value for each; and he has shewn most irrefragably that rent, profit, and interest all proceed from the same cause-the excess of the Value above the cost of production, which can only be effected by the Intensity of the Demand and the Limitation of the Supply. They all stand or fall together, and if the State has the right to confiscate the one it has the right to confiscate the others; and we earnestly commend M. de Fontenay's volume to the attention of those who believe in Mill's scheme of confiscating the rent of land.

13. The Rent of land is an excellent example of the general Equation of Economics. Rent is the money paid by the farmer to the landlord for the use of the land. The first indispensable condition of rent arising is, that one person is the owner of more land than he can conveniently cultivate himself. A landlord is a capitalist whose capital consists of land; and, like all other capitalists, he either trades with it himself or lets part of it out to others to trade with, and of course he is entitled to receive interest for the use of his capital like any other capitalist. The difference between a landlord who cultivates his own land and a farmer, is just the difference between the man who trades with his own or on borrowed capital. A man who has a large amount of capital in land is in a very different position to one who has his capital in money, because no single man can trade with any very large amount in land. It is very rarely a man farms more than a thousand acres of land, but many a merchant trades with half a million of money. Now, unless a man can trade with his land himself, or get some one else to do so, it is of no value to him; but if the merchant cannot trade profitably with half a million of money, it will still be useful to him-he can always get some interest for its use, however small. It is, therefore, a positive necessity to a man who possesses a large estate to let part of it out to farmers. No misfortune to a large landed proprietor could be worse than to have a considerable extent of his estate thrown upon his hands at once. Now, this circumstance increases the power of the person who wants to borrow the capital over the one who wants to lend it; it is a greater service done to a landlord to take a farm than it is to a tenant to let it to him. In this case, like as in other loans of capital, we must consider the farmer as the purchaser of the service; but when the capital to be borrowed is land, the power of

the purchaser over the seller is much greater than when it is money. Hence, we must expect that the price of it should necessarily be lower; and this is what we actually find to be the case. The rent of land, or the money paid for the use of that species of capital, is much less than in the safest mercantile operation. There are, no doubt, other causes, which also tend to produce a similar effect, operating simultaneously to increase the difference; but the cause we first assigned is a true cause of a certain amount of that effect, though not of the whole of it. The rent of land rarely exceeds 2 to 3 per cent. of the value of the land, and is often less than that.

14. During the great revolutionary war, a succession of bad harvests, joined to other causes, produced an enormous rise in the price of corn, so that in 1812 it reached the price of 130s. a quarter. Owing to this extraordinary rise of price, an immense quantity of inferior land was taken into cultivation at an extravagant cost, because the farmers expected that high prices would be permanent. Now, let us suppose that the old lands in cultivation had produced no more than they had done during the years of scarcity, what would have been the necessary consequence of this additional quantity of corn added to the market? As the quantity of land taken into cultivation could only be increased gradually, the first quantity added to the existing supply would not have added much to it. The proportion between the increment and the existing supply would not have been great, consequently it would only lower prices a little, and would leave a large profit to the producer. But the more land that was brought into cultivation, the more would the quantity of corn brought to market be, and the more would prices be lowered. And this might go on until the constantly increasing quantities of corn lowered the price so much, that it would only just leave a profit, and further production would cease. And it is perfectly evident, that it would always be the market price which would indicate how great an expense could be afforded as cost of production. Hence, we see that it was the increased price of corn that called inferior land into cultivation, and it was the increased quantity of corn produced that lowered the market price, until the cost of production and the market price might possibly meet. But whether they did so or not would entirely depend upon the quantity produced.

So, in the Highlands of Scotland, the rent of a sheep-farm depends upon the price of wool and sheep, and not the reverse. A Highland farmer would smile if he were told that the rent he paid raised the price of wool and sheep; when he knew well enough that the rent he could afford to pay depended upon the price of the produce.

Hence, also, we see the utter fallacy of Ricardo's rule, that it is the cost of production under the most unfavourable circumstances that regulates price. The truth is that it is the exact reverse. The price regulates the greatest cost of production that can be afforded, or the most unfavourable circumstances under which production can take place.

