Euiwet FIN OF “Ti

USDEPARTMENT OPAGRICULIURE

No. 41

Contribution from the Bureau of Plant Industry, Wm. A. Taylor, Chief.
January 14, 1914.

A FARM-MANAGEMENT SURVEY OF THREE REP-
RESENTATIVE AREAS IN INDIANA,
ILLINOIS, AND IOWA.’

By E. H. THomson, Agriculturist, and H. M. Drxon, Scientific Assistant, Office
0
5 of Farm Management.

INTRODUCTION. !

Farm management treats of the business of farming. A farm-
management ‘survey has for its purpose a study of the profits of the
individual farmer to determine the factors that control his income.
Agriculture to be progressive must be profitable. As farming is a
business involving both capital and labor, the farmer should receive
a fair income on his investment as well as wages for his labor. Many
farmers receive no wages for their work, due largely to poor farm
organization or from following types of agriculture unsuited to their
particular region.

Successful farming is an individual, economic problem. The farm
is a combination of enterprises, and their individual organization will
determine in a large measure its profitableness.

The corn-belt States excel almost all other regions in wealth of
farm products. On rich soil with ample rainfall a system of agri-
culture is found that is unequaled as an example of the expansive
type of farming. This type is developed on the basis of the farm
work horse as the means of motive power. To attain its highest
efficiency, this type calls for expansion in farming area. Such a type
is in direct contrast to the agriculture of the countries of southern
Kurope or of Belgium, where man and not the horse furnishes the
labor. The American type is based on the product per man, the
Kuropean on the product per acre of land.

In the summer of 1911 the Office of Farm Management of the
Bureau of Plant Industry, United States Department of Agriculture,
made a farm-management survey of certain districts in Indiana, Ih-
nois, and Iowa. The results of this survey, which are outlined in this

Acknowledgment is due to Messrs. H. F. Williams, E. L. Currier, E. M. McGrew,
O, 8. Rayner, and C. Wensel, who assisted in collecting the data presented in this bul-
letin. Thanks are also extended to the many farmers in the regions studied through
whose courtesy this work was made possible.

13131°—14 1

\

2 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

bulletin, include data from about 700 farms. It is fully realized that
further studies, embracing larger areas in each State, are necessary
before definite statements can be made regarding certain points.
However, the information gathered furnishes almost conclusive proof
with respect to many phases of farm organization.

The results pertaining to the size of the farm in its relation to
operating costs and the profits received are particularly valuable.
It would be highly desirable to make a survey of the same regions for
several successive years. If such data were obtained, however, it is
believed that the conclusions would be the same as those from the
one year’s study. <A possible exception might be the conclusions rela-
tive to the best paying type of farming. Extreme fluctuation in
prices may make some crops unprofitable at certain times. Potatoes
and peaches are two excellent illustrations of this.

Checking the results of any one year with the average prices for a
period of years permits fairly accurate conclusions. Investigations
made in different years and in widely separated States all point to
the same general principles that apparently control a successful farm.

METHOD OF WORK.

The data presented were obtained by having trained investigators
who were thoroughly familar with the agriculture in each district
personally visit the farmers. Every farmer in the area selected for
study was interviewed and a record of the year’s business obtained.
In this way, by including all the farms in a certain area, average
results were secured.

Experience has proved that one can not select farms which repre-
sent the average of a community. Good farm buildings and neatly
kept fences are not always sure signs of profitable farming.

Certain questions are difficult for the farmer to answer and in a
few instances his answer may be considerably in error. This trouble
is eliminated by the fact that some men will underestimate, while
others will overestimate the facts. The average is approximately
correct. Only those results are included where there is a sufficient
number of instances to insure reasonable accuracy.

The farmer knows more about his business than most people give
him credit for. Even though he keeps no records he is capable of
giving a very close estimate on all those things with which he is
familiar.

Farm data gathered by the survey method of study * are unques-
tionably as accurate as need be for all practical purposes.

1Warren, G. F., Livermore, K. C., and others, An agricultural survey—townships of
Ithaca, Dryden, Danby, and Lansing, Tompkins County, New York. New York Cornell
Agricultural Experiment Station, Bulletin 295, pp. 875-569, figs. 147-201, 1911.

Thomson, E. H. Agricultural survey of four townships in southern New Hampshire.
U. S. Department of Agriculture, Bureau of Plant Industry, Circular 75, 19 pp., 3 figs.,
1911.

\
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DA FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 3

LOCATION AND DESCRIPTION OF THE AREAS STUDIED.

Three districts, one each in Indiana, Illinois, and Iowa, were se-
lected for the farm-management study, the approximate location of
each being shown in figure 1. In choosing these areas an effort was
made to have as uniform farm conditions as possible in each region.
The soil and type of farming have a decided bearing on the profit-
ableness of agriculture ina region. These factors were carefully con-
sidered. Owing to differences in land values and to the general sys-
tem of farming it was not possible to secure three areas in separate
States that would be similar in all respects. The aim was to have
each district representative of the agricultural conditions prevail-
ing over a large area.

ln!

WISCONSIN MICHIGAN

Bory oe | |}
mao pale [ata

Wiese 4:

Map of Iowa, Illinois, and Indiana, showing the location of the areas studied.

Corn, oats, wheat, and hay were the crops universally grown in the
districts studied, corn being the predominating crop in all of the
districts. Hogs and cattle, with a few sheep, constituted the produc-
tive live stock.

DESCRIPTION OF THE INDIANA AREA.

In Indiana three adjoining townships—Forest, Johnson, and
Prairie—were selected. This region is in Clinton and Tipton coun-
ties, about 40 miles north of Indianapolis. The nearest city of con-
siderable size is Frankfort. Practically all of the farm produce sold

4 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

was shipped out of the counties, there being no local market of any
consequence.

This area is one of the oldest settled regions in the central part of
the State. The land was originally covered with heavy hardwood
timber, except for a few strips locally known as prairie soil. The
land is level to slightly rolling, being cut up in some places by
sluggish streams. The soil is a dark, rich loam and under good
management is very productive. After the land was cleared large
areas were too wet to cultivate well, but extensive systems of tile
drainage have overcome this difficulty. Many farms have miles of
tile drains running through them.

General farming is followed in almost all cases. In a few sections
canning factories have developed, and this encourages some truck
growing. This type is usually confined to small farms near towns or
cities. The average size of the 277 farms studied was 112.8 acres.
Of this area 86 per cent was tillable, 9.2 per cent was in woods, and
4.5 per cent in waste land. Roads, streams, swamps, etc., are included
in the waste area.

The important crops are corn, oats, wheat, hay, and clover aa
Of the rented farms 38 per cent of the tillable area and 36 per cent of
that on the farms managed by the owners were incorn. Oats occupied
19 per cent, wheat 11 per cent, first and second year clover and tim-
othy mixed, each 8 per cent, and pasture, not permanent, 13 per cent.

The prevailing rotation was corn two or three years, oats, wheat,
clover and timothy mixed, and pasture. Few men follow a definite
rotation on their entire farm, certain fields often being kept in corn
for several years. Generally the corn and hay were fed, oats, wheat,
and clover seed being the crops sold.

On the farms studied practically no beef cattle were raised and
only a few were purchased and fed. Hogs were the most important
of the productive live stock.

Farm buildings, as a rule, were well built and neatly kept. The
fences were unusually good, the farmers seeming to take a pride in
this method: of farm improvement.

Practically all the roads in this region were graveled, there being
only a few of the original dirt roads, which are almost impassable in
the early spring. The building of the graveled roads has been a
heavy expense to these farming districts and has been one of the
causes of high taxes. The region as a whole is more prosperous and
enterprising than some other sections of the State.

DESCRIPTION OF THE ILLINOIS AREA.

In Illinois the district selected comprised an area of approxi-
mately 110 square miles in the southern part of Cass and Menard

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 5

Counties. Among others it included the townships of Virginia,
Ashland, and Tallula. By railroad the area is about 200 miles from
Chicago and 100 miles from St. Louis. All of the produce sold is
shipped out of the district.

The land, except along the streams, is prairie soil. It is a sticky
black loam, common to large areas in the central part of the State.
Figure 2 shows the general character of the country. It lies very
level in places and is likely to be wet unless tile-drained. Nearly all
farms have excellent systems of tile drainage, which have rendered
the soil one of the most productive in America. The continuous
cropping of corn for over 50 years, although having its effect, is
almost unnoticeable. With any reasonable regard to the conservation
of fertility, this soil would seem almost inexhaustible. Corn, oats,

Fic. 2.—A typical harvest scene in central Illinois,

and wheat are the important crops. Very little hay is grown, and this
is largely clover. The second crop of clover is cut for seed.

The average size of the 196 farms studied was 240 acres. Of this
95 per cent is tillable, 3 per cent is in woods, and 2 per cent in waste
land.

The area in corn per farm was 97 acres, the proportion on the
tenant farms being about 10 per cent greater than on the farms
operated by owners. Oats occupied 34 acres and wheat the same.
The area in hay was small, being only 13 acres on the owners’ farms
and 7 acres on those rented. The area in permanent pasture was
greater than that in wheat, except on the tenant farms, where it con-
stituted one-half as much.

=
(

6 BULLETIN 41, U: S. DEPARTMENT OF AGRICULTURE.

The rotation followed by a few men was corn three years, oats,
and wheat. Clover seed was sown in the wheat. This generally
makes a good growth the same year, after the wheat is cut. It was
usually plowed under the same fall or the following spring on these
farms and was not allowed to grow a crop of hay. Several farms had
fields where corn had been grown almost continuously for a number
of years.

The plan generally followed was to plant as much corn as could
be taken care of during the rush season. Other crops, such as wheat
and oats, were used to fill in. Oats are generally recognized as being
an unprofitable crop on such high-priced land.

A large number of live stock was kept on some farms. The feeding
of cattle. hogs, mules, and horses gave an important source of
income. Still other farmers were strictly grain growers, keeping
no stock except the necessary work animals.

The farm buildings were ample and well kept., The fields were
unusually large, with hedge fences bordering them.

Considering the high price of land in that district, not as much
care as one might expect is exercised in utilizing it, there being con-
siderable waste areas along the fences and other places.

The roads are not graveled, except in a few instances. In wet
weather they are very bad, owing to the thick, tenacious, claylike
soil,

The farmers in the area studied are thrifty and are hard workers.
They know how to utilize machinery effectively so as to handle large
areas, one man and team being expected to take care of 60 acres of
corn.

DESCRIPTION OF THE IOWA AREA.

In Towa the townships of Willow, Greenbrier, and Highland, in
the counties of Guthrie and Greene, were selected. This area is
about 50 miles northwest of Des Moines and on the Chicago and
Omaha line of the Chicago, Milwaukee, & St. Paul Railroad.

The region has not:been settled as long as either the one in Illinois
or that in Indiana. Being prairie land with timber growth only along
the streams, it is a fertile and productive agricultural district. In
some places it is very rolling, steep hills being not uncommon. The
rough areas are confined to the southern part, particularly to Guthrie
County.

The soil is a dark, rich loam and is very poorly drained in the more
level areas. Tile-drainage prejects have opened up thousands of.
acres in that vicinity within the last few years.

Corn, oats, and hay are the main crops. Wheat is sown, but not
extensively,

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 7

The average size of the 227 farms studied was 186 acres. Of this
area 91 per cent was tillable. Approximately one-half of the crop
land was in corn, the other half being in oats and hay. Nearly 30 per
cent of the tillable area was used for pasture.

The rotation that was often followed was corn (two to three years),
oats, clover and timothy hay.

Beef cattle and hogs constitute the most important part of the
farm business. Large numbers of western steers are purchased and
fed, while in the hilly sections, distant from a railroad, a few cattle
are raised.

The selling of corn is generally confined to the farms on the level
lowlands and near the stations. Many of the farms are far from
market and, although the roads are fairly good, transportation is
an important factor.

DEFINITIONS OF TERMS USED IN THIS SURVEY REPORT.

In order to present the data clearly, certain terms which will be
used throughout the discussion are defined below. It is important
that the reader thoroughly understand these, as they will materially
assist in the interpretation of the results.

Farm capital—The farm capital is the average at the beginning
and at the end of the year of the value of all real estate, improve-
ments, machinery, live stock, feed and supplies, and cash necessary
to carry on the farm business. It includes the value of the farm-
house, but not the household furnishings.

