Frederic Clemson Howe.

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are agreed that a tax on land values cannot be
shifted. It remains where it falls. It diminishes
rent. ''A tax on rent," says Ricardo, ''would affect
rent only; it would fall wholly on landlords, and
could not be shifted to any class of consumers.


The landlord could not raise rent." ^ John Stuart
Mill testifies to the same thing. He says: ''A tax
on rent falls wholly on the landlord. There are no
means by which he can shift the burden upon any
one else. ... A tax on rent, therefore, has no
effect other than its obvious one. It merely takes
so much from the landlord and transfers it to the
state." ^ A tax on land values is thus unlike any
other tax save those imposed on incomes and in-
heritances. It remains where it is originally placed.
It must be paid by the owner. The state becomes
a rent collector. To the extent of the tax, society
shares with the landlord in the ownership of the land.

And as the tax increases, rent diminishes. If a
piece of land is worth $1,000 free from taxation it is
because it produces $50 rent. If a tax of two per
cent, is imposed on the capital value, the state then
receives $20 and the landlord $30. The value of
the land would be reduced to $600 and the social-
ized capital value appropriated by the state would
amount to $400. That is what is meant by the
saying that 'Hhe selling price of land is its untaxed
value." Were the present land taxes of New York
city, amounting to $60,000,000, removed, land val-
ues would rise by $1,200,000,000 immediately.

Ultimately, with the tax increased to the amount
of the rental, land values would vanish. There

' Principles of Political Economy, chap. 10.
2 Political Economy, book 5, chap. 3.


would be no rent left. The state would have appro-
priated it all. A piece of land on Broadway would
theoretically have no more selling value than a
piece of land in Kansas. It would pay more taxes.
That is all. People would have to pay a higher
annual tax for the privilege of using it.

With this achieved, the landlord would cease to be
a factor in distribution. His share would then go
to the state. Under such conditions the man who
wanted a building site would pay a tax of $50 a
year to the community instead of $1,000 capital
value to the owner. This would end his relation
to the state as well as to the landlord. There would
be no other taxes of any kind. Farm tenants would
become proprietors by the same process. Capi-
talists would be relieved of the prohibitive cost of
building sites. Great estates would be broken up,
and land monopoly would come to an end. Then
men would own land merely to use it; and they
would use it in its most productive way.

The single tax is not land nationalization. The
ownership of the land by the state is not contem-
plated. Nor is it suggested that we should return
to the village community, with its common owner-
ship of the land and its periodic distribution among
the members. Nor does the single tax involve
peasant proprietorship, such as prevails in France,
Denmark, Switzerland, and parts of Germany. It
does not involve common ownership or an agricult-


ural state at all. Neither does it propose to limit
the amount of land which an individual may hold
or to promote small holdings, such as have been
provided for by recent legislation in England and

Any such solution as these is a compromise with
the evil. Peasant proprietorship does not strike at
the root of the problem. It does not meet the real
evil, which is the private ownership of the earth.
Such a programme only increases the number of land-
lords. It makes no provision for the generations
which are to follow. Small holdings and peasant
proprietorship fail to recognize the right of the
whole people to the land. It is not the great estate,
it is the right of one man or of ten million men to
the private and exclusive ownership of the land,
which is wrong.

The state would not own the land. It would,
however, be the universal rent collector. Neither
the title, the owner, nor the present methods of
transfer would be disturbed. True, it would make
but little difference to the present owner whether
the land itself or only its annual income is taken.
In either event the land would have no value for the
purpose of sale. It would be valuable only for use.

The single tax is an automatic reform. Its
motive is to insure economic opportunities for all
time. It opens up the earth to all. It endows
mankind to-day and to-morrow with its common


heritage. Under it residence sections could no longer
be used as cow pastures; they would be used for
human habitation. Suburban building lands would
be developed and cities would spread out over a
wide area in the country districts. The land would
be opened up for cultivation. It would be allotted
by the natural demands of agriculture. If it were
profitable to use it for market gardens, it would be
used for market gardens. If it were more profit-
able to farm it in large estates, it would be divided
into large estates. The law of demand and supply
would automatically determine the size of holdings.
But as the country increased in population and the
pressure of humanity increased the demand, its sub-
division would naturally follow.

Mineral resources would be opened up by the
same pressure. Their owners would be compelled
to use them or permit others to do so. Million-acre
estates in the West could no longer be used for
grazing purposes. The burden of taxation would
render it impossible. Monopoly would be destroyed
at its root. It would be destroyed by the simplest
of methods and the only method possible short of
ownership by the state. The pressure of self-interest
would lead to the opening up of the land and the
resources of nature to use, and to use in their most
productive way.

