52 BULLETIN 1224, U. S. DEPARTMENT OF AGRICULTURE. 
that the county average rents were relatively inaccurate because of 
the method employed to adjust them to the county basis. (See 
p. 18). These correlation coefficients show, then, that average 
cash rents vary in response to variations in productivity as they 
probably would not do if custom were an effective force in their 
determination. 
This is strong evidence in support of the theoretical conclusions 
that competition and not custom is the effective force in determining 
rents, but it does not constitute a complete statistical proof of it. 
These high correlations between cash rent and productivity merely 
show that when productivity is relatively high cash rent is relatively 
high, and vice versa. But the same correlation coefficients would 
be obtained if all cash rents were lowered or increased an equal 
amount, so that the correlation coefficients alone do not prove that 
cash rents are equivalent to farm rents. If the process is kept in 
mind by which average cash rents are maintained at approximate 
equality relative to productivity, it will be seen that average cash 
rents must be approximately equal to farm rents. There are two 
sets of forces by which this relative equality in average cash rents 
is maintained: (1) If cash rents become low, relative to productivity 
in one area, tenants will tend to move into it from other regions 
and bid up the rents until they are again in relative equality to the 
rents in other areas. But information is not generally available to 
tenants regarding rents over wide stretches of country. Further- 
more, moving is expensive and troublesome, so that it is not probable 
that the movement of tenants from area to area is the most effective 
force that keeps rents equal throughout a given region relative to 
productivity. (2) Landlords will sell their farms rather than rent 
them if cash rents become lower than farm rents. In all the impor- 
tant agricultural regions of the country there are a very large number 
of landlords and retiring farmers who have the alternatives of selling 
their farms or becoming landlords. 
Since it is not a very difficult matter for existing landlords or 
retiring farmers to sell their farms if contract rents are too low to 
pay them to lease their farms, it is doubtless the action of this 
important class which has kept cash rents in approximate equality 
in relation to productivity. That is, their action has been the 
effective force in bringing about the high correlations as indicated 
by the correlation coefficients in Table 4 between cash rents and the 
productivity factors. If , this be true, if the correlation between cash 
rent and productivity is brought about by the action of landlords 
and retiring farmers, then cash rents closely approximate farm rents. 
A close relationship between cash rents and farm rents is also 
suggested by Table 7, which shows the ratio of cash rent to land 
value in four areas for a period of 10 years. This table shows that 
cash rents have increased very rapidly during this period, so rapidly 
that any theory of custom-determined cash rents becomes untenable. 
Cash rents did not increase as fast as land values, but this can not 
be taken to mean that cash rents lagged behind farm rents. It was 
more probably due to the fact that the anticipated increases in farm 
rent, which were capitalized into the values of each succeeding year, 
became constantly greater. 
