Spencer Heath Archive

Item 1311

Carbon of a letter to Francis I. duPont, Number One Wall Street, New York City

August 19, 1940

Dear Mr. duPont:

Reference is to your letter of the eighth.

I surely do know as well as you do that tenants cannot be found for every piece of land. I agree with you perfectly.

Such idle land yields no rent at present, if ever. Nothing is being given today, either outright, as a price, or for its limited use, as rent. If such a day comes, then what is received for it will be its value, then but not until then. Meanwhile, it produces nothing, neither price nor rent, and there is nothing that can be capitalized or otherwise taken as present value.

If it is “now held for a price” that does not give it any value unless or until the price (or rent) is actually received. What the owner has is not a value but merely a hope. (A hope that he will be recompensed, ultimately, for the standby services of himself and predecessors). What he hopes for, but has not, may be called a prospective value, but not a real value unless or until it becomes real-ized.

The real value of any property or service depends upon and is expressed by the recompense actually received for it — not an imaginary recompense. Real value depends upon receiving real income, either annually as rent or capitalized in price. Present values are dependent on a present income; and prospective values are nothing but prospective incomes. Values cannot be actualized in fantasy, but only in goods and services (or credits commanding them).

The object of all owners should be to increase their present values and realize their prospective ones. This can only be done (legitimately) by supplying better and further services to present and prospective customers — tenants or purchasers. This is how all values are made, including the values of real estate.

My pamphlets are a prescription of more services to create more values, and these services are specifically described.

This is my fundamental premise. Is it sound? Is there any other or more practical way to “raise and restore the income and value” of any property?

I feel very strongly that the matters I am presenting with reference to a most important topic deserve more thoughtful consideration and should receive more thorough examination than you seem to have given them. I would like very much to hear further from you.

With very pleasant recollections and high regard, I am,

Sincerely yours,