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and that by one of greater change in the case of a number of the phenomena of agriculture to which reference has been made in this thesis. It appears, moreover, that to a certain extent the practice of renting has been stimulated by both phases of the periodic movement.

RISING LAND PRICES AS A HANDICAP TO POPULAR OWNERSHIP AND

GOOD FARMING

In the advances that have occurred the landless farmers have not shared equally with the landed farmers. The speculative element in land values has been a decided handicap to those without land. Owners hold the land at a value capitalized at a rate below that at which money may be borrowed for the purchase of land. The greater the discrepancy between the two rates the smaller is the portion of the market value for which a mortgage loan can be negotiated on the purchased land. As a consequence of these conditions the opportunity for tenants to acquire land has been greatly reduced.

Whether reduced loan rates would enlarge the expectancy of ownership for those entering agriculture without land is a question. Within certain limits the reduction of loan rates would probably reduce the rate at which the value of land would be capitalized, and thus stimulate the transfer of land. The consequence would be a rise in land prices, not only because of the greater demand for land but also because of the expectation of future increment in value. Since, however, the rate at which land is capitalized depends not only on rates of return in agriculture, but also on rates of return in business in general, it is probable that farm loan rates could be reduced so as to be brought nearer to the rate at which land prices are capitalized. To the extent that this is possible, a reduction in loan rates would probably assist the landless in acquiring land, especially in the districts where land is highest in price. The cheaper loans should be available to those who give evidence of becoming or remaining actual farm operators.

The prominence of land values in discussions of tenant farming leads logically to a discussion of proposals to control land prices. For the most part the upward movement in the prices of farm lands in Illinois was not a rapid one between 1860 and 1900. Increment could not have played a prominent part in the calculations of land owners. Land was owned chiefly by those who contributed much to the developments which produced the rise in land prices. From about 1900 on, however,

a somewhat different condition has been prevailing. During the recent period the rise in land prices came without regard to the contribution made by the owners to the agriculture of the country. The districts where land prices have moved forward most have been those in which small expenditures need be made by owners for fertilizers and improvements. It would seem, therefore, that some method of making the rise in land prices reward the public would have been preferable during the period of phenomenal price increments. A tax of 25 per cent of the increment in the case of land bought in 1900 at $80 an acre and sold in 1910 at $200 would have yielded $30. If one-eighth of such land had been transferred and taxed, the proceeds would have been $2400 a section, or nearly $10,000 a school district. The expenditure of half this amount, $500 a year, within the school district, for roads, schools, and other public purposes would have been a considerable factor in rural improvement. The other half, if devoted to general tax purposes in the county, state and nation would have been of great fiscal usefulness. Not least of all advantages that might have come from such a scheme, however, is that of repressing speculation in land. The tendency for longer association of owners with their land, on which a premium would thus have been placed, would have done something to combat the practice of short leases and of temporary association with the land on the part of tenants.

Whether a tax on the increment is desirable now is another question. It is pretty certain that agitation for such a tax cannot be expected to be strong among land owners so long as the increment is accruing strongly in their sections. For that reason it seems probable that increment taxation may not be expected at the time when it might be most effective as a check on land speculation.

THE OUTLOOK

With land prices at the present stage it seems likely that the increment element must become less important and the rental element more important in the calculations of land owners. When the annual increment is $10 on land valued at $100, based on a net rental return of $6 capitalized at 6 per cent, the increment is the source of five-eighths of the addition to the landlord's income and wealth during the year. If, however, the annual increment is the same amount, $10, on land valued at $200, based on a net rental return of $10 capitalized at 5 per cent,

the increment is the source of one-half of the addition to the landlord's income. The tendency for the interest rate to fall is responsible for the failure of the increment to decline even more rapidly in importance in the calculations of the land owner. That the interest rate will fall as rapidly on account of the expectancy of future rise in land prices is less likely the higher the stage of land prices. An annual increment of $10 in the case of $100 land is 10 per cent on the investment and in the case of $200 land is 5 per cent. We may expect, therefore, that anticipation of future rise in value will exert a smaller influence both on the rate at which land is capitalized by owners and on the annual income or addition to the wealth of the land

owner.

Because greater emphasis must fall on the rental as a source of return on the high priced lands, we may probably expect a pressure by land owners for higher rents. This pressure has already been exerted in some cases. An intensified selective process is thus made operative. The demand for efficiency falls upon farmers of all tenures.

