Rent of Land

Section 2: Rent of Land

surface, adapted to the culture of the grape, determines the supply of that productive service. If the soil, capable of grow- ing good wine, be very limited in extent, and the demand for such wine very brisk, the profit of the soil itself will be ex- travagantly high.

When a farmer takes a lease of land, he pays to the proprietor the profit accruing from its productive agency, and reserves to himself, besides the wages of his own industry the profit upon the capital he embarks in the concern; which capital consists in implements of husbandry, carts, cattle, &c.

He is an adventurer in the business of agricultural industry; and, amongst the means he has to work with there is one that does not belong to him, and for which he pays rent i.e., the land. It is worthy of remark, that all land, that yields any profit at all, however trifling the amount, even so little as 20 cents the acre, or even less, may be kept in a state of cultivation= and there have been many instances of its cultivation under such circumstances. Herein it differs from capital and industry. A labourer, if he finds himself settled in a place, where his labour does not yield him what he has reason to expect, can migrate to another. So, likewise, capital quickly flows from a chan- nel, that affords a less, to one that affords a greater return. But land has not the same facilities= it is of necessity immove- able; consequently, out of its gross product, after the deduc- tion in the first instance of all advances of capital, with inter- est, as well as of the profits of industry, without which there could be no product whatever, there still remains to be de- ducted the expense of carrying the product to the market, or place of exchange. When these several deductions absorb the whole product of the land, the land itself yields no profit at all, and the proprietor can never succeed in getting a rent from it. Even if he cultivate it himself, he can only gain a profit on his capital and industry, but will receive none what- ever from the bare ownership of the land. In Scotland, there are tracts of unproductive land thus cultivated by the propri- etors, which it would not answer for any one else to under- take. So, likewise, in the back settlements of the United States, there are tracts of great extent and fertility, whose revenue alone would not maintain the proprietors; yet they are, never- theless, cultivated with success= but it is by the proprietors themselves, who consume the product at the place of growth, and are obliged to superadd to the profit of the land, which is little or nothing, the further profit of capital and personal in- dustry, which afford a handsome competency.

The preceding section was occupied in explaining the source of the profit of land.

The rent of land is generally fixed at the highest rate of that profit, and for the following reason.

Agricultural adventure requires, on the average, a smaller capital, 80 in proportion, than other classes of industry, reck- oning the land itself as no part of the capital of the adven- turer. Wherefore, there is a greater number of persons able, from their pecuniary circumstances, to embark in agricultural, than in any other speculations; consequently, a greater com- petition of bidders for land upon lease. On the other hand, the quantity of land fit for cultivation is limited in all countries; whereas the quantity of capital and the number of cultivators have no assignable limitation. Landed proprietors, therefore, at least in those countries which have been long peopled and cultivated, are enabled to enforce a kind of monopoly against the farmers. The demand for their commodity, land, may go on continually increasing; but the quantity of it can never be extended.

This circumstance is equally applicable to the nation at large, and to each particular province or district. The number of acres to be rented in each province is incapable of extension; whilst the number of persons in a condition to rent them has no fixed and absolute limit.

Whenever this is the case, the bargain between the land-holder and the tenant must always be greatly in favour of the former; and, whenever there is any portion of the soil, which yields to the latter more than the interest of his capital and the wages of his industry, a higher bidder will soon offer himself. The liberality of a few proprietors, the distance at which they hap- pen to reside, the ignorance of others, and even of the farm- ers themselves, and the imprudence of a few more, may some- times operate to depress the ratio of rent below the maximum of profit; but these are accidental circumstances, which act for a season only, and can never prevent the regular and con- stant action of natural causes, which must in the end prevail. It is obvious, that land, though in a state of cultivation, vields no profit, when no farmer will pay rent for it, which is a con- vincing proof that it gives no surplus, after allowing for the profit of the capital and industry requisite for its cultivation. In the instance just mentioned, the effect is occasioned by the distance of the market; the expense of transport swallows up the profit, which might otherwise be made of the land. Other instances might be adduced, in which badness of seasons, war, or taxation, have produced the same effect, and partially or totally absorbed the profit of land, and thus thrown it out of cultivation. 79

