CAPITAL VALUE AND RENT 1 37 



From such cases it is indeed clear, that so long as the 

 power of fixing rents at discretion remains in the hands 

 of the landlord, without restriction or qualification, 

 from the moment a tenant spends a sum on an improve- 

 ment, the improvement thus made belongs in practice to 

 the landlord, and (if no agreement has been entered 

 into to protect the tenant) it absolutely depends on the 

 sense of fairness of the landlord whether he abstains or not 

 from unjustly depriving the tenant of the value from the 

 outset, or at any determination of the tenancy. 



The only chance of forcing anything in the form of a 

 repayment by the landlord of the value added to his 

 property by the tenant's outlay is where the tenant is in 

 a position to threaten the destruction of the improve- 

 ment, as in the case of permanent pasture laid down by 

 the tenant himself. By this consideration Mr Carrington 

 Smith was enabled to get an agreement that he should 

 receive £<, an acre for pasture he had laid down and 

 improved for over twelve years, at the close of his 

 tenancy, he engaging on his side not to plough it up. 



These facts show that wholly different standards and 

 different reasoning are applied to the interests landlords 

 and tenants respectively have in any expenditure by 

 which either party contributes to the value of the 

 holding. 



Again, in assuming that rent ought to cover not only 

 a reasonable equivalent for the productive power of the 

 land, but also include a full interest on accumulated 

 outlays, it is forgotten that rent has also a necessary 

 relation to the present capital value of the land. 



This may be illustrated by a case from Mr Pringle's 

 Essex report.^ 



An estate cost, in purchase money and improvements, 

 ;^200,ooo, but would now only fetch ^^50,000 in the 

 market. Before 1879 the gross rental was between 

 £6000 and i^/OOO ; now (in 1893) ^^ is below ^4000. 

 The owner says, " I get no rent at all from my land ; I 

 merely get about 4 per cent, on the cost of buildings, 

 drains, and fences." 



' Pringle, Essex, p. 18. 



