COSTS OF PRODUCING SUGAR BEETS 13 
A second method of calculating the capital charge is based on the 
prevailing mortgage rate of interest on the market value of land. 
The average rate paid in 1922 on mortgages on the sugar-beet farms 
investigated by the Tariff Commission was 7.14 per cent. If the 
annual net cash rental is capitalized at this rate, 7.14 per cent, the 
resulting value of the land is $188 per acre; if it is capitalized at 
5.5 per cent, the present rate charged on farm mortgages by the 
Federal land banks, the resulting capitalized land value 1s $244 per 
acre, slightly more than the farmer’s stated value of $222. 
The market values of land and the cash rental data obtained from 
the farmers on the cost schedules were carefully checked by the agents 
of the commission while in the field. Stated land values were checked 
against actual sales prices, and both land rentals and values against 
those given by such competent local men as county tax officials, 
bankers, real-estate dealers, county agricultural agents, and officials 
of the agricultural colleges, particularly professors .of agricultural 
sconomics and farm management. Where the values given by 
farmers were clearly out of line with data from these sources, adjust- 
ments were made. 
In 1922 the capital employed in sugar-beet production for farm 
equipment—implements, tools, and work horses—amounted in even 
numbers to $26 per acre of beets harvested for all farms investigated, 
and to $33 per acre for the farms investigated in Idaho. At 6 
per cent the capital charge for equipment, based on the total value 
of equipment rather than on the average value, amounted to $1.56 an 
acre, or 13.8 cents per ton of sugar beets for all farms investigated, 
and to $1.99 an acre, or 13.6 cents per ton of sugar beets for the 
farms investigated in Idaho. 
The values of the implements and work horses were obtained on 
the schedules from the farmers themselves by the agents of the com- 
mission and were carefully checked against actual sales values in the 
localities, as well as against the estimates of such local men as farm- 
implement dealers, the local farm-implement auctioneer, horse 
dealers, bankers, county agricultural agents, and officials of the agri- 
cultural colleges. Where the farmers’ valuations were clearly out of 
line with sales values and estimates by these local men, adjustments 
were made. The values given by the farmers were those obtaining 
in the fall of 1922 and served as a basis for determining 1921 and 
1923 values. 
It is important to note that the value of farm equipment—machin- 
ery and tools and work horses—shown in this report includes only 
that part of the total value of the equipment allocated to the sugar- 
beet crop and, therefore, does not represent the full value of all machin- 
ery and work horses used in sugar-beet production. Two examples 
may make this point clear. A wagon worth $100 was used in hauling 
hay and grain, as well as sugar beets. The farmer estimated that 
one-half the depreciation and repairs on the wagon was chargeable 
to sugar beets; therefore only this one-half of the value, or $50, was 
considered the capital involved in sugar-beet production. Similarly 
the cost of maintenance and operation and the value of each imple- 
ment were allocated to beets on the basis of use, allowance being 
made for the varying wear and tear due to different uses. 
In the application of this method of analysis to work horses the 
cost and value were allocated to sugar beets on the basis of the 
relative number of hours of direct horse labor emploved on the sugar-