THE TAXATION GF LAND VALUES 
 
 LOUIS . F . P O ST 
 
BOUGHT WITH THE INCOME OF THE 
 
 SAGE ENDOWMENT FUND 
 
 THE GIFT OF 
 
 Henril M. Sage 
 
 1891 
 
 \.3o3..i5.^.. :■: ::.. i^v:b^As. 
 
CORNELL UNIVERSITY LIBRARY 
 
 3 1924 096 276 542 
 
The original of tliis book is in 
 tlie Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http ://www. arch i ve . o rg/detai Is/cu31 924096276542 
 
TAXATION OF LAND VALUES 
 
A PHuruGRAl'H h\ ALFULD COX. CHICAGO, OF A MEDALLION, BV E. STIFAKT HINTON 
 
 TO THE MEMORY OF 
 
 WILLIAM T. CROASDALE 
 
 BORN IN 1S4! — DIKD IN ISVl 
 FOUNDFR AND F.DITOR OF THE WILMINGTON "EvERY EvENINg" 
 
 Editor of the Baltimore "Day" 
 Editor of Henry George's "Standard" 
 
 "a binelctaxer IB a person who dun something for the Sintletax." — Croasilalc 
 
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 
 
 Assistant Secretary of Labor 
 
 IQ3 
 
 INDIANAPOLIS 
 
 THE BOBBS-MERRILL COMPANY 
 
 PUBLISHERS 
 
 E.V. 
 
A'3o-37SE 
 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." 
 Fifth edition: Copyright, 1915, as "Taxation of Land Values." 
 
 By Louis F. Post. 
 
 'UO 
 
 PRESS OF 
 
 BRAUNWORTH & CO. 
 
 BOOKBINDERS ANO PRINTBR9 
 
 BROOKLVN, N. Yt 
 
PREFACE TO FIFTH EDITION 
 
 When the contents of this book first appeared in 
 print I was using its Charts to illustrate lectures on "The 
 Singletax," "Absolute Freetrade," "The Labor Ques- 
 tion," "Progress and Poverty," "The Land Question," 
 "The Elements of Political Economy," "Socialism" and 
 "Hard Times," which I was then delivering in the United 
 States and Canada. 
 
 For book publication I adapted the principal points of 
 those lectures to the Singletax, the one theme to which 
 all the subjects are related. They were originally pub- 
 lished in this unified form in 1894 as "Outlines of Post's 
 Lectures." That edition having been exhausted, the sec- 
 ond, somewhat revised, was published in 1899 under the 
 more appropriate title of "The Singletax." The third 
 was issued in 1906 under the same title and without re- 
 vision; and when this edition also had been exhausted, 
 the fourth was issued in response to requests from 
 Great Britain as well as the United States and Canada. 
 In complying with those requests it seemed best to alter 
 the title and the text so as to conform to a habit of speech 
 which, originating in Great Britain and spreading into 
 Canada and the United States, had tended to substitute 
 for "single tax" the phrase "taxation of land values." 
 The fifth edition is in nearly every respect like the fourth 
 which is now out of print. 
 
 Such differences as there are between taxation of 
 land values and the single tax are explained in the text. 
 In that connection, however, it should be here pointed 
 out that there is a recent tendency to merge the two 
 
PREFACE TO FIFTH EDITION 
 
 words single and tax as the name of a movement, philos- 
 ophy, cult or what you will, into the proper noun Single- 
 tax. This tendency, which accords with usage in paral- 
 lel instances, is also desirable for purposes of distinction. 
 As a descriptive phrase "the single tax" might mean any 
 kind of exclusive tax. It has even been referred to, jocu- 
 larly by some but seriously by others, as a tax upon 
 bachelors. A distinctive name in place of an ambiguously 
 descriptive phrase may prevent such misapprehensions. 
 There is the advantage also of convenience. One is en- 
 abled to write "Singletaxer" and "Singletaxism" without 
 typographical awkwardness. With greater accuracy, too, 
 for those allusions are to a body of economic thought or 
 a species of social agitation in which the idea of public 
 revenues and their sole source in land premiums, as well 
 as their mode of collection, are inseparably associated. 
 The "Singletaxer" as a distinctive name identifies the 
 social reform popularized by Henry George which aims 
 at securing for common use by means of taxation those 
 values of social progress that land premiums express. 
 
