10 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 
The average capital per farm is $17,535 in Indiana and nearly three 
times that amount in Illinois. This difference is due to much larger 
farms and higher value of land per acre in the latter State. 
The receipts per farm in all three regions approximate one-tenth 
of the capital invested. 
The farm income, which represents the income earned by the com- 
bined forces of labor and capital, is the amount available to the farmer 
for his living and savings, provided he had no interest to pay on any 
mortgage or other debt. 
Deducting 5 per cent interest on the average capital leaves an 
average labor income of $408 for the 273 farm owners. This income, 
in addition to the food products furnished by the farm, represents 
the farmer’s salary as manager of the business. It is evident that 
these men are receiving only a moderate sum for their year’s work. 
If they sold their farms at inventory value and invested the money 
in good securities at 5 per cent the interest alone on a capital of 
$30,600 would return them $1,530. In addition to this, they would 
have the amount they were able to earn at other work. 
The assertion that farmers are making large profits 1s erroneous. 
They are living on the earnings of their investment and not on the real 
profits of the farm. A farmer having an investment of $20,000, with 
no mortgage, may receive a minus labor income, yet have nearly 
$1,000 as interest on which to live. It is assumed in this discussion 
that capital should return 5 per cent before allowing the farmer any- 
thing for his labor. 
VARIATION IN THE LABOR INCOMES OF OWNERS. 
In Table III the farms are divided according to the labor income 
received. Each group gives the number of men who made labor 
incomes ranging from minus $500 and more to over $5,000. 
TABLE III.—Variation in labor incomes on 273 farms operated by owners in 
Indiana, Illinois, and Iowa. 
| 
ie Foren; ~ Percent- 
i : . Yumber age oO . ou umber | age of 
Labor income received. oiiannce total Labor income received. | of farms. otal 
number. | number. 
| 
—$500 and more....-.-.---.-- 26 Se MetkOLl Ue) cil O00. Soe possonaeueose 13 4.7 
—$499 to —$200......-.--.-.-- 23 S4a (SL OOo 5005-2225 eee see 19 6.9 
== 199 OG Ona Bene reece 40 LAE Nol DOUTO 20002 eee cone cece ne 10 3.6 
SIO 200 Fee ace eee 53 19:74 1) $2 ;00L to$3;0005 22-25. -2-.- 02. 5 1,8 
S2OTMO; $4002 Ba >= eee ae ee ee 34 124 S35 OOLstOls 5: O00l ese oases ease 3 ileal 
S401 60) $6002 esas pee cer 23 8.4 || $5,000 and over. ......-...-..- 4 1.4 
POOL TO SSOO RS ees oie ae, | 20 Wee | 
} 
One farmer out of every 22 received a labor income of over $2,000 
a year. One farmer out of every three paid for the privilege of 
working his farm, that is, after deducting 5 per cent interest on his 
investment he failed to make a plus labor income. 
