UC-NRLF
Outlines of Lectures
-on
THE TAXATION OF
LAND VALUES
By Louis F. Post
Published by The Public, Ellsworth Building, Chicago
1912
Price: 30 Cents
OUTLINES
OF LECTURES ON
THE TAXATION OF LAND VALUES
An Explanation with Illustrative Charts, Notes, and
Answers to Typical Questions, of the Land-Labor-
and-Fiscal Reform Advocated by Henry George
By LOUIS F. POST
Published by
The Public, Ellsworth Building, Chicago
1912
First edition: Copyright, 1894, as "Post's Outlines."
Second edition (revised): Copyright, 1899, as "The Single Tax."
Third edition (1906): Copyright, 1899, as "The Single Tax."
Fourth edition (revised): Copyright, 1912, as "The Taxation of
Land Values."
By Ivouis F. Post.
TO THE MEMORY OF
WILLIAM T. CROASDALE
BORN IN 1843 DIED IN 1891
FOUNDER AND EDITOR OF THE WILMINGTON "EVERY EVENING-
EDITOR OF THE BALTIMORE "DAY"
EDITOR OF HENRY GEORGE s "STANDARD"
"A Singletaxer is a person who does something for the
Singletax. ' ' — Croasdale.
270343
PREFACE TO FOURTH EDITION
When the contents of this volume first appeared, I
was using the Charts in lecturing in the United States
and Canada on such subjects as "The Single Tax,"
"Absolute Free Trade," "The Labor Question," " Prog-
ress and Poverty," "The Land Question," "The Ele-
ments of Political Economy," "Socialism," and " Hard
Times."
For the purpose of securing homogeneity of theme
for book publication, I adapted the principal points of
all those lectures to one lecture and published it in 1894
under the title of "Outlines of Post's Lectures."
That edition having been exhausted, a second, some-
what revised, was published in 1899 under the more
appropriate title of "The Single Tax." The third, also
exhausted now, was issued under the same title and
without revision in 1906.
A fourth edition having been asked for, from Great
Britain as well as the United States and Canada, it has
seemed best to alter the title and the text to conform to
a habit of speech which, originating in Great Britain and
spreading elsewhere, tends to substitute for the term
"single tax" the descriptive phrase "taxation of land
values."
Such difference as there is between taxation of land
values and the single tax will be explained in the text of
this edition.
Originally the Charts were printed in the body of
the text, the Illustrative Notes as foot notes in fine type,
6 Preface to Fourth Edition
and the Questions and Answers in an appendix. But in
all editions except the first, the Charts have been insert-
ed between pages of the text, though as near as possible
to the portions of text they illustrate ; and in this edition,
not only are the Charts so placed, but the Illustrative
Notes, in larger type than before, are put into an appen-
dix, while the Questions and Answers are placed in the
body of the book as Part Four.
Except for verbal alterations necessitated by the
changes noted above, and for the substitution of illus-
trative information of a later date, the present edition
is the same as the earlier ones.
The questions in Part Four embody the substance
of all questions actually put to me in the course of a
lecturing experience of three years in every part of the
country. I think them fairly representative, as a whole,
of the questions usually asked about the substitution for
all other taxes of a tax on land values.
Louis F. POST.
Chicago, May i, 1912.
TABLE OF CONTENTS
PAGE
FRONTISPIECE — WILLIAM T. CROASDALE 3
PREFACE TO FOURTH EDITION 5
PART ONE— TAXATION METHODS
CHAPTER I— ENUMERATION OF METHODS 9
CHAPTER II— THE EXCLUSIVE LAND VALUE METHOD... 11
PART TWO — LAND VALUE TAXATION AS A TAX
REFORM
CHAPTER I — DIRECT AND INDIRECT TAXATION 13
CHAPTER II— THE Two KINDS OF DIRECT TAXATION 14
CHAPTER III— LAND VALUE TAXES ARE IN PROPOR-
TION TO BENEFITS 15
CHAPTER IV — CONFORMITY TO GENERAL PRINCIPLES
OF TAXATION 17
SECTION 1 — Interference with Production 18
SECTION 2 — Cheapness of Collection 18
SECTION 3— Certainty 18
SECTION 4 — Equality 19
PART THREE — LAND VALUE TAXATION AS AN
INDUSTRIAL REFORM
CHAPTER I— INVOLUNTARY POVERTY 20
CHAPTER II— THE SOURCE OF WEALTH 22
CHAPTER III — THE PRODUCTION OF WEALTH 26
SECTION 1 — Division of I/abor 27
SECTION 2 — Trade 28
SECTION 3 — The L/aw of Division of Ivabor and Trade... 29
SECTION 4 — Dependence of Labor upon L/and 33
8 Table of Contents
PAGE
PART THREE— CONTINUED
CHAPTER IV— THE DISTRIBUTION OP WEALTH 35
SECTION 1 — Explanation of Wages and Rent 36
SECTION 2— Normal Effect of Social Progress upon
Wages and Rent 38
SECTION 3 — Significance of the Upward Tendency of
Rent 39
SECTION 4 — The Effect of Confiscating Rent to Pri-
vate Use 40
SECTION 5— Effect of Retaining Rent for Common Use..45
SECTION 6— L/and Value Taxation Tends to Retain
Rent for Common Use 46
SECTION 7 — A Reminder 47
CHAPTER V— CONCLUSION 47
PART FOUR— ANSWERS TO TYPICAL QUESTIONS
CHAPTER I— ELEMENTARY 49
CHAPTER II — REVENUE PROBLEMS 49
CHAPTER III— SPECIAL INSTANCES 52
CHAPTER IV— ECONOMIC EFFECTS 55
CHAPTER V— L,ABOR QUESTIONS 56
CHAPTER VI— BUSINESS QUESTIONS 58
CHAPTER VII— MONEY 62
CHAPTER VIII— MISCELLANEOUS PROBLEMS 64
APPENDIX — EXPLANATORY AND ILLUSTRATIVE NOTES
THE TAXATION OF LAND VALUES
PART ONE
Taxation Methods
CHAPTER I
ENUMERATION OF METHODS
One of the methods of raising public revenues is by
Land Value Taxation.
Land value taxation is any tax1 levied on land
owners in proportion to the value of their land, irrespec-
tive of its improvements.
In most countries land value taxes are familiar
enough in connection with other taxes. This is so in
the United States, where real estate taxes are (a) in
part taxes according to the value of improvements, and
(6) in part taxes according to the value of land.2
Land value taxation may thus supply (a) a greater
or less proportion of the public revenues, the rest being
obtained from taxes on improvements, personal property,
incomes, business licenses, and so on ; or (#) it may be
exclusive, public revenues being raised from no other
source.
When land value taxation is exclusive, it is appro-
priately enough called the Single Tax, meaning only
one tax and that upon land values.
The Single Tax (exclusive land value taxation) may
1 0 The Taxation of Land Values
vary in degree, from (a) a rate that will supply revenues
sufficient only for the bare needs of government, to
(#) a rate high enough to appropriate to public use
approximately the entire annual value of land.
The annual needs of a government might coincide
approximately with the annual value of the land within
its jurisdiction, in which case there would be no practi-
cal difference between a land value tax sufficient merely
for public needs, and one high enough to appropriate
approximately all annual land values. Theoretically,
however, the difference is to be observed ; for there is a
difference in theory and there might be in practice.
We may make the following enumeration of different
kinds or degrees of land value taxation :
1. Land value taxation together with taxation on
improvements and personal property. This is commonly
known as the General Property Tax.*
2. Land value taxation together with taxation on
improvements, personal property being disregarded or
exempt. This is commonly known as the Real Estate
Tax.1'
3. Land value taxation to the exclusion of all other
revenue taxes, but limited to the needs of government.
This may be distinguished as the Single Tax Limited?
4. Land value taxation, whether exclusively such or
not, which begins with a low rate or none on land of mod-
erate value and increases progressively in rate on land
of higher values, with a view to encouraging small hold-
ings and discouraging large ones, is known as the
Progressive Land Value Tax.
5. Land value taxation to the exclusion of all other
revenue taxes, and to the full rental value approximately
of the land. This might be called simply the Single
Tax.6
The first three items in the foregoing enumeration,
The Exclusive Land Value Method 1 1
being fiscal in character, belong especially in Parts One
and Two of this volume. The fourth and fifth belong
more strictly in Part Three, as methods of industrial
reform. The chief object of the fourth is to discourage
large holdings and to encourage small ones ; the object
of the fifth, comprehending that of the fourth, is to take
land values for common use while leaving private earn-
ings to individual earners.
It is to be observed, howeyer, that all are fiscal, for
any of them would produce public revenues ; and that
all are industrial, for any of them would tend to promote
freedom of industrial production and justice in the dis-
tribution of industrial products.
CHAPTER II
THE EXCLUSIVE LAND VALUE METHOD
Land value taxation to the exclusion of all other
revenue taxes, but limited to the needs of government,
was proposed by Henry George in " Progress and Pov-
erty" in 1879, as the best known fiscal method, and one
that would moreover, by force of its own excellence for
revenue purposes, develop into the simplest means of
securing to the community as a whole the value of land,
and to each individual the value of his work, thereby at
once supplying abundant public revenues and settling
the labor question on the basis of justice. Henry George
expressed the idea in these words : * ' Abolish all taxation
save that upon land values." 1
This proposal, long known as The Single Tax,8 is
coming to be better and more favorably known as Land
Value Taxation.9 Under its operation all classes of
workers, whether manufacturers, merchants, bankers,
professional men, clerks, mechanics, farmers, farm-
1 2 The Taxation of Land Values
hands, or other working classes, would, as such, be wholly
exempt from taxation.
It is only as men own land that they would be taxed,
the tax of each being in proportion, not to the area, but
to the value of his land.
And no one would be compelled to pay a higher tax
than others if his land were improved or used while
theirs was not, nor if his were better improved or better
used than theirs.10 The value of its improvements
would not be considered in estimating the value of a
holding; site value alone would govern.11 If a site rose
in the market, the tax would proportionately increase ;
if it fell, the tax would proportionately diminish.
Land value taxation, therefore, when carried to the
point of the Single Tax (whether limited or not) may be
concisely defined as a tax upon land alone, in the ratio
of value and irrespective of its improvements or its use.
PART TWO
Land Value Taxation as a Tax Reform
CHAPTER I
DIRECT AND INDIRECT TAXATION
Taxes are either direct or indirect; or, as they have
been aptly described, "straight" or "crooked."
Indirect taxes are those that may be shifted by the
first payer from himself to others ; direct taxes are those
that cannot be shifted.18
The shifting of indirect taxes is accomplished by
means of their tendency to increase the prices of com-
modities upon which they fall. Their magnitude and
incidence13 are thereby disguised. It was for this reason
that a French economist of the eighteenth century de-
nounced them as "a scheme for so plucking geese as to
get the most feathers with the least squawking." u
Indirect taxation costs the real tax-payers much
more than the government receives, partly because the
middlemen through whose hands taxed commodities
pass are able to exact compound profits upon their
taxes,16 and partly on account of the extraordinary
expenses of original collection ; 16 it favors corruption in
government by concealing from the people the fact that
they contribute to the support of government; and it
tends, by obstructing production, to crush legitimate
industry and to establish monopolies.17 The questions
1 4 The Taxation of Land Values
it raises are of vastly more concern than the sum total of
public expenditures.
Whoever calmly reflects and candidly decides upon
the merits of indirect taxation must reject it in all its
forms.
But to do that is to make a great stride toward the
taxation of land values exclusively. For this is a form of
direct taxation. Land value taxes cannot be shifted.18
CHAPTER II
THE TWO KINDS OF DIRECT TAXATION
Direct taxes fall into two general classes : (a) taxes
that are levied upon taxpayers in proportion to their
ability to pay, and (#) taxes that are levied upon them
in proportion to the benefits received by them from the
public.
Income taxes are the principal ones of the first class ;
the land value tax is the only important one of the second
class.
There should be no difficulty in choosing between
the two. To tax in proportion to ability to pay regard-
less of benefits received, is not in accord with any prin-
ciple of just government. The land value tax, therefore,
as the only important tax in proportion to benefits,
comes nearest to being an ideal tax.
But here we encounter two plausible objections.
One arises from the common but mistaken notion
that men are not taxed in proportion to benefits unless
they pay taxes upon every kind of property they own
that comes under the protection of government; the
other is founded in the assumption that it is impossible
to measure the value of the public benefits that each
individual enjoys.
Land Value Taxes are in Proportion to Benefits 1 5
Though the first of those objections ostensibly
accepts the doctrine of taxation according to benefits,19
yet, as it leads to attempts at taxation in proportion to
wealth, it, like the other, is really a plea for taxation
according to ability to pay. The two objections stand
or fall together.
Neither objection would any longer have weight
were the fact once generally perceived that the value of
the service which the public gives to each individual is
fairly measured by land value taxation. We should then
no more think of taxing citizens in proportion to their
ability to pay regardless of the benefits they receive from
the public, than an honest merchant would think of
charging his customers in proportion to their ability to
pay regardless of the value of the goods they buy of him.
CHAPTER III
LAND VALUE TAXES ARE IN PROPORTION TO BENEFITS
To perceive that land value taxation would justly
measure the value of public benefits which every indi-
vidual respectively enjoys, we have only to consider that
the mass of individuals everywhere and now, in paying
for the land they use, actually pay for public benefits in
proportion to what they receive.
He who would enjoy those benefits must use land
where the benefits can be enjoyed. He cannot, for in-
stance, carry land from where government is poor to
where it is good ; neither can he carry it from where the
benefits of good government are few or enjoyed with
difficulty to where they are many and fully enjoyed.
He must rent or buy land where the benefits of govern-
ment are available, or forego them. And unless he buys
or rents where they are greatest or most available, he
must forego them in degree. Consequently, if he would
1 6 The Taxation of Land Values
work or live where the benefits of government are avail-
able, and does not already own land there, he will be
compelled to rent or buy at a valuation which, other
things being equal, will depend upon the value of the
government service that the site he selects enables him to
enjoy.20 Thus does he pay for the service of government
in proportion to its value to him. But he does not pay
the public, which provides the service ; he is required to
pay land-owners.
The economic principle pursuant to which land-
owners are thus able to charge their fellow-citizens for
the common benefits of their common government,
points to the true method of taxation. With the excep-
tion of such other monopoly property as is analogous to
land titles, and which in the purview of the Single Tax
is included with land for purposes of taxation,21 land is
the only kind of property that is increased in value by
government ; and the increase tends to be in proportion
to the public service which its possession secures to the
occupant.
Therefore, by taxing land in proportion to its value,
and exempting all other property, kindred monopolies
excepted — that is to say, by adopting exclusive land
value taxation — we should be levying taxes according to
benefits.22
Nor would this be in any sense class taxation, In-
deed, the cry of class taxation is rather impudent for
owners of valuable land to raise against land value taxes,
when it is considered that under existing systems of tax-
ation such land-owners are exempt.23
Even the poorest and most degraded classes in the
community, besides paying land-owners for such public
benefits as come their way, are compelled by indirect
taxation to contribute to the support of government.
But land-owners as a class go free. They enjoy the
Conformity to General Principles of Taxation 1 7
protection of the courts, and of the police and fire de-
partments, and they have the use of schools and the
benefit of highways and other public improvements, all
in common with the most favored, and upon the same
specific terms ; yet, though they go through the form of
paying taxes, and if their holdings are of considerable
value pose as "the taxpayers" on all important occa-
sions, they, in effect, and considered as a class, pay no
taxes. Enjoying the same intangible benefits of govern-
ment that others do, many of them as individuals and all
of them as a class receive in addition a pecuniary benefit
which government confers upon no other class of prop-
erty-owners. The value of their property is enhanced
in proportion to the benefits of good government and
other characteristics of social improvement which its
occupants enjoy. To tax them alone, therefore, is not
to discriminate against them ; it is to charge them for
what they get from the public.2*
CHAPTER IV
CONFORMITY TO GENERAL PRINCIPLES OF TAXATION
Land value taxation conforms most closely to the
essential principles of Adam Smith's four classical
maxims, which are stated by Henry George25 as follows :
"The best tax by which public revenues can be
raised is evidently that which will closest conform to the
following conditions: (i) That it bear as lightly as
possible upon production — so as least to check the
increase of the general fund from which taxes must
be paid and the community maintained.26 (2) That it
be easily and cheaply collected, and fall as directly as
may be upon the ultimate payers — so as to take from the
people as little as possible in addition to what it yields
to the government.27 (3) That it be certain — so as to
1 8 The Taxation of Land Values
give the least opportunity for tyranny or corruption on
the part of officials, and the least temptation to law-
breaking and evasion on the part of the tax-payers.28
(4) That it bear equally — so as to give no citizen an
advantage or put any at a disadvantage as compared
with others." 29
SECTION I. — Interference with Production.
Indirect taxes^tencLto check production and to cause
scarcity by obstructing the processes of production.
They fall upon men as they work, as they do business,
as they invest capital productively.30 But land value
taxes which must be paid and be the same in amount
regardless of whether the taxpayer works or plays, or
whether he invests his capital productively or wastes it,
or whether he uses his land for the most productive
purposes31 or in lesser degree or not at all, lay no penal-
ties upon industry and thrift. Therefore they conform
to the first maxim quoted above.
SECTION 2. — Cheapness of Collection.
Indirect taxes are passed along from first payers to
final consumers through many exchanges, accumulating
compound profits as they go, until they take enormous
sums from the people in addition to what the government
receives.32 But land value taxes take nothing from the
people in excess of the tax. Therefore they conform to
the second maxim quoted above.
SECTION 3. — Certainty.
No other tax, direct or indirect, conforms so closely
to the third maxim. "Land lies out of doors." It can-
not be hidden; it cannot be "accidentally" overlooked.
Nor can its value be greatly misapprehended or mis-
stated. Neither under-appraisement nor over-appraise-
Conformity to General Principles of Taxation 19
ment is possible to any important extent without the
connivance of the whole community.88 The land values
of a neighborhood are matters of common knowledge.
Any intelligent resident can justly appraise them, and
every other intelligent resident can fairly test the
appraisement. Therefore the tyranny, corruption,
fraud, favoritism, and evasions which are so common in
connection with the taxation of imports, manufactures,
incomes, personal property, and buildings — the values
of which, even when the object itself cannot be hidden,
are so distinctly matters of minute special knowledge
that only experts can fairly appraise them — would be
out of the question if land value taxation were substituted
for existing fiscal methods.3*
SECTION 4. — Equality.
In conforming to the fourth maxim, the ]and va.lne
tax bears more equally — that is to say, more justly —
than any other tax. It is the only tax that falls upon
the taxpayer in proportion to the pecuniary benefits he
receives from the public,35 and its tendency, accelerating
with increase of the tax, is to leave to every one the full
fruit of his own productive enterprise and effort.36
PART THREE
Land Value Taxation as an Industrial Reform
CHAPTER I
INVOLUNTARY POVERTY
Great, however, as are the merits of land value tax-
ation as a revenue system, its merits as an industrial
reform are of vastly greater importance.
Urgent need for industrial reform, fundamental in
character but simple in detail and progressive in tend-
ency, is evident from the persistence of involuntary
poverty among producers notwithstanding our miracu-
lous industrial progress.
The fact is obvious. General manifestations of
poverty are so common that even good men look upon it
as a providential provision for enabling the rich to drive
camels through needles' eyes by exercising the modern
virtue of organized giving.37 Its acute manifestations in
recurring periods of "hard times"38 are like epidemics
of a virulent disease, which excite the most contented to
fear that they, even they, may become its victims. Its
occasional spasms of violence threaten society with
chaos on one hand, and, through panic-stricken efforts
at restraint, with despotism on the other. And it
persists and deepens despite the continuous increase of
wealth-producing power.39
That much of our poverty is involuntary may be
Land Value Taxation as an Industrial Reform 21
proved, if proof be necessary, by the magnitude of char-
itable work which aims to help only the "deserving
poor" ; and as to undeserving cases — the cases of volun-
tary poverty — who can say but that they, if not due to
birth and training in the environs of degraded poverty,40
are the despairing culminations of long-continued strug-
gles to maintain respectable independence? 41 How can
we know that they are not essentially like the rest — invol-
untary and deserving? It was a profound distinction
that a clever writer of fiction42 made when he wrote of
"the hopeful and the hopeless poor." There is, indeed,
little difference between voluntary and involuntary pov-
erty, between the "deserving" and the "undeserving"
poor, except that the "deserving" still have hope, while
from the "undeserving" all hope if they ever knew any
has gone.
But it is not alone to objects of charity that the
question of poverty calls attention. There is a keener
poverty, which pinches and goes hungry, but is beyond
the reach of charity because it never complains. And
back of all and over all is the fear of poverty, which
chills the best instincts of men of every social grade,
from recipients of out-door relief who dread the poor-
house, to millionaires who dread the possibility of
poverty for their children if not for themselves.43 Most
men would rather die than lose a steady job or accumu-
lated property. Why do they fear if no one need be
poor?
It is poverty and fear of poverty that prompt men
of honest instincts to steal, to bribe, to take bribes, to
oppress, either under color of law or against law, and —
what is worse than all because it is not merely a de-
praved act but a course of conduct that implies a state
of depravity — to enlist their talents in hireling work
against their convictions.44 Our civilization cannot long
22 The Taxation of Land Values
resist such enemies as poverty and fear of poverty breed;
to intelligent observers it already seems to yield.45
But how is the development of these social enemies
to be arrested ? Only by tracing involuntary poverty to
its cause, and, having found the cause, deliberately
removing it.
Poverty of the involuntary kind cannot be traced to
its cause, however, without serious thought ; not mere
reading and school study and other tutoring, but
thought.** To jump at a conclusion is very likely to
jump over the cause, at which no class is more apt than
the tutored class.47 We must proceed step by^step from
familiar and indisputable premises.
CHAPTER II
THE SOURCE OF WEALTH
The first necessity is to make sure that we know the
source of those things that abolish poverty by satisfying
want.48 But it is quite unnecessary to specify all, and
tediously to trace each to its origin in detail. In search-
ing for the source of one we shall by generalization dis-
cover the source of all the rest.
As a common thing of this kind, the production of
which is a familiar process, BREAD is probably the best
example for our purpose. Let us, then, carefully trace
bread to its source.
To make the results of our inquiry clear to the eye
we will construct a chart as we proceed.
The chart should begin, of course, with a classifica-
tion ot IZreadwith reference to Man, for it is as an object
for satisfying the wants of man that we consider bread at
all. And then our first inquiry should be : Is Bread a
PLATE I
Objects
BREAD
CHART A
£xternal Ofr/stb
BREAD
A BAKER
A LOT -'LAND
AN OVEN
A FIRE
FLOUR
YEAST
SALT
WATER
roRTME OVEN ANDm
BAK[R 70 5TAN[) ON
CHART B
PLATE II
Ofyects
BREAD
.
Co"1'
A BAKER""
A LOT "'LAND
AN OVEN
A FIRE
FLOUR
YF.AST
SALT
WATER
rition
CHART C
Grtificial
External Olr/ects
BREAD
A BAKER. •
A LOT'' LAND—,
AN OVEN
A FIRE
FLOUR
YEAST
SALT
WATER
Man
Objects
£xlernal Objects
CHART D ,
The Source of Wealth 23
part of the personality of Man, or is it an object external
to him?
The answer is so simple that a child could make no
mistake. Obviously, Bread is external to Man. It must,
therefore, be classified with what for brevity we will call
"External Objects", meaning objects that are external
to man. And inasmuch as bread is a product — produced,
as we have already noted, by a familiar manufacturing
process, — and must therefore have constituents, we will
indicate upon the chart a place for classifying Constituents
as well as one for classifying Product.
The chart up to this point of completion is distin-
guished on Plate I as Chart A.
Now let the necessary constituents of bread be insert-
ed. Any housewife, any kitchen girl, knows what they
are as well as the most expert baker or learned chemist.
In Chart B of Plate I, which is a continuation of Chart
A, they are named in the place reserved for them : A
baker, a lot of land, an oven, a fire, flour, yeast, salt and
water.
Having noted all the constituents of Bread, let us
classify them in respect of their relations to Man, for the
satisfaction of whose wants bread is intended.
Reference to the same Chart B will show that all
these Constituents may be classified either as Man — the
baker falling within that category — or as objects external
to man, namely, External Objects. This classification is
made in Chart C, Plate II.
There is, however, a still further classification.
Though all the Constituents classified in Chart C as
External Objects are alike in the one particular that
they are external to Man, some of them may nevertheless
differ from others in respects which, for clear thinking,
must be distinguished. Let us see. Compare the first
two External Objects — the lot of land and the oven. A
24 The Taxation of Land Values
radical difference at once appears. The lot of land is a
Natural External Object. The oven is an Artificial
External Object. The lot exists independently of man's
art; the oven can have no existence whatever, as an
oven, but for man's art49 When the remaining External
Objects are considered the same difference appears. All
of them, Bread included, differ from the lot of land
precisely as the oven does; they are artificial.50 Let us
note this difference upon our chart, which now takes the
form of Chart D, Plate II.
Having thus classified or generalized the constitu-
ents of bread, it is no longer necessary to name them
individually. We may consequently simplify the chart
by erasing them, together with the word "bread" itself,
retaining only the class names. It will be more appro-
priate, too, if for the terms "constituents" and "classi-
fication," we substitute the term "factor". All this is
done in Chart E, Plate III.
But grave danger of confusion is here disclosed.
Artificial External Objects, as will be seen by reference
to Chart E, are classified both as the "product" and as
a "factor". Yet it cannot be that any factor of a
product is exactly the same as the product itself. There
must be some difference, and this difference we shall try
to discover.
Turn to Chart D on Plate II, which specifies the
artificial constituents of Bread, namely : oven, fire, flour,
yeast, salt, water. How do these artificial factors differ
from the artificial product, bread ? Simply in this, that
the artificial factors are unfinished bread, while the
product is finished bread.61 The difference, then, be-
tween Artificial External Objects as a factor, and Arti-
ficial External Objects as a final product, is that as a
factor they are unfinished, and as a product they are
finished.
PLATE III
External Otyectt
CHART E
r<
flfft fatal
fl**
Natural Extend Otyect*
na
l flxteffial Ofa'tet*
CHART F
(WEALTH)
(LABOR)
Ot/ect>
(LAND)
'Jftificial lixtemal Olr/ects
(CAPITAL)
CHART G
PLATE IV
O///ects
(WEALTH)
(LABOR)
t/rol External Ot/'ecte
(LAND)
CHART H
c|UCt
WEALTH
Pe"
LABOR
LAND
CHART I
The Source of Wealth 25
Let us note the distinction upon the chart. It is
done in Chart F, Plate III.
The language of the chart may now be supplement-
ed with the technical terms of political economy. When
comprehended and used with discrimination, these dis-
tinguish the differences we have discovered with equal
precision and greater brevity than the more cumbrous
terms upon which we have so far relied.52 See Chart
G, Plate III.
At this point we find all essential differences distin-
guished. Every factor of industry and every material
object of desire that can be imagined falls into one or
another of the four classes of the chart.53 And from
mere inspection of the chart we may see, what was
promised when we began its construction, that in search-
ing for the source of one of the objects that satisfy
human wants we have discovered the source of all. For
it is self-evident that the material wants of men are
satisfied in no other way than by the consumption of
finished artificial objects, technically termed Wealthy
and the chart shows that such objects have their source
in the combination of the three ''factors", namely:
(1) the activities of man, technically termed Labor;
(2) natural objects external to man, technically termed
Land; and (3) unfinished artificial objects, technically
termed Capital.
But while these three factors combine to produce
all the material objects that tend to satisfy human wants,
they do not constitute the ultimate source of those
objects. Our analysis is not yet ended ; the chart is still
incomplete.
Reflection assures us that all artificial objects,
finished and unfinished, resolve upon final analysis into
two factors : (a) the activities of man, and (b) natural
external objects ; or, in technical language, all Wealth,
26 The Taxation of Land Values
finished and unfinished, resolves upon final analysis into
Labor and Land. In final analysis, therefore, Capital
is eliminated. It expresses nothing which the two
remaining factors do not imply; for it is by the conjunc-
tion of those two factors that Capital is produced.5* Un-
finished artificial objects and their technical term, Capi-
tal, should therefore be erased from the chart. The
result appears in Chart H, Plate IV.
Thus all artificial objects external to man (Wealth),
are found to have their ultimate source in the conjunc-
tion of man's activities (Labor) with natural objects
external to man (Land).
Finally, by dropping cumbersome expressions alto-
gether, and using only technical terms, we complete this
series of charts55 with Chart I, which formulates the final
analysis of productive industry. This chart may be read
as follows : Wealth is produced solely by the application
of labor to land.™
This, then, is the final analysis of the processes
that are primarily necessary for the abolition of poverty.
In the application of Labor, which includes all human
effort,57 to Land, which includes the whole material uni-
verse outside of man,68 we find the source of Wealth,
which includes all the artificial things that satisfy want. 59
This is the first great truth upon which the Single Tax
philosophy rests.
CHAPTER III
THE PRODUCTION OF WEALTH
When considered in connection with primitive
modes of production, the vital importance of that truth
is clear.60 If primitive modes prevailed, involuntary
poverty could be readily traced either to direct enslave-
The Production of Wealth 27
ment through ownership of Labor, or to indirect en-
slavement through ownership of Land.61 There could
be no other cause. If both causes were absent, every
individual might, if he wished, enjoy all the Wealth that
his own powers were capable of producing in the prim-
itive modes of production, and under the limitations of
common knowledge, that belonged to his environment.82
But in the civilized state this principle is so entangled
in the complexities of division of labor and trade as to be
almost lost in the maze. Many, even of those who
recognize it, fail to grasp it as a fundamental truth. Yet
it is no less vital in civilized than in primitive modes of
production.
SECTION i. — Division of Labor.
The essential difference between primitive and
civilized modes of production is not in the accumulation
of Capital, which characterizes the latter ; it is in the
greater scope and minuteness of its division of Labor.63
Capital is an effect of division of Labor rather than a
cause. Division of Labor augments labor power and
relieves man from the perpetual pursuit of mere subsist-
ence. It makes civilization possible,6* by the production
and utilization of capital on a large scale.
The productive power of division of Labor may be
illustrated by considering it as a means for utilizing dif-
ferences of soil and climate. If, for example, the soil
and the climate of two sections of a country, or of two
different countries (for the effects of division of Labor
are not dependent upon political geography65), differ
inversely, one being better adapted to the production of
corn than of sugar, and the other on the contrary being
better adapted to the production of sugar than of corn,
they will yield more wealth in corn and sugar with divis-
ion of Labor than without it.
28 The Taxation of Land Values
Let us imagine a Mainland and an Island, which, as
to the adaptability of their soil and climate to the pro-
duction of corn and sugar, so differ that if the people of
each should raise their own corn and their own sugar
they would produce, with a given unit of Labor force,
only 22 of Wealth — n in corn and n in sugar — as
shown on Plate V, Chart A. Production in that man-
ner would ignore the opportunities afforded by nature to
man for utilizing differences of soil and climate. But by
such a wise division as Labor would adopt in similar
circumstances, if unrestrained, the same unit of Labor
force immensely increases the product, as shown on
Plate V, Chart B.
Nor is it alone because it utilizes differences of soil
and climate that division of Labor is so effective. Its
effectiveness is enhanced in still higher degree by its
lessening of the labor force necessary to accomplish any
industrial result, whether in mining, manufacturing,
transporting, storekeeping, professional employments,
agriculture, or the incidental occupations. Minute divis-
ion of labor, instead of accounting for poverty, makes it
all the more unaccountable.
SECTION 2. — Trade.