Besides this advantage accruing to the land-holder, derived from the very nature of things, he has likewise in general the advantage of possessing, or being able to accumulate greater wealth, and sometimes credit, patronage and influence, into the bargain= but the first advantage is alone sufficient to in- sure him the sole benefit of any circumstances, that may hap- pen to enhance the profit of land. The opening of a canal or road, the increase of population, wealth, and affluence in the province, always operate to raise his rent. He also benefits by every improvement in the cultivation; for a man can afford to pay dearer for the hire of an instrument, when he knows how to turn it to better account. ants so confident of undisturbed possession, as to build upon ground held on lease. Such tenants improve the land, as if it were their own; and their landlords are punctually paid; which is less frequently the case elsewhere. The land is sometimes cultivated by persons possessed of no capital whatever= the proprietor furnishes himself the requi- site capital, as well as the land. They are called in France, metayers, and commonly pay to the landlord half the gross product. This arrangement is to be met with only in the in- fancy of agriculture, and is of all others the least conducive to improvement; for the party who bears the expense of ame- lioration, whether landlord or tenant, makes the other a gra- tuitous present of half the interest on his advances. This kind of tendency was more common in the feudal times, than it is at present. The lords were above tilling the land themselves, and their vassals had not the means. The largest incomes were then derived from the land, because the lords were large pro- prietors; but they bore no proportion to the extent of the land. Nor was this owing to the defect of agricultural skill, so much as to the scarcity of capital devoted to improvements. The lord felt little anxiety to improve his property, and expended, in a way more liberal than productive, an income that he might easily have tripled. He levied war, gave feasts and tourna- ments, and maintained a numerous retinue. If we look at the then degraded condition of commerce and manufacture, superadded to the insecurity of the agricultural interest, we need go no further for the explanation of the reason, why the bulk of the community was in the extreme of indigence; and why, independently of every political cause, the nation itself was weak and impotent. Five departments would now be able to repel attacks, which overwhelmed all France at that pe- riod= but happily for her, the other states of Europe were no- wise in a better condition.

When the proprietor himself expends a capital in the improvement of his land, in draining, irrigation, fences, buildings, houses, or other erections, the rent then includes, in addition to the profit of the land, the interest likewise of the capital so expended. 81

The farmer may sometimes undertake these expenses of ame- lioration himself; but he can only calculate on receiving in- terest on the outlay during the continuance of his lease= at the expiration of which, the benefit must devolve to the land- holder, being wholly incapable of removal= thenceforward the landlord derives the whole profit, without having made any of the advances= for he receives a proportionate increase of rent in consequence. The farmer should, therefore, engage only in those improvements, whose effects will last no longer than his lease; unless the lease be long enough, to allow the profit arising from his improvements to repay the whole out- lay, together with the interest. It is in this way, that long leases operate to increase the product of the land; and it is evident the effect will be the greatest, when the land is farmed by the proprietor himself; for he is far less likely, than the farmer, to lose the benefit of such advances; every judicious improve- ment yields him a permanent profit, and the original outlay is amply Tepaid, when the land is finally disposed of. The farmer’s certainty of reaping the advantage till the end of his lease, is equally conducive to the improvement of landed prop- erty with the length of leases. On the contrary, such laws and customs, as authorize the cancelling of leases in specified cases, as in case of sale by the proprietor, are highly prejudi- cial to agriculture; since the farmer will hardly venture to undertake any considerable improvement, if kept in continual fear of seeing an intrusive successor appropriate the recom- pense of his ingenuity, labour, and capital. In fact, every im- provement he should make would but increase the risk of that injustice; for land is far more saleable in good condition than otherwise.