CHAPTER X 



THE PRINCIPLES TO BE FOLLOWED IN ESTI- 

 MATING THE VALUE OF FARM LAND AND 

 EQUIPMENTS. 



It is easy to say that the price of land, like the 

 price of any other economic good, is determined 

 by the forces and conditions which regulate the 

 demand and the supply ; but this is too general to 

 be of any help to the farmer who is trying to esti- 

 mate the value of a particular piece of land. 



The net rent, or the share of the gross returns 

 which, under conditions of free competition, is 

 credited to land, above what is necessary to keep 

 the land intact, is the starting point for figuring 

 the value of a piece of land. When one invests in 

 land, the thing for which he really pays is the per- 

 petual right to use the land and to be free from the 

 payment of rent, or to receive the income which 

 the land will yield if leased to someone else. 



The essential difference between the buying of 

 a piece of land and the buying of a perpetual an- 

 nuity bond lies in the fact that while the income 

 from the latter is fixed in terms of a money 

 income, the former may rise or fall as a result of 

 changes in the conditions of competition for the 



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