But division of labor is dependent upon trade. If
trade were wholly stopped there would be no division of
labor;66 if it be interfered with, division of labor is ob-
structed.67 In Chart B on Plate V, which illustrates the
effect of division of labor without trade, the Mainland
gets 20 of corn but no sugar, and the Island gets 20 of
sugar but no corn. Yet each wants both sugar and corn ;
and if they freely trade, their wants in these respects
will be better satisfied than if each raises its own corn
and its own sugar. Compare Chart A on Plate V, with
Chart C on the same plate.68 The comparison69 illustrates
PLATE V
MAINLAND
ISLAND
TOTAL
CORN SUGAR TOTAL
10 / //
10
CHART A
22
CORN
SUGAR
TOTAL
MAINLAND
20
0
20
ISLAND
0
20
20
TOTAL
20
20
fO
CHART B
*
CORN
SUGAR
TOTAL
MAINLAND
10
10
20
ISLAND
/o
(0
20
TOTAL
20
20
fo
CHART C
The Production of Wealth 29
the advantage to each individual, community and country,
of division of labor and trade over more primitive modes
of production. It is like the advantage of raising weights
by means of block and tackle,70 over doing it by direct
application of power.
And what this series of charts illustrates regarding
two places and two forms of wealth, is true in principle
of all places and all forms of wealth. That every one is
better served when each does for others what relatively
he does best, in exchange for what relatively they do
best, is as true of communities and nations as it is of
individuals. Indeed, it is true of communities and
nations because it is true of individuals; for it is in-
dividuals that trade, and not communities or nations
as such.71
SECTION 3. — The Law of Division of Labor and Trade.
Now, what is it that leads men to conform their
conduct to the principle illustrated by Chart C ? Why
do they divide their labor and trade its products ? A
simple, universal and familiar law of human nature
moves them. Whether men be isolated, or be living in
primitive communities, or in advanced states of civiliza-
tion, their demand for consumption determines the direc-
tion of Labor in production ,72
That is the law. Considered in connection with a
solitary individual, like Robinson Crusoe upon his
island, it is obvious. What he demanded for consump-
tion he was obliged to produce. Even the goods that
he collected from stranded ships — desiring to consume
them, he was obliged to labor in order to produce them
to places of safety. His demand for consumption always
determined the direction of his labor in production.73
And when we remember that what Robinson Crusoe was
to his island in the sea, civilized man as a whole is to
30 The Taxation of Land Values
our island in space, we may readily understand the
application of the same simple law to the great body of
labor throughout the civilized world.74 Nevertheless,
the complexities of civilized life are so likely to disguise
its relations to questions like that of the persistence of
poverty, as to make illustration desirable.
Chart A on Plate VI classifies about every kind of
Wealth that man requires, and also Personal Services
which do not crystalize in material products — such ser-
vices as those of lawyers, barbers, doctors, teachers,
actors, household workers, and so on. The circle of
various colors represents the commercial reservoir into
which Wealth and Personal Services are poured by
Labor, and from which they are drawn for use, each
color indicating a particular class.
Let us suppose now that Personal Servants tap the
commercial reservoir for food. They do it by applying
at retail stores for what will relieve their poverty as to
food. Food then flows out to them75 as indicated by the
blue arrow, which we now insert in the chart, thereby
advancing the illustration to Chart B, Plate VI.
How would the outflow of food affect managers of
retail stores ? Every merchant's office-boy knows. It
would admonish them to order further supplies from
wholesalers. Wholesalers would fill those orders, and
replenish their stock by ordering from manufacturers.
Manufacturers would thereupon send all over the world
for materials ; would call for new machinery and better
machinery; would order new buildings and repair old
ones, and would scour the country for workingmen to
come into their factories and renew their lowered stocks
of goods. Thus all kinds and all grades of labor that
could assist in producing food, from farm hands to
inventors, from bookkeepers to sailors, would feel the
influence of the demand for food in a demand for their
PLATE VI
CHART A
CHART B
PLATE VII
CHART C
CHART D
The Production of Wealth 3 1
labor. What Personal Servants really do in demanding
food is to direct the expenditure of labor to the produc-
tion of food and food-producing implements and mater-
ials. Demand for consumption determines the direction
of labor in production. We indicate this point upon the
chart by running a blue arrow from Food-makers to the
food reservoir, as in Chart C, Plate VII.
No complaint may now arise of lack of work in
food-producing lines.76 But work is only a means to an
end. It is done for the compensation it yields ; and how
are Food-makers to be compensated ? In services from
Personal Servants ? Suppose they are not in want of
services ? But they must be in want of something ; if
they need nothing they have no poverty to relieve. Let
it be clothing that they lack. Then they are compen-
sated for making food by taking clothing from retail
stores in exchange for their unpaid claim against Per-
sonal Servants. Clothing thereupon flows out of the
commercial reservoir to them as food flowed out to Per-
sonal Servants ; and with similar effect, namely, the
setting to work of all clothing-making labor, from sheep-
raisers and cotton-growers to sewing-women and sales-
men. Demand for consumption has determined the
direction of labor in production. The yellow arrows in
Chart D, Plate VII, denote this.
The poverty of Food-makers as to clothing is thus
removed. They are working all they care to at food
making, their own chosen employment, and they are
paid in clothing, their own chosen compensation. So
long as Personal Servants withdraw food and Clothing-
makers supply clothing, Food-makers cannot be poor.
Business will be brisk with them, labor will be in demand
and wages will be high. That all the other workers may
enjoy the same prosperity we shall see in a moment.
Clothing-makers pour clothing into the commercial
32 The Taxation of Land Values
reservoir because they wish to take something out, and
know that in this way they can get a larger quantity and
better quality of what they require than if they under-
take to make it themselves. They are skilled in making
clothing ; they are not skilled in other ways. Accord-
ingly they utilize the claim against Personal Servants,
which has now passed to their credit in exchange for
clothing, by drawing from the commercial reservoir the
particular commodity they desire. Suppose it to be
shelter. They proceed as Personal Servants and Food-
makers have already done, and so set Shelter-makers at
work. Shelter-makers in turn utilize the claim against
Personal Servants which has now been credited to them,
by taking luxuries out of the reservoir. This sets Lux-
ury-makers at work. Luxury-makers then pass the
claim over in exchange for services, and Personal Ser-
vants redeem it by rendering such services as Luxury-
makers demand.77 Everybody is now paid for his own
products with the products of others. Through similar
demands for more or better food, more or better cloth-
ing, more or better shelter, more or better luxuries, more
or better personal services, the interchanges may be per-
petuated indefinitely ;78 and these demands will be made
until all wants are satisfied — until involuntary poverty is
abolished.79
Let the illustration be now advanced to show the
perpetual flow of trade which this action and reaction of
demand and supply maintain, and we have Chart E,
Plate VIII.
Thus each class of workers by its demands for con-
sumption determines the direction of the labor of some
other class. And in more minute and final analysis
every person by his own demands for consumption
determines the direction of his own labor in production
as truly as Crusoe determined his. The demands of
PLATE VIII
CHART K
CHART F
PLATE IX
CHART G
LABOR
WAGES
LAND
RENT
CHART H
The Source of Wealth 33
Personal Servants for food, of Food-makers for clothing,
of Clothing-makers for shelter, of Shelter-makers for
luxuries, and of Luxury-makers for services, by enabling
all to procure what they require in exchange for what is
demanded of them, influence each as to the kind of
employment to adopt.80
Let us now complete the illustration. When we
began it we noted a distinction between Personal Ser-
vants, who render mere intangible services, and the other
classes, who produce tangible wealth. But essentially
there is no difference. By referring to the chart and
observing the course of the arrows, Food-makers are
seen working for Personal Servants precisely as Personal
Servants work for Luxury-makers. It is enough there-
fore to distinguish the different kinds of labor,81 as shown
in Chart F, Plate VIII.
For simplicity, the workers have been divided into
great classes, and each class has been supposed to serve
only one other class. But the actual currents of trade
are infinitely complex. It would be impossible to follow
them in detail, or to illustrate their particular movements
in any simple way. And it is unnecessary. The prin-
ciple illustrated by the charts on Plate VIII is the essen-
tial principle of all division of labor and trade, however
minute the details and intricate the movements; and
any person of ordinary intelligence who wishes to under-
stand will need only to grasp the essential principle as
illustrated by the charts to be able to apply it to the
complex experiences of every-day industrial life. All
legitimate trade is the interchange of Labor for Labor.88
SECTION 4. — Dependence of Labor upon Land.
We have now seen that division of labor and trade,
the distinguishing characteristics of civilization, not only
increase labor power, but grow out of a law of human
34 The Taxation of Land Values
nature which tends, by maintaining a perpetual revolu-
tion of the circle of trade, to cause opportunities for
mutual employment to correspond to desire for wealth.
Surely there could be no lack of employment if the
circle flowed freely in accordance with the principle here
illustrated ; work would abound until want was satisfied.
There must therefore be some obstruction.
That indirect taxes hamper trade, we have already
seen,83 but the obstruction must be more fundamental.
As we learned at the outset, all the material wants
of men are satisfied solely by Labor from Land. Even
personal services cannot be rendered without the use of
appropriate land.8* Let us then introduce into the illus-
tration, in addition to the different classes of Labor, the
the corresponding classes of Land-owning interests, indi-
cating them by black balls as in Chart G, Plate IX.
Every class of labor now has its own parasite.
The arrows which run from one kind of Labor to
another, indicating an out-flow of service, are respectively
offset by arrows that indicate a corresponding in-Jlow of
service ; but the arrows that flow from the various classes
of Labor to the various Land-owning interests are off-set
by nothing to indicate a corresponding return.
What possible return could those interests make ?
They do not produce the land which they charge laborers
for using ; nature provides that. They do not give value
to it ; Labor as a whole does that. They do not protect
the community through the police, the courts, or the
army, nor assist it through schools and post offices ;
organized society does that to the extent to which it is
done, and the Land-owning interests contribute nothing
toward it other than a part of what they exact from
Labor.85 As between Labor interests and Land-owning
interests the arrows can be made to run in only one
direction.
The Distribution of Wealth 35
Suppose, then, that as productive methods improve,
the exactions of the Land-owning interests so expand —
so enlarge the drain from labor — as to make it increas-
ingly difficult for any class of workers to obtain the Land
they need in order to satisfy the demands made upon
them for the kind of Wealth they produce or service
they render. Would it then be much of a problem to
determine the cause of poverty, or to explain hard times?
Assuredly not. It would be plain that poverty and hard
times are due to obstacles placed by Land-owning inter-
ests in the way of Labor's access to Land.
We thus see that in the civilized state as well as in
the primitive, the fundamental cause of poverty is
divorce of Labor from Land.8' But the manner in
which that divorce is accomplished in civilized condi-
tions remains to be explained.
CHAPTER IV
THE DISTRIBUTION OF WEALTH
The next chart, Chart H on Plate IX, displays the
fundamental principle of Production which we consid-
ered at the beginning, and also the fundamental principle
of Distribution, which is yet to be considered. In the
development of the latter will be found the explanation
of the divorce of Labor from Land.
This chart reminds us that Labor (human exertion),
by application to Land (natural materials and forces
external to man), produces Wealth (the generic term
for all those things that tend to satisfy the material
wants of man), and so tends to abolish poverty. No
man's poverty can be abolished in any other way, unless
it be by gifts, or vulgar robbery, or legalized spoils.
The illustration shows also that Wealth distributes
36 The Taxation of Land Values
ultimately into Wages87 (a fund made up of the aggre-
gate of the earnings of individual laborers), which cor-
responds to Labor ; and Rent88 (a fund made up of the
aggregate premiums for specially desirable locations),
which corresponds to Land.89
SECTION i. — Explanation of Wages and Rent.
It is differences in the desirableness of land that
divide Wealth into the two funds — Wages and Rent.
Labor naturally applies itself to that land from which,
considering all the existing and known circumstances,
most Wealth can be produced with least expenditure of
labor force. Such land is the best. So long as the best
land exceeds demand for it, laborers are upon an equality
of opportunity, and the entire product goes to each of
them as Wages in proportion to the labor force they
respectively expend. But when the supply of the best
land falls below demand for it, some laborers must resort
to land where, with an equal expenditure of labor force,
they produce less wealth than those who use the best
land. The laborers thus excluded from the best land
naturally offer a premium for it, or what is the same
thing, offer to work for its owners for what they might
obtain by working for themselves upon the poorer land.
Thus we have the differentiation of Rent from Wages.
Rent goes to land-owners as such, irrespective of whether
they labor or not ; Wages go to laborers as such, irre-
spective of whether they own land or not.90
To illustrate : On Plate X, Chart A, are four num-
bered spaces, representing land which varies in produc-
tiveness to a given expenditure of labor force,91 from 4
down to i. There is also an open space at the right,
representing land that is yet so poor as to yield nothing
to the given expenditure of labor force.
For simplicity, let the market be equally convenient
PLATE X
J
0
WAGES
CHART A
0
RLNT 0
CHART B
PLATE XI
WAGES J
RENT / 0
CHART C
WAGES
RENT J
/ 0
CHART D
The Distribution of Wealth 37
to each space. Let it be assumed also that one space is
as accessible to Labor as another, and that the differences
in their productiveness are known. Now to which space
would Labor first resort ? Obviously to that which
would yield most Wealth to the given expenditure of
Labor force — the space to the extreme left.
Suppose, then, that Labor appropriates only as much
of the best space as is required for use — say half of it.
We may note the fact with red color upon the plate, as
in Chart B, Plate X. Here we see that Wages are 4 and
Rent o. The laborers, as such, take the entire product,
dividing it among themselves in proportion to their ser-
vices. There is no Rent, because other laborers find
equally good opportunities to produce in the unmonop-
olized (uncolored) part of the same space ; the supply of
the best land exceeds the demand for it, and of course
none of it commands a premium.92
But if demand for land should continue until the
best space was monopolized,98 and some laborers were
forced to resort to the next, the best space would then
command a premium;94 Rent would rise and Wages
would fall. Even though but few laborers were actually
forced to the poorer space, they would be perpetual
competitors for the advantages of the better space. The
effect may be illustrated by indicating with red on Plate
XI the overflow of Labor from the first into the second
space, as shown in Chart C. This illustrates the elemen- ,
tary principle of Distribution, that Wages fall and Rent ""
rises as demand for land forces labor to land of lower
productiveness.95 The principle may be more impress-
ively illustrated by supposing that demand for spaces in
the chart advances so far as to include all the closed
spaces, except part of the poorest productive one. See
Chart D, Plate XI. We now find that all Wages have
fallen to the level of Wages on the poorest land that
38 The Taxation of Land Values
yields anything to the given unit of Labor force ; while
the Rent of all but that has risen, at the expense of
Wages, in proportion to its superior productiveness.*6
Reflection will convince us that this must be so.
Wages for a given expenditure of Labor force are no
more anywhere, for any great length of time, other con-
ditions being the same, than the like expenditure of
Labor force will produce from the best land to be had
for nothing. Rent takes up the difference.97
SECTION 2. — Normal Effect of Social Progress upon
Wages and Rent.
In the charts on Plates X and XI the effect of social
growth is ignored.98 We now illustrate that effect.
Social growth increases the productive power of
Labor. Let us suppose, then, that the given expenditure
of Labor force as applied to the first closed space in the
charts, is increased by social growth to 100; as applied
to the second, to 50; as applied to the third, to 10; as
applied to the fourth, to 3 ; and as applied to the open
space, to i." If there were no increased demand for
land, the effect on Wages and Rent would then be as
shown on Chart E, Plate XII. The productiveness of the
poorest land in demand having risen from i (Chart D on
Plate XI) to 3 (Chart E on Plate XII), Wages on all
the land in use rise accordingly from i to 3. They can-
not be less anywhere than at the place of least produc-
tiveness. By the same economic law, Rent remains at
zero for the fourth space in the chart, that of the least
productiveness, and rises in the other spaces respectively
from i, 2 and 3 to 7, 47 and 97. A little study of the
charts will show why.
The lesson to be learned is that Wages as well as
Rent tend to rise with increased productive power ; but
as a quantity and not as a proportion.100 As a. proportion
The Distribution of Wealth 39
of product, not only does Rent tend to rise with increased
productive power, but Wages tend to fall.
We may see and understand this phenomenon if we
observe that increase in the productive power of Labor,
like increase in the number of laborers (which is indeed
much the same thing in economic principle and effect),
tends to increase demand for land. The fact, both as to
numbers and power, as well as effect, is indicated on
Charts D and E as compared with Chart C ; and this is
a fact which observation of business life will show.101
SECTION 3. — Significance of the Upward Tendency of
Rent.
Now, what is the meaning of the tendency of Rent
to rise with social progress, while Wages tend propor-
tionally to fall? Does it not plainly indicate that if
Rent be treated as public revenue, advances in produc-
tive power will tend, through orderly and natural growth,
to the realization of the best industrial ideals ? Is it not
likewise a plain warning that if Rent be treated as
private capital, improvements in productive power will
tend to make slaves of the many and masters of a few ?
Does it not mean that common ownership of Rent
is in harmony with natural social law, and that its private
appropriation is disorderly and destructive? Caused
and increased by social growth,108 the benefits of which
should be common, and attaching to land, which should
be a common inheritance, Rent emphatically asserts
itself as a natural fund for public expenses.108
If there be at all such a thing as design in the uni-
verse, then has it been designed that Rent, the earnings
of individuals jointly as a social whole, shall be taken
for the support of the community, and that Wages, the
earnings of individuals as individuals, shall be left to
40 The Taxation of Land Values
each individual earner in proportion to the value of his
service.
SECTION 4. — The Effect of Confiscating Rent to Private
Use.
By giving Rent to individuals, society ignores this
just law.10* It thereby creates social disorder. Upon
society, then, and not upon a Providence which has
provided bountifully, nor upon the disinherited poor,
rests responsibility for poverty in civilized conditions.
Let us trace the connection and try to make it clear
by means of the charts, beginning again with the white
spaces on Chart A, Plate X. As before, the first-comers
take possession of the best land. Their doing so is shown
in Chart B of Plate X. There is no Rent here ; the
whole product goes to Wages. This effect has been
already explained, and it is obvious from inspection of
the chart itself. But the first-comers — instead of leaving
for others space they do not themselves need for use, as
in Charts B, C, D and E — now appropriate the whole of
the best space, using only part, but claiming ownership of
the rest. By distinguishing the used part with red color,
and that which is appropriated without use with blue,
we have Chart F, Plate XII.
But what motive is there for appropriating more of
the best space than is used ? Simply that the appropri-
ators may secure the pecuniary benefit of future demand
for the best land. What will enable them to secure
that ? Our legal system of land monopoly, which con-
fiscates Rent from the community that earns it, and gives
it to land-owners who, as land-owners, earn nothing.105
Observe the effect now upon Rent and Wages.
When other men come, instead of finding half of the
best land still common and free, as in Chart B of Plate
X, they find all of it owned. They are therefore obliged
PLATE XII
WAGES -3
RCNT // // 7
CHART K
WAGES
RENT
CHART F
PLATE XIII
WAGES 3
RENT / 0
CHART G
WAGES -3 -3
RENT / 0
CHART H
The Distribution of Wealth 41
to go upon poorer land or else to buy or rent from owners
of the best. How much will they pay for the best?
Not more than i if they want it for use and not to hold
for a higher price in the future ; for that represents the
full difference between its productiveness and the pro-
ductiveness of the next best. But if the first-comers,
reasoning that the next best land will soon be scarce and
theirs will then rise in value, refuse to sell or to rent at
that valuation, the new-comers must resort to land of
the second grade, though the best be as yet only partly
used. Consequently land of the first grade commands
Rent before it otherwise would.
As the seller's price under these circumstances is
arbitrary, it cannot be stated in the charts ; but the non-
speculative buyer's price is limited by the superiority of
the best land over that which he can get for nothing.
The charts may be made to show this, as in Chart G,
Plate XIII. The inevitable effect is to make Rent at the
expense of Wages. As that effect is illustrated by the
chart, Rent rises from o (Chart F, Plate XII) to i
(Chart G, Plate XIII), and Wages fall from 4 to 3.
Owing to the success of the appropriators of the
best land in securing more than their fellows for the
same expenditure of labor force, a rush is then made for
unappropriated land — not so much to use it as to enable
the appropriators to put Rent into their own pockets
when further demand for land makes even the poorer
land valuable.108 We may suppose, for illustration, that
all the remainder of the second space of Chart G on
Plate XIII, and the whole of the third, are thus appro-
priated. The effect is noted in Chart H of Plate XIII.
At this point Rent does not increase nor Wages fall.
The reason is that there is no increased demand for land
for use. The holding of inferior land for higher prices,
when demand for use is at a standstill, is like owning
42 The Taxation of Land Values
lots in the moon — interesting but not profitable. But
let more land be needed for use, and the element of profit
enters in. The new demand for land must be supplied
from the open space which yields but i to the given labor
force, or else from the better grades which are monopo-
lized. That is, producers must go to the frontier for
free land, being able there to produce only i to the
unit of labor force; or become tenants of the owners
of the better grades, paying in annual rent the differ-
ence between the productiveness of the better land and
that of the free land at the frontier ; or buy the better
land at a premium price ; or hire out on wages for piece-
work or on some form of time wages. The effect would
be the same in any case. No producer could get more
for the given expenditure of labor force than he could
get where land was free. As illustrated by the charts
this would be only i. If he got more, it would not be as
producer from or on the land ; it would be as monop-
olizer of the land. The surplus of his production would
go to land-owners (to himself if he owned the land, to
others if he did not) either directly on Rent account or
indirectly through lowered Wages, as illustrated by Chart
I, Plate XIV. The figure i as an item of Rent in paren-
theses on this chart indicates potential Rent. Producers
would give that much for the privilege of using the
space, but owners hold out for better terms ; therefore
neither Rent nor Wages is actually produced, though
both might be. The figure i as an item of Wages in
parentheses on the same chart, indicates potential
Wages — the increase of the Wages fund that would
result if the land were used, other things being the
same.
Notwithstanding that but little space is in produc-
tive use on Chart I (indicated with red), the Wages fund
is lowered to the same point by the mere monopoly of
The Distribution of Wealth 43
space (indicated with blue), that it would be at if all the
space above the poorest were fully used. It thereby
appears that under a system which confiscates Rent from
the public for private uses, ownership of land for spec-
ulative purposes causes Wages to fall to the minimum
long before they would if land were owned only for use.
In illustrating this effect we have again ignored the
element of social growth. Let us now assume as before
(Chart E, Plate XII), that social growth has increased
the productive power of the given expenditure of labor
force to 100 when applied to the best land, to 50 when
applied to the next best, to 10 when applied to the next,
to 3 when applied to the next, and to i when applied to
the poorest.
Labor would not be benefited now — as it was when
with the same chart we illustrated the effect of appropri-
ation of land only for use. Although much less land is
actually used (Chart J ), Wages are only i in Chart J,
whereas they were 3 in Chart E ; yet the only difference
between these two charts is that all the monopolized
land in Chart E is fully used, and much of it in Chart J
is held out of use. The prizes which expectations of
future social growth dangle before the cupidity of men
as rewards of land monopoly, raise demand for land so
as to make it more than ever difficult to get any without
a great price, in comparison with its productiveness.
Turn again to those two charts and study them.
The fourth grade land (capable of yielding 3 to a given
expenditure of labor force) is monopolized in expectation
of future use; and "surplus labor" is consequently
crowded out to the open space that originally yielded
nothing (Charts F, G, H and I), but which in conse-
quence of increased labor power now yields i (Chart J) —
as much as the poorest closed space originally yielded —
to the given expenditure of labor force.107 Wages are
44 The Taxation of Land Values
therefore reduced, according to the economic law already
explained, to the present productiveness of the open
space, as in Chart J, Plate XIV.
If we assume that i for the given expenditure of
labor force is the least that Labor can live upon, the
downward movement of Wages will be here held in equi-
librium. This is sometimes alluded to as "the iron law
of Wages." They cannot fall below i, for that would
reduce labor power by starvation ; but neither can they
rise above i, no matter how great the increase of pro-
ductive power, so long as monopolization of unused land
is permitted and pays.
Some producers would continually be pushed back
to land which increased productive power would have
brought up in productiveness from o to i, and by per-
petual "jug-handled" competition for work, they would
so regulate the labor market that the given expenditure
of labor force, however much it produced, could no-
where secure more than i in Wages108 — the productive-
ness, that is, of the grade of land to be had for nothing.
This tendency would persist until some labor was driven
to land which, despite the increase in productive power
of labor, would not yield the accustomed living without
still. further increase of productive power. Competition
for work would then compel all laborers to increase their
expenditure of labor force, and to do it over and over
again as progress went on and lower and lower grades of
land were monopolized, until human endurance could go
no further.109 Either that, or they would be obliged to
adapt themselves to a lower scale of living.110 In fact,
they do both.
The incidental disturbances of general readjustment
are what we call "hard times."111 These culminate in
a collapse of speculative land values, which lets unused
land into the market at lower prices, and by reducing
PLATE XIV
WAGES / / (/) /
RENT
(/) 0
CHART I
WAGES / /(/)//
RENT // ( )
CHART J
PLATE XV
/o
3
RENT
CHART K
The Distribution of Wealth 45
Rent revives industry. Thus increase of labor force, a
lowering of the standards of living, and depression of
Rent, co-operate to bring on what we call "good times."
But no sooner do "good times" return than renewed
demands for land set in, Rent rises again, Wages fall
again, and "hard times" duly reappear. The end of
every period of "hard times" finds Rent higher and
Wages lower, as a proportion of product even if not as a
quantity, than at the end of the previous period.118
This result is produced by the disorderly system
under which society diverts Rent from common to indi-
vidual uses. That maladjustment is the fundamental
cause of poverty. And progress, so long as the malad-
justment continues, instead of tending to remove pov-
erty as naturally progress should, actually generates and
intensifies it. Poverty persists with increase of produc-
tive power because laud values, when Rent is privately
appropriated, tend to even further increase.
There can be but one outcome : for individuals,
suffering and degradation ; for society, lawlessness and
destruction or decay.
SECTION 5. — Effect of Retaining Rent for Common Use.
If society retained Rent for common purposes, all
incentive to hold land for any other object than immed-
iate use would disappear. The effect may be illustrated
by a comparison of Chart J on Plate XIV with Chart K
on Plate XV.
There is but one difference between those two
charts. In Chart J, Rent is confiscated to private use;
whereas in Chart K, Rent is retained for common use.
All the labor force indicated with red in Chart J, does not
more than utilize the space to the left and part of the
adjoining space on Chart K. This would elevate Wages
to what could be produced with the given labor force
46 The Taxation of Land Values
from the poorer of the two spaces. Thus, in the figures
of the charts Wages would rise from i (Chart J) to 50
(Chart K) ; and increase of Rent would not enrich land-
owners at the expense of other classes, but would enrich
the whole community.113
As illustrated by those two charts, so would it be in
fact — let the degree be less or more — in the actual indi-
vidual and social life of mankind.
SECTION 6. — Land Value Taxation Tends to Retain
Rent for Common Use.
To retain Rent for common use it is not necessary
to abolish land-titles, nor to let land out to the highest
bidder, nor to invent some new mechanism of taxation,
nor in any other way formally to change existing modes
of owning land, or existing processes for collecting
public revenues. " Great changes can be best brought
about under old forms."11* Let land be held nominally
as it is now. Let taxes be collected by the same pro-
cesses as now. But abolish all taxes except those that
fall upon actual and potential Rent, that is to say, upon
land values. Nothing else is necessary. Nor is any-
thing further necessary except to increase land value
taxes as Rent increases. If all revenue taxes were cen-
tralized upon land values (even within the limitations of
the narrowest needs of government economically admin-
istered) it is doubtful if land-owners could any longer
confiscate enough Rent to make speculation in land
monopoly very profitable. Though some surplus were
still absorbed by them, the getting of Wealth by produc-
ing it would be so much more easy than by confiscating
Rent to private use, to say nothing of its being so much
more respectable, that speculation in land values would
lose much of its attractiveness. At any rate the question
of surplus — Rent in excess of the necessities of govern-
The Distribution of Wealth 47
ment economically administered — may be readily decided
when the Single Tax principle, that Rent justly belongs
to the community and Wages to the individual, shall
have been recognized by society to the extent of the
Single Tax Limited — to the extent, that is, of the adop-
tion of exclusive land value taxation. 116
SECTION 7. — A Reminder.
It is assumed, of course, that the reader of this
Chapter understands that Land does not mean agricul-
tural land alone ; that Rent does not mean payments by
tenants to owners for occupancy of buildings or other
use of these or other improvements ; that Wealth does
not mean stocks and bonds or land; and that Wages
does not mean alone the payments that an employer
makes to hired workmen.116
Lest there be some such misapprehension, however,
frequent recurrence to Plates I to IV inclusive, and IX,
may be advisable.
"Wealth" is the technical term for labor products.
"Labor" is the technical term for human effort of an
industrial character. "Land" is the technical term for
the natural resources of men that are external to them-
selves. "Wages" is the technical term for that share in
the aggregate of current production (currently produced
Wealth) which remains after the deduction of enough
of the whole to equalize advantages of location. The
technical term for this advantage-equalizing share of
current production is "Rent."
CHAPTER V
CONCLUSION
In "Progress and Poverty", after reaching his con-
clusion that the command of the land, which is necessary
48 The Taxation of Land Values
for labor, is in effect command of all the fruits of labor
save enough to enable labor to exist, Henry George says :
So simple and so clear is this truth that to fully see it once is
always to recognize it. There are pictures which, though looked
at again and again, present only a confused labyrinth of lines or
scroll-work — a landscape, trees, or something of the kind — until
once attention is called to the fact that these things make up a
face or a figure. This relation once recognized is always after-
ward clear.117 It is so in this case. In the light of this truth all
social facts group themselves in an orderly relation, and the most
diverse phenomena are seen to spring from one great principle.
Many events subsequent to his writing have gone to
prove that Henry George was right. Each new phase
of the social problem makes it still more clear that the
disorderly development of our civilization is explained
fundamentally, not by pressure of population, nor by the
relations of employers and employed, nor by scarcity of
money, nor by the drinking habits of the poor, nor by
individual differences in ability to produce wealth, nor
by an incompetent or malevolent Creator. It is explained,
as he has said, by "inequality in the ownership of land."
And each new phase makes it- equally clear that the
remedy for poverty is not to be found in famine and
disease and war ; nor in strikes, which are akin to war ;
nor in suppression of strikes by force ; nor in coinage of
money ; nor in liquor prohibition or high license ; nor
in technical education ; nor in anything else, however
excellent for its own purpose, short of approximate
equality in the ownership of land. Remove all those
evils, and land monopoly would be so much the stronger.
Equality as to the use of Mother Earth, that and
that alone secures to every one an equal opportunity to
participate in production and full ownership by each
producer of his own share. This is justice, this is order.
Unless our civilization have it for a foundation, new
forms of slavery wrll assuredly lead on into new forms
of barbarism.118
PART FOUR
Answers to Typical Questions
CHAPTER I
ELEMENTARY
Q. Do you regard the Single Tax as a panacea for the cure
of all kinds of social disorder ?
A. Not a panacea but a necessary condition. When William
Ivloyd Garrison the younger announced his conversion to the
Single Tax in a letter to Henry George, he took pains to state
that he did not Relieve it to be a panacea, and Mr. George replied :
' ' Neither do I ; but I believe that freedom is, and the Single Tax
is the tap-root of freedom." Your question may be answered in
much the same way. Freedom is to social order what pure air
is to physical health, and the Single Tax principle makes freedom
possible.
