The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1884-09-05
Rate of Interest and Price Of Land.

The rate of interest on money has ON
indirect, but none the less controlling
effect upon the fixed value of aoricui,
tural lands. 1t has often been pazzlino
question to American farmers how land
could bear so high a price in ENGLAND
and Europe, when the difference in the
amount OF crop there and here, on the best
worked farms, was very little. The
market value Of agricultural products is
somewhat higher there than here. but not
enough to account for ANYTHING like the
difference in the value of land there
and here. But the chief solution of the
dlihculty IN accounting for the difference
IN price of their lands was found in the
rate OF interest on permanent invest
ments. Two and a-half to four Der
cent. has been the ruling rate there for
many years, while here, until within a
few years, the rate of interest has been
SIX to ten per cent.
If land in England could be rented
Tor ten dollars per acre, then it was a
favored investment at $500 per acre:
but If land would rent at the same rate
here, ii was only worth 800 to $50
per acre, and was questionable invest
mcnt at that. The European land
holder has another advantage favorinc
his income, and that is cheaper labor
for tillage. This adds considerably to
the value of his land.
Now the question arises. what will be
the effect Of our rapid reduction in the
rate OF interest upon the price of our
farming lands? The stocks and bonds
OF our railroads, and shares in our
mines are so iluctuating and uncertain,
that our people are likely to seek in
Vestments which will be more stable.
and not subject to being swept away
| by panic. Small investors can have
no real voice in the management of
railroads, or mines, or manufacturing
companies, and therefore can never be
certain of their future value. But
when they invest in land, the value is
there, beyond the power of panic to
| seriously affect it. In England, land
holding also carries with it dignity and
responsibility, which makes it favor
lite Investment. But in this country
land has been so easily obtained-mere
occupation for five years giving title
from the GOvernment-that Americans
have not had due respect for proprietor
ship of land. This, however, is DIES.
tined to rapid change in She next two
decades. The holding of land will be
duly priced when the homcSteads arc
taken up, and is not so easy to~obtain
This change can now be observed in the
older States, where farming lands are
steadily rising in price and apprecia
ton.
The English statesman, however higl
his position, never regards his fortune
rs complete till he owns an estate il
the country. That greatest of modern
European political philosophers anC
statesmen, Burke, in the retirement o
BeacOnstield, sought inspiration for hi.
his great themes of human advance
ment, which stirred to their lowest
depths the British Commons and PEG
pie. In this environment his great ma.
ture found voice.
The same love of rural pursuits il
active OF latent in our statesmen anC
educated classes. Witness Webster
devotion to Marshfield Jefierson's tc
Monticello; Washington to Noun
Vernon; Martin Van Buren's to Lin
denwald; lrying's to Sunnyside, and
the same with hundreds of others wht
have shown great attachment to coun
try estates.
In the older portions of our country
the rate of interest is rapidly gravita
ting to the European standard, and w
may expect to see the gradual rise o
real estate TO about two-thirds the Euro
pean standard within comparatiVel,
short period of time. The proportion
of our land to population is 50 mucl
greater than in Europe, that it will pre-
vent extreme prices for another century
but the result of cheap willneces
sarily have a strong effect in raising tn
very low price of our farming lands
and the inevitable appreciation in pric
will, itself. amount TO fair interest 70
the next twenty years in all the olde
States One strong reason why invest
ments in farming lands have not alread
been more sought for uninvested capi
tai, is the absence of 4 well-regulatet
tenant system in this country.
must have a capital equal to the owner
ship of land in this country. The conse
quence is, that there the best farmer
in the kingdom are tenant farmers
whilst here it is very difficult to fin
competent tenant farmers, and there
fore land-holders find it almost imp0ss
BILE to rent their farms to competcn
tenants. This tenant system will, II
doubt, much improve as land rises i
value and it becomes more difficult +
purchase the title. Then tenants wi
include a class of the most energeti
young farmers, and land owners 70
investment will be able to rent thci
t farms for reasonable income. Whc
security of capital is considered, 1t mp
pears evident that there is no invest
ment, at the present time. otierin
greater inducements than that in farm
inc lands.-Ltrc Stock journal