23

Farm land.

3, 104. 8 3, 164. 4 3, 284. 1 3, 403. 5 3, 584. 7 3, 454. 1

3, 572. 4 3, 621.6 4, 086. 8 4, 450. 75, 250. 2 4, 679. 6 3, 538. 2 3, 318. 7

3, 055. 3 3, 186.9

24

Buildings..

432

464

495

527

558

590

622

653

685

716

748

750

750

750

750

750

25

Livestock.

375.4

347.7

317.6

338.0

341.9

324. 4

332.9

365.4

443.6

492

446. 1

306.3

241.5

276

268.7

271

26

Farm machinery

74

89

104

119

134

149

163

178

193

208

223

218

212

206

200

194

27

One-half the value of farm-owned

Miscellaneous information for State of Illinois, 1909-10 to 1924-25

METHODS OF COMPUTING THE NET INCOME OF ALL ILLINOIS FARMERS ANNUALLY FROM 1909-10 TO THE PRESENT TIME

Items 1-5: These are the Brookmire figures compiled by Mr. H. W. Moorehouse, the results of which are presented on page 8 of Exhibit 31 on behalf of the railroads in ex parte 87.

Item 6: Expense for hired labor.-(a) The number of farms in Illinois by years was determined from the census figures of 1910 and 1920 and interpolations made for the intervening years. The figure for 1925 was determined on a percentage reduction for the 1920 census as based on 8 county reports of the 1925 census and the intervening years interpolated on the basis of an equal change each year. (b) The number of months of labor per farm for those reporting the 1910 and 1920 census was determined from the census figures and interpolations made for the intervening years. From 1920 to the present time, the number of months was decreased in the same proportion as the preceding increase to correspond somewhat with the lower prices of agricultural products.

(c) The monthly wage basis used was that determined by the United States Department of Agriculture for Illinois for each year from 1910 to date.

(d) The percentage of farms using hired labor from 1910 to 1920 was based upon reports in the two census years and the intervening years interpolated on the basis of equal changes each year. From 1920 to date, the number of farms using hired labor was arbitrarily fixed at 60 per cent since no material is available to supply this figure.

(e) The hired labor used for each year was then determined by multiplying the number of farms by the percentage of farms using hired labor and this figure by the number of months during which labor was employed, times the monthly rate.

Item 7: Depreciation and repairs of farm implements and machinery.—Upon the basis of the census figures of 1910 and 1920, the value of machinery was interpolated for the intervening years. The value of Illinois machinery for 1925 was given as 200 millions, being determined by the division of taxation and statistics. (Material on file in office of Illinois Agricultural Association.) Upon the basis of this figure and the 1920 census figures, the valuations were determined, for the other years. The annual charge for depreciation and repairs was figured at 20 per cent of the investment valuation for each year.

Item 8: Depreciation and repairs on farm buildings.-The value of farm buildings as given in the census for 1910-1920 was used as the basis for determining the value of the intervening years. The valuation since 1920 has been assumed to be constant although returns from a number of counties as reported in the 1925 census indicate an increase of about 4 per cent in the five-year period. Complete returns for 1925 census later available indicate a slight increase in this item. The figures presented are therefore conservative. The annual cost of farm

buildings has been figured at 5 per cent of the annual valuation. Item 9: No basis for separating this item from the item of all feeds purchased is available for Illinois, hence no figures are given.

Item 10: Fertilizer purchased.-The census data for 1910 and 1920 was used as a basis for determining the valuation for the years between census periods. The figures for the years since 1920 have been determined at about one-half the high point although it is a question whether these charges are high enough due to the increasing use of limestone in the State.

