DISTRIBUTION OF WEALTH 



of the less productive grades of land at the rents 

 which any of the other grades of farmers could 

 afford to pay for those grades of land. It may 

 be assumed, therefore, that he would pay seven 

 dollars and twenty-five cents for the ist grade 

 land. 



With the competitive rents determined in this 

 way the A grade farmer can secure a larger net 

 return, and therefore a larger net profit, on ist 

 grade land than on land of any other grade. 

 This is true also of the B grade farmer on the 

 2d grade land, and so it continues to be true for 

 the succeeding grades of farmers on the corre- 

 sponding grades of land. The A grade farmer's 

 net return would be twelve dollars and seventy-five 

 cents, but from this must be deducted the neces- 

 sary return to capital-goods. The remainder, in 

 'case all the labor is performed by him and his 

 family, is the net profit. Now since the capital 

 is usually owned by the farmer, it is the net return 

 minus the maintenance of the capital-goods and 

 the farmer's cost of living, which shows the 

 capacity of the farmer to save from his earnings. 



These figures are intended only as an illustra- 

 tion, but as an illustration they may enable the 

 student to comprehend the complex character of 

 the forces which are operating to determine the 

 amount of rent which must be paid for a given 

 piece of land at a given time, also how it is that 

 some farmers can pay high rents and at the same 



12 177 



