THE VALUE OF FARM LAND AND EQUIPMENTS 207 



per cent, which would reduce the income to be derived from that 

 amount of money to four dollars and eighty cents, while the 

 annual income from the land would not be reduced by a lower- 

 ing of the current rate of interest. The belief that there is a 

 greater probability of a decline in the income to be derived 

 from the money than from the land, often makes men willing 

 to pay more for land than the amount of capital which will 

 now yield the same income. 



Another reason which leads men to pay more for land than 

 a money loan which will, at the present time, yield the same 

 income, is the belief that with the progress of society the compe- 

 tition for the use of land will result in a rise in rents, that, 

 while there is a tendency for the annual income which can be 

 derived by lending a given amount of money to decline, there 

 is at the same time and under like conditions a tendency for 

 the income of a given amount of land to increase. 



The available land supply of a country usually increases 

 less rapidly than the population, so that it becomes necessary 

 to resort to land which is either less fertile, less favorably 

 situated, or more difficult to bring under cultivation ; and as 

 a result of keener competition for the better grades of land the 

 amount which will be offered for the use of such land will rise. 

 While this is what usually happens in the long run, it sometimes 

 happens that the discovery of great quantities of very fertile 

 land, and the invention of better means of transportation mak- 

 ing this new land more accessible, will for a time reduce the 

 competition for the land which was already under cultivation, 

 and the rent of such land may, for a time, be reduced ; but it is 

 believed that the occasional reactions of this kind cannot per- 

 manently counteract the tendency for the price of land to rise. 



The land which yields the highest rent at one time may be 

 surpassed in the amount of rent which it will yield at another 

 time, by land which was formerly let for a smaller rent. This 

 may be the result (i) of the introduction of a new crop which 

 thrives best on the land which for other purposes was counted 

 inferior; (2) it may be the result of a dense population in a 

 region which had formerly been sparsely populated, in other 