CHAPTER II
REVENUE PROBLEMS
Q. Would the Single Tax yield revenue sufficient for all
kinds of government?
A. The late Thomas G. Shearman, Esq., the distinguished
lawyer and economist of New York, estimated that sixty-five per
cent, of the Rent that the land in the United States now yields or
offers to its owners, would be sufficient. But whether it would or
not is as yet an unimportant question. If all revenues ought to
be raised from land values, then no revenues should be drawn
from other sources while any land value remains in private pos-
session. Until land values are exhausted, taxation of industry
cannot be excused either on moral or on economic grounds.
Q. In an interior or frontier town, where land has but little
value, how would you raise enough money for schools, highways,
and other public needs?
50 The Taxation of Land Values
A. There is no town whose finances are reasonably managed
in which the land values are insufficient for local needs. Schools,
highways, and so forth, are not local but general, and should be
maintained from the land values of the State at large or of the
nation.
Q. What disposition would you make of the revenues that
exceeded the needs of government?
A. They who ask this question ought to settle it with those
who want to know whether the Single Tax would yield revenue
enough. I do not believe that public revenues under the Single Tax
would exceed the just needs of economical government. In better
highways, better sidewalks, better wharves, better schools, better
public service of various kinds, we should find sufficient demand
for all our revenues. But the question of deficiency or surplus is
one to be met when it arises. The present question is the wisdom
and the justice of applying land values to common use, as far as
they will go or as much of them as may be needed as the case
may prove to be.
Q. If the full rental value were taken would it not produce
too much revenue and encourage official extravagance? If only
what was needed for an economical administration of government,
would not land still have a speculative value?
A. In the first part of your question you are thinking of a
vast centralized government as administering public revenues.
With revenues raised locally, each locality being assessed for its
proportion for the State and the nation, there would be no such
danger. The possibility would be still further reduced by the
fact that private business would then offer greater pecuniary prizes
than public office would, wherefore public office would be sought
for higher purposes than as money-making opportunities. As to the
second part of your question, the speculative value of land would be
wiped out as soon as the tax on land values was high enough, and
that on improvement values low enough, to make production
more profitable than speculation. And this point would be reached
long before the whole rental value was absorbed in taxation.
It is doubtful if land speculation could thrive if only 50 per cent. ,
or even so little as 25 per cent. , of annual land values were taken
for public purposes, provided improvements were exempt.
Q. If a land-owner builds, does not that increase the value
of his land and consequently the amount of the tax he would have
to pay? If so, would not he be taxed for his improvement?
A. No. Upon the value of the building he would never pay
any tax. It is true that his improvement might attract others to
Answers to Typical Questions 5 1
the locality in such numbers as to make land there scarcer and con-
sequently dearer. His own lot would in that case rise in value with
the other land and be taxed more, just as the rest would be.
But that would not take any of his labor in taxes ; he would still
have his building free of taxation. Thus : If on a lot worth $1,000
a building worth $1,000 were erected, making the whole worth
$2,000, the tax would fall only upon the $1,000 which represents
the value of the lot. If land then became so scarce, relatively to
demand for it, that the lot rose in value to $2,000, the tax would
be doubled; but the owner's improvement would still be exempt.
When his property was worth $2,000 he was taxed on $1,000, the
value of the lot, leaving the other $1,000, the value of the build-
ing, free; and now, though he is taxed on $2,000, the value of
the lot, his $1,000 worth of building is still free.
Q. If a man owns a city lot with a $5,000 building on it,
what, under the Single Tax, would hinder another man, perhaps
with hostile intent, from bidding a higher tax than the first man
was able to pay, and thus ousting him from his building?
A. The question rests upon a misapprehension of method.
The Single Tax is not a method of nationalizing land and renting
it to the highest bidder. It is a method of taxation. And it
would not only hinder, it would prevent the unjust ousting of
another from his building. The Single Tax falls upon land-owners
in proportion to the unimproved value of their land ; and this
value is determined by the real estate market — by the demands of
the whole community — and not by occasional and arbitrary bids.
No one could oust a man from his building by bidding more for
the land on which it stood than the occupier was paying ; the
Single Tax would not be increased in any case unless the land
upon which it fell was in so much greater demand in the market
that the owner could regularly let it for a higher rent, and this
would not be so unless the neighboring land were similarly affected.
Q. What would be the expense of collecting the Single Tax
as compared with that of collecting present taxes?
A. Much less. It is easier to assess fairly, and easier to col-
lect fully ; the machinery of assessment and collection would be
simpler and cheaper, and it would not enable first payers to col-
lect the tax with profits upon it from ultimate payers.
Q. How would you estimate land values?
A. As we do it now. As real estate dealers estimate them.
As appraisers in partition would estimate them. Read Note 34 in
Appendix.
52 The Taxation of Land Values
CHAPTER III
SPECIAL INSTANCES
Q. How would you value the land of a farm when all the
land of the neighborhood was fully improved?
A. By ascertaining the value per square rod of the adjacent
highway. The value of that, for the purpose of adding it to the
farms along which it runs, would denote the land value of the
farms. Read Notes 11 and 34 in Appendix.
Q. How can mines be taxed without increasing the price of
the output?
A. By taxing the royalty — not the product, but the royalty ;
or, what is essentially the same, by taxing the capitalized value of
the mine, not as a going concern, but as a natural mineral deposit.
This would tend rather to lower than increase the price of the
product and raise miners' wages. Read Note 11 in Appendix.
Q. How would the Single Tax be assessed on a railroad
which passes through a farm worth (without its improvements)
$30 an acre?
A. According to the value, not of the adjacent farms, but of
the total right of way ; much as the value of a navigable river
might be determined if it were private property.
Q. How would you assess the land value tax of a man who,
by making levees, had reclaimed land from the Mississippi ? Say
that the land when reclaimed was worth $50 an acre, but that
the levees cost a great deal less.
A. The fact that the levees cost less than the value of the
land when reclaimed, shows that the opportunity for reclaiming
such land has a value. That value, the value of the opportunity
to reclaim, is the land value of the property and would be the
basis of the tax.
Q. How would you adjust mortgages to the Single Tax
scheme?
A. Mortgages are modified deeds, and mortgagees are land-
owners conditionally and in degree. I would make no adjust-
ment, but would warn mortgageors and mortgagees to adjust their
interests as they see fit when they make their mortgages, just as
I would warn buyers and sellers of land to guard their correlative
interests between themselves by their contracts. Full notice has
been given that as soon as possible and as fast as possible we
purpose inducing the people to bring about a condition in which
Answers to Typical Questions 53
land values will be taken for public use and improvement values
be left for private use. Persons who in the face of this notice
neglect to protect themselves in their contracts have no one else
to blame if, when the change comes, they suffer pecuniary loss in
the readjustment.
Q. How would the Single Tax affect leases already made?
Would the loss of declining values fall upon the owner or the
lessee?
A. That would depend upon the covenants in the lease. It
behooves tenants to see to it that their leases contain provisions
in this respect. If they fail to protect themselves they cannot
complain in case they suffer when the Single Tax comes into
operation. They will have had ample warning, and their misfor-
tune will be chargeable to their own negligence.
Q. Should the whole rental value of land be taken for com-
mon use, or only enough for government purposes?
A. Only enough for government purposes. When the people
see that this method of taxation improves business, increases
wages, cheapens land, and generally promotes prosperity, they
will not hesitate to increase taxes so long as public improve-
ments are needed or public enterprises desired and land values
are unexhausted. As is said in " Progress and Poverty " (book
viii, ch. ii) : " When the common right to land is so far appre-
ciated that all taxes are abolished save those which fall upon rent,
there is no danger of much more than is necessary to induce
them to collect the public revenues being left to individual land-
holders. ' '
Q. How would the tax be collected from those who neglect-
ed or refused to pay?
A. As taxes on real estate are now collected. Or, if neces-
sary or desired, as individuals collect rent from tenants who
refuse to pay — by suing for the tax, or evicting the occupant, or
both. I think, however, that the public would deal more kindly
with occcupants than landlords do. I think it would compensate
them for loss in respect of improvements where such loss was
really suffered.
Q. How would you reach the bondholder, or the man with
money alone?
A. Why should we wish to reach him if his bonds or his
monies represent labor products to which he has honestly acquired
a just title ? This question is a legitimate offspring of the theory
that men should be taxed according to their ability to pay, the
54 The Taxation of Land Values
merits of which are considered on pages 14 to 17. It is a question
which may also have been suggested by the fact that ' ' bond-
holders" and "men of money" are so often men who have
special privileges. There is a feeling that it would be unfair to
allow such special privileges to escape taxation, and indeed it
would be. But inquiry will show that the most important of
these privileges rest in the ownership of land, and that the
bond-holders ' ' and ' ' men of money ' ' whom the questioner
probably has in mind, are in fact great landlords; that is to say,
that their fortunes consist of evidences of title to landed privileges.
When land values were taxed, the great source of unearned in-
comes— land monopoly — would be practically abolished, and bond-
holders and men of money would be only those who earn what
they have. Such property no one should, and few ever would,
wish to expropriate.
Q. In your lecture you tell of a meteorite which a poor man
found, but which the law gave to the owner of the land on which
it fell. (See Note 105.) Wouldn't the owner, or possessor, or
whatever you choose to call him, of that land get the meteorite
just the same if the Single Tax were in force ?
A. Yes, if only one meteorite fell upon his land. But if
meteorites got into the habit of falling there, the land would grow
in value ; then the Single Tax would operate, by taxing land val-
ues, to take the value of those meteorites for common use, less
the labor expended upon them, the value of which would go to
the laborer. I told of the one meteorite to illustrate a principle.
But as a practical question we need deal only with land upon
which, speaking in metaphor, meteorites have a habit of falling.
The occasional diamond, the nugget of gold, or other valuable
thing found here or there as one of the accidents of the day, are
of no practical moment ; it is the diamond fields, the gold mines,
the especially fertile or conveniently located farming spots, the
centers of trade, and similar valuable opportunities for labor, that
are of moment as factors in social problems.
Answers to Typical Questions 55
CHAPTER IV
ECONOMIC EFFECTS
Q. Would not the Single Tax increase the rent of houses?
A. No. It takes taxes off buildings and materials, thus
making it cheaper to build houses. How can house rent go up
as the cost of building houses goes down ? Read page 14 and
the related Notes.
Q. Do not the benefits of good government increase the
value of houses as well as of land?
A. No. Houses are never worth any more than it costs to
reproduce them. Good government tends to diminish the cost of
house building; how, then, can good government increase the
value of houses? You are confused by the fact that houses, being
attached to land, seem to increase in value, when it is the land
and not the house that really increases. It is the same mistake
that a somewhat noted protectionist made when he tried to show
that there is an " unearned increment ' ' to houses as well as to
lands. He did so by instancing a lot of vacant land which had
risen in value from $5,000 to $10,000 and comparing it with a
house on a neighboring lot which, as he said, had also increased
in value from $5,000 to $10,000. At the moment when he wrote,
the house to which he referred could have been reproduced for
$5,000 ; and had he reflected or made inquiries, he must have
discovered that it was the lot on which the house stood, and not
the house itself, which had increased in value.
Q. What difference would it make to tenants whether they
paid land rent to the community or to private owners?
A. Much the difference that it makes to partners whether
they pay money into the partnership or to outsiders. When
tenants pay to the community they are paying in part to them-
selves ; and what others pay they share in, for they are part of
the community. They are also exempt from taxes. And since
there would be no inducement to speculate in land if rent went to
the community, building land would be more plentiful and rents
for residences would consequently be lower.
Q. Would not the merchant shift his land value tax by add-
ing it to the price of his goods?
A. No. Read Note 15 in Appendix.
56 The Taxation of Land Values
Q. Would not the tax on land values increase the value of
land?
A. No. Read Note 18 in Appendix.
CHAPTER V
LABOR QUESTIONS
Q. What good would the Single Tax do to the poor? and
how?
A. Constantly keeping the demand for labor above the sup-
ply of labor, it would enable them to abolish their poverty by
their industry.
Q. Hasn't every man who needs it a right to be employed
by the government?
A. No. But he has a right to have government secure him
in the enjoyment of his equal right to the opportunities for em-
ployment that nature and social growth supply. If government
secured him in that respect, and he could not get work, it would
be because (1) he did not offer the kind of service that people
wanted; or (2) he was incapable. His remedy, if he did not offer
the kind of service that people wanted, would be either to make
people see that they were mistaken or to go to work at something
else ; if he was incapable, his remedy would be to make himself
capable. In no case would he have a right to government inter-
ference in his behalf, either through schemes to make work, or
by bounties, or tariffs, or in any other special way.
Q. Would working people whose savings are in savings banks
or insuracce companies which own land or have mortgages upon
land, lose by the shrinkage in land values?
A. Not if the companies were managed intelligently. Well
managed companies would shift their investments as they ob-
served the persistent decline of land values. They would do it
even as soon as conditions appeared that would naturally cause
land values to shrink. But working people could well afford to
give up all their present savings for the permanent employment
and high wages that the Single Tax would bring about. It is not
thrifty working people but rich idle people who would lose by the
Single Tax.
Q. If taxes have to be paid by labor, what difference does it
make to laborers whether they are levied in proportion to land
values, or otherwise?
Answers to Typical Questions 57
A. When taxes are levied upon earners in proportion to
earnings, they take what the earners would otherwise keep ; but
when they are levied upon land-owners in proportion to land val-
ues, they take what the earners must in any event lose.
Q. Under the Single Tax could employers cut wages to the
starvation point?
A No. Under the Single Tax, employers would be constant-
ly bidding for workmen, instead of workmen constantly bidding
for employers as is the case now. It is the ' ' oversupply ' ' of
labor that makes starvation wages possible, and the Single Tax
would abolish that ; not by reducing the supply of labor, the
Malthusian idea, but by allowing effective demand for labor to
freely increase.
Q. What effect would the Single Tax have on immigration ?
Would it cause an influx of foreigners from different nations?
A. If adopted in one country of great natural opportunities,
and not in others, its tendency would not only be to cause an
influx of foreigners, but also to make their coming highly desir-
able. Our own experience in the United States, when we had an
abundance of free land and were begging the populations of the
world to come to us, offers a faint suggestion of what might be
expected
Q. Will not the employer be able under the Single Tax to
undersell the laborer — to sell goods for less than cost, at least
temporarily — and thereby force him to accept the employer's
terms?
A. With employers continually hunting for men to help
them fill their orders, and bidding against each other to get men,
as would be the case under the Single Tax, such a contingency
would be in the highest degree improbable. It is practically im-
possible. Nothing short of a trust, an absolutely perfect trust,
of all employers the world over could cause it. Kven then,
plenty of very useful land of all kinds being free and labor pro-
ducts being exempt from taxation, all persons outside the trust
could resort co-operatively to the land, and the trust would be
obliged to take them in as the alternative of falling to pieces under
their competition.
58 The Taxation of Land Values
CHAPTER VI
BUSINESS QUESTIONS
Q. Is not ownership of land necessary to induce its improve-
ment? Does not history show that private ownership is a step in
advance of common ownership?
A. No. Private use was doubtless a step in advance of com-
mon use. And because private use seems to us to have been
brought about under the institution of private ownership, private
ownership appears to the superficial to have been the real advance.
But a little observation and reflection will remove that impression.
Private ownership of land is not necessary to its private use ; and
so far from inducing improvement, private ownership retards it.
When a man owns land he may accumulate wealth by doing
nothing with the land, simply allowing the community to increase
its value while he pays a mere nominal tax, upon the plea that
he gets no income from the property. But when the possessor
has to pay the value of his land every year, as he would have to
under the Single Tax, and as ground renters do now, he must
improve his holding in order to profit by it. Private possession
of land, without profit except from use, promotes improvement ;
private ownership, with profit regardless of use, retards improve-
ment. Bvery city in the world, in its vacant lots, affords proof
of the statement. It is the lots that are owned, and not those
that are held upon ground-lease, that remain vacant.
Q. Would not the full Single Tax destroy the basis of all
credit — land values?
A. A tax of 100 per cent, of annual ground rent would wipe
out land values, which are but a capitalization of ground rent ;
and 100 per cent, of capitalized value, would leave the owner only
a moderate percentage of annual ground rent — enough, however,
for his service as a collector. But land values are not the basis
of credit. Merchants do not prefer mortgages on land as security
for commercial debts, unless they hope to get ownership of the
land through foreclosure. The true basis of every man's credit,
from the consumer at the cross-roads store to the great retail mer-
chant at the factory or the jobbing house, is honesty, opportunity
and ability. He who will pay his debts if he can, and has an
opportunity to earn enough to pay them with, and is able to make
good use of the opportunity, needs no land values to offer as a
basis for commercial credit. He has the ideal basis of all credit.
Answers to Typical Questions 59
This basis of credit every honest man would have if the Single
Tax were in operation.
Q. Would the Single Tax benefit the debtor class? If so,
how?
A. It would. By abolishing monopoly of opportunities to
work, and thus enabling debtors to earn enough, while decently
supporting themselves, to pay their debts. When debtors deserve
sympathy, it is not because they are in debt, but because they are
forced by existing institutions to go into debt in order to work,
and are then so hampered and harried by the same institutions as
to make orderly repayment usually impossible and bankruptcy
almost inevitable.
Q. What would be the effect of the Single Tax if you still
left railroad, telegraph, money, and other monopolies, in private
hands?
A. The real strength of all monopolies is land monopoly.
Observe, for example, the land holdings of the inside rings of
railroads. Abolish land monopoly, and the power of all the others
will go, as Samson's strength went with the cutting of his hair.
Retain land monopoly, and the abolition of every other kind will
avail nothing in the end.
Q. How is it possible to determine what part of a man's
product is due to land, and what part is due to labor?
A. All products are due wholly to union of land and labor.
Labor is the active force, land is the passive opportunity. With-
out both there can be no product. But the part of a man's pro-
duct that he individually earns, as distinguished from the part
that he obtains by virtue of advantageous location, is determined
by the law of Rent — by what his location is worth.
Q. What is the value of a man's labor?
A. What he can get for it under competition in a truly free
market. There is no other test.
Q. Is there no danger that under the Single Tax scheming
men of great intellect would be able to take advantage of their
less intelligent brethren, and by the competitive system corral
everything as they do now?
A. If they did, it would not be by the competitive system,
but because the competitive system was still imperfect. Compe-
tition is freedom, and such a thing as you suggest could not be
done where freedom prevailed. I believe that the Single Tax
would perfect competition. If it did, and at any rate to the ex-
tent that it did, every one would get what he earned.
60 The Taxation of Land Values
Q. Why does not labor-saving machinery benefit laborers?
A. Suppose labor-saving machinery were ideally perfect — so
perfect that no labor was needed. Could that benefit laborers, so
long as land was monopolized ? Would it not rather make land-
monopolists completely independent of laborers? Of course it
would. Well, the labor-saving machinery that falls short of being
ideally perfect has that tendency. The reason that it does not
benefit laborers is because, by enhancing the value of land, it
restricts opportunities for employment.
Q. Under the Single Tax theory what right have you to tax
the value of "made land," like the Back Bay of Boston? Is not
such land produced by labor?
A. The surface soil is produced by labor. But the founda-
tion— the bottom of a bay, a swamp, a river, or of a hole, is not.
"Made land" does not differ industrially from a house. Its
materials are produced from one place to another and adjusted to
meet the demand. But nature in the case of " made land," as in
that of houses, supplies the materials and the foundation. The
value of the Back Bay of Boston is chiefly the value of a location
— a communal value. The Single Tax would not take the value
of ' ' made land " ; it would take the value of the location where
the ' ' made land " is.
Q. Why does land tend to concentrate in the hands of a few?
A. Because material progress and speculation in land monop-
oly tend to ihcrease its value.
Q. Does not the growth of a community increase the value
of other things as well as of land? For example, does it not add
to the profits of professional men, or of any other business that is
dependent upon the presence and growth of the community, as
truly as it does to the value of land?
A. Granted that the growth of a community primarily tends
to increase profits, the increased profits tend in turn to attract
men there to share them. This intensifies competition and tends
to lower profits. At the same time it increases demand for land
and tends to enhance the value of that. It therefore cannot be
said that the growth of a community finally increases the value of
other things as well as of land. In fact it does not. Appropriate
houses in cities are no dearer than appropriate houses in the
country, differences in the cost of production being allowed for.
And although some professional men get very high wages in
thickly populated cities, the average comfort of professional men
in cities is no higher than in the country, if as high. Moreover,
Answers to Typical Questions 61
even if labor values as well as land values were increased by com-
munal growth, it must never be forgotten that labor values must
always be worked for by the individual, whereas land values are
never worked for by the individual. A lawyer may command
enormous fees, but he gets no fee at all unless he works for it ;
but when land commands enormous rent, the owner gets it with-
out doing the slightest work. As to the good will of a business,
if its value is personal it belongs to the owner who has earned
the confidence of the community ; if it is locational it is land
value.
Q. Is there any land question in places where land is cheap ?
In Texas, for example, you can get land as cheap as two dollars
an acre. Is there a land question there?
A. There is no place where land is cheap in the sense of the
question. Land commands a low price in many places ; but it is
poor land, not cheap land. It is probably true that in Texas
there is land that can be had for two dollars an acre, but it would
yield less profit to each unit of labor and capital expended upon
it than land in New York City which costs hundreds of thousands
of dollars an acre. The valuable New York land is the cheaper
of the two. The land question is the question in every place
where land costs more than it is worth for immediate use.
Q. Though some people have made money by owning land,
isn't it true that others have lost? And don't the losses more
than off- set the gains?
A. Possibly. But that has no bearing upon the question.
What men lose through investments in land, the community does
not gain ; but what they gain the community does lose. As be-
tween land speculators and the community, losses cannot justly
be charged against gains.
Q. What is the difference between speculation in land and
in other kinds of property?
A. If all the products of the world were cornered by specu-
lators, but land were free, new products would soon appear and
the ill effects of the speculation would quickly pass away. But if
all the land were cornered by speculators, though everything else
were free, the people would immediately and thenceforth be
dependent upon the speculators for a chance to live. That illus-
trates the difference.
Q. How can it be possible that speculative land values cause
business depressions when, as any business man will tell you, the
whole item of land value — whether ground rent or interest on
purchase money — is one of the smallest items in every business?
62 The Taxation of Land Values
A. You overlook the fact that the item of speculative rent is
the only item which the business man does not get back again.
The cost of his goods, the expense of clerk hire, the rent of his
building, the wear and tear of implements, are all received back,
in the course of normal business, in the prices of his goods. Even
his ground rent, to the extent that it is normal (i. e., what it
would be if the supply of land were determined alone by land in
use, and not affected by the land that is held out of use for higher
values), comes back to him in the sense that his aggregate profits
are that much greater than they would be where ground rent was
less. But the extra ground rent which he is obliged to pay in
consequence of the abnormal scarcity of land, is a dead weight ;
it does not come back to him. He cannot recoup his excessive
ground rent or purchase price unless or until his site rises in true
value to the level of its speculative value. Therefore, even if
infinitesimal in amount, as compared with the other expenses of
his business — and that is by no means admitted — it is the one ex-
pense which may break a thriving business down. Besides, it is
not alone the ground rent paid by the business man for his loca-
tion that bears down upon his business prosperity ; the weight of
abnormally high land values in general presses upon business in
general, and by obstructing the flow of trade forces the weaker
business units to the wall. It is not quite safe to deduce general
economic principles from the ledgers of particular business houses.
CHAPTER VII
MONEY
Q. Which is the more important, land or money?
A. This is like asking whether to a thirsty man water or a
cup is the more important. L/and is a necessity, money a conven-
ience. The use of money is to facilitate trade. But we can live
without trade. Even to trade, money is not indispensable. Trade
can be carried on by means of primitive barter or by book-
keeping, and in a very high degree it is so carried on. But we
cannot so much as live, either in solitude or in society, without
appropriate land. "Give me all the money in the world," said
an objector once; "and you may have all the land." And this
was the answer : ' ' The first thing I should do would be to order
you to give me your money or get off my land."
Answers to Typical Questions 63
Q. Would you let money escape taxation, and so favor
money lenders?
A. It is a curious fact that this question is most popular
among people who clamor for cheap money. How they expect to
cheapen money by taxing its lenders on their loans is a puzzle.
To tax money lenders is to discourage money lending, and there-
by to increase interest on loans. Yes, we should let money escape
taxation. It escapes taxation now, which in itself is a politic
reason for exempting it; but we should exempt it (by taxing
nothing but land values) for the additional and better reason that
a man's money is his own and the community has no right to it,
while a man's land value is the community's and the man has no
right to it. This would not favor money lenders in any invidious
sense. It would favor both lenders and borrowers ; lenders by
making their loans more secure, and borrowers by enabling them
to borrow on easier terms.
Q. Would the Single Tax abolish interest?
A. I do not think so. Interest properly understood is a
form of wages, and so far from abolishing it, the Single Tax,
which would tend to increase all forms of wages, would tend to
increase interest. But many forms of land rent and other monop-
oly profits are often confounded with interest, and by force of
association have given to interest a bad name ; all these would be
greatly minimized if not wholly abolished by the Single Tax. It
is impossible to answer this question intelligibly to everyone who
asks it, without requiring him to be specific; for it is seldom that
two persons agree as to what they mean by ' ' interest. ' ' The
Western farmer used to think of the high rate that he paid, part-
ly for risk, partly from his ignorance of the modus operandi of
banking, and partly because legitimate banking facilities were
scarce in his community ; the Wall Street operator thinks of the
premiums that he pays for currency in times of stress to tide him
over from day to day ; others think of ' ' interest ' ' on government
bonds, and others of dividends of companies with valuable land
monopolies. None of these payments are really interest, and the
Single Tax would tend to rid society of them. But that advan-
tage which the workmen enjoy with implements and materials
already earned, over those who have yet to earn them, an advan-
tage which is expressed in money and as interest upon capital,
will not, I should think, be abolished by anything that man can
do, no more than the advantage of skill in production can be or
ought to be abolished. The value of such advantages is part of
64 The Taxation of Land Values
the wages of the labor that creates the capital or acquires the
skill.
Q. Would not the Single Tax take away the home place,
and so tend to crush out the home sentiment?
A. When the home place now becomes valuable, it is parted
with.
Q. Yes ; but when the home place is parted with now, the
home owner is compensated by the high price he gets.
A. Then your question does not turn upon the home senti-
ment but upon the dollar sentiment. As a matter of sentiment,
the condition would be no worse in any case than now, and in
many cases far better ; as a matter of dollars, the question is one
of justice and not of the home. Under the Single Tax any one
who wanted a home could have it, and never be obliged to aban-
don one home for another, unless such changes took place in the
neighborhood as to make the place inappropriate for homes. He
could not then, as he does now, play dog in the manger, saying
to the community, ' ' I will not use this place for appropriate
purposes, nor will I allow any one else to do so. ' ' If the com-
munity felt that special hardship were involved, it could relieve it
generously out of the land value fund.
CHAPTER VIII
MISCELLANEOUS PROBLEMS
Q. Is not the right of ownership of a gold ring the same as
the ownership of a gold mine ? and if the latter is wrong is not
the former also wrong?
A. If it be wrong for you to own the spring of water which
you and your fellows use, is it therefore wrong for you to own
the water that you lift from the spring to drink? If so how will
you slake your thirst? If you argue in reply that it is not wrong
for you to own the spring, then how shall your fellows slake their
thirst when you treat them, as you would have a right to, as
trespassers upon your property? To own the source of labor
products is to own the labor of others ; to own what you produce
from that source is to own only a product of your own labor.
Nature furnishes gold mines, but men fashion gold rings. The
right of ownership differs radically.
Answers to Typical Questions 65
Q. Is it true that men are equally entitled to land? Are
they not entitled to it in proportion to their use of it ?
A. Yes, they are entitled to it in proportion to their use of
it ; and it is this title that the Single Tax would secure. It would
allow every one to possess as much land as he wished, upon the
sole condition that if it has a value he shall account to the com-
munity for that value and for nothing else. All that he produced
from the land above its value would be absolutely his, free even
from taxation. The Single Tax is the method best adapted to
modern times, and to orderly social conditions, for limiting
possession of land to its use. By making it unprofitable to hold
land except for use, or to hold more than can be used profitably,
it constitutes every man his own judge of the amount and the
character of the land he can use.
Q. Is it right that land values should bear all the taxes for
the support of public institutions, while labor products go un-
taxed?
A. Yes. Public institutions increase the value of land but
not of labor products. Read Notes 20 and 24 in Appendix.
Q. Our city raises $20,000 for fire protection. Is it fair to
tax land, which doesn't get that protection, and let houses go free
though they do get it?
A. Is not the land worth more with your fire protection than
it would be without it? Which would be better for the owners of
land in your city, to pay the $20,000, or to have no fire protection?
Read Note 24 in Appendix.
Q. Rich man with large mansion ; poor widow with small
house on same sized lot adjoining. The two pay the same tax.
Is that right?
A. There is no reason in justice why the community should
not charge poor widows as much for monopolizing valuable land
as it charges rich men. In either case it confers a special privi-
lege and should be paid what the privilege is worth. The ques-
tion is seldom asked in good faith. Poor widows who live on lots
adjoining large mansions — aren't they scarce? and when found,
what are they but land-grabbers? In our sympathy for such
widows, let us not forget the hosts of widows who not only do
not live next to mansions, but have no place in the whole wide
world whereon to live but by some landlord's consent.
Q. If land and labor are equally indispensable factors of
production, why are they not equally entitled to the product?
66 The Taxation of Land Values
A. The laborer justly owns his labor, but the land-owner
cannot justly own his land. The question is not one of the relative
rights of men and land, but of men and men.
Q. Should not the poor man be compensated for the loss of
his land value?
A. No, and reasons are numerous. Among them are these :
The poor man's rights in the community and in common prop-
erty are neither more nor less than the rich man's; the better
conditions for the poor man which the Single Tax would bring
about would more than off-set his loss in land values ; the poor
man has no land values worth speaking of.
Q. How would you compensate the man who has bought a
lot in order to make a home upon it, but is not yet able to build ?
A. By letting him, when he is ready to build, have a better
lot for nothing. The Single Tax would do this by discouraging
the cornering of land which now makes all good lots scarce. When
land was no longer appropriated except for use, and that would
result from the operation of the Single Tax, there would be an
abundance of building lots to be had for the taking, which would
be far more desirable than the kind to which men who cannot
afford to build homes now resort when they buy lots for a home.
Q. If the value of land be destroyed by the Single Tax,
would not justice require that land-owners be compensated?
A. No. I/and is for the use of all, and rent is caused by the
community. To legally vest land-ownership in less than the
whole, excluding those to come as well as any that are here, is a
moral crime against all the excluded. Therefore no government
can make a perpetual title to land which is or can become morally
binding. Neither can one generation vest the communal earnings
of future generations in the heirs or assigns of particular persons
by any morally valid title. This they attempt to do when they
make grants of land. There is both divine justice and economic
wisdom in the command that ' ' the land shall not be sold in per-
petuity." All titles to land are subject in the forum of morals to
absolute divestment as soon as the people decide upon the change.
Q. If a man buys land in good faith, under the laws under
which we live, is he not entitled to compensation for his individ-
ual loss when titles are abolished?
A. There is no sounder principle of law than that which,
distinguishing the contractual from the legislative powers of gov-
Answers to Typical Questions 67
ernment, prescribes that government cannot tie up its legislative
powers. Now, land grants and taxation are so clearly matters of
general public policy that no one can successfully dispute that
they are legislative and not contractual in essential character. Tax-
ation is so by municipal law as well as in essential moral principle ;
land grants would be so by municipal law if landed interests had
not perverted the law. It follows that titles to land values, and
privileges of more or less exemption from taxation, are morally
voidable at the pleasure of the people; for no legislature can
morally divest future legislatures of legitimate legislative power.
