630 Proceedings of the Royal Society 
If the tax be an ad valorem duty on rent, it will modify the 
supply curve only between D and N. There will remain just as 
much land as before capable of paying rates of interest less than 
OM, but the quantity of land capable of paying the higher rates 
will be diminished; in other words, the rate of interest which the 
poorest land worth cultivating pays will not he affected, for this 
land pays no rent and remains untaxed—hence no land will be 
thrown out of cultivation, hut the supply curve will be altered from 
DN to DN', diminishing the volume representing rent, hut leaving 
the other quantities untouched; hence any tax assessed on rent 
is paid wholly by the landlord. The amount of the tax is the 
volume standing on DNN'. It is curious to remark that this 
tax in no way falls on the consumer. The tax on rent sim¬ 
ply diminishes the excess of value which some land has over 
others; no land is thrown out of cultivation, and no less capital 
employed in production than before; no one suffers hut the 
landlord. If, instead of being assessed on the rent, the tax is 
assessed on the produce of the cultivation, the incidence of the tax 
will be greatly modified. The cultivation of land will no longer 
be so profitable; i.e ., the returns from capital employed on r ythe 
land will be less; in other words, the whole supply curve of the 
land will be modified, falling everywhere if the produce taxed be 
that which is produced on all qualities of land. Some land will 
fall out of cultivation, and only part of the tax will he borne by 
the landlord; part will fall in the first instance on the tenant, hut 
he, like any other manufacturer, will recover almost the whole 
of his portion from the consumer. Tenants will he injured by 
the limitation of the number of transactions, and labourers by the 
diminution in the amount of work required. This is the effect of 
an octroi duty. 
Sometimes a tax is assessed not on the rent, but on an assumed 
value per acre. Such a tax can never he raised on land which pays 
no rent, for the owner would rather abandon possession of the land 
than pay the tax. It might, however, lead to the abandonment of 
the cultivation of poorer soils; it would then injure tenants and 
consumers, although they would not pay one penny of the tax; for 
taxes cannot be paid out of lands which lie waste; assuming that 
the tax is always less than the rent, as it certainly always should 
