OVERCAPITALIZED LAND BAD THING 29 



tions apply in the neighborhood of a town or of a village not too far from a 

 railway station that is to say, in precisely those localities which the small 

 holder who wanted to start market gardening, or some other such business, 

 would find the most desirable for his purpose. Here he might have to compete 

 with the retired professional man, merchant, or tradesman, who, though 

 unable to buy a large estate, wished for a 'bit of land,' which he could either 

 build on or, at least, feel a pride in owning, and for which he is not disposed 

 to look too closely at the price, assuming he finds what suits his fancy. So 

 to begin with, the would-be small owner, standing as a solitary unit might 

 agree to buy land at a higher price than he ought to pay from a commercial 

 standpoint even if he had the money. But he has not got the money. He 

 possesses a certain sum, and this the seller of the land agrees to accept, the 

 remainder being left on mortgage." 



This situation leads Pratt to the conclusion that tenancy at a - 

 fair rent is better than ownership at an overcapitalized valuation. 

 His words are: "Looking at the matter from the point of view of 

 first principles, I should say the purchase provided tenancy on 

 satisfactory lines can be secured instead is the more undesirable 

 because the small holder should be able to do better with his 

 money. Farming as a business must be run on business lines, and 

 there ought to be greater profit from capital placed in a business, 

 with the possibilities of a more or less frequent turn-over, than 

 from capital locked up in land that is wanted for cultivation, 

 especially in land bought at, as I have said, more than its commer- 

 cial valuation." 



Overcapitalized land is a bad thing for the farmers themselves, 

 as the foregoing discussion indicates. It is likewise a bad thing 

 for the wage-earning class. The outstanding economic fact in our 

 past history has been the abundance of cheap, fertile land. And 

 this "free" land as long as it lasted was the one great force 

 tending to maintain the high rate of American wages. Truly did 

 Winthrop sense the situation when he wrote in 1645: "Our chil- 

 dren's children will hardly see this great continent filled with 

 people, so that our servants will still desire freedom to plant for 

 themselves, and not stay but for verie great wages." In a similar 

 vein wrote a royal official of New York in 1723: "North America 

 containing a vast tract of land, everyone is able to procure a piece 

 of land at an inconsiderable rate, and therefore is fond to set up 

 for himself rather than work for hire. This makes labor continue 

 very dear ..." 



Earnings from "watered-stock" and earnings from the "un- 

 earned increment" in land value are in essence the same, and are 

 indeed twin evils. Each man ought to reap where he sows and 

 what he sows, and no more. How much profit, then, is the farmer 

 entitled to? A fair answer to this question is contained in the 



