The river press. [volume] (Fort Benton, Mont.) 1880-current, 1911-04-19
Land Values
in Montana.
BY E. S. Cooley, superintend.
ent Of Farmers Institutes.

BY z. S. Cooley, Superintend.
ent Of Farmers Institutes.
!. + + + + + + i. i. !. i. - + + +
Probably in no part of the United
States have the prices of land ad.
vanced more rapidly during the past
half decade than in certain parts OF
Montana. The doubling of the price
each year for three or four years is
mo- unheard of, and q%uadrupling in
hve years Is a common thing. To
some Of the older residents of the
state, accustomed to regard land val.
ues as low, and sceptical about the
safety of land as an investment at
any price, this increase in prices looks
very questionable. There is a com.
mon apprehension of a decline in
prices that will retard the states
progress and bring financial ruin to
investors.
am frequently asked If land prices
have not gone too high; If the land
is really worth the sum asked; If
there will not be a subsequent decline.
One section of land In Fergus county,
sold at So per acre four years ago
l1906), upon which no improvements
have been made, lately changed hands
at $42. Eastern Montana can produce
scores of examples of lands that have
advanced in price from SO or 81 to $25
to $40 per acre in five years. Is it
safe for the settler or the investor t.
pay these latter prices?
Land values may be divided into (1)
the intrinsic, based upon capacity to
produce crops, and (2) place, depend
ing on location. For example: A.
Land that will grow a steer worth
$50, less $40 cost in four years on ten
acres, produces an annual income of
81 per acre gross and has an intrinsic
value for that purpose of about $40
per acre. B. Land that grows two
tons of hay worth So per ton at a cost
Of Sc per acre is paying 10 per cent
on an investment of 500 and is worth
approximately that sum. G.. Land
that produces twenty-five bushels of
wheat worth 81 per bushel at a cost
of $40 per acre, earning SIS per acre
net, is paying 10 per cent on $3.50.
D. Land that produces one ton of
tobacco worth 5000 at a cost of SIS
per acre, leaving $125 net, is paying
10 per cent IN a value of $1,25O per
acre. E. Land that produces annual
ly $500 worth of lettuce and $500
worth of celery per acre at a cost of
800 for manure and $500 for labor,
after paying taxes and other charges
amounting to 800 additional, would
vet pay 10 per cent on a valuation OF
$4,000. The market prices of these
lands may be more or less as follows:
"A, $40 per acre; B, $25; G, $50 to $40;
D, 5000 to $500; and E. $1,000 to
$4,000, for price and value become
approximately identical only under
complete utilization and perfect on
ditions. Place value, depending on To-
cation, may be $1,000 900 per acre in
certain parts of New York city, $1,000
per acre in Great Falls and nothing
in unsettled territory away from the
arteries of commerce..
The law of supply aid demand at.
fects place value and price far more
than it does intrinsic value. For ex-
ample, though land may be capable
of producing just as much wheat in
Montana, 1000 miles from Minneap-
oils and 100 miles from a railway, as
one mile from P%illsbury's mills, In the
latter case twenty-five bushels worth
$25, produced at a cost of $40, leaves
SIS, or 10 per cent OF $3.50 value; in
the former case we must deduct 20
cents per bushel for freight by rail-
way and 80 cents per bushel for haul
ing to railroad, leaves 30 cents as the
farm value of the crop. which means
q net deficit and no value of the land
tor wheat growing.
Again we might ind $4,000 acres Of
wheat land close to the railroad. cap
able OF growing twenty-five bushels o.
wheat per acre at a cost of SO. will
a 20-cent freight rate to a 81 pei
bushel market. Although such lant
produces $12 per acre net. or 10 pei
cent on $120. II only a small proper
ton of this area Is producing a crop
the price of 1t all will be regulated b.
that of the no%n-producing portion. Ii
Iowa. with no vacant unproducint
land. the price will approximate thu
value. 1920 per acre: in Montana thu
price will depend largely upon the pro
portion ~unoccupied.
Do l think Montana lands are be
coming too high in price? Do ] con
slider land investments at presen
prices precarious? Most emphatical
ly, no!
Unirrigated wheat lands that will
produce thirty to forty bushels O