Certain economists do not distinguish between land and capital. There is so much similarity between land and capital and between rent and interest that they classify land as a form of capital and consider rent as interest on landed capital. There are, however, certain good reasons for distinguishing between land and capital and giving land a separate treatment. For us the most important reason for the distinction arises from the fact that land is limited in quantity while it is possible to increase the quantity of most other forms of capital. This is especially true of agricultural land in the older countries, although it is true that in all countries some land of poorer grade can be found which is not actually in cultivation, and also it is true that here and there the total amount of agricultural lands can be added to by filling up lakes and draining swamps. But, on the whole, the fact that land is limited in quantity gives rise to certain problems to which attention must be paid, problems which do not arise in connection with capital. The same reasoning applies to waterfalls and to mineral deposits. Their limited occurrence in nature makes it necessary that they be given different treatment from goods which can be reproduced at will.

While, therefore, we insist on the distinction between land and capital, we do not overlook the fact that there is a boundary line between the two where one merges into the other, and where it is difficult to say whether we should classify the particular good as land or as capital. For instance, this will be true where the owner of a lake goes to great expense to fill it up. This made-land has in many respects the economic appearance of capital. It is also true where capital in the form of manures for the land has been used upon the land and has improved the quality of the land that the returns from the capital can then be treated as returns from land. But this difficulty of finding just where the boundary line between land and capital is located is not a sufficient reason for failing to make a distinction between the two.