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Tenancy as an Economic Institution: The Growth and Distribution of Agricultural Tenancy in Iowa, 1850–1900

Published online by Cambridge University Press:  11 May 2010

Donald L. Winters
Donald L. Winters
Affiliation:
Vanderbilt University
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Abstract

This article analyzes the growth and distribution of agricultural tenancy in Iowa from 1850 to 1900. For the period before 1880 (when the published censuses did not record land-tenure data), it estimates tenancy rates based on a twelvecounty sample. It analyzes several explanations of the causes of tenancy and concludes that it was a natural outgrowth of a normally operating market system rather than a sign of economic malfunction. The article argues that the widening margin between current rates of return to land and mortgage interest rates explains much of the growth in tenancy. It also finds that regional specialization in farming largely explains the spatial distribution of tenancy by 1900.

Type
Articles
Information
The Journal of Economic History , Volume 37 , Issue 2 , June 1977 , pp. 382 - 408
Copyright
Copyright © The Economic History Association 1977

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References

1 Bogue, Allan G., From Prairie to Cornbelt: Farming on the Illinois and Iowa Prairies in the Nineteenth Century (Chicago, 1963), pp. 63–65Google Scholar. Seddie Cogswell used this method in his study, Tenure, Nativity and Age as Factors in Iowa Agriculture, 1850–1880 (Ames, 1975), pp. 6–10Google Scholar.

2 Gray, L. C., et al. , “Farm Ownership and Tenancy,” United States Department of Agriculture Yearbook, 1923 (Washington, 1924), p. 507Google Scholar; see also William Bennett Bizzell, Farm Tenantry in the United States, Texas Agricultural Experiment Station Bulletin No. 278 (College Station, 1921), p. 110.

3 Goldenweiser, E. A. and Truesdell, L. E., Farm Tenancy in the United States (Washington, 1924), p. 21Google Scholar; see also Taylor, Henry C., Outline of Agricultural Economics (New York, 1931), pp. 318–20Google Scholar.

4 Gates, Paul W., “Land Policy and Tenancy in the Prairie States,” Journal of Economic History, 1 (May 1941), 80–82CrossRefGoogle Scholar; see also Gates, Paul W., “The Role of the Speculator in Western Development”, The Pennsylvania Magazine of History and Biography, 66 (July 1942), 327Google Scholar. William G. Murray comments: “Strange as it may seem, landlords and tenants made their appearance in parts of the state [Iowa] while virgin prairie was to be had for a nominal sum in other parts.” “Struggle for Land Ownership,” in A Century of Farming in Iowa, 1846–1946 (Ames, 1946), p. 12Google Scholar; see also Shannon, Fred A., The Farmer's Last Frontier: Agricidture, 1860–1897 (New York, 1945), p. 54Google Scholar.

5 Clay, Ida, and Winnebago counties are ignored because they have too few operators.

6 The Iowa Homestead and Western Farm Journal, 15 Apr. 1881, p. 1.

7 Ibid., 22 Dec. 1882, p. 4.

8 Gill, Thomas P., “Landlordism in America,” The North American Review, 142 (Jan. 1886), 54, 62Google Scholar.

9 Gates, “Land Policy and Tenancy in the Prairie States,” pp. 78–81; Swierenga, Robert P., Pioneers and Profits; Land Speculation on the Iowa Frontier (Ames, 1968), pp. 226–27nGoogle Scholar; see also Cox, LaWanda F., “Tenancy in the United States, 1865–1900: A Consideration of the Validity of the Agricultural Ladder Hypothesis,” Agricultural History, 18 (July 1944), 102Google Scholar.

10 Swierenga, Pioneers and Profits, pp. 177–78, 185, 190n, 225.

11 Ibid., pp. 192–205, 218–19; see also Fogel, Robert W. and Rutner, Jack L., “The Efficiency Effects of Federal Land Policy, 1850–1900: A Report of Some Provisional Findings,” in Aydelotte, William O., et al. , eds., The Dimensions of Quantitative Research in History (Princeton, 1972), pp. 411–19Google Scholar.

