The Online Library of Liberty

A project of Liberty Fund, Inc.

• Notice.
• Mr M C Culloch’s Publications.
• Treaties and Essays On Subjects Connected With Economical Policy; With Biographical Sketches of Quesnay, Adam Smith, and Ricardo
• A Treatise On Money. 1
• Sect. I.—: Circumstances Which Led to the Use of Money. Principal Properties Which Every Commodity Used As Such Ought to Possess. Not a Sign Or a Measure of Value, But a Real Equivalent.
• Sect. II.—: Circumstances Which Regulate the Exchangeable Value of Money.
• Sect. III.—: A Moderate Seignorage On Coined Money Advantageous. Principles Which Should Regulate Its Amount. 1
• Sect. IV.—: Expense of a Currency Consisting of the Precious Metals.
• Sect. V.—: Paper Money. Principle On Which Its Value Is Maintained.
• Sect. VI.—: Whether Gold Or Silver Should Be Adopted As the Standard of the Currency, Or Whether It Should Consist of Both.
• Sect. VII.—: Standard of Money. Degradation of the Standard In Rome, France, Great Britain, and Other Countries. Effects of This Degradation.
• Tables Relative to the Money of the United Kingdom.
• Treatise On the Circumstances Which Determine the Course of Exchange.
• Inland Exchange.
• Foreign Exchange.
• Sect. I.—: Nominal Exchange.
• Sect. II.—: Real Exchange.
• Sect. III.—: Computed Exchange.
• History and Influence of Bills of Exchange.
• Essay On Interest and Usury Laws.
• A Treatise On the Letting and Occupancy of Land.
• 1.: Money Rents.
• 2.: Proportional Rents.
• 3.: Produce Rents.
• 4.: Service Rents.
• An Essay Showing the Erroneousness of the Prevailing Opinions In Regard to Absenteeism.
• Sketch of the History of Commerce, to the Sixteenth Century.
• Sect. I.—: PhŒnician Commerce.
• Sect. II.—: Grecian Commerce.
• Sect. III.—: Roman Commerce.
• Sect. IV.—: Italian Commerce In the Middle Ages.
• Sect. V.—: Vasco De Gama and Columbus.
• An Essay On the Rise, Progress, and Decline of Commerce In Holland.
• An Essay On the Rise, Progress, and Decline of the Hanseatic League.
• Essay On the Origin of the Compass.
• Sketch of the Progress of Maritime Law.
• An Essay On the Colonial System of the Ancients.
• Sketch of the Life and Writings of Francis Quesnay.
• Sketch of the Life and Writings of Adam Smith, Ll.d.
• Sketch of the Life and Writings of David Ricardo, Esq., M.P.

3.

Produce Rents.

We come now to the third method of fixing rents. In it the rent is rated in specified quantities of produce, usually made convertible into money at the ordinary prices of the day. And, though not free from defects, this seems, on the whole, to be the least exceptionable plan hitherto proposed. It affords the best attainable security against changes in the value of the currency, and it neither damps the tenant’s exertions, nor thwarts the progress of his improvements; for he knows that every bushel of corn he can raise beyond the fixed quantity payable to the landlord is entirely his own. It is defective, however, inasmuch as it imposes on the farmer the necessity of paying more than the fair value of his farm in unfavourable years; while, in favourable years, the landlord gets less rent than he ought to receive. But it is difficult—or rather, perhaps, impracticable—under any system, wholly to obviate the effect of these disturbing causes. We are, however, inclined to think, that under the free system now adopted in regard to the corn trade, the disturbances referred to will be comparatively unimportant; for it is no longer reasonable, seeing the immense variety of markets to which recourse may be had, to suppose that the fluctuations in our harvests should exercise anything like their former influence over prices. It is doubtful, therefore, whether it be really worth while to set about organising any scheme for obviating or lessening the influence of such inconsiderable oscillations. But if this should be thought desirable, it may easily be accomplished by fixing maximum and minimum prices; it being declared in the lease, that the produce payable to the landlord shall be converted into money, according to the current prices of the year; but that, in the event of their rising above the maximum fixed in the lease, the landlord shall have no claim to such excess of price. By means of this check, the tenant is protected from paying any very considerable excess of rent in scarce years. On the other hand, to prevent the rent from being improperly reduced in unusually plentiful years, a minimum price is agreed upon, and it is stipulated, that to whatever extent prices may sink below its amount, the landlord shall be entitled to receive the minimum price for the produce payable as rent. With a free trade in corn, and a system of this sort, rents would fluctuate very little indeed, and landlords and tenants would enjoy the highest degree of security. We may add that this is not a mere speculative opinion. The plan now proposed was extensively introduced many years ago, into sundry well cultivated districts, including East Lothian and Berwickshire. And the experience of the estates in which it has been adopted, has shown that it is as effectual as can well be desired, for the protection of both parties, and for securing the progress of improvement.

In fixing a produce rent for farms, especially if they be adapted to a mixed system of corn and stock husbandry, which is now the case with all except those which consist of heavy clay lands, it should not be rated in corn only. Butchers’ meat, wool, and dairy produce, are articles of the greatest importance; and it would be fair to all parties, that rents should be made to depend, to some extent, on them, as well as on corn. At present, the value of stock and dairy produce appears more likely to increase than that of corn; and leases for nineteen or twenty-one years, in which no reference is made to the former, may seriously compromise the interests of the landlord. Without, however, laying much stress on the contingent probability now alluded to, it is obviously proper, seeing in how great a degree cultivation depends on them, that rent should be rated partly in the products of stock, and of the dairy, and partly only in corn: in other words, it should be made to consist of certain quantities of grain, butchers’ meat, wool, butter and cheese; the whole being convertible into money at the current prices of the day. A mixed rent of this sort would give the maximum degree of security to both tenants and landlords. And though it might, at the outset, be attended with some little trouble, there would be no difficulty in carrying it out when parties had become familiarised with it.

Maximum and minimum checks might, if desired, be applied to butchers’ meat, wool, etc., in the same way as to corn. But this would make the plan too complex. And under a system of free trade, and with rents consisting of different articles, which may be supposed to vary in opposite directions, it would be quite unnecessary.