Nor can they divest the people of such power. The reserved right
of the people to terminate grants of land value, is as truly a part
of every grant of land as if it were written expressly in the body
of the instrument. Moreover, notice was given when Henry
George published ' ' Progress and Poverty, ' ' and has been reiter-
ated until the whole civilized world has now become cognizant of
it, that an effort is in progress to do what is in effect this very
thing. This notice is a moral cloud upon every title. He who
buys now, buys with notice. It will not do for him when the
time to end those grants comes, to say: " I relied upon the good
faith of the government whose laws told me I might buy." He
has notice, and if he buys he buys at his peril, so far as his ex-
pectations of appropriating ground rent or a higher selling value
are concerned. Men cannot be allowed to make bets that the
effort to retain land values for common use will fail, and then,
when they lose their bets, to call upon the people to compensate
them for the loss. Read the chapter on ' ' Compensation ' ' in
Henry George's "Perplexed Philosopher."
Q. If the ownership of land is immoral, is it not the duty of
individuals who see its immorality to refrain from profiting by it ?
A. No. The immorality is institutional, not individual.
Every member of a community has a right to land and an interest
in the rent of land. Under the Single Tax both rights would be
conserved. But under existing social institutions the only way of
securing either it to own land and profit by it. To refrain from
doing so would have no reformatory effect. It is a mental eccen-
tricity to believe or profess to believe that institutional wrongs
and individual wrongs are upon the same plane and must be cured
in the same way — by individual reformation. But individuals
cannot change institutions by refraining from profiting by them,
any more than they could dredge a creek by refraining from
68 The Taxation of Land Values
swimming in it. Institutional wrongs must be remedied by in-
stitutional reforms.
Q. What is your opinion of socialism ?
A. About the same as Henry George's. Read his opinion in
chapter xxviii of his ' ' Protection or Free Trade . ' '
APPENDIX
Explanatory and Illustrative Notes
The headings and reference figures correspond to those of the text
PART ONE, CHAPTER I, PAGES 9 TO 11
1. The word "tax" is used comprehensively in the United
States for local as well as State or national levies for public reve-
nue, except that custom house exactions are usually called ' 'tariffs' '
or "duties." In Great Britain, however, the word "tax" is
usually understood to designate Imperial levies, local taxes being
called ' ' rates. ' ' In this volume the words " tax " and ' 'taxation' '
are used indiscriminately for fiscal exactions, whether national or
local, direct or indirect, tariff, duty, excise, or license.
2. In the city of New York, according to the report of the
Tax Department for 1910, the value of improvements was stated to
be $2,490,206,348, whereas the value of the land alone was stated
to be $4,001,129,651. As the tax rate that year in New York was
about 1.8 per cent., it may be computed that improvement taxes
amounted to about $44,000,000, while the taxes on land values
amounted to about $72,000,000, a total of about $116,000,000 on
real estate.
3. "The general property tax" is common in the United
States and Canada ; but there is a tendency in both countries to-
ward modification, it being generally conceded that this form of
tax is a bungling fiscal method and hopelessly unfair in operation.
To the general property tax in the United States there are often
added inheritance taxes, franchise taxes, occupation taxes, and
other forms, some of which might be included in the theory of
the general property tax.
4. The real estate tax, as part of the general property tax,
is universal in the United States ; until recently it was likewise
universal in Canada, where it is still general. In both countries,
however, it is everywhere supplemented with other taxes in greater
70 The Taxation of Land Values
or less variety and degree, some of which belong in the category
of the general property tax and some do not. Although personal
property is not exempt in the United States, personal property
taxes are extensively ' ' dodged. ' ' For an excellent presentation
of this subject see the American Magazine (New York) for Dec-
ember, 1910, and January, 1911, et seq., in a series of articles by
Albert Jay Nock, under the title of "The Things That Are
Caesar's."
5. The nearest actual approach to this system is in some of
the municipalities of New Zealand, Australia, and Canada. In
Canada the city of Vancouver is conspicuous, although other
Canadian cities, notably Edmonton, Victoria, and New Westmin-
ster, are making successful experiments of the same kind. British
Columbia has long had laws permitting municipalities to use their
own discretion in taxing different classes of property. Under
those laws it has been common for municipalities in that Canadian
Province to value land for taxation at 100 per cent, of its market
value and improvements at less, thereby establishing a tendency
toward " the single tax limited." Vancouver was among these. In
1896 that city reduced improvement valuations to 50 per cent, of
market value, leaving land at 100 per cent.; the valuation of im-
provements was reduced in 1906 to 25 per cent.; and in March,
1910, to zero. As there are no taxes of moment in Vancouver now
but those upon land values (except Provincial and Dominion taxes) ,
Vancouver may be said to be operating, as a municipality, under
the principle of ' ' the single tax limited. ' ' No such experiment
is legally possible in the United States, except in Oregon. Al-
though efforts have been under way in New York since the early
90' s of the last century to secure legislation allowing New York
localities the option privileges afforded those of British Columbia,
these efforts have so far been balked by the legislature ; but at
the election of 1910 in Oregon, where the legislature is subject to
the Initiative and Referendum, this privilege was accorded to all
the counties of Oregon by an Initiative vote of 44,171 to 42,127, a
favorable majority of 2,044.
6. The Single Tax, unlimited by governmental needs, has
not been adopted anywhere. But in some countries — notably
Germany and Great Britain — taxation of the ' ' unearned incre-
ment" as it is called, has been adopted in moderate and varying
forms. It seems to be attaining popularity elsewhere. An ' ' un-
earned increment " is an increase of the capitalized value of the
rental possibilities of a given piece of land (over its previous cap-
Appendix 7 1
ital value at a given time or under given circumstances), in con-
sequence of social growth or other cause apart from the owner's
improvements, which enhances demand for it and therefore aug-
ments its market price. The British (I/loyd George) budget of
1909 imposed a tax of 20 per cent, on ' ' unearned increments. ' '
For example : A holding officially valued in 1909 at ^100,000, if
it were sold in 1924 for ^"120,000 (or, in certain circumstances,
were then revalued at that amount), would have an "unearned
increment" of ^"20,000, and upon this the tax would be 20 per
cent. The owner would therefore keep ^16,000 of the increased
social value, and the government would get ^"4,000. Some single
taxers object to taxation of the "unearned increment," as being
a process of division between society and successful investors in
land, and as having no tendency toward the destruction of land-
lordism, but rather a tendency to encourage land speculation with
the state for a partner in the profits. This criticism does not
seem to me valid ; its effect would most likely be to discourage
efforts at promoting the single tax in places where movements
for the taxation of ' ' unearned increments ' ' offer the only present
leverage, or the best, for practical single tax work. True enough,
unearned increment taxes do not take the entire rental value, nor
enough of the capital value to deprive the owner of an unearned
profit. Neither would any kind of land-value tax, short of the
"single tax unlimited." But it does take a part of the land
value of properties on which it falls, which is certainly better
than taking none ; and, what is probably more important with
this and all other kinds of land value taxation than the mere fact
of the tax, is the nature of the agitation. Everywhere opposed as
confiscation of private interests in land, it is everywhere defended
as the taking for the community of what belongs to the community.
Such agitations are especially promotive of the full single tax idea.
That ' ' unearned increment ' ' taxes do not discourage speculation
in land, and therefore fall short of the principal object of the
single tax unlimited, is doubtless true ; but it is as certainly true
that, defective though they may be in forcing vacant land upon
the market, they do relieve industry from tax burdens, which is
another prime object of the single tax. Their chief value, how-
ever, is their tendency to develop an appreciation in public opin-
ion of the fundamental fact that land values are community
values and belong to the community. For a lucid explanation of
the complex law for the taxation of ' ' unearned increment ' ' in
Germany, see an article by Robert C. Brooks, of the University
72 The Taxation of Land Values
of Cincinnati, in the " Quarterly Journal of Economics" for Aug-
ust, 1911. Professor Brooks characterizes the German law as "one
of the largest and most significant practical applications of the single
tax idea that has ever been attempted ;" and to the objection that
the ' ' unearned increment ' ' tax of that law ' ' has ' no teeth in it, ' "
he says that ' ' a fairer statement would be that it has simply cut
its milk teeth and may be expected to develop mature molars and
incisors later."
PART ONE, CHAPTER II, PAGES 11 TO 12
7. "Progress and Poverty," book viii, ch. ii.
8. In "Progress and Poverty," book viii, ch. iv, Henry
George speaks of ' ' the effect of substituting for the manifold taxes
now imposed, a single tax on the value of land ; ' ' but the term did
not become a distinctive name until 1888. The first general
movement along the lines of ' ' Progress and Poverty ' ' began with
the New York City election of 1886, when Henry George polled
68,110 votes as L/abor candidate for mayor, and was defeated by
the Democratic candidate, Abram S. Hewitt, by a plurality of
only 22,442, the Republican, Theodore Roosevelt, polling but
60,435. Following that election the United Labor Party was
organized on State lines, and at the Syracuse Convention in Aug-
ust, 1887, it came to represent the central idea of " Progress and
Poverty." Coincident with the organization of the United lyabor
Party the Anti-Poverty Society was formed ; and the two bodies,
one representing the political and the other the religious phase of
the idea, worked together until President Cleveland's tariff mes-
sage of 1887 appeared. In this message Mr. George saw the timid
beginnings of that open struggle between Protection and Free
Trade to which he had for years looked forward as the political
movement that must culminate in the abolition of all taxes save
those upon land values, and he responded at once to the senti-
ment of the message. But many Protectionists who had followed
him, now broke away from his leadership, and the United lyabor
Party and the Anti-Poverty Society were soon dissolved. Those
who understood Mr. George's real position regarding the land
question readily acquiesced in his views as to political policy, and
a considerable movement resulted, which, however, for some
time lacked an identifying name. This was the situation when
Thomas G. Shearman, Esq., wrote for the Standard an article on
Appendix 73
taxation in which he illustrated and advocated the land value tax
as a fiscal measure. The article had been submitted without a
caption, and Mr. George, then editor of the Standard, entitled it
"The Single Tax." This title was at once adopted by the
"George men," as they were often called, and has since served
as the name of the movement it describes. Though ' ' the single
tax" is the English form of "1'impot unique," the name of the
French physiocratic doctrine of the eighteenth century, the names
have no historical connection. See ' ' lyife of Henry George, ' ' by
Henry George, Jr., chapter ix, p. 496 and 496 n.
9. ' ' I/and-value taxation ' ' is the almost exclusive term in
Great Britain. There are special reasons, one of which is that in
that country, unlike the United States, there was no Imperial
real estate taxation of importance until the adoption of the L,loyd
George Budget of 1909. Prior to this the only real estate taxes were
(1) survivals of the land- value tax of the time of William and
Mary, based upon valuations of 200 years ago and very much
reduced by commutations, and (2) "rates" (local taxes) based
not upon capital values regardless of use but upon actual rentals.
Occasion was thereby furnished for that British agitation for the
taxation of land values of which the I/loyd George Budget was
the first triumph.
10. When it is remembered that some land in cities is worth
millions of dollars an acre, that a small building lot in the busi-
ness center of even a small village is worth more than a whole
field of the best farming land in the neighborhood, that a few
acres of coal or iron land are worth more than great groups of
farms, that the right of way of a railroad company through a
thickly settled district or between important points may be worth
more than its rolling stock and trackage, and that the value of
workingmen's cottages in the suburbs is trifling in comparison
with the value of city residence sites, the absurdity of the plea
that the Single Tax would discriminate against farmers and small
home owners and in favor of the rich is apparent. The bad faith
of this plea is evident when we consider that under existing sys-
tems of taxation the farmer and the small home owner are com-
pelled to pay in taxes upon improvements, food, clothing, and
other objects of consumption, much more than the full annual
value of their bare land.
11. The difference between site value and improvement value
is much more definite than it is often supposed to be. Even in
74 The Taxation of Land Values
what would seem at first to be most confusing cases, it is easily
distinguished. If in any example we imagine the complete des-
truction of all the improvements, we may discover in the remain-
ing value of the property — in the price it would after such des-
truction fetch in the real estate market — the value of the site as
distinguished from the value of the improvements. This residuum
of value would be the basis of computation for levying the Single
Tax. The distinction is frequently made in business life. When-
ever in the course of ordinary business affairs it becomes necessary
to estimate the value of a building lot or to fix royalties for mining
privileges, no difficulty is experienced, and substantial justice is
done. And though the exigencies of business seldom require the
site value of an improved farm to be distinguished from the value
of the improvements, yet it could doubtless be done as easily and
justly as with city or mining property. Unimproved land attached
to any farm in question, or unimproved land in the neighborhood,
if similar in fertility and location, would furnish a sufficiently
accurate measure. If neither existed, the value for enclosure of
the contiguous highway would always be available. It should not
be forgotten, either, that land for which the demand is so weak
that its site value cannot be easily distinguished from the value of
its improvements must be land of but little value. The objection
that the value of land cannot be distinguished from the value of
improvements is among the most frivolous of the objections that
have been raised to the Single Tax by people with whom the wish
that it may be impracticable is father to the thought that it really
is so. Equally frivolous is the objection that land values cannot
be scientifically appraised. This objection has been demolished by
W. A. Somers, for years a Minnesota assessor, who is the inventor
of the Somers system of scientific land valuation . The Somers sys-
tem won the confidence of Tom I/. Johnson, Mayor of Cleveland,
and its use in the first quadrennial valuations of Cleveland in
1910, under the personal supervision of Mr. Somers, was a demon-
stration of its exceptional value. It is described in The Public, of
Chicago, at pages 604, 608 and 827 of volume xiii. Mr. Somers
superintends the use of his system by a corporation of Cleveland,
Ohio, which is engaged in the business of valuing land. This fact
has raised against him the objection that he has ' ' commercialized ' '
his system, and that the employment of his corporation by tax
authorities to assist them in their official duties is a " farming
out" of taxes. The objection appears to be far-fetched. It
should be made known for whatever it may be worth ; but so far
Appendix 75
as Single Taxers are concerned, the point is not whether the
system has been ' ' commercialized ' ' but whether variations in
land value can be ascertained by means of it with economy and
approximate accuracy. On this point Tom L/. Johnson, whose
judgment in such a matter rightly commanded respect, has
testified strongly in the affirmative.
12. "Taxes are either direct or indirect. A direct tax is one
which is demanded from the very persons who it is intended or
desired should pay it. Indirect taxes are those which are de-
manded from one person in the expectation and intention that he
shall indemnify himself at the expense of another."— John Stuart
Mill's Prin. of Pol. EC., book v, ch. Hi, sec. 1. t "Direct taxes
are those which are levied on the very persons who it is intended
or desired should pay them, and which they cannot put off upon
others by raising the prices of the taxed articles. . . Indirect
taxes on the other hand are those which are levied on persons
who expect to get back the amount of the tax by raising the price
of the taxed articles." — Laughlin's Elements, par. 249. 1 Taxes
are direct ' ' when the payment is made by the person who is in-
tended to bear the sacrifice." Indirect taxes are recovered from
final purchasers.— Jevons' s Primer, sec. 96. If " Indirect taxes are
so called because they are not paid into the treasury by the person
who really bears the burden. The payer adds the amount of the
tax to the price of the commodity taxed, and thus the taxation is
concealed under the increased price of some article of luxury or
convenience." — Thompson's Pol. EC., sec. 175. U Read chapter
iii, of book viii, " Progress and Poverty."
13. Jevons defines the incidence of a tax as "the manner in
which it falls upon different classes of the population."— Jevons 's
Primer, sec. 96. If Sometimes called "repercussion," and refers
' ' to the real as opposed to the nominal payment of taxes. ' ' — Ely 's
Taxation, p. 64.
14. Though his language was blunt, the sentiment does not
essentially differ from that of ' ' statesmen ' ' of our day who meet
all moral and economic objections to indirect taxation with the
one reply that the people would not consent to pay enough for
the support of government if public revenues were collected from
them directly. This means nothing but that the people are actu-
ally hoodwinked by indirect taxation into sustaining a government
that they would not support if they knew it was maintained at
their expense ; and instead of being a reason for continuing indi-
76 The Taxation of Land Values
rect taxation, would, if true, be one of the strongest of reasons
for abolishing it. It is consistent neither with the plainest prin-
ciples of democracy nor the simplest conceptions of morality.
15. A tax upon shoes, paid in the first instance by shoe
manufacturers, enters into manufacturers' prices, and, together
with the usual rate of profit upon that amount of investment, is
recovered from wholesalers. The tax and the manufacturers'
profit upon it then constitute part of the wholesale price and are
collected from retailers. The retailers in turn collect the tax
with all the intermediate profits upon it, together with their own
usual rate of profit upon the whole, from final purchasers — the
consumers of shoes. Thus what appears on the surface to be a
tax upon shoe manufacturers, proves upon examination to be an
indirect tax upon shoe consumers, who pay in an accumulation of
profits upon the tax considerably more than the government
receives. The effect would be the same if a tax upon their leather
output were imposed upon tanners. Tanners would add to the
price of leather the amount of the tax, plus their usual rate of
profit upon a like investment, and collect the whole, together
with the cost of hides, of transportation, of tanning and of selling,
from shoe manufacturers, who would collect with their profit
from retailers, who would collect with their profit from shoe con-
sumers. The principle applies also when taxes are levied upon
the stocks or sales of merchants, or the moneys or credits of
bankers ; merchants add the tax with the usual profit to the
prices of their goods, and bankers add it to their interest and
discounts. It must not be supposed, however, that recovery of
indirect taxes from the ultimate consumers of taxed goods is
arbitrary. When shoe manufacturers, or tanners, or merchants
add taxes to prices, or bankers add them to interest, it is not
because they might do otherwise but choose to do this ; it is because
competition compels them. Manufacturers, merchants, and other
tradesmen who carry on competitive businesses must on the
average sell their goods at cost plus the ordinary rate of profit, or
go out of business. It follows that any increase in cost of produc-
tion tends to increase the price of products, and that any fall in
cost tends to decrease the price. Now, a tax upon the output of
business men, which they must pay as a condition of doing their
business, is as truly part of the cost of their output as is the price
of the materials they buy or the wages of the men they hire.
Therefore, such a tax upon business men tends to increase the
price of their products. And this tendency is more or less marked
Appendix 77
as the tax is more or less great and competition more or less
keen. It is true that a moderate tax upon monopolized products,
such as trade-mark goods, proprietary medicines, patented articles
and copyright publications is not necessarily shifted to consumers.
The monopoly manufacturer whose prices are not checked by the
cost of production, and are therefore as a rule higher than com-
petitive prices would be, may find it more profitable to bear the
burden of a tax that leaves him some profit, thereby retaining his
entire custom, than to drive off part of his custom by adding the
tax to his usual prices. This is true also of a moderate import
tax to the extent that it falls upon goods that are more cheaply
transported from the place of production to a foreign market
where the import tax is imposed than to a home market where
the goods would be free of such a tax — products, for instance, of
a farm in Canada near to a New York town, but far away from
any Canadian town. If the tax be less than the difference in the
cost of transportation the producer will bear the burden of it ;
otherwise he will not. The ultimate effect would be a reduction
in the value of the Canadian land. Examples which may be cited
in opposition to the principle that import taxes are indirect, will
upon examination prove to be of the character here described.
Business cannot be carried on at a loss — not for long. Therefore
taxes on business must as a rule be borne not by the business house
but by its customers.
16. "To collect taxes, to prevent and punish evasions, to
check and counter-check revenues drawn from so many distinct
sources, now make up probably three- fourths, perhaps seven-
eighths, of the business of government outside of the preservation
of order, the maintenance of the military arm, and the adminis-
tration of justice." — Progress and Poverty, book iv, ch, v.
17. For a brief and thorough exposition of indirect taxation,
read George's "Protection or Free Trade," ch. viii, on "Tariffs
for Revenue."
18. This is usually a stumbling block to those who, without
much experience in economic thought, consider land value taxa-
tion for the first time. As soon as they grasp the idea that taxes
upon labor products shift to consumers, they jump to the conclusion
that similarly taxes upon land values would shift to users. But
this is a mistake, and the explanation is simple. Taxes upon
what men produce make production more difficult and so tend
toward scarcity in the supply of products, which stimulates prices ;
78 The Taxation of Land Values
but taxes upon land, provided the taxes be levied in proportion to
value, tend towards plenty in the supply of land (meaning market
supply of course) because they make it more difficult to hold val-
uable land idle, and so they depress prices. Taxes on products
are added to their price, for all competing products must pay the
tax; but taxes on land values are not added to the price of land,
for competing land of no price would pay no tax. If ' ' 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." —
John Stuart Mill's Prin. of Pol. EC., book v., ch. Hi, sec. 1.
f "A tax laid upon rent is borne solely by the owner of land." —
Bascom*s Tr.,p. 159. 1 "Taxes which are levied on land . . .
really fall on the owner of the land." — Mrs. Fawcetfs Pol. EC.
for Beginners, pp. 209, 210. 1 ' 'A land tax levied in proportion
to the rent of land, and varying with every variation of rent, . .
will fall wholly on the landlords." — Walker's Pol. EC., ed. of
1887, p. 413, quoting Ricardo. f'The power of transferring a
tax from the person who actually pays it to some other person
varies with the object taxed. A tax on rents cannot be transferred.
A tax on commodities is always transferred to the consumer." —
Thorold Rogers' s Pol. EC., ch xxi, 2ded.,p. 285. 1 "Though
the landlord is in all cases the real contributor, the tax is com-
monly advanced by the tenant, to whom the landlord is obliged
to allow it in payment of the rent." — Adam Smith's Wealth of
Nations, book v, ch. ii, part ii, art. i. \ " The way taxes raise
prices is by increasing the cost of production and checking supply.
But land is not a thing of human production, and taxes upon rent
cannot check supply. Therefore, though a tax upon rent compels
land-owners to pay more, it gives them no power to obtain more
for the use of their land, as it in no way tends to reduce the sup-
ply of land. On the contrary, by compelling those who hold land
on speculation to sell or let for what they can get, a tax on land
values tends to increase the competition between owners, and
thus to reduce the price of land." — Progress and Poverty, book
viii, ch. Hi, sudd. ii. 1 Sometimes this point is raised as a question
of shifting the tax in higher rent to the tenant, and at others as a
question of shifting it to the consumers of goods in higher prices.
The principle is the same. Merchants cannot charge higher
prices for goods than their competitors do, merely because they
pay higher ground rents. A country storekeeper whose business
Appendix 79
site is worth but a few dollars, charges as much for sugar, probably
more, than a city grocer whose site is worth thousands. Quality
for quality and quantity for quantity, goods sell for about the
same price everywhere. Differences in price are altogether in
favor of places where land has a high value. This is due to the
fact that the cost of getting goods to places of low land value,
distant villages for example, is greater than to centers which are
places of high land value. Sometimes it is true that prices for
some things are higher where land values are high. Tiffany's
goods, for instance, may be more expensive than goods of the
same quality at a store on a less expensive site. But that is not
due to higher land value ; it is because the dealer has a reputa-
tion for technical knowledge and honesty (or has become a fad
among rich people), for which his customers are willing to pay
whether his store is on a high priced site or on a low priced one.
Though land value has no effect upon the price of goods, it is
easier to sell goods in some locations than in others. Therefore,
though the price and the profit of each sale be the same, or even
less, in good locations than in poorer ones, aggregate receipts
and aggregate profits are much greater at the good location. And
it is out of this aggregate, and not out of each profit, that rent is
paid. For example : A cigar store on a thoroughfare supplies a
certain quality of cigar at fifteen cents. On a side street the same
quality of cigar can be bought no cheaper. Indeed, the cigars
there are likely to be poorer, and therefore really dearer. Yet
ground rent on the thoroughfare is very high compared with
ground rent on the side street. How, then, can the first dealer,
he who pays the high ground rent, afford to sell as good or bet-
ter cigars for fifteen cents than his competitor of the low priced
location? Simply because he is able to make so many more sales
with a given outlay of labor and capital in a given time that his
aggregate profit is greater. This is due to the advantage of his
location. And for that advantage he pays a premium in higher
ground rent. But the premium is not charged to smokers ; the
dealer of the side street protects them by his competition. It
represents the greater ease, the lower cost, of doing a given vol-
ume of business upon the site for which it is paid ; and if the
state should take any of it, even the whole of it, in taxation, the
loss would be finally borne by the owner of the advantage which
attaches to that site — by the landlord. Any attempt to shift it to
tenant or buyer would be promptly checked by the competition of
neighboring but cheaper land. 1 ' 'A land tax, levied in proportion
80 The Taxation of Land Values
to the rent of land, and varying with every variation of rent, is in
effect a tax on rent ; and as such a tax will not apply to that land
which yields no rent, nor to the produce of that capital which is
employed on the land with a view to profit merely, and which
never pays rent ; it will not in any way affect the price of raw
produce, but will fall wholly on the landlords." — McCulloch's Ric-
ardo, 2d ed. , p. 107. 1 Moreover, prospective taxes on land values
are capitalized and deducted from purchase price in land sales, so
that land buyers pay no taxes on their land unless it rises in
value, and then only on the increase. This is demonstrated in
Fillebrown's "A. B. C. of Taxation," which is valuable also on
other points regarding taxation of land values. Among its fiscal
statistics are those of a kind which, since they are also of later
date, may be substituted for illustrative uses for the computa-
tions of James R. Carret, the Boston conveyancer, which have
appeared in note 13 of previous editions of this book.
PART TWO, CHAPTER II, PAGES 14 TO 15
19. It is often said, for instance, by its advocates, that house
owners should in justice contribute to the support of the fire de-
partments that protect them ; and it is even gravely argued that
houses are more appropriate subjects for taxation than land,
because they need protection, whereas land needs none. Read
Note 24.
PART TWO, CHAPTER III, PAGES 15 TO 17
20. I/and values are lower in all countries of poor govern-
ment than in any country of better government, other things being
equal. They are lower in cities of poor government, other things
being equal, than in cities of better government. I/and values are
lower, for example, in Juarez, on the Mexican side of the Rio
Grande, where government is poor, than in Kl Paso, the neigh-
boring city on the American side where government is better.
They are lower in the same city under poor government than
under improved government. L/et the city authorities anywhere
pave a street, put water through it and sewer it, or make any
other improvement, and building lots in the neighborhood rise in
value. Kverywhere that the ' ' good roads ' ' agitation has borne
fruit in better highways, the value of adjacent land has in-
Appendix 81
creased. Instances of this effect as results of public improvements
might be collected in abundance. Every man must know of some
within his own experience. And it is perfectly reasonable that it
should be so. L/and and not other property must rise in value
with desirable improvements in government, because, while any
tendency on the part of other kinds of property to rise in value is
checked by greater production, land cannot be reproduced.
Imagine an utterly lawless place, where life and property are con-
stantly threatened by desperadoes. He must be either a very bold
man or a very avaricious one who will build a store in such a
community and stock it with goods. But suppose such a man
should appear. His store costs him more than the same building
would cost in a civilized community ; mechanics are not plentiful
in such a place, and materials are hard to get. The building is
finally erected, however, and stocked. And now what about this
merchant's prices for goods? Competition is weak, because
there are few men who will take the chances he has taken, and
he charges all that his customers will pay. A hundred per cent. ,
five hundred per cent. , perhaps one or two thousand per cent,
profit rewards him for his pains and risk. His goods are dear,
enormously dear — dear enough to satisfy the most contemptuous
enemy of cheapness ; and if any one should wish to buy his store,
that would be dear too, for the difficulties in the way of building
continue. But land is cheap! This is the type of community in
which may be found the land, so often mentioned and so seldom
seen, which "the owners actually can't give away, you know! "
But suppose now that government improves. An efficient admin-
istration of justice rids the place of desperadoes, and life and
property are safe. What about prices then? It would no longer
require a bold or desperately avaricious man to engage in selling
goods in that community, and competition would set in. High
profits would come down. Goods would be cheap — as cheap as
anywhere in the world, the cost of transportation considered.
Builders and building materials could be had without difficulty,
and stores would be cheap, too. But land would be dear! Im-
improvement in government increases the value of that, and of
that alone.
21. Railroad franchises, for example, are not usually thought
of as land titles, but that is what they are. By an act of sovereign
authority they confer rights of control for transportation purposes
over narrow strips of land at terminals (especially at terminals),
and between terminals and along trading points. The value of
82 The Taxation of Land Values
this right of way is a land value. The same is true of street fran-
chises, water power, etc.
22. Each occupant would pay to his landlord the value of
the public benefits in the way of highways, schools, courts, police
and fire protection, etc., that his site enabled him to enjoy. The
landlord would pay a tax proportioned to the pecuniary benefits
conferred upon him by the public in raising and maintaining the
value of his holding. And if occupant and owner were the same,
he would pay directly according to the value of his land for all
the public benefits he enjoyed.
23. While the land-owners of the City of Washington were
paying something less than two per cent, annually in taxes, a
Congressional Committee (Report of the Select Committee to In-
vestigate Tax Asseessments in the District of Columbia, composed
of Messrs, Tom L. Johnson, of Ohio, Chairman; Wadsworth,
of New York, and Washington, of Tennessee. Made to the
House of Representatives, May 24, 1892. Report No. 1469},
brought out the fact that the value of their land had been increas-
ing at a minimum rate of ten per cent, per annum. The Wash-
ington land-owners as a class thus appear to have received back
in higher land values, actually and potentially, about ten dollars
for every two dollars that as land-owners they paid in taxes. If
any one supposes that this condition is peculiar to Washington,
let him make similar estimates for any progressive locality and
see if the land-owners there are not favored in like manner. But
the point is not dependent upon increase in the capitalized value
of land. If the land yields or is capable of yielding to its owner
an income in the nature of ground rent, then to the extent that
this actual or possible income is dependent upon government,
the landlord is in effect exempt from taxation. No matter what
tax he pays on account of his ownership of land, the public gives
it back to him to that extent.
24. Take for illustration two towns, one of excellent govern-
ment and the other of inefficient government, but in all other
respects alike. Suppose you are hunting for a place of residence
and find a suitable site in the town of good government. For
simplicity of illustration let us suppose that the land there is not
sold outright but is let upon ground rent. You meet the owner of
the lot you have selected and ask him his terms. He replies :
"Two hundred and fifty dollars a year."
c ' Two hundred and fifty dollars a year ! ' ' you exclaim. ' 'Why,
Appendix 83
I can get just as good a site in that other town for a hundred
dollars a year. ' '
' ' Certainly you can, ' ' he will say. ' ' But if you build a house
there and it catches fire it will burn down ; they have no fire de-
partment. If you go out after dark you will be ' held up ' and
robbed ; they have no police force. If you ride out in the spring,
your carriage will stick in the mud up to the hubs, and if you
walk you may break your legs and will be lucky if you don't
break your neck ; they have no street pavements and their side-
walks are dangerously out of repair. When the moon doesn't
shine the streets are dark, for they have no street lights. The
water you need for your house you must get from a well ; there is
no water supply there. Now in our town it is different. We
have a splendid fire department, and the best police force in the
world. Our streets are macadamized and lighted with electricity;
our sidewalks are always in first class repair ; we have a water
system that equals that of New York ; and in every way the pub-
lic benefits in this town are unsurpassed. It is the best governed
town in all this region. Isn't it worth a hundred and fifty dollars
a year more for a building site here than over in that poorly gov-
erned town ? ' '
You recognize the advantages and agree to the terms.
But when your house is built and the assessor visits you
officially, what would be the conversation if your sense of the fit-
ness of things were not warped by familiarity with false systems
of taxation? Would it not be something like what follows?
