THE VALUE OF FARM LAND AND EQUIPMENTS 213 



which rented for two-fifths is rented for one-half. Unfortu- 

 nately, the census gives no measure of the increase in rents. 



The cash income from land may remain the same and a 

 legitimate rise in the price of land result from a fall in the 

 interest rate on safe loans. It is doubtful if this has been an 

 important influence in the recent rising prices of land. 



Belief in future increase in the returns from land may be 

 the occasion of a rise in prices beyond the amount on which 

 the rent will at present pay interest. This is the speculative 

 factor in the present price of land. Just what share of present 

 prices are speculative no one can tell. Much which was specu- 

 lative investment prior to war prices appears no longer to be 

 speculative, because the return which goes to land as share 

 rent pays a satisfactory rate of interest on the present price 

 of the land. The danger is that the prices of products will 

 fall and leave the land values on a speculative level again. 



The paying of a price for farm land beyond its worth as a 

 basis of farming operations is not so serious a matter for the 

 purchaser who is able to pay cash for the land. If he has paid 

 too much and the price does not rise, or having risen falls again, 

 he is poorer but not broken. With the man who buys on a 

 land contract with only 20 per cent of the purchase money paid 

 down, the case is different. In recent years many farms have 

 been purchased at a high price and with only a small proportion 

 of the purchase money paid down. The outcome has usually 

 been good because of the ability of the purchasers and the trend 

 of prices. If debt paying is favored by rising prices of farm 

 products, most farmers will pull through safely, even when 

 land prices are above the productive value of the land. In 

 case of stationary prices, all have a hard tune, but the more 

 able will succeed in spite of the burden of excessive principal 

 and interest. If an era of falling prices should follow, hope 

 would soon be crushed and the failure of all but the very ablest 

 would be all but certain. It is unwise for a farmer to invest 

 a large share of his savings in a non-interest bearing speculative 

 margin in the price of land. 



There are many explanations of the extraordinary rise in 



