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Charles Bowdoin Fillebrown.

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firm being at that time (1869) the attorneys for the Erie Rail-
road, its officers bargained with them to have Mr. Shearman
come and sit in an anteroom of their office simply for consulta-
tion, at $25,000 for his year's salary. Succeeding the Black Fri-
day, September 24 of the same year, various suits had been
brought in the courts, involving more than $50,000,000. Shear-



Thomas G. Shearman, 1834-1900 83

man & Sterling, 1 who had succeeded to Field & Shearman,
were retained to defend them, and the law and facts were decided

as Mr. Shearman contended that they should be Before

he had been four years at the bar, in connection with Mr. Tilling-
hast, Mr. Shearman had printed and published a treatise on
pleadings and practice in the state of New York, which was a
work in two volumes, aggregating more than one thousand pages,
and the second volume was entirely his own work. In connec-
tion with Mr. Redfield, a few years later he published an ele-
mentary treatise on the Law of Negligence, which has run through
more editions, as we understand, than any other elementary work

published in this country in this generation Mr. Shearman

would draw and execute contracts involving the largest amounts
of property and money of any man that has stood at the Amer-
ican bar in this generation, and then come home to Brooklyn to
this "prayer-meeting" and speak words of consolation to those
who were afflicted and suffering ; to take his place in the Sunday
school and Sunday school teachers' meeting, to give kindly cheer
to those with whom he came in contact.



Dr. Lyman Abbott, Beecher's successor in the Plymouth
pulpit, said of Mr. Shearman:

He was by profession a lawyer ; by temperament and nature

he was a reformer He watched the welfare of the poor

and suffering, the outcast and the unfortunate, and he studied
how to relieve them. This it was that made him interested in
labor organizations, that made him a single-tax man, and a civic
and municipal reformer. He gave a large measure of his life
and brought all his energy to problems that touched the lives of
others, and did not touch his own.

Edward M. Shepard said : " I declare of Thomas G.
Shearman that few men of our land, or of our time, have
nearly approached him in zeal for the rights of the plain people,
as against the craft and strength of the more powerful."

!The Shearman & Sterling of today at 55 Wall Street, New York
City.



84 The Principles of Natural Taxation

Something of general interest to all real students, but
especially to those of the law, is found in the critical analysis
of a fellow-craftsman, a partner for some years previous to
his connection with David Dudley Field, Mr. Amasa J. Red-
field, who wrote of Mr. Shearman :

His mind was pervaded by "an original, intrinsic equity."
.... If a particular judgment had wrought an injustice, he
instinctively questioned or peremptorily denied its authority to
control in any other cases, however eminent the court which
pronounced it. As he conceived it, the aim of law is to accom-
plish the ends of justice, or, as put by Burke, "there are two,
and only two, foundations of law equity and utility." . . . .
He was never dismayed by a multitude of cases bearing upon
a given point of law, however various their particular facts, or
apparently irreconcilable their several judgments with each other;
he seemed to have an intuitive perception of the real principle
at the bottom of the whole mass of adjudications, and brought it
forth to the light, in a single comprehensive statement, marvel-
ously brief and clear. At the same time, as I have had many
opportunities of observing, his precise and logical habit of mind
tended always to moderation of statement and the avoidance of

excessive generalization He had a faculty of instantly

catching sight of an important point of any narrative or argu-
ment or the absence of any on each page of a book as he
rapidly turned leaf after leaf. He seems to have had Macaulay's
knack of never reading the lines of a printed page, but took in
the whole of it at one sweep of the eye, from top to bottom,
discovering at once whether it was worth a more careful perusal.
.... In him the man was greater than the lawyer. His profes-
sional obligations were many and insistent, but such were the
sincerity of his sympathy and his large view of things, that he
never lacked the time nor the grace to step aside to help a friend, 1

1 In view of the foregoing tributes, the writer trusts that he does not
violate the proprieties when he betrays an ambition to couple his name in
ever so humble a way with that of a man whose life was so full of laudable
accomplishments, by inserting here a quotation from the private cor-
respondence of Mr. Shearman who had been speaker of the evening at
four of the series of banquets then being given by the Massachusetts Single
Tax League. On his last vacation he wrote from Geneva to a favorite



Thomas G. Shearman, 1834-1900 85

nor the will to devote his powers, without a suggestion of per-
sonal advantage, to the promotion of every civic and civilizing
endeavor.