"How much do you regard this house as worth? " asks the
assessor.
"What is that to you? " you inquire.
' ' I am the town assessor and I am about to appraise your
property for taxation."
" Am I to be taxed by this town ? What f or ? "
"What for?" echoes the assessor in surprise. "What for?
Is not your house protected from fire by our magnificent fire de-
partment ? Are not you protected from robbery by the best police
force in the world? Do you not have the use of macadamized
pavements, and good sidewalks, and electric street lights, and a
first class water supply? Don't you suppose those things cost
something? And don't you think you ought to pay your share? "
"Yes," you answer with more or less calmness, " I do have
the benefit of those things and I do think that I ought to pay my
share toward supporting them. But I have already paid my share
84 The Taxation of Land Values
for this year. I have paid it to the owner of this lot. He charges
me two hundred and fifty dollars a year — one hundred and fifty
dollars more than I should pay or he could get but for those very
benefits. He has collected my share of this year's expense of
maintaining town improvements ; you go and collect from him.
If you do not, but insist upon collecting from me, I shall be pay-
ing twice for those things, once to him and once to you ; and he
won't be paying at all, but will be making money out of them,
although he derives the same benefits from them in all other
respects that I do."
It is bad public policy, to say nothing of the bad civic morals,
to reckon what the community ought to get by what it needs.
This policy is a survival of the old idea that taxes are tribute. On
the hypothesis that taxes are compensation for service, we must
reckon what the community ought to get by the value of what it
gives.
PART TWO, CHAPTER IV, PAGES 17 TO 19
25. "Progress and Poverty," book viii, ch. iii.
26. This is the second part of Adam Smith's fourth maxim.
He states it as follows : ' ' Every tax ought to be so contrived as
both to take out and to keep out of the pockets of the people as
little as possible over and above what it brings into the public
treasury of the state. A tax may either take out or keep out of the
pockets of the people a great deal more than it brings into the public
treasury in the four following ways : . . Secondly, it may ob-
struct the industry of the people, and discourage them from
applying to certain branches of business which might give main-
tenance and employment to great multitudes. While it obliges
the people to pay, it may thus diminish or perhaps destroy some
of the funds which might enable them more easily to do so."
27. This is the first part of Adam Smith's fourth maxim, in
which he condemns a tax that takes out of the pockets of the
people more than it brings into the public treasury.
28. This is Adam Smith's second maxim. He states it as
follows : ' ' The tax which each individual is bound to pay ought
to be certain and not arbitrary. The time of payment, the man-
ner of payment, the quantity to be paid, ought all to be clear and
plain to the contributor and to every other person. Where it is
otherwise, every person subject to the tax is put more or less in
the power of the tax gatherer."
Appendix 85
29. This is Adam Smith's first maxim. He states it as fol-
lows: "The subjects of every state ought to contribute towards
the support of the government as nearly as possible in proportion
to their respective abilities, that is to say, in proportion to the
revenue which they respectively enjoy under the protection of the
state. The expense of government to the individuals of a great
nation is like the expense of management to the joint tenants of
a great estate, who are all obliged to contribute in proportion to
their respective interests in the estate. In the observation or
neglect of this maxim consists what is called the equality or
inequality of taxation. ' ' In altering this maxim Henry George
says ("Progress and Poverty," book viii, ch. iii, subd. 4):
' 'Adam Smith speaks of incomes as enjoyed ' under the protec-
tion of the state ' ; and this is the ground upon which the equal
taxation of all species of property is commonly insisted upon —
that it is equally protected by the state. The basis of this idea is
evidently that the enjoyment of property is made possible by the
state — that there is a value created and maintained by the com-
munity, which is justly called upon to meet community expenses.
Now, of what values is this true? Only of the value of land.
This is a value that does not arise until a community is formed,
and that, unlike other values, grows with the growth of the com-
munity. It only exists as the community exists. Scatter again
the largest community, and land, now so valuable, would have no
value at all. With every increase of population the value of land
rises ; with every decrease it falls. This is true of nothing else
save of things which, like the ownership of land, are in their
nature monopolies." Adam Smith's third maxim refers only to
conveniency of payment, and gives countenance to indirect taxa-
tion, which is in conflict with the principle of his fourth maxim.
Mr. George properly excludes it.
30. ' ' Taxation which falls upon the processes of production
interposes an artificial obstacle to the creation of wealth. Taxa-
tion which falls upon labor as it is exerted, wealth as it is used
as capital, land as it is cultivated, will manifestly tend to discour-
age production much more powerfully than taxation to the same
amount levied upon laborers whether they work or play, upon
wealth whether used productively or unproductively, or upon
land whether cultivated or left waste." — Progress and Poverty,
book viii, ch. iii, subd. 1.
31. It is common, besides taxing improvements as fast as
86 The Taxation of Land Values
they are made, to levy higher taxes upon land when put to
its best use than when put to partial use or to no use at all. This
is upon the theory that when his land is used the owner gets full
income from it and can afford to pay high taxes ; but that he gets
little or no income when the land is out of use, and so cannot
afford to pay much. It is an absurd but perfectly legitimate illus-
tration of the pretentious doctrine of taxation according ability to
pay. Examples are numerous. Improved building lots, and
even those that are only plotted for improvement, are usually
taxed more than contiguous unused and unplotted land which is
equally in demand for building purposes and equally valuable.
So coal land, iron land, oil land and sugar land are as a rule taxed
more as land when opened up for appropriate use than when lying
idle or put to inferior uses, though the land value be the same.
Any serious proposal to put land to its appropriate use is com-
monly regarded as a signal for increasing the tax upon it.
32. "All taxes upon things of unfixed quantity increase
prices, and in the course of exchange are shifted from seller to
buyer, increasing as they go. If we impose a tax on money
loaned, as has been often attempted, the lender will charge the
tax to the borrower, and the borrower must pay it or not obtain
the loan. If the borrower uses it in his business, he in his turn
must get back the tax from his customers, or his business becomes
unprofitable. If we impose a tax upon buildings, the users of
buildings must finally pay it, for the erection of buildings will
cease until building rents become high enough to pay the regular
profit and the tax besides. If we impose a tax upon manufactures
or imported goods, the manufacturer or importer will charge it in
a higher price to the jobber, the jobber to the retailer, and the
retailer to the consumer. Now, the consumer, upon whom the
tax thus ultimately falls, must not only pay the amount of the
tax, but also a profit on this amount to every one who has thus
advanced it — for profit on the capital he has advanced in paying
taxes is as much required by each dealer as profit on the capital
he has advanced in paying for goods." — Progress and Poverty ,
book viii, ch. Hi, subd. 2.
33. The under-appraisements so common at present, and
alluded to in Note 31, are possible because the community, ignor-
ant of the just principles of taxation, does connive at them.
Under-appraisements are not secret crimes on the part of asses-
sors ; they are distinctly recognized, but thoughtlessly disregarded
Appendix 87
when not actually insisted upon by the people themselves. And
this is due to the dishonest ideas of taxation that are taught.
i,et the vicious doctrine that people ought to pay taxes according
to their ability, give way to the honest principle that they should
pay in proportion to the benefits they receive, which benefits, as
we have already seen, are measured by the land values they own,
and under-appraisement of land would cease. No assessor can be-
fool the community in respect of the value of the land within his
jurisdiction. And with the cessation of general under-appraise-
ment, favoritism in individual appraisements would also cease.
General under-appraisment fosters unfair individual appraisements.
If land were generally appraised at its full value, a particular unfair
appraisement would stand out in such relief that the crime of the
assessor would be exposed. But now, if a man's land is appraised
at a higher valuation than his neighbor's equally valuable land,
and he complains of the unfairness, he is promptly and effectually
silenced with a warning that his land is worth much more than it
is appraised at, anyhow, and if he makes a fuss his appraisement
will be increased. To complain further of the deficient taxation
of his neighbor is to invite the imposition of a higher tax upon
himself.
34. If you wish to test the merits in point of certainty of land
value taxation as compared with other taxes, go to a real estate
agent in your community and, showing him a building lot upon
the map, ask him its value. If he inquires about the improve-
ments, instruct him to ignore them. He will be able at once to tell
you what the lot is worth. And if you go to twenty other agents,
their estimates will not materially vary from his. Yet none of the
agents will have left his office. Each will have inferred the value
from the size and location of the lot. But suppose when you show
the map to the first agent you ask him the value of the land and
its improvements. He will tell you that he cannot give an esti-
mate until he examines the improvements. And if it is the
highly improved property of a rich man he will engage building
experts to assist him. Should you ask him to include the value of
the contents of the buildings, he would need a corps of selected
experts, including artists and liverymen, dealers in furniture and
bric-a-brac, librarians and jewelers. Should you propose that he
also include the value of the occupant's income, the agent would
throw up his hands in despair. If without the aid of an army of
experts the agent should make an estimate of these miscellaneous
values, and twenty others should do the same, their several esti-
88 The Taxation of Land Values
mates would be as wide apart as ignorant guesses usually are.
And the richer the owner of the property the lower as a propor-
tion would the guesses probably be. Now turn the real estate
agent into an assessor, and is it not plain that he could appraise
land values with much greater certainty and cheapness than he
could appraise the values of all kinds of property? With a plot
map before him he might fairly make almost all the appraise-
ments without leaving his desk at the town hall. And there
would be no material difference if the property in question were
a farm instead of a building lot. A competent farmer or business
man in a farming community can, without leaving his own door-
yard, appraise the value of the land of any farm there; whereas
it would be impossible for him to value the improvements, stock,
produce, etc., without at least inspecting them.
35. The benefits of government are not the only public ben-
efits whose value attaches exclusively to land. Communal devel-
opment from whatever cause produces the same effect. But as it
is under the protection of government that land-owners are able
to maintain ownership of land and through that to enjoy the
pecuniary benefits of advancing social conditions, government
confers upon them as a class not only the pecuniary benefits of
good government, but also the pecuniary benefits of progress
in general.
36. ' ' Here are two men of equal incomes — that of the one
derived from the exertion of his labor, that of the other from
rent of land. Is it just that they should equally contribute to the
expenses of the state? Evidently not. The income of the one
represents wealth he creates and adds to the general wealth of the
state ; the income of the other represents merely wealth that he
takes from the general stock, returning nothing." — Progress and
Poverty, book viii, ch. iii, subd. 4.
PART THREE, CHAPTER i, PAGES 20 TO 22
37. Not all charity is contemptible. Those charitable people,
who, knowing that individuals suffer, hasten to their relief, de-
serve the respect and affection they enjoy. That kind of charity
is neighborliness ; it is love. And perhaps in modern circum-
stances organization is necessary to make it effective. But organ-
ized charity as a cherished social institution is a different thing.
It is not love, nor is it inspired by love ; it is simply sanctified
Appendix 89
selfishness, at the bottom of which will be found the blasphemous
notion that in the economy of God the poor are to be forever with
us that the rich may gain heaven by alms-giving. Suppose a hole
in the sidewalk into which passers-by continually fall, breaking
their arms, their legs, and sometimes their necks. We should
respect charitable people who, without thought of themselves,
went to the relief of the sufferers, binding the broken limbs of
the living, and decently burying the dead. But what should we
think of those who, when some one proposed to fill up the hole to
prevent further suffering, should say, "Oh, you mustn't fill up
that hole ! Whatever in the world should we charitable people do
to be saved if we had no broken legs and arms to bind, and no
broken-necked people to bury? " Of some kinds of charity it has
been well said that they are "that form of self-righteousness
which makes us give to others the things that already belong to
them. ' ' They suggest the old nursery rime :
"There was once a considerate crocodile,
Which lay on the bank of the river Nile.
And he swallowed a fish, with face of woe,
While his tears flowed fast to the stream below.
'I am mourning,' said he, 'the untimely fate
Of the dear little fish which I just now ate.' "
Read Chapter viii of ' ' Social Problems, ' ' by Henry George, en-
titled, "That We All Might Be Rich."
38. Differences between ' ' hard times ' ' and ' ' good times ' '
are but differences in degrees of poverty and in the people who
suffer from it. Times are always hard with the multitude. But
the voice of the multitude is too weak to be heard at ordinary
times through the ordinary trumpets of public opinion. They are
not regarded nor do they regard themselves as people of any im-
portance in the industrial world, so long as the general wheels of
business revolve. It is only when poverty has eaten its way up
through the various strata of struggling and pinching and squeez-
ing and squirming humanity, and with its cancerous tentacles
touched the superincumbent layers of manufacturing nabobs,
merchant princes, railroad kings, great bankers and great land-
owners, that we hear any general complaint of "hard times."
39. "Could a man of the last century — a Franklin or a
Priestly — have seen, in a vision of the future, the steamship
taking the place of the sailing vessel, the railroad train of the
wagon, the reaping machine of the scythe, the threshing machine
of the flail ; could he have heard the throb of the engines that in
90 The Taxation of Land Values
obedience to human will, and for the satisfaction of human desire,
exert a power greater than that of all the men and all the beasts
of burden of the earth combined ; could he have seen the forest
tree transformed into finished lumber — into doors, sashes, blinds,
boxes or barrels, with hardly the touch of a human hand ; the
great workshops where boots and shoes are turned out by the
case with less labor than the old-fashioned cobbler could have put
on a sole ; the factories where, under the eye of a girl, cotton be-
comes cloth faster than hundreds of stalwart weavers could have
turned it out with their hand-looms ; could he have seen steam
hammers shaping mammoth shafts and mighty anchors, and deli-
cate machinery making tiny watches ; the diamond drill cutting
through the heart of the rocks, and coal oil sparing the whale ;
could he have realized the enormous saving of labor resulting
from improved facilities of exchange and communication — sheep
killed in Australia eaten fresh in Bngland, and the order given
by the I/ondon banker in the afternoon executed in San Francisco
in the morning of the same day ; could he have conceived of the
hundred thousand improvements which these only suggest,
what would he have inferred as to the social condition of
mankind ? It would not have seemed like an inference ; further
than the vision went it would have seemed as though he saw ;
and his heart would have leaped and his nerves would have
thrilled, as one who from a height beholds just ahead of the
thirst-stricken caravan the living gleam of rustling woods and the
glint of laughing waters. Plainly, in the sight of the imagination,
he would have beheld these new forces elevating society from its
very foundations, lifting the very poorest above the possibility of
want, exempting the very lowest from anxiety for the material
needs of life. . . And out of these bounteous material condi-
tions he would have seen arising, as necessary sequences, moral
conditions realizing the golden age of which mankind have always
dreamed. . . More or less vague or clear, these have been
the hopes, these the dreams born of the improvements which
give this wonderful century its pre-eminence. . . It is true
that disappointment has followed disappointment, and that
discovery upon discovery, and invention after invention, have
neither lessened the toil of those who most need respite, nor
brought plenty to the poor. But there have been so many things
to which it seemed this failure could be laid, that up to our time
the new faith has hardly weakened. . . Now, however, we are
coming into collision with facts which there can be no mistaking.
Appendix 9 1
. . And, unpleasant as it may be to admit it, it is at last becom-
ing evident that the enormous increase of productive power which
has marked the present century and is still going on with acceler-
ating ratio, has no tendency to extirpate poverty or to lighten the
burdens of those compelled to toil. It simply widens the gulf
between Dives and Lazarus, and makes the struggle for existence
more intense. The march of invention has clothed mankind with
powers of which a century ago the boldest imagination could not
have dreamed. But in factories where labor-saving machinery
has reached its most wonderful development little children are at
work ; wherever the new forces are anything like fully utilized
large classes are maintained by charity or live on the verge of
recourse to it ; amid the greatest accumulations of wealth, men
die of starvation, and puny infants suckle dry breasts; while
everywhere the greed of gain, the worship of wealth, shows the
force of the fear of want." — Progress and Poverty , Introduction.
40. The leader of one of the labor strikes of the early eighties,
a hard-working, respectable, and self-respecting man, told me
that the deprivations which he himself suffered as a workingman
were nothing as compared with the fear for the future of his
children that he felt whenever he thought of the repulsive sur-
roundings, physical and moral, in which, owing to his poverty,
he was compelled to bring them up. \ Professor Francis Way-
land, Dean of the Yale law school, wrote in the Charities Review
for March, 1893 : ' ' Under our eyes and within our reach children
are being reared from infancy amid surroundings containing every
conceivable element of degradation, depravity and vice. Why,
then, should we be surprised that we are surrounded by a horde
of juvenile delinquents, that the police reports in our cities teem
with the exploits of precocious little villains, that reform schools
are crowded with hopelessly abandoned young offenders? How
could it be otherwise ? What else could be expected from such
antecedents, from such ever-present examples of flagrant vice?
Short of a miracle, how could any child escape the moral contag-
ion of such an environment? How could he retain a single
vestige of virtue, a single honest impulse, a single shred of respect
for the rights of others, after passing through such an ordeal of
iniquity? What is there left on which to build up a better char-
acter? " In the Arena of July, 1893. Helen Campbell said : "It
would seem at times as if the workshop meant only a form of
preparation for the hospital, the workhouse and the prison, since
the workers therein become inoculated with trade diseases, mutil-
92 The Taxation of Land Values
ated by trade appliances, and corrupted by trade associates till no
healthy fiber, mental, moral, or physical remains." This testi-
mony bears a distant date but it is as true now as when it was
uttered ; and similar testimony only recently uttered is abundant.
But no further citation is necessary to arouse the conscience of the
merciful and the just ; and any amount of proof would not affect
those self-satisfied mortals whom Kipling describes when he says
that "there are men who, when their own front doors are closed,
will swear that the whole world's warm."
41. Some years ago a gentleman now well and favorably
known in New York public life — a judge these many years — told
me of a ragged tramp whom he had brought, more to gratify a
whim perhaps than in any spirit of philanthropy, from a neigh-
boring camp of tramps to his house for breakfast. After break-
fast the host asked his guest, in the course of conversation, why
he lived the life of a tramp. This in substance was the tramp's
reply : "I am a mechanic and used to be a good one, though not
so exceptionally good as to be safe from the competition of the
great class of average workers. I had a family — a wife and two
children. In the hard times of the seventies I lost my job. For
a while we lived upon our little savings ; but sickness came and
our savings were used up. My wife and children died. Every-
thing was gone but self-respect. Then I traveled, looking for
work which could not be had at home. I traveled afoot ; I could
afford no other way. For days I hunted for work, begging food
and sleeping in barns or under trees ; but no work could I get.
Once or twice I was arrested as a vagrant. Then I fell in with a
party of tramps and with them drifted into the city. Winter came
on. I still had a desire to regain my old place as a self-respecting
man, but work was scarce and nothing that I could do could I find
to do except some little job now and then which was given me as
pennies are given to beggars. I slept mostly in station houses.
Part of the time I was undergoing sentence for vagrancy. In the
spring I tramped again. But now I did not hunt for work. My
self-respect was gone so completely that I had no ambition to
regain it. I was a loafer and a jail-bird. I had no family to sup-
port, and I had found that, barring the question of self-respect,
I was about as well off as were average workmen. After years of
tramping this opinion is unchanged. I am always sure of enough
to eat and a place to sleep in — not very good often, but good
enough. I should not be sure of that if I were a workingman.
I might lose my job and go hungry rather than beg. I might be
Appendix 93
unable to pay my rent and so be turned upon the street. I might
marry again and have a family which would be condemned to the
hard life of the average workingman's family. And as for soci-
ety, why, I have society. Tramps are good fellows — sociable fel-
lows, bright fellows many of them. L/ife as a tramp is not half
bad when you compare it with the workingman's life, leaving out
the question of self-respect, of course. You must leave that out.
No man can be a tramp for good until he loses that. But a period
of hard times makes many a chap lose it. And as I have lost it I
would rather be a tramp than a workingman. I have tried both.
By the way, Mr. , this is a very good cigar — this brand of
yours. I seldom smoke much better cigars. ' ' The facts in detail
of this man's story may have been false; they probably were.
But so were the facts in detail of Bunyan's "Pilgrim's Progress."
There is, however, a distinction between fact and truth, and no
matter how false the man's facts may have been, his story like
Bunyan's was essentially true. Much of the poverty that upon
the surface seems to be voluntary and undeserving comes from a
growing feeling among those who work hardest that, as Cowper
describes it, they are
"getting down buckets into empty wells,
And growing old with drawing nothing up."
At Victoria, B. C., in the spring of 1894, I witnessed a canoe race
in which there were two contestants and but one prize. Ivong
before the winner had reached the goal his adversary, who found
himself far behind, turned his canoe toward the shore and dropped
out of the race. Was it because he was too lazy to paddle? Not
at all. It was because he realized the hopelessness of the effort.
42. H. C. Bunner, once editor of Puck,
43. A well known millionaire is quoted as saying : "I would
rather leave my children penniless in a world in which they could
at all times obtain employment for wages equal to the value of
their work as measured by the work of others, than to leave them
millions of dollars in a world like this, where if they lose their
inheritance they may have no chance of earning a decent living. ' '
This millionaire was Tom Iv. Johnson. What he said was in reply
to a question at a public meeting in St. I/ouis in 1893.
44. "From whence springs this lust for gain, to gratify
which men tread everything pure and noble under their feet ; to
which they sacrifice all the higher possibilities of life ; which con-
verts civility into a hollow pretence, patriotism into a sham, and
94 The Taxation of Land Values
religion into hypocrisy ; which makes so much of civilized exist-
ence an Ishmaelitish warfare, of which the weapons are cunning
and fraud? Does it not spring from the existence of want?
Carlyle somewhere says that poverty is the hell of which the
modern Englishman is most afraid. And he is right. Poverty is
the open-mouthed, relentless hell which yawns beneath civilized
society. And it is hell enough. The Vedas declare no truer thing
than when the wise crow Bushanda tells the eagle bearer of Vishnu
that the keenest pain is in poverty. For poverty is not merely
deprivation ; it means shame, degradation ; the searing of the
most sensitive parts of our moral and mental nature as with hot
irons ; the denial of the strongest impulses and the sweetest affec-
tions ; the wrenching of the most vital nerves. You love your
wife, you love your children ; but would it not be easier to see
them die than to see them reduced to the pinch of want in which
large classes in every civilized community live? . . From this
hell of poverty it is but natural that men should make every effort
to escape. With the impulse to self-preservation and self-gratifi-
cation combine nobler feelings, and love as well as fear urges in
the struggle. Many a man does a mean thing, a dishonest thing,
a greedy and grasping and unjust thing, in the effort to place
above want, or the fear of want, mother or wife or children." —
Progress and Poverty, book ix, ch. iv.
45. "There is just now a disposition to scoff at any implica-
tion that we are not in all respects progressing. . . Yet it is
evident that there have been times of decline, just as there have
been times of advance ; and it is further evident that these epochs
of decline could not at first have been generally recognized. He
would have been a rash man who, when Augustus was changing
the Rome of brick to the Rome of marble, when wealth was aug-
menting and magnificence increasing, when victorious legions
were extending the frontier, when manners were becoming more
refined, language more polished, and literature rising to higher
splendors — he would have been a rash man who then would have
said that Rome was entering her decline. Yet such was the case.
And whoever will look may see that though our civilization is
apparently advancing with greater rapidity than ever, the same
cause which turned Roman progress into retrogression is operating
now. What has destroyed every previous civilization has been
the tendency to the unequal distribution of wealth and power.
This same tendency, operating with increasing force, is observable
in our civilization to-day, showing itself in every progressive
Appendix 95
community, and with greater intensity the more progressive the
community. . . The conditions of social progress, as we have
traced the law, are association and equality. The general tend-
ency of modern development, since the time when we can first
discern the gleams of civilization in the darkness which followed
the fall of the Western Empire, has been toward political and
legal equality. . . This tendency has reached its full expres-
sion in the American Republic, where political and legal rights
are absolutely equal. . . It is the prevailing tendency, and
how soon Europe will be completely republican is only a matter
of time, or rather of accident. The United States are, therefore,
in this respect, the most advanced of all the great nations in a
direction in which all are advancing, and in the United States we
see just how much this tendency to personal and political freedom
can of itself accomplish. . . It is now . . evident that political
equality, co- existent with an increasing tendency to the unequal
distribution of weath, must ultimately beget either the despotism
of organized tyranny or the worse despotism of anarchy. To turn
a republican government into a despotism the basest and most
brutal, it is not necessary to formally change its constitution or
abandon popular elections. It was centuries after Caesar before
the absolute master of the Roman world pretended to rule other
than by authority of a Senate that trembled before him. But forms
are nothing when substance has gone, and the forms of popular
government are those from which the substance of freedom may
most easily go. Extremes meet, and a government of universal
suffrage and theoretical equality may, under conditions which
impel the change, most readily become a despotism. For there
despotism advances in the name and with the might of the people.
. And when the disparity of condition increases, so does uni-
versal suffrage make it easy to seize the source of power, for the
greater is the proportion of power in the hands of those who feel no
direct interest in the conduct of goverment ; who, tortured by want
and embruted by poverty, are ready to sell their votes to the
highest bidder or follow the lead of the most blatant demagogue ; or
who, made bitter by hardships, may even look upon profligate and
tyrannous government with the satisfaction we may imagine the
proletarians and slaves of Rome to have felt, as they saw a Cali-
gula or Nero raging among the rich patricians. . . Now, this
transformation of popular government into despotism of the vilest
and most degrading kind, which must inevitably result from the
unequal distribution of wealth, is not a thing of the far future.
96 The Taxation of Land Values
It has already begun in the United States, and is rapidly going on
under our eyes. . . The type of modern growth is the great
city. Here are to be found the greatest wealth and the deepest
poverty. And it is here that popular government has most clearly
broken down. . . In theory we are intense democrats. . .
But is there not growing up among us a class who have all the
power without any of the virtues of aristocracy? . . Industry
everywhere tends to assume a form in which one is master and
many serve. And when one is master and the others serve, the
one will control the others, even in such matters as votes. . .
There is no mistaking it — the very foundations of society are being
sapped before our eyes. . . It is shown in greatest force where
the inequalities in the distribution of wealth are greatest, and it
shows itself as they increase. . . Though we may not speak of
it openly, the general faith in republican institutions is, where
they have reached their fullest development, narrowing and
weakening. It is no longer that confident belief in republicanism
as the source of national blessings that it once was. Thoughtful
men are beginning to see its dangers, without seeing how to
escape them ; are beginning to accept the view of Macaulay and
distrust that of Jefferson. And the people at large are becoming
used to the growing corruption. The most ominous political sign
in the United States to-day is the growth of a sentiment which
either doubts the existence of an honest man in public office or
looks on him as a fool for not seizing his opportunities. . . Thus
in the United States to-day is republican government running
the course it must inevitably follow under conditions which cause
the unequal distribution of wealth. ' ' — Progress and Poverty, book
x, ch. iv.
46. "The power to reason correctly on general subjects is
not to be learned in schools, nor does it come with special knowl-
edge. It results from care in separating, from caution in com-
bining, from the habit of asking ourselves the meaning of the
words we use, and making sure of one step before building an-
other upon it — and above all, from loyalty to truth." — Henry
George's Perplexed Philosopher, p. 9.
47. "Harold Frederic, when the I/ondon correspondent of
the New York Times, reported Mr. Gladstone as having said in
substance, in one of his campaign speeches, that the older he
grew the more he began to conclude that the highly educated
classes were in public affairs rather more conspicuously foolish
Appendix 97
than anybody else. Mr. Frederic thought that the Tories had
since done much to ' breed a suspicion that therein Gladstone
touched the outskirts of a great and solemn truth.' But it need-
ed not the action of the Tories to breed that suspicion. In this
country as well as in England it is plain to any close observer
that the highly educated classes, or to speak with more exactness,
the highly tutored classes, when compared with the common
people, are in public affairs but little better than fools. The
explanation is simple. The common people are philosophers
unencumbered with useless knowledge, who look upon public
affairs broadly, and moralists who pry beneath the surface of
custom and precedent into the heart of public questions. The
minds of the tutored classes, on the contrary, are dwarfed by close
attention to particulars to the exclusion of generals, and distorted
by such false morality as is involved in tutorial notions regarding
vested rights."— The Standard, July 27, 1892. f The tendency
of tutoring to elevate mere authority above observation and thought
is well illustrated by the story of two classes in a famous school.
The primary class, being asked if fishes have eyelids, went to the
aquarium and observed ; the senior class being asked the same
question, went to the library and consulted authorities. If "One
may stand on a box and look over the heads of his fellows, but he
no better sees the stars. The telescope and microscope reveal
depths which to the unassisted vision are closed. Yet not merely
do they bring us no nearer to the cause of suns and animalcula,
but in looking through them the observer must shut his eyes to
what lies about him. . . A man of special learning may be a
fool as to common relations." — Henry George^s Perplexed Philo-
sopher, Introduction.
PART THREE, CHAPTER II, PAGES 22 TO 26
48. For it is ability or inability to satisfy his wants that de-
termines whether or not a man is poor. He who has the power to
procure what he wants, as he wants it, and in satisfactory quality
and quantity, is not poor. No matter how he gets the power,
provided he keeps out of the penitentiary, he is accounted rich.
49. This difference is frequently ignored, even by political
economists ; but it should be plain to any intelligent mind that no
reasoning can be trusted which does not distinguish a difference
so radical.
98 The Taxation of Land Values
50. As to the flour and the yeast, there is no doubt of this. And
it is equally true though not so obvious of the fire, which but for the
art of man would not exist in the oven ; of the water, which but for
that would not be at hand ; and of the salt, which without man's
art would be in neither proper form nor place. It follows that,
either as to form or place, or as to both, all the external objects,
except the lot of land, are artificial. The bread itself is of course
artificial.
51. It is because man desires bread that he constructs ovens,
builds fires in them, grinds flour, digs or evaporates salt, prepares
yeast, or carries water to the dough-trough. And going farther
back, it is because he desires bread that he raises grain, erects
mills, and produces machinery for bread-making. This is plain
enough in a community of one like that of Robinson Crusoe.
But it is just as true in a community of millions. In the com-
munity of one the solitary individual performs all the work neces-
sary to produce bread because he wants bread. In the great
society individuals divide their work, some doing one part and
others other parts; but the motive, still the same, is desire for
bread. All the processes of industry to the extent that they are
directed to the production of bread, whether they be in the depart-
ments of mining, of lumbering, of railroading, of navigation, of
engineering, of farming, of storekeeping, of baking, or what not,
are steps or stages in bread-making ; and every artificial object
produced for the purpose of faciliating bread-making is to that
extent unfinished bread. But bread itself, from the time it comes
into the possession of the consumer (for it is not complete until
the final deliverer has accomplished his work regarding it), is a
finished object. The essential difference, then, between the arti-
ficial objects that are classified as ' ' product ' ' and those that are
classified as ' ' factors ' ' is that the former are finished and the
latter are unfinished. 1 Professor Marshall (Marshall's Prin.,
book it, ch. Hi.} divides artificial objects into "goods of the first
order, which satisfy wants directly, such as food, clothing, etc. ;
goods of the second order, such as flour mills, which satisfy wants,
not directly but indirectly, by contributing toward the production
of goods of the first order ' ' ; and ' ' goods of the third order, ' '
under which he arranges "all things that are used for making
goods of the second order, such as the machinery for making milling
machinery. ' ' He says we might carry the analysis further if nec-
essary, and so we might ; but though we dragged it out into an
interminable catalogue, every artificial item beyond ' ' goods of the
Appendix 99
first order ' ' would be an unfinished artificial object and for all
purposes of economic reasoning nothing else. His own classifica-
tion into "consumers' goods" (finished artificial objects), and
"producers' goods" (unfinished artificial objects) is complete.
