in a situation of that kind, and the occupants are scattered over a distance of several miles. So long as their wants are satisfied within themselves, it is evident that the river can be of no use to them for the purposes of exchange, and it is of little importance whether they are near to, or distant from it. When they begin to trade with each other, without any common centre, the river becomes useful, because it facilitates the arrangements they wish to make, but there is still no difference in the value of any of the properties along its banks. After a time it is found that a much more convenient mode of operation would be to have a common centre, where all parties could meet for the purpose of performing their exchanges. Immediately upon this, the property near that centre rises in value, because of the capital employed in building the store house, and in supplying it with merchandise. The people who had settled inland, would find themselves now, at the distance of two miles, more remote from the place of exchange, so far as regarded the cost of transportation, than were those at five miles distance along the river, and rents upon its banks would be higher than those inland, by nearly the whole difference. Here it will be said that rent is paid for the natural advantages arising out of the proximity of the river, but it is really for the accidental one, arising out of the location of the capital. The tendency of capital is to diffuse itself equally in all directions, but natural obstacles may and do obstruct it. It passes freely along a river, but its passage may be intercepted by a mountain, beyond which its influence may be but slightly, if at all, felt. Two valleys may run parallel to each other; both may have streams of water passing through them, and the natural advantages of both may be the same; yet one may have had a manufacturing town, or a city, located in it, and have thus become the centre of business, while the produce of the other has to surmount the hill, or mountain, that separates them. The owner of land on the Ohio finds it better, at one time, to send his produce to Philadelphia or Baltimore, rejecting the use of his natural advantages; at another the application of capital in the form of a steamboat, doubles the value of his property, by enabling him to convey its produce cheaply to New Orleans: at a third it is again increased by

the making of a canal, which enables him to reject entirely the use of the route which nature has provided, and to send it by canal and rail road to Philadelphia. The natural advantages of property on Lake Ontario are very great, but the smaller capital of Montreal, passing up the bed of the St. Lawrence, is not felt with as much intensity as is that of New York, even with the disadvantage of the interference of various natural obstacles. Should capital be applied in sufficient quantity through the whole distance, the attraction towards New York will be irresistible; the use of natural advantages will be entirely relinquished, and rents in New York will rise in consequence of the capital so employed. The situation of Baltimore is more favourable for a trade with the West than that of Philadelphia, but capital to a great amount has been applied, and the trade is attracted to the latter city. The natural advantages of the Seine are trifling, yet property near Paris is high, while that on the Rhone, or the Loire, for which nature has done as much, is of small value.

Yet

Rivers cannot be cause of value, as they frequently fail totally to give it. The Amazon does not give it to the land on its banks, nor does the Indus. The latter is vastly larger than the Ganges, yet it is not even used. Lieutenant Burnes says, that in Sinde, the villages within reach of the inundation are 'large and numerous, and including the whole face of the country 'there cannot be less than a million of human beings. 'there is no trade carried on by water in this country, and 'there are consequently no boats.'t In describing the Punjab, which yields more grain than is necessary for the consump 'tion of its inhabitants, and where camels, mules, horses and 'cattle abound,' and are of superior description,' he says the 'Indus and all other rivers are navigable, but not navigated.'

There may be, on the same stream, in one place, a powerful water-fall; excellent timber in a second; coal in a third, &c. If the first capitalist that comes there chance to be a miller, the settlement may be formed around his mill, and the advantages of situation possessed by land in the neighourhood of it will be very considerable. It may happen that the settle

• Travels in Bokhara, Vol. I. 146. + Ibid, Vol. I. p. 80. ↑ Ibid, Vol. I. p. 149.

ment is placed in the situation most advantageous for the preparation of lumber, and then land in that neighbourhood will be most valuable; and so, in another place, if coal should be the attraction. What are called natural advantages, like fertile soils, are dependant for their value wholly upon the application of labour and capital, and we cannot attribute to them the payment of rent. The situation that is most convenient to fertile lands may be of most value to-day ; to-morrow the neighbourhood of a mass of granite may attract capital, and soon after both may be eclipsed by its investment in the coal trade, requiring a different place of business. The labour employed on the superior soils of the South of England gave value to town lots that are now restored to cultivation, while the coal and iron of the north, have attracted capital that has given immense value to land on the Mersey, that was before valueless, notwithstanding those natural advantages. If, however, we examine the cost at which this coal and iron have been brought into activity, we shall find that it far-very far-exceeds their present value.

