42 N. n. Agr. Experiment Station [Bulletin 260 



Table 32 — Average profits, 395 farms. 



Receipts $3,878 



Expenses 2,924 



Farm income $954 



Interest on averaije capital at 5 per cent 561 



LABOR INCOME $393 



Milk and milk products used in house $79 



Poultry and other meat and eggs used 53 



Potatoes, fruits, and garden crops used 114 



Allowance for house rent (11%) 207 



Wood and miscellaneous used in house 154 



Total privileges $607 



Less privileges for labor 121 



$486 



LABOR EARNINGS* $879 



Value of operator's time** $792 



Return on capital ($954-$792 ) $162 



Per cent return on capital 1.4 



* Labor income plus house rent and other privileges used by operator and 

 other members of the family vs^hen not doing farm work. The estimated value 

 of privileges used by paid and unpaid labor for 241.2 days per farm was 

 $242.38, or slightly more than a dollar a day. The estimated cash cost of board 

 already included in farm expenses was $121.38. The difference, therefore, or 

 $121, is deducted from total privileges in computing labor earnings. 



** The average value of the operator's time as estimated by them, i. e., what 

 they thought they were worth on the job or what they would have to pay to 

 get the work done that they were accomplishing. 



Labor Earnings 



In addition to labor income, tlie farmer lias a house to live in and 

 certain products from the farm. The estimated average value of house 

 rent and products contributed by the farm toward the operator's fam- 

 ily living amounted to $607. A part of this was shared with paid and 

 unpaid labor used in the farm business. Therefore, tlie net privileges 

 for the farmer and his family are reduced to $486. This added to his 

 labor income amounts to $879, and is called labor earnings. 



The Significance of Labor Income 



Farm incomes are difficult to compare with the incomes in other 

 business. In farming, the home and the business are one ; in other 

 business they are usually separate. The easiest comparison is with 

 hired men. In the days long after the Civil War and before the World 

 War, say the period from 1910 to 1914, often used today as a norm 

 or base, hired men's wages amounted to about one dollar a daj'^ and 

 board. Spillman,'- Warren'^ and others estimated the average labor 

 income of farmers of the United States at that time as about $300, or 