As we have seen, nearly all of the menacing
monopolies are either identified with the land or are


connected with the railways or are made possible by
the protective tariff. The land monopolies are the
most complete and the most perfect. It is the
ownership of three-fourths of the iron ore in the
United States and the bulk of the coking coal that
makes the Steel Trust invincible. It cannot be
reached by competition, and regulation is impos-
sible. The same is true of the anthracite-coal mo-
nopoly, of the bituminous-coal, the oil, copper, lead,
and natural-gas monopolies. It is the ownership of
limited sites of land that makes these monopolies so
easily consolidated and immune from every form of
attack. They, too, have been and are still aided by
the railways, and are safeguarded from foreign com-
petition by the tariff.

Railway discriminations and the tariff have made
possible the sugar, wool, leather, paper, lumber,
and other monopolies. They are the products of
class legislation. They are not the outcome of the
natural evolution of industry. Nor are they the
final flowering of the industrial process which began
with the steam-engine. They are not due to any
great skill on the part of their creators. They enjoy
no sanctity of superior ability. They are the prod-
ucts of class-made privileges.

These monopolies can be destroyed by the same
tools which created them. They can be destroyed
by the abolition of the tariff, the public ownership
of the railways, and the taxation of the natural


resources with which they arc identified. The
owners of these limited mineral sites could no longer
sit idly on the preserves which they have acquired
and limit the output. The resources would have
to be developed in order to meet the tax. A great
increase in production would take place. Compe-
tition would be re-established and prices would fall
in consequence. The domestic producer could not
prevent this by combination with the foreign manu-
facturer. The pressure in the rear would prevent
it. Raw materials would sell at their labor rather
than their scarcity cost, while the independent pro-
ducer would be placed on a footing of equality with
those who own the raw materials of production.

There are only two ways by which the economic
well-being of humanity can be improved. One is
by an increase in the amount of wealth. The other
through its more just distribution. Poverty can be
abolished in no other way. It is often assumed that
there is not enough wealth to go around. As we
have seen, however, the annual wealth produced in
America amounts to $1,170.20 for every family of
five, which is just about two and a half times the
average wage as ascertained by the census. There
is, therefore, wealth in abundance were it justly

But the taxation of land values would increase
this production. It would also equitably distribute
it. Of this there can be no possible doubt. The


taxation of land values would affect not agriculture
alone, not mining alone, but all industry would
sympathetically respond to the stimulus which the
opening of the land would involve. Houses, fac-
tories, and improvements would be encouraged in
the cities and the country, while the stimulus of
self-interest would lead those who own more than
they can profitably use, to dispose of their holdings
to those who would develop them.

This movement would be still further stimulated
by the exemption of all improvements, all ma-
chinery, all factories, and the products of labor from
taxation. Capital and labor would be encouraged,
not penalized. Capital now locked up in land
speculation would be forced into active business
enterprise, while the removal of the taxes upon all
sorts of consumable wealth would add a further
stimulus to industry and production. Persons of
small capital could engage in industry. They could
organize companies and acquire sites at little or no
cost. A revival of small industry would follow. It
would not require any aid from the state. It would
come from the voluntary action of the men them-
selves. The increase in wages, the cheapening in
the cost of land, the diminished cost of tools and
machinery would lead to the organization of co-
operative industries on a small scale.

But the great gain would come from the new light
of hope, of freedom, of industrial independence that


would brighten the eye of all. Then each man
could more readily choose his calling; he would
not be driven to accept the job that was nearest
at hand. A new country with new vistas would
always beckon to him just as it did to his fore-
fathers; but it would be a country in which all the
gains of civilization would serve him and his chil-
dren. The human mind can no more picture the
society which would result from the forcing of all
land into use, and its most productive use, than
the imagination of Watt could have foreseen the
changes which were to follow the discovery of
steam, or of Franklin the discovery of electricity.
In comparison with the effects of this revolution, all
other reforms for which we are now agitating would
be inconsequential.


This stimulus to production would only achieve
this result if the increased wealth were properly dis-
tributed. How, it may be asked, would the farmer,
the wage-earner, and the great mass of humanity
be bettered by the change?

In the first place, the abolition of all indirect
Federal taxes would save the consumer $600,000,000
a year. It would free him from the monopoly prices
now exacted by reason of the tariff. For the tariff
has increased the cost of living and placed a burden
upon the consumers of America of from one and one-
half to two billion dollars a year. These indirect
taxes and monopoly charges are paid most largely
by the poor. For the consumption of sugar, to-
bacco, wool, cotton, fuel, oil, meat, and foodstuffs
is out of all proportion to the relative incomes of
the rich and the poor.