52. It makes no difference what terms are adopted, for they
serve only as symbols ; but it is of vital importance that the same
terms shall never symbolize things that essentially differ. The
technical terms that usage forces upon us in connection with our
subject are especially liable to abuse in this respect because they
are also loose colloquial words. The term ' ' wealth " is a be-
wildering example. It has been used to symbolize as of one class
such diverse things as building lots, houses, farm sites, farm im-
provements, deeds, mortgages, water power, promissory notes,
warehouse receipts and the goods they call for, book accounts, and
slaves, thus confusing three or four different kinds of things, in-
stead of distinguishing one kind from all others. Made to include
building lots and farm sites and water power, the term is a
symbol for natural objects ; made to include houses, farm improve-
ments, and goods, it is a symbol of artificial objects; by including
slaves it symbolizes man ; and by including deeds, promissory
notes, warehouse receipts, and book accounts, it symbolizes noth-
ing but evidences of legal title as between individual men. When
the same term is used to include things so essentially different as
"Natural Objects External to Man," "Artificial Objects External
to Man," "Man" himself, and indicia of title, it is hopeless to
use it in reasoning about the mutual relations of those things.
53. For example : Flour, which is unfinished bread, and
therefore unfinished wealth ( ' ' Capital " ) , appears upon analysis to
be a compound of grain, a mill site, and a miller. The mill site
and the miller are respectively land and labor ; but the grain and
the mill are unfinished wealth ( ' ' Capital ' ' ) and may be further
analyzed. Passing the mill for a moment to analyze the grain,
we find it composed of a farmer, a farm site, and farming im-
provements and implements. The farm site, like the mill site, is
land ; and the farmer, like the miller, is labor; but the improve-
ments and implements, like the mill and the grain, are unfinished
wealth — Capital, and may be still further analyzed. And so on.
If analyzed to the last, every constituent of bread, and every con-
stituent of that constituent, would resolve into lyabor and I^and.
To follow them step by step would be tedious work and require
much special knowledge. It would involve consideration of fac-
tories and factory sites, stores and store sites, railroads and railroad
1 00 The Taxation of Land Values
sites, mining and mines, lumbering and forests, rivers, docks,
oceans, and ships. But analysis in full detail is not necessary.
The conclusion is obvious the moment it is understood.
54. The primary error in most socialistic reasoning on
economics consists in ignoring the fact that Capital is but a pro-
duct of Ivabor and L,and ; or what in effect is the same thing, in dis-
regarding the necessary inference that L/and is the only implement
of labor. Many socialists insist that they do not ignore it ; but
that, while acknowledging L/and to be the primary implement of
L/abor, they see in this only an abstract formula, having at the
present stage of civilization no practical importance. Society,
they urge, is impossible without Capital ; and he who would live
in society must have Capital, or be the slave of those who do have
it. Therefore, they argue, Capital is in the social state as indis-
pensable as land. Their reasoning hinges upon the mistaken
assumption that Capital is an accumulation of the past instead of
being a product of the present. As one socialistic author puts it,
" Though labor may have originally preceded Capital, yet it is
now as absurd to place one before the other as it is to attempt to
say whether the hen originated the egg or the egg the hen. ' ' The
explanation of the division of labor and trade, one effect of which
is overlooked by socialistic philosophies, affords a better opportun-
ity than the present for considering this elementary economic
error of socialism, and a brief discussion of the subject will be
given in that connection. (See Note 86.) But it may be ex-
plained here that much of the confusion of thought on this sub-
ject among socialists is due to unquestioning acceptance for their
economic thinking of analyses of business bookkeeping. For
business accounts it is well enough to enter under the head of
" Capital" all objects or values that serve as capital in the par-
ticular business. But this is not enough for general economic
purposes, where all interests are considered. For such purposes,
we must know not alone whether business men call certain
objects or values Capital in their own business, but also whether
there are any fundamental economic differences of which this or
that particular business may not need to take account. Now,
there can hardly be a more fundamental economic difference than
that which we distinguish by the terms ' ' natural ' ' and ' ' artifici-
al." These terms distinguish such differences as that of metals
in their original state in the earth, from manfactures of metal ;
and while the manufacturer may properly account a mineral
deposit as part of his capital along with his machinery, the
Appendix pW»\5.J 101
economic investigator who does so is like the school boy who has
not yet learned to distinguish between plus and minus. It is from
ignoring distinctions between natural capital and artificial capi-
tal, that large corporations are considered as capitalists only, and
not as landlords. In economic fact they may be enormously greater
landlords than capitalists. The report of the Commission of
Corporations of the United States shows that the so-called capital
of the Steel Corporation (steel trust), for instance, is so largely
of ore-deposit holdings that ' ' in the ore is its highest degree of
concentration and control."
55. It may seem at first like a great waste of time and space
to have gone through this long analysis for no other purpose at
last than to demonstrate the self-evident fact that I/and and I/abor
are the sole original factors in the production of Wealth. But it
will have been no waste if it enables the reader to grasp the fact
firmly. Nothing is more obvious, to be sure. Nothing is more
readily assented to. Yet by college professor and economic
author and socialistic leader and business man alike, this simple
truth is cast adrift at the very threshold of economic argument or
investigation.
56. There is ample authority among economic writers for
this conclusion. Professor Ely has enumerated Nature, L/abor
and Capital as the factors of production, but he describes Capital
as a combination of Nature and L/abor. — Ely's Introduction, part
ii, ch. Hi. 1 Say described industry as ' ' nothing more or less
than human employment of natural agents." — Say's Trea., book
i, ch. ii. 1 And though John Stuart Mill and numerous others
wrote of L/and, Labor and Capital as the three factors of produc-
tion, as did Professor Jevons also, most of them, like Jevons,
recognize the fact, though in their reasoning they often fail to
profit by it, that Capital is not a primary but a secondary requis-
ite. —Jevons 's Pol, EC. , sees. 16, 19. 1 Henry George says: ' ' L/and,
lyabor and Capital are the factors in production. The term L/and
includes all natural opportunities or forces ; the term Ivabor, all
human exertion ; and the term Capital, all wealth used to produce
more wealth. . . . Capital is not a necessary factor in production.
L/abor exerted upon L/and can produce Wealth without the aid of
Capital, and in the necessary genesis of things must so produce
Wealth before Capital can exist." — Progress and Poverty, book in,
ch. i. 1 Also : * ' The complexities of production in the civilized
state, in which so great a part is borne by exchange, and so much
102 Tite Taxation of Land Values
labor is bestowed upon materials after they have been separated
from the land, though they may to the unthinking disguise,
do not alter the fact that all production is still the union of
the two factors, I/and and Labor." — Id., ch. viii. H By intel-
ligent observers no authority is needed. In all the phenom-
ena of human life, whether primitive or civilized, the lesson of
the Chart stands out in bold relief. Nothing can be produced
without L/abor and lyand ; and nothing can be named which under
any circumstances enters into productive processes that is not
resolvable into either the one or the other. To satisfy all human
wants mankind requires nothing but human labor and natural
material, and each of them is indispensable.
57. "The term labor includes all human exertion in the
production of wealth." — Progress and Poverty, book i, ch. ii.
58. "The term L/and necessarily includes, not merely the
surface of the earth as distinguished from the water and the air,
but the whole material universe outside of man himself, for it
is only by having access to land, from which his very body is
drawn, that man can come in contact with or use nature." —
Progress and Poverty, book i, ch. ii.
59. ' ' As commonly used the word ' wealth ' is applied to any-
thing having exchange value. But . . Wealth, as alone the
term can be used in political economy, consists of natural pro-
ducts that have been secured, moved, combined, separated, or in
other ways modified by human exertion, so as to fit them for the
gratification of human desires." — Progress and Poverty, book i,
ch. ii.
PART THREE, CHAPTER III, PAGES 26 TO 35
60. If we imagine upon a lonely island a solitary man, with-
out capital, without clothing, without adequate shelter, what
would be our explanation of his poverty? We could not say that
it was caused by a superabundance of goods — by ' ' over-produc-
tion ' ' ; nor should we be any more likely to attribute it to scarity
of money. We should first ask if the land of the island were
barren. Upon being assured that it would yield far more than the
solitary inhabitant could consume, we should ask if he were
physically or mentally incapable of producing the things he re-
quired. If told that not only was he quite capable, but that in
the years he had been upon the island he had continually
improved in industrial knowledge, in inventive acuteness, in man-
Appendix 1 03
ual dexterity, and in muscular power, and yet that he was
scarcely if any better able to satisfy his wants than when first
cast ashore, we might ask if he were lazy. If informed that he
was not lazy, that he worked almost as many hours as ever and
quite as hard and far more productively, we should ask if he were
the chattel slave of an exacting master. Satisfied that this was
not the case, we should then say: "The only explanation left is
that in some way that man's opportunities to use the island are
restricted — the Ivabor of the island and the L/and of the island do
not freely meet. ' ' And if we were thereupon advised that a neigh-
boring cannibal chief, who claimed the island as his private property,
had granted the lone inhabitant permission to live, upon the sole
condition that he yield tribute for the land, and that the tribute
had a way of advancing as the worker's productive power in-
creased, we should understand the cause of his poverty. And we
should advise him to find a way at once of throwing off that can-
nibal's yoke, and to postpone all secondary questions until their
proper settlement could operate for his own benefit instead of the
cannibal's.
61. The ownership of the I/and is essentially the ownership
of the men who must use it. ' ' I^et the circumstances be what
they may — the ownership of land will always give the ownership
of men to a degree measured by the necessity (real or artificial)
for the use of land. . . Place one hundred men upon an island
from which there is no escape, and whether you make one of
these men the absolute owner of the other ninety-nine, or the
absolute owner of the soil of the island, will make no difference
either to him or to them." — Progress and Poverty, bookvii^ ch. ii.
I^et us imagine a shipwrecked sailor who, after battling with
the waves, touches land upon an uninhabited but fertile island.
Though hungry and naked and shelterless he soon has food and
clothing and a house — all of them rude to be sure, but comfortable.
How does he get them? By applying his L/abor to the I/and of the
island. In a little while he lives as comfortably as an isolated
man can. Now let another shipwrecked sailor be washed ashore.
As he is about to step out of the water the first man accosts him:
' ' Hello, there ! If you want to come ashore you must agree to
be my slave." The second replies: "I can't. I come from the
United States where they don't believe in slavery." "Oh, I beg
your pardon. I didn't know you came from the United States.
I had no intention of wounding your patriotism, you know. But
say, they believe in owning land in the United States, don't they? ' '
1 04 The Taxation of Land Values
"Yes." "Very well; you just agree that this island is mine,
and you may come ashore a free man." "But how does the
island happen to be yours? Did you make it? " " No I didn't
make it. " " Have you a title from its maker? " " No, I haven't
any title from its maker." "Well, what is your title, anyhow? "
" Oh, my title is good enough. I got here first." Of course he
got there first. But he didn't mean to, and he wouldn't have
done it if he could have helped it. But the newcomer is satisfied
and says: "Well, that's a good United States title, so I guess I'll
recognize it and come ashore. But remember, I am to be a free
man. " " Certainly you are. Come right along up to my cabin. ' '
For a time the two get along well enough together. But on some
fine morning the proprietor concludes that he would rather lie
abed than scurry around for his breakfast ; and not being in good
humor, perhaps, he roughly commands his ' ' brother man ' ' to
cook him a bird. "What? " exclaims the brother. "I tell you
to go and kill a bird and cook it for my breakfast. " " That
sounds big," sneers the second free and equal member of the
little community; ' ' but what am I to get for doing this ? " " Oh, "
the first replies languidly, ' ' if you kill me a fat bird and cook it
nicely, then after I have had my breakfast off the bird you may
cook the gizzard for your own breakfast. That's pay enough.
The work is easy. " " But I want you to understand that I am
not your slave, and I wont do that work for that pay. I'll do as
much work for you as you do for me, and no more." "Then,
sir," the first comer shouts in virtuous wrath, " I want you to
understand that my charity is at an end. I have treated you
better than you deserved in the past, and this is your gratitude.
Now I don't propose to have any loafers on my property. You
will work for the wages I offer or get off my land ! You are
perfectly free. Take the wages or leave them. Do the work or
let it alone. There is no slavery here. But if you are not satis-
fied with my terms, leave my island!" The second man, if
accustomed to the usages of some labor unions, would probably
go out and to the music of his own violent language about the
"greed of capital," destroy as many bows and arrows as he could,
so as to paralyze the bird-shooting industry ; and this proceeding
he would call a strike for honest wages and the dignity of labor.
If he were accustomed to social reform notions of the ' ' goo-goo ' '
variety, he would propose arbitration, and be mildly indignant
when told that there was nothing to arbitrate — that he had only
to accept the other's offer or get off his property. But if a per-
Appendix 1 05
ceptive and red-blooded man, he would notify his comrade that
the privilege of owning islands in that latitude had expired.
62. While in the Pennsylvania coal regions several years ago
I was told of an incident that illustrates the power of perpetuat-
ing poverty which resides in the monopoly of land. The miners
were in poverty. Despite the lavish protection bestowed upon
them by tariff laws at the solicitation of monopolies which had
dictated our tariff policy, the men were afflicted with poverty in
many forms. They were poor as to clothing, poor as to shelter,
poor as to food, and to be more specific, they were in extreme
poverty as to ice. When the summer months came they lacked
ice because they could not afford to buy, and they suffered. But
owing to the undermining of the ground and the caving in of the
surface here and there, there were great holes into which the snow
and the rain fell in winter and froze, forming a passable quality
of ice. Now it is frequently said that intelligence, industry and
thrift will abolish poverty. But these virtues did not succeed
among the men of whom I speak. They were intelligent enough
to see that this ice if they saved it would abolish their poverty as
to ice, and they were industrious enough and thrifty enough not
only to be willing to save it, but actually to begin the work.
Preparing little caves to preserve the ice in, they went into the
holes after a long day's work in the mines, and gathered what,
so far as the need of ice was concerned, was to abolish their pov-
erty in the ensuing summer. But the owner of that part of the
earth — a man who had neither made the earth, nor the rain, nor
the snow, nor the ice, nor even the hole — telegraphed his agent
forbidding the removal of ice except upon payment of a certain
sum per ton. The miners couldn't afford the terms. They con-
trolled the necessary L/abor, and were willing to give it to abolish
their poverty ; but the necessary L/and was placed beyond their
reach by an owner. In consequence of that, and not from any
lack of intelligence, industry or thrift on their own part, their
poverty as to ice was perpetuated.
63. It is failure to realize this that accounts for the theory of
colleges and Socialists that laborers in the civilized state are
dependent upon accumulated capital as well as upon land for
opportunities to produce. See ante, Note 54, and post, Note 86.
64. Here are two men at a given point. Bach has an
errand to do a mile to the east, and each has one to do a mile to
the west. If each goes upon his own errand each will travel a
106 The Taxation of Land Values
mile out and a mile back in one direction and the same in the
other, making four miles' travel apiece, or eight miles in all.
But if one does both errands to the east and the other does both
to the west and they trade results, they will travel but two miles
apiece, or four in all. By division of labor they free half their
energy and half their time for use at other work, or at study, or
at play, as their inclinations dictate.
65. No more than are the effects of a healthful climate.
Protectionists who argue that there should be free trade between
villages, cities, counties and States in the same nation, but pro--
tection for nations, thus making the effect of trade to de pend up
on the invisible political boundary line that separates communities,
are like the Negro woman who, when her house, without being
physically moved had been politically shifted from North Carolina
to Virginia by a change of the boundary line, expressed her satis-
faction in the remark that she was very glad of it, because she
"allus yearn tail dot dat yah Nof K'line was an a' mighty sickly
State," and she was glad she didn't " live dyeah no mo' ! "
66. Men who devoted themselves to specialties, unable to
exchange their products for the objects of their desire, which
alone would be the motive for their special labor, would abandon
specialties and resort to less civilized methods of supplying their
wants.
67. Division of labor, whether adopted to take advantage of
the different varieties of land, or to secure the benefits of special
skill in labor, cannot continue without trade ; and to the degree
that trade is impeded, to that degree division of labor will
languish. It is only under absolute free trade between all people
and in respect of all products that division of labor can flourish.
Any interference with it is economically an enslavement of labor
in a degree proportioned to the degree of interference.
68. It will be seen from this chart that the people of the two
places, by dividing their given expenditure of labor in such man-
ner as to utilize the natural advantage peculiar to each place, secure
a clear profit of 18. And this is a substantial profit, consisting
not merely of figures upon paper, but of real wealth — artificial
external objects which serve to satisfy human desires.
69. The people of the Mainland have now sent 10 of their
corn to the Island, and the people of the Island have paid for it
by sending 10 of their sugar to the Mainland. For simplicity the
Appendix 1 07
cost of effecting the trade is omitted. It does not affect the prin-
ciple. If the cost were so high that more sugar and corn could
be got without division of labor than with, division of labor would
be abandoned as unprofitable; if low enough to admit of any
profit at all, the trading would go on, unless restrained, precisely
as if it involved no cost. It may be well to state, however, that
th.e nearer we get to no cost in trading the better are we off.
Hence, any tariff on trading, whether domestic or foreign, like
railroad or shipping rates for frieght, is prejudicial ; for tariffs
add to the cost of trading just as freight rates do. Protection has
that for its object. When it does not add enough to the price of a
foreign product to prevent importation it fails of its purpose.
And though revenue tariffs have no such object they produce the
same effect, only in minor degree.
70. If every man were obliged, unassisted by the co-opera-
tion of others, to supply his own needs directly by his own labor,
few could more than meagerly satisfy even the simplest of those
desires which we have in common with lower animals. Though
each labored diligently the aggregate of wealth would be exceed-
ingly small compared with the necessities of those who wished to
consume it, while in variety it would be very limited and in qual-
ity of the very poorest kind. But by division of labor, which has
been carried to marvelous lengths and is still developing, produc-
tive power is so enormously increased that the annual wealth
products of the present time, in quantity and quality, in variety,
usefulness and beauty, almost appear to be the work of giants
and fairies.
71. Mankind as a whole may be likened to a great man, with
eyes to see, brain to invent aud direct, nerves for intercommuni-
cation, ard various muscles for various actions. As different parts
of the bodies of men do different things, each part contributing
co-operatively to the general result, so it is with the body economic,
whose different parts — individual men — contribute in different
ways to the common good. Trade is to the body economic what
digestion is to the physical body. To prohibit it is to deprive the
great man of his stomach ; to restrict it is to give him dyspepsia.
Says Emerson in the " American Scholar, " an oration delivered at
Cambridge in 1837 : ' ' It is one of those fables which out of an
unknown antiquity convey an unlocked for wisdom, that the gods
in the beginning divided man into men, that he might be more
helpful to himself ; just as the hand was divided into fingers, the
108 The Taxation of Land Values
better to answer its ends." Reflection upon the labor-saving
power of trade makes it clear that the notion of protectionists that
free trade is prejudicial to home industry has no foundation. It
would interfere with "home industries" that could be better
conducted elsewhere ; but by that very fact it would strengthen
the industries that belonged at home. When we decide to buy
foreign goods we do not thereby decide to employ foreign labor
instead of American labor ; we decide that the American labor
shall be employed in making things to trade for what we buy,
instead of making the identical things that we buy. And we
get a better net result or we wouldn't do it. Free trade and labor-
saving machinery, which belong in the same industrial category,
increase the aggregate wealth of a country where they flourish.
Whether or not they tend to impoverish individuals or classes,
depends upon the manner in which the increased wealth is dis-
tributed. If they do so tend, the remedy surely does not lie in
the direction of obstructing trade and smashing machines so that
less wealth may be produced with given labor, but in altering the
conditions that promote unjust distribution.
72. The term ' ' production ' ' means not creation but adapta-
tion. Man cannot add an atom to the universe of matter ; but he
can so modify the condition of matter, both in respect of form
and of place, as to adapt it to the satisfaction of human desires.
To do this is to produce wealth. "Consumption" is the
ultimate object of all production. We produce because we
desire to consume. But consumption does not mean destruction.
Man has no more power to destroy than to create. His power in
consumption, like his power in production, is limited to changing
the condition of things. As by production man changes things
from natural to artificial conditions in order to satisfy his desires,
so by consumption he changes things from artificial to natural
conditions in the process of satisfying his desires. Production is
the drawing forth of desired things, of Wealth, from the I/and ;
consumption is the returning back of those things to the I/and.
If ' ' All labor is but the movement of particles of matter from one
place to another." — Dick's Outlines, p. 25. \ "Production con-
sists merely in changing things." — Ely's Intro., partii,ch.i;
Mill's Prin., book i, ch. i, sec. 2. If " As man creates no new
matter but only utilities^ so he destroys no matter, but only utili-
ties. Consumption means the destruction of utility." — Ely's
Intro. , part v, ch. i, p. 268. If Production means ' ' drawing forth. ' '
—Jevons's Primer, sec. 17. f "Man cannot create material things.
Appendix 1 09
. . His efforts and sacrifices result in changing the form or
arrangement of matter to adapt it better for the satisfaction of
wants." — Marshall's Prin., book it, ch. in, sec. 1. V It is
sometimes said that traders do not produce ; that while the cabi-
net maker produces furniture, the furniture dealer merely sells
what is already produced. But there is no scientific foundation
for this distinction."' — Id. 1f"As his [man's] production of
material products is really nothing more than a rearrangement of
matter which gives it new utilities, so his consumption of them is
nothing more than a disarrangement of matter which diminishes
or destroys its utilities."— /tf. 1 "In like manner as by produc-
tion is meant the creation not of substance but of utility, so by con-
sumption is meant the destruction of utility and not of substance
or matter." — Say's Trea. , book ii, ch. i. 1 "All that man can do
is to reproduce existing materials under another form, which may
give them a utility they did not before possess, or merely enlarge
one they may have before presented. So that in fact there is a
creation not of matter but of utility ; and this I call production
of wealth. . . There is no actual production of wealth without
a creation or augmentation of utility. " — Say's Trea., book i, ch. i.
73. Isn't it significant that while Robinson Crusoe had un-
satisfied wants he was never out of a job?
74. Demand for consumption is satisfied not from hoards of
accumulated wealth, but from the stream of current production.
Broadly speaking there can be no accumulation of wealth in the
sense of saving up wealth from generation to generation. Ima<]ine
a man satisfying his demand for eggs from the accumulated stores
of his ancestors ! Yet eggs do not differ in this respect from other
forms of wealth, except that some other forms will keep a little
longer, and some not so long. The notion that a hoarding instinct
must be aroused before the great and more lasting forms of wealth
can be brought forth is a mistake. Houses and locomotives, for
example, are built not because of any desire to accumulate wealth,
but because we need houses to live in and locomotives to trans-
port us and our goods. It is not the saving, but the serving,
instinct that induces the production of these things; the same
instinct that induces the production of a loaf of bread. 1f Artificial
things do not save. No sooner are the processes of production
from land complete than the products are on their way back to
the land. If man does not return them by means of consumption,
then through decay they return themselves. Mankind as a whole
1 1 0 The Taxation of Land Values
lives literally from hand to mouth. What is demanded for con-
sumption in the present must be produced by the labor of the
present. From current production, and from that alone, can
current consumption be satisfied. ' ' Accumulated wealth ' ' is, in
fact, not wealth at all in any considerable degree. It is merely
titles to wealth yet to be produced, A share of stock in a mining
company, for example, is but a certificate that the owner has an
undivided property interest in a natural mineral deposit and the
machinery constructed to operate a mine there, and that he is
legally entitled to a proportion of the wealth produced and to
be produced from that deposit. Titles to future wealth may
be both legally and morally valid. This is so when they
represent past labor or its products loaned in free contract for
future labor or its products; for example, a contract for the
delivery of goods of any kind to-day to be paid for next week,
or next month, or next year, or in ten years, or later. Or they
may be legally but not morally valid. This is so when they repre-
sent the profits of a franchise (whether paid for in labor or not)
to exact tribute from future labor ; for example, a franchise to
confiscate a man's labor through ownership of his body, as in
slavery, or a franchise to confiscate the products of labor in gen-
eral through ownership of land. Or they may be both legally and
morally invalid, as when they are obtained by illegal force or
fraud from the rightful owner.
75. If it be asked how Personal Servants can draw the food
out of the retail stores unless they have money, let the questioner
inform himself as to the ways in which business is done. No man,
unless he be a notorious cheat or in extraordinary bad luck, needs
money in order to obtain goods at retail stores, provided he has
or can presently get profitable employment. All he needs is em-
plojinent, or an early prospect of employment, and a reputation
for honesty. There is therefore no unwarranted assumption in
the example, even if we exclude the use of money from consider-
ation. See Note 77.
76. Farmers, millers, bakers, ranchers, butchers, fishermen,
hunters, makers of food-producing implements, food merchants,
railroad men, sailors, draymen, coal miners, metal miners, build-
ers, bankers who by exchanging commercial paper facilitate trade,
together with clerks, bookkeepers, foremen, journeymen, com-
mon laborers, and other hired workmen in all these various
branches of food production, find work seeking for them instead
Appendix 1 1 1
of their seeking for work. To specify the labor that would be
profitably affected by this demand would involve the cataloguing
of all workmen, all business men, and all professional men who
either directly or indirectly are connected with food industries,
and the naming of every grade of such labor, from the newest
apprentice to the largest supervising employer. Would not this
be putting an end to ' ' hard times ' ' ? For what is the most
striking manifestation of ' ' hard times ' '? Is it not ' ' scarcity of
work " ? Is it not that there are more men seeking work than
there are jobs to do? Certainly it is. And to say that, is not to
limit " hard times" to hired men. The real trouble with the
business man when he complains of ' ' hard times ' ' is that peo-
ple do not employ him as much as he expects to be employed.
Work is scarce with him, just as with those he employs, or as he
would phrase it, ' ' business is slack. ' ' I^et there be ten men and
but nine jobs, and you have "hard times." The tenth man will
be out of work. He may be a good union man who abhors a
"scab" and will not take work away from his brother workman.
So he hunts for a job which does not exist, until all his savings
are gone. Still he will not be a "scab," and he suffers depriv-
ation. But after a while hunger gets the better of him, and he
takes one of the nine jobs away from another man by underbid-
ding. He becomes a "scab." And who can blame him? any
one would rather be a " scab ' ' than a corpse. Then the man
who has lost his place becomes a * ' scab ' ' too, and turns out
some one else by underbidding. And so it goes again and again
until wages fall so low that they but just support life. Then the
poor house or a charitable institution takes care of the tenth man,
who thereafter serves the purpose of a possible labor competitor to
prevent a rise in wages. Meanwhile, diminished purchasing pow-
er, due to low wages, bears down upon business generally. But
let there be ten jobs and but nine men. Conditions would be in-
stantly reversed. Instead of a man all the time seeking a job, a
job would be all the time seeking a man ; and wages would rise
until they equaled the value of the work for which they were
paid. And as wages rose, purchasing power would rise, and
business in general would flourish. If general demand freely
directed general production, there would always be ten jobs for
nine men, and no longer only nine jobs for ten men. It could
not be otherwise while any wants were unsatisfied.
77. The mechanism of these exchanges should be explained :
Personal Servants upon demanding food may pay money for
1 1 2 The Taxation of Land Values
it. The retailers might thereupon pass the money along, and it
would ultimately return to Personal Servants. Or the Personal
Servants may give notes payable at a future time, which being
endorsed over would at last be redeemed by them in services.
Or they may give checks on banks, which assumes previous work
done by them or the discounting of their notes by the banks. As
the world's exchanges are almost wholly adjusted by means of
checks, and other commercial paper which is in effect the same as
checks, let us illustrate that mode by a series of charts adapted
from Jevons. If We will begin with two traders, A and B. They
have no money, but every time that one demands anything of the
other he must offer in exchange something that the other wants.
There must be what is called ' ' a double coincidence ' ' of demand
and supply ; each must want what the other has. This is primi-
tive barter. It may be represented by the following chart :
-B
In the civilized state, even in its beginnings, primitive barter
must be obstructive to trade, and it gives way to the use of cur-
rency—some common medium which is taken for goods not be-
cause the taker wants it but because he knows that he can read-
ily exchange it for the goods that he does want. With cur-
rency in use, when A wants anything of B he is not obliged to
find something that B wants. All he needs is currrency. Thus
currency reduces the friction of trading.
But as the volume of trade augments, demand for currency in-
creases ; and because it is scarce, or troublesome or dangerous to
transmit, or all together, easier means of exchange are resorted
to, and bookkeeping takes the place of currency as currency took
the place of primitive barter. At this stage, when A wants any-
thing of B, B charges him ; and when B wants anything of A, A
charges him. Their mutual accounts being adjusted, the small
balance is paid with currency. Thus the demand for currency is
greatly lowered by bookkeeping, and the friction of trading is
correspondingly reduced.
Now let us bring in two more traders, C and D :
Though all four of these traders
keep mutual accounts, the settlement
of balances requires more currency
than before, and scarcity of currency,
Appendix
113
together with the danger and expense
of transmission, evolves an extension
of bookkeeping. A common book-
keeper, called a ' ' Bank, ' ' is employed,
and all need for currency disappears:
Balances are now settled by checks, and all accounts are ad-
justed in the central ledger at the bank.
But the introduction of another group of traders, another
community, renews the demand for currency, and another bank
appears. Thus:
&AMK
And now the two banks are in the same position that A and
B were in before any bank came. They keep mutual accounts,
but they must have currency to settle their balances. And if we
bring in more communities the demand for currency further in-
creases. Thus :
Now the four banks are in the same situation that A, B, C
and D were in before there were any banks. This evolves a
bank of banks — a clearing house :
114
The Taxation of Land Values
All necessity for currency once more disappears.
These charts illustrate the principle by which mutual trading
is effected. In practice, the need of currency is never wholly
done away with, but the tendency is constantly in the direction of
doing away with it. And it is said that over ninety per cent, of
the trading transactions of the world are adjusted in this manner,
and less than ten per cent, by means of currency.
The clearing-house principle extends over the civilized world.
In illustration of this, observe the following chart :
NEW YORK
BERllfl
PAWS
Appendix 1 1 5
These five cities are like the five banks. The bookkeeping of
each city is conducted by local banks and clearing-houses, and the
central bookkeeping by those of the market town of the world,
which at present is lyondon. In this way the mobility of labor is
in effect enormously increased. Ivabor in every corner of the
world is brought into close trading relations with labor everywhere
else, so that only war, pestilence, protection and land monopoly
interfere with the full freedom of its movement.
78. Personal Servants, on the basis of their employment by
Ivuxury-makers demand more food, which keeps Food- makers
at work ; Food-makers demand more clothing, which keep8
Clothing-makers at work ; Clothing-makers demand more shelter,
which keeps Shelter-makers at work ; Shelter-makers demand
more luxuries, which keeps L/uxury-makers at work ; I/uxury-
makers demand more services, which keeps Personal Servants at
work. And so on indefinitely. If now we add progressive inven-
tion, so that every one produces more and more wealth with less
and less labor, instead of finding poverty upon the increase, in-
stead of being harried by periodical "hard times," we shall find
business brisk and every one becoming richer and richer. That
is to say, though all work less than before, each obtains better
results from others while giving better results in exchange. And
should we improve the verisimilitude of the illustration by bring-
ing in the fact that all workers in civilized society are specialists
in a much more minute degree than the division into Clothing-
makers, Food-makers, etc., would imply — that every one who
works does over and over some one thing in one of these branches,
as the making of shoes or the baking of bread, or even only part
of a thing, as the cutting of shoe soles, and that while giving out
a great deal of his own product he demands in pay a little of every
other kind of product — the same effect would regularly result.
