Rent charge

“ It was always insisted that a rent could only be charged upon something of which the use could be separated from the ownership, as otherwise it would savour of usury. [2] In the sixteenth century interesting discussions arose about the possibility of creating a personal rent charge, not secured on any specific property, but such discussions did not trouble the writers of the period which we are treating. ”

“ By an act of 1860 (23 & 24 Vict. c. 93) a gross rent charge can be substituted for a commutation of tithes on common rights at a fixed sum per head; a gross rent charge made payablein respect of the tithes of a gated or stinted pasture rated to the relief of the poor may be apportioned thereupon and enforced in the method prescribed by the other Tithe Acts; a rent charge on commons may be commuted for part of the land or redeemed, if the landowners and persons liable for tithe so agree; and upon enclosure, a rate per head may be converted into a rent charge on the lands allotted. ”

“ If {91} to-day A gives £1000 for a piece of land he does so with full knowledge of local rates, and the seller gets less for his land because of his knowledge. Therefore, when A, in his turn, leases his land and a house built upon it to another person, he cannot allege that he bears the burden of the rates. Yet it remains true that, if the burden did not exist, the land would yield A a higher rent. In a word the rates have become a rent-charge upon the property. ”

“ The idea of property does not, however, necessarily imply that there should be no rent, any more than that there should be no taxes. It merely implies that the rent should be a fixed charge, not liable to be raised against the possessor by his own improvements, or by the will of a landlord. ”

“ But apart from the fact that the size of the area which yields urban land rents is exceedingly small, local rates are a perpetual charge upon land rents. The point is that, as the renter of fixed property is rated according to his rental, the size of the rental he is able to pay is in part determined by the amount of the rates. The higher the rates, the less rent he can afford, and therefore the less can the landowner obtain for the use of his land. ”

“ On the whole, the actual landlord is by no means the monster he is popularly represented to be. He will wait rather than change a good tenant. He will make no fuss if the back rent is paid ever so slowly. To many respectable folk, keeping the home together on perhaps 22s. a week, this is an inestimable boon. It is wonderful how, among these steady people, rent is made a first charge on income, though naturally, given enough pressure, rent must wait while such income as there is goes to buy food. ”

“ Practically, however, where the expense of rent is actually incurred through the use of a building belonging to outside parties, the prevailing practice at the present time is to charge rent expense to the departments using the accommodations. ”

“ We are not now so much concerned with the practical conclusions which they deduce respecting the real incidence of taxation, as with the fact that the distinction involves a point of fundamental importance in the theory of rent. Rent, broadly defined as a payment for differential advantages, is measured upwards from a minimum level where, it is assumed, no rent is paid. The producers on the 'margin' of production clear their expenses, but have no surplus in hand to transfer to the landlords. ”

“ All rents, revised according to the actual value of the produce or property, were to be paid direct to the State. As long as he paid this rent-tax no man could be disturbed in the possession of his holding. ”

“ As a part of this capital, when once expended in the improvement of a farm, is inseparably amalgamated with the land, and tends to increase its productive powers, the remuneration paid to the landlord for its use is strictly of the nature of rent, and is subject to all the laws of rent. Whether the improvement be made at the expense of the landlord or the tenant, it will not be undertaken in the first instance, unless there is a strong probability that the return will at least be equal to the profit that can be made by the disposition of any other equal capital ”

“ The sordid subject came up again for discussion when Phyllis and I went to have a preliminary chat with the house-agent.
"You have spoken with eloquence and conviction about reception-rooms, out-houses, railway stations, golf courses, and h. and c.," said I, "but sooner or later some one must rise and say a few pointed words about Rent."
"That all depends on what you are prepared to give," he replied. "The rough-and-ready rule is to fix one's rent at a tenth of one's income."
"Yes, but which income?" I asked. "For I have two incomes and I can't afford a separate house for each." ”

“ But the first farthing they take more than their hundred, be it sooner or later, is usury.
Again, when we build a house, and let it, we have a right to as much rent as will return us the wages of our labour, and the sum of our outlay. If, as in ordinary cases, not labouring with our hands or head, [248] we have simply paid—say £1000—to get the house built, we have a right to the £1000 back again at once, if we sell it; or, if we let it, to £500 rent during two years, or £100 rent during ten years, or £10 rent during a hundred years. ”

“ Relation of rent to wages and interest Stated reversely, the law of rent is necessarily the law of wages and interest taken together, for it is the assertion that, no matter what be the production that results from the application of labour and capital, these two factors will only receive in wages and interest such part of the produce as they could have produced on land free to them without the payment of rent - that is, the least productive land in use. ”

“ It is difficult to assign any fixed proportion between income and rental to suit all cases, but a reasonable basis for the settlement of this point may be found in the assertion that while not less than one-tenth of a man's entire income need be set apart for rent, not more than a sixth, or at the very utmost a fifth should be devoted to this purpose, and this amount ought to include parochial rates and taxes. ”

“ It must form an adequate reward for all the effort and expenditure which have been devoted to the undertaking. It must furnish sufficient earnings of labour and interest of capital. So much as this it must yield in the case of those producers, who are placed under the greatest disadvantages, and furnish the last, or, as it may be called, the 'marginal' part, of the supply for which there is a demand; and it is the surplus above this amount which competition transfers to the landlords as rent.
All this reasoning, then, rests on the assumption of competition. ”

