SOME ECONOMIC ASPECTS OF FARM OWNERSHIP if 
however, when allowance is made for the purchasing power of the 
increments and rents thus far expressed in money. 
NOMINAL y. REAL RENTS AND INCREMENTS 
The rents and increments discussed in the preceding paragraphs 
were expressed in terms of money which varied from year to year 
in its power to exchange for commodities. From the standpoint of 
persons who must convert commodities into money rent or money 
increment, and from the standpoint of those who must convert 
money rents and increments into commodities, the rents and incre- 
ments thus far presented are merely nominal. By reducing rents 
and increments to their commodity equivalent it is possible to learn 
how these farms performed as producers of real rent and increment.” 
Instead of an average annually compounded yearly return of 9.2 
per cent for rent and increment combined, as expressed on the 
unconverted-money basis, the percentage on the converted-money 
basis was 6. For increment alone, the corresponding reduction is 
from 5 to 3.5 per cent. However, for mortgage investments the 
average yearly return was only 6.4 per cent. 
THE TRENDS IN OWNERSHIP CONDITIONS 
The factors that affected the economic position of the owners of 
the 16 selected farms will be treated in this section from the stand- 
point of their general trends over the quarter century 1896-1920. 
In a later section more particular attention is given to the short- 
swing movements above and below these trends. Though important, 
the short-swing movements must be considered in the hght of these 
major long-swing movements. 
7The expression of rents and increments in terms of unconverted money—that is, 
money without reference to its purchasing power—is well adapted to the situation of 
persons who are under heavy obligations to pay off mortgage debts and meet other 
obligations for fixed amounts of money. The expression of rents and increments on 
the basis of commodities or converted money, however, is better fitted to the situation 
of those rent payers who are producing commodities with which to pay rent and of 
those rent receivers who are little disturbed by fixed money obligations and who are 
interested more particularly in the standard of living their families can maintain by 
converting rents and increments into articles for consumption. The index numbers of 
wholesale prices of commodities published by the United States Bureau of Labor Sta- 
tistics were made the basis of a calculation to obtain for each year a “‘ conversion index ”’ 
by which to multiply the figure representing dollars of rent or increment of a given 
year in order to obtain the number of dollars of the purchasing power of 1920 required 
to equal it. The result was to convert the variable money of the respective years to 
the purchasing power of 1920. 
