FARM LAND VALUES IN IOWA. 25 
The same tendencies prevailed in the Warren district, though the 
increase in farm labor income was on a much smaller scale. 
When farm labor incomes are calculated on the basis of the land 
values of August, 1919, the situation is entirely changed. The deduc- 
_ tion of 5 per cent for the use of capital results in a minus labor income 
of $148 for owners in the Tama district and a minus labor income of 
$207 for the same class in the Warren district. In the Warren district 
the average labor incomes of farms of the several classes of tenure 
were actually less than in 1915, while in the Tama district the average 
for all farms is somewhat less than in 1913. In the Tama district farm 
labor incomes of owners additional and tenants, on the basis of land 
valnes of August, 1919, are about 50 per cent higher than in 1913; an 
increase however, that is not as great as the decline in the purchasing 
power of the dollar from 1913 to 1919. Consequently the labor incomes 
of 1913 represented a greater amount of purchasing power than those 
based on land values of August, 1919. 
Tt is well to pause in the presentation of these facts to emphasize 
their significance. 
It is apparent that the level of land values prevailing in 1919 was 
too high to make it possible to pay 5 per cent on these values and still 
to earn a fair return for the labor and risk of the farmer. This was 
especially true of farms operated by owners, which make a poorer 
showing than the farms operated by other classes of tenure—a result 
which is also shown by the statistics of 1913 and 1915. Consequently, 
under these conditions, the average farm owner in this area who 
operates his farm must be willing to take a lower return than 5 per 
cent on the market value of his farm or to give his own time for less 
than nothing. In case a large part of the capital is borrowed at 
~~ interest rates of 534 to 6 per cent, the financial outlook for such a 
farmer is not a promising one. 
It may be said that the income considered is that of 1918, while 
the land values are those of 1919. However, it is probable, as already 
stated, that in the Tama district the good yields and unusually favor- 
able prices of 1918 resulted in incomes as high as may be expected 
for some years. Furthermore, recent data indicate lower farm labor 
incomes for the crop year 1919 than for 1918. 
OPERATORS’ LABOR INCOMES OF TENANTS AND OWNERS ADDITIONAL. 
In Table XIII, above, farm labor incomes were calculated on the 
basis of allowing 5 per cent or 54 per cent for the use of all capital 
employed, including the value of the land. Tenants, however, obtain 
the use of the land by paying rent rather than by paying a certain rate 
of interest on the value of the land, while owners additional obtain a 
part of their land by payment of rent. 
184592°—20—Bull. 8744 
