Frederic Clemson Howe.

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We can now forecast the struggle which the future
holds in store for America. The supply of land is
fixed and constant. It is the same to-day as it was
four centuries ago when Columbus first set foot upon
the continent. No ingenuity of man can add a
square foot to the earth's surface. Better means of
transit, greater ease of communication, the reclama-
tion of the desert places of the West, all these have
increased the area available for cultivation. But
the amount of land remains as it was when the last
discoverer opened up the last continent to human
habitation.

The uncertain element in the equation is the de-
mand. This is indicated by the census returns.
The decennial enumeration of peoples will deter-
mine the fierceness of the struggle for existence and
the price which must be paid for the use of the earth.
The birth rate is the barometer by which the returns
of the landlord may be measured.

We need not go beyond the Civil War to see the
rapidity of the growth of population. From 1860 to
1870, during one-half of which time the nation was
convulsed with civil war and maintained more than
a million men under arms, the population increased
from 31,443,321 to 38,558,371, or 22.6 per cent.
During the following decade, a decade which was
coincident with the expansion of the West and the



THE SERVITUDE OF TO-MORROW 115

projection of the Pacific Railway systems, 11,597,412
people were added to the population, or an increase of
30.1 per cent. By 1890 the population had mounted
up to 62,622,250, or an increase of 24.9 per cent.;
while, by the close of the century, 75,994,575 claimed
allegiance to the United States, or an increase of
20.7 per cent. In forty years' time the population
had increased over 141 per cent. If the population
increases as rapidly during the present decade as it
did during the last, America will contain 92,024,430
people in 1910. At the same rate of growth another
19,417,154 will be added by 1920. Continuing this
increase, the population of America will amount to
134,955,658 souls in 1930 ; to 163,430,301 in 1940,
and to 197,914,094 in 1950, or two and a half times
the present population. By the middle of the cen-
tury, at the present rate of growth, nearly 200,000,-
000 people will be struggling for the right to live in
America. But even then people will be living at a
density of but 67 per square mile, which is far
from crowded in comparison with other countries
or the Eastern states of America. For to-day the
population of Massachusetts is 348 per mile; of
Pennsylvania, 140 per mile; of Ohio, 102 per mile;
and of Wisconsin, 38 per mile. The population of the
German Empire is 280 per mile; of France, 188 per
mile; and of little Holland, 425 per mile.

With every babe that is born the value of the land
is increased, as is the tribute which its owners com-



116 PRIVILEGE AND DEMOCRACY

mand for its use. The ignorant immigrant, landing
at Castle Garden, possessed of nothing save the cloth-
ing suspended across his shoulders, increases per-
ceptibly the value of the soil, upon which the laws of
nature decree that he must either labor or starve.
The million refugees who annually crowd to America,
driven unwillingly from their native land, add to the
value of the land at least half a billion dollars a year.^
Its value responds to their coming. There are so
many more hands to labor, so many more mouths to
be fed, so many more human beings to struggle for
an opportunity to live upon the land of promise
which another has enclosed. And the 80,000,000
already here are made the poorer by their coming.
The burden of rent of all the people is increased in
consequence.^

Herein is the crux of the social puzzle. Herein
is the explanation of increasing poverty in the midst

' " It has been calculated that by the mere fact of his arrival each
emigrant increased by about $400 the value of the territory of the
United States. " — Charles Gide, Political Economy, p. 458. This is
an understatement. It is nearer $1,000.

* For the five years running from 1900 to 1905, the aggregate in-
crease in the value of all classes of farms was $6,131,000,000. The
cause of this increase in land values is indicated in the Bulletin
United States Department of Agriculture, No. 44, which says:
"While the public land suitable for farming has been reaching ex-
haustion, the flow of immigration from foreign countries has been
continuing in its direction, and where no farming land could be ob-
tained from nation, state, or railroad the influx of agricultural
people was halted in regions where farms had been established in
more recent years, and the consequent pressure of new demand upon
a fixed area increased the value per acre during the five years often
as much as fifty to a hundred per cent. "



THE SERVITUDE OF TO-MORROW 117

of increasing wealth; of misery, destitution, and
suffering on the one hand, and unimaginable luxury
and waste on the other. In this struggle for the use
of the land and the speculative values to which it
gives rise, is the solution of the paroxysms of indus-
try which periodically afflict the commercial world.
It is this, too, that explains the vacant fields and
idle workshops, while millions of men are seeking
employment.

