The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-19


where 1t is. Iowa grows the corn
that fattens its own swine. Some
other pork producing States must
buy their corn from the outside, pay
ing freight to the railroads, as well
as a producers profit to the growers.
Samples of the Frenzy.
The frenzy that has turned Iowa
into a regular agricultural Wall Street
may, in part, be understood by the
reader of these lines when he thinks
about the following sample cases:
Seven years ago a farmer of AZ
bought 100 acres of land for which
he paid $1s5 an acre. In July, just
passed. he sold the farm to a retired
farmer living in town at $500 an acre.
The first farmer made a profit of s215
an acre, or $2l,500 altogether. The
purchaser himself, an experienced
farmer, paid $4,000 in cash, agreed to
pay $4,000 in money on March 1, 1920,
and gave a ten year mortgage for
$4,000 at per cent.
This man says that he bought the
farm as an Investment" and will
lease 1t to a tenant. But his interest
charge will be $4,000 year. or $50 an
acre. Does he expect ever to find a
tenant who will pay enough to meet
the interest? And where will he get
the $4,000 that he must have on hand
March /, next?
January Is real estate dealer pur-
chased a farm Of 1856 acres at 1915 an
acre. Holding 1t for six months, he
h. 60 N
acre. The profit here was s19,530. Up
to year ago the purchaser had been
a tenant. He paid the real estate
dealer 81 900 down, agreed to pay him
$4,000 next March and gave him a
mortgage of S44,6S0, due in ten years
at 5n per cent. interest. This, 1t will
be noticed was rather a large and dar-
ing venture for a man who was no
more than a renter in 1918. Between
now and next March he must arrange
for a cash payment of $4,000. Per-
! haps he hopes to sell the farm in the
meantime and thus pass the burden
to some other Spectator.
! Another man belonging to the ten
ant class bought quarter section
100 acres, in May for 1902 an acre
|
to the seller. The transaction called
for s4s.32o, cash and mortgages, or
which, at 81 per cent, the yearly
interest will amount to s2,416. This
farm. up to its sale, was rented fol
| $500 a year. The profit of the seller
was $24,64O, less s640 commission PAID
to his agent.
A farmer of As, owning 240 acres Of
land, valued at 1915 an acre. concluded
to test his luck at gambling. In July
this year, he bought $50 acres, sis
miles distant from the farm on which
he lives. He paid Sass an acre foi
the land, which four days earlier hac
been sold for s425. The advance. 1
will be seen. was $4,000, or $3.50
every twenty-four hours.
In this case the purchaser. a farme
1t should be remembered, paid 81 00
in money, bound himself to pay $26,
900 in money on March /, 1920, AM
gave a $4,000 mortgage at 5h pc
cent. due IN ten years The invest
ment' amounts to s74,4oo; the yearl!
interest is s4,0s2, which is at the rat,
OF S25 an acre. VIII any one sa!
that this farm has not been "over
capitalized? Can cheap corn h
grown on the farm or cheap porl
produced?
Not often will a farmer admit tina
he is gambling in land. There is, how
ever, one case on record. A man o
So, living on q large farm, purchase
another tract of 100 acres at $40 al
acre. He said that he bought the LAM
on a speculation. In less than thre
months he sold it for $500 an acre, o
at an advance of $1O.SO0. On the fac
Of matters, he won.
Two young farmers were the pur
chasers. The transaction totalled $50,
900. Only $1,000, however, or less thar
S per cent. was paid down. Mex
March a cash payment Of $1,000 viii
be due. Two mortgages were given
enc OF $4,000 for ten years at pc
cent. and the other of $4,000 70
twelve years at 51s per cent. Wha
will happen to these two young farm
ers IL they fail to sell the farm b.
ploughing time next spring?
Take the case of another farmer
living on a farm valued at $4,000
During July, this year. he bough
eighty acres, ten miles from his home
paying $34,S0o for the tract, whicl
was at the rate OF s495 an acre. Hi
interest charge is 1914 a year. H
says he intends to rent the property
Interest s24 an Acre.
But he must first find a tenant VIII,
will pay almost S24 an acre in rent i
he hopes to get a return sufficient I,
meet the interest only. 1t would seen
that this man Is also a speculator, n
matter what he says TO the contrary
Now and then, however, a farme
is found who is willing to pay a boon
price for land that he plans to cult
waite. Nineteen years ago a younl
man of 20 purchased a 1923 acre farm
at $50 an acre. Last May he sold i
to another farmer at a profit O
$35,670.
! He received $4,000. The balance
s41,5oo, is to be paid next March
Practically. this was a cash transac
ton, or will have become one II tn
balance is met promptly. as wa
agreed, and is not deferred. The pur
chaser, a farmer aged 80, says tina
he will move on the land and operat
1t. His investment was $43, $50. TIL
money is worth at least 8 per CEN
Interest, then, will amount to So
1880, or about $3.50 an acre. I
Iowa cash rent ranges usually fror
81 to $40. This transaction, even
the land did cost $3.50 an acre, rank