“ Taxes on rent. A tax on rent falls wholly on the landlord. There [pg 551] are no means by which he can shift the burden upon any one else. It does not affect the value or price of agricultural produce, for this is determined by the cost of production in the most unfavorable circumstances, and in those circumstances, as we have so often demonstrated, no rent is paid. ”

“ The poor-rate, although in its first levy laid upon both landlord and tenant, and, by reason of a certain elasticity in human affairs, borne for a time partly by the tenant, becomes finally a tax upon the rent alone. ”

“ If the tax be moderate, and the circumstances of the country such, that it is either stationary or advancing, there would be little motive for the occupier of a house to content himself with one of a worse description. But if the tax be high, or any other circumstances should diminish the demand for houses, the landlord's income would fall, for the occupier would be partly compensated for the tax by a diminution of rent. ”

“ The landlords will therefore be compensated in value and price for what they lose in quantity; and will suffer only so far as they consume their rent in kind, or after receiving it in money, expend it in agricultural produce: that is, they only suffer as consumers of agricultural produce, and in common with all the other consumers. Considered as landlords, they have the same income as before; the tithe, therefore, falls on the consumer, and not on the landlord. ”

“ If a man is charged with L100 a year poor-rate, it would make no real difference to him, while it would make a vast difference to the poor to take land to that value, put the poor to work tilling it, allowing them to enjoy the produce. Any expense should be paid direct by the landlord, which would leave the charge upon the land, and exempt the improvements of the tenant, which represent his labor, free. ”

“ But in the economic meaning of rent, payments for the use of any of the products of human exertion are excluded, and of the lumped payments for the use of houses, farms, etc., only that part is rent which constitutes the consideration for the use of the land. The part that is paid for the use of buildings or other improvements is properly interest, as it is a consideration for the use of capital. ”

“ A farmer, in making his present contract for rent, does not concern himself with the past history of the causes of the fertility or situation of the land, but with its present advantages, and he makes no attempt to draw the distinction between the earned and the unearned. And, in the future, he and his landlord may allow the nominal rent to remain unaltered in spite of increased prosperity or intensified depression in agriculture, in consideration simply of lessened expenditure or added liberality in the matter of improvements. ”

“ It is assumed that, if wages or profits fell below the points, which, on a comparison of the advantages and drawbacks, pecuniary and other, of farming and other occupations, are considered to be normal in the farming industry, some labourers and farmers would seek some more advantageous employment, and that, if they rose above, some fresh competitors would enter the ranks of agriculture. It is assumed that landlord and tenant are actuated by competitive considerations alone, the one trying to obtain the highest and the other the lowest rent. ”

“ The burden of local rates has, it is contended, been mainly imposed, or largely increased, since the conclusion of many of the contracts. It could not have been anticipated by the tenants when they entered upon their leases; and, while some of the expenditure for which the taxation is levied is devoted to objects of present, and temporary, or general convenience, some of it is incurred for works of permanent improvement, the cost of which will be defrayed before the leases expire, while the benefit will remain to enhance the reversionary value of the interests of the ground landlords. ”

“ In the case of the working classes the rent absorbs, at the lowest possible estimate, about one third of their total earnings, for it must be remembered that the rent is an expense that goes on all the time, whether they are employed or not. If they get into arrears when out of work, they have to pay double when they get employment again. ”

“ This, in the case of the average wage earner in this country, is not less than one-third, that is, he who earns one dollar and a half will receive as wages one dollar, the other half dollar is retained by the employer as due for the capital invested. Then having no home he must pay tribute to property in shelter for himself and family. The rent will be higher in proportion to the poverty of the apartments. The poorest tenement returns the highest rate of interest to the landlord. ”

“ Higher rents may conceivably be offered than would arise from a single regard to the productive powers of the land and the income accruing from the sale of its produce. The second occupation may be of primary importance; and, even if it is subsidiary, as in the case of the crofters, a sudden failure or unexpected disaster in their fishing ventures may render them not merely unwilling, but unable, to pay a rent, which was fixed with the prospect of securing some part of their income from this subsidiary source. ”

“ To the latter the rise is but a compensation for the tithe he pays; to the first, who pays none, it is clear gain, and therefore enables him, and if there be freedom of competition forces him, to pay so much more rent to his landlord. ”

“ It has been as much as I could do to get together forty-five dollars each month to pay you. Indeed, I can pay no more."
"Pardon me for saying that that is no affair of mine," said the landlord brusquely. "If you can't pay the rent, by all means move into a smaller house. If you stay here you must be prepared to pay fifty dollars a month." ”

“ I have, I think, now fully established my contention that the rate-rent which would be willingly offered by the tenants of Garden City, in respect of the advantages afforded them, would be amply sufficient, (1) to pay landlord's rent in the form of interest on debentures; (2) to provide a sinking fund for the entire abolition of landlord's rent; and (3) to provide for the municipal needs of the town without recourse to any Act of Parliament for the enforcement of rates—the community depending solely on the very large powers it possesses as a landlord.
N. Revenue-bearing Expenditure. ”

“ If the payment of tithe were abolished to-morrow, can any sane man believe that the tenant-farmer would be allowed to put the tithe into his pocket or to keep it there? Can any sane man believe that rents would not rise exactly in proportion to the amount of charges from which the tenant was relieved? Rent is nothing more than the money payment supposed to represent the just return which the owner claims from the occupier for105 the privilege of cultivating his land. The occupier makes his account and calculates how much he can gain by the compact. The landlord’s share is his rent. ”