 The Charts in this volume were in the first edition 
 printed in the body of the text; and in that edition the 
 Illustrative Notes were foot notes in smaller type than 
 the type of the text, while the Questions and Answers 
 were in an Appendix. But in succeeding editions the 
 Charts appear between pages of the text as in the present 
 edition. They are placed, however, as near as possible 
 to the particular text which they respectively illustrate. 
 And in the present edition, following the arrangement 
 of the fourth, the Illustrative Notes, in larger type than 
 
PREFACE TO FIFTH EDITION 
 
 before, are put into an Appendix, while the Questions 
 and Answers are placed in the body of the book as Part 
 Four. This edition, the first to issue from a prominent 
 publishing house, is superior in book-making qualities 
 to all the others. 
 
 One word about the questions in Part Four. They 
 embody the substance of all questions actually put to me 
 from audiences in three lecturing trips which I made in 
 the early '90's across the continent and up and down 
 through the States and into Canada. I think them fairly 
 representative of the questions usually asked even to this 
 day. If there are any new questions now, or any im- 
 portant variations of old ones, I am unaware of it. 
 Whether my answers are conclusive or even satisfactory 
 is for the reader to judge ; but be their value what it may, 
 answers are there to all the objections to the Singletax 
 that I have ever encountered. 
 
 Louis F. Post. 
 
 Washington, D. C, July 1, 1915. 
 
CONTENTS 
 
 PART ONE 
 Taxation Methods 
 
 CHAPTER PAGE 
 
 I Enumeration of Methods 1 
 
 II The Exclusive Land Value Method .... 4 
 
 PART TWO 
 Land Value Taxation as a Tax Reform 
 
 I Direct and Indirect Taxation 6 
 
 II The Two Kinds of Direct Taxation .... 8 
 
 III Land Value Taxes Are in Proportion to Benefits 10 
 
 IV Conformity to General Principles of Taxation . 13 
 
 Section 1 — Interference with Production . . 13 
 
 Section 2 — Cheapness of Collection .... 14 
 
 Section 3 — Certainty 14 
 
 Section 4 — Equality IS 
 
 PART THREE 
 Land Value Taxation as an Industrial Reform 
 
 I Involuntary Poverty 16 
 
 II The Source of Wealth 19 
 
 III The Production of Wealth 25 
 
 Section 1 — Division of Labor 25 
 
 Section 2— Trade 27 
 
 Section 3 — The Law of Division of Labor and 
 
 Trade 28 
 
 Section 4 — Dependence of Labor Upon Land . 33 
 
CONTENTS— Co»/i«M£cf 
 
 CHAPTER PAGE 
 
 IV The Distribution of Wealth 36 
 
 Section 1 — Explanation of Wages and Rent . . 26 
 Section 2 — Normal Effect of Social Progress 
 
 Upon Wages and Rent ... 39 
 Section 3 — Significance of the Upward Tendency 
 
 of Rent 40 
 
 Section 4 — The Effect of Confiscating Rent to 
 
 Private Use 41 
 
 Section S — Effect of Retaining Rent for Common 
 
 Use 48 
 
 Section 6 — Land Value Taxation Tends to Retain 
 
 Rent for Common Use ... 49 
 
 Section 7 — A Reminder 50 
 
 V Conclusion 52 
 
 PART FOUR 
 Answers to Typical Questions 
 
 I Elementary 54 
 
 II Revenue Problems * 55 
 
 III Special Instances 59 
 
 IV Economic Effects 63 
 
 V Labor Questions 65 
 
 VI Business Questions 68 
 
 VII Money 74 
 
 VIII Miscellaneous Problems 77 
 
 Appendix — Explanatory and Illustrative Notes ... 85 
 
TAXATION OF LAND VALUES 
 
Taxation of Land Values 
 
 PART ONE 
 Taxation Methods 
 
 CHAPTER I 
 
 ENUMERATION OF METHODS 
 
 One of the methods of raising public revenues is by 
 Land ValuT^TaBtationT 
 
 Land va lue taxation is any tax^ levied o n land-own- 
 ers i n proportion to the value of their land, irr espec- 
 ti ve of its improve ments. 
 
