes with which Germany has been experimenting, is also being organized. We hope that others will shortly be on the way.
Dayton may therefore not only furnish to the country the first model of a subsistence homestead community, it may be the first city which will have developed the idea on a scale large enough to enable the country to determine its effects upon industrial and city conditions.
What finally may we look for from the spread of this movement throughout the country? What changes would follow upon such a widespread return to country life? This age is conspicuous, among other things, for its concentration of population and for its centralization of production. Are there any grounds for expecting any reversal of this trend?
My answer is yes. The gasoline engine and the electric motor have robbed the factory system of many of the advantages it has possessed up to now. Power can now be used not only for small scale and custom production, but even for domestic and individual manufacturersa technological change which makes decentralization economical. But in my opinion any profound change in ways of living such as we are considering, can come only from one of those combinations of historical events which usher in revolutions. Out of such a concordance of events we get not only social and political revolutions such as have taken place in Russia, we get economic and social revolutions such as the Industrial Revolution.
Is not such a combination of incidents in existence at present? The long drawn out business depression with its collapse of the dream of golden plenty from mass production, and the election of Franklin D. Roosevelt with his belief in the possibilities of subsistence homesteading, have combined to give this movement a chance to spread rapidly. If the NRA fails to end industrial unemployment, as I believe it will fail; and if we fail to make commercial farming profitable, as we have failed with all measures for agricultural relief up to the present, the hundreds of thousands of people now eager for some other way of life than dependence upon jobs and the insecurities of modern business will be augmented by millions. And as the catalytic agent to produce action we have this appropriation from Congress of $25 million for the purpose of initiating this new land and population policy.
But one thing is essential if the movement is to gather headway, and above all if it is to achieve the objective of a better and more secure way of living. Homesteading must be treated not as an economic problem solely nor as a housing problem, nor as an agricultural problem (all of which it is in part), but primarily as an educational problem. There is no insoluble economic problem involved in subsistence farminghundreds of people to my personal knowledge have succeeded in living on subsistence homesteads for years, and thousands and thousands have lived that way more or less unconscious of doing anything unusual for centuries.
The really difficult problem is that of inspiring and training familiesfor this is a family undertakingto change their notions of the good life, and their ways of securing the necessities and satisfactions of life. In some way they will have to be taught to think in terms of years instead of weekly pay-envelopes; to look upon the earning of cash as something to which they ought to devote only part of their time, and to secure their satisfactions out of creative and self-expressive activities instead of out of conspicuous consumption and vicarious play. Homesteading is, then, in the last analysis, a problem in adult education and as such must secure the right kind of educational leadership.
First, definition. Among those working at one phase or another of the back-to-the-land movement there is the widest disagreement as to what constitutes a subsistence homestead. Is it only half an acre, or can it be as much as fifty acres? Should homesteading be confined to areas around places where industrial employment can be secured, or should it include farm colonization projects in which crops such as cotton furnish the cash income of the homesteader? A National Conference on Subsistence Homesteading is meeting in Dayton as this issue of Survey Graphic is in press and may furnish a definition.
Second, an organizing and educational institution covering the whole country. To provide the continuous education needs for a period of years, as well as to furnish the government with responsible local institution for supervising homestead groups which loans are made, the cooperation of established institutions, such as state agricultural and mechanical colleges, must be enlist in the movement.
Finally, there is the necessity for securing ample capital finance the homesteaders and the communities they establish. While thousands of families have or can secure the little capital needed to start homesteading individually, there are hundreds thousands well fitted for homesteading who are unable to consider it because of lack of finances. The $25 million government funds available at present is sufficient only for a comparatively small number of these families. Therefore as soon as the division is ready for the expansion of the work, Congress should appropriate ample funds for this purpose. In what better way could government money be spent in an effort to help thousands of hard-working families rendered helpless by the depression and to bring about business recovery? Most of the money would actually be used to purchase lumber, cement, hardware, tools, tractors, agricultural implements and small machinery of many kinds and would therefore increase employment in the very industries now operating at the low levels. I therefore suggest that Congress consider carefully the possibility of appropriating at least a billion dollars for this purpose in 1934. By this means the business of putting the new land and population policy into effect would be promptly got under way.
In October 1932, Survey Graphic published a special number on Obsolete Cities. There it was said, "Half of us live in or within twenty-five miles of ninety-five metropolitan cities. And we live badly. They are obsolete." What is the answer? Subsistence homesteads offer one solution to this great modern dilemma.