Farming efficiency in the future, however, will probably consist to a greater extent in the ability to increase net profits through co-operative dealing with the market. The efficiency test must, therefore, rule more strongly against operators of the tenures whose characteristics are opposed to successful co-operative effort on their part.

It is not necessary, however, that the farmers of other tenures operate as efficiently as the owners themselves would operate. If owners prefer to have their land operated by others than themselves, and if their holdings are sufficiently large, they may content themselves with the financial disadvantage resulting from their refusal to operate their own land.

The coming of the automobile and improved roads and the extension of rural delivery routes and of telephones may remove the main disadvantages of rural residence. Improved opportunities of applying business methods in agriculture with a favorable reaction on profits will doubtless attract people of better training and experience into the operation of farm land.

The test of productive efficiency may be somewhat slow in acting and costly but it bids fair in the long run to penalize unsound farming regardless of the tenure of the operators, and to guarantee, therefore, the survival of the best forms of tenure and of the best individual operators.

The United States census bureau supplied unpublished data by means of which the author calculated the percentages that follow.

I. The percentage of the farm acreage operated by part owners under lease, and under deed, by counties, Illinois, 1910: Adams, 7.5, 11.0; Alexander, 1.9, 4.0; Bond, 8.4, 15.4; Boone, 3.5, 3.5; Brown, 7.7, 11.6; Bureau, 6.5, 7.4; Calhoun, 6.1, 10.2; Carroll, data incomplete; Cass, 6.7, 8.9; Champaign, 9.0, 8.9; Christian, 8.3, 8.9; Clark, 10.3, 13.7; Clay, 9.6, 14.9; Clinton, 7.5, 14.3; Coles, 7.7, 8.2; Cook, 5.3, 4.2; Crawford, 10.4, 13.3; Cumberland, 14.6, 17.7; De Kalb, 3.9, 4.9; De Witt, 8.7, 7.5; Douglas, 8.9, 8.8; Du Page, 1.6, 1.4; Edgar, 11.7, 9.7; Edwards, 14.8, 24.3; Effingham, 9.3, 17.7; Fayette, 12.2, 17.8; Ford, 5.6, 5.3; Franklin, 9.4, 13.9; Fulton, 5.5, 6.9; Gallatin, 10.6, 13.9; Greene, 9.6, 11.4; Grundy, 6.4, 7.7; Hamilton, 8.8, 15.6; Hancock, 9.1, 11.5; Hardin, 1.9, 4.6; Henderson, 8.3, 9.1; Henry, 5.2, 6.2; Iroquois, 7.4, 7.2; Jackson, 8.1, 11.8; Jasper, 13.5, 21.8; Jefferson, 8.0, 15.0; Jersey, 9.6, 12.2; Jo Daviess, 3.0, 5.0; Johnson, 4.6, 9.6; Kane, 1.6, 2.2; Kankakee, 8.0, 8.6; Kendall, 4.0, 4.5; Knox, 7.4, 8.2; Lake, 5.0, 6.3; La Salle, 6.5, 6.8; Lawrence, 10.2, 10.8; Lee, data incomplete; Livingston, 7.4, 7.8; Logan, 5.8, 5.6; McDonough, 8.1, 8.5; McHenry, 1.7, 2.3; McLean, 7.8, 7.3; Macon, 8.0, 7.6; Macoupin, 8.5, 11.5; Madison, 6.7, 10.3; Marion, 10.4, 17.6; Marshall, 7.7, 9.2; Mason, 8.0, 7.9; Massac, data incomplete; Menard, 9.8, 8.8; Mercer, 5.7, 6.3; Monroe, 10.1, 17.9; Montgomery, 8.4, 11.7; Morgan, 10.4, 10.5; Moultrie, 10.2, 9.7; Ogle, 5.3, 6.0; Peoria, 8.1, 9.0; Perry, 8.1, 12.5; Piatt, 7.5, 6.9; Pike, 8.4, 8.6; Pope, 4.0, 7.4; Pulaski, 7.5, 9.2; Putnam, 8.9, 8.7; Randolph, 8.1, 11.6; Richland, 10.2, 16.0; Rock Island, 5.0, 6.1; Saline, 7.2, 13.5; Sangamon, 10.2, 9.7; Schuyler, 7.9, 12.3; Scott, 9.8, 12.6; Shelby, 10.0, 11.6; St. Clair, 6.7, 9.1; Stark, 6.6, 8.9; Stephenson, 4.9, 6.6; Tazewell, 7.3, 8.2; Union, 5.9, 10.0; Vermilion, 9.4, 7.7; Wabash, 9.6, 10.2; Warren, 9.3, 9.5; Washington, 7.3, 13.8; Wayne, 9.0, 16.6; White, 9.6, 11.5; Whiteside, 3.8, 4.3; Will, 6.8, 7.5; Williamson, 6.9, 10.3; Winnebago, 4.1, 4.4; and Woodford, 8.6, 6.3.

