FABM LAXD VALUES IN IOWA. 43 



This tendency is attributable to several causes. The most im- 

 portant is the fact that constantly increasing values of land have 

 yielded an increment which may be counted as a substantial addition 

 to the income derived annually from the rent or use of the land. It 

 is obvious, however, that whether- this fact may be considered a justi- 

 fication for the present high land values depends on whether the 

 increase may be expected to continue. The reply of many people in 

 Iowa is that land always has increased in value; therefore it will 

 continue to increase. 



Another reason for the low rate at which farm land is capitalized 

 is the fact that the farm is not only the source of money income, 

 but also yields satisfaction as a home. Therefore a part of the high 

 land values represents allowance for home advantages, including 

 residence and other conveniences, good roads, schools, and other 

 social benefits. 



A most important reason, however, is the tendency for farmers 

 to invest in land with little consideration for the possibilities of 

 other lines of investment. This tendency may be explained by 

 ignorance of other methods of investment, by the belief that invest- 

 ments in farm land are peculiarly safe, and by the pride of ownership, 

 or the mere blind passion for ownership which causes many farmers — 

 especially peasant immigrants — to accept a low standard of living in 

 order to acquire land. 



As a result of these conditions the average cash rental of farm land 

 in 49 Iowa counties in 1918 was 2.71 per cent of land values, March 

 1, 1918, and 2.35 per cent of land values, March 1, 1919. The 

 percentage of land values for August, 1919, would be still less. 

 In the Tama district cash rentals were 2.15 per cent of land values 

 in 1913, 1.90 per cent in 1918, and 1.30 per cent of the land values 

 of August, 1919. It should be noted, however, that owners operating 

 their farms are able to earn a slightly larger percentage of return than 

 would be derived from renting them to others for cash rent. Thus, 

 the per cent of average return to owners from operation in the Tama 

 district was 3.98 in 1913, 4.99 in 1918, and 3.5 on the basis of land 

 values in August, 1919. 



If, on account of the various motives mentioned above, farm owners 

 are willing to pay prices for land which will make it necessary to take 

 considerably less than 5 per cent for the use of the land, shall we con- 

 sider the value of farm land abnormal, and the condition itself one 

 to be deplored? 



The question may first be considered from the standpoint of farm 

 owners, however they may have attained that status. If the owner 

 is free of debt, the rent of the land combined with the income assign- 

 able to the labor of the farmer and his family, together with interest 

 on operating capital, may enable him to live in considerable comfort. 



