Judith Gap journal. [volume] (Judith Gap, Mont.) 1908-19??, 1911-06-02
Land Values
in Montana.
BY F. s. Cooley, Superin:end.
ent Of Farmers Institutes.
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Probably in no part Of the United
States have the prices of land adj
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
not unheard of. and quadrupling in
five years is 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; ii
there will not be subsequent decline.
One section of land in Fergus county.
sold at So per acre four years ago
(1906). 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 to
pay these latter prices?
Land values may be divided into G)
the intrinsic. based upon capacity to
produce crops, and (2) place. depend.
ing on location. For example: A.
Land that will grow 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 cost
of Sc per acre is paying 10 per cent
on an investment Of 500 and is worth
approximately that sum. c. 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 cost of SIS
per acre. leaving $125 net. is paying
10 per cent on value of $3.50 per
acre. E. Land that produces annual
~ $500 worth of lettuce and $500
worth of celery per acre at a cost of
500 for manure and $500 for labor.
after paying taxes and other charges
amounting to 500 additional. would
yet 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 con.
ditions. Place value. depending on To-
cation, may be 100000 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 and demand af-
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 Pillsbury's mills. in the
latter case twenty-five bushels worth
$25, produced at cost of $40. leaves
SIS. or 10 per cent on $3.50 value: in
the former case We must deduct 20
cents per bushel for freight by rail.
way and so cents per bushel for haul
ing to railroad. leaves 30 cents as the
farm value of the crop. which means
a net deficit and no value of the land
for wheat growing.
Again we might ind $4,000 acres Of
wheat land close to the railroad, cap
able of growing twenty-five bushels of
wheat per acre at cost Of SO. with
a 2O.cent freight rate to a 81 per
bushel market. Although such land
produces S12 per acre net, or 10 per
cent on 1920, If only a small proper
ton of this area is producing crop.
the price of it all will be regulated by
that of the non.producing portion. In
Iowa. with no vacant unproducing
land. the price will approximate the
value. $l21 per acre: in Montana the
price will depend largely upon the pro.
portion unoccupied.
DO think Montana lands are be.
coming too high in price? Do con.
slider land investments at present
prices precariOus? Most emphatical.
ly, no!
Unirrigated wheat lands that will
produce thirty to forty bushels OF