Receipts —The farm receipts include the amount received from the
sale of all farm products and also the receipts from outside labor,
rent of buildings, etc. If the value of buildings, stock, produce, or
equipment is greater at the end of the year than at the beginning,
the difference is considered a receipt.

Eepenses.—The farm expenses represent the amount of money
paid out during the year to carry on the farm business. If the
value of buildings, stock, produce, or equipment at the end of the
year is less than at the beginning, this loss is considered an expense.
Household or personal expenses are not included, except the value
of board furnished to hired help.

Farm. income.—The farm income is the difference between the re-
ceipts and expenses. It represents the amount of money available
for the farmer’s living, provided he has no interest to pay on mort-

gages or other debts.

Labor income.—The labor income is the amount that the farm oper-
ator has left for his labor after 5 per cent interest on the average capi-
tal is deducted from the farm income. It represents what he earned
as a result of his year’s labor after the earning power of his capital

8 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

has been deducted. In addition to the labor income the operator
‘received a house to live in, fuel (when cut from the farm), garden
products, milk, butter, eggs, etc. The labor income corresponds to
what a hired man receives when he is given so much cash wages,
together with beard and room.

Farm owner.—The term “ farm owner ” is applied to the man who
works or manages the farm he owns.

Owner additional—The term “ owner additional ” is used to desig-
nate the man who owns a farm and rents additional land.

Landlord.—The landlord is the owner of a farm which is rented
to a tenant.

Tenant.—The tenant is the person operating a farm rented from
one landlord.

Tenant additional—The term “ tenant additional ” apples to the
person operating land rented from more than one landlord.

Number and kinds of farms studied.—In the total area studied in
ihe three States 700 complete farm records were secured. These
were divided into four classes, according to the method of manage-
ment. The farms operated by owners numbered 273. None of these
men rented additional land, but worked only the farms they owned.
The farms operated by tenants numbered 247, each farm being owned
by one landlord, whose income from that farm was determined. ‘The
third class comprised a group of farmers, 126 in all, who owned one
farm and rented additional land. They took this means of having
the use of more land than they actually owned. The fourth class,
51 in number, is made up of a few tenants who rented land from two
er more landlords. These were not included in the tabulations with
the other tenant farmers who operated only one farm.

Of the 700 farms studied, 57 per cent were operated by owners
and 48 per cent by tenants. Table I gives the number and classifica-
tion of the records taken in each of the States.

Tapte I—Number and classification of farms studied in Indiana, Illinois, and

Towa,
Classification of farms. Indiana. | Illinow. | Iowa.
Farms operated by—
Owners ee. See os SAE RI SE SERS TPE eee ee eee 123 73 77
“Penants: & oi skos aaa Se bya dione PERSE miemtaee sate aisete ater ae eee &3 71 93
Owners who rented additional land Be 56 36 37
Tenants, but owned by two or more landlords..........-.....--.------- 15 16 20

Totaloccs cca sees ee Se Ses ee a Bee ee eee eee | 277 196 227

INFLUENCE OF CLIMATE ON RESULTS.

In studying the profits of a region certain factors which may exert
a marked influence must be noted. It has been conclusively demon-

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 9

strated that the rainfall during the months of July and August de-
termines to a large extent the yield of corn.

Figure 3 shows
the average monthly
maintall: for 10
years, as well as for
the year 1910.

In Illinois and
Indiana the year
may be said to be
normal in almost all
elimatic respects.
In Iowa a drought
in early summer
caused a shortage in
the returns of pos-
sibly 20 per cent be-
low normal. The
effects of this
drought were most
noticeable on the
corn crop. The
prices of live stock
and grain are dis-
cussed on page 31.
These had a marked
effect on the prefits

INCHES

4

PRECIPITATION

SPRINGFIELD, /LLINO/S.

AVERAGE MONTHLY PRECIPITATION, 190/-1910 /NELUSIVE.
am ——— MONTHLY PRECIPITATION, (9/0.

Fie. 3.—Chart showing a comparison of the rainfall in 1919
with the 10-year average for each district surveyed.

derived from the two types of farming.
FARM PROFITS.
INCOMES RECEIVED BY FARM OWNERS.

The average capital, receipts, expenditures, and labor incomes for
the 273 farms operated by owners are given in Table IT.

TABLE II.—Average area, capital, receipts, expenses, and profits on 273 farms
operated by owners in Indiana, Illinois, and Towa.

Grand

; otal Cees - total or

Item. Indiana. | Illinois. Towa. general

average.
Motalriuimn peroliakins: 25.855). oe te eee ces eee cee 123 73 77 273
ASV ONTO ALOR oe 1a cle oooh cece she cele ne See an eante ae oe oe acres. .| 105 253 176 178
Mvenace CADIB es qos = aslo Less Se SPR Wai ook ee | $17,535 | $51,091 | $23,193] $30,606
EMEP OIE CEN Cho gee panne On Bem nee ocean cae nee Sere eee 1, 876 5, 042 2,308 3, 076
L\W7 SRD RD GS MERE So oso aoe soca Ses See Ses ons ape Rem oee mses 689 1, 866 858 1,138
Average farm income... ..- Fe II Bo ee ae Oe oe et oe ae 1, 187 3,176 1, 450 1,938
Averare interestiat'o percent: ©. 222202 5lc 2 oe se-s o-te eee Soe é 877 2, 554 1,159 1,530
Average owner’s labor income... ...------ beet Ly ee ieee bst as | 310 622 291 408

1 The value of unpaid family labor, except the operator’s, has been added in with the other farm ex-
penses. It is equivalent to the amount that would have been paid to hired help had not the family done
the work. The average amount per farm was $86 in Indiana, $127 in Illinois, and $101 in Lowa,

13131°—14 2

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 is 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 Towa.

\| ; |
|

Percent- Percent-
. So) 2 Ms Se cae 8 Number} ageof | : oe Number | age of
Labor income received. Srnerniel total Labor income received. Biers. total
number. | number.
Ez : | aa
—$500 and more -...---------- 26 99 eS8OL tO L000! = cease eeees eee 13 At
—$499 to —$200....-.--------- 23 8545) eS1 00] Tost 5002s ease ee ee 19 6.9
ti iO Waaeee eee Se aeeac oe 40 1407 Mel, 001 to $2000. - ae 5 4--ce sae 10 3.6
ST OPO Res oe oe aes 53 19:4 |) $2;001 To $3;000-~ = 2-25 25---25- 5 1.8
$201 to'$400. - 2.2. ---2=------ 34 1254)" as 00s to $5: 000s sss eee 3 Teal
SANGO POOOR: ©.5 c= eee ere 23 8. 4 || $5,000 and over. -....--------- 4 1.4
SOUL TOS SOO he ek oe eee 20 7.3

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.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. a:
INCOMES RECEIVED BY FARM TENANTS.

There are few regions in the United States where tenant farming
has been developed so extensively and where it plays such an impor-
tant part in agricultural production as in the corn belt. The per-
centage of farms worked by tenants is second only to those operated
by owners, and the areas farmed and the products grown compare
very favorably with those of the farm owners.

In the region covered by this survey, records were secured from 247
tenant farmers. These men rented one farm, or land owned by one
person. There were 51 other tenants who rented farms from two
different parties. Their records show the same results, which have
not been included in Table IV.

Tasre [V.—Average capital, receipts, expenses, and profits of tenants on 247
farms operated by tenants in Indiana, Illinois, and Towa.

Indiana | Illinois Iowa Average
Item. (83 (71 (93 (247

farms). farms). farms). farms).
SORU Oe PORT OMA i ee ia tee encircle ls fee alt os acres. - 128 202 187 172
PAPEL ACO CAD IGA aces om noch eee Bone a a te cee pea ee ee ae $1, 758 $2, 867 $2, 667 $2, 431
PANU AN AZO ECO DS sree sae oe ots ee a Senne oe nae Sawn eee ae 1,335 2,257 1, 605 ere,
SVOnASEIORDOTISCS aaa. cae wee) Jt Se we: A ee ee ee oe ee 492 975 755 740
Wena AN ECONO wre even ee nse eet a aewine hare eee 843 1, 282 850 992
Aeragonnterestial,& POMCON t= ne 2 Sate snes eee ane tees ee esiem 88 143 134 122
Average tenant’s labor Income. =. -._---.-:=.--------:- eee 755 1, 139 716 870

Most tenants hope to become farm owners as soon as they have
sufficient capital. The income they receive while leasing a farm is a
measure of the period they will have to work before making the,
change. The average tenant in Indiana, with an investment of
$1,758, received $755 for his year’s work. In Illinois, with an invest-
ment of $2,867, he received $1,139 as a labor income. In Iowa, with
an average capital of $2,667, his labor income was $716. Owing to
drought in early summer, the income of the tenant in Iowa was prob-
ably 20 per cent less than it would have been in a normal crop year.

The 247 tenant farmers made an average labor income of $870
from an investment of less than $2,500. When it is remembered that
the farm owners with over 12 times this investment made less than
half the labor income of the tenants, the evidence is unmistakable
that the man with small capital should rent rather than buy a farm.

For the amount invested, the tenant’s income is very much greater
than that of the farm owner. The sum available for the family liv-
ing, however, is smaller in the case of the tenant, for the farm owner,
with an average capital of $30,606 (see Table IT), has $1,530 interest
to use, as well as the $408 labor income. Thus, if the farm owner
is free of debt, as one-half of them are, he has $1,938 available for
a living, as compared with the tenant’s $992.

12 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

In addition to this sum available for a living, each has what the
farm furnishes in the shape of produce. After the tenant pays his
living and personal expenses ‘out of this amount his savings can not
be large. If we allow the owners 3.5 per cent on their investment
instead of 5 per cent they would then receive approximately the
same labor income as the tenants ($870). This percentage is the
same as that received by the landlords frem the rented farms. Tak-
ing into consideration the results from all the farms managed by
owners and by tenants, they show that a return can be expected of
2.5 per cent on the investment and a labor income of $870.

Seasonal variation and fluctuating prices have a marked influence
on the profits from farming in the districts studied. The average
price received for corn sold by the landlords of the-247 tenant farms
was 41 cents, and a drop of 5 cents alone would have reduced the
income 6 per cent.

INCOMES RECEIVED BY LANDLORDS.

The farm, in the case of the landlord, is a business investment.
He furnishes the capital, largely in the form of land, and the tenant
furnishes the necessary labor and other means for its operation. The
average investment of the 247 landlords for the three States studied -
was $25,210. The average net income cn the capital invested was
3.5 per cent. All items of expense, including repairs, seeds, taxes,
and insurance, were deducted before figuring the net returns. Table
V gives the average capital, receipts, expenses, and returns for the
landlords in each State.

TABLE V.—Average capital, receipts, expenses, and profits of landlords for 247
farms operated by tenants, as shown in Table IV.

Indiana | Illinois Iowa | Average
Item. (83 (71 (93 (247
farms). farms). | farms). | farms).

PASV TER CAL eke eee le elon acres. . 128 202 187 172
Averare capitaleeees 82) eee ee Ses Si Soe ARE See Oe $18, 423 | $36,479 | $20,728 $25, 210
AvVerageireceipts. 52. - =o 5- 9 ean ee ae eee eee 1, 002 1,538 1, 014 1, 185
ANY OT 2 POO SP ADSES ae ee ee eee ee 351 213 354 306
AV Orage ea PTT CONC a ep teeeeye e ate eee eere 651 1,325 660 879

Average profit on investment !...............-- per cent. . 3.53 3.64 3.19 3.5

1 Obtained by dividing the farm income by the average capital.

The average return on investment from the farms in Illinois was
3.6 per cent, in Iowa 3.2 per cent, and in Indiana 3.5 per cent. The
income is a moderate return on the large capital, considering the
enormous rise in land values during the past 10 years. In computing
this income no credit has been allowed for the rise in value of real
estate, except in case of actual improvements,

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 13

There has been a marked tendency throughout the entire country
to consider the farm more and more as a business proposition. The
landlord who is receiving 3.5 per cent net from his farm, with the
bare land figured at $150 or more an acre, has a good, safe invest-
ment. It would seem from the results that if the year studied was
a normal one, land in the corn belt is not overvalued. Changes in
the price of the staple products, such as corn or oats, or material
changes in the cost of production of these crops would be reflected
in the price of farm land. Unless the price of corn becomes much
higher for the next period of years, a pronounced increase in the value
of land in this region can not be expected.

The advisability of buying a farm as an investment with the
intention of not living on it is often a perplexing question.