 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 
 (b) in part taxes according to the value of land.^ 
 
 Land value taxation may thus supply (o) a greater 
 or less proportion of the public revenues, the rest being 
 obtained from taxes on improvements, personal prop- 
 erty, incomes, business licenses, and so on; or (&) it 
 may be exclusive, public revenues being raised from 
 no other source. 
 
 1 
 
2 TAXATION OF LAND VALUES 
 
 When lanfl iralup taYgfi'nn ig pyrliKiivp, it is appro- 
 priately enough c.a.\\e.cl jhg Single Tax, meaning only 
 onet ax and that upon land valu es. 
 
 The Single Tax (exclusive land value taxation) may 
 vary in degree, from (o) a rate that will supply reve- 
 nues sufficient only for the bare needs of government, 
 to (b) 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 prac- 
 tical difference between a land value tax sufficient 
 merely for public needs, and one high enough to ap- 
 propriate approximately all annual land values. The- 
 oretically, 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 dif- 
 ferent kinds or degrees of land value taxation : 
 
 L Land value taxation together with taxation on 
 improvements and personal property. This is com- 
 monly 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.' 
 
 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 
 
TAXATION OF LAND VALUES 3 
 
 not, which begins with a low rate or none on land of 
 moderate value and increases progressively in rate on 
 land of higher values, with a view to encouraging 
 small holdings 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 approxi- 
 mately of the land. This might be called simply the 
 Single Tax." 
 
 The first three items in the foregoing enumeration, 
 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 
 earnings to individual earners. 
 
 It is to be observed, however, that all are fiscal, for 
 any of them would produce public revenues ; and that 
 all are industrial, for any of them would tend to pro- 
 mote freedom of industrial production and justice in 
 the distribution of industrial products. 
 
CHAPTER II 
 
 THE EXCLUSIVE LAND VALUE METHOD 
 
 Land value tax ation to the exclusion of all other 
 re venue tax es, but limited to the needs of governm ent, 
 was pr oposed by Henry George in Progress an dPov- 
 erty in 187 9. as the best known fiscal met ho JTand one 
 that would moreover, b y force of its own excellence 
 fo r revenue purposes, develop i nto the simplest means 
 of securing to the community as a w hole the value of 
 land, an d to each individual the value of his w ork, 
 therehy at nnre sTi pplying- abundant public revenue s and 
 settling, tho lah or qnpstion on the basis of ju stice. 
 Henry George expressed the idea in these words: 
 "Abolish all taxation save that upon land values."'' 
 
 This proposal, long known as the S ingle T ax," is 
 coming to be better and more favorably known as Land 
 Va lue Taxati on.'^ Und er its operation all class es^ f 
 workers, w hether manufacturers, merchants, bank ers, 
 profession al men, clerks, mechanics, farm ers, farm- 
 hands, ^or_£th£r_woitoi£_£ksses^w^ be 
 wholly expmpt fr om taxatio n. 
 
 It is only as men own land that they would be taxed, 
 the tax o f each being m proportiorl, n5t to the a rea, 
 but to the value of his land. 
 
 And no one would be compelled to pav a higher tax 
 
 4 
 
TAXATION OF LAND VALUES 5 
 
 than others ij his land were improved or used while 
 their4^,jKas not, nor if his were better impr"ovea ~or 
 better 'usedJiajJ theirs/" (Qie va lue of its impr ove- 
 ments ^^"^"^'^ "^t b^ rntr^irlereH in ekimatinft the value 
 of a h olding; site value alone would govern. "\ If a site 
 rose inltb£.Jiiarket. the ta ^ would proportionat ely "in- 
 crease; if it fell.jhe tax woul d proportion ately di- 
 mimeb> 
 
 Land valuetaxation, therefore, when carried to the 
 point of the Single Tax (whether limited or not) may 
 be concisely defined as^ tax upon land alone, in t he 
 ratio »f y^iii^ ^nH irre^tive of its improvements or 
 it s 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." ' 
 
 Indire ct taxes are those that may be shifted by the 
 first payer from himself to others: direct tax es are 
 tho oc that can not bo - s hi f ted/ ^ 
 
 The shifting of indirect taxes is accom plished by 
 mpans.nf their tenHenry tn increase the prices of com- 
 mn ditipt! npnn which they fall. Their magnitude and 
 incidence^' are thereby disguised. It was for this rea- 
 son that a French economist of the eighteenth century 
 denounced them as "a scheme for so plucking geese as 
 to get the most feathers with the least squawking."^* 
 
 Indirect taxation costs the real taxpayers 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,^° and partly on account of the extraordinary 
 
 6 
 
TAXATION OF LAND VALUES 7 
 
 expenses of original collection;^' 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.^' The questions 
 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 ex clusivelv. For thi s is a form 
 of d irect ta xation. Land value taxes can not be 
 shifted." 
 