Mr. Shearman left an estate not far exceeding three hun-
dred thousand dollars. It would have been much larger had
it not been for the charity he was constantly dispensing.
Although his business was domiciled in Wall Street, he was not
a speculator. The size of his estate was not the result of real
estate transactions but of his savings from income. It was
not due to especially large fees. Those that he received were
moderate. He did a great deal of professional work without
any charge whatever, from sentiment for the unfortunate or
as a charity. He had an exceedingly keen mind, and an ex-
ceptionally retentive memory, and to these two distinguishing
qualities he was, to a most extraordinary degree, indebted for
his success.

The foregoing will give the reader an outline picture of the
type and caliber of a man who gave his best years and best
efforts to present the principles and possible practice of the
single tax, cleared of all economic entanglements, in such plain
form that they can be intelligently studied by taxing authori-
ties, economists, and all others who are interested. It is be-
lieved to be of educational value to present here his own
delineation of taxation as a science, together with his predic-

Sunday-school pupil, now Mrs. C. J. Northrop : " In all times it has been
the misfortune of reforms that some of their advocates have made it
impossible for others to do any effective work for them for considerable
periods.

" . . . At this time the professed friends of every reform in which I am
much interested insist upon mixing it with retrograde movements or have
adopted a policy of bitterness and vituperation or have thrown it entirely
overboard. There is no one left, except Mr. Fillebrown, with whom I can
co-operate. I have told him that I will do anything for and with him that
a New Yorker can do for a Bostonian."



86 The Principles of Natural Taxation

tion of what betterments it may be expected to work in the
line of social welfare.

THE NATURAL TAX 1

1. Automatic taxation. Having seen that every form of
indirect taxation is unjust to the poor, and that every form
of so-called direct taxation thus far examined is unjust to the
honest, we cannot be surprised at the unanimity with which it
has hitherto been declared that there is no scientific or natural
method of taxation.

Nevertheless, if we can find in actual operation, in every
civilized country, a species of taxation which automatically col-
lects from every citizen an amount almost exactly proportioned
to the fair and full market value of the benefits which he derives
from the government under which he lives and the society which
surrounds him, may we not safely infer that this is natural taxa-
tion? And is not such taxation capable of being reduced to a
science ?

Such an automatic, irresistible, and universal system does
exist. All over the world men pay to a superior authority a
tribute, proportioned with wonderful exactness to these social,
advantages. Each man is compelled to do this, by the fact that
other men surround him, eager to pay tribute in his place if he
will not. The just amount of this tribute is determined by the
competition of all his neighbors, who calculate to a dollar just
how much the privilege is worth to them, and who will gladly take
his place and pay in his stead. Every man must, therefore, pay
as much as some other man will give for his place ; and no man
can be made to pay any more.

2. Ground rent. This tribute is sometimes paid to the
state, when it is called a tax; but it is far more often paid to
private individuals, when it is called ground rent.

Where there is no government there is no ground rent. As
government grows more complex and does more for society,
ground rents increase. Any advantage possessed by one piece of
land over another will, it is true, give rise to rent ; but that rent
cannot be collected without the aid of government ; and no advan-
tage in fertility is ever equal in value to the advantage of society
and government. An acre of sand on the coast of New Jersey,
at Atlantic City, Cape May, or Long Branch, is worth more rent

1 Natural Taxation, Chap. ix.



Thomas G. Shearman, 1834-1900 87

than a million acres of fertile land five hundred miles distant
from all human society. The sixteenth of an acre of bare rock
in New York City is worth more than a thousand acres of the
best farming land in Manitoba.

