The advocate., 1892-03-02
RENT, INTEREST AND PROFIT.

from your very able correspondent, Mr..
W. P. BOrlSnd, in the January number of
the Magazine. that have succeeded In
making myself only partially understood
by him, and l will, therefore, essay to
make my meaning more plain.
To commence, l assert that rent Of
used and occupied land is simply interest
upon the money value Of such land. /
further assert that the man has been un-
willingly duped, who pays for such land
more than that amount Of money upon
which the rent will pay the current,
prevalent rate Of interest upon money.
Hence, If we reduce interest we reduce
the price Of rental lands. further as
sert that the increase in value Of unused
aud unoccupied land, less the taxes paid
upon such land, Is the net interest upon
the original money cost of the land, and
that the investment In such land Is con-
Sldered good or bad as the net annual In
crease In value does or does not equal
the legal current, prevalent rate Of inter
est upon the money cost Of such land.
AS consequence, or rather as proof of
the correctness of this view, I offer the
fact that In the last two or three years
sixty or seventy million dollars In mort
gAges have been foreclosed upon Kansas
City real estate, thus also proving that
the monopoly Of money swallows up and
outgenerals the monopoly Of land. And
these thoughts unfold another idea, !. e.,
that land values are not strictly the re-
suit Of the community In which such
lands are situated, the greater portion OF
such land value being brought into being
by the application Of, not labor, but for
elgn capital or money at interest, the
owner Ofsuch money being substituted
for the ostenslbls owner of the land, and
receiving the rent In the form of interest.
Thus the rate of interest becomss the
measure or standard Of the rate of rent,
the competition of landlords to realize
the interest upon the borrowed capital,
invested in their land, tending to bring
about that result Even in the case OF
landlords who are not in debt, they are
satisfied If their rents are equal to the in
terest upon the money cost OF their land,
which they could realize If they had such |
money loaned out at interest. Is this
sufficiently plain and explicit? And is
not then interest the basis Of rentP
Mr.. Borland thinks that am badly
mixed upon this question of profit. Let
me also explain that point. Profits are
satisfactory 80 long as they are equal to
the interest upon the money or capital
invested In business, were such money or
capital loaned outat interest. Compe-
tition in business allows money to. be in |
vested In business only so long as such
business returns profits equal to or even
slightly less than the current, prevalent |
rate Of interest. Thus interest is the
basis, not only Of rent, but also of profit. |
Now, have no objection to profit con-
sidered in the light Of Prof. Amasa
Walkers definition, quoted by Mr.. Bor.
land, to-wit: "The reward of mental ef-
fort or enterprise, applied to the union of
capital and labor" This class Of rewards
while called "proAt," Is simply wages for
labor expended In business enterprises,
and so long as such wages are not out of
all proportion to the reward of class l, !.
G.. wages paid to Inhyaical or muacularn