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 (6) ta xes that are levied upon them 
 
 in prnpngtinti tr. fh(- hpitpfti! rerphjcrt, hy tjipm trnm thp 
 
 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 pav rega rd- 
 less of-benefijtajCficeived, i s not in accord with an y prin- 
 cipl e. of just fynvernm ent. The land value tax, there- 
 ' fore, as the only important tax in proportion to bene- 
 fits, comes nearest to being an ; deal 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. 
 
 Though the first of those objections ostensibly ac- 
 
 8 
 
TAXATION OF LAND VALUES 9 
 
 cepts the doctrine of taxation according to benefits,^' 
 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 tha t land value taxation would justly 
 measure thg value of public benefits which every indi- 
 vidual respectively enjoys, we have only to consider 
 that the mass^qf individu als everjrwhere and now, in 
 paying for the land they use, actually pay for_gublic 
 benefits in prop ortio n to what they receive. 
 
 He who would enjoy those benefits must use land 
 where the benefits can be enjoyed. He can not, 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 en- 
 joyed. H e must rent or buy land w here the bene fits of 
 government are avai lable, or forego them. And unless 
 he buys or rents where tEey are greatest or most avail- 
 able, he must forego them in degree. Consequently, if 
 he would work or live where the benefits of "govern- 
 ment are availa ble, 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 fifjthegpxernment service that the site he selects 
 enables him to enjoy.^" Thus does he pay~Tor the 
 service of government in proportion' "to' its value to 
 
 10 
 
TAXATION OF LAND VALUES 11 
 
 him. But he doesjiot pay the public, which provide^ 
 the service ; he is required to pay land-owners. 
 
 The economic principle pursuant to which land- 
 owners are thys, aWe. to charge. JtorMosSteSiti^ for 
 the common benefits of their common g-overnment, 
 points, to the .tnie mfit]],Oid.,Ql-±axation. With the ex- 
 ception of such other monopoly property as is analo- 
 gous to land titles, and which in the purview of the 
 Single Tax is included with land for purposes of tax- 
 ation, ^^ land is the only kind of property that is in- 
 creased in value by government; and the increase tends 
 to be^in proportion to the public, service whic;h..its pos- 
 session secures to the occupant. 
 
 Therefore, by taxing laiidin proportion to its value, 
 and exempting all other property, kindred monopolies 
 excepted — that is to say, by adopting exclusive land 
 valueJaxation — we should be levyingjaxes according 
 tojafiuefits." 
 
 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 taxation such land-owners are exempt.^* 
 
 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 
 protection of the courts, and of the police and fire de- 
 partments, and they have the use of schools and the 
 
12 TAXATION OF LAND VALUES 
 
 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 property-owners. The value of their property is 
 enhanced in prop ortion to th e benehts ot good ^vern- 
 ment and other characteristics pf_sqcial improvement 
 which its occupants en joy. To tax them alone^ there- 
 fore, is not to discriminate against them ; it is to 
 charge them for wiiat.tbfiy.get ixsmiXbs^JS&i^^ 
 
CHAPTER IV 
 
 CONFORMITY TO GENERAL PRINCIPLES OF TAXATION 
 
 Land value taxation conforms niost closely to the 
 essentkL4udad|il£a»aL Adam Smith's four .classical 
 maxims, which are stated by Henry„XieQrg£f° as fol- 
 lows: 
 
 "The best tax by which public revenues can be raised 
 is evidently that which will closest conform to the fol- 
 lowiJigxQJiditions : ( 1 ) That it bear as lightly as pos- 
 sible upon production — so as least to check the increase 
 of the ggiifjaLiund. from _>KMc.h, taxes must „be paid 
 and -the" community maintained.^* (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 a&-little-as_possibleJa.addition..to what it yields 
 to the-g0v©PHma«Ht.^^ (3) That it be certainr^so as to 
 give the least opportunity, for tyranny oc.gorruption 
 on the part of officials, and the least temptation to law- 
 breaking and evasion on the part of the taxpayers.^* 
 (4) That it bear equally — so as to ^give.no citizen an 
 advantage or put any at^a disadvantage as compared 
 with.aiibers."^« 
 
 Section 1. — Interference with Production. 
 
