Learning How to Solve the Land
Problem in Cities.
By 1921 the State authorities should be given the
right to condemn for any purpose whatever Settle-
ment Lands or other lands in their vicinity at an
adequate remuneration. Such a law would enable
the State to acquire land within or adjacent to Set-
tlement areas for urban purposes when occasion de-
manded it, and this land would, of course, be plat-
led according to the best rules of city planning,
each piece when resold by the State being deeded
for adequate private urban use and for the special
purpose for which it was reserved. Naturally such
urban Settlement Lands would be sold subject to a
maximum legal selling price and a minimum use,
and in the end they would be made tax-free. This
would all be provided for as in the case of agricul-
tural Settlement Lands (steps two, four, five and
six). By developing these Land Settlement towns,
which will certainly spring up, the State will gradu-
ally learn by experience how to frame laws in de-
tail for freeing the land from taxation in its cities,
new and old, in a manner economically advan-
tageous to the public. The right to condemn land
for private urban purposes in or adjacent or near to
Land Settlement projects is, therefore, of vital im-
portance.
28 THE COMING LAND POLICY
19211922.
FOURTH STEP.
(Minimum Use of Settlement Land).
Soon after the plan of fixing the maximum legal
selling price is in regular operation, the State
should enact a law providing for the minimum use
that any privately owned parcel of Settlement Land
may be put to without incurring fines or invalidat-
ing the owner's title to it. Because the owner will
then no longer have any assurance of a speculative
gain through increase in the price of his land he
will undoubtedly regard himself as a loser every
day he cannot or does not use it profitably. For
this reason, the law fixing the minimum use should
not be stringent. Indeed, it should be so sparing
with its penalties that an owner, who for any rea-
son wishes to sell or otherwise dispose of his farm,
may have ample time to do so without being com-
pelled to suffer any material loss through fines, or
being in the meantime obliged to put it to greater
use than is profitable for him. Of course, until the
present land tax is discarded, that in itself will act
as a more than sufficient penalty under the new
conditions.
However, should any owner neglect his land in
a manner really detrimental to the public interest,
he will have to be punished accordingly. In disputed
cases, the question of guilt and penalty should be
decided possibly by special land courts with juries
composed of farmers, who would be in position to
sympathize better with the supposedly neglectful
owner, if he deserved such sympathy.
THE COMING LAND POLICY 29
1925-1930.
FIFTH STEP
(Introduction of Tax on Individual Incomes De-
rived from Settlement Lands) .
Necessity for land tax ended. Because land spec-
ulation in Settlement Farms will be greatly checked,
and because the "economic" rent of the land in
these farms will be largely neutralized wherever the
preceding steps are well establishd, it will no long-
er be essential that public funds be raised by means
of taxes on agricultural land and its improvements
located within the limits of Land Settlement com-
munities. When desired, such taxes may be super-
seded within the limits of these Land Settlements
by the individual income tax on all incomes (in
excess of the legal exemption) derived from the
land. This will constitute the "fifth step" which
might be taken some time between 1925 and 1930.
However, taxes on excess-land holdings described
under "Step Six" must be continued.
Haste not important. With the first four steps
of the coming land policy in full operation, the ob-
ject of immediate importance, that is, cessation of
speculation in Settlement, Lands, will largely have
been accomplished, and the fifth step, or the change
from real estate taxes to the individual income tax,
in these Settlement communities can be delayed a
reasonable length of time, as above suggested, with-
out ultimate injury to the plan of untaxing the
land. It can even be postponed until the individual
income tax becomes general as the principal source
of public revenues throughout the State, meaning
State, county, district and urban revenues, as well
as Federal.
30 THE COMING LAND POLICY
Making the tax optional. If, before the income
tax becomes general as a main source of revenue
for Stale and lesser political subdivisions, these
communities care to introduce a tax on the incomes
derived from land as a substitute for all local taxes
on land and improvements, the people will have to
vote an amendment to the State constitution cover-
ing this procedure in Settlement districts. At first
it may in addition be necessary to provide for this
change in taxation through a clause in the deeds
given to the settler' by the State. The law might
provide that the citizens of any Land Settlement
project, or district, may vote to substitute a tax on
income derived from land to take the place of ex-
isting taxes on land and improvements.