12 Swierenga first used this method of estimating speculative activity in his study, Pioneers and Profits, pp. 29–34.

13 The regression analysis omits Clay, Ida, and Winnebago counties for 1860 and Ida County for 1870 because they have too few operators. Had they been included the relationship between the two variables would have been significant at the .05 level, but negative. Cogswell, using Swierenga's data, also fails to find an association between tenancy and speculation in his eastern Iowa counties. Tenure, Nativity and Age as Factors in Iowa Agriculture, pp. 22–27.

14 Data gathered from Tenth Census of the United States, 1880, vol. 3, Agriculture (Washington, 1883), pp. 50–53Google Scholar (cited hereafter as Federal Agricidtural Census, 1880); Eleventh Census of the United States, 1890, vol. 6, Agriculture (Washington, 1895), pp. 138–41Google Scholar (cited hereafter as Federal Agricultural Census, 1890); Report of the Auditor of State, 1881, pp. 76–78; Report of the Auditor of State, 1891, pp. 77–79. The tax lists from the year immediately following the census year are used because the auditor's report was as of March 1 before 1857 and as of January 1 after 1857, while census data were collected in the summer.

15 County Recorder's records for Adair, Audubon, Black Hawk, Clay, Clayton, Des Moines, Henry, Jasper, Mitchell, and Webster counties. These counties are located throughout the state and, based on several agricultural measures, are representative of the state as a whole for the late nineteenth century. See Winters, Donald L., “Tenant Farming in Iowa 1860–1900: A Study of the Terms of Rental Leases,” Agricultural History, 48 (Jan. 1974), 149–50Google Scholar for a discussion of the selection of sample counties and leases used.

16 Swierenga, Robert P., “Pioneers and Profits: Land Speculation on the Iowa Frontier,” (Ph.D. dissertation, State University of Iowa, 1965), pp. 343–46, 348–58Google Scholar.

17 Twelfth Census of the United States, Taken in the Year 1900, vol. 5, Agriculture (Washington, 1902), p. 312Google Scholar (cited hereafter as Federal Agricultural Census, 1900, with appropriate volume number).

18 Swierenga, Pioneers and Profits, pp. 215–16; Cogswell, Tenure, Nativity and Age as Factors in Iowa Agriculture, pp. 26–27.

19 Swierenga, Pioneers and Profits, pp. 185, 190n, 216, 225–26.

20 The Iowa Homestead and Western Farm Journal, 10 Sept. 1869, p. 1; Bogue, From Prairie to Cornbelt, pp. 56–57; Earle D. Ross, “Farm Tenancy in Iowa,” Annals of Iowa, 3rd ser., 31 (July 1951), 37.

21 Manuscript Censuses, 1850–1880 (figures are based on all tenants and a 10 percent owner sample). Cogswell found similar age patterns for tenants and owners in eastern Iowa. Tenure, Nativity and Age as Factors in Iowa Agriculture, p. 31.

22 Throne, Mildred, ed., “Iowa Farm Letters,” Iowa Journal of History, 58 (January 1960), 43, 61Google Scholar; see also Danhof, Clarence H., “Farm Making Costs and the ‘Safety Valve,’ 1850–1860,” Journal of Political Economy, 49 (June 1941), 323Google Scholar; Murray, “Struggle for Land Ownership,” p. 13.

23 Parker, Nathan H., Iowa As It Is In 1856; A Gazetteer for Citizens, and a Hand-Book for Immigrants … (Chicago, 1856), p. 71Google Scholar.

24 Caird, James, Prairie Farming in America (New York, 1859), p. 93Google Scholar.

25 Reprinted in The Iowa Homestead and Western Farm Journal, 10 Sept. 1869, p. 1.

26 The Census of the United States: 1850 (Washington, 1853), p. 956Google Scholar (cited hereafter as Federal Census, 1850).

27 Lindsey, Adrian H., “The Nature and Causes of the Growth of Iowa Land Values” (Ph.D. dissertation, Iowa State College, 1929), pp. 185–86Google Scholar.

