its value in labour had diminished. He would perhaps have 21 per cent. of the product, giving him 63 bushels, and leaving to the occupant 237, as the return for his labour, aided by the spade and the plough.

The value of No. 1, when first produced for cultivation, was three years' labour, and as that of one year was worth 150 bushels of wheat, the price of the farm in wheat would have been 450 bushels, or nine years' purchase of the 50 bushels received as rent. The value in labour being now 30 months, and a year's labour being worth 237 bushels, its price in wheat would be nearly 600 bushels.

Here we find that the value of the farm in labour had fallen, and that the owner could not obtain in exchange for it as much as at first; nor could he have as rent so large a proportion of the produce. Labour had, however, by the aid of the plough and the spade, been rendered so much more productive, that this reduced proportion was attended with an increase of more than 25 per cent. in the quantity of commodities, rent having advanced from 50 to 63 bushels.

If wheat were the commodity adopted as the standard of comparison, the price of the farm would have risen. The increased productiveness of labour applied to cultivation, having lessened the cost of production of that commodity, the effect would be a general rise of prices. That of the farm, which was originally only 450 bushels, would now be about 600 bushels.

Labour, being thus aided by improved implements, had improved in its quality. Farms were more readily produced than they had been, and the consequence was a diminution in the value, in labour, of all previously existing farms, and a like diminution in the proportion of the product that could be claimed by the proprietor, as rent, for its use. The course of operation here is precisely the same as that produced by the improvements in the quality of axes before described.*

Let us now suppose the same community, upon the same land, with the difference that the system of exchange is established among the different families of which it is composed. After a

* Ante, page 19.

short time, it is found expedient to establish a store, at which the producer of wheat can obtain a spade, and the producer of spades can exchange them for wheat. The necessity for transporting their produce to this place of exchange, causes the owners of the farms in the vicinity, to make roads leading to it, at considerable cost of labour. These roads tend to facilitate the approach to the same place of those persons who may subsequently appropriate to themselves the lands that remain unoccupied. When the time arrives for the formation of settlements No. 2, a little further removed, their owners find roads leading through No. 1, ready for their use. No. 2, being able by the labour of 27 months, aided by a spade, to obtain a farm that will yield 200 bushels, it follows that by the same quantity of labour, (three years) originally bestowed on No. 1, he could have a farm that would yield him 267 bushels. He desires, however, to exchange a part of his produce at the store for such articles as he does not produce, and the cost of transporting that part is equal to 25 bushels. He has therefore only 242 bushels, or the value of that quantity in other commodities, for his consumption.

The two parties produce on their farms quantities precisely equal, but No. 1 has the benefit arising out of the consumption of 25 bushels more than the other. To what is this due? Not to any difference of land, because the soils are exactly equal, and yield the same quantity, but to the additional capital and labour employed upon his land, and at the store in facilitating exchanges. The establishment of a store-or the building of a factory-is more advantageous than the same quantity of capital applied to the construction of the best description of road. The latter enables the farmer to take his produce to market, whereas the former brings the market to him. The store being placed in the centre of the settlement, those nearest to it, who have been engaged for some years in making roads and accumulating the capital which caused its establishment, now derive advantage therefrom in having 25 bushels of wheat, per annum, more than those whose farms are more recent, and who have contributed but little to the roads and other improvements.

Had No. 1 wished to rent his farm when it produced him only 200 bushels, he would have obtained one fourth of the

proceeds, or 50 bushels. The increased facility of obtaining farms having lessened their value in labour, No. 2 could not obtain for the use of one yielding 242 bushels more than 23 per cent. of the produce of his land, say 56 bushels, leaving the labourer 186 for his year's work. If 186 bushels be the value of one year's labour, No. 1 may receive 81 bushels as the rent of his farm, leaving the occupant 186, whereas the tenant could have had only 150 when he first occupied it, and paid only 50 bushels.

