88o AGRICULTURAL ECONOMICS 



The receipts exceeded the farm expenses by $757. This represents 

 the amount that was earned by the unpaid farm labor and the interest 

 on capital. If we subtract 5 per cent interest on the capital, or $276, 

 and $58, the average value of unpaid farm labor done by members of 

 the farmer's family, we have $423 which is the average labor income 

 of these 615 farmers. For their year's labor they received this amount 

 of money in addition to having a house to live in and such products 

 as the farm furnished. The labor income of tenants averaged $379. 



A farmer's labor income might be nothing or even a minus quantity 

 and yet he might live. If a farmer has $6,000 capital, and if the 

 receipts were only $200 more than the farm expenses, his labor income 

 would be $200 less the amount that $6,000 would earn if placed at 

 interest. This would give a labor income of minus $100. Yet, if not 

 in debt, the family would have $200 to live on. In this case they would 

 be living on their interest, not on the product of their labor. In other 

 cases men who are making money according to the opinions of their 

 neighbors, really make nothing except interest. They get nothing 

 for their work. 



The farmers that are cited as the best ones are often not making 

 more than interest on their capital. Others that are not thought of as 

 successful are doing well. If a farmer has $10,000 and is not in debt 

 or if he has a son working at home, he may be getting ahead and have 

 an attractive place and yet not be getting more than interest on his 

 capital and pay for the son's work, leaving nothing for his own work. 

 Such farms are often written up in bulletins and papers as examples 

 of model farming. 



In order to see how accurately profitable farms may be told by 

 appearance, each person taking records indicated his opinion of the 

 farm while taking the record. Of the twenty-five most profitable 

 farms in four townships, only four were correctly classed. One was 

 put in the lowest class. The majority of those that were placed in 

 the highest class failed to make good labor incomes. The appear- 

 ances of a farm are not a reliable indication of profits. Attractive 

 farms are frequently kept up by the interest on a large investment. 



A farm cannot be said to be financially successful unless it pays 

 all expenses, interest on the capital, the value of unpaid family labor, 

 and a good wage for the operator. 



Variation in labor incomes. The average owner received $423 as 

 pay for his personal labor and management for a year, but there were 

 wide variations from this amount. 



