CAPITAL-GOODS AS A FACTOR IN PRODUCTION 



275 



the man with small capital should rent rather than buy a farm. For 

 the amount invested, the tenant's income is much greater than that 

 of the farm-owner. The sum available for the family living, however, 

 is much smaller in the case of the tenant, for the farm-owner, with an 

 average capital of $30,606, has $1,530 interest to use, as well as the 

 $408 labor income. Thus, if the farm-owner is free of debt, as one- 

 half of them are, he has $1,938 available for a living, as compared with 

 the tenant's $992. 



Turning to farms operated by owners, we find that the relation 

 of capital to labor income on 273 such farms was as follows: 



The chance of a farm-owner making a labor income of $1,000 with 

 less than $15,000 invested is less than i in 20. It may be also noted 

 that the farm-owners showing the greatest losses (minus labor income 

 of $500 or more) had nearly as much capital invested as did those 

 securing labor incomes of $2,001 and over. This shows clearly 

 the penalties that follow an injudicious or unfortunate outlay of 

 capital. 



As to the relation of tenants' capital to their labor incomes, it is 

 interesting to observe that farmers having less than $1,000 of capital 

 secured very small labor incomes ($324 and $799 for the two groups), 

 whereas farmers better equipped with capital were able to secure labor 

 incomes of from nearly $1,000 to nearly $3,000. However, the 

 increase in labor income is less than proportionate to increase in 

 capital after the $1,501 to $2,000 group is passed. This goes to show 

 that for efficient use of capital-goods in the corn belt a rather expansive 

 type of farming is needed. Farms with less than 100 acres in crops 

 are not utilizing horse labor nearly as efficiently as the larger 

 places. 



NOTE. Figures of a similar nature are given by Warren and 

 Livermore in Bulletin 295 of the Cornell Experiment Station. All 

 these data are open to the objection, for our present purpose, that in 