Ground rent, therefore, is the tribute which natural laws levy
upon every occupant of land, as the market price of all the social
as well as natural advantages appertaining to that land, including,
necessarily, his just share of the cost of government. 1

1 The definition of rent here given is not inconsistent with the principles
of Ricardo ; although it is not expressed in his words. As Senior and other
friends of Ricardo have remarked, he never took pains to express himself
accurately; and he constantly assumed that his readers would remember
every limitation which he had once laid down and would comprehend all
that was implied in his mind. His definition of the law of Rent is a
remarkable illustration of his peculiar methods.

No man could have been more fully aware than was Ricardo, of the
enormous amount of rent which was collected in his own time from land
.which had no fertility and no productive power. Most of his life was
spent upon just such land in London; and for the use of such land he paid
and received great rents. Yet his famous definition assumes that rent is
never paid for anything except " the use of the original and indestructible
powers of the soil." And his exposition of the operation of this law is
confined so strictly to the growth of "corn" (that is, wheat), that some
of his disciples and many of his critics seriously assume that Ricardo did
not suspect the existence of any law of rent, which was not governed en-
tirely by the growth of " corn."

But Ricardo's methods, in this and in other instances, recall the style
of the Ten Commandments. Taken literally, those commandments are as
defective a code of morals as can be found in almost any ethical system.
They do not in terms forbid the most brutal violence or recklessness, if
death does not result, nor any form of fraud or swindling not amounting
to literal theft. They do not forbid any form of outrage upon unmarried
women. They do not forbid lying, except in judicial proceedings. They
have not a word about malice, envy, hatred, bribery, betrayal of trust, or
even treason. And yet both the Hebrew nation and the Christian church
have always seen these prohibitions implied in the curt words which de-
nounce merely a few of the worst and most striking forms of crime.

So it is with Ricardo. He took the most striking and easily understood
illustration of a principle as his method of stating the principle itself. His
writings always bear the marks of a genius, which was driven by its own
internal energy to find relief in utterance, but which cared very little
whether its utterances were understood or not. In this particular instance,
he suggested a principle by a single illustration of the most familiar char-
acter. But the principle is not limited by the illustration. Any advantage
which one piece of land has over another, for the use of man, was in-
cluded, in Ricardo's mind, among the "original and indestructible powers
of the soil." And foremost among these advantages stands that of afford-
ing standing ground, in the midst of a highly civilized society, under the
protection of a highly organized and faithful government.



The Principles of Natural Taxation

3. The justice of ground rent. Now observe how per-
fectly this natural tribute meets all the requirements of abstract
justice, with which our professor friends have so long wrestled
in vain. Here is the exact quid pro quo. No sane man, in any
ordinary society, pays too much rent. For he pays no more than
some other man is willing to pay for the same privileges. He
therefore pays no more than the market value of the advantage
which he gains over other men by occupying that precise position
on the earth. He gains a certain profit out of that position which
he could not gain elsewhere. That fact is conclusive proof that
this profit is not the fruit of his labor, but comes out of some
superior fertility in the soil, some superior opportunity for selling
the fruits of his labor, some superior protection from government
in the enjoyment of those fruits, or some other advantage of
mere position. Thus he receives full value in exchange for his
payment. He receives it, not merely society in general. He
receives the ^vhole of it ; he is not compelled to divide a dollar's
worth of this benefit with his neighbors. But, on the other hand,
he pays the full value of what he thus receives, and he owes
nothing more to anybody. The transaction is closed upon fair
and equal terms.

Here, then, is a tax, just, equal, full, fair, paid for full value
received, returning full value for the payment, meeting all the
requirements of that ideal tax which professors and practical
men alike have declared to be an impossibility. It is not merely
a tax which justice allows it is one which justice demands.
It is not merely one which ought to be collected it is one which
infallibly will be and is collected. It is not merely one which
the State ought to see collected it is one which, in the long run,
the State cannot prevent from being collected. The State can
change the particular landlord it cannot abolish rent.