 Indirect"taxes~tSi3^TTctiecFpro3uction and to cause 
 
 13 
 
14 TAXATION OF LAND VALUES 
 
 scarcity by obstructing the processes of production. 
 They fall upon men as they work, as they do business, 
 as they invest capital productively.'" 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 
 purposes'^ or in lesser degree or not at all, lay no penal- 
 ties u pon indiistry ;^n , ( ;], 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 govern- 
 ment receives.'^ But land value taxes take nothing 
 from the .peflplcin. excess .of the taxT 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 can not be "accidentally" overlooked. 
 Nor can its value be greatly misapprehended, or mis- 
 staitecLJSeither under-apprai'sement'lior over-appraise- 
 ment is possibl&Jto any important extent_ without the 
 connivanee'wI-tiiejuilialejQpmmunity." The land values 
 of a neighborhood are matters of common knowledge. 
 Any intelligent resident can justly appraise them. 
 
TAXATION OF LAND VALUES IS 
 
 and every other intelligent resident can fairly test 
 the appraisement. Therefore the tyranny, corrup- 
 tion, fraud, favoritism, and evasions which are so com- 
 mon in connection with the taxation of imports, manu- 
 factures, incomes, personal property, and buildings — 
 the values of which, even when the object itself can not 
 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.'* 
 
 Section 4. — Equality . 
 
 In conforming to the fourth maxim, thejand yalue 
 tax bears more equally — that is to say, more justly — 
 than anyjather tax. It is the only tax that falls_ upon 
 the taxpayer in proportion to the pecuniary !^gnefit§..he 
 receives from the public, ^^ and its tendency, accelerat- 
 ing with increase of the tax, is to leave to every one the 
 full fruit of his own productive enterprise and effort.^* 
 
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 
 refoxtP 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 notwithst anding our miracu- 
 lous _industrial_£rogress. 
 
 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.'^ Its acute 
 mani f estatians -in- recurring. periods-of-.-'hard times' ' ' ' 
 are like, epidemics of. ^xLmlenL 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 
 
 16 
 
TAXATION OF LAND VALUES 17 
 
 panic-stricken efforts at restraint, with despotism on 
 the other. And it persists and deepens despite the con- 
 tinuous JMXSS.SS.Si.t wealth-producing power. ^° 
 
 That much of our poverty is involuntary may be 
 proved, if proof be necessary, by the magnitude of 
 charitable work which aims to help only the "deserving 
 poor" ; and as to undeserving cases — the cases of vol- 
 untary poverty — who can say but that they, if not due 
 to birth and training in the environs of degraded 
 poverty,*" are the despairing culminations of long-con- 
 tinued struggles to maintain respectable independ- 
 ence?*^ How can we know that they are not essen- 
 tially like the rest — involuntary and deserving ? It was 
 a profotmd distinction that a clever writer of fiction*^ 
 made when he wrote of "the hopeful and the hopeless 
 poor." There is, indeed, little difference between vol- 
 untary and involuntary poverty, between the "deserv- 
 ing" and the "undeserving" poor, except that the "de- 
 serving" 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 pov- 
 erty for their children if not for themselves.*^ Most 
 men would rather die than lose a steady job or accu- 
 
18 TAXATION OF LAND VALUES 
 
 mulated 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.** Our civilization can not 
 long resist such enemies as poverty and fear of poverty 
 breed; to intelligent observers it already seems to 
 yield." 
 
