Page:Manual of Political Economy.djvu/169

120 of equal fertility situated at a short distance from some large centre of population. The relative rents, therefore, which are paid for different farms are determined by fertility of soil and by convenience of situation. It will be generally admitted that the value of land depends upon the two causes we have just mentioned, but the important question to answer is this: Can we obtain an index to the amount of rent which land can afford to pay at any particular time? The object of the present chapter is to supply an answer to this question.

In every country there is the greatest variety in the productiveness of the land; high rents are paid for the use of some land, whereas other land not far distant may be too poor to be cultivated. Let it be supposed that there are two farms which are rented at different rates; the one farm is rented more highly than the other because its soil is more fertile or its situation more convenient, and the difference in the rents paid by these two farms would indicate the pecuniary value of the superior productiveness of the one farm over the other. There may be another tract of land so poor that, if cultivated at all, it could only bear a nominal rent; for land will only pay a nominal rent when the produce raised from it is no more than sufficient to return the average rate of profit upon the capital spent in its cultivation. If we compare such barren land with land which pays a considerable rent, then, as we have just remarked, the difference in the pecuniary value of the superior productiveness of this better land may be measured by the difference in the rents paid by the good and barren land respectively. But this difference is denoted by the whole rent paid by the good land, since the rent of the poor land is assumed to be merely nominal; or, expressing this in other words, it may be stated, that the rent of land represents the pecuniary value of the advantages which such land possesses over the worst land in cultivation, the rent which this worst land yields being merely nominal in amount.

The proposition which has just been enunciated, and