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transportation trusts as an example, the Union Pacific
Railroad system. Eight years ago its capital (market)
value was approximately $130,000,000, and this repre-
sented chiefly the real, tangible, created property at that
time. Since then, less than $150,000,000 more has been
invested in the Union Pacific Railroad, and yet the market
value of its securities to-day is not $230,000,000, as you
would naturally suppose, but is over $600,000,000. The
Pennsylvania Railroad system fifteen years ago was
worth $1,500,000,000; to-day it is worth over $2,500,-
000,000; the Reading system in 1896 was worth about
$120,000,000; to-day it is worth $600,000,000. The
Great Northern Railroad in 1890 was worth only about
$40,000,000; to-day it is worth over $500,000,000. The
public utility corporations of New York City cost to con-
struct less than $200,000,000, and yet to-day they are
capitalized for over $1,000,000,000. The Standard Oil
Company represents an original investment of far less
than $50,000,000, and yet it is worth in the markets to-day



LAND VALUES 305

nearly $600,000,000. The great Steel Trust has actually
cost only $400,000,000, and yet it is worth nearly
$1,500,000,000.

"The difference between the cost of these things and
the market value represents the unearned increment, or
capitalized value, of their monopoly or special privileges.
This increment, created, of course, by the community,
the growth of population and general increase of produced
wealth, has, as the country has grown, increased with it,
and will necessarily continue to do so." ^

1 "The Evolution of the Trust," by John Moody, The Arena, for
May, 1907, p. 479.



APPENDIX II
THE SUFFICIENCY OF THE LAND VALUES TAX

Is a land values tax adequate for the needs of the nation,
the States, and the local authorities? Thinking only of
farming lands, many people assume that it is not; they
believe that it is necessary for the government to disguise
its sources of revenue in order to secure sufficient funds
to maintain the state.

It is not in the rural districts that land values are
greatest. The land values of New York City alone are
equivalent to the values of 100,000,000 acres of ordinary
farming land. The land values of all our cities are equal
to the value of one-half of the land under cultivation in
the United States. And this does not include the colossal
values of the mineral resources, of the railways and the
transportation agencies. Land values are a far different
thing from land, and the taxation of land values is a far
different proposal than the taxation of land.

We can readily see the sufficiency of the tax proposed
from a consideration of the values already existing. The
total revenues collected by all of the agencies of the
government in 1902 amounted to $1,709,136,540.' Of
this sum, $670,789,517 was collected by the Federal Gov-
ernment, and $1,038,347,023 by the States, counties, cities,
and local divisions. Most of the local revenues came from
the general property tax on land and improvements, and

> Census Bulletin, "Wealth, Debt and Taxation," p. 963.
306



THE LAND VALUES TAX 307

at least one-half of the revenues came from land. So
that if we deduct the taxes already collected from land
values, it leaves the sum of but $519,173,511 to be shifted
to that source for local purposes, as well as $670,789,517
of Federal revenues now collected by consumption taxes
through the customs and internal revenue systems.

As we have seen, the pure land values of the country
are at least $35,000,000,000. They undoubtedly amount
to twice that sum. But even if we assume the former
figure, the annual economic rent, measured at five per
cent, amounts to $1,750,000,000. It is probably nearer
$3,000,000,000. As we have seen, the total revenues to
be shifted from indirect taxes and improvements amount
to but $1,189,963,028, which, assessed against the rent, or
land values, would still leave over half a billion dollars in
the hands of the land-owners.

We can see the adequacy of the land values tax in some
great city where the land is valued separately from the
improvements, and is valued with some degree of accuracy
as it is in New York and Boston. The untaxed land values
of the former city amount to nearly $4,000,000,000.
The annual rent from the land alone equals $200,000,000.
All of the needs of this most extravagant city could be
assessed against this fund, and leave untouched for
Federal, State, and other purposes the sum of $100,000,000
a year,^

1 The total revenues of New York amount to about $170,000,000
a year. The city's proportion of the State tax amounts to about
$25,000,000. The proportionate part of the Federal revenues
which should be assigned to the city is about $30,000,000. If all
these revenues were collected from the rent of the land of the me-
tropolis, there would still be left for the land-owners something like
$30,000,000 a year. For already $60,000,000 is being taken from
the land each year under existing taxes for local purposes.



