ON THE THEORY OF RENT. 545 



determine the value of the produce, and having done that, it turns out 

 that towards the close of his lease prices dwindle, and then he comes to 

 the landlord beseeching for a reduction of the rent, i.e., of the last instal- 

 ments of the price fixed fifteen or sixteen years ago. Now let us see how 

 the BanS"shire tenant making this demand really stands. The average 

 value of oats for five years prior to 1867 was \l. Os. lOd. ; the average 

 price of beef for the same period was 74s, 8d. ; it is reasonable, therefore, 

 to believe that the price of the lease was fixed on these figures. For the 

 first ten years of the lease oats were on the average 11. 3s. 9d., or 2s. lid. 

 above the anticipated rate, and beef was 88s. 2d., or 13s. Gd. above the 

 calculation : for the next five years of the lease the oats were 11. Os. 5d., 

 and beef was 8.5s., being 5d. below and 10s. -id. above the calculated 

 price. Then for the last four years oats averaged 18s. ll^cZ. and beef 

 80s. 6d. That is to say, for ten years the prices were largely in excess, 

 for five years somewhat in excess, and for four years also still somewhat 

 in excess of the value on which the price was calculated when the bargain 

 was made. In what other trade would any concession be asked or made 

 in such circumstances ? Yet almost universally over Scotland concessions 

 have been made to sitting tenants, but I am satisfied justice has never 

 been done in public appreciation to the generosity and good feeling which 

 have characterised the action of the Scotch landlords, who have admitted 

 an interpretation of their bargains which would, in ordinary commercial 

 business, have been scouted as Quixotic. I do not say that this was either 

 an imprudent or an inexpedient course. I think it was most prudent and 

 highly expedient, as tending to keep good tenants, and to inspirit and 

 encourage them, but it none the less deserves I'ccognition in moi'c ample 

 terms than it has received.' 



So much for rent. Let us for a little see what have been the commer- 

 cial results of this very serious fall of prices and rent on the saleable value 

 of land itself. For a time, speaking from my own experience, when first 

 the fall of value came to be recognised not as an incidental circumstance 

 but as a permanent economic fact, land was virtually unsaleable ; but 

 again economic forces asserted themselves, sellers of land came to recog- 

 nise the fall, prices of land descended, and the inevitable result has begun 

 to follow ; the inexorable laws that regulate supply and demand have 

 begun to operate, and buyers who a few years ago would never have 

 thought of purchasing land, are now buying, and many more begin to 



» It has now been practically demonstrated that in the contract of letting land 

 there is virtually a warranty implied wliich is not recognised in law. If the subject 

 of the lease becomes sterile from natural causes, the law does recognise that the 

 claim for rent ceases — the thing let has perished ; but if the produce itself becomes 

 sterile, if the price it yields fails to compensate the cost of raising it, though the law 

 recognises no claim on the part of the tenant to consideration, 3'et in practice the claim 

 is largely conceded, so that virtually a landlord may now be held to guarantee as a 

 condition of rent (1) That the subject rented shall continue to yield normal returns, 

 i.e., shall not from any abnormal cause, such as flooding or destruction, become 

 sterile ; and (2) that its produce shall continue to yield a normal return, i.e., shall 

 not be so reduced in price as to afford a return inadequate to defray cost of produc- 

 tion and rent. In other and perhaps more scientific words, the landlord has to 

 guarantee that his land shall continue to maintain that position relatively to other 

 cultivated land which, as shown above, shall justify that margin of value beyond that 

 of the least fertile cultivated land, which really constitutes his claim to rent. .But 

 this implied guarantee must be applied to the lease as a whole, not to any selected 

 and exceptional portion of it. 



1887. N N 



