return, no doubt result, nature assisting, from the labours of the cultivator; but the value of these things-the power they confer of commanding the resources of society-is not measured by those labours, but depends on causes extrinsic to the cultivator's operations. The produce bears the price it does, not in virtue of what the farmer has done, but because society needs food-needs food in quantities which can only be obtained by bringing lands under cultivation inferior to the best on his farm. That portion of the value of his produce which is due to this circumstance is, so far as he is concerned, an accident; something to which he has no more right than any one else. As it does not result from his exertions, so it offers no encouragement to his industry; his claim to it is therefore wanting in that basis which constitutes the justification of property from the economic point of view. My conclusion then is that the due reward of the cultivator's industry, even where he supplies the entire labour and capital employed in production, is not necessarily co-extensive with the whole produce of his farm. It is only so on the supposition that he enjoys in raising it no exceptional advantages arising out of his relations with other people. But where he enjoys such exceptional advantages, that is to say, where he farms land better than the worst that yields the current profit of the country, the principle of property, economically considered, is satisfied by his retaining so much of the produce as shall give him the average remuneration, leaving to society the remainder to be disposed of as it shall think fit.

The other element of the problem is to do substantial justice to the reasonable expectations of the landlord. I say "reasonable" expectations, because if the State is to be bound, not by what landlords might reasonably expect when investing their money in land, but by what they actually expected, or do now expect there is an end to the question; nothing remains but to recognise their right of property in its most absolute sense, and lend the power of the empire to its maintenance. Risu solvuntur tabulæ. But if this extreme ground is not to be maintained, then the claims of the landlord and tenant are reconciled, become in fact the correlatives of each other; for "reasonable" expectations must be bounded by the considerations set by public policy; and public policy manifestly requires that agriculture should enjoy the advantages common to other industries in the country—a result which is only attained when the ordinary rewards of industry are left with the cultivators of the soil. So much as to the nature of the problem.

Let me here recall to the reader the nature of " economic rent," and the causes to which it owes its existence. It is that portion of the value of the returns from land which remains after the outlay of production has been replaced with customary profit; and its existence

results from a permanent discrepancy between the price of agricultural produce and the cost of production of a large portion, the price being regulated by the highest standard of cost, and being consequently more than sufficient to remunerate the outlay on all produce raised at a cost less than this. These being the causes which determine economic rent, the amount will evidently be measured by the extent of the discrepancy; and consequently will vary, the price of produce being given, with the productiveness of the soil, or the productiveness of the soil being given, with the price of produce. Now these phenomena-the prices of agricultural produce and the productiveness of the soil, as indicated by its average yield—are already made the subject of record in our official statistical returns. Here then we have two available criteria which measure the growth of economic rent. Let us see how far they will help us in the solution we are in search of.

The definition of "economic rent" as being so much of the value of the produce as exceeds the due remuneration of the cultivator's industry, might seem to identify this element with that which is properly, on the principle of distribution just laid down, the landlord's share; and the inference would be just, if we were to include in the cultivator's industry, not merely the capital and labour employed in raising the annual crops, but also that employed in adding to the productive qualities of the soil. But, as economists are aware, when the results of labour and capital are once made a part of the land itself, the returns upon them are governed, not by the laws of profit, but by those of rent, and become in practice inextricably blended with the rent due to natural fertility; while for the same reason they are distinguished from the returns which accrue on the ordinary annual outlay. In describing, therefore, "economic rent" as the value which remains in excess of what is needful for the due remuneration of the cultivator's industry, it must be understood that that industry only is spoken of which is employed in the direct production of the annual returns. Bearing this in mind, and having regard to what the tenant may do in the way of permanent improvement of the soil, it will be seen that the future growth of the landlord's share will not be commensurate with the future growth of "economic rent," and will not consequently follow the same indications. "Economic rent" gives us the maximum which the landlord's share can possibly attain; but in determining the amount which in the actual circumstances is properly his, we must discriminate the causes on which the productiveness of agriculture depends. What we want, in short, is some test which shall enable us to detach from the general value of the raw produce of the country that portion of it which is the result of causes external to the cultivator's operations. It is this portion only which society,

in sanctioning private property in land, has consented to give up to the landlord.

Of the two criteria just mentioned-prices of produce, and the productiveness of the soil-the former, agricultural prices, plainly cannot be affected (at least in a way to raise rent) by any conduct on the tenant's part. An advance of price of a durable kind can only arise from one or both of two conditions-either from a fall in the value of money, or from such an augmented demand for food as should necessitate for its satisfaction the bringing under cultivation, without contemporaneous improvement in the art of agriculture, less fertile soils than any now cultivated. The latter contingency is one exceedingly unlikely to occur; but the former is at the present moment in process of realisation, and amongst the causes immediately affecting the pecuniary interests of landlords is perhaps the most important. Changes in the price of produce can thus only occur as the result of causes operating through society at large; it follows that all such changes would indicate grounds for a corresponding change in the pecuniary amount of the landlord's share. This has been generally recognised by the advocates of fixity of tenure in Ireland, and may be taken as a settled point in the controversy. It remains to consider whether this criterion alone adequately satisfies the justice of the case.