No. 2 would improve his roads, and increase his farm. With the aid of a plough be would greatly increase his production, and by expending labour upon his roads, he would diminish the cost of exchanging it. The effect would be to facilitate the communications of No. 3, who would now, with the aid of the spade and plough, be able to obtain in 20 months a farm of 200 bushels, or, at the cost of three years' labour, one that would yield him 360 bushels. Having a large quantity to exchange, and a greater distance to transport it, the cost might be, notwithstanding the improvements of the roads by No. 2, 60 bushels, leaving 300 as the return to a year's labour. The three farms being thus produced, and labour being aided in all cases by the same machinery, the returns on the land will be equal. No. 1, we will suppose to yield now,

360

Three years' labour would now produce a farm capable of yielding a net income of 300 bushels, whereas, originally, it would produce one capable of yielding only 200 bushels. The effect of this increased value of labour would be, as before shown, to diminish the proportion that could be required by the owner, and No. 3 could not now obtain more than 21 per cent. of the proceeds, say 63 bushels, leaving 237 to the labourer. If the owner of No. 2 desired to rent it, he might claim of the

occupant all, or nearly all, that it would yield over 237 bushels, the value of a year's labour employed upon No. 3, say 93 bushels as rent, or interest for the capital he had expended. No. 1 might claim 123 bushels from the occupant, who would still retain 237 as wages.

The capital applied to the improvement of the roads, and the facilitation of exchanges, has had the same effect as if the owner had appropriated a larger quantity of land, and improved his machinery to such an extent as to enable an individual to cultivate that increased quantity. A whole year's labour expended upon No. 3, will produce net only 300 bushels, whereas it will, upon No. 1, produce 360, equal to one and one-fifth labourers. The capital expended aids production to the extent of one-fifth of a labourer, and the owner claims the product of the aid thus afforded, or 60 bushels more than would be paid for the use of No. 3.

The value of a year's labour being 237 bushels, and three years' labour being the cost of farm No. 3, its value would be 711 bushels, yielding 63 as interest. No. 2, yielding 93 bushels as rent, would now be worth 1050 bushels, or about 4 years' labour, and No. 1, giving a rent of 123 bushels, the labour of six years, or about 1400 bushels. The owner of No. 1 had, however, been nine years employed in bringing his farm into the condition in which it now exists, and No. 2 had been six years. Their value in labour, is therefore less than their cost, because it could not exceed that of producing another of similar productive power, and the improved implements had tended to lessen the labour required for so doing.

The extension of the settlement to No. 4, would be attended with similar effects. No. 1 would improve his roads and his farm. No. 2 would benefit thereby, and go on to improve his own. No. 3 would do the same, and No. 4 would be brought into action. Its occupant would be enabled, in consequence of increased capital in the form of agricultural instruments, to appropriate a farm that would yield him 410 bushels. The cost of transportation would be 90, and there would remain 320. No. 3 would yield net 350-No. 2, 380, and No. 1, 410. The wages of labour would rise to 256 bushels.

Rent on No. 4 would be 20 per cent. on the net product, say 64 bushels, leaving 256 to the labourer-No. 3 might pay 94 bushels-No. 2, 124-and No. 1, 154 bushels, leaving in each case the same quantity, as wages, to the occupant. A year's labour being worth 256 bushels, and 3 years being required to produce a farm like No. 4, its value would be 768 bushels, yielding 64 as rent. No. 3, yielding 94 bushels, would now be worth 44 years-No. 2, 6 years, and No. 1, 7 years' labour, or 1920 bushels. The quantity actually bestowed upon them, has, however, been 3-6-9 and 12 years.*

Nos. 1, 2, and 3, enjoy what are termed advantages of situa tion-i.e. they have had capital applied in the form of stores, roads, &c., to facilitate the exchange of their productions for the commodities desired by the producers.

* It is not to be supposed that changes such as are here described, take place in the short period of twelve years. On the contrary, several generations are likely to pass away before they are accomplished. We suppose No. 1 to have had twelve years of labour actually applied to its improvement, independently of the time occupied in raising the means of subsistence. Allowing 48 years to have elapsed from the time of commencing the settlement, the first three years of which were exclusively applied to the preparation of the farm No. 1, there will remain 9 years labour to be taken from the remaining 45, or one-fifth of that of the proprietor for the whole term. No. 2 will have had 33 years—the first three wholly devoted to it, and one-fifth of the remaining 30-and No. 3, 18 years, three of which exclusively thus occupied, and one-fifth of the remaining fifteen years, making six years in the whole.

During the 45 years, wages have risen from 150 to 256 bushels, the average being 203. The owner having applied one-fifth of his labour, has thus given about 40 bushels per annum to the permanent improvements of his farm, to the making of roads, &c., &c. Its original value was 450 bushels, and to this has been added, for 45 years, a contribution of 40, making 1800. The total cost is, therefore, 2250 bushels, but the value is 1920 only.