The Renting Contract 1 1

§ 6. Renting of agricultural land. The employment of the renting-contract is determined by its advantages and dis advantages under particular conditions as compared with other business methods. Even in the renting of land for agricul ture, the difficulties of the contract are great. It calls for a personal oversight that is burdensome to the landlord and an noying to the tenant, to make sure that repairs are made, that straw and hay are fed on the place so that the soil may not be impoverished, to ensure the purchase of other fertilizer accord ing to the agreement, and hundreds of other details. The practice of making long leases obviates some difficulties and aggravates others. If improvements made by tenants revert to the landlord at the expiration of the lease, as was formerly the case in Ireland, there is little motive for enterprise; and if tenants' improvements must be bought by the landlord, there are many occasions for dispute. Under fairly unchang ing conditions as to prices and markets, long-time leases may be equitable; but during the wavelike change of food prices in the nineteenth century long leases increased the hardships to tenants in all countries in Europe and America. Despite these drawbacks, agricultural lands with their improvements continue to be largely rented, both in Europe and America. Of the nearly 6,400,000 farms in the United States in 1910, owners occupied 62 per cent, hired managers ran 1 per cent, and tenants operated 37 per cent (24 per cent renting on shares of the produce, and 13 per cent for cash). There were 2.3 million farm homes rented in 1910. But in America and Australia, far more than in the older countries, land changes hands by sale, and many persons prefer to go into debt for land, giving a note, secured by mortgage, and paying interest on the loan, rather than to pay rent.

§ 7.

Renting of urban real-estate. The class of wealth that is now proving to be, on the whole, best usable under the renting-contract is land and buildings in urban locations. On the whole the difficulty of ensuring the durative character of city real-estate (land and building taken together) is less than in the case of agricultural real-estate. The land being used solely as solid surface, standing room, and not at all as a source from which the chemical elements of fertility are extracted, is (except in the most rare cases of floods and earth quakes) subject to no such physical deterioration. The build ings, however, make up a large part of the value of urban real-estate, and in many cases they are subject to depreciation and to dangers. The greatest of these dangers, that from fire, can be guarded against by insurance and thus converted into a regular cost of maintenance. Damages by rough usage may be offset by higher charges to the tenants. Rentals charged to careless classes of tenants, or to careless individuals, often are fixed higher than rentals to careful tenants. By these means and by careful oversight, tenements and resi dences, which have a large measure of consumptiveness, can be treated as durative agents more easily than can agricultural lands.

§ 8. Renting of dwellings. There are in many cases strong reasons why it is to the interest both of the owner and of the tenant to bargain for the transfer of the usance rather than of the fee-simple (complete right of ownership) of city residences. With many changes in the modern citizen's busi ness and social conditions, thousands of families are often absent for a time from their regular place of residence, and while letting their own houses to tenants, they become tenants in the houses of others. Often the tenant may be a rich man who could easily buy the house, if hiring it were not more advantageous. Every year many thousands of winter homes of owners are let in summer while the owners are away, and many thousands of summer homes usually occupied by the owners are let where the owner is prevented by ill-health, or by business plans, or by travel from occupying the home himself, or is led by the desire for a change to go to some other place for the summer. The uncertainty of employment

for professional, clerical, or manual workers, makes the buy ing of a house of doubtful wisdom in many cases, even where it would be financially possible. There are thus millions of families that are not would-be buyers of houses, but are nevertheless buyers of the uses of houses. There were 8.4 mil lion homes other than farm homes rented in 1910 in the United States (that is homes in cities, villages, and the country dis tricts, not occupied by one operating a farm). This demand is far beyond what can be met by the chance vacancies of owners' regular dwellings, and it offers a field for a very safe A number of significant facts are here shown graphically. In every census division a larger percentage of farm homes is owned than of "other homes." A larger percentage of farm ownership is found in every northern and western division than in any southern division, New England being highest and the Mountain and Pacific divisions fol lowing in order.

The last two columns show the small percentage of ownership by colored occupants in the South, this explaining largely the small per centage of ownership in that section both of farm and other homes.

In every division "other homes" are owned in smaller proportion than are farm homes, the contrast being greatest where the urban popu lation is largest, viz., in New England and the Middle Atlantic states. The North Central, the Mountain, and the Pacific divisions all rank high in ownership of other homes as well as of farms, and the southern divisions rank low in both.

kind of investment under their personal oversight for persons of small or moderate means.

§ 9. Renting of real-estate for business use. The rent ing-contract has marked advantages in the hiring of shops, stores, and office-buildings in cities. There the land has a well-nigh absolute durativeness, and the buildings may be built of very durable materials. Merchants often find it of advantage to move into larger quarters as business grows, or into a different neighborhood as the center of trade changes. Moreover, as active business men they often can keep their funds invested to better advantage in their business than by putting them into the purchase outright of a store-building, as the rate of yield on real-estate investments is usually less than that in commerce and manufacture.° Many small mer cantile businesses require only a small space, less than could be bought or built on to advantage in a large city, and many agents and professional men need merely office space. This large and regular demand for shops and offices calls forth the enterprise of investors to construct and maintain suitable buildings to let for these purposes. Hundreds of millions of dollars of the funds of life insurance companies, collected from policy-holders, are invested in this way, as well as funds of educational institutions and of business corpora tions. Thus it happens that many corporations with millions of capital are in the larger cities tenants in offices owned by other corporations which own office buildings, such as the Times Building, the Metropolitan Life Insurance Building, the Singer Building, the Woolworth Building, the Equitable Building, in New York City. The very size of such office buildings and their conspicuousness in public attention give to the offices in them an advantage in convenience of access and for advertising purposes greater than is possible under other circumstances.