CONTRACTS USED IN RENTING FARMS ON SHARES. 35 



While the central point upon which the various stipulations in 

 farm leases for share renting are focused is the idea of providing a 

 just basis for a partnership in which the proceeds shall be shared 

 equally, the first attempts to provide such a basis were naturally only 

 approximations to justice. The various items of expense and equip- 

 ment were borne by the landowner or tenant in such a manner as 

 to balance one another as nearly equally as might be. In cases where 

 it was not convenient for landowner and tenant to share these items 

 equally an adjustment was reached by dividing the proceeds un- 

 equally. Even in such cases, however, the idea of equal sharing was 

 apparently the point of departure, and the unequal sharing of pro- 

 ceeds was an adjustment to the fact that the two parties had con- 

 tributed unequally to the business. 



At least two apparent exceptions to the fundamental half-and-half 

 principle of tenant farming are widely prevalent. One of these is 

 the share-cropping method of operating cotton farms. The area 

 operated by a share cropper is usually too small to yield a living for 

 his family and pay a reasonable interest on one-half of the working 

 capital required for the operation of the farm. The share cropper 

 is therefore required to furnish no working capital. In fact, he is 

 virtually a hired laborer rather than a tenant. 



The other exception is typified by a form of lease contract used 

 in renting general crop farms throughout the country. Where there 

 is actual competition among tenants for the opportunity to operate 

 farms, landowners commonly exact a bonus in the form of a require- 

 ment that the tenant furnish most or all of the working capital. 

 The assumption underlying this practice is, as explained above, that 

 the tenant's own labor alone is not equal in value to the use of the 

 land, but that labor plus working capital equals land in productive 

 value. 



Many recent farm leases indicate the possibility of using more 

 flexible and, at the same time, more precise methods of adjusting 

 the division of proceeds to the relative contribution of landowner 

 and tenant to the partnership. These recent methods, which are 

 gradually coming into vogue, involve in all cases the equal sharing 

 of proceeds. Both landowner and tenant receive one-half of the 

 net farm income. If equipment and other working capital are fur- 

 nished in equal shares and all expenses are shared equally, one-half 

 of the farm income naturally goes to each party without further 

 adjustment. If the working capital is furnished in unequal shares, 

 expenses and interest on each one's share of the working capital are 

 taken from the gross returns, after which the net farm income is 

 shared equally. 



Underlying the lease contract in such cases is the assumption that 

 the tenant's labor is equal in value to the use of the land. For 



