THE RENT AND VALUE OF FARM LAND 621 



a differential return, even though all land were originally of the same 

 quality. 



Differences in situation have precisely the same effect as differ- 

 ences in fertility. An apt illustration of the effects of situation (first 

 elaborated by the German economist Thiinen) is got by supposing 

 all land to be of the same quality, and to be situated on all sides of 

 a central city to which its produce is brought for sale. Imagine con- 

 centric circles to be drawn about such a central point. Evidently the 

 land in the nearer rings has an advantage over that in the more dis- 

 tant rings. All the produce is sold in the central market at the same 

 price; but that from the more distant land has to bear a higher cost 

 of transportation, and its cultivator must be reimbursed for this. 

 The owner of the nearer land has an advantage which causes rent 

 to rise. 



The advantage due to situation is obviously less, the lower the 

 cost of transportation. The cheapening of carriage in modern times 

 has greatly diminished the importance of situation rent. This is 

 strikingly the case for all agricultural produce grain for example, 

 which is easily transportable. Though refrigerating apparatus and 

 fast freight facilities have made it possible to bring meat, fruit, vege- 

 tables, and milk from very distant sources of supply, the nearer lands 

 still have some advantage from situation. If, indeed, the rates of 

 transportation should be the same for all distances, the advantage 

 would disappear. The railways which brijig the milk to some of the 

 large cities of the United States adopted at one time the practice of 

 a " postage stamp rate" that is, an even charge on all shipments, 

 distance being disregarded. So far as they carried out this method, 

 advantages of situation, and consequently economic rent resulting 

 from situation, were done away with for milk farms. As it happened, 

 public authority was appealed to by the owners of the nearer lands 

 to prevent this practice, it being alleged that it was unreasonable and 

 unjust to fix rates without regard to distance. The Interstate Com- 

 merce Commission sustained this contention and forbade the postage 

 stamp rate; though prima facie it would seem to have been to the 

 advantage of consumers, and not in violation of any sacred or inalien- 

 able right of the nearer producers. 1 



1 The reader might well examine in this connection the issues which underlay 

 the early Granger agitation, particularly in connection with "long and short haul" 

 legislation. EDITOR. 



