THE RENT AND VALUE OF FARM LAND 635 



There are many causes, but the principal one is speculation. 

 According to the census, the price of Iowa farm land advanced 118 

 per cent from 1900 to 1910, or more than doubled in market price. 

 Owners continue to hold land for the increase in price, regardless of 

 the low rental value. It has been a common occurrence for land to 

 pay less than 3 per cent on the investment and within a year's time 

 advance 20 per cent in price. An exceptional case is known of a farm 

 changing hands five times during the year. Although the rent was 

 less than 3 per cent on the first sale price of $65 . oo and no improve- 

 ments were made during the year, the last sale price of the land was 

 $135.00 per acre. 



A rise in the price of land and an increase in the size of the farm 

 business are two causes for an increase in tenant farms. When land 

 rises in price so rapidly that the rent does not nearly pay a mortgage 

 rate of interest, it is a question whether a tenant should attempt to 

 buy land and pay the larger rate or remain a tenant until the two rates 

 are more nearly equal. 



Information concerning the amount of farm tenancy was first 

 collected by the census in 1880. At that time 24 per cent, or less than 

 one-fourth, of the Iowa farms were rented. In 1910, 37.8 per cent, 

 or nearly two out of every five, were rented farms. While farms 

 managed by owners and managers decreased in size and number from 

 1900 to 1910, tenant farms increased in size 16 acres and in number 

 2 . 9 per cent. Our data show that the highest per cent of tenancy is 

 found on land that has risen most in price during the last ten years. 

 Speculators who held the swamp lands of north-central Iowa as large 

 stock ranches are now draining the land and dividing it into cultivated 

 fields, which they rent to tenants. From $10 to $35 per acre has paid 

 all expenses for tiling and outlet, and one year after draining, this 

 black fertile soil has produced abundant yields of corn and oats and 

 has continued to do so with only faint signs of depletion. This simple 

 grain farming has required little supervision on the part of the land- 

 lord and has paid immediate returns in grain rent, besides promising 

 a large advance in the price of land. This is the area, where most 

 leases contain a sale clause and many tenants shift from one farm to 

 another every year. Land is not owned as a home, but as an invest- 

 ment, and the land is constantly on sale to the highest bidder. As a 

 result, farms exchange hands frequently and the price of land is 

 thereby artificially raised. 



