PROFITS IN AGRICULTURE 



883 



the combined forces of labor and capital, is the amount available 

 to the farmer for his living and savings, provided he had no interest to 

 pay on any mortgage or other debt. 



Deducting 5 per cent interest on the average capital leaves an 

 average labor income of $408 for the 273 farm owners. This income, 

 in addition to the food products furnished by the farm, represents 

 the farmer's salary as manager of the business. It is evident that 

 these men are receiving only a moderate sum for their year's work. 

 If they sold their farms at inventory value and invested the money 

 in good securities at 5 per cent, the interest alone on a capital of 

 $30,600 would return them $1,530. In addition to this, they would 

 have the amount they were able to earn at other work. 



The assertion that farmers are making large profits is erroneous. 

 They are living on the earnings of their investment and not on the 

 real profits of the farm. A farmer having an investment of $20,000, 

 with no mortgage, may receive a minus labor income, yet have nearly 

 $1,000 as interest on which to live. It is assumed in this discussion 

 that capital should return 5 per cent before allowing the farmer 

 anything for his labor. 



Variation in the labor incomes of owners. In Table III the farms 

 are divided according to the labor income received. Each group gives 

 the number of men who made labor incomes ranging from minus $500 

 and more to over $5,000. 



TABLE HI 



VARIATION IN LABOR INCOMES ON 273 FARMS OPERATED BY OWNERS IN INDIANA 

 ILLINOIS, AND IOWA 



One farmer out of every 22 received a labor income of over $2,000 

 a year. One farmer out of every three paid for the privilege of 

 working his farm, that is, after deducting 5 per cent interest on his 

 investment he failed to make a plus labor income. Analysis of their 



