Ae eee ee ee a Ee eee Pe eee BSISS ket beth tees 
SOME ECONOMIC ASPECTS OF FARM OWNERSHIP 138 
in the case of wheat. This resulted from the marked upward trend 
in the local market valuation per unit of farm products, particularly 
bushels of wheat. 
In its turn, the local market valuation of farm products, par- 
ticularly wheat, was increased both because of higher valuations 
prevailing in the central markets and because of diminished spreads 
between the central markets and the local market. These spreads 
were shown to have declined both in cents per bushel, as in the case 
of the spread between Amenia and Liverpool, and in cents per 
dollar’s worth, as in the case of the spread between those points as 
well as between Amenia and Minneapolis. In other words, the 
ratio of the spreads to the price of wheat, in either local or central 
markets, was diminished. There was also a decrease in the ratio 
of the spreads to the wholesale prices of commodities entering the 
index number list. On the other hand, the power of wheat to com- 
mand in exchange the general run of wholesale commodities was 
increased according to its valuation both in local and central mar- 
kets. 
It therefore appears that the economic position of the owners of 
these farms was improved, in spite of the decreasing average yields 
per acre, by reason of the increased-value of the physical units pro- 
duced and because of the cheapening of marketing service, particu- 
larly transportation, as measured in terms of commodities. Figura- 
tively speaking, economic improvements-outside of these farms, 
until the last part of the quarter century, were having the effect of 
moving these farms closer to the central markets. ; 
Economies practiced outside these farms also apparently strength- 
ened their economic situation in other ways. Considering, for 
example, the decrease in the money cost of plowing, or, in fact, the 
decrease in the commodity equivalent of all five selected costs com- 
bined, the decline in these items is not to be attributed solely to 
economies practiced within these farms. External economies to be 
credited in various degrees for a large part of this change include 
improvements in the types of machinery used in plowing, improve- 
ments in manufacturing and marketing this machinery, and various 
other improvements connected with making this machinery cheap. 
Without internal economies resulting from exercise of good farm 
management, however, the decrease in cost ratios could scarcely have 
been realized to the extent indicated by these records. 
The trend of the five selected cost items (Table 5) bears an 
influential relationship to the trend of primary net rents. The trend 
of real-estate taxes, another item of costs as viewed from the stand- 
point of the owners, has ‘a similarly close relation to the trend of 
secondary net rents. In the race between primary and secondary net 
rents on the one hand, and the movement of commodity prices on 
the other hand, these cost factors come into account. 
The explanation is as follows: The trend of increase of five 
cost items was upward at about half the slope of the trend in crop 
receipts. Primary net rents, therefore, had an upward trend more 
marked than that of crop receipts. However, since the upward trend 
of commodity prices was nearly as steep ‘as that of primary net rents, 
the purchasing power of primary net rents barely escaped a down- 
ward trend. If the upward trend in the price of wheat had not 