Land of the first quality may be cut off from market, and be without value, because of impediments that may be removed by the aid of capital. All the fertile lands of the Red River were deemed worthless, because of the difficulties arising out of the raft,* that prevented its navigation. Labour and skill have been applied, and the difficulty is removed, a consequence of which is that they are becoming very valuable, although their fertility is no greater than before.

Advantage of situation will always be found to be only proximity of capital, and the same effect is produced, whether it be brought to the land, or the land be brought to it, by making good roads, or canals. In the case of those on the Red river, there might be equal fertility, but the value would be comparatively small, were it not for the capital invested in steamboats, by which their produce is carried to market. Were the occupants obliged to depend upon keel boats, as was formerly the case

*The Raft was an immense mass of timber, accumulated during many ages, tha occupied the bed of the river for above 150 miles, and entirely prevented its navigation. It has recently been removed, at very considerable cost.

on the Ohio and Mississippi, a large portion of the produce would be absorbed by the cost of transportation. Proximity of capital enables the cultivator to exchange his products readily for those commodities which he requires for his own consumption and that of his family, and thus land of the sixth degree of fertility, in the neighbourhood of London, yields a larger quantity of commodities, in return to labour, than can be obtained from that of the first degree in Illinois. Every acre of land throughout the world may be made to pay rent by the application of labour to its improvement, or to facilitating the exchange of its products, while the most fertile soils to which labour has not been applied, can command no rent, and have no value to render them worth the labour of appropriation.

The man who appropriates a distant soil expends labour in so doing, precisely as does another who appropriates whales, or fish, or birds. The whaleman must be able to exchange his oil for as many hats, or coats, as he could have obtained by any other pursuit, or he will have misspent his time. In like manner, he who goes to a distant land and appropriates it, must obtain something which he could exchange for hats and coats, equal in value to the labour he has bestowed, or he will have wasted his time. Every man who came out with William Penn gave a certain quantity of time and of money in the search of this distant land, and that which he received in return should have been worth the labour thus given. We shall, however, show that such was not the case-that the whole colony would not, thirty years after, sell for one fourth of the cost of production, and that such has been the case with colonies in general. If land possessed exchangeable value, independently of the labour applied to its appropriation and improvement, Penn should have had it in his power to sell it for a large advance upon its cost, whereas he would gladly have sold at a heavy loss.

The man who sells oil makes no charge for its natural quali ties. In estimating its cost he puts down the value of the labour employed in its pursuit, and such is its value. The cost of steam consists in the quantity of labour applied to producing the engine and the fuel, and in managing the engine. The man who sells oil and steam is in reality paid for the labour em ployed in producing them. They exist in boundless quantity, and their value in exchange arises out of the labour so employed.

Such is the case with land, and he who pays rent for its use pays only interest upon the labour that has been employed in its production, by which it has been rendered a marketable commodity, for which hats, shoes, coats, or money, can be had in exchange.

If the views we have thus submitted are correct, landed property must be subject to the same laws which govern the accumulated product of labour invested in the form of axes, ploughs, and other implements, and which we have already stated.* If so, with the increase of capital and extension of cultivation, there must be an improvement in the condition of the labourer —an increased facility of obtaining landed or other capital—an increase in the amount of commodities obtainable for the use of any given amount of capital,-accompanied by a diminution in the labour value of pre-existing capital, and a diminution in the proportion of the product of labour that can be claimed as rent, or interest, for its use. If, on the contrary, the value of land results from limitation of supply, rendering it necessary, with the increase of population, to apply labour and capital with a diminished return, there must be with the extension of cultivation, a deterioration in the condition of the labourer-a diminished facility of obtaining landed or other capital-a decrease in the amount of commodities obtainable for the use of a given quantity of capital-accompanied by an increase in the value of land, more rapid than would result from the labour applied to its improvement, and a power of demanding a constantly increasing proportion of the product of labour, as rent, for its use. In the one case there must exist a power of extending cultivation with a constantly increasing return to labour, and in the other a necessity for applying labour with a constantly diminishing return.

For the purpose of ascertaining which of these views is in accordance with the facts offered to our consideration throughout the world, in past and present times, we propose now to inquire what has been the change produced upon wages and profits by the extension of cultivation, and whether the present value of landed property exceeds or falls short of the value of the quantity of labour required for its reproduction, were it again in a state of nature.

* Ante, page 19,