VARIATION IN THE PROFITS OF LANDLORDS.

Table VI gives the variation in the landlords’ returns in the three
States studied.

DI

TABLE VI.—Varidtion in profits of landlords on 247

Illinois, and Towa.

tenant farms in Indiana,

r . Percent- _| Percent-
Landlord’s profit on invest- | sl eales age Landlord’s profit on invest- mes | age
ment (per cent). lon ~ | of total ment (per cent). lordsteal of total

*- | number. °- | number.

Wessiphenulie nao 53-0 6 | 2.4 42 | 17.0
TL TL (KON a re 20 | aw | 13 | 5.3
PAGEOVS! ese aise shoe ae ois" - | 75 30.4 tn 2.8
Sil. WO Sees Cee ee eee 78 | 31.6 6 2.4

Out of 247 men 6 received less than 1 per cent on their invest-
ments. The same number received between 7 and 8 per cent; none
received over 8 per cent. It is clear that no phenomenal returns
can be expected from capital put in farm land in those States at
the present time. It is believed that the data in Table VI are a
very good indication of the returns one may expect from a farm
investment in those districts. The chances of making more than 5
per cent are about 1 in 10.

BANKERS’ ESTIMATES OF FARM PROFITS.

In the corn-belt States one is nearly always referred to the local
banker for information concerning the farmers of the region. The
banker is considered good authority on all questions relating to the
farmer’s business, his income, investment, etc. Inquiry relative to
the incomes of the farmers was made of the cashiers of 90 banks in

14 BULLETIN 41,.U. S. DEPARTMENT OF AGRICULTURE.

the regions studied. Fifty-three replies were received and the results
are given in Table VII.

TABLE VII.—Bankers’ estimates of farmers profits compared with facts brought
out by the survey.

ee ee Se eee a. go
Landlord’s profit on
| farminyvestment (per | Tenant’s labor income.
cent).
State. l
aniare | Returns.as ankere | Lcomes as
Bankers’ | shown by | Bankers’ | shown by
ite vies survey. : survey.
Indiana. ....- Bee SPR oie SER he ee ee 4.20 | 3.53 $625 | $755
Wim GIS 75-9 = 455 Sasa gs eS eee es Oe oe | 4.91 | 3.64 691 1,139
DEO Ya Sc ge er ea es ee eh nr rR ee ee la ES 4.06 | 3.19 656 716
FAI VOTO eee: San Te or ee a ee ee 4.91 3.50 657 870

These estimates, although not agreeing identically with the results
as found by the survey, are exceedingly interesting. The bankers
believed that the landlords were getting about 1.4 per cent more than
they were and the tenants $213 less than they were. Thus, the
bankers’ estimates of the total income from the rented farms com-
pares very closely with the results of our investigations.

Inquiry was also made as to the interest that the farmers would
receive if they sold their farms and placed their money in the bank.
The average rate given is 3.7 per cent. This nearly corresponds with
the returns that the landlords are actually receiving from their
capital invested. It also agrees with the income of the farm owners,
if we allow them the same labor income that the tenants receive.

The average value per acre of the land (including buildings) in
the three States is approximately $145 in Indiana, $175 in Illinois,
and $111 in Iowa. The’ profits which are shown in the preceding
tables are figured on this basis.

INCOMES OF FARM OWNERS WHO RENT ADDITIONAL LAND.

The stages that almost every farmer goes through in becoming a
farm owner are, first, as a hired man; second, as a tenant; third, as an
owner. In addition, there is another step that many men take in
acquiring farms of sufficient size to give them comfortable incomes.
Many men are able to own a small farm but feel the need of having
a larger area to work. By renting additional land, usually parts of
an adjoining farm, they utilize their labor and work horses to better
advantage and receive greater returns without any appreciable in-
crease in investment. Table VIII gives the capital, receipts, expenses,
and labor income for 129 farmers who are following this method.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 105

TaBLe VIII.—Average capital, receipts, expenses, and profits on 129 farms
operated by owners renting additional land.

| |
i}
Indiana | Illinois | Towa Average
Item. (56 (Gi; (37 (129
farms). | farms). | farms). | farms).
EASES OD oY erage Res ae ee Pe Ne eee eee eee $11,321 | $32,382 | $17,829 $20, 510
Average receipts. ........ ipa CAR ety SE nS Sea. 1, 780 4,279 | 2, 228 2,762
PACER ANG OX CNSES senate =. ee erie sion Sea eax ane oe 742 1,599 887 1,076
BV ORApetaAnM li COMBIeEeRce os. jaae cee eee a ee cee eee 1,038 2, 680 1,341 1,686
Average interest at 5 per cent................- Soe aa sane Sa 566 1,619 891 1,025
ENVerare Operators labOrdneCOMe. . fclso- sees ee ene = serene 472 1,061 450 661

With $10,000 less invested than is shown by the owners operating
only their own land, the labor income of these owners additional is
over $250 greater than that of the farm owners. The average size
of the farm owned was 105 acres, and 78 acres additional were rented.
Where it is possible, this method permits a farmer to have a home
of his own and at the same time a good-sized farm business with
a comparatively small investment. It is an intermediate step be-
tween tenant and owner.

DISTRIBUTION OF FARM RECEIPTS.

The farm receipts are derived mainly from crops and live stock.
The preportion received from each varies with the method of opera-
tion as to whether run by owner or tenant, as well as with the type
of farming followed. In Indiana 48 per cent of the total income
received by the owners was from the sale of live stock, while the ten-
ants received only 36 per cent from this source. In Illinois cattle
and hogs were fed in much larger numbers, the income of the owners
from live stock being 60 per cent of the total receipts. On the ten-
ant farms 50 per cent of the receipts was from the sale of crops and
36 per cent from the sale of stock.

In Table IX the distribution of the receipts for both owners and
tenants Is given.

TaBLeE [X.—Distribution of farm receipts to landlord and tenant on 247 farms
operated by owners and tenants in Indiana, fllinois, and Lowa.

Operated by tenants (247 farms).
Operated by own- seca = >
ers (273 farms).
Bou ean ae Landlord only. Tenant only.
Source of income. * 4 |

Percent- Percent- Percent- Percent-

Receipts.| ageof | Receipts.| age of | Receipts.) ageof | Receipts.| age of

total. total. total. total.
CTODS Sah 5 400 tsceenis- $858 27.9 $1, 333 49.3 $677 57.1 $657 37.9
Std io See ee ee LS: 55.8 778 28.8 128 10.8 649 Yin
Stock products. ....-. 143 4.6 111 4.1 8 ou 103 5.9
Increased inventory. . 331 10.8 459 17.0 158 13.3 301 17.4
15D 50) ee ee ae 26 .8 20 B74 See BeBe Merman nea 20 eo,
Miscellaneous........ 3 Fi! 2 POLIS sitetecetan| Pee ae eee 2 gil
CCHS TREN OT TES OS = tees lS eel | rk See ee ee || eee oe 214 TSS IN Hechee cleo cee
Average or total. 3,076 100.0 2,703 100.0 1,185 100.0 1,732 100.0

16 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

More crops and less stock are sold from the rented farms than
from those of the owners. This is to be expected, owing to the share
system of rental, whereby the landlord receives half of the grain,
most of which he sells.

The item of increased inventory represents an increase in inyest-
ment, either through more stock, new buildings, or tile drainage.
To offset this, the cost for all improvements is included in the farm
expenses. When the investment costs of this nature are charged to
the farm there must be a corresponding increase in the capital at
the end of the year.

Corn, oats, and wheat constitute the crops sold. Even on the
small farms practically no cash crops other than these are grown.
The farmers making the best incomes received a higher percentage
of their receipts from live stock.

A further discussion of the influence of the type of farming on
profits is given on page 29.

DISTRIBUTION OF FARM EXPENSES.

The distribution of expenses on both owner and tenant farms is
given in Table X.

TABLE X.—Distribution of farm exrpenses (in percentages of total expenses)
on farms operated by owners and tenants in Indiana, Illinois, and Towa,

Operated by tenants | | Operated by tenants
Oper- (247 farms). | Oper- (247 farms).
ated by ated by
Item of expense. | owners |————___—_ ; Item of expense. | owners ad =; | eS
(273 : (273
Rabe Farm ,| Land- Farm Land-
farms). |. total. jPenant.| lord. farms). | total, |Tenant. lord.
|
a borseee esas 330: (os allOn le 3as6u 0.4 || New buildings...| 10.9 Sid | eee 22.8
Seeds 4o56 seciwaree ze sl PAs Nei! 4.1 || Building repairs . 6 8 2 1.6
Fertilizer........ 33 a lees .9 || Tile drains....._. 3.8 627" Sees 18.4
Feed and grain..| 18.8 10.5} 9.9} 4.4||Twine and
New machinery | | thrashing. ..._. 4.4 | 6.5 | 7.0 -8
and harness....| 5.6 9.2) 10.0 .8 || Insurance......_- 1.0 53} at 2.0
Machinery and || RAKES 6 ote ee 10.4 14.4 1.8 35.0
harness repairs. eR 1.6 1.8 IS Reng a. oa se aaa earns ae Seer eee 28.8" | eee
New fences...... Ia 1 eer ese 4.0 || Miscellaneous... . 4.8 3.8 4.0 8
Fence repairs... - 1158} eS 1 3.9 | :
( \ |

Approximately one-third of the total expense is for labor. This
amount includes the value of board furnished; also the value of the ~
family labor, except that of the operator, Some of the farm owners
purchased large quantities of corn for feeding, thereby making this
expense 18.8 per cent of the total. The expense for tile drains was
largely incurred in Iowa and Indiana, where the construction of ex-
tensive systems meant considerable outlay.

The expense for twine, based on over 10,000 acres of small grain,
averaged 21 cents per acre, or seven-tenths of a cent per bushel. From

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. alr

24 to 24 pounds of twine per acre are ordinarily used. Thrashing
charges were approximately 2 cents a bushel for oats and 4 cents for
wheat, plus the cost of coal used.

The average value of the farm buildings on the owner farms was
$9,401, and on the tenant farms, $1,652. If we include the cost of new
buildings and cash repairs, the annual charge is 5.2 per cent of the
building investment on the owner farms and 4.4 per cent on those
rented. These percentages are higher than they would be in a region
that has been settled longer and where fewer new buildings were
being erected.

The average amount invested in farm machinery and tools on the
owner farms is $391. The annual expense for new machinery and
cash repairs is 16.9 per cent of the inventory value. This amounts to
50 cents per crop acre per year. On the rented farms the average
amount invested is $368, and the cash paid out for new machinery,
harness, and repairs is 21.2 per cent of the inventory value. This
makes a cost of 56 cents per crop acre. It is expected that the cost
would be higher on the latter, as men just starting in farming as
tenants would be likely to purchase more new machinery.

RELATION OF PROFITS TO THE EFFICIENCY OF THE FARMER.

Of the 273 farms operated by owners, one-third of them make a
minus labor income. Analysis of their farm business should show
the reasons why so many of these men failed to receive anything for
their labor. Is it because of poor crops, inferior stock, improper or-
ganization of the farm, or merely plain indifference on the part of the
farmer? It may justly be said that all these factors are contributing
causes,

Leaving out of consideration the limitations set by the size of the
farm and the capital invested, the characteristics of the inefficient
farmer stand out prominently. Economically speaking, the greatest
losses figured on the basis of a labor income are due to indifference or
contentment on the part of the farmer. His farm area and capital
are sufficient to earn a substantial income. He fails through neglect
of work, low crop yields, inefficient stock, poor farm organization,
and unused capital. His expenses are the same per acre as those of
good farmers. His receipts are the weak point. His neighbors
succeed, not by spending less, but by taking in more.

The size of the farm must also be considered in figuring losses, but
large losses are not probable in a small business. The little farmer
may lose all he has, but the greatest amount he can lose is small,

13131°—14——3

A sta BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.
The relation of profits to the efficiency of the farmer is shown in
Table XI.

