El Paso herald. (El Paso, Tex.) 1901-1931, 1912-01-13
HIGH RENT IS
POOR MAN s
BURDEN
One-Fifth of Living Ez-
penses Usually Go to the
Landlord.
REAL EsATE VALUES
SHOW BIG INCREASE
- FrederIe ]. Haskin.l


IN the enhancement Of real estate
values and rental charges. Economists
agree that real estate values are the
best barometers Of market conditions.
since they are more sensitive to fluc-
tuations There are some who explain
the high cost of living by saying that
one Of the responsible elements is the
rise in realty prices. They contend
that the increased price Of farming
lands makes necessary a proporuonate
increase liz the price Of farm COM
modities. Another school Of thought
replies that this is clearly the case Of
putting the cart before the horse
OF entirely mistaking the cause for
the effect.
Not the Cause, but the Effect.
DIT. Thomas Nixon Carter professor
OF political economy in Harvard uni
versity, has declared that student
would fail TO pass the lnIryutclo
course in economies at Harvard shOulo
he make such a blunder He says that
every student Of economics Knows that
the high price Of lana IS not the cause,
but the effect, Of the high price OF
farm products; that If the price or
these products should fan 10 an IN
remuneratfre value. high land values
win disappear; while, on lne ol ll
hand. If the price Of these commodities
rises still higher, land values VIII con-
tinue TO mount
II is probable that the contention
Of DR.. Carter IS wei FOUNDED w men
the average buyer Of farm land goes
into the market he fixes the price ne
rfu pay by the prospective earning
mower Of the land ne is purchasing
II he believes that an era OF lower
prices of farm commodities is ahead
of him he concludes that the pre-
vailing price is too high II, on the
other hand. he believes an era OF even
higher prices is ahead. he viii pay
higher price for the land
True in Cities. Also.
What is true in the case OF farming
land is likewise true with relation 10
CITY property. While some real estate
IS bought and held for speculative pur-
poses, the maJOr portion is valued en-
tfrelv upon basis Of its earning
power. Rents are fixed by the value
many Instances especial desirabllity
leads to higher rents than values
would warrant.
How rapidly rents have increased in
2 decade is disclosed by such state
ments as those OF prominent New
York grocery firm to the effect that
81 was paving S59,0Oe a year rental in
1900. This firms estimates show that
1910. This firms estimates show that
its selling expense in 1910 amounted to
- per cent of the gross sales. as
against s = percent in 1900, consider
able percentage Of which they attribute
10 the remarkable rise In rental
charges.
Eighteen Percent For Rents.
A few years ago "a detailed inquiry
into the family budgets Of more than
$4,000 families having an income OF
less than $500 year. This inquiry
revealed the fact that 43 percent Of
So mHrnar
was expended FOR food. is percent for
rent and l3 percent for clothing The
inquiry also revealed the fact that the
average family was paying S122 year
rent Another inquiry was made into
the actual amount Of income necessary
70 insure a proper and decent living
condition for a working man and his
family in New York city. In fact,
number Of independent inquiries were
made and the average OF them was
taken The result OF this examination
showed that II would cost not less tnan
$3.50 g year Tor the average Working
man to maintain an average family in
proper surroundings in New York city.
and thar approximately One-fifth OF
this would have 10 be paid out for
rent
One of the Burdens.
How heavily the burdens Of higher
rentals and food values fall upon the
population Of the average city IS shown
by an Investigation conducted in Bos-
examined and the fact was revealed
that there were nearly 5000 uncol-
lectabie account outstanding. Almost
lectable accounts outstanding. Almost
owed by people who were absolutely
From this it appears that fully
percent Of the Boston people have been
unable To meet the rising cost Of Hv-
ing The conclusion Of the invest-
gators was that 1t would not be fair
TO presume that these accounts rep
resented wilful living beyond the
means Of those who made them, but
that. on the other hand, they indi-
Gated for the most part the inability
OF the people to make their income
meet their necessary outgo.
Values Increase Rapidly.
Realty values in the United States
have increased with remarkable rapid
ity. The census bureau Of 1900 placed I
the total value Of all real estate in
the United States at $4,000, o0O.O00. II
the enhancement from 1903 to 1912
has been prcpOrtionately as large as (
that from 1900 TO 1903, the realty va I
1es OF the country today approximate I
$50 600 600 00o Realty values fin New /
York city increased nearly 81. 600, O00,-
boo In a single tWO-year period. The I
worlds record price for real estate IS 4
81 per square inch. price which was !
paid for a plot OF ground in Wall /
street One may gather an idea Of 4
relative realty values from the state 4
nent that I'm san Francisco one may \
find property which sells at more than !
$4,000 a front foot, while in Rome /
so front foot IS the record price.
Under the stimulus Of higher prices.
agricultural lands have increased in Z
value by leaps and bounds It is es-
rmated that the cotton lands Of the
south have doubled in value in 10
ears; while In some cases the value
Of wheat lands in the northwest has
increased 80 percent. In fact, farm
Ing lands have reached such a plane
Of value that # the farmer should
count his work and that OF his family
~ the usual rates. he would find great
difficulty IN making the interest on his
investment.
The Farmers Fixed Charges
For instance. the farmer who grows
wheat or Sl5O-an-acre land has q fixed
charge Of So an acre thereon for in
-erest Add 10 this his taxes ana his
insurance and Il viii be seen that IL
axes some y or Is bushels Of wheat
b meet his fixed charges alone.
There has been no nationwide in
luiry into the cost Of producing farm
products OF into the profits made by
he farmers The nearest approach to