FARM ORGANIZATION IN SOUTHERN ARIZONA. 49 
upon owned farms no satisfactory degree of success is obtained until 
the investment reaches at least $8,000. Even at this point t he labor 
income is not equal to that paid to Mexican and Indian labor for work 
on the farms, while the farm income little more than reaches the 
average living requirements of a farm family. Renters make a 
much larger labor income than owners, for an equal amount of capi- 
tal invested,, owing to the low rent charged for land as compared 
with the average mortgage interest rate. The average net returns 
to the landlords on 210 rented farms were 4.87 per cent of the value 
of the real estate. Upon these terms renting becomes a more profit- 
able method of increasing capitalization than borrowing money, 
and men of small means have found it more profitable to rent land 
than to purchase it. This is due to the fact that working capital 
earns a much higher interest rate in southern Arizona than money 
hives ted in real estate, and by investing in live stock and equip- 
ment and renting his land the renter is able to earn much more for 
his labor, which is his chief asset, than he can earn on the land that 
he could purchase with the amount of money he has at his command. 
As shown in Table XX, a considerable number of the owners of the 
smaller farms increase the size of their business by renting addi- 
tional land, making a profit by doing so. 
The tables show a steady rise in the average size of the farms 
operated as the amount of capital increases, but as there are wide 
differences the size limits of farms operated by a given amount of 
capital the influence of the factor of size of farm can best be studied 
by classifying the farms into groups having narrower size limits 
than are obtained by classifying on the basis of capitalization. The 
study of the distribution of capital on the various farms and the 
distribution of expenses can also be studied better by classifying 
into groups based upon size of farm. 
In establishing the size of farms in Arizona there has been a strong 
tendency to divide the section of 640 acres into even fractions, such 
as halves, quarters, eighths, sixteenths, thirty-seconds, and sixty- 
fourths, giving rise to a large number of farms of the even sizes of 
320, 160, 80, 40, 20, and 10 acres respectively. When it is desired 
to increase the size of one of these farms it is usually done by adding 
to it some even division of itself or some other one of these divisions. 
In order to preserve these even divisions as much as possible in 
the study of size, the farms were classified into the following groups: 
Farms of 19 acres and under; 20 acres; 21 to 39 acres; 40 acres; 41 to 
79 acres; 80 acres; 81 to 119 acres; 120 to 159 acres; 160 acres; 161 to 
320 acres; and above 320 acres. In determining farm income and 
labor income for this study all rented farms have been regarded as if 
owned by the operators, the farm income being determined by sub- 
