The morning times. [volume] (Washington, D.C.) 1895-1897, 1896-09-20
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Tho Times undertakes no RESPONSE
biIity for any views Expressed in
this column II.
RENT AND WAGES.

saw that as Industry was Obliged To re
sort to lower grades, tho owners OF the sew
| era; upper grades would be enabled to en-
| ploy labor and capital at a pr oft me assured
| by the difference between what Producers
could obtain by rcsofting to the best land
| free OF rent, and that which the sane eff
| fort would produce In the several upper
grades Of land. We observed that each
advance in rent niafktd define in the
wages OF industry all along the line: while.
at the SANG time, rent emerged in favor OF
a new set of land owners, whose prev iou-
incomes consisted OF their wages only
When industry had descended by success
siyc steps, from the best land where a
man working alone could produce twenty
four bushels or wheat per acre, to the low
est grade, where nc could produce but
eighteen bushels by the same effort. we
found that rent for the test land had risen
To six bushels per acre, and that individual
wages had fallen to eighteen bushels per
acre. At this POINT the individual owner
Of the best grade Of land receives as rent
an amount equivalent to one-third OF Judi
vi,iual wages
From the point OF view we are now CON
s,lcring II is manifest that none of tie
lando wners below the grade OF the first
can hope to ever receive rs high rent as
viii go to those of the first grade. That Is
to say, If the present status OF tie several
grades OF land with respect to the location
OF the market and tie facilities for Reach
ing it were to remain forever as IL is now,
the private ownership Of land Gould never
produce equitable returns to the several
grades OF landO wDers, even when presumed
to be equally well equipped with capital in
the outset, and to expend equal energy and
care in the management OF their estates.
We thus see that it is in the very nature or
rent in it's most primitive form, not only to
reduce the income OF industry, but to cause
an unequal distribution of wealth among
the landowners themselves. This marks
an important distinction between the pr-
waite ownership OF land AMI that OF CAPITAL.
Theoretically, and apart from rental in
comes, equal capitals produce equal re-
turns. as expressed III current rates Of III
terest True, some capitals are invested
unprofitably. and some are squandercd.
But when wo men have an equal amount
Of capital ready to invest. there il no nat
ural presumption suggesting any greater
income to the one than TO the other
Upon this point Prof. Francis a. Walker
says: The law or capital differs from
the law OF rent in this; There is not thco-
retiCaily any non-interest capital. We
nave seen that the existence of Il body
II no-rent lands is essentially involved in
the theory OF rent. There is nothing cor
responding to this In the law Of capital
We have reyiously shown that all forms
of capital are destined to be exchanged
From this proposition we deduce the prop
osition that one Of the essentials of capital
sits vallein exchange Nothing constitutes
any part OF capital that is not valua.Ie.
Some writers have sought 10 establish
The idea that there is rent OF capital
analogous to that of land. Their argu-
ments are base d on he pruposit.oIt that there
are different grades OF capital as there are
Of land. They give az examples. Old houses
tOo good to tear down; antiquated machin-
cry and the like. originally Co,tiEg as much
as the present price OF new, but yielding
small err returns han could he ohra incd fror..
new. The fallacy OF this argument Is 80
manifest that QUE could scarcely believe
that professional eesnomist had ever en-
tanned it, If 1t had individually appeared
n the Quarterly Journal o: Econonics-
The fallacy lies in, the assumption that
the old house constitutes the sanie>amount
of capital that IL did while new when,
as n matter Of fact, II has been ~ process
of exCha nge for other capital or goods all
its economic life. The old house is not The
same thing physically that it was when
new. Economically, IT is only remnant
of capital almost, wholly exchanged.
So OF the old or antiquatcd machine
If worn out. it has been replaced by
other forms of wealth. II superseded by
1t has ceased to he capital altogether
But lands landirrespecuve OF its vaIue.
and, under the conditions which We have
been illustrating, industry receives the
largest returns. while none OF the land
used has any value whatever
We refer, of course, to that condition
in which industry is supposed 10 he extent
ing from what was primarily free Land
OF the best grade to inferior grades, with
out taking INTO account any change in
modes OF culture or possible changes in
surrounding conditions tending to modify
the relative Importance OF the several
grades of land
Limiting our view to these conditions,
II seems inevitable that rise of rent
must he accompanied by fall in wages
or return TO industry. If it could Ec shown
that the same result followed "a a necessary
consequence of q more extensive use Of
capital, there might be some excuse for
confounaing capital and land. Yet, writers
WHO pose as economic teachers, constantly
tell us that capital tends to increase
wages, while. by ignoring the tendency
OF rent TO reduce them, pretend that there
IS no important distinction between rent
and interest, between landlord and capt.
talist, or between land and capital.
One of tue most plausible reasons for
such confusion, may he found in The fact
that the selling price of land S the present
value Of its prospective rent If wheat
be worth 81 per bushel. one hundred acres
OF land yielding six bushels per acre rent,
Will give the owner an inCoLs. OF $500 per
annnm. What. then shall we consider he
selling price OF this land? 1t will centainly
De less than the tot Il sum OF all the an
lual incomes. These una Y continue forever.
anu the total sum wo IL d be infinite in that
case. No one could ever pay for piece
Of rentable land if the number of dollars
asked for 1t was equal to the number IF
doll ars It world bring o all OF its successive
owners.
Evidently the principle OF interest must be
invoked to make such a purchase possible;
and this is what is really done. That is to
say, the future returns are discounted, tie
more remote ones practically left out Of
consideration altOgether,l and tie price is
fixed at capitalized sum, which. at
per cent interest-supposiug this to be tie
current rate-would give a return equal 10
the prospective rent.
Who pays for these fardistant returns =
so remote that they have no influence on the