TABLE XI.—Relation of profits to the efficiency of the farmer on 273 farms
operated by owners in Indiana, Illinois, and Iowa,

| | ask Distribution per acre.
x Aeon Aver P
: um- mais age
Labor income. ber of S crop
farms. Ae area Re- Ex- Farm | Inter- | Labor
(acres). (acres).| ceipts. | penses. |income.| est. |income.
|
—FOO0 ANG MOG =. are oe eee 26 267 | 199 | $10.98 $5. 97 $5. O1 $8.74 | —%3.73
== 9499 10: —F$200 nose on sea See 23 160 117 12. 02 5792 6.10 8.16 | — 2.06
LOO LOWO cynics oo ose tee eee ee 40 102 77 | 12.94 eas} 7.41 8.30 | — .89
SUSE ONS 200-52 ha esd |< Se gee 53 120 95 | 14.84 5.70 9.14 8.31 . 83
P2UISTODAOD Ee ata te eee eee 34 139 96 | 14.98 5.37 9.61 7.42 2.19
S40 ITO SO00 Sci gon aes a eee oe 23 161 118 | 17.80 5:79), 12001 8.78 3. 23
SOU ISTO SSO0 eras aac ese ome ce oe rece 20 184 140 17.13 5.16 11.97 8. 22 3.75
SOO LstO sl O00 e+. = eee eee ae 13 217 160 16.77 4.51 12. 26 8.14 4.12
SLOT tO; D1 500 Soe ee eee ee 19 201 169 | 19.18 5.00 | 14.18 8. 23 5.95
S150L tO $2000 58:2. 2 Basen a eee | 10 249 179)| 25.79 9.60 | 16.19 9.31 6.88
Owen 322000 sone cc. eee een | 1 330 240 25. 46 7.14 18. 32 8. 46 9. 86
Motalioraverave.. see eee 273 178 1335 |elie28 6.39 | 10.89 8.60 2. 29

In Table XI the farms are classified according to labor income.
The men making the poorest and those making the best profits have
large farms. Those just “ breaking even ” have, on an average, small
farms. j

Many of these men are also poor farmers, but they can not be ex-
pected to do as well as those working a large area. We do not find
the gross inefficiency among the tenants, for they must earn the
rent which goes to the landlord, and if they receive nothing for
their labor they can not live. They have no interest on which to
live, as does the farm owner with a large investment. The country
would be benefited if the few inefficient farm owners on the large
farms were persuaded to rent their farms to enterprising tenants.
They would still have as much or more than they are now getting,
and the tenant would have a good living.

FARM CAPITAL.

It is difficult to realize the immense wealth embodied in the farms
of the North Central States. The broad expanse of rich land, rang-
ing in value from $100 to $200 an acre, constitutes an enormous
resource. Owing to the extreme variations in capital, the number
of farms included in the survey are too few to permit a careful
study of the influence of the size of investment on profits. Of the
273 farm owners only 9 had less than $5,000 capital, while 50 per
cent of them had more than $20,000.

Generally speaking, the farmer’s capital is in about the same
proportion as the size of his farm, especially in a region of com-
paratively uniform land values. If the men with large capital

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 19

are making better incomes, it means that the larger farms are pay-
ing better.

RELATION OF THE OWNER’S CAPITAL TO HIS INCOME.

In Table XII is shown the relation of capital to labor income
on the 273 farms operated by owners.

TaBLe XII.—Relation of the farm owner's capital to his income on 273 farms
in Indiana, Illinois, and Lowa.

.| Average Average
Capital. pier labor in- Capital. umber iEhOrine
SKINS. /Siiaarawn | of farms. | “come.
SaO00rand less. o2.. 2. -5-ss<2-- 9 $74 || $40,001 to $60,000.........._... 29 $315
$5,001 to $10,000......-..--.-. 37 45 |) $60,001 to $80,000. ......-..-..- 10 1,114
$10,001 to $15,000........-...-. 44 283 || $80,001 and over.............. 12 1,804
$15,001 to $20,000.............- 45 265
$20,001 to $30,000........-.-..- 55 264 IBV CLES Ob 15 rot pare ate esis | eo ee 408
$30,001 to $40,000............-- 32 483

|

It will be noticed that of the entire number 9 men with less
than $5,000 capital received $74 for their year’s work. Only 2 farm-
ers out of 46 with less than $10,000 invested made over $400. Out of
the entire 273 only 12 men received over $2,000 labor income. Each
of these had more than $20,000 invested. The chance of a farm owner
making a labor income of $1,000 with less than $15,000 invested is
less than 1 in 20.

The data in other tables are conclusive in showing more efficient
use of man, horse, and machine labor on the large farms. The results
also show no appreciable difference in the crop yields obtained on the
different-sized farms. When the same system of farming is followed,
Jarger returns must result on the larger farms. Men who have large
capital invested and who operate the big farms have a right to expect
greater returns for the risk and responsibility incurred. Of course,
if the type of farming followed is an unprofitable one, then the large
farms will necessarily show large losses. The area a farmer works
limits the use of his labor. The amount of capital he has invested
limits the income from that source.

RELATION OF LABOR INCOME TO THE DISTRIBUTION OF OWNER’S CAPITAL.

The farm owner has about six-sevenths of his total capital invested
in land and buildings. The balance is largely in live stock, there being
only a small percentage in machinery, tools, and supplies. Farmers
making good incomes have their capital invested in very much the
‘same manner as those receiving poor incomes. Table XIIT shows
the distribution of capital for the 273 farm owners, arranged accord-
ing to the incomes they receive.

20

BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

Taste NIII.—Relation of the labor income to the distribution of capital on 273
farms operated by their owners in Indiana, Illinois, and Towa.

Percentage in—

ai Average FI
Labor income. |
caplal \" “Real | Muchin- | Goo.) eo

estate. ery. OC) || PUREE:
—$500 and more $46, 582 | 89.7 12:2 65% 2.4
== 9499) TOL 200 Hae ae a a ee ee 25, 933 89.2 bgt 7.4 PAR}
=P LOO TOMO Ree oma ea= panes sane nee ees 16, 883 88.5 1.2 oi 2.6
DUSbOW 200 Be sees ee oe eee eee ere 19, 753 89.6 1.4 6.7 2.3
$201 to $400.__... 20, 435 86.7 17 9.1 adh
$401 to $600 27, 986 86.8 2.0 8.2 3.0
SOO ISOS S00 eee ees ot Sa ee ete Mey eae eae 30, 158 86.6 1183} 8.9 3.2
SOU ITTO OL O00 R Re SRLS a yon ett ee ae 35, 082 89.8 1.2 6.9 2a
SG OOTSLOR S00 Sake cee eee eee ae one aoe | 32.658 88. 2 1.4 8.0 2.4
SLDOINtO'S 20002 322 teen setae ees Nee Se ie | 46,573 83.7 1.0 ui Mer 3.6
S200 lan Glover oe = tty oe eee cee ee eee eo 25) 85. 1 1.0 11.0 2.9
AWVGTAS Os c= 4 SES oars SNe oe pane te eee | 30,439 87.6 1.3 8.4 27,

| L

It will be noted that the men having the lowest incomes have nearly
as much capital as those having the highest. A large business is neces- .
sary to incur large losses; similarly, large incomes can not be expected
from small investments. Small incomes usually attend small busi-
nesses. Where land values are high, the amount of money invested in
working capital becomes proportionately small.

DISTRIBUTION OF THE TENANT’S CAPITAL.

The tenants in the States reported upon have less than 10 per cent
as much capital as the owners. This is shown in Table XIV.

TaBLE XIV.—Averdage distribution of the tenant’s capital on 247 farms in

Indiana, Illinais, and Towa.

Distribution of capital. Indiana. | Illinois. Towa. nonee
Average totale ee ee Eee ney Seer $1, 644 $2, 740 $2, 459 $2, 281
AVerageinVvestedhnelive stock sees ee em se se eos per cent. . 62.0 63.8 66. 2 64.0
Avverage invested in machinery, 4.2. 4. - = eeeeee eee sees Gone? 14.5 13.9 13.7 14.0
Average invested in grain and feed......................- dozeee 15.1 14.3 14.1 14.5
A Vera ge inicash: >< Sone. 2 aaa e eee aa ome nee erage eee ae dole: 8.4 8.0 6.0 7.5
Two-thirds of the investment of the tenants is in live stock, a

large part of which is work horses. In a region where the system of
rental is for the landlord to furnish half of the working capital the
amount needed by the tenant is less. Few landlords furnish any of
the working capital on the farms studied in this survey.

RELATION OF THE TENANT’S CAPITAL TO HIS INCOME.

A farm owner having a large investment, nearly 90 per cent of
which is in real estate, can let it lie idle or nearly so for the entire
year. It is partly due t6 this indifference on the part of some
farmers that all men with large capital fail to show good returns.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. A

These men being free of debt are content to make only a moderate
living, even though their farms under ordinary management would
return double the income they now produce.

The situation of a farm tenant is entirely different. He has his
capital in live stock, work horses, and machinery. These are an
expense to him unless used. They are the means whereby he can
utilize capital in the form of land. Generally, unless a tenant has
use for his teams and machinery he will dispose of them, as there is
always a market for such equipment. The tenant has a small capital,
and 5 per cent interest on it is not sufficient to give him a living;
hence he must receive wages for labor. The farm owner with large
capital may receive no labor income and only 2 per cent on his
investment, yet have a comfortable living.

In Table XV the farms are divided according to the amount of the
tenant’s capital, to show its relation to his labor income.

TABLE XV.—Relation of the tenant's capital to his income on 247 farms in
Indiana, Illinois, and Iowa,

Tenant’s average. || Tenant’s average.
3 Number LE ore Number

Tenant’s capital. offarms.| | wee Tenant’s capital. anna. ante

Capital. | income. || | Capital. Sata
$500 and less... .--- 5 $324 | $328 | $2,001 to $3,000... -- 66 $2, 439 $915
$501 to $1,000.....--. 21 799 338 || $3,001 to $4,000. --.- 41 3,415 1,095
$1,001 to $1,500. .._. 44 1,271 502 || $4,001 to $6,000... .. 14 4, 808 1,796
$1,501 to $2,000. --... 48 1, 758 | 655 || $6,001 and over..... 8 8, 657 2, 879

RELATION OF BOTH THE TENANT’S AND LANDLORD’S CAPITAL TO THEIR INCOME.

Table XVI gives the relation of tenant’s and landlord’s capital to
the incomes they receive for the regions surveyed in each of the three
States.

TABLE XVI.—Relation of the tenant’s and the landlord’s capital to the income
received on 247 farms in Indiana, Illinois, and Towa,

OPERATED BY TENANTS IN INDIANA (83 FARMS).

ienatises Tenant’s | Tenant’s | Landlord’s| Landlord’s

Tenant’s capital. of amras average ; labor average | income on
‘| capital. income. capital. |investment.

, Per cent.

SHUT) GREG LIL DSi se eee ee ee 5 $324 $328 $9, 492 4.0
CULL ae IA 0) pee ee ae ea 13 750 312 9, 940 2.9
IPOUIGLOML D002... a ce nee ese se cssmes 18 1, 263 506 12, 829 3
CUS OIPT KOS PAU 1S ee ee Se eee eee 19 1,726 765 17,679 3.0
SAN ELONS QOU Sas Sacre cane ce es sececcscee a 18 2,381 1,051 22, 130 3.6
SP TOip4 O00 LS Sa sea5 3c 2 2e 5 sh Sec. we ceases 8 3,324 1, 217 34, 904 4.0
$4,001 to $6,000.......--- ee eee ah Se 2 4,770 2,322 54, O88 4.4
Total or average for Indiana.........-.| 83 1,758 755 18, 425 3.5

22 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

TABLE XVI.—Relation of the tenant’s and the landlord’s capital, ete-—Continued.

OPERATED BY TENANTS IN ILLINOIS (71 FARMS).

Namber Tenant’s Tenant’s | Landlord’s| Landlord’s
Tenant’s capital. of eae average labor average | income on
5 capital. income. capital. |jinvestment.
Per cent.
$50) to's 1-000 2 ese ee eee 2a ee eee 4 $871 $429 $10, 031 2.7
SOOO bOO LS = 2s tte Ss Ae | eee ee 10 1, 262 614 23, 737 3.5
SL50 LM tOs2000 ese So eee oe eee eee 15 1, 733 709 29, 703 4.1
S200: tOSS 000 Mestre so oe eee eee 18 | 2, 482 1,054 36, 948 4.05
$3:001L4t0}S2000 Seo st so eee eee 15 | 8, 493 1,085 42, 898 3.3
4 OOL tO SO'OO0 See lack se ee eee 4 | 4, 828 1, 732 50, 950 3.6
S600 Wandiovers -s- dose ee eee oo ee eee eee 5 9,011 4,117 70, 750 Be 1
Total or average for Ilinois.........-. | 71 | 2, 867 1,139 36, 479 3.6

OPERATED BY TENANTS IN IOWA (93 FARMS).