308 APPENDIX 11

The speculative growth in land values is enough in
itself to meet the needs of almost any growing city. Thus
in New York the growth in the value of the land, as shown
by the annual reports of the Commissioners of Taxes and
Assessments for the years 1904 to 1908, amounted to
$786,004,347. This is equivalent to $196,501,086 a year,
or $26,501,086 more than the revenues of the city. The
same thing is true of Boston, Philadelphia, Washington,
and San Francisco, where similar studies of the subject
have been made.

Mr. C. B. Fillibrown, of Boston, has made a most
careful study of this subject, and in a paper read before
the National Tax Association in Columbus, Ohio, in
1907, said:

"The following Boston estimate indicates the gigantic
proportions of the factor, ground rent, and its sufficiency
to meet all reasonable costs of government, economically
administered, not only without impoverishing the land-
owner, but without subjecting him at any time to a tax
more burdensome or more continuous than that borne by
every man that has lived in a house since a house tax
was invented.

The gross ground rent of the land of the city of Boston

is, by careful estimate, not less than $50,000,000

Of this amount there is already taken in taxation . . 10,000,000
Leaving to the land-owners of to-day a net grotmd

rent of $40,000,000

"The fact that this sum amounts to $68 per capita,
or $340 per family, will help the mind to grasp its magni-
tude as a factor in the distribution of wealth.

State and local taxation upon improvements, build-
ings, personal property, and polls amount to some-
thing over another $10,000,000

If this additional amount were taken from rent, there
would still remain to the land-owners a balance of . $30,000,000
— $51 per capita, or $255 per family."



THE LAND VALUES TAX 309

How readily all of the revenues of the nation could
be met from rent in its various forms is seen from the
policy pursued by the government in its treatment of the
lands of the Lidian tribes in Oklahoma, referred to else-
where. Minnesota has demonstrated the same thing in a
small way. That State was fortunate enough to retain
some of its school lands. LTpon them iron ore was dis-
covered. There were but fifteen iron ore deposits in all,
but through the imposition of a royalty of twenty-five
cents a ton on the ore mined, the State has come into pos-
session of a fund of over $16,000,000. Had the Federal
Government pursued this policy from the beginning, as it
is now proposed by the President in his recent message
on conservation to Congress, all of the revenues of the
Federal Government could have been met by a royalty
charge of one-quarter of the value of the mineral output
of the country, which, according to the Geological Survey,
was worth the sum of $2,069,289,196 in 1907. Five hun-
dred millions of dollars could have been realized from
this source had the nation reserved but 25 per cent, of the
value of its mineral products alone.

In foreign countries the increase in land values and the
possibilities of their taxation for public purposes are being
urged. In an article entitled " Wohnungsnot," in Con-
rad's Jahrbiicher for 1902, it is asserted that the land
underlying the city of Berlin increased in value in twenty
years, from 1870 to 1890, by the sum of $875,000,000, or
at the rate of $43,750,000 a year. Mr. Camille Huysmans,
in a publication entitled La Plus-Value Immobiliere dans
les Communes Beiges (Brussels), has gathered together
evidences of the increase in urban-land values in the
countries of Europe. He shows that in Germany, Eng-
land, France, Belgium, and elsewhere the increase is only



310 APPENDIX II

less significant than in the United States. And in Ger-
many, this unearned increment is already being taxed by
most of the larger cities, while in Great Britain, Belgium,
and Switzerland measures are being pressed for the same
purpose.