It makes no difference whether the land is owned
by a handful of ducal proprietors or by a million
petty landlords, whether by English syndicates or
by the well-to-do farmer of the neighboring county
seat. So far as those who hereafter come into the
world are concerned, the result is the same. For rent
is fixed by the law of demand and supply; supply
ever constant, demand increasing year by year.

This law of demand and supply, by which the
dealings of the business world are conducted; this
law which operates so beneficently in most instances,
determining with the precision of a natural law the
basis on which the products of labor will exchange,
the amount of food and clothing which will be pro-
duced each year, as well as the output of ten thou-
sand factories, mines, and workshops located in the
most distant portions of the earth; this law, which
adjusts production and exchange with a precision
almost comparable to that which determines the
amount of rain which shall fall upon the surface of the



118 PRIVILEGE AND DEMOCRACY

earth, is a very cruel thing when applied to the first
necessity of life which the laws of nature decree must
be used by man if he would live, but which the laws
of man permit to be owned by the generation which
first appropriates it.

Under natural conditions this growth in popula-
tion should increase the well-being of all the people
rather than the well-being of the few. For just as
the fisherman increases his catch by a division of
labor, which frees him from the necessity of making
his net or of preparing his meals; just as the hunter
is able to capture more game when relieved of the
necessity of making his weapons, so the productive
power of society has been increased by the division
of labor and the specialization of the workers which
has been going on from the beginning of time. The
watch we are now able to buy for a dollar once in-
volved weeks of labor. A single workman is now so
skilled in the handling of looms that he produces
three hundred times as much as was possible a
century ago. The cotton-spinner produces as much
as did three hundred and twenty men in 1769. One
operator in a cotton factory supplies the wants of
two hundred and fifty men; in a woollen factory, of
three hundred men, and in a shoe factory, of one
thousand men. A single man produces more iron,
steel, or copper than did a hundred a generation
ago; he produces more than did a thousand in the
seventeenth century.



THE SERVITUDE OF TO-MORROW 119

This is true in almost every line of industry.
This increase in the productive power of society
should have long since banished poverty. For
along with every pair of hands seeking work there
are bodies to be clothed and stomachs to be fed.
Increasing population does not mean increasing pro-
duction only; it means increasing consumption as
well. And the wants of man know no limit. There
can be no such thing as overproduction. Even
were every human being comfortably housed, ade-
quately fed and clothed, even were all of the needs
with which we are familiar amply provided for, there
would arise a multitude of wants which would employ
ten times our present population. Yet instead of
improving the well-being of society, this increase in
population, increasing as it does the value of the
land and the rent which must be paid for its use,
makes of necessity for poverty. It fills the tene-
ments with sweat-shop workers, and the mines with
child laborers. Some obstacle intervenes to prevent
the operation of the natural laws of production and
distribution; some influence diverts the gains of
civilization from those whose labor produces them.
This influence is the private ownership of the land
which withholds the storehouse of nature from use,
and appropriates through rent every increase in the
productive power of society.

From now on this tribute to those who own the
land must, of necessity, increase. With every babe



120 PRIVILEGE AND DEMOCRACY

that is born and with every immigrant that comes
to our shores the struggle for a place to live and to
labor will be reflected in the value of the land. This
will increase the charge which may be exacted for its
use. This is the inevitable result of the law of de-
mand and supply when applied to the land, for rent
is established by the same law that fixes the ex-
change price of a loaf of bread or a pair of shoes. In
time rent will appropriate all that the worker can
produce save the margin of subsistence, below
which he cannot permanently go. Even this will
not be secure, for men will offer more for the land
than they can produce upon it in the hope of ward-
ing off starvation.

