886 AGRICULTURAL ECONOMICS 



of profit on the capital invested which makes for good citizenship in 

 the country and for a high standard of living on the farm. 



In making the calculations the results of which are shown in 

 Table XXXII the farm income is first reduced to percentage of 

 capital invested. In the first line of the table the value of the farmer's 

 labor is left out of consideration, the entire net income being treated 

 as the percentage of profit on capital invested. There is seen to be 

 relatively little variation in the figures for different sizes of farms 

 except that in the smallest and the largest groups the figures are 

 somewhat smaller than in the intermediate sizes, and in these inter- 

 mediate sizes the two smallest show a somewhat larger percentage 

 profit than the three groups of larger farms. The last line of the 

 table was calculated by using the farmer's own estimate of the value 

 of his labor, subtracting this amount from the net farm income, and 

 then expressing the remainder as percentage profit on capital invested. 

 This method corresponds to that usually used in industries where 

 everyone connected with the business receives a salary. The average . 

 percentage profit calculated in this manner is 9.4 per cent for the 378 

 farms operated by their owners. Except for the farms of 40 acres and 

 less, there is comparatively little variation in the profits. It is because 

 profits have so often been figured in this manner that the public has 

 been misled as to the advantages of the large as compared with the 

 small farm. It is interesting to note, as shown in next to the last 

 column of Table XXXII, that the percentage profit on the tenant 

 farms calculated by both methods is larger than it is on the owner 

 farms. We shall later see the reason for this. 



The year in which this survey was made happened to be one 

 which was rather favorable to the mushroom business, and the 

 average profits made by farmers who grow mushrooms were con- 

 siderably larger than those of the more usual types of farming in 

 this region, as is seen by the last column of Table XXXII. There 

 are, however, years in which the reverse is very distinctly the case. 



The average net income of the landlords who own the 124 tenant 

 farms here under consideration was, for the year 1911, 7.3 per cent 

 of their invested capital. In comparing the labor income of owners 

 and tenants in the same locality, the fairest comparison is made when 

 the interest on capital is estimated in both cases on the basis of the 

 interest received by landlords. Such a comparison is made in Table 

 XXXVII between the 378 farms operated by their owners and the 

 124 tenant farms found in this survey. When capital is allowed an 