28 Taylor, Outline of Agricultural Economics, pp. 254–57; Holmes, C. F., Relation of Types of Tenancy to Types of Fanning in Iowa, Iowa Agricultural Experiment Station Bulletin No. 214 (Ames, 1923), p. 327Google Scholar; Lloyd, O. G., Farm Leases in Iowa, Iowa Experiment Station Bulletin No. 159 (Ames, 1915), pp. 172–73Google Scholar; Goldenweiser and Truesdell, Farm Tenancy in the United States pp. 67–70; Johnson, D. Gale, “Allocation of Agricultural Income,” Journal of Farm Economics, 30 (Nov. 1948), pp. 731–33CrossRefGoogle Scholar.

29 Schulz, T. W., “Capital Rationing, Uncertainty, and Farm Tenancy Reform,” The Journal of Political Economy, 48 (June 1940), pp. 313–17, 322–23Google Scholar; Taylor, Outline of Agricultural Economics, pp. 319–20.

30 Stewart, George, “Can Farms of the United States Pay for Themselves”, Journal of Farm Economics, 2 (Oct. 1920), 178Google Scholar; Kelso, M. M., “A Critique of Land Tenure Research,” Journal of Land and Public Utility Economics, 10 (Nov. 1934), 397CrossRefGoogle Scholar. George Stewart studied the purchase of farms through mortgage in 1921 and concluded that “about the only chance for an ordinary young man who has no capital to acquire ownership of a farm is to inherit one or to ‘marry’ one.” “Size of Initial Payment Required to Permit Purchase of a Farm in a Given Time,” Journal of Farm Economics, 3 (July 1921), pp. 122–27.

31 Swierenga, Pioneers and Profits, p. 148. Under the time entry system, the lender entered government land in his own name and gave the purchaser a bond guaranteeing transfer of the title when the terms of the contract were met.

32 Caird, Prairie Farming in America, pp. 90–91; Country Gentleman, 11 May 1871, p. 293.

33 Hamilton Freeman, 5 Dec. 1877; The Prairie Farmer, 15 Mar. 1879, p. 2.

34 Homes for Millions: The Cheap Land of Western Iowa (Council Bluffs, 1870), p. 10; “Land book, 1876–1879,” Cox and Kirkwood Collection, MsC 33, State University of Iowa Library, Iowa City. Mildred Throne found a third downpayment as typical in 1866 in southern Iowa. “Southern Iowa Agriculture, 1865–1870,” Iowa Journal of History, 50 (July 1952), 211–12Google Scholar.

35 The Iowa Homestead and Western Farm Journal, 23 July 1889, p. 5.

36 County Recorder's records for Franklin, Hamilton, and Webster counties; Report on Real Estate Mortgages in the United States at the Eleventh Census: 1890 (Washington, 1896)Google Scholar, map plate of Iowa, n.p.

37 Calculated from data presented in Murray, William G., An Economic Analysis of Farm Mortgages in Story County, Iowa, 1854–1931, Iowa Agricultural Experiment Station Bulletin No. 156 (Ames, 1933), pp. 372–73Google Scholar.

38 Ninth Census of the United States, 1870, vol. 3, Agriculture (Washington, 1883), p. 146Google Scholar (cited hereafter as Federal Agricultural Census, 1870); Federal Agricultural Census, 1900, vol. 5, p. 276. Interest rates from Story County are used as estimates for the state; the assumption that these rates approximate those of the state is based on the fact that Story's average rate for the 1880s was 7.8 percent while the state's was 7.7 percent. See Murray, An Economic Analysis of Farm Mortgages in Story County, Iowa, p. 396 and Report on Real Estate Mortgages, p. 249.

39 Average rates of return were found by calculating average rent per acre as a percent of average value per acre for each of the ten counties. The rental percentages were then weighted by the number of tenants in the county at the end of the decade, and the weighted average over the ten counties was calculated. Federal Agricultural Census, 1870, pp. 146–50; Federal Agricultural Census, 1880, pp. 114–15; Federal Agricultural Census, 1890, pp. 207–8; Federal Agricultural Census, 1900, vol. 5, pp. 276–77; Murray, An Economic Analysis of Farm Mortgages, p. 249.