This tendency is already manifest. It is this that
explains the spirit of unrest that is expressing itself
all over the country. John Stuart Mill has de-
scribed the result of increasing population in the
case of Ireland. He had in mind the agricultural
workers. But the result is the same in any country
and under any conditions of industry. ''The prod-
uce of the cottier (competitive) system," he says,
''being divided into two portions, rent and the re-
muneration of the laborer, the one is evidently de-
termined by the other. The laborer has what the
landlord does not take; the condition of the laborer
depends upon the amount of rent. But rent being
regulated by competition depends upon the relation
between the demand for land and the supply of it.



THE SERVITUDE OF TO-MORROW 121

The demand for land depends upon the number of
competitors, and the competitors are the whole rural
population. The effect, therefore, of this tenure is
to bring the principle of population to act directly
on the land, and not, as in England, on capital.
Rent, in this state of things, depends on the propor-
tion between population and land. As the land is a
fixed quantity, while population has an unlimited
power of increase; unless something checks that in-
crease, the competition for land soon forces up rent
to the highest point consistent with keeping the
population alive. " ^

This, then, is the servitude of to-morrow. It is
not new to the world. But it is only since the
seventeenth century that the law has endowed one
man with legal means to take from another all that
he could get.

The extent to which the growth of population,
the improvements in the arts and sciences, the in-
crease in the productive power of society, have ex-
pressed themselves in the value of the land, and the
amount which has been added to the wealth of the
few by the exertions of the many, will be considered
in the next chapter.

» Principles of Political Economy, chap, 9.



CHAPTER XI
THE UNEARNED INCREMENT

We have witnessed the changes which have taken
place in the economic foundations of democracy
during the past few years; we have seen how ten-
ancy has followed close upon the heels of three cen-
turies of freedom through the prodigal waste of our
land and resources; we have projected our imagina-
tion into the future when the population will have
doubled, and the struggle for existence will have in-
creased in intensity through the demand for the land,
which must ever remain limited in amount. We
have seen, too, how the growth of population creates
a social value which is not retained by the commu-
nity, but is appropriated by those who own the land.

Such is the process by which organized society im-
poverishes itself; such is the process by which it has
always done so. Such, too, are the means by which
the servitude of the Middle Ages is continued down to
the present day, for we are the lineal heirs of serfdom,
just as the Church and the jurisprudence of to-day are
the heirs of many of the abuses of the Middle Ages.

But the growth of population is not the only
agency which adds to the wealth of those who own
the soil. All other activities contribute to it. Good

122



THE UNEARNED INCREMENT 123

government reflects its goodness in the value of the
land. It increases its security as well as its at-
tractiveness for homes and business. The opening
up of streets and sewers, the dedication of parks and
open spaces, all these contribute to the enrichment
of those who toil not nor spin. Even the education
of kindergarten, school, and university, the building
of cathedrals and public structures, the increase in
health and security, all these are reflected back into
the value of the land, and must be paid for by those
who make use of it.

The progress of science and invention, the design-
ing of new machines for increasing the wealth of
mankind, all these, as well as every advance in civ-
ilization are passed on to the pockets of the landlord.
And this increased wealth which society contributes
to his purse is as unearned by him who appropriates
it as was the manna which descended from heaven
to the Hebrew people. It enriches the most barren
of building sites as does the dew upon the grass, or
the ray of the rising sun to which all nature responds.
The invention of the Bessemer process, the cheapen-
ing of the means of transportation, the erection of
mammoth iron steamships, the expenditures of mill-
ions of dollars by the Federal Government upon the
inland waterways of America, have not cheapened the
cost of iron and steel to the consumer. They have
but added tens of millions of value to the iron and
the coal mines, the railways and the harbors owned



124 PRIVILEGE AND DEMOCRACY

by those who sit idly upon the resources of the earth
which they have been permitted to monopoUze.
Every improvement in the railways, every new de-
vice for doing the work of human hands, has added
to the capital value of the land and the mineral re-
sources of the country. The application of elec-
tricity to transit upon our streets has not solved the
housing problem. It cheapened the cost of produc-
tion to the owners of the franchises. It increased the
value of city and suburban land. But any reduc-
tion in the charges for transit and electricity, for gas
and for water is ultimately absorbed by the owners
of the land, who thwart every effort for the relief of
housing conditions by the speculative withholding
of building sites. Even the increased efficiency of
labor is not appropriated by capital. The capital-
ist is but the intermediary through whose hands the
increasing productivity of society flows. For he,
too, like the wage-earner and the tenant farmer, is
subject to the tribute which the private ownership
of the land involves.

