FARM LAND VALUES IN IOWA. 31 



Whether the economic rent of 1918 may continue to be main- 

 tained depends, of course, on future yields and future prices. The 

 former can undoubtedly be substantially increased in the Warren 

 district, but it is at best doubtful whether the high average economic 

 rent of the Tama district will be maintained in subsequent years. 



It is not to be assumed, of course, from the above discussion that con- 

 tract rent should be as high as economic rent, for the latter has been 

 calculated by allowing the tenant only the estimated value of his 

 labor and superintendence, with no allowance for his enterprise and 

 risk. 



PER CENT NET RETURN OF ALL CLASSES OF OPERATORS ON OPERATORS' CAPITAL. 



In order to determine how profitably the farmer's capital is em- 

 ployed in production it is desirable to ascertain the net return on his 

 capitalization. To determine this net return it is necessary to 

 deduct from the average farm income the rent paid for land not 

 owned by the operator, together with the value of the labor and 

 supervision of the farmer. The percentage of this remainder to the 

 farmer's capital, whether represented by land, operating capital, or 

 live stock, may provide a measure of the return on capital for the 

 different classes of farmers, as contrasted with the return on invest- 

 ments in other lines of business, and it may also afford a test of the 

 relative profitableness of farming under different tenures. The 

 increased value of the land is regarded as reinvested capital in the 

 case of owners operating their farms. These facts are presented in 

 Table XVIII. 



It will be noted that on his comparatively small investment the 

 average per cent of return of the tenant is much higher than that 

 of either owners or owners additional. In 1913 tenants in the Tama 

 district earned 18.3 per cent as compared with 3.98 per cent for 

 owners and 5.6 for owners additional. In 191*8 tenants in this 

 district earned nearly 32 per cent as compared with 5 per cent for 

 owners and 7 per cent for owners additional. In the Warren district 

 tenants earned 12.4 per cent in 1915 as compared with 3.6 per cent 

 by owners and 5.3 by owners additional. In 1918, however, tenants 

 in this district made only 2.3 per cent on' total capital, while owners 

 earned 3.6 per cent on capitalization, and owners additional 5.5 

 per cent. The small relative return to tenants in this case is due 

 to the large proportion of share tenants in Warren County, for all 

 classes of share tenants paid the landlord about 5.8 per cent on the 

 1918 average value of the farms rented. 



Although, because of their relatively small investment, the percent- 

 age of return on capital earned by tenants varies to a much greater 

 extent than do the returns of owners and owners additional, the 

 general tendency has been for tenants to earn a higher percentage 

 of return on their capital than either of the two other classes. 



