10 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 



The average capital per farm is $17,535 in Indiana and nearly three 

 times that amount in Illinois. This difference is due to much larger 

 farms and higher value of land per acre in the latter State. 



The receipts per farm in all three regions approximate one-tenth 

 of the capital invested. 



The farm income, which represents the income earned by the com- 

 bined 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,G00 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 any- 

 thing 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 III.- 



-Variation in labor incomes on 273 farms operated by owners in 

 Indiana, Illinois, and Iowa. 



Labor income received, 



—$500 and more 

 -8199 to -8200. 



-8199 to SO 



81 lo 8200 



8201 tO $400 



$401 to $600 



$601 to | 





IVrcriil- 



Number 



age of 



of farms. 



total 





number. 



26 



9.9 



2:5 



8.4 



-to 



14.7 



53 



19.4 



34 



12.4 



23 



8.4 



20 



7.3 



Labor income received. 



8801 to 81,000. . 

 81,001 to 81,500. 

 81,501 to $2 ,000 

 82,001 to $3,000 

 $3,001 1o $5,000. 

 $5,000 and over 



Number 

 of farms. 



Pcrcent- 

 age of 

 total 



number. 



4.7 

 6.9 

 3.6 

 1.8 

 1.1 

 1.4 



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. 