$501 to:$1'000s. t -., Ween ae eee eee 4 $776 | $272 $8, 568

3.2

S100 to’ S 1; 500522 55-7 2 Sener eee see nee 16 1, 288 | 387 13, 808 3.0
S1501:t0'$2:000 043 eee ee een teens 14 1,816 490 16,971 2.8
$2;001/C0:$3:000- 2 52 SS ere ae comeee mee eeeeee 30 2,455 639 19, 374 3.0
$3;001 to:$4; 000 S225 sooo eee tence eee eaanene 18 3, 428 983 25, 027 3.2
$4:001 ito $6:000 2 2s sean eee eee es seen 8 4,825 1, 334 31, 490 3.2
$6;00ltand “over 22; ose Ces ee er ae 3} 8, 303 1,641 50, 412 4.7
Total or average for lowa.............- 93 2, 667 716 20, 728 3.2

Almost without exception the tenant’s income is in direct propor-
tion to the sum he has invested (fig. 4). This is a very encouraging
fact in that it shows that a tenant is able to acquire sufficient capital
to become an owner. Many farmers begin as hired men. After a
few years they save enough money or acquire credit so that they
can rent a farm. This gives them a start, even though it may be a
small place at the outset. By renting, the income is increased over
the amount that could be earned as a hired man, and in a few years
the tenant is able to establish sufficient credit or save enough to enable
him to rent a larger place.

ONE REASON WHY TENANTS CHANGE FARMS.

Men who start in as tenants usually have very little capital and
are limited in the size of the farm business they can select. After
a few years of work they have enough teams and equipment to rent
a larger farm, which will pay them increased returns for their year’s
labor. The changing of tenants from one farm to another is thus
frequently a transitory step by young men seeking to become farm
owners. If these same men were compelled to start on a small place
and stay there for a long period of years they could never hope to
eventually become owners, but by selecting farms which will use
their entire working capital to its maximum they are able to advance
rapidly. The income that a tenant receives with a capital of $4,000
to $6,000 is decidedly greater than that which he would have if he
purchased a farm with that amount. No farm owner with less than a
$20,000 investment received a labor income of over $2,000, while 1 ten-
ant out of every 22 received this income with less than $6,000 capital.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 23

Of course, in order to make a substantial income, the tenant must
have the use of a large amount of capital, which is furnished by the
landlord. The system of renting as practiced in the corn belt to-
day is particularly well suited to the tenant’s advancement. Not
only is he free to move from a small to a larger farm as soon as he
acquires sufficient working capital, but the returns that he receives
from his investment are exceedingly large. Tenants as a rule avoid
small farms. They are not large enough to pay the interest on the
capital and leave anything for labor. The amount of capital that
a tenant needs to operate a certain-sized farm depends quite largely
on the type of farming that he wishes to follow and also on the
system of rental.

$3,000

2,500

ly 2,000
9
1S)
2 1,500
i
&
S 1,000
Xx
N

500

(e) $1,000 2,000 3,000 4000 5,000 6,000 7,000 8,000
CAPITAL
ric. 4.—Chart showing the relation of the tenant’s labor income to the capital he has
invested.

In the case of live-stock farmers, some landlords furnish half of
the live stock. Few, if any, furnish any of the work stock or equip-
ment. |

In the case of a cash rental the tenant has to furnish everything,
and if he wishes to follow the live-stock type of farming he needs
to have a good-sized investment on the large farms.

The system of farming practiced in the corn belt is one which
enables a tenant to work a large area of land with small capital.
The machinery that is used is simple and inexpensive. The work
horses are, perhaps, the largest investment.

RELATION OF THE SIZE OF THE LANDLORD’S INVESTMENT TO HIS INCOME.

The size of the landlord’s investment apparently makes little dif-
ference in the percentage of income, as shown in the preceding tables.

24 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

It is highly important that the tenant have sufficient working capital,
which necessitates a medium-sized farm to permit him to use it effi-
ciently. The tenant, no matter what area of farm he.is operating,
must first pay rent, even though he has nothing left for his labor.
The only disadvantage the landlord has in owning a small farm is
that there may be difficulty in renting it.

RELATION OF THE SIZE OF THE FARM TO THE PROFITS.

According to the last census the farms in the North Central States
are growing fewer in number and larger in area. The use of im-
proved machinery and the expansive type of farming followed have
been important factors in rendering the small farm a less efficient unit.

The term “small farm” as used throughout this bulletin is under-
stood to be synonymous with small business. Under an intensive
system of agriculture a very large business may be conducted on a
small area, but in the corn belt. especially in the district covered by
this survey, none but an expansive type of farming is found.

A very good indication of the relative returns that can be expected
from 40-acre, 80-acre, and 160-acre farms is given in Table XVII.

Tasp.e NVII.— Comparison of labor incomes on 40-acre, 80-acre, and 160-acre
farms in Indiana, Illinois, and Towa.

Operated by owners | Operated by tenants
(71 farms). Wee agit
Item. SSS | — ae
40-acre | 80-acre | 160-acre ie 4)-acre | S0-acre | 160-acre
farms. farms. { farms. fs farms. farms. | farms.
INtimibeniofvarms: (ee... sameciece ace ees 20 26 25 28 37
Number of farms witn incomes of $1,000 or |
MNOS Sa Gee a roee ee oe Soci D Sooo SoC onnCras 0 A 5 0 13
JAVOLaSe INCOME. ==. 58-2 n en snee soso ees $70 | $266 | $364 264 $440 $904
|

Of all the farms operated ,by owners there were 20 of just 40
acres in area, the average labor income of which was $70. None made
2 labor income of $1,000. There were 26 men on 80-acre farms and
only one of them made a labor income of $1,000. Of the 25 men on
160-acre farms one in five made $1,000 or more.

Only one tenant rented a 40-acre farm, and he had less than $300
for his year’s living. Most tenants know better than to rent such a
small farm, fully realizing the improbability of a good income. The
average income of the 37 tenants on 160-acre farms was $904. More
than one in every three made a labor income of $1,000. If the man
on the 40-acre farm in Illinois or in any of the North Central States
expects to have as good a living as his neighbor on 160 acres he must
produce four times as much per acre with no increase in expenses.

In Table XVIII the farms are arranged according to their size
to show the relation existing between the area of the farm and the
income received.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 95

TABLE X VIII.—Relation of ‘the size of farm to the income on 273 farms operated
by owners in Indiana, Illinois, and Towa.

|
| Farms. Distribution per acre. | Money
RNAS aes: PE AS a EY Bek td 2 ____| available
Ie | | for farm-
’ ecare | er’s living
| Number. Bee | Receipts. | Expenses. | Interest. | iffree of
| Saar very rs | debt.
sO neres and 1ess....-.-.--.----- | 32 Bi.4) $18.10 $6.98 | $9.03 $416
al to'80!acress2-.222-25-- eee aes =e 5 72. 7. 09 5, 46 8.45 848
RlmbOp2OMCreSeee= = Suet ee sos. 48 106. 9 16. 22 6. 88 8. 22 998
ico l60'acrés<22-052--=2 taeece 4 149. 4 15. 62 5. 80 8. 30 1, 467
RG IGO 200 ACTESH =: Sess s 23 eae - 31 179. 1 18. 04 7. 12 8. 58 1,956
BUI GOL2SO ACreSis- == Jesece ose == 36 239. 8 18. 12 6. 70 8. 42 2,738
ASIetOMO0lACTES sae... ceases k= <= 19 321.8 13. 89 5. 07 8. 32 2,838
AMIETORIEZ50 @Crest.o- <= -<402-5-5 2 12 623.8 16.19 6. 28 7.90 6, 182
Total or average...-....--- | 273 178.3 | 17. 25 6.38 8. 58 1,938

The receipts per acre are practically the same on the small and
large farms. The expenses are also the same. If greater intensity
were practiced on the small areas, larger receipts to the acre would
be the result.

If the farmer is free of debt he has available for his living the
amount shown in the right-hand column of Table XVIII. This
amount represents the combined income from capital and labor.

The results of the 1910 census show that nearly one-half of the—
farm owners in the counties from which the survey records were
taken have mortgages on their farms. The amount of the mortgage
is approximately one-fourth of the total farm investment. It is not
hard to understand why the small farmer is less efficient. Just as
long as he continues to grow such crops as corn, oats, wheat, and hay
his income will be meager. The only possible remedy is more land.
He may either rent or buy, according to his available funds.

On the other hand, if the man on the small place should change
his type of farming so that he could grow crops returning a high
income per acre, he would then have possibilities of a much greater
income. A farm is a place to work, and unless it is so organized to
permit the full use of labor small wages must result.

There are a few highly specialized farms which return a high
rate of income per hour of labor. However, these farms are not
found where corn and oats are the leading crops. The introduction
of good live stock in a measure helps toward utilizing more labor,
but even this step will seldom suflice to give the small farmer an
income comparable with that of the man on 160 acres or more.
Thus, the decrease in the number of farms in the North Central
- States is no cause for alarm. It is rather a sign that land is being
utilized more efficiently and that the same products are being pro-
duced at less cost.

26 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF
OPERATION. ;

The size of a farm is the controlling factor in the efficient use
of farm labor and machinery. The old hand-labor methods prac-
ticed by our forefathers, which are still common in Europe, were
suited to a small area. Under those conditions a man needed only
as much land as he could properly cultivate alone. A family was
able to raise only a small amount above that needed for their own
living. If these methods still prevailed in this country, the present
number of farmers would be entirely inadequate to support our urban
population.

The adoption of modern machinery has enormously increased the
efficiency of the farm worker. Fewer men are now needed in the
farming districts, and those not needed are able to devote themselves
to useful work in the cities and towns. As a result of this condition
more of the benefits of civilization are available to the farmer.
Although the farmers are fewer in number, the production per man
is Increasing.

If hand labor could compete with machine work, farm wages would
be much less and the product per man proportionately smailer. Our
agricultural civilization would then gravitate toward the peasant
conditions existing in some parts of Europe, where the agriculture
is developed on the basis of the maximum product per acre of land
instead of the maximum product per man.

RELATION OF THE SIZE OF THE FARM TO THE USE OF MAN LABOR. -

In Table XIX the farms are classified according to their total
area. The cost of labor includes all paid labor, board of workmen,
family labor, and the estimated value of the operator’s labor. The
value of the family, or unpaid, labor is explained on page 9. The
tenants estimated their work as worth $367, and the owners estimated
theirs at $363, or an average of $365 for all the farmers.

The term “crop area,” as used in the following tables, includes all
tillable area except permanent pasture.

Taste XIX.—Relation of the size of the farm to the cost of man labor per acre
on 700 farms in Indiana, Illinois, and Towa.

| Total labor (includ- |

| Totallabor (inelud-
| ing estimate of | ing estimate of
Num- farmer’s own la- Num- farmer’s own la-
Area. ber of bor). | Area. | ber of bor). s
| farms. SS SSS 4 PERT S 5 rel
| Per till- | Per crop || Per till- | Per crop
|ableacre. acre. || ableacre.| acre.
40 acres and less... .-- 45 $8. 18 $10. 08 || 321 to 400 acres... -.... 30 $3. 36 $3. 88
AlstolSOACTESs ss see ee 114 | 6. 54 7. 28 || 401 to 560 acres... -.--- | 12 | Sole 3.88
81 to 120/acres...-.--- 120 4. 98 5. 57 ! 561 to 720 acres....--- 5 3. 80 4.41
121 to 160 acres...-.-. 130 4, 37 4,89 || 721 to 1,250 acres. ...-. 4 3. 50 5, 29
161 to 200 acres.....-- 93 | 4,21 4.7 |
201 to 240 acres...-.-- 75 | 4, 20 4. 69 || Total or average. - 700 3. 74 4, 63
241 to 280 acres....-.- 35 3. 94 4. 40 || y
281 to 320 acres..-.-.--- 37 3.41 3. 98

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 27

On farms of 40 acres and less the cost of labor is over $10 per crop
acre. On all farms above 120 acres the cost is less than $6 per crop
acre. This increased efficiency of man labor on the larger farms
constitutes an important factor in the cost of crop production.

RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF WORK HORSES.