Item 11: Seed purchased.-From the State crop reports, the acreage by years for corn, oats, wheat, barley, rye, and potatoes has been determined. The quantity of seed required for these acreages has been determined on the basis of 1 bushel of corn for 8 acres; 14 bushels wheat per acre, 3 bushels oats per acre, 2 bushels barley per acre, 11⁄2 bushels rye, and 10 bushels potatoes. The proportion of these seeds which were purchased was then determined by the average of two surveys, one conducted in 1919 by the United States Department of Agriculture and another in 1925 through the State office of the bureau of crops and livestock estimates. The proportion of seed purchased was then figured at 125 per cent of the average market price for each year. To this total there was added 10 per cent to cover the cost of other seeds, such as clover, grasses, and minor grain crops.

Item 12: Insurance.-The total amount of the risk involved and the annual expenditure of all farm mutual insurance companies of the State was determined from the annual reports of the companies as submitted to the insurance department of the State. On the basis of the statement on page 239 of the 1924 Yearbook of the United States Department of Agriculture, the risks carried on farm

property other than mutual insurance companies were estimated as equal to that carried by mutual companies. On the basis of rates furnished by the Illinois Inspection Bureau at Springfield, the rates on commercial insurance were assumed to be two times those existing in farm mutual companies. By combining the cost as given by farm mutual companies with that determined in this manner for the commercial companies, this item was determined for each year. (It is my opinion that this figure is quite conservative.)

Item 13: Use of the automobile in farm business.-The number of all automobiles registered year by year from 1910 to the present date was obtained from the secretary of state. Prior to 1920 the figures obtained included trucks as well as pleasure cars. In 1920 to 1925, inclusive, the number of passenger cars varied between 872 per cent and 88 per cent of the total then registered. Upon this basis, the number of pleasure cars prior to 1920 was assumed to be 88 per cent of all cars registered. The fifth edition of the Prairie Farmer's Data Service gives the number of farm-owned automobiles for the year of the 1920 census to be one to each 1.76 farms for the 12 North Central States. Applying this figure to the number of farms in Illinois gives the number of farm-owned automobiles at that time. A survey conducted by the State branch of the United States Department of Agriculture Bureau of Crops and Markets in 1924 indicated that there were 832 per cent of all farms in the State that had automobiles. The number of farm-owned automobiles in 1920 as determined by the Prairie Farmer's Data Service was 26.75 per cent of all passenger cars. This proportion was assumed for all years preceding 1920. From 1920 to 1924 the number was determined on the basis of the increase as indicated by the report of the State branch of the United States Department of Agriculture. The cost for use of farm automobiles was then determined on the basis of each car being driven 3,000 miles annually for farm business at a cost of $0.07 per mile.

Item 14: Miscellaneous expenses.-The true average cost for miscellaneous expenses was determined for 606 farms, scattered in 35 counties of the State, whose operators kept records during 1924 in cooperation with the county farm bureaus and the department of farm organization and management of the University of Illinois. Upon this basis and the Bureau of Labor statistics index of the wholesale prices of all commodities, the cost of miscellaneous expenses was determined for each year. (The index referred to is published in the “Agricultural Situation" for October 1, 1925, on p. 8.)

Item 15: Total expenses.-Item 15 is the addition of items 2 to 14, inclusive. Item 16: Net income. This item is the subtraction of item 15 from item 1, and represents what the operators of the State receive for their labor and capital. Item 17: Value of foodstuffs produced.—The value of foodstuffs produced on the farm from the family living was determined on the basis of detailed records kept with Champaign County farmers in 1923-24 by the department of farm organization and management of the University of Illinois. To this figure was applied the index number for all articles of food for the years 1907-1924, as given in the pamphlet "Prices and Cost of Living," published in October of 1925. These figures were checked by similar records kept on a group of farms from 1913 to 1922 in Franklin and Hancock Counties, and from 1920 to 1922 in Champaign County. Also, by figures for the years 1918-1922, inclusive, as published in the United States Department of Agriculture Bulletin 1338. The value of the use of the dwelling from 1920 to date was assumed to be $200. One hundred and fifty dollars was assumed for 1910, and the intervening years for the period from 1910 to 1920 was increased gradually. These figures for the use of the dwelling are considerably lower than those determined by the investigations referred to. No charge was made for fuel, since this was not an item of consequence in any of the investigations conducted in the State, although in some sections of the State it is an item of considerable importance. The value of food and shelter thus determined was then multiplied by the number of farms for each year to get the total value of this item.

