28 BULLETIN 1068, TJ. S. DEPARTMENT OF AGRICULTURE. 



his reward from the privileges of owning the farm, including the 

 right to all increases in land value and to any intangible values the 

 tenant may place on ownership. 



Share tenancy, therefore, yields the tenant a greater immediate 

 cash return than he could earn with an equivalent expenditure of 

 cash and labor as an owner operator, and this condition tends to 

 increase the period of tenancy of operators, and thus the per cent 

 of tenancy. A rigid enforcement of the antibonus law, if the legally 

 specified share is less than the net return attributable to land after 

 all expenses are deducted (not including rent to be paid as an ex- 

 pense), would tend to make land values lower than they would be 

 were there no such law, and the enforcement of the law under the 

 conditions outlined would, without doubt, tend to lessen the stimulus 

 to tenancy mentioned above. 



Land owners in the black land have frequently said their rents 

 were too small to yield them a return on the capital invested in the 

 land equivalent to the return yielded on the same capital if it were 

 put in equally safe alternate investments. In 1919, a year favorable 

 to landlords, the landlord's net return on his farm capital was less 

 for both tenant classes than the average first mortgage loan rate. 

 The average rate of net return to the landlords on share-tenant 

 farms was 5.6 per cent and on cropper farms 6.6 per cent (see item 

 8, Table 15). 



However, if the returns of the landlord from rent in the past were 

 supplemented by his net returns from increases in land values it 

 would be found that his total net gain as a land owner has been very 

 attractive. By reference to data in Table 7, it will be noted that 

 land values in the black land as a whole, including improvements 

 placed on the land, have increased each decade since 1870, and by 

 increases varying from 39 to 144 per cent. 



In order to give the proper emphasis to this important phase of the 

 tenure problem, data on each land purchase were taken from all 

 operators interviewed who had bought land in the black land. These 

 data are summarized in Table 16. In each individual case the in- 

 crease or decrease in land values was calculated by deducting the 

 value of improvements (buildings, fences, drainage, clearing, etc.) 

 from the gross increase or decrease. All increases are calculated in 

 terms of their equivalent in interest compounded annually on the 

 original investment, which is, in reality, counting the original invest- 

 ment and the accumulated increase as reinvested capital for each 

 year. 



It will be noted that only 3.7 per cent of all purchases were made 

 at a loss, and that these places were usually kept for a very short 

 time. Practically no losses were recorded on purchases where the 