4. Landlords natural tax-gatherers. It is quite true that
some men do not pay ground rent to anyone else. But these are
landlords of the mostly highly developed type. A few of these
men seem, at first glance, neither to pay nor receive ground rent.
But this is an illusion. They do receive such rent, in the value
which remains in their possession in excess of what they would
hold if they paid rent like other people. Moreover, such men
almost invariably have either paid a price for the land on which
they live (which is capitalized rent paid by them), or they hold
land which cost them less than they could sell it for (which



Thomas G. Shearman, 1834-1900 89

is capitalized rent gained by them), or they have done both.

Those who actually receive ground rent, or who could receive
it if they would, form the class which we call " landlords." They
are the tax-gatherers appointed by Nature. 'Year by year they
assess the value of the privilege of occupying their land. They
can do this, with an accuracy to which no government assessor
can ever attain, because they receive, at least once a year, the
best possible information as to this value, in the form of bids
from tenants. They have only to announce their willingness to
receive bids, and the bids come in. Nobody runs after the asses-
sor to tell him what property is worth. Everybody runs after the
landlord to tell him what his land is worth. Not that everybody
tells him the truth ; but he soon finds out what is the truth, by
comparing conflicting statements. The landlord, we repeat, is Na-
ture's elected tax-gatherer. But Nature does not compel him, any
more than any other collector of taxes, to pay over to the State
what he collects. This must be done by the State itself.

5. Taxation of ground rents. Nature, having thus pro-
vided a method by which all men pay, of necessity, a tribute
sufficient to defray all expenses of government, clearly points
to the collection of such expenses from this tribute. We have
already seen that Nature and Science condemn every other method
of raising public revenue, by making equality and justice impos-
sible under any such method. Do they not, with equal clearness
and precision, point to the taxation of ground rents, as not
merely a just method of raising revenue, but also as the only
just one? Scientifically speaking, a tax upon ground rents is
not a tax at all: it is merely the collection by the State of a tax
already levied by an automatic process. If we call it a tax, it is
a tax upon the proceeds of taxation, and nothing else. Until
this source of revenue is exhausted, every other tax is double
taxation. So long as this fund remains, every other tax is, of
necessity, unjust, as truly as it would be unjust to squander the
proceeds of any tax among a few favored officials and then levy
the whole of the same tax over again upon the people. Seldom
has there been a more beautiful illustration of the wise yet relent-
less working of natural law than in the proved impossibility of
justly collecting any tax other than upon ground rent. It shows
that Nature makes it impossible to execute justly a statute which
is in its nature unjust. The propriety of an exclusive tax upon
ground rents is established, not merely by affirmative proof of its



90 The Principles of Natural Taxation

justice, but by the demonstration of universal experience that no
other form of taxation can be made effective, adequate, just, and
equal.

6. No objectionable methods of collection. The absolute
soundness of the theory upon which the tax on ground rents is
based is further established by the fact that its efficient collection
requires no objectionable methods. Such a tax already exists
in the United States, although it is covered up by a multitude of
other taxes. We all know, by experience, that such a tax is
entirely free from the oppressive and corrupting incidents of
other taxes. It calls for no personal returns, no taxpayers' oaths,
no exposure of private affairs. The collector of such a tax would
not have the slightest excuse for inquisitorial proceedings, for
the examination of private books, for entry into houses, for per-
sonal searches, or for asking a single question of the taxpayer.
In fact, he would not pay the smallest attention to any statement
which a taxpayer might make. Women and children would be
taxed no more heavily than men. Trust estates would pay no
more than others. There would be no exemptions, no favoritism,
and no preference given, either to the rich or to the poor. Mis-
takes, of course, would occur, and the bribery of assessors would
be possible. But those are an extremely small part of the evils
of all existing methods of taxation ; and some of the most mon-
strous inequalities are found where the assessors are absolutely
incorruptible and thoroughly competent. All of these would
disappear.

7. Assessment of ground rent practicable. It is asserted
by a few persons, who have given no careful consideration to the
subject, that it is as difficult to assess accurately the value of the
bare land as it is to assess any other property. This objection
will not bear the least examination.