INDEX



Agricultural land, Increase in

value of, p. 131
Anthracite coal, Monopoly of,

p. 153
Aster estate, p. 124



B



Banking methods. Change in
character of, p. 59; monopoly
of credits, p. 62

Belgium, Land system and ten-
ancy in, p. 91

Bituminous coal, Monopoly in,
p. 50

Black Plague, p. 9; Effect of on
society, p. 279



City, Cost of land monopoly in,
p. 168

Civil War, Influence of public
lands on, p. 20; ascendancy
of privileged classes during,
p. 207

Civilization and decay, p. 239

Class legislation, p. 104; class
rule, p. 107

Coal, Monopoly in, pp. 46, 153 ;
land values in, p. 132; mo-
nopoly charges for, p. 167

Common ownership of land, p. 96

Community land, Village owner-
ship of, p. 98

Consolidation of wealth in
America, p. 57



Copper, Value of deposits of,
p. 53; land values in, p.
132

Cost of living. Increase in, p. 174

Costs of tenancy, p. 83



D



Dangers of railway monopoly,
p. 143

Decay, Civilization and, p. 239

Demand and supply, Law of,
p. 117

Democracy, Economic founda-
tions of, p. 18; influence of
West on, p. 21; effect of eco-
nomic opportunity on, p. 25;
due to communal land tenure
in early times, p. 97; era of,
p. 206; meaning of, p. 294;
of to-morrow, p. 294

Distribution of wealth, p. 185



E



Economic influence of land, p. 12

Economic interpretation of poli-
tics. Preface; p. 203

England (See Great Britain);
feudalism in, p. 8

Extravagance in government,
due to tariff, p. 221



Famine, Cause of, p. Ill
Federal Constitution, Venera-
tion for, p. 108



311



312



INDEX



Feudalism, in England, p. 8;

source of, p. 95; completion

of, p. 99; essence of, p. 106

Feudal tenure. Distinguishing

feature of, p. 101 ; destruction

of, p. 102

Finance, New methods in, p. 58

Franchise corporations. Land

values in, pp. 133, 154
Fraudson the public domain, p. 39
Freedom, traceable to systems
of land tenure, p. 25; indus-
trial, p. 298. (See Liberty.)



G



Government, commercialized by
the Civil War, p. 211

Great Britain, Feudalism in, p.
8; village community in, p.
98; land monopoly in, p. 164;
cause and extent of poverty
in, p. 165; effect of land mo-
nopoly in, p. 192; free trade in,
p. 300

Ground rent, a feudal survival,
p. 148. (See Rent and Land.)

H

High finance, p. 58
Holland, Effects of system of
land tenure, p. 92



Indian tribes. Leasing of lands of

by government, p. 31
Indirect taxation, Origin of, p.

204; some of the costs of, p.

218; war due to, p. 222
Industrial consolidation, p. 64.

(See Monopoly.)
Industrial freedom, p. 298; effect

of, p. 301
Ireland, Effect of competitive

tenancy in, p. 88; John

Stuart Mill on, p. 120



Iron ore. Monopoly of, p. 51;
holdings of United States
Steel Corporation, p. 52

Insurance companies, p. 60



Labor problems. Inadequacy of
explanation of, p. 173

Land, Effect of system of tenure
in ancient Rome, p. 5; mo-
nopoly in England, p. 10;
economic influences of, p. 12;
cause of American Revolu-
tion, p. 19; influence of public
lands in America, p. 20;
wages, effect of free land on,
p. 23; extent of^^public lands
in America, p. 28; poHcy of
government in relation to, p.
31; land grants, p. 32; value
and extent of, p. 35; land
monopoly, extent of, p. 43;
monopoly of, p. 75; private
property in, p. 100; values of,
p. 116; in New York City, p.
124; elsewhere, p. 129; in the
United States, p 135; railway
problem a land problem, p.
138; policy in distribution of
public lands, p. 177; cause of
land values, p. 187; socializa-
tion of land values, how ac-
complished, p. 259. (See Land
Values, Monopoly, Single
Tax.)

