202 AGRICULTURAL ECONOMICS 



the most important fact to be considered is that the other fac- 

 tors usually increase more rapidly than does land. As the 

 farmers and the equipments continue to increase more rapidly 

 than the land, some of the better grades of these more rapidly 

 increasing factors are crowded down farther and farther upon 

 the less and less productive land. This necessarily results 

 in the driving out of business of some of the lower grades of 

 farmers and equipments, leaving upon the margin higher 

 grades of these factors, which will be able to earn their necessary 

 minimum upon lower grades of land, and hence the margin of 

 cultivation may be driven down to less productive land by the 

 competition of the increasing numbers of farmers and the in- 

 creasing supplies of equipments. The resulting change in the 

 distribution of the gross product among the factors is illustrated 

 by the dotted lines in Fig. 10, where it will be noted that the rent 

 rises as a result of a fall in the returns to the other factors of 

 production. 



It is possible for the rent to rise, however, without any 

 absolute decline in the returns to the other factors. Changes 

 in the prices of agricultural products will greatly influence the 

 share which will be accounted to land. When, as a result of 

 increased demand for food and clothing, the prices of agri- 

 cultural products rise, the share of the returns of a given farm 

 which may be credited to land increases. When, for any reason, 

 such as the opening of vast areas of very productive land, the 

 prices of agricultural products fall, the share of the gross re- 

 turns which can be paid for the use of land will, other things 

 remaining the same, necessarily fall, and the movement will 

 tend to be the reverse of that shown in Fig. 10. 



The laws of value and price hold true with respect to the 

 price which is paid for the use of land and equipments ; but 

 as we have seen, the conditions of supply and demand are very 

 complex, and the difficult problems in distribution arise out of 

 the fact that costs and prices do not correspond except on the 

 margin where the least productive of all of the factors are 

 brought together, and that there are large surpluses over 

 costs, to be divided. It was one time thought that all of this 



