OK THE THEORY OF EENT. 541 



excessively low equally intolerable ? Because, in accordance witli the 

 theory of rent, the range of price does not affect rent directly, but only 

 indirectly, through the medium of causes to which price contributes only 

 a proportion of their efficacy. 



In comparing the results of recent lettings in various parts of the 

 country, I have been much struck by the circumstance that the fall of 

 rent has been much greater on the larger than on the smaller farms, and 

 that those tenants who themselves labour on the land have evidently 

 suffered less, and are more ready to enter on leases than the larger 

 farmers who have been accustomed only to direct and superintend.' 



Another fact is the general reluctance of both landlords and tenants 

 to expend capital either on high cultivation or on permanent improve- 

 ments. Capital is certainly being withdrawn from agriculture. 



Applying these facts to the theory of rent, we are led to consider 

 what are and what have been the relations of labour and of capital to 

 rent. Doubtless labour and the recompense of capital are antecedent to 

 and creative of rent ; and we all know that under modern circumstances 

 wages are very slow to yield, and that when they do yield they surrender 

 not by reducing the rate, but by restricting the volume. Wages continue 

 high, but the workers become fewer. 



Now on large farms the item of wages is a very important one, and if 

 cultivation is to be kept up, it is an inflexible item ; but on smaller farms, 

 where wages and superintendence merge, the wage rate is really reduced^ 

 the tenant himself insensibly works for less recompense, though the 

 labourer insists on his full rate of wage. 



In the same way with capital, the capital of the tenant contributes to 

 the cultivation, and the necessary recompense for its use is also ante- 

 cedent to rent ; but people often forget that the recompense of all capital 

 has of late been largely reduced, whether in the form of interest or of 

 profits, and capital engaged in agriculture cannot be exempt from the 

 influences which affect all capital. 



And there is yet another element to be reckoned with. There is a 

 point at which the alternative will be presented to a proprietor whether 

 he will let or even cultivate his land at all, or devote it to pasture instead 

 of tillage. Economically he will let only if sufficient inducement be held 

 out, and there are many persons bent on farming who are prepared to 

 offer such an inducement, although the rent they engage to pay may 

 infringe on what has hitherto been deemed the adequate recompense of 

 the cultivator. 



All these considerations combine to arrest the direct influence of the 

 fall of prices on proprietors, and to distribute the loss more equably than 

 is often recognised. The formula prescribed on many platforms is this : 

 The gross produce of a farm was formerly 600Z., of which cultivation 

 absorbed 200^., interest and tenant's profit 200Z., and rent 200Z. Prices 

 have fallen 25 per cent. ; the return is therefore reduced to 450Z. Ex- 

 penses remain the same as before, interest and tenant's profit remain the 

 .same; these absorb 400Z._as before, and the surplus for the landlord is 

 only 501. But let us consider this in the light of commercial experience. 



> It must not be assumed that this infers a rise of rent of these smaller possessions, 

 or even a fall of rent much less than in other cases. The upkeep of such tenancies 

 is expensive, and it has yet to be seen whether under the altered circumstances of 

 the present times the burden of the upkeep of these small holdings is to fall as 

 exclusively as hitherto on the landlord. 