Grand aggregate total of the tax. Until the reg-
ular income tax is employed for State and lesser
purposes and is applied to individual incomes
throughout the State, the aggregate sum to be
raised in any year for state, county and district pur-
poses within each settlement district respectively by
means of the suggested income tax on profits de-
rived from the land, should, of course, be an
amount as equitable as conditions will permit.
Doubtless the most feasible amount would be a sum
as nearly equal as possible to the aggregate total
of all taxes which would be assessed in that year
against land and improvements located within the
Settlement areas, provided taxes were to be levied
there by the same plan or method employed in the
State at large. Naturally, as soon as the State as a
whole abandons taxes on land (other than those on
excess-land holdings) and its improvements, sub-
stituting some other form of assessment, the latter
would be made to apply as well to State Land Set-
THE COMING LAND POLICY 31
tlement territory, thus superseding whatever form
of income tax might at the time be current there.
Points on applying tax. For purposes of uni-
formity as between the different districts and for
reasons of efficiency and economy, any such income
tax for local application within the several Land
Settlement projects would have to be assessed and
collected under the supervision of the State. Pend-
ing the adoption of a general state income tax, if a
tax on incomes from farms were adopted in Land
Settlement districts, farms held vacant unnecessar-
ily, and producing no incomes, might in certain
cases have to be assessed an amount equal to
the average tax on profits derived from similar
farms that are being operated. Also for practical
reasons, until the regular income tax is applied
throughout the entire State to supersede taxes on
land (except excess holdings) and improvements,
this local tax on incomes derived from the farming
of Settlement Land would have to be levied at a
uniform or so-called normal rate percent, regardless
of the size of income; for it is quite certain that any
surtax, or "additional" tax involving higher rates
on the larger incomes would tend to lead those ex-
pecting to earn more liberal incomes than the aver-
age to locate outside of Settlement Land districts
where their property would for the present at least
be assessed in the old way.
Three good reasons. There are three reasons for
substituting the individual income tax for the tax
on Settlement Farm land and improvements: 1, it
makes such land more nearly free; 2, the less the
farmer's income for any year, the smaller his tax;
3, it is a beginning in Untaxing the Consumer.
Income tax versus land, tax. A partial analysis
of the income tax, to show who pays it, is a very
32 THE COMING LAND POLICY
complex problem; nevertheless I expect to treat the
subject in another supplement as viewed from the
taxpayers' angle. For the present let it suffice to
say that the difference to the consumer between the
tax on individual incomes and that on land is
fundamental. This difference is due largely not
only to the normal part of the income tax, but to the
exemptions, the surtax, and indirectly the excess
profits tax. Likewise it is due in a measure to the
fact that incomes are earned at least partially, mak-
ing them to this extent a part of the true cost of
production, and to the further fact that the income
tax is practically universal and, therefore, more
general than the land tax in its direct application.
But the individual income tax on incomes derived
from strictly farming operations, as here proposed,
does not relieve the consumer as much as will the
regular individual income tax. However, the for-
mer is a step in advance of our present mode of
taxation, pending the time when the regular in-
come tax becomes universal and a substitute for the
land tax at least.
1925-1930.
SIXTH STEP.
(Fixing Maximum Size of Tax-free Parcels of Land
and Amount of Taxes on Excess Holdings) .
This step must be introduced simultaneously with
the fifth. It fixes by law the maximum size of tax-
free allotments of land to be allowed any single oc-
cupant for any particular purpose under given con-
ditions, and it establishes by law the progressive
rates of taxation on any available additional or
excess land deeded the occupant. The extent of
these free allotments, also of the excess holdings, is
THE COMING LAND POLICY 33
to be governed by the good of society in general.