Item 18: Items 16 plus items 17. Net income and farm labor.

Item 19: Operators' and family labor.—The monthly wage for hired labor without board for each year was taken as the basis of the operators' labor. This was reduced to the yearly basis and 30 per cent was added arbitrarily to take care of the value of family labor. This figure was then multiplied by the number of farms for each year to determine the total value of this item.

Item 20: Operators' and family labor on railway wage basis.—Item 20 is trying to get at exactly the same thing as item 19, but on a different basis. The average wage of railway workers was determined year by year from 1909 to 1924. This varied from $658 in 1909 to $1,820 in 1920 and $1,614 in 1924. These annual

wages were increased by 30 per cent to account for the farmer's unpaid-family labor giving the family wage on the basis of railway wages. This was then multiplied by the number of farm families year by year.

Item 21: Net return for farm capital on farm wage basis.-This is a subtraction of item 19 from item 18, and represents the net return in dollars for the farm capital investment when the farmer is allowed hired-hand wages plus 30 per cent to cover the labor of his family.

Item 22: Net return for farm capital on railway wage basis.-This is a subtraction of item 20 from item 18, and represents the net return in dollars for the farm capital investment if the farmer and his unpaid-family labor are allowed the same scale of wages paid to railroad workers. Items 22 and 21 are merely two different ways of portraying net return on capital invested in Illinois farming industry.

FARM CAPITAL INVESTMENT

Item 23: The value of farm land. The acreage of farm land was determined on the basis of the 1910 and 1920 census years and interpolations made for the intervening years. The valuations of all plow land in the State, as indicated in the bulletin of March 15, 1925, of the division of livestock estimates of the United States Department of Agriculture from 1916 to 1920 were used as an index of the proportionate change in land values from year to year. For the years preceding 1916, estimates were made of the yearly changes based upon the differences between the 1910 census and 1916. The valuations for 1925 were determined on the basis of the proportionate decrease in land values as shown by the census figures for 11 counties released to date. The figures of all plow land referred to above were used as an index of the proportionate amount of change occurring annually between 1920 and 1925. Complete returns from the 1925 census for the State of Illinois indicate that the figures given for 1924-25 is about $250,000,000 less than the census figure; this would give somewhat larger valuations for the years between 1920 and 1924. The result of this lower valuation is to give correspondingly higher returns for those years. The difference amounts to only two-tenths of 1 per cent for 1924-25, the year most affected. Therefore, the earlier calculation is retained as substantially correct.

Item 24: Farm buildings.-The method of determining this was indicated under item 8 in figuring depreciation and repairs on the buildings.

Item 25: Livestock. The total value of livestock, by years, from 1910 to 1925 was determined from the published reports of the United States Department of Agriculture as given in the Crop Reporter and in Crops and Markets, by years for Illinois. No calculations were made for investment in poultry.

Item 26: Farm machinery. The method of determining the value of farm machinery was indicated under item 7 in calculating depreciation and repairs on machinery.

Item 27: One-half value of farm automobiles.-The method of determining the number of automobiles owned on farms by years was indicated under item 13. These automobiles were assumed to be worth $600 each, one-half of which was figured as an investment in the farm business.

Item 28: Miscellaneous.-This item includes working capital, feed, grain, supplies, and other miscellaneous items, and was determined on the basis of 20 per cent of the combined investment in livestock, farm machinery, and farm automobiles.

Item 29: Total investment.-This is the sum of items 23 to 28, inclusive. Item 30: Mortgage indebtedness.-This is derived from item 3 as submitted by the Brookmire service and from item 4 under miscellaneous items.

Item 31: Bank indebtedness.-This item was derived from item 4 as submitted from the Brookmire service, and item 5 under miscellaneous items.

