FAEM OWNERSHIP AND TENANCY IN TEXAS. 27 



of the interest paid in the region for loans under reasonably favor- 

 able conditions. 



In practice the operator does not calculate his labor income in this 

 manner. He knows that what he receives from the farm for family 

 living materially reduces his family expenses, correspondingly in- 

 creasing his reward for labor and management. Furthermore, if he 

 is an owner, knowing that land values have steadily risen in the past, 

 he assumes that this rise in the future will supplement the "low re- 

 turn that his land yields from its present use. Moreover, he fre- 

 quently is influenced to pay more for his farm than he otherwise 

 would pay. because he desires to own his home. Consequently, part of 

 the land cost is considered part of his family expenses. In short, he 

 does not charge all of the present cost of land to its present operating 

 use. Hence, the landowner realizes that he has not in any sense low- 

 ered his power to earn wealth by becoming an owner ; he knows that 

 he has bought new personal satisfactions and future incomes which 

 lie thinks are worth the price paid for them. 



Thus, when these values are not deducted from the net surplus 

 which is the reward of the operator for his work and management 

 (see item 6) the result is quite different from that shown in item 4„ 

 The average labor income of owner operators increased from $317 

 to $1,293, and the increase for the labor income of owners' additional 

 income is from minus $61 to plus $731. 



The average rate of net return on the investment of the share ten- 

 ant in the farm business is more than four times as large as the rate 

 of return to owners on their investment (see item 7). This situation 

 is quite generally realized, and is a strong stimulus to the develop- 

 ment of tenancy in the area. 



The pecuniary considerations responsible for this tendency may 

 be further shown by presenting the things that would confront a 

 share tenant who contemplated buying the average farm operated 

 by the share tenant- interviewed. The average value of the farms 

 operated by share tenants was S16,489 (see Table 9), and the average 

 i i't rent paid to the Landlord in 1919 was $924. 31 Assuming that 

 the tenant could |>a\ one-third of the price of the farm in cash, 33 

 the interesl ai ~\ per cent on the remainder would amount to $825 

 for the year, Leaving a remainder over rent of $99 to apply as pay- 

 ment for the interest on the cash payment and upkeep. Interest on 

 the cash payment would amount to $412, and after taking the re 

 mainder of $99 from this, the tenant would be short $313 as an owner 

 of the place he rented in L919. For this $313 he would have to get 



i r<- j- iii<- trrofifl i' hi from the Ibd<3 lean t&xv and upkerp. 



■ paid in caul] by owner who have bought since 1900 (Seei 

 Table 