Land grants to railways, p. 32;
corruption connected with, p.
35

Landlordism, Origin of, p. 102

Laveleye, on tenancy in Bel-
gium, p. 91

Law, Effect of on society, Pref-
ace; p. 203

Liberty, Meaning of industrial,
pp. 256, 295, 301

Loria, Achille, on class ascend-
ancy in politics, Preface; p. 3;



INDEX



313



on wage conditions in new
countries, p. 178

M

Migrations of people, p. 4

Mill, John Stuart, pp. 88, 120

Mineral production in United
States, p. 154

Mineral resources. Disposal of,
p. 45; value and annual prod-
uct of, p. 54; extent of con-
trol of by monopoly, pp. 55,
166

Money monopoly, p. 59

Monopoly, see Land; extent of
land monopoly, p. 45; pe-
troleum, p. 47; other minerals,
pp. 46 to 53; money monopoly,
p. 59; Wall Street and mo-
nopoly, p. 60; cause of, p. 68;
railways, p. 143. (See Land
and Railways.)

Morals, Economic foundations
of, p. 243; made by the as-
cendant economic class, p. 244



N



Natural gas, p. 49

Negro slavery, p. 109

New York City, Land values in,
p. 126; means for the social-
ization of, p. 260; burden of
rent in, p. 151



O



Oklahoma, Value of lands in,

p. 130
Overproduction impossible, p.

119

P

Pacific railways. Land grants to,
p. 33; corruption and frauds
connected with, p. 35

Petroleum, Monopoly in, p. 47



Politics, Merger of with privilege,
p. 213; class control of in all
countries. Preface; in America
p. 215; some of the costs of,
p. 229

Population, Effect of on land
values, p. 114; density of, p.
160

Poverty, Cause of, p. 119; in
Ireland, p. 120; causes usually
assigned, p. 157; an over-
looked cause of, p. 229; costs
of, p. 238

Private property in land, p. 100

Privilege, Motive of, p. 231; cost
of, p. 235; control of press by,
p. 250

Production, Mineral, in America,
p. 154

Prosperity, progress of produc-
tion, p. 118; in new countries
due to land, p. 195

Protective tariff. Origin of, p.
204; a war product, p. 207;
some of the costs of, p. 218;
effect of abolition of, p. 287

Public lands, see Land; influence
on in America, p. 20; extent
of, p. 28; relation of govern-
ment to, p. 31

Public Lands Commission, Re-
port of, p. 86

Public domain. Extravagance io
its disposition, p. 177



R



Railways, see Monopoly and
Land; land grants to, p. 32;
corruption connected with, p,
35; consolidation of, p. 55;
increase in rates on, p. 56;
values of, 133; railway prob-
lem, a land problem, p. 138;
monopoly of, p. 143; relation
of Pacific railways with Con-
gress, p. 210; connection with
politics and increase in capital-



314



INDEX



ization and earnings, p. 225;
extent of tax evasions, p. 227;
necessity of public ownership
of, p. 289

Rent, see Land and Single Tax;
origin of competitive, p. 102;
increase of, p. 119; a feudal
survival, p. 148; a burden on
labor, p. 150; not limited to
land alone, p. 152; total in
United States, p. 15G; opin-
ions of economists on, p. 189;
taxation of, p. 258; effect of
taxation on, p. 271; amount
of in America, p. 307; in the
larger cities, p. 308

Resources of America, p. 29;
disposal of, p. 45

Revenues of Federal Govern-
ment, p. 217

Revolution, American, causes of,
p. 19

Roman law, basis of land tenure,
p. 94; source of feudal system,
p. 95

Rome, see Land Monopoly; evo-
lution of, p. 4; land monopoly
in, p. 6; Roman law, basis of
land monopoly, p. 94



Standard Oil Company, Extent

of holdings of, p. 48
Supply and demand, Law of, p.

143



Tariff, Evolution of, p. 204; a
war product, p. 207; some of
the costs of, p. 218; wars due
to, p. 222

Tax evasions, p. 227

Taxation. (Sec Indirect Taxa-
tion and Tariff.)

Tenancy, Extent of in United
States, p. 71 et seq.; effect of,
p. 76 et seq.; in Ireland, p. 88;
in Belgium, p. 91; origin of,
p. 102 et seq.