II. The percentage of the farm acreage operated under lease by tenants and part owners, and under deed by owners proper and part owners, by counties, Illinois, 1910: Adams, 39.9, 58.9; Alexander, 41.1, 56.2; Bond, 44.0, 55.4; Boone, 56.4, 43.0; Brown, 36.9, 62.9; Bureau, 55.7, 41.2; Calhoun, 37.6, 59.5; Carroll, data incomplete; Cass, 48.0, 51.2; Champaign, 66.2, 32.7; Christian, 66.2, 32.3; Clark, 38.6, 60.9; Clay, 34.1, 63.4; Clinton, 54.4, 44.8; Coles, 56.0, 42.0; Cook, 50.5, 46.5; Crawford, 40.1, 58.7; Cumberland, 40.6, 58.1; De Kalb, 58.0, 40.3; De Witt, 68.6, 29.6; Douglas, 61.1, 36.3; Du Page, 53.2, 44.6; Edgar, 58.3, 40.1; Edwards, 31.3, 68.2; Effingham, 30.4, 69.1; Fayette, 43.0, 56.2; Ford, 75.3, 23.7; Franklin, 34.1, 64.5; Fulton, 47.9, 50.3; Gallatin, 50.8, 48.4; Greene, 47.0, 48.2; Grundy, 67.3, 31.4; Hamilton, 32.0, 56.0; Hancock, 46.4, 51.9; Hardin, 21.6, 77.8; Henderson, 48.5, 50.0; Henry, 56.6, 41.6; Iroquois, 66.5, 30.4; Jackson, 42.4, 45.3; Jasper, 36.1, 63.1; Jefferson, 31.8, 67.4; Jersey, 47.3, 51.1; Jo

Daviess, 29.5, 69.4; Johnson, 22.2, 74.0; Kane, 54.2, 42.2; Kankakee, 53.0, 44.3; Kendall, 56.3, 42.3; Knox, 54.7, 42.0; Lake, 41.8, 50.8; La Salle, 58.2, 41.2; Lawrence, 36.7, 51.7; Lee, data incomplete; Livingston, 68.2, 31.0; Logan, 72.4, 26.9; McDonough, 53.5, 449; McHenry, 50.3, 47.1; McLean, 65.0, 32.4; Macon, 68.5, 29.4; Macoupin, 51.5, 47.1; Madison, 51.0, 48.3; Marion, 32.9, 65.4; Marshall, 68.3, 31.4; Mason, 66.8, 32.8; Massac, data incomplete; Menard, 56.4, 43.2; Mercer, 47.8, 50.1; Monroe, 50.1, 49.4; Montgomery, 51.6, 47.2; Morgan, 51.8, 47.0; Moultrie, 60.2, 38.7; Ogle, 57.8, 40.2; Peoria, 50.3, 48.1; Perry, 35.8, 62.3; Piatt, 62.8, 29.7; Pike, 45.7, 52.2; Pope, 23.4, 75.9; Pulaski, 37.8, 61.7; Putnam, 59.4, 39.6; Randolph, 41.8, 58.0; Richland, 32.2, 66.0; Rock Island, 44.6, 53.2; Saline, 34.8, 62.9; Sangamon, 60.8, 37.4; Schuyler, 43.5, 54.3; Scott, 49.1, 49.0; Shelby, 51.7, 46.7; St. Clair, 54.4, 45.3; Stark, 54.0, 44.6; Stephenson, 43.3, 55.9; Tazewell, 59.4, 38.5; Union, 38.5, 59.1; Vermilion, 63.2, 34.8; Wabash, 44.9, 54-9; Warren, 56.5, 38.3; Washington, 43.7, 55.6; Wayne, 31.0, 67.5; White, 46.6, 53.0; Whiteside, 60.5, 37.8; Will, 49.2, 49.9; Williamson, 35.2, 64.1; Winnebago, 49.7, 49.1; and Woodford, 61.1, 37.9.

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