Chapter VIII: Section CLI

THEORY OF RENT.--LAND FAVORABLY SITUATED.

The favorable situation of a piece of land operates, in almost every politico-economical respect, in the same manner as its fertility.[151-1] If a market, to be fully supplied, needs to be fed from a circuit of ten miles, the price must be sufficient to make good not only the other cost of production but the freight over ten miles. Here, therefore, all producers living nearer to the market, who have to make a smaller outlay for transportation and yet obtain the same market price for their produce, make a profit exactly corresponding to the advantage of their situation.[151-2]

The situation of individual pieces of land relatively to farm buildings, etc., operates in a similar way.[151-3]

[Footnote 151-1: _L'éloignement équivaut à la stérilité._
(_J. B. Say._) If we imagine with _A. Walker_ an entirely
uncultivated country, equally fertile in every part, settled
only on the coast, and divided into shares of equal breadth,
equally accessible at all points, so that every settler has
unlimited space to extend his possessions from the coast
into the interior, the shares situated in the middle of the
coast strip would be most eagerly sought after; since in its
vicinity, prospectively, all the institutions of the country
would come together. The colonist, therefore, who should
obtain that share as his, would, unquestionably, be in a
condition to pay a price for this preference, that is a
rent. (Science of Wealth, 296.)]

[Footnote 151-2: It is a consequence both of their
difference of situation and of their fertility that in the
Himalaya the farmers low down on the sides pay 50 per cent.
of the gross product as farm-rent, and higher up, 20 per
cent. less. (_Ritter_, Erdkunde, III, 878.) Both influences
may be traced most accurately in East Friesland, and in
similar places: marsh land, sandy land, heath land, and high
moorland.

Its situation influences especially the money rent of land,
and its quality the amount of produce. (_McCulloch_,
Principles, III, 5.)]

[Footnote 151-3: We need only mention the hauling of the
crops and of manure. According to the instructions of the
royal Saxon commission, above mentioned, the cost is assumed
to be 10 per cent. higher for a distance of 250 rods, and 20
per cent. higher for a distance of 500 rods.]