These various areas will have to be fixed roughly
at first until a system of applicable records, based
on experience, has been devised, installed and de-
veloped. Deeds given by the state for excess hold-
ings will convey a more limited ownership than
deeds given for tax-free holdings. But the former
should be assignable as well as the latter. The
right to own and use any certain piece of land as
an excess holding will, of course, depend not only
on the payment of the annual taxes, but also on the
demand and need for such land by other settlers as
a tax-free holding. Furthermore the degree or in-
tensity of use to which an excess holding is being
put will necessarily have to be taken into account
before it is reduced or altogether withdrawn from
the excess-land owner, and proper compensation
must be given him for any loss he may sustain.
This tax on excess holding can, of course, never be
superseded by any other form of taxation, and it
must be merely nominal in Settlements where an
excess of idle land may prevail. The law must
protect the excess-land owner fully to assure him
of the fruits of his labor. Regulative laws for ex-
cess as well as tax-free holdings can be developed
more easily and more thoroughly under conditions
as they exist in Land Settlements than under any
other circumstances.
Now, according to the use to be made of it, a tax-
free holding should be as large as a good farmer
can handle with a specified number of em-
ployees. As the plan of determining the size of
these allotments becomes better perfected and
standardized the size of his family and other cir-
cumstances may be taken into account in fixing the
limits of such allotments. Eventually productive
34 THE COMING LAND POLICY
results from year to year must also figure in de-
termining the size of these allotments.
The same general principles regarding taxation
must be applied to land owned by farming corpora-
tions, but to cover land under such ownership the
law will have to provide special rules for deter-
mining the area of tax-free holdings and for ascer-
taining the rate of taxation on excess holdings.
1920-1930.
SEVENTH STEP.
(Price Regulation of Essential Agricultural
Products).
Much of the benefit that should accrue to the
farmer and to society from the application of the
six foregoing steps may be neutralized if selling
prices of essential agricultural products are not
established from time to time by the public on a
basis fair to all concerned. This benefit will also go
amiss if the middleman is not eliminated whenever
he serves an insufficiently useful purpose in ex-
change for the commission he receives. It will be
an easy matter to fix and regulate prices on es-
sential agricultural products once the forward
movements in the field of husbandry, mentioned
in Appendix Two, are well under way. It is esti-
mated that between the years 1920 and 1930 price
regulation of the most essential agricultural prod-
ucts can safely be established throughout the
United States for the benefit of both the farmer
and the Public. As time goes on, this regulation
can be extended and made more scientific and exact,
especially when agricultural products are sold more
and more collectively on a state-wide scale.
THE COMING LAND POLICY 35
1930-1980.
EIGHTH STEP.
(Eliminating the Items of Raw Land and General
Public Improvements).
Artificially imposed obstacles. As stated in "Un-
taxing the Consumer", the Raw Land item of farms
should gradually he made practically free of price.
One reason for this is that the young farmer of the
future, and his wife, may start life without arti-
ficially imposed obstacles that are or should be for-
eign to the business of farming; for, without un-
hampered agricultural activity, race vitality of the
highest type cannot be developed and maintained.
This does not mean that agriculture as a business
occupation should not pay every just expense in-
cident to its operation, however.
Free Farm Land.
With definite maximum legal selling prices es-
tablished for the land of any Settlement Farm,
meaning farm land as it was when bought in a rela-
tively raw or undeveloped condition by the Settle-
ment Board, the State might between 1930 and
1980, when it is older and richer, annually purchase,
say, a two percent undivided interest in the Raw
Land item of each Settlement Farm without acquir-
ing any proprietory rights over the improvements
in or upon the land, such as buildings, drains, level-
ing, enhanced fertility, etc., or any rights in the in-
come derived from it.
Getting rid of price of general public improve-
ments. In the same manner, also beginning with
the year 1930, the amount included in the maxi-
mum legal selling price of the farm for general
36 THE COMING LAND POLICY
public improvements should be paid back to the
farm-owner by the State in like annual installments.
