CORN BELT LAND VALUES IN RELATION 

 TO COST OF PRODUCING CORN 



RENT or interest on the monc}' invested in land is a legitimate 

 item in cost of production — so far as the individual farmer 

 is concerned. But society is likely to reach a time when it will 

 assert the right to object to paying a price for corn which will 

 permit of paying a very high rent, which in turn is used to support 

 very high land values. 



Society may say, in effect: Your high land values are just as 

 vicious as watered railway stock, and you have no more right to 

 expect a five per cent return on the inflated value than the rail- 

 roads have to expect such a return on their watered stock. 



Society may be expected to pay a price for corn which is estab- 

 lished by competition between farmers in this country and in the 

 .Argentine, and by the need of Europe for our pork products. 

 This price doubtless will bear much the same relation to the general 

 price level as before the war. It may be high enough to permit of 

 corn belt land values as they existed in 1920, or even higher values. 

 Or it may be low enough to compel a reduction in corn belt values 

 and farm-hand wages. 



In the case of a severe drop in corn prices, it is conceivable but 

 not probable that corn belt farmers will organize sufficiently to 

 compel the return to a price high enough to maintain 1920 land 

 values and farm-hand wages. 



It is believed that under conditions of free competition It will 

 be necessary for corn to sell for about 85 cents a bushel, on a basis 

 of December 1st farm valuations in the corn belt in the ordinary 

 crop year, in order to maintain land values as they existed in 1930. 

 This means that prices might go as low as 70 cents a bushel in 

 years of big crops, or as high as $1 in years of small crops. It is 

 also assumed that labor at harvest, without board, will settle down 

 to about $4<.2o a day, which was the 1918 level. If labor at har- 

 vest, without board, continues at $5 a day, which was the 1919 

 level, it will be necessary for corn to sell for about 88 cents a 

 bushel, on a December 1st farm basis, in order to maintain the 1920 

 level of land values and farm-hand wages. 



It is recognized that this prediction may be wide of the mark 

 in case farmers are able to organize themselves for selfish purposes 

 as effectively as capital and union labor. For forty years pre- 

 ceding the war, the farmer paid his regular monthly labor a sweat- 



