§ 1. Price of the separable use. § 2. Medieval land tenures and the usance of land. § 3. Land destruction and repair. § 4. The medieval rent-charge as a sale of income. § 5. Definition of the renting contract. § C. Renting of agricultural land. § 7. Renting of urban real-estate. § 8. Renting of dwellings. § 9. Renting of real-estate for business uses. § 10. The renting contract in other cases. § 11. Buying the usance without the renting contract. § 12. Unsuitability of the renting contract in commerce. § 13. Definition of rent. Note on Various meanings of rent.

§ 1. Price of the separable use. Wherever there is a thing of value there is a chance that trade will occur between men, and that a price will result. In our discussion of price above (Chapter 7) we fixed our attention upon those cases where concrete objects with direct uses are traded as wholes, such as loaves of bread, apples, and horses. The owner of such a commodity must usually sell the whole object if he is to sell the uses that it contains. The price is built upon the valuations - in the minds of the various traders - of the totality of uses contained in the goods. Now the valuation of the uses separately - the conception of usance - makes possible the problem of price in a different form, that of the buying and selling of the separable uses, leaving the ownership of the durative agent unchanged. The simplest way to buy the uses of a thing would seem to be to buy the use-bearer outright—boat, horse, house, land, with all its uses. But the sale of the separable use may under some conditions be simpler and more advantageous to both parties than the sale of the use-bearer itself.

§ 2. Medieval land tenures and the usance of land. Doubtless the perception of this advantage led to multitudes of loose bargains for the use of personal belongings in earlier conditions of society;1 but the first great development of usance-trade was in the case of land. In ways and for reasons which need not be described here, land ownership in all the early civilizations was bound up with certain political rights and dignities. The land was not a personal possession, it could not be sold outright (in most cases) ; it must be passed on to the heir and successor of the landlord. The landlord got his income from those to whom the land-uses were granted. Even as late as feudal times in medieval Europe the whole social organization was built around land tenures.

Land and the things pertaining to it, such as ditches, houses, mills, cattle, and stock, constituted the wealth of the rulers and landlords. Land was granted to the vassal, or to the tenant or to the serf in return for produce, and for services, some military and some agricultural in character. The contract, expressed or customary, was known and carefully interpreted in all its items. The tenant was held strictly to his duty to keep the land in nearly undiminished fertility. A certain mode of using the land was enforced; certain limitations were placed upon the use of pastures, of forests, and of fields. Moreover, the tenant had an interest or equity in the land because the rent he had to pay was fixed by custom, not by competition, and always, probably, was less than a competitive price would have been. The landlord, therefore, could count in good part on the undiminished power of his land and stock from one year to another.

It would be a mistake to see in these early and medieval relations between a king and his vassals, and between land owners and the serfs on their estates, more than a vague and embryonic form of rent-contract. Political rather than economic relations were dominant; it was a time of status rather than of free contract.2 Originally in taking the land and pledging loyalty to his feudal superior, each vassal, high or low, assumed pretty definite obligations, some of a military, others of a political, others of an economic nature. But thereafter in the thought of that time there was but vaguely present the notion of contract in the modern sense as regulating the economic relations of the descendants, peasant and landlord, or landlord and his feudal superior. "Each man took his place in accordance with inherited and forced, rather than free, contracts."3 But gradually there developed a more modern form of agreement between the owner of land and the tenant. Kent-payment by the tenant and wage-payment by the landlord for any work done on his domain by the peasants were counterparts in this development in which contract was gradually displacing custom, status, and inheritance. § 3. Land destruction and repair. It has been seen that all economic agents, considered as wholes, are more or less consumptive, and more or less durative.4 In practice and in theory they may be treated as either the one or the other. They may be treated as consumptive by letting them wear out, while spending all their uses within a certain period; thus are used food, fuel, lubricating oil, lights, and sometimes tools and machinery. All their value is looked upon as transferred to, or realized in, the product, in that period. On the other hand some goods are given, by means of repairs, an artificial appearance of durability, so that the whole agent is treated as having the durability of the most enduring part of it. It was in this manner that agricultural land came to be looked upon as indestructible.5 As mere land surface, or location on the earth's surface, it is, except for rare catastrophes, such as earthquakes, volcanic eruptions, and floods, well-nigh everlasting in the view of mortal man. But it is something more than mere location that makes land useful, whether used for agricultural, forestry, quarrying, or mining purposes. Used for these, and even for residence and commercial purposes, it is quite capable of being used up and destroyed as a use-bearer. It is in large part not nature but man's art in the careful use of land that enables it to be looked upon as an indestructible agent, yielding a permanent series of uses. A form of contract came to be used in letting the land for hire, that called for the return of the land in as good condition as when it was taken. The tenant had to replace the elements of fertility which he used up. It is clear that the main thing he buys from the landlord is what we have called the usance of land; but as he usually takes something more (through failure to repair and because of inevitable depreciation) he pays for this an additional price included in the gross rent.

1 See on the lack of definite notions of price among fellow-members of tribes in primitive society, selections from Herbert Spencer and from Sir Henry Maine, in the "Source Book in Economics," pp. 3-14.

2 For a description of the conditions prevailing in England just before the Norman Conquest in 10GG see Cunningham, "The Growth of English Industry and Commerce," vol. I, p. 10 ff. The conditions, as he says, are "difficult to describe in modern terms, as these connote distinctions which only emerged at a later date."

3 Cunningham, idem, p. 129.

4 Review in general ch. 11 on Consumption and duration.

5 See especially ch. 11, secs. 7, 8.