OBSERVATIONS,

&c. &c.

1. Of all the branches of political economy, there is no one on which there has been more difference of opinion than that of the nature of the rent of land; and undoubtedly there is no one of greater importance. This question equally concerns the luxuries of the rich and the comforts of the poor: and on its being rightly understood, may depend the actual existence of millions of persons. Under these circumstances, it is surely then a matter of the highest moment, and most imperatively incumbent on the Legislature that it should not adopt the suggestions of theprists, who recommend a total alteration in a system which has been found by experience to work well on the whole, until it has fully satisfied itself by a most minute examination of their propositions, that they have not only drawn just conclusions, but also that the principles from which they have deduced them are correct. If we proceed to legislate hastily, we may produce effects ruinous in the extreme, and which it may be impossible to repair. It is the object of the author in the following pages to demonstrate the erroneous nature of some of the fundamental positions of those, whose mere dicta are apt to be received as unquestionable authority amongst a certain class of political economists, and to caution his readers against implicitly confiding in doctrines (no matter what may be the reputation of the holders of them) which have been built on such unstable foundations.

2. The doctrine of Mr. Ricardo and Mr. M'Culloch is stated by the latter in the following terms: "On the first settling of any country abounding in large tracts of unappropriated lands, no rent

is ever paid; and for this plain and obvious reason, that no person will pay a rent for what may be procured in unlimited quantities for nothing. Thus, in New Holland, where there is an ample supply of fertile and unappropriated land, it is certain, that until the best lands are all cultivated, rent will never be heard of. Suppose however that tillage has been carried to this point, and that the increasing demand for raw produce can, in the actual state of the science of agriculture, be no longer supplied by the culture of the best lands: under these circumstances it is plain that either the increase of population must cease, or the inhabitants must consent to pay such an additional price for raw produce as will enable the second quality of land to be cultivated. No advance short of this will procure them another bushel of corn: and competition will not, as will be immediately shown, allow them to pay more for it. They have, therefore, but one alternative. If they choose to pay a price sufficient to cover the expence of cultivating land of the second quality, they will obtain additional supplies; if they do not, they must want them. Suppose now, that the consumers offer such a price as will pay the expence of producing corn on soils, which, in return for the same expenditure as would have produced 100 quarters on lands of the first quality, will only yield 90 quarters; it is plain it will then be indifferent to a farmer whether he pays a rent of 10 quarters for the first quality of land, or farms the second quality, which is unappropriated and open to him without paying any rent. 111. C. p. 266.

3. The doctrine here laid down in such plausible terms is not only not true, but in part the direct contrary is the truth, as has been decidedly proved by Mr. Torrens in the following words:

"Mr. Ricardo contends that rent is the difference between the quantity of produce obtained by a given capital from lands of superior quality, and the quantity of produce obtained by the same given capital from the worst quality of land resorted to. Thus if there be three qualities of land under cultivation, from which the same given quantity of the ingredients of capital raises respectively, 100, 90, and 80 quarters of corn, then the rent upon the first quality of land will be 20 quarters; that upon the second quality will be 10 quarters; while the third and last quality will pay no rent at all. The same principle is maintained by Mr. McCulloch and Mr. Mill, and constitutes, indeed, the distinguishing doctrine of the Ricardo school on the important subject of rent."

Mr. Torrens continues :-"This doctrine is erroneous. Rent is not the difference in the quantities of produce obtained by equal capitals from lands of different degrees of fertility."-Torrens, Ess. Corn Law, p. 144.

VOL. XXVII.

Pam.

NO. LIII. Q

Mr. Torrens undertakes to show that neither the gradations of soil, nor the successive applications of capital to land, with decreasing returns, are in any way essential, either to the appearance or the rise of rents.

To prove his assertion, he says, "Let us suppose that the whole of the lands of the first quality are appropriated; that the population is so limited, that the cultivation of these lands is sufficient to supply the demand for food and material; and that the rate of profit, both in agriculture and manufactures, is fifty per

cent.

"This being the previous state of things, we will suppose, further, that population and capital gradually increase, and that the consequent increasing demand for food raises the value of agricultural produce, in relation to wrought goods, until manufacturing profit falls from fifty to forty per cent., while no inferior soils can be resorted to; and while additional capital, applied to the land already under tillage, cannot create an additional quantity of produce sufficient to replace itself.

"Under these circumstances, it is self-evident, that the persons who possess disposable capital would have an interest in giving the proprietors of land, for the use of the soil, nine per cent. out of the fifty per cent. which cultivation yielded; because, after making this deduction for rent, the capitalist would have one per cent. more than if he engaged in manufactures or trade-thus the relation between landlord and tenant would be formed.

"Should population and capital have still a tendency to increase, the growing demand for food might raise the value of raw produce in relation to wrought goods, until manufacturing and commercial profits fell to thirty, to twenty, to ten, and to five per cent., which I assume to be the lowest rate of return, for the sake of which the capitalist will engage in business. It is perfectly selfevident, that during this process, it may be the interest of those who possess disposable capital, to give to the proprietors, for the use of the soil, 20, 30, 45 per cent. out of the 50 per cent. yielded by agricultural industry. Thus profits might fall to their minimum and rents rise to their maximum, though no soil of an inferior quality were resorted to, and though no additional capital were applied to the land with a diminished return."-Torrens, Ess. Corn Law, p. 141.

