22 BULLETIN 874, U. S. DEPARTMENT OF AGRICULTURE, 



In Table XII it will be noted that average farm incomes for owners 

 and tenants of the Tama district nearly doubled between 1913 and 

 1918. The increase per acre was somewhat less, because there was 

 a considerable increase in the average size of the farms both of owners 

 and of tenants. The percentages of increase of farm income per 

 acre were 47 for owners, 84 for owners additional, and 74 for tenants. 

 For all farms the increase in farm income per acre was 65 per cent. 

 In contrast with these rates of increase in farm income average land 

 values of these farms increased only from 17 to 23 per cent during 

 the same period. In the Warren district the percentages of increase 

 in farm income as compared with the percentages of increase in land 

 value were not so marked because of the fact, already noted, that in 

 this district the corn crop of 1918 was far below normal. Yet, 

 even under these unfavorable conditions the percentages of increase 

 in fa*m income were larger than the percentages of increase of land 

 value, the former averaging 36 for all classes of farms as compared 

 with 24 per cent for the latter. 1 



These facts appear to indicate that up to 1918 the increase of 

 Iowa land values had lagged behind the increase of average farm 

 income, and there can be little doubt that this created a favorable 

 condition for the sudden and rapid advance in land values during 

 1919 and the accompanying "boom." 



For the years studied, and in both districts, "owners additional" 

 (those who rent land in addition to their own holdings) made a larger 

 average farm income than either owners or renters. Moreover, 

 owners appear the least efficient of the three classes, whether effi- 

 ciency is measured by total farm income or b*y farm income per acre, 

 with the single exception of 1913 in the case of farm income per 

 acre (refers to Tama County). 



FARM LABOR INCOME CLASSIFIED BY TENURE. 



In farm income, as discussed above, no allowance is made for the 

 annual interest on the value of capital employed, including the value 

 of the farm. To whatever extent a farmer borrows the capital 

 employed, he must pay interest out of the income from the farm. 

 If he employs his own capital, he should receive a return for it corre- 

 sponding to what he could get in other kinds of investment. In 

 farm economic studies it has been generally customary to consider 

 5 per cent a reasonable allowance for the use of capital in farming. 

 It should be recalled, however, that of the recent sales of farms a 

 large number were made on the basis of mortgages bearing 5 \ per 

 cent. Moreover, for short-time loans obtained from banks, the 



1 This increase in farm values for the Tama district is considerably smaller than that indicated by sta- 

 tistics of the Census and Bureau of Crop Estimates, which for the entire State was about 40 per cent from 

 1913 to 1918. 



