222 NATURE OF CAPITAL AND INCOME [Cmar. XIII

rapidly, it may happen that in certain quarters, although
the present use for dwelling purposes is more important, in
a few years the locality will cease to be a residence quarter
and the land will be needed for business purposes. In such
cases, it may “pay” to keep the land out of present use entirely
 and reserve it until the city has grown so as to make
it profitable to erect a business block. If the land were now
encumbered with a dwelling, either the possibility of its
subsequent use for business purposes would be cut off,
or the profit from its conversion to those purposes would be
impaired by the prior destruction and waste of the dwelling.
Under such circumstances it would usually happen that
speculators would buy up and hold the land. The manner
in which the gain presents itself to them is simply as a prospective
 rise in value from the growth of the city; they
therefore buy the land to sell it later at a higher price.
Such a speculator is commonly regarded as keeping land
“out of use.” He is, however, only deferring the use, and,
if he has foresight, is no more to be condemned than the
wise speculator on the wheat exchange, whose work, as is
well known, operates to conserve the supply of wheat. The
speculator thus tends to bring about the best utilization of
the land in the sense that, out of several alternative income
streams which the land might be made to yield, that one is
selected which possesses for him the maximum present
value. In general it is probable that the best uses of the land
for the public also are found in this way. The latter conclusion
 does not, however, absolutely follow from the former,
since the “best” uses are not necessarily those which
have the greatest market value; but those who would
prevent all land speculation will at least need to adduce
other arguments than that speculation “keeps land out of
use,” before they have proven their case; for wise land
speculation means simply the discriminating choice, out of a
number of uses, of that use or series of uses which affords
to-day the greatest present value.