We can see this unearned increment which society
creates most readily in the great cities. And we can
visualize it in the fortunes of some old family. The
estate of the Astors in the city of New York is a
striking example. In less than fifty years' time the
crowding of 5,000,000 people around Manhattan
Island has given a value to the Astor estate of
$450,000,000. Scarce a century ago the ancestor



THE UNEARNED INCREMENT 125

of the present family invested a few thousand dol-
lars in farming lands lying about the outskirts
of what was then a mere village. Much of the
property so acquired was barren rock. And so it
has remained to this day. In itself it has little more
value than the rolling prairies in Nebraska. Since
that time the hand of man has added little to its
fertility. No modern alchemy has changed its char-
acter. The land is much as it was when the glaciers
of a distant age laid it bare to the elements. But the
growth of a great nation, the development of trade
and commerce, the revolutions which have taken
place in industry, have fertilized this granite outcrop
until it produces golden eagles from every rod of its
surface. Society has done what the Astor family
could not have done, even with the lamp of Aladdin.
And society has done everything that has been done
to make the land valuable. When Jacob Astor died
in 1848, the value of his holdings had increased until
they were worth $20,000,000. A quarter of a cen-
tury later the estate had grown in value to $100,-
000,000. By 1890 it was estimated to be worth
$250,000,000. Seventeen years have since elapsed,
and in that time the struggle of mankind for a
footing on this most densely peopled spot in the
western world has given a value of $450,000,000 to
the Astor estate.^ ''In fifteen or twenty years, at

'"The Astor Fortune," by B. L. Hendrick, McClure's Magazine,
1905.



126 PRIVILEGE AND DEMOCRACY

the present rate of progress, it (the Astor estate) will
have reached the billion mark, and then it will go on
even faster, till the ordinary mind is appalled at the
portentous figures. ... If the same rate be main-
tained for another century, the Astor fortune will
attain the unimaginable total of $80,000,000,000." '
The insignificant investment of a century ago has
multiplied many thousand times. And by means of
short leases, revalued from time to time, the values
which society created have all been retained by the
estate. Public improvements, the opening up of
streets, the laying out of parks and boulevards, the
development of transportation, the increase in secur-
ity and attractiveness, all of the expenditures of the
metropolis, have passed into the value of the land.
The recently opened Subway, which was paid for from
out the city's credit, is said to have added an amount
equal to its cost to the value of the Astor holdings.^

'The Astor estate is but one of many in the metropolis. The
vahie of the land underlying the city staggers the imagination.
A short time ago the small comer lot at No. 1 Wall Street was sold
for $700,000. It contains about 1,170 square feet. Its purchase
price was about $4.00 per square inch. In 1902 the building site at
the corner of Fifth Avenue and 28th Street was sold for $400,000.
Within twelve months it was resold for $550,000. To-day its value
is not far from $1,000,000. But a few years ago the land upon
which the Tunes building is erected, at the corner of Broadway and
42d Street, was in the market for $500,000. It recently sold for
nearly three times this figure. Cases of this sort can be multiplied
indefinitely, from the Battery to the Bronx.

2 See report of New York City Club entitled "Building of Rapid
Transit Lines in New York City by Assessment upon Property Ben-
efited, " which showed that the value added to adjacent land by the
building of the Subway would have paid its cost several times over.



