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90 BULLETIN 1322, U. S. DEPARTMENT OF AGRICULTURE 
eastern North Dakota for operation by lessees. Such owners were 
put to special pains to supply inexperienced tenants with credit, 
equipment, and supervision. An investigation of the rents paid by 
experienced as compared with inexperienced tenants on these farms 
confirms the natural expectation that under uniform share contracts 
used by these owners the latter paid less.1* Despite the handicaps 
of such a period, rents advanced relatively more than realty valua- 
tions, even when rents paid by inexperienced tenants are mixed 
with the others. The dominating factor was the temporary weakness 
of the demand side of the farm-purchase market during this period. 
A PERIOD IN WHICH COMPUTED VALUATIONS WERE LESS THAN CURRENT 
‘MARKET VALUATIONS 
Why did these farms during all but five years of the quarter 
century have market valuations higher than the computed valuations, 
as both appear in Table 7? It is not surprising, perhaps, that a 
period of undervaluation should be followed by one of overvalua- 
tion. Optimism may easily run beyond proper limits. That the 
period of overvaluation should be so much longer, however, and 
that the overvaluation should continue to be both absolutely and 
relatively larger with the passage of time is less easily explained. 
From 1910 to 1914, although falling interest rates afforded ground 
for higher real-estate valuations, diminished rents more than offset 
them. The market valuation of real estate was still further en- 
hanced, however, perhaps in anticipation of increased rents or lower 
interest, rates, and went to figures between $30 and $45 per acre. Re- 
duced interest rates, at least, did not materialize. 
After the World War began, rents increased sufficiently to cut 
down the overvaluation of the real estate in the market. to per- 
centages as low in 1916 as 48, using secondary net rents as the basis 
of figuring, and 35, using primary net rents. Even in 1916 rents 
were not sufficient to justify valuations in excess of $57 an acre 
on the former basis or $63 on the latter. 
Between 1916 and 1919 the computed valuation fell off nearly 
$10 per acre. The market valuation, however, continued to advance 
between $5 and $10 a year until 1920. 
It is possible that some persons in this district did not require 
from their farms rates of net returns as high as the rates of interest 
demanded on first farm-mortgage loans. This may have been the 
case with the actual owners of these farms as well as with potential 
owners. The former may have retained the title to these lands 
because of great interest in administering landed property, because 
of prestige of a social type, because of desire to lead ‘their children 
into agricultural careers, or because of other considerations that 
would lead them away from alternative lines of investment. 
In exercising an influence toward higher valuations than were 
warranted merely on the basis of interest rates and rents, potential 
owners may have had one or more of a number of motives. To some 
extent their desire for farm real-estate ownership may have rested 
upon a belief that owning a farm likewise put them in possession of 
a workshop or factory capable of using the labor resources of the 
14See Farm Tenants and Owners on a Corporate Estate, by Walter H. Baumgartel and 
Charles L. Stewart, mimeographed report, U. 8. Dept. Agr. 