 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 can not be traced 
 to its__causej, 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.*' 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 thi ng;s that a bolish poverty by satisfy- 
 ing want/° But it is quite unnecessary to specify all, 
 and tediously to trace each to its origin in detail. In 
 searching for the source of one we shall by generaliza- 
 tion discover 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 of Bread with reference to Man, for it is as an 
 object for satisfying the wants of man that^we, con- 
 sideiuhrgad at all. And then our first inquiry should 
 be : Is Bread a 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 wiL 
 call "External Objects Jj meaning ..objects-thal are ex- 
 ternal tqjnan. And inasmuch as bread is a product— 
 
 19 
 
20 TAXATION OF LAND VALUES 
 
 produced, as we have already noted, by a familiar 
 manufacturing process, — and must therefore have con- 
 stituents, 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 c onstituents of bread be in- 
 serted. 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 continua- 
 tion 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 clas- 
 sification 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 never- 
 theless 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 radical difference at once appears. The lot of 
 
PLATE I 
 
 CHART A 
 
 pro'"*^' co.^"-'""' 
 
 
 ^ BAKER 
 
 A LOT LAND ^^^^^ ^q j^^f^p g^j 
 
 
 AN OVEN 
 
 Z^xferml Oh'ecti 
 
 BRtAD 
 
 A rmt 
 
 FLOUR 
 
 
 YEAST 
 
 
 SALT 
 
 
 WATER 
 
 CHART B 
 
PLATE II 
 
 prorf"^' 
 
 A BAKER ^^'^ 
 
 
 A LOT ''LAND 
 
 
 Z^xkrmi Ol^/ecls 
 
 BREAD 
 
 AN OVEN 
 
 A EIRE 
 
 FLOUR 
 
 YEAST 
 
 SALT 
 
 WATER 
 
 £xUr/ii7l O^JecTi 
 
 CHART C 
 
 prod"'' 
 
 const"""" ci«s^'f''"'"" 
 
 A BAKER '^^^ 
 
 fixfernal Olr/ects ■ 
 
 BREAD 
 
 A LOT«aAND 
 
 AN OVEN 
 A FIRE 
 FLOUR 
 YEAST 
 SALT 
 
 — A/alural 
 
 External Ol'/eets 
 
 GrliTicial 
 External Oh'ects 
 
 
 WATER 
 
 
 CHART D 
 
TAXATION OF LAND VALUES 21 
 
 land is a Natural External Object. The oven is an Ar- 
 tificial External Object. The lot exists independently 
 of man's art; the oven can have no existence whatever, 
 as an oven, but for man's art.*^ 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 arti- 
 ficial." Let us note this difference upon our chart, 
 which now takes the form of Chart D, Plate IL 
 
 Having thus classified or generalized the constituents 
 of bread, it is no longer necessary to name them in- 
 dividually. 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. J;h,e„ "product' '.and 
 as a "factor." Yet it can not 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 ChMt„CUia.£lal£,„lI,--.J3illidi. specifies Jie, 
 artificial constituen ts. _Qf-Jir£.ad....naxaeI:K.;..-avxti.„.fire. 
 flour,_yeastj__saltj, water. How do these artificial factors 
 differ from the artificial product, bread ? Simply in this, 
 that the artificial factors are un finis hedhreaAjjwhile the 
 prodiliiJag£aaiii?}££Lliread." The di fference , then, be- 
 
22 TAXATION OF LAND VALtTES 
 
 tween Artificial External Objects, as a factor, and Arti- 
 ficia l,. External Objects as a final t>roduct. is that as a 
 factor^they are unfinis hed, and as a product they are 
 fi nished. 
 
 Let us note the distinction upon the chart. It is done 
 in Chart F, Plate III. 
 
 The language of the chart may now be supplemented 
 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.^^ 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.°^ And from 
 mere inspection of the chart we may see, what was 
 promised when we began its construction, that in_ 
 searching fr>r tlio snnrrp nf qy}e, nf the objects t hat 
 satisf3[Jh,uman 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 consump- 
 tion of finished artificial objects, technically termed 
 Wealih,' 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 
 Lobar; (2) natural..obiects.external tQ-.man. techn icallv 
 termed Land; and (3) unfinished artificial objects, 
 technically termed Capital. 
 
