The Nonpartisan Leader Newspaper, December 22, 1919, Page 4

Watered Farm Valueé Speculation in Land and Inflated Prices . Make Farmers’ Job Harder Washington Bureau, Nonpartisan Leader., ~ [HENEVER the stock of a railroad ) | is watered, the actual workers in the railroad industry, as well as all the people served by the railroad, are hurt. The work- ers must toil. harder to pay ‘more profits on the fraudulent “investment,” the fictitious val- ue of the stock. The people must pay higher freight and passenger rates, or must get less service for their money, in order that . .the water may be turned into gold for the benefit of the stockholders who did the watering. Exactly the same rule operates when farm land values are “kited,” according to the office of farm management, United States department of agri- vculture. When a family is earning its living on a farm valued at $150 an acre, and land speculation sends the value of that farm up to $300 an acre, the land does not produce any more grain or pork on that account. If allowance is made for the dou- "bled valuation of the land, then the family pro- duces just half as much grain or other products as “it did before, per dollar of “investment.” And if the family owns the farm it feels somehow that it ought to work harder, so that it may still earn a dividend on the watered valuation. If it be a ten- ant family, then it must work harder or get out. Higher prices for the crop are offset by higher prices for all things that must be bought. ’ What has actually re- sulted from the fever of land speculation in Iowa and other states in the West, in the last 18 months, has been the keep- ing of boys and girls out of school, the reduction of the family standard of liv- ing, and the reckless sale of farms to men wholly unfitted for farming. Doctor- L. C. Gray, the economist in charge of land economics in the de- partment, is in charge of the investigation which the government is making in- to the farm land specula- tion ‘epidemic, has stated in a recent magazine ar- ticle that virtually the whole corn belt is affected by this fever, which has become “almost a frenzy.” The department has issued a warning against it. The sudden and de- cisive drop in the price of hogs toward the end of September brought the speculation to a’ close, - at least temporarily. Field agents report that it ‘may break out again next spring. The menace to farm tenants, the investigators feel, is still serious. Here are some figures on Iowa land, gathered by Doctor Gray: Iowa’s agricultural.census of 1915 showed that $129.87 per acre was the average value of farm lands in the counties where the study of the speculation is now going on. On March 1, 1918, the estimated valuation of 753 farms in these counties, as shown by their actual sale prices, had risen 47.8 per cent, making it $192 per acre. The average valuation of the same farms in Au- gust, 1918, had risen to $258.24 per acre, or al- most exactly twice the average value for all farms in those counties in 1915. EXCESS'VALUATION TWO BILLION DOLLARS . These increases were not due to any rumors of the finding of oil, or of development for town lots. They were due to supposed farming values alone. In May, 1918, the farms sold showed a raise of 19.4 per cent in value per acre over the farm sales made in March, 1918. Sales in August, 1919, showed the av- erage per acre 34.5 per cent higher than in March of the previous year. If the same rate of increase were assumed for all farm lands in the state, then Iowa farm lands had taken on a watered valuation up to the fall of 1918 which is - conservatively estimated at $2,000,000,000. . allowing for all How much damage is done depends largely upon how many farms are actually sold at the “kited” valuation. Between March 1, 1918, and August, as studied in various places (the actual period av- eraging between three and four months) 8.9 per cent of ‘all farms in these counties had changed hands. At that rate, nearly 30 per cent of the farm lands in Iowa would have been sold had the fever run for a year. 3 : In the boom region there were 693 farms that were ‘sold once; 261 were sold twice; 48 were sold three times; some 22 were sold four times in four months. Prices have in some cases gone to $600 an acre, while there were many sales between $400 and $500 an acre for corn land! A study was made of the actual labor income, or net wage, of the individual farmer in Iowa in 1913, in 1915, and in 1918. Upon over 900 farms in 1913, allowing 5 per cent on the I valuation of the BEWARE! I farm, and after expenses, includ- ing