38 
BULLETIN 1224, U. S, DEPARTMENT OF AGRICULTURE. 
Figure 7 can not be taken to show the true ratio of rent to value for 
any one of the 21 years. The number of farms on which the annual 
average rents are based is too small to be considered representative 
of all the land in Ohio. The rents paid on these farms, however, 
show the trend in rents for the State with a fair degree of accuracy, 15 
This series of rents may, therefore, be used to show the trend^ in 
the ratio of rent to value during this period. The downward trend 
is at once strikingly evident, and in light of the preceding discussion 
the explanation is not far to seek. In the early part of this century 
the farmers, who are the principal buyers and sellers of land, had 
fresh in their memories the long depression of the nineties. Further- 
more, land incomes up to this period had not increased very much 
Ratio of Gross Cash Rent to Land Value in Ohio, 1900-1920. 
PER 
CENT 
10 
- 
- 
- 
- 
- 
• 
- 
- (Tl 
si) 
- 
•01 '02 '03 '04 "06 07 "06 09 II 
1900 1905 1910 
12 '13 14 16 '17 
1915 
1920 
Fig. 7.— The ratio of rent in each year to the selling value in the same year is shown by this curve. It 
does not show the rate of return on investments in farm lands. The rate of return on the investment 
is the ratio of the average income of all future years to the purchase price. The trend of this curve 
is downward because an increasing percentage of the value of land was based on expected increases 
in income. 
or very rapidly. Hence, very little was anticipated in the way of 
further increase in land income and the ratio of rent to value was, 
therefore, relatively high. But in the years following 1900 the 
average increase in land income was greater and greater, so that a 
constantly increasing percentage of the value was based upon 
anticipated increases in income, resulting in declining ratios of rent 
to value. 
A further reason for this decline in the ratio of rent to value is 
found in the fact that mortgage rates of interest were declining 
throughout the greater part of this period. 
This same downward tendency in the ratio of rent to value is also 
found in Iowa. This is demonstrated by Table 13, which shows the 
ratio of rent to value by decades. 
18 Compare the series based on farms leased from 1900 to 1920 with the shorter series based on larger num- 
bers of farms for the years in which they overlap, Table 6, p. 19. 