Tenement conditions in New
York, p. 150



U



Unearned increment, p. 122
United States Steel Corporation,

p. 52; value of land holdings,

p. 153



S



Scotland, Land monopoly in, p.

164
Serfdom, Evolution of, p. 94
Servitude, Explanation of, p. 121
Settlement of America, p. 12
Single tax. Meaning of, p. 257
et seq.; justice of, p. 264; as
a social philosophy, p. 264; ef-
fect on distribution of wealth,
p. 276; on industry and wages,
p. 277; on wages, p. 281; suf-
ficiency of in United States,
p. 306; movement for in other
countries, p. 309
Speculation, Effect of land values
ta.x on, p. 267



Values, Land, p. 116. (See

Land.)
Veneration for old ideas, p. 107
Village community, p. 98

W

Wages, Effect of free land on, p.
23, movement of in United
States, p. 174; what deter-
mines, p. 181; effect of mo-
nopoly on, p. 181; strikes and
labor wars, p. 182; iron law
of, p. 199; average of in
United States, p. 235; effect
of single tax on, p. 277; Black
Plague and, p. 279



INDEX



315



Wall Street, Extent of control

of, pp. 55, 60; identified with

politics, p. 209
Wallace, Alfred Russel, on land

monopoly in Scotland, p.

164



War, traceable to indirect taxa-
tion, p. 222

Wealth, Consolidation of, p. 57;
distribution of, p. 185; produc-
tion of in America, pp. 185,233

West, Enclosure of, p. 16



BOOKS BY FREDERIC C. HOWE

The British City

The Beginnings of Democracy

12mo. $1.50 net



CONTENTS


Introductory.


Glasgow— A City of Things


The Beginnings of Democracy.


and Conscience.


The Town Council.


London: A Municipal Democ-


The Citizen and the City.
The Ideal-s of the British City.


racy.


The American and the British


The Growth and Extent of


City; A Comparison.


Municipal Trading-


The Dead Hand of the Land.


The Cities and the Tramways.


The British Parliament— The


The Ga-s Supply.


Sanctuary of Privilege.


The Electncity Supply.


The Upper and Nether Mill-


The Greatest Gain of .Ml.


stones of Privilege.


The Municipality and Labour.


The Next Step of Industrial


Parliament and the Cities: The


Democracy.


Tyranny of a Class.


The City of To-morrow.


Index.



"The author views the hi.story of municipal
government in England, de.scribes its structure and
form. . . . His position is unquestionably sound, and
he reflects the spirit of the age and the dominant
tendencies and ideas. He has written a vital and
significant book." — Chicago Post.

"A valuable contribution to a branch of political
science of the foremost present importance."

— Philadelphia Press.

"There are few persons interested in municipal
questions who will not find it of value."

—The Nation.



BOOKS BY FREDERIC C. HOWE

PUBLISHED BY

CHARLES SCRIBNER'S SONS

The City

The Hope of Democracy

12mo. $1.50 net.



CONTENTS.


Introductory


The City Republic.


The New Civilization.


The City Charter.


Tiie Profit Account.


The Cost of the Slum.


The Loss Account.


The City's Homes.


The American City at Work.


The City's Wreckage.


The Source of Corruption.


The Wards of the City.


The Boss, the Party, and the


The City Beautiful.


System.


The City's Trea-sure.


The Way Out — Municipal
Ownership.


The Revenues of the City.


The City for the People.


Does Municipal Ownership
Pay?


The Hope of Democracy.


Index.



" In bis analysis of the present political and municipal
systems, the author shows not only a profound knowledge of
his theme, but an enlightened and constructive conception of
the remedies which will require to be employed in the recti-
fication of existing abuses."

— John lire Primrose, Lord Provost of Glasgow.

"Every chapter is interesting. 'The City ' merits a wide
reading and is calculated to do a most useful service."

— Hon. Lucius F. C. Garvin.

" A frank discussion of municipal problems as they are
actually encountered in the more typical of our American
cities. The prevailing note is one of optimism."

— Review of Reviews.



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