With the prevailing type of agriculture as found in the corn belt,
both man and horse need more land to work. Farms with less than
100 acres in crops are not utilizing horse labor nearly as efficiently
as the larger places. On farms of 40 acres one horse works less than
10 crop acres, while on farms of 240 acres or more one horse works
two and one-half times as much land. One of the difficulties with
a farm of less than 40 acres in the corn belt is that it requires the
same number of horses for certain farm operations as the larger
place. The area in crops is so limited that only a small part of the
available horse labor can be utilized.

The labor demand of such crops as corn and oats is not evenly dis-
tributed through the growing season; hence, horses remain idle for
a large part of the time. If men on the small farms were following
a different type of agriculture, it would be possible to utilize the
horses more efficiently by growing crops which require a large amount
of horse labor per acre. By means of diversification of crops so as
to better distribute their labor these men may succeed in competing
with those on the large places.

The relation of the size of the farm to the number of crop acres on
which a horse can be utilized is shown in Table XX.

TABLE XNX.—Relation of the size of the farm to the number of crop acres on
which a horse can be utilized on 700 farms in Indiana, Illinois, and Lowa.

Farms.
| Sep, Aree
Area. eS Average per horse
Average 3
7 ; Average specs Nl sayeboaloc\eroyi (acres).
| Number. size (acres). crop area aay
(acres). horses.
AUT CHES TATION LOS Strat yee nr stele tn ice asi ote sees 45 36.6 26.4 2.8 9.4
IGOR SUTACLOS Semen iat se ieee ee Saleen cee, 114 71.4 56. 7 3.6 15.7
Slob OphAQIACTCS heer eases to Se se Se a oS Solera 120 107.2 86. 0 4.5 19.1
IPARCOMIGUIACECS snes coe e eee sce a aeraei- 130 149.3 122. 4 5.8 ale 3
LG UTOWOOIRCIES Heese cee esse tse cascics see ee 93 183.6 143. 4 6.6 yal yt
D(NetOP40MCreS sess 2 oe at See ccceae esses 75 227.4 184.9 7.8 23.7
PANEL SO) ACROSS eine he oe soc SRE See =| 35 262.5 211.2 8.4 25.1
et Gioo ACHES aEo se Gets oe | ke eee ete eee 37 305. 6 233. 8 9.5 24.6
SL ERCLA ACTOS aoe oe oie ee ea as Sees een 30 364.1 298. 0 10.8 27.6
AME LOP OU AGTES emote nine cas soe + seo aeet sce 12 | 474.8 368. 6 13.1 | 28.1
Gail COANE eee eee Genes BEE: Be Sees 5 652.6 555. 4 | 19.4 28.6
EEO ZOU ACTOS: jars s ee ame stereo seis emer 4 991.2 | 612.0 19.0 3252
\

To judge from the data given in Table XX, there is no marked in-
crease in the efficiency of horse labor on the very large farms over
the medium-sized ones.

28 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF MACHINERY.

In the regions studied, small farms do not permit as efficient use of
machinery as those of medium size. The same laws which govern
the use of farm labor apply to machinery. Land enough to allow the
maximum use of machinery is the keynote to the whole situation.
A certain equipment is needed and this is much the same on a 60-
acre as on a 160-acre farm. A farm may be of such size as to re-
quire two sets of certain implements, yet not large enough to permit
the maximum use of each,

Figure 5 illustrates the use of modern machinery and large teams
for farm work. These are typical of the expansive type of farming
found on the broad, level areas in the North Central States.

Fic. 5.—A sulky gang plow drawn by four horses. Modern machines with large teams,
such as this, are used throughout these regions and utilize labor efficiently.
In Table XXI is given the machinery investment per crop acre on
the different-sized farms.
TABLE XXI.—Relation of the size of the farm to the efficiency of machinery on

700 farms in Indiana, Illinois, and Lowa.

Farms. Value of machinery.
Size of farm. Average
= . Average On Total per | Per cro

Number. size (acres). antes ‘ae acre. 2
I COTAOIACKCS” Sona se eee rare eae 45 | 36.6 26.4 $1383 $5. 04
41 Vo'80 Acres eas se ee ee eee oe eee 114 | 71.4 56. 7 241 4.25
Sito 120 aeres. on. 22. es een oe oe en 120 | 107.2 86.0 279 3.24
121 to 160 acres..-..... oe Bae ae eee eae cee | 130 | 149.3 122.4 345 2. 82
LGTtOL20DACKeS* Sst sn. So cece ee aes eee 93 | 183.6 143. 4 413 2. 88
ZO UO 240ACrOS oor 2 eee eee oe ee 8 ee oe | 75 227.4 184.9 452 2.44
24to 280acres =.= eee eee ee Peer 35 262.6 211.2 | 718 3. 40
Prat Ma RObS PAN S241 2 Ca eae eo aS es a eee 37 305. 6 233. 8 561 2.40
S2l tor00 acres a eee sea ee eee 30 364. 1 298. 0 747 2.5]
401 torS60aereste sec seco ete eee ae ee eee 12 474.8 368. 6 690 1.87

SGISCOGZ0 ACTOS Seas Eee ae eae a 5 652.6 555. 4 790 ie
P20 OSL 250 ACTS 2c sence ee cece eee eee eee 4 991. 25 612.0 | 1,313 215

|

Motalionaveravesss-- 52+ eae soe eee 700 179.6 142.8 384 2.69

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 29

The results are the same for each district studied. The machinery
cost on the small farm of 40 acres or less is double that on those
over 200. As the area increases up to 100 acres there is a marked
decrease in the machinery cost, but above this area the gain in effi-
ciency is small or entirely lacking.

RELATION OF THE SIZE OF THE FARM TO THE CROP YIELDS.

Climatic conditions have such marked influence on crop yields that
records for one year are of little value as a measure of the yields
in a given region. However, such records do permit a comparison
of yields on farms of different sizes when conducted under the same
system of management.

It is generally believed that the small farm is more efficient owing
to better crops. This appears to be a mistaken theory. The figures
given in Table XXIT show the average yields of corn, oats, and
wheat on the large and small farms.

TABLE XXI1.—Rfelation of the size of the farm to the yield of various crops.

Indiana. Illinois. Towa.!
g s L ae Z ee
| Yield per acre =| Yield per acre S| Yield per acre
S = bushels). =| bushels). 5 bushels).
Size of farms. & ( Ss ( ) s ( 3)

% aa alle e %

Ke me be

s +3 5 3 iS 43

By lesey ll pein Sl ietiellimmeiaellle voshe |) Sebel Ue a et ailea expe ates

| Bi Alae saan 3 EA lines eel esc = oleae al

vA, CS fo) S Z 'S) e) S Zz iS) (e) =
80 acres and less.--_--.----- 92 | 50.2 | 44.4 | 19.0 12 | 60.4 | 43.0 | 16.0 ZBI cheer, || Web.) Oil ee =
Sisto 60!acress.—. = = 2 -: x 75. | 52.9) | 47.5. | 19.2 YOM Pat reise) | fells fO|hoOsor |) oo. Ol| were:
AGO S20 ACTeS. oS os. 39 | 52.8 | 47.0 | 19.4 107) 52545153957 | 15.8 (AUN SBE hip Bin ae See
BleacresandlOver: cst. -cee bce oes fee mecriec= tn Se Bee Senha PEN aha Pee (OR aa pet l(t tomes Sa ress em eels Saclans

Total or average. ..--| 206 | 52.1 | 46.6 | 19.3 144 | 53.3 | 39.3 | 16.5 HOS TAO) kassni eee
!

1 The yield of corn in Iowa in 1910 was much below normal, owing to drought in early summer.

In Indiana higher yields of both corn and oats were obtained on
the larger farms. The difference is slight, yet 2.6 bushels of corn
is worth considering.

In Illinois the highest yields of corn were secured on the smaller
farms. On the other hand, the yields on larger farms, those ex-
ceeding 320 acres in size, excelled both groups, ranging in size from
81 to 320 acres. There were only 12 farms under 80 acres, too few
from which to draw definite conclusions.

In Iowa the larger farms consistently had the better yields.

RELATION OF THE TYPE OF FARMING TO THE INCOME.

All the farmers in the regions studied are following the same gen-
eral expansive system of agriculture, developed on the basis of
maximum product per man. Within this system two important

30 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

types are found. One is the crop farm, where 50 per cent or over of
the total farm receipts are derived from the sale of grain. The other
type is the live-stock farm, where the farmer markets his crops
largely through hogs, horses, and beef cattle (fig. 6). The number
of men following each type will vary greatly in different years, ac-
cording to the relative price of cattle and hogs (figs. 7, 8, and 9).

One year’s results are altogether too few to form any substantial
basis of comparison. The data are presented only to show the im-
portance of the type of farming in relation to income. It is fully
recognized that further studies in another year under different con-
ditions might easily show results just the reverse of these in regard
to the best paying type of farming.

Fic, 6,—The type of hogs which are an important source of income on Iowa farms,

Of the 273 farm owners 194 were classed as live-stock farmers
and 79 as crop farmers. The average capital and income of each
are given in Table XXITI.

TABLE NNIII.—Relation of the type of farming to the income on farms operated
by owners in Indiana, Illinois, and Lowa,

Live-stock farms. Crop farms.
== eee
Farms. E ae || Farms. 5 | ;
| % sth hes a ie 3
State. Fa al eee ees = ara i coy [oreo =
le jee| B | 8 g | gee ale
ze Ps Se © 2S A MS! Be (3) ro)
5 8 | 88 2 2 5 Sioa 2 BS
ee 3 oS a a S oD
2 = oN a ay po! SS) Sx a tw
# | s | 5 8 SR feo | 5 g
ual [se > 3 SB) Flo P =
A hoses < 4 Z = | & < 4
Imdiana oe Boece soe See tea 95 |103.2 | 5.6 |$17, 405 $348 28 }113.0 | 2.0 |$17, 981 $182
Minos sess Soe oe eee eee 32 |284.2 | 66.3 | 58, 487 1, 588 41 1229. 4 | 24.4 | 45, 319 —131
WOW aes: ooh cee a oe arene bee 67 |181. 2 | 40.1 | 23, 775 329 10 |140. 9 | 17.1 | 19, 296 34
Tota! or average...........| 194 iste 37.3 | 33,222 755 79 }161.1 | 14.5 | 27, 5382 28

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. ol

‘The live-stock men had a larger area and more capital and were
receiving a much higher labor income. The average income of the

HIGH ANO LOW PRICES OF CASH OATS, BY \IONTHS, AT THE CHICAGO MARKET,
1903 TOVWW2, INCLUSIVE .

SRSVYS

ors

GLNTS PER BUSHEL

1903 1904 4905 1906 4907 1908 7909 49/0 79/1 4H/2

HIGH AND LOW PRICES OF CASH) CORN, BY (IONTHS,AT THE CHICAGO (TARKET,
1903 TO 1912, INCLUSIVE .

CENTS PER BUSHEL
THEVT SRINKSVAIN

1903 4904 4905 /906 4907 1908 1909 1W/0 49/1 19/2

Fie. 7.—Chart showing the fluctuation in the prices of oats and corn in the Chicago
market from 1908 to 1912, inclusive. (Data from the Live-Stock Daily Drovers’
Journal.)

crop farmer was $28 per farm, and of the live-stock men $755. This
wide difference in favor of the live-stock farmer holds true in each

of the States.

:
= a
e
wy
v
& si

Nie ean | T a
= I7 | |

1893 1894 1895 1896 1897 1898 (899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 191) i912

Fie. 8.—Chart showing the fluctuation in the prices of hogs, steers, and sheep in the
Chicago market from 1893 to 1912, inclusive. (Data from the Live-Stock Daily
Drovers’ Journal.)

In the case of the tenant farms, the results of which are given in
Table XXIV, the conclusions are practically the same. The data

32 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

e

given in this table are for the entire farm, including both landlord
and tenant.