Item 32: Total indebtedness.-This is the addition of items 30 and 31. Item 33: Unencumbered investment. This item is obtained by subtracting item 32 from item 29.

Item 34: Rate of return on capital investment on hired hand wage basis.-Item 21 is converted into a percentage return by dividing it by item 33. This indicates the rate of return earned on farm capital investment when the farmer and his unpaid family help are allowed hired hand wages.

Item 35: Rate of return on farm capital investment on railway wage basis.—This measures the same thing as item 34 in a slightly different way, in that it allows railroad wages instead of hired-hand wages for the farmer's labor and that of his family. This is determined by dividing item 22 by item 33. These figures

are somewhat lower than those in item 34. This is particularly true during the last five years, since the railway-wage basis during this time has been high compared to the hired-hand basis.

MISCELLANEOUS ITEMS

Item 1: Number of farmers in the State.-The method of determining this item was indicated under item 6 above, in figuring the cost of hired labor.

Item 2: Monthly wages of hired labor without board.-This item, by years, throughout the period, was furnished by the United States Department of Agriculture.

Item 3: Farm-owned automobiles.-The method of determining this item was indicated under item 13 above.

Item 4: Interest rate on farm mortgage indebtedness.-The high and low points, by years, were taken from the annual report of E. D. Chassell, secretary-treasurer of Farm Mortgage Bankers Association, as published in the October 3, 1925. issue of the United States Invester. The intervening years have been supplied, Item 5: Bank interest rate.-This item is from unpublished material furnished by Bureau of Agricultural Economics, United States Department of Agriculture, for years 1914, 1918, 1921, and 1923. Interpolated for other years.

Excerpt from a statement by Congressman Fort in the hearings before the House Committee on Agriculture, March 15, 1926:

Mr. FORT. May I make a statement and ask a question simultaneously? I have been accused of being opposed to this legislation, and in view of what Mr. Vrooman has said I want to put in the record this statement: That there is another reason, which he did not mention, and which, in my opinion, is another reason why an exportable surplus is a national necessity, and that is that upon the maintenance of an export surplus of various commodities depends our advantageous position in our balance of trade with foreign nations. If we eliminate the exportable balance of surplus of farm commodities, we will become a debtor nation within 10 years.

Excerpts from a statement by Dr. Thomas C. Atkeson, Washington representative, National Grange, before the House Committee on Agriculture, February 25, 1924:

Mr. ATKESON. Mr. Chairman and gentlemen of the committee, some of you perhaps know that it is my privilege to represent a farm organization in Washington. I think it is the oldest of the farm organizations. The last annual session was its fifty-seventh annual session. If in this more than a half a century of its existence this organization has not learned some things, it ought to have been chloroformed when it was younger.

So

Under the procedure in our meetings we follow a very different method from most of the loosely organized farm organizations. Our session covers a period of never less than 10 days, and has continued 16 days for the longest session. some deliberation and consideration is given to all the questions that come before this organization at its annual sessions. Its annual sessions are generally numerously attended. Three years ago, at the Boston session, I think that was the most numerously attended session that the organization has ever held. We probably had in that city 15,000 farmers. Being a dues-paying, secret organization, we know exactly how many people take the highest degree in the organization, which they can only get at a national session.

Away back in 1894, a gentleman who was then a member of the California State Grange, and whose proposition had been indorsed by that State grange, was presented to the National Grange.

I thank you very much, and if you care to have these 18 whereases placed in the record, I will be glad to turn them over to the reporter in order that he may do so.

Mr. SINCLAIR. I think they ought to be placed in the record, Mr. Chairman. The CHAIRMAN. Without objection, it is so ordered.

(The matter referred to is as follows:)

1. Our imports and interest on foreign loans must be paid in bullion or commodities, and as no nation can make such payments in bullion, therefore the payments in our country must be made in commodities.

2. A protective tariff on manufactures enhances their prices in the United States, and therefore renders their export impracticable, leaving only agricultural staples to constitute the great bulk of our exports.