§ 4. The medieval rent-charge as a sale of income. It thus came about that land, tho not as an economic good indestructible, was nevertheless in many cases so managed as to yield a continuing income. In medieval times this income or rent was realized in products and services, not in money. The fruits of the soil were consumed on the spot instead of being sold as now. Land was thought of as a place on which the tenant could live and from which the landlord could draw an income. The medieval estates were so tied up by legal conditions that they could not be sold outright, so means were found of doing practically the same thing. The owner, in some cases, mortgaged the annual rental by selling a rent-charge upon it. A rent-charge was an annual sum payable (in perpetuity or until redeemed) out of the yield of an estate. Thus, in the Middle Ages, not the land itself, the mill, the market rights, the forest, etc., were subject to trade, sale, and contract, but merely the usufruct, as a whole or in part, for a definite period. The sale of rent-charges has now only a historical interest, as loans now are made in other ways, the land being pledged as security for repayment. After this brief survey of the old land tenures we turn now to the modern method of selling the use of wealth of various kinds under the form of the renting-contract.

§ 5. Definition of the renting-contract. The renting-contract is the agreement of a borrower to pay a specified price for the use of a thing and, at the end of a specified period, to restore it in good condition or pay for its repair. In practical business it is necessary to have definite agreements to prevent disputes, and whenever a thing is rented there is a contract, either implied by custom or formally made, orally or in writing. The terms are all specified; the duration, whether for a day or perpetual, or at the pleasure of either party; the rent, whether cash, share of the produce, definite or contingent on some events; taxes, insurance, and repairs, what and how much to be done by either borrower or lender. In the case of things other than land, many other details must be specified. Some of these details may be merely implied in a higher gross rent, which covers ordinary wear and tear, ordinary risk of breakage, fire, etc., and ordinary risks of every kind (e.g., rent of piano, of theatrical wardrobe), the borrower being liable, however, for unusual carelessness in use.

The form of the renting-contract is observed by men in estimating the uses of their own wealth where no contract exists. If they count the gross product of an agent as a net-usance, it is bad bookkeeping. In many cases it is necessary, therefore, for owners to observe the form of the renting contract in order to determine the net yield of durable goods.

§ 6. Renting of agricultural land. The employment of the renting-contract is determined by its advantages and disadvantages under particular conditions as compared with other business methods. Even in the renting of land for agriculture, the difficulties of the contract are great. It calls for a personal oversight that is burdensome to the landlord and annoying 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 according 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 unchanging 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 earthquakes) subject to no such physical deterioration. The buildings, however, make up a large part of the value of urban real-estate, and in many eases 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 residences, 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 business 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 buying 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 million homes other than farm homes rented in 1910 in the United States (that is homes in cities, villages, and the country districts, 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