4. Thus, I apprehend, there is an end of Mr. Ricardo's doctrine of the nature of rent; on the certainty of the truth of which, he and his school have been struggling to pass laws implicating not only the prosperity or ruin, but the very existence of millions of their countrymen, and the conversion of their country from a garden into a desert. I know no set of men whose nerves are so

strong as those of the true philanthropical economists. The sacrifice of ten or a dozen millions of men now living, is nothing when put into the scale against the prosperity of persons to live a hundred years hence. These gentlemen, in fact, hold that most extensive evil may be done now, that future good may ensue.

Enough has been said; but I will now go one step further, and show, that "resorting to inferior soils, and applying additional capital to land with a decreasing return, instead of being the causes which create and elevate rents, are the limiting circumstances which prevent rent from rising so high as it otherwise would rise."Torrens, p. 139.

"Suppose that while the increasing demand for food raises the value of raw produce in relation to wrought goods, until manufacturing profits fall from 50 to 40 per cent., there are extensive tracts of unappropriated land of second-rate quality, capable of yielding to the cultivator a return of 40 per cent. on his capital. It is self-evident, that the appropriation and culture of these tracts could not have the effect of creating or of elevating rent. Resorting to these lands of second-rate quality would have a tendency directly the reverse, and would render it impossible for rent to rise beyond ten per cent. on the capital employed on the first quality of land. Though population and capital should continue to increase, and though the growing demand for food should periodically enhance the value of raw produce in relation to wrought goods, until manufacturing profit fell below, and agricultural profit rose above 40 per cent. ; yet so long as there remained to be reclaimed any land capable of returning 40 per cent. to the cultivator, the disposable capital of the community would be poured out on it; the supply of raw produce would be periodically increased and its value reduced, until manufacturing profits rose up, and agricultural profits fell back, to 40 per cent.; and, consequently, no motive could possibly exist to induce the person possessing disposable capital to offer the proprietors of the first quality of land a rent exceeding 10 per cent. on the capital employed in cultivation.

"As soon as it is found that the tracts of second-rate quality are inadequate to supply the increasing demand for food and material, the value of raw produce, in relation to wrought articles, will permanently rise, and the rate of manufacturing profit permanently fall below 40 per cent. When this occurs, it will become the interest of those who possess disposable capital to offer the proprietors of the lands of second-rate quality a portion of the produce for the use of the soil. Should the rise in the value of raw produce cause manufacturing profits to fall to 30 per cent., then disposable capital would flow on the unappropriated lands of

third-rate quality, which, by the supposition, are capable of yielding 30 per cent. to the cultivator. Here it is self-evident that the cultivation of the lands of third-rate quality is the consequent, and not the antecedent, of the creation and of the rise of rent on the lands of second-rate quality.

"It is unnecessary to detain the reader by pursuing the illustration further. In every increase in the demand for food, beyond what the quality of the land actually under cultivation can supply, the necessary effect of resorting to soils of an inferior grade, is not to cause rent to rise, but to prevent it from rising higher."

5. When all the immense mass of thorns and briers is cleared away, which has concealed from common view the mare's nest discovered by Mr. Ricardo, what has it at last turned out? Merely this; that as population increases and there is more want of corn, corn becomes dearer, and thus renders it profitable to cultivate poorer lands, or to cultivate more highly those which are already in cultivation. This is the amount of the discovery, when stripped of its verbiage, with which the world has been tormented for the last seven years. For Mr. Torrens has proved that high rents and dear corn are not the consequences of bringing poor lands into cultivation, but that the bringing poor lands into cultivation is the effect or consequence of high rents and dear corn. The cause

has only been put for the effect, and the effect for the cause.

6. From their doctrine respecting the rent of land, Mr. Ricardo and Mr. McCulloch proceed to deduce consequences respecting the expediency of importing grain, and the cultivation of our own soils, which shall now be pointed out and refuted. They are erroneous, because the foundation on which they are built, (namely, the nature of the rent of land) is erroneous; and because in this last case, as in the former, these gentlemen have only taken a partial view of their subjects. From the nature of this fleeting and uncertain science, this is what persons are very apt to do: it is almost impossible ever to be certain that the subject is viewed in all its different aspects. It is contended that the cultivation of lands of inferior quality necessarily increases the price of provisions, and consequently the necessary rate of wages; thereby reducing the rate of profit and the accumulation of capital, which it tends to banish to other countries, as the rate of profit is decreased.

7. I shall now show, that by our restrictions on the import of foreign grain, and by the cultivation of our own soils, we do not diminish capital, but, on the contrary, cause it to accumulate much more rapidly than if we imported grain at a lower price.

The proposition respecting the import of grain may be stated in the following popular terms, free from all technical verbosity— terms which every one can understand :