66o 



AGRICULTURAL ECONOMICS 



the form of land, and the tenant furnishes the necessary labor and 

 other means for its operation. The average investment of the 247 

 landlords for the three states studied was $25,210. The average net 

 income on the capital invested was 3 . 5 per cent. All items of expense, 

 including repairs, seeds, taxes, and insurance, were deducted before 

 figuring the net returns. Table V gives the average capital, receipts, 

 expenses, and returns for the landlords in each state. 



TABLE V 



AVERAGE CAPITAL, RECEIPTS, EXPENSES, AND PROFITS OF LANDLORDS FOR 247 

 FARMS OPERATED BY TENANTS 



* Obtained by dividing the farm income by the average capital. 



The average return on investment from the farms in Illinois was 

 3 . 6 per cent, in Iowa 3 . 2 per cent, and in Indiana 3 . 5 per cent. The 

 income is a moderate return on the large capital, considering the 

 enormous rise in land values during, the past ten years. In computing 

 this income no credit has been allowed for the rise in value of real 

 estate, except in case of actual improvements. 



There has been a marked tendency throughout the entire country 

 to consider the farm more and more as a business proposition. The 

 landlord who is receiving 3.5 per cent net from his farm, with the 

 bare land figured at $150 or more an acre, has a good, safe investment. 

 It would seem from the results that if the year studied was a normal 

 one, land in the corn belt is not overvalued. Changes in the price of 

 the staple products, such as corn or oats, or material changes in the 

 cost of production of these crops would be reflected in the price of 

 farm land. Unless the price of corn becomes much higher for the 

 next period of years, a pronounced increase hi the value of land in 

 this region cannot be expected. 