Every man who demands anything for consumption thereby
determines the direction of I^abor toward the production not only
of that thing, but also of all the artificial materials and implements,
from the simplest tool to the most expensive and complex mach-
ines that are used in its production. The actual process is much
more intricate than that of the charts, but the charts illustrate the
principle so that any intelligent person who understands them can
apply it to the most complex affairs of industrial life, f ' ' This
principle is so simple and obvious that it needs no further illus-
tration, yet in its light all the complexities of our subject disap-
pear, and we thus reach the same view of the real objects and
1 1 6 The Taxation of Land Values
rewards of labor in the intricacies of modern production that we
gained by observing in the first beginnings of society the simpler
forms of production and exchange. We see that now, as then,
each laborer is endeavoring to obtain by his exertions the satis-
faction of his own desires ; we see that although the minute div-
ision of labor assigns to each producer the production of but a
small part, or perhaps nothing at all, of the particular things he
labors to get, yet, in aiding in the production of what other pro-
ducers want, he is directing other labor to the production of the
things he wants — in effect, producing them himself. And thus if
he makes jackknives and eats wheat, the wheat is really as much
the produce of his labor as if he had grown it for himself and left
wheat-growers to make their own jackknives." — Progress and
Poverty, book i, ch. iv.
79. There is no end to man's wants. IP'The demand for
quantity once satisfied, he seeks quality. The very desires that he
has in common with the beast become extended, refined, exalted.
It is not merely hunger, but taste, that seeks gratification in food ;
in clothes, he seeks not merely comfort, but adornment ; the rude
shelter becomes a house ; the undiscriminating sexual attraction
begins to transmute itself into subtile influences, and the hard
and common stock of animal life to blossom and to bloom into
shapes of delicate beauty." — Progress and Poverty , book ii,ch. iii.
f A labor agitator was arguing the labor question with a rich man,
the judge of his county, when the judge as a clincher asked :
"What do workingmen want, anyway, that they haven't got? "
Promptly the agitator replied with the counter-question : ' ' Judge,
what have you got that you don't want? "
80. Regarding society as a unit, the operation of the law is
no less indisputable in social than in solitary conditions. The
demands of society as a whole determine the degree of activity
for each department of production, much as Robinson Crusoe's
demand for baskets imposed greater activity upon his arms than
upon his legs, or as his demand for goats imposed greater activity
upon his legs than upon his arms. But it is not necessary to
regard society as a unit in order to see that in the social as in the
solitary state, labor in production is expended in the direction of
demand for consumption. Each individual, in the social as in the
solitary state, produces the identical wealth that he demands for
consumption. The man, for example, who wants a coat, and to
get it makes shoes that he does not want, but with which he hires
Appendix 1 1 7
some one to make him a coat, really produces the coat ; while he
who wants shoes, and to get them makes coats which he does not
want, but which he trades for shoes, really produces shoes.
Similarly, through the whole range of industry, each individual
hires other individuals to do what he wants done, and pays for it
by doing for others what they want done. The condition is one of
reciprocal hiring. Under the common sense legal maxim, qui
facit per alium facit per se (what one does by another he does
himself), as sound in economics as in jurisprudence, each laborer,
by inducing others to make the things that he demands, in order
to exchange them for what he makes, really produces what he
demands. But for his demands, supplemented by his labor, these
things would not be produced. True it is that in general trade
goods are usually made in advance of specific demand for them.
But it would be superficial reasoning to infer from this that pro-
duction determines consumption instead of being determined by
it. The collection of commodities in the market is analogous to
the collection of water in reservoirs for the accommodation of in-
habitants of cities. Water is so collected in advance of specific
demand, not to induce the people to consume water, but because,
being accustomed to consuming water, they make a steady demand
for it. And this demand determines the supply. There are large
reservoirs for large cities and small ones for small cities. So with
the commercial reservoir. Stores are filled with goods in advance
of specific demand, not to induce demand but in obedience to it.
There is an approximate constancy to the demand for wealth,
upon which labor relies, and in consequence of which wealth is
continually in process of completion. Though orders be supplied
from existing stock, the stock is at once replenished in accordance
with the demand upon it. And this is equivalent to the proposi-
tion that demand for consumption determines the direction in
which labor will be expended in production. . For it makes no
difference in economic principle whether a shoe dealer takes his
customer's measure and makes him a pair of shoes, or keeps
shoes in stock, and when he sells a pair buys another like them.
In either case the shoe dealer is providing shoes pursuant to order.
In the one he anticipates the order and has the goods ready when
they are called for ; in the other he obliges his customer to wait
until the goods can be made. Though production may often seem
to precede demand, as when goods are stored months in advance
of any possible demand for consumption, and may sometimes pre-
cede it actually, as when a new nostrum is placed upon the market,
1 1 8 The Taxation of Land Values
the fact remains that general production in any direction rises and
falls with the rise and fall of general demand for consumption — in
other words, is determined by that demand. And this law regu-
lates the supply of wealth not only as to quantity, but also as to
quality and variety.
81. "This, then, we may say is the great law which binds
society — 'service for service.' " — Dick's Outlines, p. 9.
82. In the light of this principle how absurd are some of the
explanations of hard times. Overproduction! when an infinite
variety of wants are unsatisfied which those who are in want are
anxious and able to satisfy for one another. Hatters want bread,
and bakers want hats, and farmers want both, and they all want
machines, and machinists want bread and hats and machines, and
so on without end. Yet while men are against their will in par-
tial or complete idleness, their wants go unsatisfied ! Since pro-
ducers are also consumers, and production is governed by demand
for consumption, there can be no real overproduction until demand
ceases. The apparent overproduction which we see — overproduc-
tion relatively to ' ' effective demand ' ' — is in fact a congestion of
some things due to an abnormal underproduction of other things,
the under production being caused by obstruction in the way of
L/abor. Scarcity of capital! when makers of capital in all its
forms are involuntarily idle. Scarcity of capital, like scarcity of
money, is only a loose expression for lack of employment. But
why should there be any lack of employment while men have
unsatisfied wants which they can reciprocally satisfy? Too much
competition ! when competition and freedom are the same. It is
not freedom but restraint, not competition but monopoly, that
obstructs the action and reaction of demand and supply which we
have illustrated in the chart.
83. See page 13 of the text, and Notes 15 and 16 of Appendix.
84. Demand for food is not only demand for all kinds and
grades of Food-makers, but also for as many different kinds of
land as there are different kinds of labor set at work. So a
demand for clothing is not only a demand for Clothing- makers, a
demand for shelter is not only one for Shelter- makers, a demand
for lyuxuries is not only one for I/uxury- makers, a demand for
services is not only one for Personal Servants, but these demands
are also demands for appropriate land — pasture land for wool, cotton
land for cotton, factory land, water fronts, railroad rights of way,
Appendix 1 1 9
store sites, residence sites, office sites, theater sites, and so on to
the end of an almost endless catalogue.
85. See pages 16 and 17 of text, and Notes 23 and 24 of
Appendix.
86. Persons with socialistic inclinations argue that while it is
true that L/abor and lyand are the only things necessary in primi-
tive conditions, Capital also is necessary in civilized conditions.
(See ante. Note 54.) And some of them want to know, sometimes
with something like a sneer, what clerks and mechanics and book-
keepers and other specialists in our highly organized industry
would do with land even if it were freely open to them. ' ' They
don't know how to make food, and they can't eat sand! " I once
heard a socialist exclaim. The same notion is widespread among
that large class of single tax opponents in church and college
whom the late Wm. T. Croasdale described as ' ' people who
believe in socialism, but don't believe in putting it into practice. "
The idea is best expressed perhaps by a brilliant socialistic writer,
Charlotte Perkins Gilman, in the following lines :
1 ' Free land is not enough. In earliest days
When man, the baby, from the earth's bare breast
Drew for himself his simple sustenance,
Then freedom and his effort were enough.
The world to which a man is born to-day
Is a constructed, human, man-built world.
As the first savage needed the free wood,
We need the road, the ship, the bridge, the house,
The government, society, and church, —
These are the basis of our life to-day —
As much necessities to modern man
As was the forest to his ancestor.
To say to the new born, ' Take here your land ;
In primal freedom settle where you will,
And work your own salvation in the world ; '
Is but to put the last-come upon earth
Back with the dim fore-runners of his race,
To climb the race's stairway in one life!
Allied society owes to the young —
The new men come to carry on the world —
Account for all the past, the deeds, the keys,
Full access to the riches of the earth.
Why? That these new ones may not be compelled
1 20 The Taxation of Land Values
Each for himself to do our work again ;
But reach their manhood even with to-day,
And gain to-morrow sooner. To go on, —
To start from where we are and go ahead —
That is true progress, true humanity."
— In This Our World.
If one man were turned loose alone upon the earth, or shut
off from trading with his fellows, it might in great degree be
true, as Mrs. Gilman says, that he would be put ' ' back with the
dim forerunners of his race, to climb the race's stairway in one
life ; ' ' but her criticism does not apply to millions of free men
who freely trade. To them the land would be enough. Even
though they were denied existing roads and ships and bridges and
houses, they would soon make new ones, and starting "from
where we are," would "go ahead." For free land means access
to all natural materials and forces, and free trade means unob-
structed industrial intercourse between laborer and laborer. These
are the essential conditions, the only conditions, of all produc-
tion— even of the most civilized. The root of the socialistic idea is
the thought that we are dependent for modern life upon accumulated
capital. This is a mistake. Modern life depends, not upon accum-
ulated capital, but upon accumulated knowledge made effective
by interchange of labor. A laborer who operates some great
machine seems to be dependent upon the owner of his machine
for opportunity to work ; but the only people upon whom he really
depends are laborers who are competent co-operatively to make
such machines, and who have access to both the land from which
the materials must be drawn and that upon which they must
group themselves while doing the work. When socialists lay
stress upon the importance of accumulated capital they are attrib-
uting to accumulated capital the power that resides in land and
trade ; for to control these is to command the benefits of accumu-
lated knowledge. Since the production of a machine precedes its
use, the inference is almost irresistible, upon a superficial consid-
eration, that opportunities to labor and compensation for labor
are governed by the existing supplies of machinery to which labor
is allowed access. But this is of a piece with the old notion of
classical political economy that opportunities to labor are depend-
ent upon the existing supplies of subsistence that are devoted to
the maintenance of laborers. The inference is wrong in either
form. When we once grasp the essential truth of the law illus-
trated in the text, that the production of subsistence, or machinery,
Appendix 1 2 1
or any other unfinished object, that is to say, of Capital, is but a
form of general wealth production, and that all forms of wealth
production are in obedience to demand, we clearly see that labor
is in no respect dependent upon Capital either for employment or
compensation. In the social as in the solitary state, L/abor and
L/and are the only factors of wealth production. It is not Capital
but L/and that supplies materials to L/abor for its subsistence and
its machinery. Instead of capitalists supplying laborers with
subsistence and machinery, laborers themselves continuously pro-
duce subsistence and machinery from the materials that land sup-
• plies. Capitalists neither employ nor pay laborers ; laborers
employ and pay one another, f Keir Hardie, the distinguished
L/abor member of the British Parliament, once objected in a public
speech that while the Single Tax considers the relation of men to
the land it ignores the relation of men to one another. For the
the latter reason he considered himself as ' ' more than a Single
Taxer. ' ' Mr. Hardie had evidently ignored the fact that the Single
Tax includes the principle of free trade ; or else the fact that free
trade, supplementing free land, would accomplish with reference
to the relations of men to men what he criticized the Single Tax
for ignoring. Free trade is that phase of the Single Tax which
considers the relation of men to men, even as its other phase con-
siders the relation of men to the land. \ Much of the Socialistic
misapprehension of the Single Tax is due to confusions of I/and
with Capital, as if they were identical. For business purposes
this identification is immaterial. Whether the "capital" of a
business house consists, for instance, of the money value of land,
or of machinery, etc., or of both, makes no difference so far as
the mere question of marketable assets is concerned. But when
the question is political, the difference is very great. Taxation,
for instance, operates upon land values and machine values quite
differently ; and rights of ownership have a different moral sanc-
tion and different industrial origins and economic effects. For
political purposes the difference between land as the natural
environment and opportunity for Labor ^ and artificial tools as
products of labor must be distinct. \ Most of the so-called
' ' capital ' ' of our time is not Capital in contradistinction to I/and ;
it is land the value of which is capitalized. In every effective
instance of the power of Capital over L/abor, the capital mentioned
consists of a commercial mixture of artificial capital and natural
capital — of machinery produced by L/abor and land produced by
Nature. The commercial mixture is effected by means of evidences
1 22 The Taxation of Land Values
of title, such as railroad stocks which represent tracks, etc., (labor
products), and grants of exclusive rights of way (land); and it is
the land titles hidden in those stocks that are greatest if the rail-
road is at all a capitalistic menace. To insist that Capital (as distin-
guished from L/and) is monopolistic because "capital ' ' , the commer-
cial mixture of land and labor products, is so, seems very much like
asserting that soda water is intoxicating because men may get drunk
on whisky and soda, f The object of Socialism and that of the
Single Tax is the same — abolition of the exploitation of labor. The
Single Tax proposal proceeds upon the theory that abolition of land
monopoly will abolish exploitation of labor. Socialists insist that
abolition of capital monopoly also is necessary. This is conceded
by Single Tax advocates, but they consider that abolition of land
monopoly makes monopoly of capital impossible. In reply,
Socialists point to powerful capitalists who own little land ; to
which the Single Taxer responds that their ' ' capital ' ' proves to be
nearly all land when you investigate the source of their incomes.
Apart, however, from socialistic misapprehensions as to the seat
of capitalistic power, Socialism sets up a demand for government
by the labor class. If by this is meant hired man class alone, the
Single Tax advocate would disagree ; but in so far as Socialism
does not make that limitation, the Single Tax advocate agrees.
Tf The one solid rock upon which the Single Tax theory rests, more-
over, is that no socialistic progress can be secure, however good it
may be in itself, unless it is preceded or accompanied by abolition
of land monopoly. Control of the land is the corner stone of all
power. Because it rests upon land monopoly Capital is formidable ;
until land monopoly is abolished, L/abor will be weak. Karl
Marx told the whole story in a few words when in his Gotha-
platform letter, reprinted in the National Socialist Review
(Chicago, May, 1908), he said: "In the society of to-day, the
means of labor are monopolized by the landed proprietors.
Monopoly of landed property is even the basis of monopoly of
capital and by the capitalists." ^f Read " Progress and Poverty,"
book i, chs. iii, iv, and v. Also read ' ' The Story of My Dicta-
torship," chs. v, vi, vii, and viii.
PART THREE, CHAPTER IV, PAGES 35 TO 47
87. " What is paid for labor of any kind is called wages. We
are apt to speak of the payments given to the common day laborer
only as wages ; and we give finer names to payments made for
Appendix 1 23
some other kinds of service. Thus we speak of the doctor's or
the lawyer's fee ; of the judge's salary ; of the teacher's income ;
of the merchant's profit; of the banker's interest, and of the
professor's emoluments. They are all in reality only payments
for labor of different kinds, or for different results of labor, —
that is, they are all wages."— Dick's Outlines, p. 23. 1 "Wages
is what goes to pay for the trouble of labor."— Jevons's Primer,
sec. 39. l"His [the manager's] share is called the wages of
superintendence, and although usually much larger than the share
of a common laborer, it is really wages of the same nature." — Id. ,
sec. 41. V'The common meaning of the word wages is the
compensation paid to a hired person for manual labor. But in
political economy the word wages has a much wider meaning, and
includes all returns for exertion. For, as political economists
explain, the three agents or factors in production are land, labor
and capital, and that part of the produce which goes to the second
of these factors is styled by them wages. . . It is important to
keep this in mind. For in the standard economic works this
sense of the term wages is recognized with greater or less clear-
ness only to be subsequently ignored." — Progress and Poverty,
book i, ch. ii.
88. Rent ' ' is what is paid for the use of a natural agent,
whether land, or beds of minerals, or rivers, or lakes. The rent
of a house or factory is, therefore, not all rent in our meaning of
the word." — Jevons^s Primer, sec. 40. l"The term rent in its
economic sense . . differs in meaning from the word rent as
commonly used. In some respects this economic meaning is nar-
rower than the common meaning ; in other respects it is wider.
It is narrower in this : In common speech, we apply the word
rent to payments for the use of buildings, machinery, fixtures,
etc. , as well as to payments for the use of land or other natural
capabilities ; and in speaking of the rent of a house or the rent of
a farm, we do not separate the price for the use of the improve-
ments from the price for the use of the bare land. But in the
economic meaning of rent, payments for the use of any of the
products of human exertion are excluded, and of the lumped pay-
ments for the use of houses, farms, etc., only that part is rent
which constitutes the consideration for the use of the land — that
part paid for the use of buildings or other improvements being
properly interest, as it is a consideration for the use of capital.
It is wider in this : In common speech we only speak of rent
when owner and user are distinct persons. But in the economic
1 24 The Taxation o Land Valu e s
sense there is also rent where the same person is both owner and
user. Where owner and user are thus the same person, whatever
part of his income he might obtain by letting the land to another
is rent, while the returns for his labor and capital are that part of
his income which they would yield him did he hire instead of
owning the land. Rent is also expressed in a selling price. When
land is purchased, the payment which is made for the ownership,
or right to perpetual use, is rent commuted or capitalized. If I
buy land for a small price and hold it until I can sell it for a large
price, I have become rich, not by wages for my labor or by inter-
est upon my capital, but by the increase of rent. Rent, in short,
is the share in the wealth produced which the exclusive right to
the use of natural capabilities gives to the owner. Wherever land
has an exchange value there is rent in the economic meaning of
the term. Wherever land having a value is used, either by owner
or hirer, there is rent actual ; wherever it is not used, but still
has a value, there is rent potential. It is this capacity of yielding
rent which gives value to land. Until its ownership will confer
some advantage, land has no value." — Progress and Poverty,
book Hi, ch. ii.
89. " The primary division of wealth in distribution is dual,
not tripartite. Capital is but a form of labor, and its distinction
from labor is in reality but a subdivision, just as the division of
labor into skilled and unskilled would be. In our examination we
have reached the same point as would have been attained had we
simply treated capital as a form of labor, and sought the law
which divides the produce between rent and wages ; that is to say,
between the possessors of the two factors, natural substances and
powers, and human exertion — which two factors by their union
produce all wealth. — Progress and Poverty, book Hi, ch. v.
^ Care must be taken not to confuse the hire of a house, com-
monly and legally termed "rent, " with economic Rent. House
rent is really Wages ; it is compensation for the labor of house
building. But economic Rent is not compensation for anything
the owner does ; it is simply differential premiums for the varying
advantages of different locations.
90. Ivand of every kind may vary in desirableness from other
land of the same kind. Certain farming land, for example, is so
fertile that it will yield to a given application of labor two bushels
of wheat to every bushel that certain other farming land will
yield ; and it is obvious that, other things being equal, farmers
Appendix 1 25
would prefer the more fertile land. But some fertile land lies so
far away from market that less fertile land lying nearer is more
productive, because it costs less to exchange its products for what
their producer demands ; in such cases farmers would prefer the
less fertile land. The same principle applies to all kinds of land.
Building lots at or near a center of residence or business are pref-
erable for most purposes of residence or business to lots equally
good in other respects which are far away. Now, the land thajt is
preferable is of course most in demand ; and if it be all in use,
with demand for it unsatisfied, competition for the preference sets
in, and gives value to it. All land cannot be equally desirable. Some
excels in fertility. Some is rich with mineral deposits, a species
of fertility. On some, towns and cities settle, thereby adding to
the productiveness of the labor that uses it, because these sites
are thus made centers of co-operation or trade. And yet produc-
tion in the civilized state requires that the producer shall have
exclusive possession of the land he needs. This necessity inevit-
ably gives to some people more desirable land than others have,
even though all should have an abundance. Consequently the
returns to equal labor are unequal. The man who has land that
is more fertile or better located than that of another gets more
wealth than the other in return for a given expenditure of labor.
If, for example, one with given labor produces 10 bushels of corn
from fertile land, equal, say, to $5 worth of any kind of wealth in
the market, and the other with the same labor produces 8 bushels
of corn, or $4 worth of any kind of wealth in the market, the first
receives 2 bushels (or $1) more for his labor than the other
receives for his, though each labors with equal effort, skill, and
intelligence. Or, if the fertility of the land be the same, but its
situation in reference to the market be such that the cost of trans-
portation still preserves the relation of $5 to $4, the same inequal-
ity of wages results. It is this phenomenon that gives rise to
Rent. Rent is the market value of just such differences in the quality
of opportunity as are here illustrated. It is a premium for choice
land, for preferential locations, for site, for space. This premium
is a very different thing from compensation for individual labor.
Nor is the difference modified when premium-owners first obtain
Wages for work, and with them buy the premium-commanding
land. Rent can no more be turned into compensation for individ-
ual labor by exchanging labor products for mere legal power to exact
it, than a man can be turned into Wealth by exchanging Wealth
for him. Whether the fruits of purchase or of conquest or of
1 26 The Taxation of Land Values
fraud, Rent always constitutes that part of Wealth which is de-
ducted from current production as premiums for superior oppor-
tunities for production. Wages and Rent are both drawn from
Wealth, and both go often to the same individual and in the same
form of payment, as when a freehold farmer consumes the grain
he raises from more fertile land than his neighbors have, or a city
freeholder occupies or receives hire from his house and lot ; but
Wages flow from Wealth to labor as compensation for production,
while Rent flows from Wealth to land-monopolists in premiums
for allowing I/abor to produce Wealth from superior locations.
Wages are appurtenant to Labor ; Rent is appurtenant to I/and.
It is as laborer that the individual takes Wages, but as land-
monopolist that he takes Rent.
91. A unit of labor cannot be definitely measured save by
the value of some labor product. The day's labor of one may
produce less than an hour's labor of another. But for purposes
of illustration it is competent to refer to a unit of L/abor force as
an abstraction, intending thereby to denote all the Labor of muscle
and brain requisite to acquire the necessary knowledge and skill
and to produce wealth to a given value from given natural sources.
92. "No land ever pays rent unless in point of fertility or
situation it belongs to those superior kinds which exist in less
quantity than the demand." — Mill's Prin., book ii, ch. xvi, sec. 2.
1 ' ' The produce of labor constitutes the natural recompense or
wages of labor. In that original state of things which precedes
both the appropriation of land and the accumulation of stock, the
whole produce of labor belongs to the laborer." — Smith's Wealth
of Nations, book i, ch. viii. 1 ' ' Rent or land value does not
arise from the productiveness or utility of land. It in no wise
represents any help or advantage given to production, but simply
the power of securing a part of the results of production. No
matter what are its capabilities, land can yield no rent and have
no value until some one is willing to give labor or the results of
labor for the privilege of using it ; and what any one will thus
give, depends not upon the capacity of the land, but upon its
capacity as compared with that of land that can be had for noth-
ing. I may have very -rich land, but it will yield no rent and
have no value so long as there is other land as good to be had
without cost. But when this other land is appropriated, and the
best land to be had for nothing is inferior, either in fertility,
situation or other quality, my land will begin to have a value and
Appendix 1 27
yield rent. And though the productiveness of my land may de-
crease, yet if the productiveness of the land to be had without
charge decreases iu greater proportion, the rent I can get, and
consequently the value of my land, will steadily increase. Rent,
in short, is the price of monopoly, arising from the reduction to
individual ownership of natural elements which human exertion
can neither produce nor increase." — Progress and Poverty, book
Hi, ch. ii.
93. "Rent is the effect of a monopoly; though the monopoly
is a natural one, which may be regulated, which may even be
held as a trust for the community generally, but which cannot
be prevented from existing. . . If all the land of the country
belonged to one person he could fix the rent at his pleasure.
The effect would be much the same if the land belonged to so few
people that they could and did act together as one man and fix
the rent by agreement among themselves. . . The only
remaining supposition is that of free competition. " — Mill's Prin.,
book ii, ch. xvi, sec. 1. 1 Rent "considered as the price paid for
the use of land is naturally a monopoly price. ' ' — Smith's Wealth of
Nations, book i, ch. xi.
94. The line of separation between the poorest land thus
commanding a premium, and the best land for which labor will
not pay a premium, was formerly called the "margin of cultiva-
tion," probably because the law of rent was not understood with
reference to any but agricultural land ; but it may now be better
called the "margin of production," since the law of rent applies
to all kinds of land, including, of course, the building lots of
cities. The premium for land falls not into the fund termed
Wages, but into the fund termed Rent. When Rent appears,
Wages consists not of the entire product of labor, but of so much
of that product as might with the same expenditure of labor force
be produced from the best land that commands no premium. The
remainder goes to the owners of the land from which it is in
fact produced, in proportion to the advantages which their
land respectively contributes to its production. This excess is
the premium. It is what constitutes Rent as distinguished
from Wages. And both the amount of the general fund Rent,
and the amount of rent which each land-owner obtains, are deter-
mined by the competition of I/abor for superior opportunities.
Thus, in the beginnings, all Wealth would be Wages ; but as
labor was forced from better to poorer lands, or, what is the same
1 28 The Taxation of Land Values
thing in its principle of operation, as greater capabilities attached
to particular lands in consequence of social development, good
government, industrial improvement, etc. , Rent would arise, and
as a proportion of the gross Wealth-product, would increase as
I/abor was forced to poorer land or new capabilities were added to
land by society. The law derived from these phenomena is known
as Ricardo's law of rent. Henry George formulates it as follows :
' ' The rent of land is determined by the excess of its produce
over that which the same application can secure from the least
productive land in use." — Progress and Poverty, book Hi, ch. ii.
H As will be noticed, the law is the law of Wages as well as the law
of Rent. For whatever determines the proportion of Wealth
taken as Rent necessarily determines the proportion left as Wages.
With reference to that part of this note which reads, "as greater
capabilities attached to particular lands in consequence of social
development, good government, industrial improvement, etc.," a
British student of the subject, A. W. Madsen, has asked this
question : ' ' As Labor and Land are the two factors in the produc-
tion of Wealth, is it not a mistake to say that these new capabili-
ties will be added to land rather than to Labor ? " In explanation
of this question, he adds: " If new capabilities were added to all
land, including the land at the margin of cultivation, does it fol-
low that Rent will rise? It seems that Rent would rise on all
land above the margin only if new capabilities were added to that
land in varying proportions. ' ' Taking my statement as it appeared
in previous editions of this book, and as I retain it here for purposes
of correction, I think the criticism may be sound ; for I seem to
have mentioned the value of greater capabilities attaching to par-
ticular land as added to land in general. I might be understood,
therefore, as implying that they would be evenly instead of differ-
entially distributed in Rent. The statement should be altered so as
to read : "As greater capabilities attached to particular lands in
consequence of social development, good government, industrial
improvement, etc. , Rent on the particular land so affected would
arise or increase ' ' , etc. The concrete illustration is a city. Mr.
George summarizes this point ( ' ' Progress and Poverty, ' ' ch. ii of
book iv, p. 241) as follows: "To recapitulate: The effect of in-
creasing population upon the distribution of wealth is to increase
rent, and consequently to diminish the proportion of the produce
which goes to capital and labor, in two ways : First, By lowering
the margin of cultivation. Second, By bringing out in land special
capabilities otherwise latent, and by attaching special capabilities
Appendix 1 29
to particular lands. I am disposed to think that the latter mode,
to which little attention has been given by political economists,
is really the more important. ' '
95. Though figures are used, these charts are to be under-
stood not as mathematical demonstrations , but simply as sugges-
tive illustrations.
96. The labor that was forced to the poorest lands would
continually bid for the opportunities that the better lands offered,
until an equilibrium was reached at the point shown in the pre-
vious chart, where the given expenditure of labor is as well com-
pensated in one place as in another. If laborer and land-owner be
different persons, the laborer receives what is distinguished as
Wages, and the land-owner what is distinguished as Rent. If the
same person, he receives Wages as laborer and Rent as land-
owner.
97. But we must not jump to the conclusion that there is any
essential wrong in Rent. Rent is nature's method of measuring
the value of the differences in natural opportunity which different
laborers, owing to variations in land, are obliged to accept. And,
what in practice is more important, it is nature's method of meas-
uring the value to each individual of those advantages which con-
sist in accumulations of common knowledge, in co-operative effort,
in good government, in a word, in the benefits that society as a
whole confers as distinguished from those which each individual
earns. The question is not one of the rightfulness or the wrong-
fulness of Rent. Personal freedom necessitates Rent, for it
necessitates the private possession of land, and private possession
of land, some locations being more desirable than others, makes
Rent inevitable. Nothing short of communism could abolish it.
The real question is, What shall society do with Rent? Shall it give
it to individuals, or use it for common purposes? 1 " Were there
only one man on earth, he would have a right to the use of
the whole earth. When there is more than one man on earth,
the right to the use of land that any one of them would have,
were he alone, is not abrogated ; it is only limited. . . It has
become by reason of this limitation, not an absolute right to use
any part of the earth, but (1) an absolute right to use any part of
the earth as to which his use does not conflict with the equal
rights of others (i. e., which no one else wants to use at the same
time), and (2) a co-equal right to the use of any part of the earth
which he and others may want to use at the same time." — A Per-
1 30 The Taxation of Land Values
plexed Philosopher, p. 45. U It is in the adjustment of co-equal
rights that Rent occurs.
98. ' ' The effect of increasing population upon the distribution
of wealth is to increase rent . . in two ways : First, By lowering
the margin of cultivation. Second, By bringing out in land special
capabilities otherwise latent, and by attaching special capabilities
to particular lands." — Progress and Poverty, book iv, chs. ii and
Hi. If ' ' When we have inquired what it is that marks off land
from those material things which we regard as products of the
land, we shall find that the fundamental attribute of land is its
extension. The right to use a piece of land gives command over
a certain space — a certain part of the earth's surface. The area
of the earth is fixed ; the geometric relations in which any partic-
ular part of it stands to other parts are fixed. Man has no con-
trol over them ; they are wholly unaffected by demand ; they
have no cost of production ; there is no supply price at which they
can be produced. The use of a certain area of the earth's surface
is a primary condition of anything that man can do ; it gives him
room for his own actions, with the enjoyment of the heat and the
light, the air and the rain which nature assigns to that area ; and
it determines his distance from, and in a great measure his rela-
tions to, other things and other persons. We shall find that it is
this property of land, which, though as yet insufficient prominence
has been given to it, is the ultimate cause of the distinction which
all writers are compelled to make between land and other things. ' '
Marshall* s Pr in., book iv, ch. ii, sec. i.
99. Of course social growth does not go on in this regular
way. The charts are merely illustrative ; they are intended to
illustrate the universal fact that as any land becomes a center of
trade or of other industrial or social relationship its value rises.
100. ' ' Perhaps it may be well to remind the reader, before
closing this chapter, of what has been before stated — that I am
using the word wages not in the sense of a quantity, but in the
sense of a proportion. When I say that wages fall as rent rises,
I do not mean that the quantity of wealth obtained by laborers as
wages is necessarily less, but that the proportion which it bears
to the whole produce is necessarily less. The proportion may
diminish while the quantity remains the same or increases." —
Progress and Poverty, book Hi, ch. vi.