In that year the General Public Improvement item
might be added to that of Raw Land. The con-
solidated amount should then be liquidated at a
uniform rate per annum, ending not later than 1980.
After 1930 no further tax payments made for gen-
eral public improvements should enter into the
maximum legal selling price of farms. The item
Special Public Improvements, covering such im-
provements as have been paid by special assess-
ments on the farm, should continue to be a part of
the maximum legal selling price of the farm.
Annual reduction in price of farm. Then the
maximum legal selling price of the Raw Land item,
as thus augmented by the General Public Improve-
ment item of each farm, will be reduced just so
much each year between seller and purchaser. In
time there would remain no part of the selling price
of the farm to cover raw land or appurtenant gen-
eral public improvements. Settlement farms sold
by the Board after 1930 will have to be given
slightly different treatment in regard to the two
per cent annual refund. In these cases their selling
price should be discounted or rebated in an amount
equal to two per cent per annum between 1930 and
the year of sale, on the combined total of the raw
land and the general public improvement items of
the farm. This discount should be regarded as cov-
ering just so many accumulated annual refund in-
stallments of the past, but paid now by the State in
one lump sum, i. e., at time of sale to the settler.
As the yearly refund installments are to be met by
the State, so will it have to bear this accumulated
discount. This will be necessary, in order that the
last of the two per cent refund installments may be
THE COMING LAND POLICY 37
paid off to the land owner on all farms in the same
year, namely, 1980.
Private ownership still. Notwithstanding the
full payment of these refund installments and the
discount just referred to, a man's ownership in his
farm will continue indefinitely, subject to condi-
tions prescribed by law, and, when he or his heirs
or other successors sell out, he or they will be en-
titled to receive payment only for the value of pri-
vate improvements in and upon the land, together
with the proportional part of special public im-
provements appurtaining to it, growing crops and
initial overhead cost. In some cases of sale to pri-
vate parties he may be remunerated for the value
of special features and for excess on private Im-
provements and on initial overhead cost, pro-
vided the purchaser be willing to pay so much.
Then farm land would be as free as it can be
made, and in the meantime, once the State Land
Settlement Board can supply all the new farms for
which there is any demand, agricultural land will
be comparatively free.
1930-1950.
NINTH STEP.
(Placing All Agricultural Land under the Farm
Settlement Plan).
The eight preceding steps apply to State Settle-
ment farm lands, also in a suitably modified way
to urban land connected with the Settlements, pro-
vided any such urban centers develop, as suggested
under the Third Step.
It will not be many years before the State Settle-
ment Board will be given permanent control over
1443
38 THE COMING LAND POLICY
all settlement lands, and I foresee conditions which
after 1930 will lead owners of agricultural land
located outside of these settlements to request that
their property he placed under the jurisdiction of
the Board and subjected to regulations identical
with those governing land in the State Settlements.
By 1950 practically all farm lands of the state,
both in and outside of the settlements, will be under
supervision of the State Land Settlement Board and
will be governed through the best land laws it is
possible to devise. In relatively few cases a modi-
fied type of condemnation or other legal proceed-
ings will be required to complete the work, giving
us a new single land policy based on free land, that
is, untaxed land.
1920-1950
THE MOST IMPORTANT STEP.
(A Land Problem Commission).
Of course, instead of taking the steps numbered
two to nine inclusive, it would be necessary only
to create a Land Problem Commission, composed
of men honest, straightforward, well versed in so-
cial science and professionally the best in their train-
ing the country can produce. Such a body of men
will properly plan all necessary steps and by first
creating an intelligent, powerful public opinion in
favor of their plans they will see that these steps
are taken. In fact, a wise selection of the members
of this Commission will be by far the most impor-
tant factor in solving the land question. With ade-
quate working equipment and sufficient means,
such a commission could survey the land problem
of the world at large and thus acquire all the ex-
THE COMING LAND POLICY 39
perience obtainable through observation and study.