THE UNEARNED INCREMENT 127

The whole of Manhattan Island was first sold to
the Dutch by the Indians for $28.00. In 1904 the
land values of Greater New York were appraised
for taxation at $3,057,161,290. By 1906 the land
had increased in value to $3,391,711,526. In two
years' time $334,550,236 had been added to the
fortunes of those already enriched through the city's
growth. They had done nothing to create this value.
They had given no labor, no thought to the develop-
ment of the city. Many of the owners lived in dis-
tant parts of the world. The growth continued just
the same. By 1907 the appraised value of the land
underlying the city had advanced to $3,557,591,504,
or an increase over the year before of $165,879,978.
In 1908 the valuation had still further increased to
$3,843,165,597, or an increase of $284,271,643.'

The human imagination cannot comprehend such
stupendous figures. The total area of the city is but
190,000 acres. The land is worth $213,400 per acre.
One acre of the metropolis would buy an average
farm of 5,000 acres in extent. The land values of
Greater New York exceed the total value of all the
buildings and improvements in the city, on which
generations of labor have been expended, by over
$700,000,000.

In 1900 the value of all of the farm property
in the nine states of New York, New Jersey, Penn-

1 Taken from Annual Reports of Commissioners of Taxes and
Assessments of New York for these years.



128 PRIVILEGE AND DEMOCRACY

sylvania, Massachusetts, Connecticut, Maine, New
Hampshire, Vermont, and Rhode Island was but
$2,950,532,628, or $607,058,876 less than the value
of the naked land in New York City in 1907. This
value exceeded by nearly $1,000,000,000 all of the
capital in the United States invested in machinery,
tools, and implements in 1900. It was almost equal
to the value of all the farm buildings in the United
States.

This narrow point of land which forms the gate-
way of the nation, and which can scarcely be dis-
cerned upon the map, exceeds in value the census
appraisal of all of the farming land with the improve-
ments thereon lying to the east of the Alleghany
Mountains. It is equal to one-sixth of the total
value of the 841,201,346 acres of improved land in
the United States. Into these farms have gone three
centuries of struggle. They represent the sacrifices
of the pioneer, of the log cabin, and the prairie
schooner, the drought and the scourge of the West-
ern prairie. In this making of a nation are all the
sacrifices and the isolations, the struggles and the dis-
appointments, the lack of opportunities for educa-
tion, and the unceasing toil of those who have con-
verted the plains of America into fields of golden corn
and grain. Yet a few thousand landlords, who have
possessed themselves of a spot of land but little
larger than a Western township, have come into pos-
session of wealth half as valuable as all the farm



THE UNEARNED INCREMENT 129

products produced in a single year in the United
States.

No thrift of the owners created this value; but
the coming of population, the development of com-
merce and industry, the perfection of the arts and
sciences, all these agencies have brought into exist-
ence unearned incomes more princely than that
which enabled Crassus to unite with C2esar and Pom-
pey in the control of the Roman republic/

All other wealth save the land has an exchange
value, measured by its labor cost. Under free com-
petition, this is as true of a locomotive or of a monster
steamship as it is of a pair of shoes or a sack of flour.
It is the amount of labor which enters into each that
determines the price at which it exchanges. But
no such rule fixes the annual value of the land.
Rent is not the equation of labor for labor; it is the
resultant of a certain number of human beings seek-
ing a chance to live. And the rent that is paid is the
price exacted by those who own from those whose very
labor has given the land whatever value it enjoys.
Society is really taxed because of its own enterprise.

'New York is not exceptional in this regard. In 1902 the land
and the franchises of the city of Boston were appraised at $879,259,-
355 or $1,100 per capita. In 1906 they had increased to $1,047,-
499,500. In city after city where assessments assume to represent
the real selling value of property, the value of the land alone amounts
to nearly $1,000 per head of the population. The land value or
social value of America in city and country, from the data available,
would seem to amount to from $750 to $1,000 per capita for every
man, woman, and child in the country.



130 PRIVILEGE AND DEMOCRACY

In reality land values are not wealth at all. They
are a power to tax, a power to levy tribute upon
the wealth which others produce. Land values are
merely a toll, and rent is in the nature of an annual
license for the privilege of living, which the laws of
the land permit one class to collect from those who
labor upon the earth.


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Online LibraryFrederic Clemson HowePrivilege and democracy in America → online text (page 8 of 19)