101. The condition illustrated in the last chart would be the
result of social growth if all land but that which was in full use
Appendix 1 3 1
were common land. The discovery of mines, the development of
cities and towns, and the construction of railroads, the irrigation
of arid places, improvements in government, all the infinite con-
veniences and labor-saving devices that civilization generates,
would tend to abolish poverty by increasing the compensation of
labor, and making it impossible for any man to be in involuntary
idleness, or underpaid, so long as mankind was in want. If de-
mand for land increased, Wages would tend to fall as the demand
brought lower grades of land into use ; but they would at the same
time tend to rise as social growth added new capabilities to the
lower grades. And it is altogether probable that, while progress
would lower Wages as a proportion of total product, it would in-
crease them as an absolute quantity. ^ The British critic quoted
in a previous note, Mr. Madsen, suggests with reference to the
above clause of this note as it appeared in previous editions and is
here reproduced, that "this is a very indefinite conclusion to
come to as the result of an economic argument, ' ' because econo-
mists ought to be ' ' able to say definitely how wages will be
affected by tracing definite causes to their effects and stating pos-
itively whether wages will rise or fall." Political economy as a
science is one of tendencies. Economists may tell what the gen-
eral tendency of given general conditions will be ; but they cannot
tell what specific effects will occur, for all the facts are not avail-
able. They can predict, for illustration, that if one man be given
an absolute monopoly of the planet with power to retain it, he
will be supported by the labor of other men ; but they cannot tell
what proportion each will give him nor how much he will get.
The comparison of proportional with quantitative wages is consid-
ered with some fullness by Henry George in ' ' Progress and Pov-
erty," book iv, chapter iv. The primary effect of labor-saving
improvements is doubtless to delay the need for lower grades of
land ; but the secondary effect — though the first in point of time,
if general and confident expectation of improvement has set in —
is to hurry the demand, even if not the need, for lower grades of
land. It is suggested that if we devoted ourselves as a nation to
the growing of wheat, labor-saving devices would enable us to
grow the same quantity on less land and therefore give the bene-
fit to wages. This is true as a tendency; and it is because it is
true as a tendency that, under the influence of the expansiveness
of human desires and the consequent intensity of monopolization
of land, it is not true as a fact of actual experience. Able to get
a larger quantity of wheat with less labor, we continue doing the
1 32 The Taxation of Land Values
same labor, thereby increasing our production of wheat, in order
to swap the excess for sealskin coats, or other objects of previous-
ly ungratified desires. The effect is a tendency to an increase in
the demand for wheat land, and consequently to an increase of
Rent rather than of Wages.
102. Here, far away from civilization, is a solitary settler.
Getting no benefits from government, he needs no public revenues,
and none of the land about him has market value. Another settler
comes, and another, until a village appears. Some public revenue is
then required. Not much, but some. And the land has a little
value, only a little ; perhaps just enough to equal the need for
public revenue. The village becomes a town. More revenues
are needed, and land values are higher. It becomes a city. The
public revenues required are enormous, and so are the land values.
*U This criticism has been made : "If the tendency is for wages to
fall, under natural conditions, would this not mean that the value
of the services of an individual wage- earner would decrease with
social progress? " The question results from inattention to the
point noted in Note 101 (96 of old edition) as to proportional and
quantitative wages, and also to the point regarding speculation in
land values. It has been the chief object of the Rent diagrams
to illustrate this very thing. With social progress wages tend to
fall as a proportion of product. Under natural conditions the
value of the services of an individual would therefore fall, as a
proportion of product. But as the product is greater, so the indi-
vidual's absolute wages are greater. Individually he is richer
from less labor ; and socially he should be better off from the
common use of increased land values. That would be the natural
result. But when land monopoly (an unnatural factor) is intro-
duced, giving the increasing values of land to individuals instead
of the community, a speculative pressure sets in. I^and is held
out of use for higher prices. This diminishes the market
supply of land. Thereby its price is increased out of proportion
to its greater productiveness. Consequently wages diminish not
only as a proportion relatively to product, but also as an absolute
quantity. It is not merely social progress that produces the
quantitative reduction of wages ; it is social progress under land
monopoly. This is the theme of ' ' Progress and Poverty, ' ' and
the phenomenon from which the book gets its name.
103. Society, and society alone, causes Rent. Rising with
the rise, advancing with the growth, and receding with the de-
Appendix 1 33
cline of society, it measures the earning power of society as a
whole as distinguished from that of the individuals. Wages, on
the other hand, measure the earning power of the individuals as
distinguished from that of society as a whole. We have distin-
guished the parts into which Wealth is distributed as Wages and
Rent; but it would be correct, indeed it is the same thing, to
regard all wealth as earnings, and to distinguish the two kinds as
Communal Earnings and Individual Earnings. And how can
society be justly supported in any other way than out of its own
earnings ? 1 Criticising the theory that ' ' rent is simply payment
for public service," my British reviewer, Mr. Madsen, says: "It
would seem to me that the sum of the Wages of all the laborers
[meaning all workers] is the earning power of the nation as a
whole, and that Rent is purely the payment that these individual
laborers must make to one another as compensation for the
advantageous positions which they occupy in producing wealth."
That seems to me to be a true statement well made ; but doesn't it
mean precisely what Note 98 of the former edition (the first par-
agraph of Note 103 of this edition) means? The critic may have
been misled by the term public service, assuming that this term
implies that rent is determined by service rendered by the public
through government. That would be a mistake. The idea is
that Rent is determined by social service, which includes not only
governmental or like public service, but also that untraceable com-
mon service which every individual renders to the whole, over
and above what he renders to himself, when he engages in special-
ized production. It is a social or co-operative phenomenon — is
Rent ; and although the more fertile spots will yield Rent when
others do not, this is true only in co-operative (i. e. specialized)
industry. Kven then, the proportion of Rent due to exceptional
fertility (including mineral deposits, etc., in that term) is prob-
ably very slight in comparison with the proportion due to social
or co-operative concentrations. To call Rent the wages of society
as a whole, in contradistinction to individual Wages, may be a
poor figure of speech, but it is at any rate a figure that conforms
closely to the fact.
104. "Whatever dispute arouses the passions of men, the
conflict is sure to rage, not so much as to the question ' Is it
wise? ' as to the question, ' Is it right? ' This tendency of popular
discussions to take an ethical form has a cause. It springs from
a law of the human mind ; it rests upon a vague and instinctive
recognition of what is probably the deepest truth we can grasp.
1 34 The Taxation of Land Values
That alone is wise which is just ; that alone is enduring which is
right. In the narrow scale of individual actions and individual
life this truth may be often obscured, but in the wider field o'f
national life it everywhere stands out. I bow to this arbitrament,
and accept this test." — Progress and Poverty, book vi, ch. i.
The reader who has been deceived into believing that Henry
George's proposition is in any respect unjust, will find profit in
a perusal of the entire chapter from which the foregoing extract
is taken. If As an illustration of the weakness of the opposing
position, the argument advanced by one of the most distinguished
men of his time may be read to advantage. It will be found in
"Land and Its Rent," by Gen. F. A. Walker. Gen. Walker was
so naively lucid, that one has only to read his book thoughtfully
to realize not only that he was wrong, but that if his is the best
answer to George, George must have been right. That Gen.
Walker was not strongly logical may be inferred from his contro-
versy of 1883 with Henry George, which is reproduced in the
Appendix to George's "Social Problems;" that he was strong
neither logically nor morally in reference to civic relationships, is
evident from the final paragraph of his preface to ' ' I/and and Its
Rent," mentioned above. Alluding there to his discussion of
Henry George's views in the body of "I/and and Its Rent," Gen.
Walker says : ' ' For the spirit in which he discusses the views of
a writer who deliberately proposes that government shall confis-
cate the entire value of landed property, without compensation to
those who, under the express sanction and encouragement of gov-
ernment itself, have inherited or bought their estates, the author
has no apology to offer. Every honest man will resent such a
proposition as an insult. ' ' This point can have no logical or moral
force unless it applies to the value not only of land, but of every
other kind of property which may at any time be inherited or bought
"under the express sanction and encouragement of government;"
for Gen. Walker gives no reason for considering landed property
especially sacred. It follows, if Gen. Walker thought straight
morally and reasoned straight logically, that every honest man
would resent as an insult any proposition to confiscate in any way
the entire value of any kind of property ' ' without compensation
to those who, under the express sanction and encouragement of
government itself, have inherited or bought ' ' it. If that position
is sound, the sacredness of property is determined not by the
moral law but by governmental sanctions irrespective of the
moral law. Could any contention be more absurd, either in logic
Appendix 1 35
or in morals? If slavery exists, government must not abolish
it without compensating slave owners ! And this, notwithstanding
that Abolitionists who have always opposed it, and slaves who
have been born or kidnapped into it, and their descendants as
long as the compensation debt lasted, would be taxed to pay
for the losses of those who have favored and profited by slavery.
So long as that compensation was withheld, not only would slave-
owners continue to profit, but the slaves must continue to suffer
confiscation of their work. Query : Could an individual slave con-
fiscate from his master the entire value of himself as a slave, by
running away, without exciting the resentment of "every honest
man" of the kind for whom General Walker spoke? Observe
that the question of whether landed property and slave property are
morally on the same level is not involved in General Walker's code
of civic morality. The moral question he raises, and the only one,
is not whether landed property and slave property are morally the
same. He holds that the value of any kind oj property whatever,
if inherited or bought ' ' under the express sanction and encour-
agement of government, ' ' can not be confiscated morally without
compensation to its owners.
105. It is reported from Iowa that a few years ago a workman
in that State saw a meteorite fall, and, securing possession of it after
much digging, he was offered $105 by a college for his " find."
But the owner of the land on which the meteorite fell claimed the
money, and the two went to law about it. After an appeal to the
highest court of the State, it was finally decided that neither by
right of discovery, nor by the right of labor, could the workman
have the money, because the title to the meteorite was in the man
who owned the land upon which it fell.
106. The text speaks of Rent only as a periodical or continu-
ous payment — what would be called ' ' ground rent. ' ' But actual
or potential Rent may atways be, and frequently is, capitalized for
the purpose of selling the right to enjoy it, and it is to selling
value that we usually refer in the United States, Canada and
Australasia, when dealing in land. I/and which has the power of
yielding Rent to its owner will have a selling value, whether it be
used or not, and whether Rent is actually derived from it or not.
This selling value will be the capitalization of its present or pros-
pective power of producing Rent. In fact, much the larger pro-
portion of land that has a selling value is wholly or partly unused,
producing no Rent at all, or less than it would if fully used. This
1 36 The Taxation of Land Values
condition is expressed in the chart by the blue color. 1 ' ' The
capitalized value of land is the actuarial ' discounted ' value of all
the net incomes which it is likely to afford, allowance being made
on the one hand for all the incidental expenses, including those
of collecting the rents, and on the other for its mineral wealth,
its capabilities of development for any kind of business, and its
advantages, material, social, and aesthetic, for the purposes of
residence. "—Marshall's Prin., book vi, ch. ix, sec. 9. "The
value of land is commonly expressed as a certain number of times
the current money rental, or in other words, a certain ' number of
years' purchase' of that rental ; and other things being equal, it
will be the higher the more important these direct gratifications
are, as well as the greater the chance that they and the money
income afforded by the land will rise. ' ' — Id. , note. \ ' 'Value . .
means not utility, not any quality inhering in the thing itself, but
a quality which gives to the possession of a thing the power of ob-
taining other things in return for it or for its use. . . Value in
this sense — the usual sense — is purely relative. It exists from and is
measured by the power of obtaining things for things by exchang-
ing them. . . Utility is necessary to value, for nothing can be
valuable unless it has the quality of gratifying some physical or
mental desire of man, though it be but a fancy or whim. But
utility of itself does not give value. . . If we ask ourselves the
reason of . . variations in . . value . . we see that things
having some form of utility or desirability, are valuable or not
valuable, as they are hard or easy to get. And if we ask further,
we may see that with most of the things that have value this diffi-
culty or ease of getting them, which determines value, depends on
the amount of labor which must be expended in producing them ;
i. <?., bringing them into the place, form and condition in which
they are desired. . . Value is simply an expression of the labor
required for the production of such a thing. But there are some
things as to which this is not so clear. I/and is not produced by
labor, yet land, irrespective of any improvements that labor has
made on it, often has value. . . Yet a little examination will
show that such facts are but exemplifications of the general prin-
ciple, just as the rise of a balloon and the fall of a stone both
exemplify the universal law of gravitation. . . The value of
everything produced by labor, from a pound of chalk or a paper of
pins to the elaborate structure and appurtenances of a first-class
ocean steamer, is resolvable on an analysis into an equivalent of
the labor required to produce such a thing in form and place ;
Appendix 1 37
while the value of things not produced by labor, but nevertheless
susceptible of ownership, is in the same way resolvable into an
equivalent of the labor which the ownership of such a thing
enables the owner to obtain or save. ' ' — A Perplexed Philosopher,
ch.v.
107. The paradise to which the youth of our country have so
long been directed in the advice, "Go West, young man, go
West," is truthfully described in "Progress and Poverty," book
iv, ch. iv, as follows : ' ' The man who sets out from the Kastern
seaboard in search of the margin of cultivation, where he may
obtain land without paying rent, must, like the man who swam
the river to get a drink, pass for long distances through half-
tilled farms, and traverse vast areas of virgin soil, before he
reaches the point where land can be had free of rent — i. e., by
homestead entry or pre-emption."
108. Henry Fawcett, in his work on "Political Economy,"
book ii, ch. iii, observes with reference to improvements in agri-
cultural implements which diminish the expense of cultivation,
that they do not increase the profits of tne farmer or the wages of
his laborers, but that " the landlord will receive in addition to the
rent already paid him, all that is saved in the expense of cultiva-
tion." This is true not alone of improvements in agriculture, but
also of improvements in all other branches of industry.
109. "The cause which limits speculation in commodities,
the tendency of increasing price to draw forth additional supples,
cannot limit the speculative advance in land values, as land is a
fixed quantity, which human agency can neither increase nor
diminish ; but there is nevertheless a limit to the price of land, in
the minimum required by labor and capital as the condition of
engaging in production. If it were possible to continuously reduce
wages until zero were reached, it would be possible to continuously
increase rent until it swallowed up the whole produce. But as
wages cannot be permanently reduced below the point at which
laborers will consent to work and reproduce, nor interest below
the point at which capital will be devoted to production, there is
a limit which restrains the speculative advance of rent. Hence,
speculation cannot have the same scope to advance rent in coun-
tries where wages and interest are already near the minimum, as
in countries where they are considerably above it. Yet that there
is in all progressive countries a constant tendency in the specula-
tive advance of rent to overpass the limit where production would
1 38 The Taxation of Land Values
cease, is, I think, shown by recurring seasons of industrial paraly-
sis."— Progress and Poverty, book iv, ch. iv.
110. As Puck once put it, "The man who makes two blades
of grass to grow where but one grew before, must not be surprised
when ordered to ' keep off the grass.' "
111. "That a speculative advance in rent or land values in-
variably precedes each of these seasons of industrial depression is
everywhere clear. That they bear to each other the relation of
cause and effect, is obvious to whoever considers the necessary
relation between land and labor. " — Progress and Poverty, book
v, ch. i.
112. What are called "good times" reach a point at which
an upward land market sets in . From that point there is a down-
ward tendency of wages (or a rise in the cost of living, which is
the same thing) in all departments of labor and with all grades of
laborers. This tendency continues until the fictitious values of
land give way. So long as the tendency is felt only by that class
which is hired for wages, it is poverty merely ; when the same
tendency is felt by the class of labor that is distinguished as ' ' the
business interests of the country," it is "hard times." And
"hard times" are periodical because land values, by falling, allow
"good times " to set in, and by rising with "good times " bring
"hard times" on again. The effect of "hard times" may be
overcome, without much, if any, fall in land values, by sufficient
increase in productive power to overtake the fictitious value of
land.
113. The laborer would receive in Distribution all that he
earned and no more than he earned in Production ; and that is
the natural law. In social conditions, where industry is subdi-
vided and trade is intricate, it is impossible to say arbitrarily what
is the equivalent of given labor. Hence, no statute fixing the
compensation for labor can really be operative. All that we can
say is that labor is worth what men freely contract to give and
take for it. But it must be what they freely contract to take as
well as what they freely contract to give ; and men are not free
to contract for the sale of their labor when labor generally is so
divorced from land as to abnormally glut the labor market and
make men's sale of their labor for almost anything the buyer
offers, the alternative of starvation. Laborers may be as truly
enslaved by divorcing Labor from lyand as by driving laborers
with a whip.
Appendix 1 39
114. "Such dupes are men to custom, and so prone
To rev'rence what is ancient and can plead
A course of long observance for its use,
That even servitude, the worst of ills,
Because delivered down from sire to son
Is kept and guarded as a sacred thing. ' '
— Cowper.
It is only custom that makes the ownership of land seem rea-
sonable. I have frequently had occasion to tell of the necessity
under which the city of Cleveland, Ohio, found itself, of paying a
land-owner several thousand dollars for the right to swing a draw-
bridge over his land. When I described the matter in that way,
the story attracted no attention ; it seemed perfectly reasonable to
the ordinary lecture audience. But when I described the tran-
saction as a payment by the city to a land-owner of thousands of
dollars for the privilege of swinging the draw "through that
man's air," the audience invariably manifested its appreciation of
the absurdity of such an ownership. The idea of owning air was
ridiculous ; the idea of owning land was not. Yet who can ex-
plain the difference, except as a matter of custom? To the same
effect was the question of the Rev. F. Iv. Higgins to a friend.
While stationed at Galveston, Texas, Mr. Higgins fell into a dis-
cussion with his friend as to the right of government to make
land private property. The friend argued that no matter what
the abstract right might be, the government had made private
property of land, and people had bought and sold upon the
strength of the government title, and therefore land titles were
morally absolute. "Suppose," said Mr. Higgins, "that the
government should vest in a corporation title to the Gulf of
Mexico, so that no one could fish there, or sail there, or do any-
thing in or upon the waters of the Gulf without permission from
the corporation. Would that be right?" "No," answered the
friend. "Well, suppose the corporation should then parcel out
the Gulf to different parties until some of the people came to own
the whole Gulf to the exclusion of everybody else, born or un-
born. Could any such title be acquired by these purchasers, or
their descendants or assignees, as that the rest of the people if
they got the power would not have a moral right to abrogate it?"
' ' Certainly not, ' ' said the friend. ' ' Could private titles to the
Gulf possibly become absolute in morals? " " No. " " Then tell
me," asked Mr. Higgins, "what difference it would make if all
the water were taken off the Gulf and only the bare land left ? ' '
1 40 The Taxation of Land Values
115. The late Thomas G. Shearman, Esq., of New York,
author of the famous magazine article on ' ' Who Owns the United
States ? ' ' and of the work on public revenues entitled ' ' Natural
Taxation," estimated that sixty- five per cent, of the present
annual value of the land in the United States would pay all the
present expenses of American government — Federal, State, county,
and municipal. If Mr. Shearman's estimate did not mean that he
purposed a tax upon annual values. In harmony with Henry
George's views he advocated the taxation of capital values. The
effect would be the same ; for capital value is the capitalzation in
the market of annual value, and a tax estimated upon capital
values would be paid out of or constitute a deduction from annual
values. If, for illustration, a lot of land were yielding, or with
proper use would yield, $100 in annual ground rent, it would
command a capital value of about $2,000 (disturbing influences
ignored for simplicity of calculation) in a land market where com-
mercial interest was five per cent. To tax this capital value two
per cent, would reduce the net annual ground rent from $100 to
$60, for the annual tax would be $40 and would have to be paid
out of the income. This would reduce the capital value
from $2,000 ("twenty years' purchase" of a net annual ground
rent of $100) to $1,200 ("twenty years' purchase" of a net
annual ground rent of $60); and inasmuch as the next year's
tax at two per cent, on the $1,200 of capital value would not
yield $40 to the public treasury, but only $24, it has been
objected that a baffling problem arises. This, however, is a
mistake. Although the old rate would not on the lower capital
value raise the old revenue, a higJier rate would, and without
making any difference to the tax payer. For instance : A tax of
3>£ per cent, on the lower capitalization of $1,200 in the above
illustration would yield $40 to the public and leave $60 to the tax
payer ; and that rate would produce the same result every year so
long as no alteration in the annual ground rent value occurred
and commercial interest remained at five per cent. It has been
estimated that a tax of 45 per cent, on capital value would take
for public use continually enough of annual ground rent value to
leave to the tax payer margin sufficient only to pay fairly for land
management, and to leave no sufficient basis for injurious specu-
lation in land. Take, for illustration, the previous example of a
lot of land with an annual ground rent of $100. If it were certain
that this income must bear a tax calculated at 45 per cent, upon
its capital value in a market where commercial interest rules at
Appendix 141
five per cent., the selling value would be about $200; for that
value, after payment of 45 per cent, taxes calculated upon it, thus
taking $90 out of the $100, would leave $10, which would be the
income that investors would probably expect for assuming the
risks and managing the affairs of such an investment. None of
these figure are offered as precise, except for purposes of simple
illustrative calculation, but they are not far from what may be
reasonably regarded as approximate. 1 Mr. Alex. W. Johnston,
an Australian writer on economics (author of ' ' L/aw and liberty, ' '
published by Angus and Robertson, Sydney, New South Wales)
objects to any taxation upon the capital value of land. He argues
that, whereas "the state has a perfect moral right to appropriate
rent for revenue ' ' it has no ' ' moral right to impose a tax on the
capital value of land because that is an immoral method," being
" artificial, arbitrary and variable ' ' and not based upon principle —
4 ' only a partial and half-hearted application of a principle which
seeks justice for the people. ' ' The answer is that land is now
recognized as private property, that this makes annual ground
rents private incomes, that these are on sale in the market
at capitalized values, and that wherever such conditions obtain
the wisest way of beginning to get those incomes for public use is
by taxing capital values. This would not take all that belongs to
the public, but the rest would be, as Henry George wrote, only a
matter of ' ' keeping on. ' ' And shall we refuse to take less of
what belongs to us, until we can take all? Mr. Johnston quotes
Abraham I/incoln as saying that ' ' nothing is settled until it is
settled right. ' ' Sound doctrine that ; but Mr. Johnston makes
strange use of it when he says that Lincoln ' ' might have added :
What is less than right is all wrong. ' ' This ignores the law of
progress, which may be rendered as "one blessed thing after
another ' ' — blessed if in the right direction and the reverse if in
the wrong direction. Before anything now wrong can be settled
right, we must begin to settle it right. In countries where the
land market is a ground-rent market, ground-rent might be appro-
priated for public use directly, either by taxation or upon some
plan of public ownership and leasing of land. But in countries
where the land market is a capital- value market, the United
States or Canada for instance, any attempt to begin getting
ground rent otherwise than by taxing capital values would be like
trying to split logs with the thick end of the wedge. 1 Whether
the Single Tax ever should or would pass from a tax estimated on
capital values to one estimated on annual ground rents, is a ques-
1 42 The Taxation of Land Values
tion for the future. The time to determine this will be when the
people have so clearly recognized the common right to land as to
be in a frame of mind to deal intelligently with the best method
of securing it. 1 The ' ' Single Tax L/imited ' ' has made consider-
able practical progress since the text of this book was originally
written, seventeen years ago. A large number of municipalities
in New Zealand get all local revenues from land value taxation,
and this is true also of a large number in Australia. In Canada,
too, the method is in full local operation in several cities, notably
Vancouver. England has made advances toward it, and so has
Germany, while Norway and Denmark are giving it serious con-
sideration, as are some of the States of the American Union. The
fullest account of these advances of which I know in book form
may be found in the late Max Hirsch's " I/and- Value Taxation in
Practice," an Australian book, obtainable at "The Single Tax"
office, Melbourne, Victoria. Owing to the author's untimely
death the record ends before the greatest advances were made.
Full accounts are to be found in the files of The Public, a weekly
review, published at Chicago, Illinois, U. S. A., since April 1,
1898. In producing prosperous conditions the ' ' Single Tax Ivim-
ited ' ' wherever introduced has been manifest. But fears have
arisen that reaction may set in because the land value taxes are
not high enough to keep pace with increasing land values. Any
such reaction would be in harmony with the doctrines of ' ' Prog-
ress and Poverty." These teach that improvements in govern-
ment tend to increase land values ; and inasmuch as land value
taxation, in lieu of taxes on industry, is an improvement in govern-
ment— an improvement of the highest order according to "Progress
and Poverty ' ' — it must be expected that land value taxation will
tend to increase land values. If, then, the land value tax is not
increased commensurately, speculation in land will tend to revive.
All this was anticipated by Henry George when he wrote as follows
in Chapter ii of Book viiiof " Progress and Poverty ": ". . . it
will not be enough merely to place all taxes upon the value of
land. It will be necessary, where rent exceeds the present gov-
ernmental revenues, commensurately to increase the amount de-
manded in taxation, and to continue this increase as society pro-
gresses and rent advances. But this is so natural and easy a
matter, that it may be considered as involved, or at least under-
stood, in the proposition to put all taxes on the value of land.
That is the first step, upon which the practical struggle must be
made. When the hare is once caught and killed, cooking him
Appendix 1 43
will follow as a matter of course. When the common right to
land is so far appreciated that all taxes are abolished save those
which fall upon rent, there is no danger of much more than is
necessary to induce them to collect the public revenues, being left
to individual land holders. ' ' If The objection that upon the first
applications of the "Single Tax I/united," land owners begin
after awhile to reap their old advantages, is no argument against
the "Single Tax Unlimited." The former is only in the way of
a beginning. Such criticisms of it are like those of the little boy
who said to his father as he saw him going with a shovel toward
the barn : ' ' Pa, what are you going to do? " ' ' Going a- fishing, ' '
said the father. "May I go with you?" "Yes, I guess so."
And the little chap trudged along, asking questions as he went.
' ' Pa, can you catch fish with a shovel ? " " Yes, ' ' said his father.
' ' Pa, what kind of fish can you catch with a shovel? " " Pa, how
do you catch fish with a shovel ? ' ' and so on and on until they
fetched up at the back of the barn, where the father began to dig.
Thereupon the questioning was renewed. "Why, pa, you don't
catch fish here do you?" "We begin to, my son," was the
answer. ' ' But, pa, I thought you caught fish in the creek. ' ' ' 'We
do, but we ain't at the creek yet." There was silence until the
boy saw his father putting angle worms into a tin cup. He was
thoughtful a moment, childishly thoughtful, and then he broke
out : ' ' Why, pa, them ain't fish, is they ? " ^ Some helpful inves-
tigations into the sufficiency of land value taxation have been
made in recent years. Among the publications reporting these
are the Blue Book of the British government, the periodical
reports of the Tax Department of New York City, and data of
taxation in Oregon counties procured under the direction of
Wm. S. U'Ren of Oregon City, Oregon. The Rhode Island Tax
Reform Association of Providence published a pamphlet in 1911,
prepared by John Z. White of Illinois, which gives the names and
taxes of every taxpayer of 1910 in Woonsocket, R. I. , and shows how
much each would have paid under the ' ' Single Tax I/imited. ' '
Another useful publication in this connection is Benjamin C.
Marsh's "Taxation of I/and Values in American Cities, the Next
Step in Exterminating Poverty, ' ' which is published by the author
(320 Broadway, New York City); and a convenient hand book
for speakers and writers as well as students is " The A. B. C. of
the I/and Question," prepared by James Dundas White, 1^1^. D.,
M. P. , and published by the L<and Values Organization of London
(20 Tothill St. and 376 Strand).
1 44 The Taxation of Land Values
116. This idea of the concealed picture was graphically illus-
trated with a story by James G. Maguire, at that time a judge of
the Superior Court of San Francisco and afterward a Member of
Congress from California, in a speech at the Academy of Music,
New York City, in 1887. In substance he said :
"I was one day walking along Kearney street, San Francisco,
when I noticed a crowd around the show window of a store, look-
ing at something inside. I took a glance myself, and saw only a
very poor picture of a very uninteresting landscape. But as I was
turning away my eye caught the words underneath the picture,
' Do you see the cat? ' I looked again and more closely, but saw
no cat in the picture. Then I spoke to the crowd :
" ' Gentlemen,' I said, ' I see no cat in that picture. Is there
a cat there ? '
' ' Some one in the crowd replied :
1 ' Naw, there ain't no cat there. Here's a crank who says
he sees the cat, but nobody else can see it.'
' ' Then the crank spoke up :
" ' I tell you there is a cat there, too. It's all cat. What you
fellows take for a landscape is just nothing more than the out-
lines of a cat. And you needn't call a man a crank either, because
he can see more with his eyes than you can."
"Well," the Judge continued, " I looked very closely at the
picture and then I said to the man they called a crank :
" 'Really, sir, I cannot make out a cat. I can see nothing
but a poor picture of a landscape.'
" 'Why, Judge,' he exclaimed, 'just look at that bird in the
air. That's the cat's ear.'
" I looked, but was obliged to say :
" ' I am sorry to be so stupid, but I can't make a cat's ear of
that bird. It is a poor bird, but not a cat's ear.'
" 'Well, then,' the crank urged, 'look at that twig twirled
around in a circle. That's the cat's eye.'
" But I couldn't make an eye of it.
" 'Oh, then,' said the the crank a little impatiently, 'look at
those sprouts at the foot of the tree, and the grass. They make
the cat's claws.'
"After a rather deliberate examination, I reported that they
did look a little like a claw, but I couldn't connect them with a
cat.
" Once more the crank came back at me. 'Don't you see
Appendix 1 45
that limb off there? and that other limb under it? and that white
space between? Well, that white space is the cat's tail.'
' ' I looked again and was just on the point of replying that
there was no cat there so far as I could see, when suddenly the
whole cat burst upon me. There it was sure enough, just as the
crank had said ; and the only reason that the rest of us couldn't
see it was that we hadn't got the right point of view. But now
that I saw it I could see nothing else in the picture. The land-
scape had disappeared and a cat had taken its place. And do you
know, I was never afterward able, upon looking at that picture,
to see anything in it but the cat. ' '
From this story as told by Judge Maguire has come the slang
of the Single Tax agitation. To ' ' see the cat " is to understand
the Single Tax.
PART THREE, CHAPTER V, PAGES 47 AND 48
117. "Progress and Poverty," book v, ch. ii, page 293.
118. "Our primary social adjustment is a denial of justice.
In allowing one man to own the land on which and from which other
men must live, we have made them his bondsmen in a degree
which increases as material progress goes on. This is the subtile
alchemy that in ways they do not realize is extracting from the
masses in every civilized country the fruits of their weary toil ;
that is instituting a harder and more hopeless slavery in place of
that which has been destroyed ; that is bringing political despot-
ism out of political freedom, and must soon transmute democratic
institutions into anarchy. It is this that turns the blessings of
material progress into a curse. It is this that crowds human
beings into noisome cellars and squalid tenement houses; that
fills prisons and brothels; that goads men with want and con-
sumes them with greed ; that robs women of the grace and beauty
of perfect womanhood ; that takes from little children the joy and
innocence of life's morning. Civilization so based cannot con-
tinue. The eternal laws of the universe forbid it. Ruins of dead
empires testify, and the witness that is in every soul answers,
that it cannot be. It is something grander than Benevolence,
something more august than Charity — it is Justice herself that
demands of us to right this wrong. Justice that will not be
denied ; that cannot be put off — Justice that with the scales carries
the sword." — Progress and Poverty, book x, ch. v.
THIS BOOK IS DUE ON THE LAST DATE
STAMPED BELOW
AN INITIAL FINE OF 25 CENTS
WILL BE ASSESSED FOR FAILURE TO RETURN
THIS BOOK ON THE DATE DUE. THE PENALTY
WILL INCREASE TO SO CENTS ON THE FOURTH
DAY AND TO $1.OO ON THE SEVENTH DAY
OVERDUE.
MAR 24 1933
29 IS35
LD 21-50m-l,'33
UNIVERSITY OF CALIFORNIA LIBRARY
t
Live Music Archive
Librivox Free Audio
Metropolitan Museum
Cleveland Museum of Art
Internet Arcade
Console Living Room
Books to Borrow
Open Library
TV News
Understanding 9/11