the labor of the rest- of his family, the farmer earned an average of -$303 for the en- tire year. In 1915, on 800 farms, the av- erage annual wage of the farm- —With apologies to Herbert Johnson in ‘the Country Gentleman. er was $370—an amount which purchased some- where near the amount of goods that his $303 for the year 1913 bought. The first 40 farms, of a total of 450 studied in 1918, show an' average an- nual wage to the farmer of $749.33—which would not purchase much more than his $303 in 1913. But if the watered valuation of the farms be tak- en into consideration for 1919, when the crops were no better.and the prices no higher than in 1918, the labor income of tlie farmer in 1919 figures out at only a few cents over $57. : For the year 1918 there were about 50 first class farms co-operating with the Iowa College of Agriculture in keeping cost accounts. These fafms showed an average farm labor income—the farm- er’s own wage—of $2,656. But the average rental paid on these farms in this class, for the period 1913-1915, had been only 3.03 per cent a year. If a man had rented a farm at that rate, he would, on the basis of the records for 1918, and using the 1915 valuation, have made $1,964.64 for 1918, while if compelled to pay rent on the basis of 5 per cent he would have made only $1,420.38. ) —— Railway Salaries Public Must Pay in Higher Rates for Large Salaries of Road Officials Washington Bureau, Nonpartisan Leader. ~|ONGRESSMAN THETUS W. | SIMS of Tennessee, who was chairman of the house commit- tee on interstate and foreign commerce when the Democrats were in control of the house, has raised the issue of profiteer salaries inthe railroad business. Here is the amendment which he tried to add to the rate-making clause of the Esch railroad bill: “Provided, that not exceeding $20,000 of the sal- ary or compensation paid any official or any rail- road company shall be charged to operating ex- penses or be considered by the interstate commerce commission in reaching its conclusion as to the justness of reasonableness of any rate, fare, charge, classification, regulation or practice.” Mr. Sims explained -that his amendment was to limit the expenses chargeable to operation, and did not prevent these railroad companies from paying their officials as much as they liked, provided the excess above $20,000 a year should be.taken from the net earnings which otherwise would go to the stockholders. There had been a loud protest from the op- ponents of public oper- ation of the railroads to the effect that the government had hired a lot of additional help at high rates. Sims made answer to this. “The Pennsylvania railroad - system,” he said, “had for the year 1917 a president at a salary of $75,460, which is more than the pres- ident of the United States receives. It had 11 wice presidents with compensations begin- ning with $40,620 and running down to $25,- 000. In all, it has 23 officials and attorneys whose compensation in 1917 was from $20,000 up, amounting in all to $681,960. d “The president of the United States receives $75,- 000. Ten cabinet members receive in all $120-,090. The nine justices of the supreme court receive $126,500. The vice president of the United States and the speaker of the house each receive $12,000. These 23, the highest paid officials of all depart- ments of the government, executive, judicial z}nd legislative, all combined, receive salaries amounting to $345,500, just a little more than half the 23 of- ficials of the Pennsylvania railroad system amount to all combined.” "STILL ARE DRAWING IMMENSE SALARIES These figures were taken, Mr. Sims explained, from the report of the government railroad wage board. The same report shows that in 1917, wh19h was the last year of private operation, the rail- roads had 208 general officers drawing $20,000 or ‘over. Among them were the seven men who have been the regional directors of the entire railroad industry of the United States under government operation. Five of these seven directors have been receiving $50,000 a year each, and two of them | $40,000 a year each, from Uncle Sam. In each case this was a considerable reduction in pay from Fhe amount allowed them by the railroad companies. When Secretary McAdoo was di- rector general of railroads he drew no salary for that work. Director General Hines gets $25,000 a year, although in 1917 he received $77,210 aschairman- of the board of the Santa Fe system. Government operation has been much more economical of exec- utive salaries than was private operation. Here are some instances of salaries paid by