The tariff taxes are regressive taxes. They are
exaggerated poll taxes. They bear most heavily
on those least able to pay them. The abolition of
indirect taxes and monopoly charges would add



from $100 to $200 a year to the purchasing power
of each family. The price of commodities would
fall to this extent. But this is not all. The
abolition of all taxes upon houses, buildings, and
things which labor produces would still further
reduce the cost of living. It would cheapen the
cost of everything consumed. For taxes upon
labor products are shifted on from the producer to
the consumer until they are finally lodged with him
who buys. With these taxes abolished, prices would
still further fall. Money would buy more than it
does to-day. It would go further. All this would
elevate the standard of living.

Thus the well-being of the consuming class would
be improved. Then, too, the landlord would cease
to be a claimant in distribution. His share, which,
as we have seen, amounts to probably three billion
dollars a year, would pass to the community, leaving
only the capitalist and the worker to struggle for the
output. How would the taxation of land values
affect the relations of these claimants? How would
it insure to the worker the full product of his toil,
and to the capitalist only a fair return upon his in-
vestment? How, in other words, would the condi-
tion of him whose only capital is in his labor be

We can easily imagine the results which would
follow from some calamity of nature which di-
minished the population of the country by one-


half. The effect upon the distribution of wealth
would be immediate. The relations of classes
would be reversed. Mills and factories would be
short-handed. The mines and the countryside
would be denuded of labor. A clamor for workmen
would ensue. The farmer would compete with the
mill-owner. The railroads would struggle with the
mine-operator. The newspapers would be filled with
alluring advertisements of positions seeking men.

Wages would rise with great rapidity. They
would go up by leaps and bounds. The tramp and
vagrant class would disappear. So would soup
houses and the bread lines upon our streets. Vice
and crime would greatly diminish, and the inmates
of charitable and penal institutions would be reduced
to a diminishing point. The unemployed and de-
linquent classes would fill the vacuum. Those in-
dustries which were the least attractive would be
the last to be filled, for the wage-earner would be in
a position to choose his employment. For the time
being he would be the master of the situation.
There would be two jobs hunting for every man.
Under existing conditions there are more men
than jobs. And it is this that depresses wages. A
few men out of employment will disturb the equi-
librium of wages. They impair the standard of
living of their fellows.

With the supply of labor thus reduced, a new
relationship between capital and labor would arise.


Arrogance would give way to a kind of partnership.
The two agencies in production would come together
on terms of equality. A readjustment of all indus-
trial relations would take place. Men would not
need to sacrifice their lives in order to escape star-
vation. Safety appliances and compulsory insur-
ance would be provided as a matter of necessity.
Otherwise the employer could not keep his men. In
place of the struggle for a chance to labor, there
would be substituted a struggle on the part of
employers for men.

Such are some of the obvious results which would
follow such a decrease in population. History offers
a complete confirmation of this hypothesis. In the
fourteenth century the black plague swept over Eu-
rope. It appeared in England in 1348 and 1349,
and carried off one-third of the population in a few
years' time. The spirit of society was revolutionized
by it. A dearth of labor was created. Wages shot
up from two to three hundred per cent, in a few
years' time. The landlords were unable to work their
farms. They could not market their products. Ten-
ants deserted their holdings in order to participate
in the increased wages that were offered. In conse-
quence landlords reduced their rents, or relieved their
tenants from payment altogether. Many members
of the aristocracy were impoverished. This was
the golden age of British peasantry. They com-
manded the situation.


"It was both easy and profitable for a villein to
turn his back upon an unwise lord and escape to
another manor or to a town. Only in a very few
cases does it seem to have been possible to get
laborers, servants, or tenants under the old condi-
tions. The great point of complaint was the rise
in wages. In very many cases villeins were com-
pelled to take up vacant holdings. In others, the
lands were let on lease to free tenants. And, as the
supply of land was much greater than the demand
for it, villeins were able to compel the lords to con-
sent to the commutation of services. Moreover, it
appears that the rents paid were frequently lower
than before. Thus the black death resulted in an
increase of free tenements and a decrease of the lord's

The land-owners controlled Parliament. They
sought to check, by criminal laws, the increase in
wages and the abandonment of holdings by the serfs.
They enacted the Statute of Laborers, by which it
was provided that all workmen should accept the
same rate of wages that prevailed before the plague.
The penalties were severe. Imprisonment was de-
creed against any one who left his service before
the end of his term. But the act was of no avail.
It was re-enacted with increased penalties from time
to time. The landlords controlled the administra-
tion of the law. The peasantry was ignorant and
immobile. Yet fortified with all of the power of

« History of the English Agricultural Laborer, by Dr. W. Hasbach,
p. 22.


the government, the aristocracy was helpless before
the situation. The shortage in the labor market
reduced rent and increased wages. The advantage
was all with the laborer and the tenant. This con-
dition continued for nearly two centuries, until
population again began to press upon the land.
This is the opinion of all those who have studied
this period of English history. ''I have stated more
than once," says Professor J. E. Thorold Rogers,
''that the fifteenth century and the first quarter of
the sixteenth were the golden age of the English
laborer." *

