The favorable situation of a piece of land operates, in almost every politico-economical respect, in the same manner as its fertility.[151-1] If a market, to be fully supplied, needs to be fed from a circuit of ten miles, the price must be sufficient to make good not only the other cost of production but the freight over ten miles. Here, therefore, all producers living nearer to the market, who have to make a smaller outlay for transportation and yet obtain the same market price for their produce, make a profit exactly corresponding to the advantage of their situation.[151-2]
The situation of individual pieces of land relatively to farm buildings, etc., operates in a similar way.[151-3]
[151-1] L'éloignement équivaut à la stérilité. (J. B. Say.) If we imagine with A. Walker an entirely uncultivated country, equally fertile in every part, settled only on the coast, and divided into shares of equal breadth, equally accessible at all points, so that every settler has unlimited space to extend his possessions from the coast into the interior, the shares situated in the middle of the coast strip would be most eagerly sought after; since in its vicinity, prospectively, all the institutions of the country would come together. The colonist, therefore, who should obtain that share as his, would, unquestionably, be in a condition to pay a price for this preference, that is a rent. (Science of Wealth, 296.)
[151-2] It is a consequence both of their difference of situation and of their fertility that in the Himalaya the farmers low down on the sides pay 50 per cent. of the gross product as farm-rent, and higher up, 20 per cent. less. (Ritter, Erdkunde, III, 878.) Both influences may be traced most accurately in East Friesland, and in similar places: marsh land, sandy land, heath land, and high moorland.
Its situation influences especially the money rent of land, and its quality the amount of produce. (McCulloch, Principles, III, 5.)
[151-3] We need only mention the hauling of the crops and of manure. According to the instructions of the royal Saxon commission, above mentioned, the cost is assumed to be 10 per cent. higher for a distance of 250 rods, and 20 per cent. higher for a distance of 500 rods.
THE THEORY OF RENT.
(CONTINUED.)
From what we have said, it follows that the rent of the land of a country is equal at least to the sum of all the differences between the product of the least productive portions of capital which have been necessarily laid out in the cultivation of the soil and the product of the other portions more productively laid out by other husbandmen. It may rise higher than this on account of a coalition among landowners or immoderate competition among farmers, who may thereby be forced to surrender a portion of their wages and interest on capital to the former; but it can never lastingly fall below this amount. If the landowners themselves were to surrender all claim to rent, the price of agricultural products would not sink if the market was kept fully supplied; and the excess obtained from the better land over and above the cost of production would go, but only in the nature of a gift, to the farmers, corn dealers and individual consumers.[152-1] Normal rent is not to be explained by any mysterious or peculiar productiveness[152-2] of the land that yields it, but on the contrary, by the fact that even material forces unexhaustible in themselves, but which can be productive only in combination with given parcels of land, uniformly oppose even successively greater difficulties to every successive and additional improvement.[152-3]
Moreover, the capital which becomes a part of the land to such an extent that it cannot be separated from it, and perhaps not even distinguished from it at sight, such for instance as has been laid out for purposes of drainage or in the purchase of material intended to modify the nature of the soil, partakes of the character of the land itself, and its yield obeys the laws of rent. How frequently it happens that such improvements made by the farmer without the least assistance from the owner of the land permanently contribute to an increase of the rent. (§ 181.)[152-4]