In this way many false steps will be saved and
progress will be more quickly and economically ef-
fected. With the co-operation of the various State
Land Settlement Boards that are bound to be in-
augurated, such a Commission would naturally de-
velop a land policy that would be practicable in its
main features as soon as formulated. The great
question in this connection is: what man or body
of men, with the authority to appoint such a com-
mission, has both the capacity to do so and the
political power to keep their appointees in office,
protecting them against excessive harrassment?
1920-1950
CONTEMPORARY STEPS.
(Obtaining Public Control over Our Other Natural
Resources).
The General Survey.
A survey of all our other natural resources and
the activities closely connected with them should be
started immediately, and continued contemporane-
ously with the preceding steps by a special Com-
mission. The later should also develop a plan or
program that will gradually place all natural re-
sources by 1950 or 1960 in the care of the Public
for public operation. This survey would neces-
sarily prescribe what the public should do within
a very few years to prepare a sufficient number
of public servants adequately to operate our electric
power plants and distributing systems; also what
it should do through secondary schools and colleges
to make itself highly fit in proper time to carry on
public ownership and operation of all natural re-
sources.
40 THE COMING LAND POLICY
The economic program covering these natural re-
sources should allow at least four or five years
for the survey and formulation of a clear and spe-
cific outline plan extending thirty to forty years
into the future. A conservative time schedule for
the accomplishment of such steps as the Commis-
sion may outline for carrying out the entire plan
should be adopted and followed as closely as prac-
ticable.
Water Power the Next to Be Socialized.
The ownership and operation of water power
should be as completely socialized as is domestic
water. The survey covering this item need not re-
quire over two years, at which time active steps
should be taken to accomplish public ownership of
all of it within two decades. Beginning in two
years, private power plants, one after another,
should be taken over by our cities as rapidly as the
political capacity of the public is sufficiently de-
veloped to permit of their operation by the people,
and new plants should be built by the Public as re-
quired. It will be found that as soon as public
ownership of water power is irrevocably estab-
lished, our colleges, and business interests espe-
cially, will strive to make its operation more suc-
cessful than public ownership of domestic water is
at present. Even our most conservative politicians
will see the desirability of furthering the interests
of such a policy. One reason for this is that no
private interest in particular will any longer profit
directly by the power business, and all interests,
large and small, will have use for electric power,
will want it at the lowest reasonable rate and will
demand the best service.
THE COMING LAND POLICY 41
Water power should be the next natural resource
acquired and operated by the public. Because it is
still to a great extent in possession of the govern-
ment, it would require the least outlay of money to
"recapture" what private interests have already
acquired, and it is the easiest of all, except domestic
water, to operate, making it particularly adaptable
to public ownership. Again, it is destined to be
the most fundamental and important of all natural
resources, barring, of course, domestic water and
rural and urban land.
Coal and Iron Mines.
The plan for general public ownership and op-
eration of coal mines by qualified cities and states
should provide for an actual beginning within five
years in operating a few on a moderate scale in
some favorable locality, and for accomplishing
their acquisition throughout the nation in twenty-
five years, unless conditions warrant more rapid
progress. In the same manner, the Public should
gradually control and produce all the iron ore and
all other common metals of the country within
thirty or forty years. Notwithstanding some shirk-
ing and inefficiency within public ownership en-
terprises, and the scheming opposition of certain
corporation interests, this will and must be done
until public ownership of our vital natural re-
sources is an accomplished fact. It would be a great
gain for both Business and the Public if the former
were to lend substantial aid in qualifying the Pub-
lic to manage these resources successfully.
A Time Schedule for Each Natural Resource.
The plans for carrying out the scheme must in
general terms conservatively prescribe how much
42 THE COMING LAND POLICY
is to be completed by the end, say, of each five-
year period, so that those most interested may
know whether progress is keeping up with the
time schedule. If the schedule is approximately
carried out, it will insure enthusiastic support of
the public; for it will show that the authorities are