Of course, absolute accuracy is not to be expected in anything.
It has not pleased God to make this world literally perfect, in any
respect ; and man cannot hope to be wiser than his Maker. But
a close approach to accuracy is possible in taxing ground rents,
and it is not possible in any other tax.

Where land is rented separately from its improvements, the
tax can be collected with almost ideal accuracy. The tenant can
be required to pay it, being allowed to deduct it from his rent.
He will have no motive for understating the rent, and if he over-
states it the loss will be his own. Nothing but positive fraud



Thomas G. Shearman, 1834-1900 91

on the part of the official assessor can produce inequality in this
tax, and such fraud would be too dangerous to be common.

Where land and improvements are rented together, the value
of the land alone is always approximately ascertainable. Real
estate dealers in the district would have little difficulty in esti-
mating the price at which any tract of land could readily be sold,
and this would be the proper basis for assessment.

Where land is owned by the actual occupier, dealers can still
easily estimate its market value. Titles to town lots are con-
tinually changing, thus fixing a standard of prices ; while in rural
districts there is much less variation in prices, and all the neigh-
bors know the relative value of each farm. Whatever inequali-
ties might remain, it is certain that they would be vastly less than
those which are now common.

8. Assessment of farm land. It has been asked: How
can the unimproved value of farm lands be ascertained after they
have been cleared, plowed, drained, and fertilized for many
years? The answer is simple. The whole of a farm is to be
assessed at the same value per acre which attaches to the un-
improved land remaining on the farm and having substantially
the same natural advantages or disadvantages. It is next asked :
How shall such an estimate be made if the whole farm has been
fully cultivated ? There is no such farm, except a few very small
ones, selected from larger farms; and in those cases the valua-
tion can be made upon the basis of unimproved land on adjoining
farms. It has been pretended that there are cases in which there
is no unimproved land near by. But this is almost absurd. Yet
if such a marvelous farm could be found, it is certain to be close
to a highway. The price which could be obtained for the land
covered by the highway, if closed and sold, would afford a perfect
test of the value of all adjoining land.

But the best reply to all such objections is to be found in
the .practical experience of California, where this very method
of assessment is carried out in agricultural districts, without
difficulty, having been required by law ever since 1879, and by
the experience of Massachusetts, where the value of farm lands
has been ascertained by the decennial census, for many years,
carefully separating the value of improved lands from unimproved
and unimprovable lands.

9. Judicial correction of assessments. Under the present
systems of taxation it has been found necessary to allow appeals



92 The Principles of Natural Taxation

to the courts from some unjust assessments ; while state boards
of equalization in New York, Illinois, California, and other states
put county valuations up or down, in order to remedy the evils
caused by local carelessness or evasion. These remedies should
be extended and placed upon a foundation of complete justice.
The courts should be given full power to make local assessments
uniform, reducing every assessment to the basis of the lowest in
the county. The county would lose no revenue, for the tax rate
would be increased to correspond with the general reduction. But
citizens would be relieved from the gross injustice which many
now suffer. At present, in New York, if not everywhere, a tax-
payer can obtain no relief unless his own property is overvalued.
But an undervaluation of his neighbor's is just as effectual an
increase of his share of the general burden as would be an over-
valuation of his own property. It would cast an offensive respon-
sibility upon him, to give him relief only through a judgment
increasing his neighbors' assessments ; and such a course would
produce no better result for the county than would a general
reduction to one common basis. The State at large would take
care of its interest in the matter, through the board of equalization.

10. Correction by sales. If all other remedies failed, one
would remain, which is far too dangerous for use under existing
methods, but which would be quite safe under the new system.
The owner of any real estate which was assessed for more than
the real value of the bare land, could refuse to pay the tax. Then
his land would be offered for sale to the highest bidder, subject



Online LibraryCharles Bowdoin FillebrownThe principles of natural taxation, showing the origin and progress of plans for the payment of all public expenses from economic rent → online text (page 9 of 24)