40 Schickele, Rainer, Farm Tenure in Lowa: Facts of the Farm Tenure Situation, Iowa Agricultural Experiment Station Bulletin No. 356 (Ames, 1937), p. 245Google Scholar; see also Johnson, “Allocation of Agricultural Income”, pp. 731–33. Other studies have observed that the capitalization of land values at low rates encouraged tenancy. See Stewart, Charles L., Land Tenure in the United States with Special Reference to Illinois (Urbana, 1916), p. 81Google Scholar; Wehrwein, Carl F., “The ‘Agricultural Ladder’ in a High Tenancy Region,” Journal of Land and Public Utility Economics, 7 (Feb. 1931), p. 76CrossRefGoogle Scholar; Haken, William Ten, “Land Tenure in Walnut Grove Township, Knox County, Illinois”, Journal of Land and Public Utility Economics, 4 (Feb. 1928), pp. 190–91CrossRefGoogle Scholar.

41 Goldenweiser and Truesdell, Farm Tenancy in the United States, p. 65.

42 Manuscript Censuses, 1850, 1880 (figures based on all tenants and a 10 percent owner sample). The amount of improved acreage in tenant farms moved from 74 percent to 79 percent of that of owner-operated farms between 1850 and 1880.

43 Cogswell, Tenure, Nativity and Age as Factors in Iowa Agriculture, pp. 47–48.

44 Federal Agricultural Census, 1900, vol. 5, pp. 8, 148. Tenants had a slightly higher percentage of improved acreage by 1900.

45 Manuscript Censuses, 1850–1880; County Auditor's records for Franklin, Hamilton, and Webster counties.

46 A Biographical Record of Hamilton County, Iowa (Chicago, 1902)Google Scholar; Biographical Record and Portrait Album of Webster and Hamilton Counties, Iowa (Chicago, 1888)Google Scholar; Lee, J. W., ed., History of Hamilton County, Iowa (Chicago, 1912), vol. 2Google Scholar; Pratt, Harlow M., History of Fort Dodge and Webster County, Iowa (Chicago, 1913), vol. 2Google Scholar; Stewart, I. L., ed., History of Franklin County, Iowa: A Record of Settlement, Organization, Progress and Achievement (Chicago, 1914), vol. 2Google Scholar; The Biographical Record of Webster County, Iowa (Chicago, 1902Google Scholar).

47 Schulz, “Capital Rationing, Uncertainty, and Farm Tenancy Reform,” pp. 313–16; Tharp, Max M., “A Reappraisal of Farm Tenure Research,” Land Economics, 24 (Nov. 1948), 323CrossRefGoogle Scholar.

48 The regression equations are Y = 11.5 + .34X1 (R2 = .28) and Y = 33.3 + 2.7X2 (R2 = .33), both significant at the .001 level, where Y = estimated percent of change in tenancy rate, X1 = percent of change in land value per acre, X2 = percent of change in farm value as a portion of total investment. Since X1 and X2 are closely correlated (.7), the two variables together account for little more of the observed variation than each does separately. For the whole state farm value as a portion of total investment (farm value + implement value + livestock value) increased from 77 percent in 1850 to 82 percent in 1900. Federal Census, 1850, pp. 956–57; Federal Agricultural Census, 1900, vol. 5, p. 276.

49 Stepwise regression procedure has been used for the selection of variables to be included in the regression equations used in this article. Variables not significant at .05 level or below were rejected. For a discussion of the procedure employed, see Draper, N. R. and Smith, H., Applied Regression Analysis (New York, 1966), pp. 171–72Google Scholar.

50 While land value increased 4.8 times between 1850 and 1900, equipment value increased 2.2 times and livestock value 3.9 times. Federal Census, 1850, pp. 956–57; Federal Agricultural Census, 1900, vol. 5, p. 276. Several historians have pointed to rising implement costs as a major determinant of increasing tenancy, but, as Cogswell has noted, they exaggerate its importance. See Gates, Paul W., The Farmer's Age: 1815–1860 (New York, 1960), p. 293Google Scholar; Shannon, The Farmer's Last Frontier, p. 146; Cogswell, Tenure, Nativity and Age as Factors in Iowa Agriculture, pp. 118–19.