TABLE XXIV.—Relation of the type of farming to the income on farms operated
by tenants in Indiana, Illinois, and Iowa,

Live-stock farms. Crop farms.
o Oo
Farms. | 5 Farms. | 5
State. fall Su eee 2 Vaile oss g
iP a a | n i= |
n YG a rs) m +o 3 ro)
= Se } rs) rE = ax rs) 5
bw S s $ >) =I me 2° a 8 @ =I
Sil snes oe ape | Coens = @
si 3/8 re (eee he P= Me Ne HS 5 | 8
5 = 5 > 3 3 x 5 is e
Gol Ss) <q Aa 14] a |e <4 4
InGiana se, Hees oun cece ee ee eee ote 46 124 4 |$19, 623 | $589 | 37 134 4 |$20,879 | $354
MMW IS ES) foe ere coor alctsclere erase Meine aoe es 13 198 30 | 42,087 /1,066 | 58 | 204 12 | 38, 732 545
WO W8 ate oe os esos ee oi eee = te saisia rete 58 179 37 | 23,238 | 496 | 35 199 30 | 23, 654 82
Potalioravieragele-s ces seen cee 117 167 24 | 28,316 717 |130 | 179)) 15.533) 20 foo 327

On these farms the crop men had a larger area and nearly the
same capital, yet their income was less than half that of the live-stock
men. This wide margin of profit in favor of the live-stock farmer

Fie. 9.—Beef eattle and hogs in a feed lot, showing a method of feeding which utilizes
labor during the winter months.

‘is due primarily to two reasons, the most important of which is that
the crop men sold their corn at about 41 cents per bushel. (See
Table XXV.) The live-stock farmer fed his corn to hogs, which he
sold at a price ranging from 74 to 9 cents a pound. Many men also
fed cattle, which likewise sold on a high market.

TABLE XX V.—Average price (in cents per bushel) received for crops sold on
owner and tenant farms in Indiana, Illinois, and Towa,

a Corn. Oats. Wheat.
State.

Owners. | Tenants. | Owners. | Tenants. | Owners. | Tenants.

Indiana s2 cesses. aes nes see eee 42.6 41.1 31.9 32.4 89. 8 92.3
Tilinois: 2 23i.'. Ssjsse tes Hes ees ee ceee eens 42.9 41.7 32. 3 32. 2 95. 6 96. 1

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 33

It is generally figured that a bushel of corn will produce 10 pounds
of pork. If this is true, the crop farmer received only about half as
much for corn as did the live-stock men. On the other hand, the
stock farmer had losses due to disease, more expense, more labor, and
a larger investment, but the difference in the relative prices of hogs
and corn more than offset these factors.

Another reason the live-stock man did much better was because he
utilized his labor. The crops grown in those regions do not fully
utilize the farm labor throughout the year, but by having live stock
the men had something to do during the winter months and were well
paid for their work.

There have been periods in the history of the North Central States
when the live-stock men received the smaller incomes, and they are
likely to occur again. This condition will occur when there is a
large overproduction of hogs and a short corn crop, thereby forcing
the cash price of corn higher than could be obtained through feeding
it. Experienced observers of the profitableness of farming in these
States agree that the man who follows the practice of feeding his
crops generally wins out in the long run. He will have his off years
once in a while, but over a long period the chances are largely in
his favor.

COMPARISON OF YIELDS OF VARIOUS CROPS.

It is commonly supposed that the live-stock farmers make greater
profits, due to much better yields. The yields of corn, oats, and
wheat on the two types of farms are given in Table XXVI.

TABLE XXVI.—Comparison of the crop yields on farms operated by owners and
tenants in Indiana, Illinois, and Iowa.

Operated by owners (273 farms).
State Live-stock farms. Crop farms.
Rare Yield per acre (bushels). NGS Yield per acre (bushels).
ber. Corn. | Oats. | Wheat. ber Corn. | Oats. | Wheat.
Teenie. ete eeee Pleas 52 47 20 28 51 49 18
TN ITONS ced sacs ASS EEE SS See 32 60 43 17 41 51 36 18
Gyles ee ae eee ed: 67 37 35 20 10 42 Stiidl eee
Totallor average.:.:..--------'-- 194 50 42 19 79 48 40 18
Pe i
Operated by tenants (247 farms).
State. Live-stock farms. Crop farms.
Yield per acre (bushels).| __ Yield per acre (bushels).
Num- Num-
ber. | Gorn.-| Oats. | Wheat.| P&T | Corn. | Oats. | Wheat.
Ibayohieera yeh ae acts aes al oe ee 46 53 45 19 37 51 46 18
Wein Giste tae cot ke i aceon 13 59 42 15 58 51 39 15
TKO! & App Soe 0S See 28 ieee See eee 58 35 31 17 35 itl Ba ee es ae a
Total or Averages ss22). 22 Ll. os: 117 49 39.3 17 130 46 39.6 16.5

34 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

There is a slight difference in yield in favor of the live-stock men.
The results for the one year are only an indication, further studies
being needed to determine this point. However, the difference in
crop yields is not as great as many persons suppose. The larger
profits of the live-stock type of farming are due, primarily, to a bet-
ter utilization of the farmer’s time and to the relative selling price
of hogs and corn.

SYSTEMS OF FARM TENURE.

Two systems of farm rental are found in the districts studied in the
three States. The most common one is a share basis, whereby the

owner furnishes the land and one-half the grass seed and pays one-

half the cost of thrashing and all his taxes and insurance. All grain
crops are shared equally, the tenant agreeing to deliver the landlord’s
share to the elevator or market. In a few cases, especially in Indiana,
where the grain is fed instead of sold, the owner furnishes half of
the productive stock. Where the landlord furnishes no stock and
sells his half of the grain the tenant may sell or feed his share. All
hay or roughage is usually fed on the farm. In the grain districts
very little hay is grown, the farmers using oat straw for feeding their
horses.

RELATION OF THE SYSTEM OF RENTAL TO THE TENANT’S INCOME.

The kind of a lease the tenant secures has a bearing on his income.
Table X XVII gives the labor incomes of tenants renting under both
systems. The tenants paying their rent in cash received greater in-
comes in Indiana and Illinois, but less in Iowa. They have greater
capital, although they are on smaller farms.

TapBLe XN VII.—Relation of the system of rental to the tenant’s income on 247
farms operated by tenants in Indiana, Illinois, and Towa,

Cash-rent system. | Share-rent system.
State. x
Number | Tenant’s| Labor | Number | Tenant’s| Labor
of farms. | capital. | income. | of farms.| capital. | income.
ING aN Ae sooo ee sae omar eee ha oa 14 $2, 272 $864 69 $1, 654 $733
IU hia eS eee alee KURI mne Sh tee one hee | 17 3, 118 1, 440 54 2,788 1,044
POW Go. Sone te eee See eres 27 2, 942 689 66 2,555 727
MopaltOmavieralerec cece oo ee ee 58 2,777 998 189 2,332 835

With the cash-rent system a tenant needs more ‘capital than on
the share basis. He has to bear all expenses and furnish nearly
everything for operating the place. He takes greater risks and in
a poor year stands a chance to lose heavily. If he has no surplus
capital he may have to sacrifice some of his working equipment to pay
the rent.

.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 35)

The year for which the records in Iowa were taken was 20 per cent
below normal, and this is the main reason the cash-rent tenants made
less than those on a share basis. In a normal year they would
undoubtedly have made from $800 to $900 in labor income.

When the landlord rents for cash he assumes very little responsi-
bility and has no work to do in looking after the farm. He is there-
fore entitled to only a fair income on his investment and to no pay
for general supervision.

RELATION OF THE SYSTEM OF RENTAL TO THE LANDLORD’S INCOME.

In Table XNNVIII are given the incomes the landlords received
on the same farms as shown in the preceding table.

TABLE XXVIII.—felation of the system of rental to the landlora’s income on
247 farms operated by tenants in Indiana, Illinois, and Towa.

| Cash-rent system. Share-rent system.

|

PUES: | Number | Uand- | Returns | Number | L@nd- | Returns
leerarnres | lord’s jon capital apitarnis lord’s | on capital

~~" | capital. | invested. “~~ | capital. | invested.

\ | Per cent. Per cent.

Ley GHEETONE AE 22 ARSE ae ae oe = oe a 14 | $14,968 3. 42 69 | $19, 126 3.59
WUTC. 5 ee So SE ee ree ee Di 28 5tie 2.50 54 38, 906 3.89
IONE Sh Ae ea ie ee Ohi Eee ters i eae 27 19; ae 2.37 66 21, 388 3. 49
MOTAMOMAVICLACES fe spc kc Sone ee ace | 58 | 20, 951 2.76 189 26, 473 | 3.64

Those who leased their farms on a cash basis received a much lower
return than those on a share basis. This is to be expected, for the
tenant took the risk and, as in Iowa, did not make as much as if he
had rented the farm on shares.

The relative merits of the different systems of renting will not be
discussed here. It is a subject of most vital importance and needs
careful investigation. The present basis followed in the share system
of rental has serious defects, which need adjusting for different
regions according to the crops grown and the type of farming fol-
lowed.

COMPARISON OF CROP YIELDS ON FARMS OPERATED BY OWNERS
WITH THOSE OPERATED BY TENANTS.

It is the general belief that tenant farms have been robbed of their
erop-producing power. The records for one year are by no means
conclusive, yet when taken from adjoining farms in each district
they are an indication of the results secured under both kinds of
tenure.

36

BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

In Table X XIX is given the average yield for corn, oats, and
wheat on the owner and tenant farms in the three States studied.

TarLE XXIX.—Comparison of crop yields on owner and tenant farms in Indiana,
Iilinois, and Towa.

Yield per acre (bushels).
State. Corn. Oats. Wheat.
Owner. | Tenant. Owner. | Tenant. | Owner. | Tenant.
a Se 8 | |
Indiana se seccs SA See eee ee 52.5 52.2 47.8 | 45.5 19.5 19.0
Tin Oise a2 ey eeetee oer eaioree eis oon nee oe 54.5 52.2 38.2 39.7 17.4 15.4
LOW altee ce Set ee hs oll ee Bie ee sae 37.9 36.4 34.9 32.6 19.7 16.8
CACVELAD Cok conse sien ee ee eee noe oe 48.3 | 46.9 40.3 39.3 18.9 ie

The farms operated by owners averaged about 2 per cent better —
yield than those operated by tenants. The difference is small, much
less than many persons imagine. Given equally productive soil,
the tenant farmer will grow as good crops as the owner. The tenant
has to work for what he gets, while the owner, often having large
real estate holdings, does net need to hustle as much, because a return
of even 2 per cent on his capital is sufficient to give him a good living.
The tenant farmer is unjustly criticized for conditions over which
he has no control. He is compelled to agree to terms of lease whereby
the landlord sells his half of the products regardless of the wishes
of the tenant. With most of the farms rented on half shares the
‘landlord and not the tenant is largely responsible for the wasteful
system of farming.

RELATION OF THE INCOME TO THE AGE OF THE FARMER.

Under average conditions the farm is no place for the weak or
for those unable to direct work. The man who intends to spend his
working life in the country should start early, for success is not
gained in a moment but by many years of persistent effort. It is
true that some farmers have made small fortunes in a short time, but
this is usually through a phenomenal rise in land values. Few men
have become rich from the real profits of the land. Those who have
done so usually needed a lifetime in which to work. Through skill
in management and by hard labor a comfortable living and mod-
erate profits may be expected. Those persons who are turning to the
farm with the idea of reaping large incomes are doomed to severe
disappointment.

The average age of the farm owners and the number of years they
have been farming are given in Table XXX.

~

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. ye

TABLE XXX.—Feldtion of the farmer’s income to his age and other factors on
273 farms operated by owners in Indiana, Illinois, and Iowa.

Number | Number Age Age
Income. Age. of years | of years began became
; a tenant. | an owner.| farming. | owner.

See IWAEL OCTNOTO Stoner oe oe iets arene Bae 2 ora rene 52.7 3.0 213 28. 4 31.4
TUL OS AUN) Ss Be os ie ny AR ae cnr tr ee 49.0 2.0 73. | 29. 7 SLi7
o AULD NEN Dee Sen SI ioe RS DOD DI ER oA Re Peer ea ae 48.8 2.6 N53) 27.9 30.5
CLAUD UC SG AES Se ok a Roepe SOS See Gas eee | 47.3 4.6 17.6 | 25.1 29.7
pie doar LONGI ee ret oesre Sece eta a ote loctrd tie eee iene 48. 0 1.3 | 20.6 | 26.1 27.4

PSV CLAD CR hee tee ee eo en od CCR Te Sapa 49.8 205) 19.2 27.4 | 29.9

Those making the poorest incomes were 28 years of age when they
started farming and were past 30 when they became owners. On
the average the oldest men are making the least profits.

Many of the farm owners in the North Central States whose records
are included in this report started in farming as homesteaders, or
else bought their places when land was cheap as compared to
present prices. On the average these men rented land for 24 years
before becoming owners. This is a much shorter period than is re-
quired to-day. Land values in these regions are so high that many
years of work as‘a tenant are necessary before sufficient funds can
be acquired with which to buy a farm. The large amount of capital
required and the long time necessary in which to earn this may have
the effect of making more tenant farmers.

