FARM PROFITS. 15 



5 per cent interest on the capital is added to expenses, the total 

 cost is 3 per cent in excess of receipts. 



FARM EARNINGS. 



From a study of the receipts and expenses it is seen that both 

 showed a marked increase during the period. Comparing the first 

 two years with the last two, it is seen that receipts increased 83 per 

 cent and expenses 66 per cent, thereby leaving a considerable larger 

 farm income for the latter years than for former years, as the farm 

 income represents the difference between receipts and expenses. 

 For the seven-year period the farm income averaged $610 per farm. 

 This was highest in 1917 ($1,024) and lowest in 1913, when it fell 

 to only $421 per farm. 



The labor income, which is found by deducting from the farm in- 

 come 5 per cent interest on the capital, and represents the amount 

 left for the farmer's own labor and management (in addition to 

 farm-furnished products), averaged $276 per farm for the seven- 

 year period. The labor income was less than $200 per farm for each 

 of the first four years; in 1917 it reached $666. 



The average value of the farmer's own labor and management 

 was $304,. in addition to the supplies furnished by the farm. The 

 value of his labor increased from $281 in 1913 to $347 in 1918. If 

 the value of his labor be deducted from the farm income, the remain- 

 der represents the earnings of the capital, which was 4.6 per cent for 

 the seven-year period. The average return varied from 2.2 per cent 

 in 1913 to 9.7 per cent in 1917. It was less than 4 per cent for each 

 of the first four years, and in only one year (1917) did it exceed 6 

 per cent. 



Beginning with 1916 the prices of farm products were on a much 

 higher level than in previous years. The average labor income of 

 the 25 farms in this area for the four years 1912 to 1915 was $153; for 

 the three years 1916 to 1918 it was $441. The return on capital for 

 the earlier period averaged 2.8 per cent and for the later period 6.6 

 per cent. 



The family income, which represents the amount of money avail- 

 able to the family after deducting from the total receipts all farm 

 expenses and interest paid on indebtedness, averaged $694 per farm. 



The interest on indebtedness was a small item to the farmers in 

 this area, as only a part of them carried mortgages and most of those 

 reported were small. In 1912, one-third of the farmers had indebt- 

 edness varying in amount from $150 to $3,000; in 1918, only one in 

 eight was in debt. During the intervening period the mortgages 

 on five farms were paid off with money made from the farming, and 

 on three others the mortgages were decreased, while the amount was 

 increased in but one case. Indebtedness decreased most rapidly 

 during the years showing greater profits, while in 1913, the year 

 returning least profits, there was no decrease in the indebtedness. 



