58 TWENTY-FIRST REPORT. 



the corn-belt states, considerable capital in the form of land, buildings, live 

 stock, machinery, etc., is invested in the farm enterprise, and the income 

 received is looked at as so much interest on the investment. In fact there 

 are many instances where farmers are receiving no labor incomes as such, 

 but yet are able to thrive from the interest on their investments. The same 

 thing is true, more or less, with respect to fruit-growing, cattle-raising, dairy- 

 ing, and in all industries where much capital is required to be invested in the 

 enterprise. Interest, thus, forms the major portion of the incomes of those 

 who are so engaged. 



The farm entrepreneur does more managing than the entrepreneurs of 

 other industries. This is due largely to the peculiarities of the farm enter- 

 prise. It is by no means so easy for the farmer to substitute some other per- 

 son's services for his own managerial services as in the corporate form of 

 industry. Of course, there are cases where hired managers do operate farms 

 in the West, but it is the exception rather than the rule. Hence, profits in 

 farming, generally considered, are almost indistinguishable from wages of man- 

 agement. But, precisely considered, pure profits, profits embodying the 

 element of risk-taking, ought to be distinguished from profits embodying man- 

 agement. Theoretically, the two concepts are quite distinct. Technically 

 speaking, many farmers do not receive pure profits ; they receive wages for 

 labor, wages for management, and interest on capital. However, not a few 

 do receive pure profits as a reward for assuming the responsibility of the 

 farm enterprise. 



The chief incalculable element involved in risk-taking in connection with 

 the farm enterprise is the probability of a rise or fall in the price of land. An 

 increase in the value of farm land makes possible a surplus, which is profit. 

 During the last decade, farm land has increased in value more rapidly than 

 any other kind of farm property. The prices of farm products have also 

 shown a marked increase in comparison with the prices of other products, and 

 the influence is reflected in the value of farm lands. It is not unnatural, 

 therefore, to expect that a considerable surplus, representing profits, has been 

 due to a rise in land values, and this has gone to those who own lands. Where 

 the landlord and the manager are distinct and separate agents in agricultural 

 production, the former receives the benefit resulting from increased land 

 values, and, in general, the landowner is entitled to this surplus as a reward 

 for the risks incurred. 



By way of summary, therefore, we come to the following conclusions : 

 First, the average net earnings of farmers in the United States in 1909 were 

 between $400 and $500. At the present time, it is conservatively estimated 

 that the average farm income has increased by from 25% to 50%. 



Second, in general, the average farm income compares favorably with the 

 average income of almost any group of wage-earners or salaried employees. 



