A RISE IN SELLING PRICE 27 



fifteen or twenty years ago. And if we are guided by the reports of land sales 

 in foreclosure proceedings, the depreciation has been more than fifty per cent. 

 In three hundred and eighty-three cases in six counties in one state the lands 

 sold for but twenty-five per cent of the debt, and the debt was only one-third 

 the estimated value of the land when the debt was incurred." 



Investigating Agricultural Conditions. Four years after this 

 date another cycle of prosperity having failed to develop Con- 

 gress passed an act (June 18, 1898) creating the Industrial Com- 

 mission with powers to investigate and report on agricultural and 

 other conditions. Volume X of the Industrial Commission's 

 Report issued in 1901 contains these statements concerning farm 

 land prices: 



"The prices of agricultural land in the Eastern States have generally 

 fallen, in some cases to about fifty per cent of the figures asked during the time 

 of high prices. There is said to have been also a general decline in the price of 

 land along the Mississippi river. Figures given for Pennsylvania show an 

 increase in the average price of farm lands between 1859 and 1879 (the high 



C rices preceding the latter year being explained by the inflated currency), 

 ut a drop by 1889 to a lower price than that of thirty years previous . . . 

 About 1890, California lands showed the effect of the high prices of fruit in 

 an increase of values which could scarcely be expected to be permanent. Land 

 can now be obtained at about one-third, or even less, of the prices prevailing 

 at that time." 



This decline in farm values may be the best thing, after all, 

 considering the question from the standpoint of proper capital- 

 ization versus overcapitalization. For, as L. H. Bailey testifies, 

 " valuation of farm properties have decreased. It is therefore 

 apparent, if prices have not depreciated, that the income from 

 investment in farm lands to-day is relatively greater than a gen- 

 eration ago. When farm values are low it is the time to purchase 

 farms if one desires to make a living from the proceeds. In this 

 view, therefore, the decline in farm values promises well for the 

 earning power of farming." 



Professor Bailey, however, is led into error in his conclusions 

 concerning the permanence of low values. He says, "It has been 

 a fault with farmers, perhaps, that they have considered the 

 changes in farm values to be merely temporary, and they have 

 therefore been free to contract debts hoping that the status would 

 quickly regain itself. The fact seems to be, however, that the 

 decline in farm values is general and relatively permanent." 



A Rise in Selling Price. Yet the value of farm land increased 

 in the ten-year period, 1900-1910, by one hundred and eighteen 

 per cent! Since the land in farms increased during this period by 

 only four and eight-tenths per cent, it is evident that this enormous 

 increase in land value is due almost wholly to a rise in the selling 