In Table XX XJ are given the ages of the tenants and the time they
began farming for themselves. No data showing how long these
men worked as hired men before becoming tenants are available.

TABLE XXXI.—Relation of the income to the tenant's age and other factors on
247 farms operated by tenants in Indiana, Illinois, and Towa.

|
: Number | Number| ag
Income. jeNiemmbes Age. of years of years Recamne
| of farms. : on this ;
| | a tenant. farm tenant.
| 2 ;
pat ATIC IMONO as eee Aad. 58) Skee on eatin See 3 44.7 9.0 | Chul 35.7
PILOTS 2) Mere een es eee e de ajoehes Sune Secesseesek 25 42.1 12.8 | 6.0 29.3
$201 to $400.....-- Ne es 8 Soc cn te ee Seen 40 38.3 9.2 | 4.4 29.1
CHO TRO KIC) sees tea cee See OE ane Seno nee ae ees aoe | 41 36, 4 8.6 | 5. 4 27.8
CAO TO EE 0s oe aes ee ee ee eg eee 35 36.6 8.4 | 4.9 28.2
SUAS A ae ae ees ea 33 36. 5 9.0 | 5.5 27.5
SOO INLONSU S00 Se a ceo. Sasol cet cise Sesenenaee 41 35. 1 8.9 | 4.9 26.2
Wie IMGOLS A OUO sees oe) -icte eas os easiness ieelsle te ere | 12 33.7 6.8 4.9 26.9
$2,001-and over.......... Be eee ate aan Sas | 17 35.3 5.3 4.5 30.0
PROTA Onavelarert as: = sess a=, 44 Seas seca | 247 37.0 8.9 al 28.9

Results shown in other tables in this bulletin prove conclusively
that the more capital a tenant has the greater his income; that is, the
larger business he operates the larger is his pay. It might be
expected, then, that the oldest tenants would be making the largest

38 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

incomes. The results as given in Table XX XI show just the reverse ;
the oldest tenants make the lowest incomes. They have the least
capital and farm the smallest areas. They are men, few im number,
who are poor and inefficient farmers naturally, and who are not able
to save enough money to buy a farm. Therefore, landlords with
good farms will not rent their land to them, and they are compelled
to take the least desirable farms in the neighborhood. The enter-
prising young men soon acquire sufficient funds to discontinue renting
and become farm owners. The tenants of to-day seem to start in
farming younger than did the owners who began 15 years ago.

The common saying that the tenant farmer moves from one farm
to another every year is not supported by the data in Table XXXI.
Five years is the average period that the tenants had rented the
farms of which the records were taken.

RELATION OF THE EDUCATION OF THE FARMER TO HIS INCOME.

Unquestionably one of the best things for a young man who intends
to become a farmer is a good high-school education. Many farmers
with very little schooling succeed, but these same men would do better
if they had had the opportunity of further trainmg. No one ever
hears a farmer regret that he spent a part of his early life in school.

In Table XXXII the farmers are divided according to the extent
of their education. .

°
TABLE XXXII.—Relation of the owner’s or tenant's education to his income on
farms in Indiana, Illinois, and Towa.

Operated by owners (273 farms). Operated by tenants (247 farms).
BiaceTuiOr. Num-| Aver- | Aver- | ee Aver- | Num-| Aver- | Aver- | “Y€™ | Aver-
ber of |agesize|agecap-| )F6, | age | ber of | agesize jage cap- cae age
farms. | (acres).| ital. income.| 28°: farms.| (acres).| ital. lincome.| 28°:
None at school. ....-.- 4 91 |$15,039 | —$586 55 4 | 118 | $1,650 $680 40
Common school. ------ 214 165 | 27,494 301 51 186 167 | 2,200 742 38
Bluighsschooles s.--eneee 46 206 | 37,725 651 46 51 190 | 3,203 1, 268 33
College;etes--.22--5--< 9 | 240 | 42,781 796 53 6 294 | 3,351 1, 721 41
Totaloraverage.| 273 | 178 | 30,606 408 49.8 247 172 | 2,431 870 37

There were only eight men, four owners and four tenants, who
never had a school training. Of the owners and tenants 77 per cent
attended a common or district school. About 18 per cent attended
a high school, and one out of every 35 went to college or to some
institution of similar grade.

On the whole the tenants had received more education than the
owners, 23 per cent of them having more than a district-school
education, while only 20 per cent of the owners had such training.

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 39

Those men having the best training made the largest incomes,
although they were materially helped in doing this by much larger
farms and greater capital.

To determine the real influence of education, the tenant farmers
having the same training were divided according to their capital
(Table X XXIII).

TABLE XXNIII.—Felation of education to profits of tenants with equal capital.

Capital and training.

Units of comparison. $1,000 and less. $1,001 to $2,000. | $2,001 to $3,000. | Over $3,000.
— — | | ~~ — ———
|
Common High |Common High |Common|; High |Common}| High
school. school. | school. school. school. school. school. school.
i} “t |
Number of farms. .... 23 3 | 73 19 54 er 40 23
Average size...acres.. 69 109 | 138 123 184 165 251 266
Average age of farmer. 36.4 29.3 | 36.9 31.1 | 39.8 | 28.3 39.5 36.8
= = —— | |
Average capital. ..... $686 $730 | $1,517 $1, 549 $2, 427 $2,513 $4, 023 $5,095
Average labor income 318 259 | 561 659 864 | 866 1, 086 2, 087

The difference is in favor of the high-school men, especially in the
group of those having over $3,000 capital. In this case they made
nearly double the average income.

Considering that the farm boys of to-day will be the farmers
of to-morrow, altogether too little attention is given to their train-
ing. Farming is a business the same as any other industry, and
until our schools teach some of the fundamental principles governing
profitable farming the farm boy is likely to seek work elsewhere.
Many boys leave the farm because they see no future in it. Another
important reason is the lack of profitable work at home. A moderate-
sized farm is necessary to give employment to the farmer and his
sons. The small farm does not provide work; hence, the boys must
find employment elsewhere. Let them fully understand how farm
profits and losses are made and there will be an incentive to remain.
First make our farms profitable, and the question of keeping the boys
there will solve itself.

FARMING AS A BUSINESS.

By studying a sufficient number of farms in a region one may
learn how the more successful farms differ from the less successful.
So far, this discussion has dealt only with an analysis of the farm
business. From this study of profitable and unprofitable farms cer-
tain important principles governing farm organization are clearly
brought out. These fundamentals are as follows: (1) Size of busi-
ness, (2) quality of business, (8) diversity of business, and (4)
adaptability of the type of farming.

40 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

Size of the farm business—No one expects a small grocery store
which has only a few customers a day to be a great financial success.
The total amount of business is insufficient to earn the operator a
substantial income. Exactly the same is true with the small farm.
The volume of business is limited by the area in crops and the
capital invested. The small farm furnishes a home as well as much
of the produce consumed by the family. If it were not for these
factors the men on the small area would hardly be able to live.

Wages are a reward for labor, and if a farm does not provide
work the pay must be correspondingly small. The family-size farm,
which in the corn belt should be above 100 acres, is unquestionably
a more efficient unit than an area of 40 acres or less. Crops can be
grown cheaper, labor will be better paid, and the farmer and his
family will enjoy more of the benefits of modern civilization.

Quality of the farm business—The farmer may have sufficient area
and grow the right kind of crops, yet not be successful, owing to the
poor quality of his entire business. Poor crops that do not pay the
cost of production, and the feeding of these to unproductive live
stock are common causes of failure. This characteristic of unsuc-
cessful farming attracts much public attention. Such farms are un-
profitable largely through ignorance or indifference on the part of the
operator. Under good management they can generally be made suc-
cessful.

Diversity of the farm business —Improper organization of a large
farm limits its possibilities, just as area limits the small farm.
Single crops or single live-stock enterprises seldom utilize farm
labor to its maximum. By having several crops there is not only
better distribution of labor, but the chances of total loss from crop
failures are lessened. Fortunately, corn, oats, and wheat utilize the
farmer’s time pretty thoroughly through the growing season. In
some parts of this country certain crops that need labor only a part
of the year may be so profitable that the farmer can afford to be idle
the rest of the year. However, these are the exceptions. Most crops
are not profitable enough to permit any such practice. Idle horses
and machinery are nearly as expensive as idle men. (See fig. 10.)
If the working equipment can all be kept busy on paying enterprises,
success is almost assured.

Adaptability of the type of farming—KEqually important in the
selection of enterprises to permit the maximum use of labor is the
consideration of the profitableness of each. Dairy cows and cash
crops may utilize all of the farmer’s time, but in certain regions,
possibly, dairy cattle under the best management could hardly be
made to pay a profit. Markets and other conditions have to be care-
fully considered in choosing the enterprises which are to constitute
the main sources of income. Fitting the right crop to the soil and

FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 41

selling it to the proper market or feeding it to the right kind of live
stock are important factors. Following such types of farming as are
unsuited to the region is often a cause of unprofitable agriculture
in some of the older settled States.

The wide fluctuation in prices of certain crops makes it extremely
difficult for a farmer to choose a definite rotation. One year they
will be such as to give handsome profits on certain crops, and the
next year they may be insufficient to pay the cost of production. The
question confronting the average farmer is not so much one of pro-
duction as it is of marketing. Most farmers are able to grow a suffi-
cient quantity of crops to give them a very comfortable living if they
are assured of reasonable prices for their products. However, under
present conditions the farmer has to take big chances with nearly all

Fic. 10.

Farm work horses and mules in pasture during the month of August, illustrating
a practice which is common in many sections,

of his crops. If he is so unfortunate as to have a combination of
crops every one of which is low in price in some particular year,
severe losses will be the result. Potatoes, apples, peaches, onions, and
cabbage are good illustrations of the crops that fluctuate widely in
price from year to year.

The essential characteristics of the more successful farms are a
sufficient area and a proper organization of well-selected farm enter-
prises to permit the maximum use of men, horses, and machinery.

SUMMARY.

The aim of the farm-management survey is to determine the fac-
tors governing the profitableness of farming as a business.

The results from the three districts selected in Indiana, Illinois.
and Iowa indicate what may be expected from the utilization of

42 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE.

high-priced land under an expansive system of agriculture. In the
region studied the owners made good profits. The average labor in-
come of the farm owners was $408 and of the tenants $870. In addi-
tion, the operators had a house to live in and those products which the
farm furnished toward their living.

The landlords, on the average, received 3.5 per cent on their in-
vestments. The size of their investments had no appreciable bearing
on the rate of income.

Assuming that the year in which this study was made was a nor-
mal one, a labor income of $870 to the operator, whether owner or
tenant, and a return of 3.5 per cent on the capital invested may be
expected.

The tenant’s income is in direct proportion to his capital and the
size of the farm he operates. Men owning small farms often materi-
ally increase their incomes by renting additional land. This affords
a better utilization of their equipment without much increase in
capital.

The tenant’s income is in proportion to the risk he assumes. On
the cash-rent basis his income is greater in a good year and less in a
poor year than when he rents on the share basis.

The farmers making the lowest labor incomes are on big farms,
but fail through inefficient management. Poor crops, low prices for
products sold, poor stock, failure to work, and unused capital are
the main causes contributing to their failure.

Modern machinery, with the use of more horses and fewer men, has
made the farm of less than 100 acres an inefficient unit. Further re-
adjustments in area will occur, which will tend to lessen the number
of persons needed and at the same time increase the net production of
the farm.

The system of agriculture found in the corn-growing States is an
excellent example of the expansive type of farming developed on the
basis of the farm work horse as the motive power. This system is in
direct contrast to the intensive type found in some of the countries of
southern Europe, where the man and not the horse furnishes the
labor. The American type needs large areas and is based on the
maximum product per man. The European type requires a small
area and is based on the maximum product per acre of land.

In the corn-belt States the family-size farm is the most desirable.
It provides work for the farmer and his sons and permits the best use
of men, horses, and machinery. If the small farm has a place it
must be near a city and should be highly diversified in its organi-
zation.

WASHINGTON : GOVERNMENT PRINTING OFFICE : 1914

‘ADDITIONAL COPIES of this publication
may be procured from the SUPERINTEND-
ENT OF DocCUMENTS, Government [rinting
Ofi.ce, Washinzton. D. C., at 10 cents per copy

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