FARM LAND VALUES IN IOWA. 25 



The same tendencies prevailed in the Warren district, though the 

 increase in farm labor income was on a much smaller scale. 



When farm labor incomes are calculated on the basis of the land 

 values of August, 1919, the situation is entirely changed. The deduc- 

 tion of 5 per cent for the use of capital results in a minus labor income 

 of $148 for owners in the Tama district and a minus labor income of 

 $207 for the same class in the Warren district. In the Warren district 

 the average labor incomes of farms of the several classes of tenure 

 were actually less than in 1915, while in the Tama district the average 

 for all farms is somewhat less than in 1913. In the Tama district farm 

 labor incomes of owners additional and tenants, on the basis of land 

 valnes of August, 1919, are about 50 percent higher than in 1913; an 

 increase however, that is not as great as the decline in the purchasing' 

 power of the dollar from 1913 to 1919. Consequently the labor incomes 

 of 1913 represented a greater amount of purchasing power than those 

 based on land values of August, 1919. 



It is well to pause in the presentation of these facts to emphasize 

 their significance. 



It is apparent that the level of land values prevailing in 1919 was 

 too high to make it possible to pay 5 per cent on these values and still 

 to earn a fair return for the labor and risk of the farmer. This was 

 especially true of farms operated by owners, which make a poorer 

 showing than the farms operated by other classes of tenure — a result 

 which is also shown by the statistics of 1913 and 1915. Consequently, 

 under these conditions, the average farm owner in this area who 

 operates his farm must be willing to take a lower return than 5 per 

 cent on the market value of his farm or to give his own time for less 

 than nothing. In case a large part of the capital is borrowed at 

 interest rates of 5J to 6 per cent, the financial outlook for such a 

 farmer is not a promising one. ~ 



It may be said that the income considered is that of 1918, while 

 the land values are those of 1919. However, it is probable, as already 

 stated, that in the Tama district the good yields and unusually favor- 

 able prices of 1918 resulted in incomes as high as may be expected 

 for some years. Furthermore, recent data indicate lower farm labor 

 incomes for the crop year 1919 than for 1918. 



OPERATORS' LABOR INCOMES OF TENANTS AND OWNERS ADDITIONAL. 



In Table XIII, above, farm labor incomes were calculated on the 

 basis of allowing 5 per cent or 5| per cent for the use of all capital 

 employed, including the value of the land. Tenants, however, obtain 

 the use of the land by paying rent rather than by paying a certain rate 

 of interest on the value of the land, while owners additional obtain a 

 part of their land by payment of rent. 

 184592°— 20— Bull. 874 4 



