94. BULLETIN 1322, U. S. DEPARTMENT OF AGRICULTURE 
is made for ule estate and road taxes, and $1.90 when all such taxes 
are deducted. The former of these two varieties of net rents is 
called primary and the latter secondary. 
Net rents, whether primary or secondary, were a small percentage 
of gross rents, and net increments were a large percentage of gross 
increments. 
Net increments amounted to about three times as much as net rents 
during the average year. 
Rents and increments yielded an average annual rate of return on 
current real-estate valuations of over 9 per cent. When computed 
so as to allow for variations in the general wholesale prices, these 
accruals were at an average rate of about 6 per cent. 
Real-estate valuations had a sharper upward trend than cme 
factors having upward trends affecting the economic position of 
these owners. The trend in real-estate valuations was at an average 
annual compound interest rate of 8.4 per cent. 
Primary net rent per $100 worth of real estate was as follows for 
the terminal years: Actual figures, 1896, $5.40, and 1920, $2.26. 
Net increment per $100 worth of real estate was as follows: Actual 
figures, 1896, $4.93, and 1920, $7.83. _ 
Interest on $100 borrowed on first farm-mortgage security was as 
follows: Actual figures, 1896, $9.30, and 1920, $6.80. 
Computing valuations for this real estate on the basis of rents 
and interest rates, the highest resulting figures for any of the 25 
years, as compared with a top market valuation of $110, was about 
$63 when computations are based on primary net rent, and when 
based on secondary net rents $57 On the basis of secondary net 
rents, the computed valuation is fr om $3 to $10 less than when com- 
puted on primary net rents. In the two or three years preceding and 
including 1920 the market valuation was from two to three times 
higher than the computed valuation. Excess valuation in relation 
ie current net returns to landlords was evidently a factor in the real- 
state market in the later years. 
(The declining yield of wheat, the major crop, was offset by a more 
than proportional rise in the price of wheat. Selected costs declined 
when considered as a whole. Some of the decline being traced to 
reduced relative spreads in price between local and distant markets. 
Trends in yields, costs, and prices combined so as to change the 
economic position of the owners to a degree beyond the efforts of 
operators or owners to bring about or counteract. 
The annual variations of primary net rents appear to have been 
in neghgible correlation with factors that were not components of 
the rents paid under the contract used. Correlation between rent 
and these constituent factors was higher in the case of price than 
in the case of yield. Correlation with selected costs was not marked. 
Annual variations of primary net rents were thus by no means sys- 
tematically compensated by variations in costs and in nonconstit- 
uent factors, and variations in yield were not offset by current 
changes of cost or prices of products. 
The hazards of irregularity were apparently greater in later 
years for a number of the factors, including rents, increments, and 
crop values. 
WASHINGTON : GOVERNMENT PRINTING OFFICE : 1925 
