Returning to the discussion of price, we find that the price of ordinary articles, those not controlled by monopoly organizations, depends upon two causes. These are a change in the schedule of prices, and changes in the quantities offered for sale.. If this statement be true, then the effects of any given set of causes upon price would include rent, if rent in any measure modifies price. Let us suppose that the landlords agree to forego their rents. In that case, there is nothing to lead us to the conclusion that there will be any change in the sales. The demand will be the same as before, tho possibly it may be modified in its actual form.
Turning to the other side of the problem, the quan tity or supply side, will there be more offered as a consequence of the remittal of rents? Some of the farmers will have larger incomes, but the supply is furnished by many different producers, from the most satisfactorily located farmer, to the one least favor ably located, who just manages to get a return to cover the expenses of production, and who consequently pays no rent. If prices did fall on account of there being no rental payments, the inferior lands would no longer be cultivated. In other words, the supply that came from the marginal lands would not be forthcom ing, and a new margin would be established at the point where the expenses of production were met by the price.
It appears, then, that anything which affects wages and interest at once works toward the modification of the supply that is to be had at the prevailing prices.
If rent enters into price and is a cause of it, then its increase or decrease should modify the prices that are asked when the product is presented for sale. It is a matter of common observation that the garden truck men, coming as they do from every part of a district to the central market, sell their products at practically a common price.
The man who pays high rent gets no more for what he raises than the man who squats on a city lot and brings his product to the market in a big basket on his arm. If rent enters as a factor, the changes in it ought to modify the supply of produce offered at given times. If it is a fact that the marginal pro ducers are not rent-payers, that they pay for labor and capital, and not for natural agents, then it would appear that if rent does not enter into their costs it does not enter into price. These marginal producers come into the market or go out of it, according to the price that is offered. If the market wants the part of the product turned out by the marginal producers, it must pay their necessary costs.
The tenant who pays a cash rent for the use of land naturally thinks of it as one of his costs. He must make enough to cover his rent, but the prices of his products are not caused by the rent.
A remission of English rents would not change the price of wheat materially, because it would not increase either the amount of land cultivated or the amount raised per acre. Rent is a result of variations in demand. rather than a cause of changes in supply.'