The only other cause which can affect economic rent being the productiveness of the soil, it might seem as if-unless where the landlord undertakes or concurs with the tenant in undertaking improvements of a permanent kind (cases which might easily be provided for by special arrangements between the parties)—I say it might seem, excluding such cases, as if all future increase of productiveness in the soil must necessarily be the result of the action of the tenant, and that consequently all future augmentation of economic rent, not referrible to an advance in prices, should properly be assigned to him. But plausible as this inference is, I think it may be shown to be unwarrantable.

Let us consider the following case. Suppose some country village, at present of small account, to grow into a town of some importance. It would naturally soon be connected by railways with the chief industrial centres of the country, and, as an inevitable consequence, agricultural rent in the neighbourhood would greatly rise: it would rise for two reasons. First, because the local demand would raise the local prices, and, thus far, the criterion of prices would assign the increase to the landlord; but it would rise, secondly, because the proximity of a town and the facilities offered by railway communication would greatly cheapen production. The farmer would now be able to procure his ploughs and harrows, his threshing and reaping machines, his artificial manures, his tiles for draining, on greatly cheaper

terms than before. Farming at greater advantage, he would be able (and that irrespective of any advance of price) to cultivate soils which formerly it would not have paid to cultivate, and in general to employ with profit a larger capital on his farm. The soil, without supposing any change in its physical properties, would now yield a larger return, and in effect become more productive. The larger capital employed upon it would yield a larger return, while of this increase a portion would be obtained at a lower cost than the current prices, without supposing any advance beyond what has previously prevailed, would suffice to remunerate. These are conditions which imply an advance in "economic rent "—an advance not due to prices, and not indicated by prices; and the question is to what cause is this result to be attributed—to the industry of the tenant, or to the progress of society in the locality? The tenant is very evidently a co-operator in the result. Without his capital

and industry the increased produce could not be obtained; but that capital and industry would find their due reward in a corresponding augmentation of wages and profits; and the fact we have to deal with is the existence of a new increment over and above this due remuneration. It is with this part of the phenomenon only that we are concerned; and the point to be determined is its proper cause. Now it seems to me, for the same reasons which apply to the phenomenon of rent in other cases, that it is properly referrible, not to the action of the cultivator, but to the progress of society.

The principle involved in this illustration is of very great importance, since it represents an influence that is constantly operating in all progressive countries, and which cannot but operate in Ireland if it is not to remain for ever in the slough of despond. Every fresh invention in the arts of productive industry applicable to agriculture, every extension of railway communication, every new development of internal trade, of external commerce, would be attended with consequences analogous in character to those which happened in the rural environs of our imaginary town. If Englishmen desire an illustration on a grand scale they have only to look around them. The immense growth of rent in England and Scotland within a century is wholly unexplained by any corresponding rise in the price of produce, and is far from being adequately explained by the improvements effected in the permanent qualities of the soil, considerable as these have been. The phenomenon only becomes intelligible when we take account of the influence of industrial and commercial progress generally in cheapening agricultural production. Here, then, we find a source of growth for "economic rent," born of circumstances extrinsic to the tenant's sphere, and which should,

(1) I have to thank my friend Professor Waley for having called my attention to the importance of this aspect of the case.

therefore, on the principle of discrimination we have adopted, properly accrue to swell the landlord's share. But augmentations of rent thus arising would not be accompanied with any corresponding advance, nor, necessarily, with any advance at all, in agricultural prices.

I am, therefore, brought to the conclusion that the criterion of prices, taken simply, and without reference to other circumstances, would fail to furnish an adequate basis for the periodical adjustment of rent. Its adoption would, in effect, transfer to the tenant that for which the State has permitted and encouraged the landlord to pay. I own the considerations just adduced, not to mention others that might be urged in the same sense, go strongly-at least so it seems to me to show the fundamental impolicy of giving up land to private speculation. But that is not the question here. Land in Ireland has been given up to be thus dealt with; and, this being the policy of the country, those who have embarked their fortunes in this venture are entitled to be protected in its legitimate fruits.

There is, therefore, need of some criterion to supplement that of prices, some criterion which shall mark the growth of rent proceeding from causes not embraced by price, nor yet identical with the operations of the tenant in improving the soil. In a word, we want a test which shall discriminate so much of the increased productiveness of the soil as arises from enhanced efficacy of the productive instrument itself, from that increased productiveness which is, so to speak, the agricultural expression of the progress of the age. After some consideration I am inclined to think that such a test may be found in the average yield per acre of the staple produce of the soil over the whole country-information supplied already by Irish agricultural statistics. This average productiveness would not, I think, in the main, be very seriously affected by the permanent outlay of tenants, for it must be remembered that a large portion of their improvements are in the nature of reclamations of waste land; and such land will, from the nature of the case, be the least productive in the country. Thus the effect of tenants' improvements would largely be to bring down the average level of productiveness throughout Ireland. On the other hand, there would be improvements, such as thorough draining, effected in the better lands, which would tend to raise the level. As between the two modes of influence I strongly incline to think that the tendency to depress the level would prevail; though I do not believe the preponderance in this direction would be so great as seriously to affect the correctness of the test.1 This, however, might be matter for

(1) Applied to land under tillage in Ireland since 1847-the period from which the present system of statistics dates-the criterion shows a very great decline in the productiveness of the soil; but the explanation of this is to be found in the fact of its being partially applied. The newly-reclaimed land is always, at least in the first