15. From these observations we gather that the farmer is just in the same position as the manufacturer; neither of them can command the price they please for the articles they have to sell ; consequently they must each consider what will be the probable value of it when sold, and then they must devote the whole of their skill and energy in diminishing the cost of production. In order to do this each of them calls in the aid of science; the manufacturer in the mechanical form of machinery, the farmer in the chemical form of manures and draining, and every other means that science or skill can suggest to develope the productive powers of the earth. Neither of them can fix absolutely what the cost of production is, until every improvement in science has been adopted, and every resource exhausted. It is undoubtedly true that the cost of production and the value of the produce must have a relation to each other, but the question which is to govern the other is the whole difference between protection and free trade. Under the former system, the cost of production might be as extravagant and wasteful as possible; the land might be undrained and badly cultivated, and the object was to secure by law a price which should under all circumstances cover every conceivable piece of waste and bad management, which was, with somewhat of a mauvaise plaisanterie, called the natural price of corn. While the one system held out a direct reward for every species of mismanage ment and ignorance, and stinted production, the other, on the contrary, encourages skill and energy, and stimulates production, and so confers upon the community at large the blessings of as great abundance and cheapness as circumstances permit.

16. Our formula at once explains a fact which is well known to every one who has a practical acquaintance with the management of estates, that it is far more advantageous for a landlord to have his estate divided into farms of moderate size than very large ones, because so many more persons have a moderate than a large quantity of capital, and consequently so many more are able to compete for a moderate sized farm than a large one. The landlord being the seller of the service, his power over each competitor increases according to their number, and he can demand a higher price for it. But if a farm is very large, so few can compete for it, that the landlord's power over each diminishes, and he will usually be obliged to let it low. The same remark holds good in houses, and for the same reason; houses of a moderate size let much better than those of a large one.

17. To many persons it appears an inequitable' arrangement that a tenant should pay a fixed sum to the landlord, whatever be the price of corn, which is notoriously an article whose value is of the most fluctuating description. And no doubt to persons who are not much acquainted with the subject, the metayer system may appear to be more equitable. But it is not found to be so in practice. Payment of rent in kind used to prevail to a considerable extent in Scotland. In many parts of the country there are still to be seen large buildings, in which the farmers used to store the rents of the landlord. But the unfortunate landlord, of course, got the worst part of everything. And as civilization advanced this payment of rent in kind was universally abolished, and a payment in money substituted. Now, as the people have universally abandoned payment in kind, and substituted payment in money, it is the best proof that can be had that the latter method is more practically convenient than the other.

But even though the payment in kind of a portion of the produce has been abandoned, and the payment made in money, many schemes have been devised to ensure what appeared to be a more equitable division of profits between landlord and tenant, according to the varying price of corn. And different modifications of this system, which is generally called "corn rents," are in favour in this country. While, in some parts of the country, opinion is much in favour of corn rents, on the other hand, in many other parts of the country which are in the highest state of cultivation,

and where the highest science prevails, corn rents are held in utter abhorrence, and opinion is equally tenacious of fixed rents.

At the first blush of the thing it might appear that corn rents are manifestly the most equitable. To this we say, that so many different systems have been proposed, that it is impossible to give a general answer. Some that have been proposed can be clearly shewn to be most unfair. To give, therefore, a proper answer we must have the particular system that is proposed. But our own observation leads us to doubt whether these corn rents are so advantageous as is frequently supposed. In the first place, as agricultural science improves, the greater is the variety of the produce of the farm, and the greater is the complexity of accounts required to calculate the rent. Besides, we believe that it will be found that there will be less variation in the value of the whole produce of a farm than in its quantity. When the quantity is great the price will be low, when the quantity is small the price will be high, consequently the total money value will probably be more steady from year to year than the whole quantity. And it will be found that farmers in general, at least those of substantial capital, who are most desirable to have as tenants, prefer to have a fixed charge once for all, which they know beforehand, and which they can calculate upon, than a varying one.

18. Ricardo applied his principle of Rent to mines as well as to land1" Mines as well as land generally pay a rent to their owner; and this rent, as well as the rent of land, is the effect, and never the cause, of the high value of their produce.

"If there were abundance of equally fertile mines, which any one might appropriate, they could yield no rent; the value of their produce would depend on the quantity of labour necessary to extract the metal from the mine and bring it to market."

To this it may be observed that if any one might appropriate the mines there could, of course, be no rent: because the very condition of rent arising is that the mine is already appropriated by one person and let out to another; so that whether the mines are equally fertile or not, has nothing to do with the question.

"But there are mines of various qualities, affording very different results, with equal quantities of labour. The metal produced from the poorest mine that is worked must at least have an ex1 Principles of Political Economy, ch. 3.