51 Caird, Prairie Farming in America, pp. 11, 94.

52 Wallaces' Farmer, 14 Jan. 1898, p. 21; see also Wallaces' Farmer and Dairyman, 19 June 1896, p. 406.

53 Country Gentleman, 24 Nov. 1864, p. 331.

54 American Agriculturalist, Feb. 1878, p. 74.

55 Wallaces' Farmer, 9 Nov. 1900, p. 1094.

56 Bogue, From Prairie to Cornbelt, p. 57; see also Bogue, Allan G., “Foreclosure Tenancy on the Northern Plains,” Agricultural History, 39 (Jan. 1965), 3–16Google Scholar.

57 Murray, “Struggle for Land Ownership,” p. 13.

58 Gates, “The Role of the Speculator in Western Development,” p. 327; Shannon, The Fanner's Last Frontier, p. 146.

59 Report on Farms and Homes: Proprietorship and Indebtedness in the United States at the Eleventh Census: 1890 (Washington, 1896), p. 44Google Scholar.

60 Report on Real Estate Mortgages, p. 107, gives foreclosure rates for three states in the 1880s, but the data are of little use. Allan G. Bogue gives estimates of foreclosure rates for several areas in the late nineteenth century in “Land Credit for Northern Farmers,” Agricultural History, 50 (Jan. 1976), 91.

61 Murray, An Economic Analysis of Farm Mortgages in Story County, Iowa, pp. 380, 396.

62 Ibid., p. 371.

63 County Recorder's records for Greene and Henry counties.

64 County Recorder's records for Franklin, Hamilton, and Webster counties.

65 County Auditor's records for Franklin, Hamilton, and Webster counties.

66 Black Hawk County Land Deed Book 39, p. 111.

67 The incidence of foreclosure tenancy may well have been greater in the plain states in the 1880s and 1890s. See Bogue, “Foreclosure Tenancy on the Northern Plains,” pp. 3–16.

68 Hibbard, Benjamin H., Agricultural Economics (New York, 1948), pp. 211–14Google Scholar; Black, John D., et al. , Farm Management (New York, 1948), pp. 80–81Google Scholar; Kelso, “A Critique of Land Tenure Research,” p. 397.

69 The regression equation is Y = 1.5 + 2.9X1 (R2 = .13), significant at the .05 level, where Y = estimated tenancy rate and X1 = livestock value per farm. Data from Manuscript Census, 1860.

70 See Bogue; From Prairie to Cornbelt, pp. 216–41, for an excellent discussion of this growing specialization.

71 Manuscript Censuses, 1850–1880 (figures are based on all tenants and a 10 percent owner sample); Federal Agricultural Census, 1900, vol. 5, pp. 8–9. Stewart found a spatial association between tenancy and grain production in Illinois. See Land Tenure in the United States with Special Reference to Illinois, p. 120; see also Goldenweiser and Truesdell, Farm Tenancy in the United States, pp. 33–44.

72 Gates, Paul W., Frontier Landlords and Pioneer Tenants (Ithaca, 1945), p. 51Google Scholar; Hibbard, Agricultural Economics, p. 215; Goldenweiser and Truesdell, Farm Tenancy in the United States, p. 72; Wehrwein, George S., “Place of Tenancy in a System of Farm Land Tenure,” Journal of Land and Public Utility Economics, 1 (Jan. 1925), 77CrossRefGoogle Scholar.

73 Manuscript Censuses, 1850–1880 (figures are based on all tenants and a 10 percent owner sample). Cogswell found that immigrants in eastern Iowa had a higher incidence of tenancy than owners, but concludes that this was due to distortion introduced by one county with an unusually high proportion of foreign-born. Tenure, Nativity and Age as Factors in Iowa Agriculture, pp. 37–39.

74 Data on percentage of foreign-born from The Census of Iowa, As Returned in the Year 1867 (Des Moines, 1867), pp. 3–67Google Scholar; The Census of Iowa As Returned in the Year 1869 (Des Moines, 1869), pp. 1–61Google Scholar; Twelfth Census of the United States, Taken in the Year 1900, vol. 1, Population (Washington, 1901), pp. 501–2Google Scholar.