FARM LAND VALUES IN IOWA. 41 



ownership may be considered fortunate in that a comparatively small 

 proportion of the present farmers of Iowa have assumed the heavy 

 financial handicap involved in the purchase at the excessively high 

 level of values resulting from the "boom." Probably not more than 

 5 per cent of the farms of Iowa were acquired by actual farmers at 

 boom " prices." The remaining 95 per cent of the farmers have 

 marked up the prices of their farms, and in case of necessity can 

 mark them down again. 



The "boom" was a process of rapid recapitalization of Iowa farm 

 lands on the basis of the high prices of farm products and relatively 

 high farm earnings of the war period. The process brought about 

 an average increase of about $66 an acre, amounting to an increase 

 of about $200,000,000 for farms actually sold, and, if imputed to all 

 the farms of' the State, resulting in a total increase of more than 

 $2,000,000,000. Active farmers assumed a larger "proportion of the 

 recapitalized values than they had held of former values. Urban 

 owners took advantage of the process of recapitalization to realize 

 the increments of land values that had accrued during the period of 

 ownership, with the result that these urban dwellers received nearly 

 half of all the increment of value in the case of farms owned by 

 the sellers before the beginning of the "boom" and more than two- 

 thirds of the increment derived from resales of farms purchased 

 during the period of the "boom." 



The process of recapitalization and redistribution of ownership 

 occurred without any serious tendency toward "shoestring" specu- 

 lation such as sometimes accompanies a land "boom." There were 

 unquestionably some instances of this character, but they were 

 exceptional. The great majority of buyers were people of substantial 

 means, and the terms of sale were not much less conservative than 

 those sanctioned by prevailing custom in the region. Moreover, the 

 jDractice of reselling contracts of sale was not as extensive as was 

 generally believed. Consequently the March settlement following 

 the "boom" occurred without a serious credit stringency. Some 

 uncertainty and resulting litigation may grow out of the complica- 

 tions from resales, but this is of minor consequence. 



Some temporary inconvenience and delay in the making of tenant 

 contracts also resulted from the "boom" due to the uncertainties of 

 ownership, but this was also a minor consequence because of the fact 

 that not more than 10 per cent of the farms were sold and" not more 

 than one-fourth of these were resold. 



ULTIMATE CONSEQUENCES. 



The immediate consequences of the "boom" of 1919 are of relatively 

 minor significance as compared with the ultimate consequences. 

 The latter grow out of the relation of farm values to farm incomes 