That the results described would follow a sudden
reduction in population is obvious. It could not be
otherwise. And the condition of labor would con-
tinue to improve until population again filled in the

Let us reverse this picture. The taxation of land
values would be a permanent black plague to land
monopoly. It would not diminish the number of
wage-earners. It would increase the demand for
labor. This increase in the demand would have the
same effect upon wages as the decrease in the supply.
All of the land in the country would seek tenants
and workers. Mines would have to be operated to
meet the burdens of taxation. So would city sites.
So would farms. Almost immediately men would
be masters of the situation. They would be able

« Work and Wages, p. 326.


to choose their employment. They would be free
from the pressure of hunger which forces them into
the first opportunity which offers. Hope would
take the place of despondency, for there would be
opportunity to work where one willed. Then the
land would serve the people instead of humanity
serving the landlord. The wage-worker would find
his nominal wages greatly increased, and the price
of all the necessities of life correspondingly dimin-
ished. For wealth would be created in greater

But the opening up of the resources of the earth
by taxation would do far more than the reduction
in the number of laborers. For loss of population
means a loss in the productive as well as the con-
suming power of society. Increasing opportunity,
on the other hand, involves an increase in the per
capita production of wealth. The division of labor
which has taken place has increased the per capita
production. The labor of a single man produces
to-day three hundred watches, where a generation
ago it produced at most a hundred. The skilled
workman at a machine turns out three hundred
pairs of shoes, where the cobbler at the bench pro-
duced at the most a score. Where the housewife
at the loom was able to clothe only her family, now
a child at the machine will produce cloth for a hun-
dred families. The division of labor has so in-
creased the productivity of the worker, that poverty


should have long since disappeared from the face
of the earth. And this increase in productive power
would go to the producing classes were it not in-
tercepted by some maladjustment of the laws of
distribution. This maladjustment would disappear
with the opening up of the resources of the earth,
for the increase in the opportunities for labor would
place the producing class at such an advantage that
they would be able to appropriate to themselves
all of the products of their labor.

The taxation of land values would do this. It
would affect the labor market just as did the black
plague or the discovery of a new continent. Labor
would be the predominant partner in the wage
agreement. No statute of laborers or combination
of capitalists could affect this situation. Through
the forcing of the land into use, and its most pro-
ductive use, and the full taxation of rental values,
rent would vanish and the wealth of the world would
be distributed between labor and capital.

A few short years would usher in such prosperity
as the world has never seen. Involuntary poverty
would disappear. Opportunity would call upon tal-
ent. There would be no limits to the demand for
labor. The benignant laws of freedom would sup-
plant the ignorant laws of man. Competition for
men would arise where now there is none. Initia-
tive and talent would enjoy an opportunity to ex-
press themselves. Men would not be limited to the


single job which they must now accept or starve.
They would be free to labor at that which was most
congenial, and at that which was consequently the
most productive. Then labor and capital would be
free from all taxes. There would be no barriers to
trade, no tribute on wealth. Only the landlord
would disappear as a claimant in distribution. He
now performs no useful service. He would then re-
ceive no compensation. Rent would flow to society,
and society in turn would be divided into two
claimants, labor and capital, and they would meet
in the struggle for the division, just as they now
meet in every new country where the worker is free
to choose whether he will work for himself or for
another. And the experience of all new countries,
where land is free, demonstrates that labor is then
the dominant partner in distribution.

It may be urged that such an increase in wages
would endanger industry. The reverse would be
true. It would destroy monopoly and imperil those
combinations which are identified with the land. It
would usher in competition and stimulate innumer-
able new industries. But prosperity does not con-
sist in the inflated dividends of the Steel Trust or
the watered securities of the railroads; it does not
consist in crowded New York hotels or summer
resorts. Prosperity should consist in twenty mill-
ion families whose wages or incomes enabled them
to live in comfort and happiness. It is they who


form the market. It is they who consume the out-
put of mill and of factory. Only a small portion of
the wealth that is produced is consumed by the priv-
ileged classes. And were the income of America's
working population doubled to-morrow, there would
be ushered in an era of prosperity which would
flood the factories with orders and bring to the
docks of New York the surplus products of other
lands. For the wants of man know no limit.
Our eighty millions of people can consume many
times what they do to-day and still many legitimate
wants would remain unsatisfied.

The taxation of land values would awaken indus-
try all along the line. It would give an impetus to
the building of homes and factories. Agriculture
and mining would be awakened in the same manner.
Those who produced the raw materials would con-
sume the finished product. And they in turn would

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Online LibraryFrederic Clemson HowePrivilege and democracy in America → online text (page 17 of 19)