PLATE III 
 
 d^' 
 
 ,et 
 
 pro 
 
 (T/f/Z/'c/W/ 
 External Oly^ts 
 
 f 
 
 i^ 
 
 Afatural £xternal Olr/ecl} 
 (7rt ficial External Ol-Jecfi 
 
 CHART E 
 
 yM''' 
 
 pcior' 
 
 
 /^an 
 
 FiDisM drtif/rinl 
 Zlxternal Oii^/cits 
 
 //arural £!xtern(Tl Oh'ects 
 
 
 unfi/iis/ieJ 
 CJrIif'cial £xternal Ol^jecti 
 
 CHART F 
 
 od^' 
 
 V 
 
 /Tffijhi/ (7rtiTicial 
 External Oh'eds 
 
 (WEALTH) 
 
 fa 
 
 .lors 
 
 r//' 
 
 'an 
 
 (LABOR) 
 
 ,A/olural Exlernal Ol^/ecfi 
 
 , , (LAND) 
 
 'Artificial External Olr/ects 
 
 (CAPITAL) 
 
 CHART G 
 
PLATE IV 
 
 f' 
 
 idacf 
 
 siflCI 
 
 •tor* 
 
 (WEIALTM) 
 
 /ian 
 
 (LABOR) 
 
 A/<7!ural External OA/ech 
 
 (LAND) 
 
 CHART H 
 
 CHART I 
 
TAXATION OF LAND VALUES 23 
 
 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, fin- 
 ished and unfinished, resolve upon final analysis into 
 two factors : (a) the activities of man, and (&) natural 
 external objects ; or, in technical language, all Wealth, 
 finished and unfinished, resolves upon final analysis 
 into Labor and La nd. In final analysis, therefore. 
 Capital is eliminated. It exp^sses nothii^~wliich the 
 two remaining factors do not imply ; f or Jt is by the 
 conju nction of those two factors that Capital is pro- 
 duced."* Unfinished artificial objects and their tech- 
 nical term. Capital, should therefore be erased from 
 the chart. The result appears in Chart H, Plate IV. 
 
 Thus all-artificial objects external. toyman. (Wealth) 
 are found to have their ultimate source in the conjunc- 
 tion of man's activities (Labor) with natural objects 
 external to man (Lajid). 
 
 Finally, by dropping cumbersome expressions alto- 
 gether, and using only technical terms, we complete 
 this series of charts"" with Chart I, which formulates 
 the final analysis of productive industry. The chart 
 may be read as follows : Wealth Js-prMducedsaLdy by 
 the..a^lication of Labor to Land.^^ 
 
 This, then, is the finaLaxLaljrMs_olthe_p_rocessjesJ;hat 
 are prunanlyj^ecessary for..,the abolitionjof^qyerty. In 
 the application of Labor, which includes all human 
 
24 TAXATION OF LAND VALUES 
 
 effort/'' to Land, which includes the whole material 
 universe outside of man,"* we find the source of 
 Wealth, which includes all the artificial things that sat- 
 is fy_iianJi^* This is the first great truth upon which 
 the Singletax philosophy rests. 
 
CHAPTER III 
 
 THE PRODUCTION OF WEALTH 
 
 When considered in connection with primitive 
 modes of production, the vital importance of the 
 primary truth that Wealth is produced solely by the 
 application of Labor to Land, is clear."" If primi- 
 tive modes prevailed, in voluntary poverty . could be 
 readily traced either to direct enslaveme nt through 
 owners hip of Lab or, or t o indirect enslavement 
 through ownership of Land.®^ Therecoul^T be no 
 other cause. IF' ^SotK ^auses ^^ere^absent, every in- 
 dividual mi ght, if he wished, enjoy all the Wealth 
 that his own powers were, capable of producing iaJhe 
 primitive^ modes of production, and under the limita- 
 tions of common knowledge,,, that belonged _LQ.l!ls--en- 
 vironment."^ 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 funda- 
 mental truth. Yet it is no less vital in civilized than 
 in primitive modes of production. 
 
 Section 1. — Division_of Labor. 
 
 The essential difference between primitive andciyil- 
 ized mo des of prod uction is not in_ the accumulation of 
 Capital, which characterizes the latter; it is in the 
 
 25 
 
26 TAXATION OF LAND VALUES 
 
 greater scope and minuteness of its division of La- 
 ■bor." Capital is an effect of division of Labor rather 
 t Vian a rm ixe. Division of Labor augments labor power 
 and relieves man from the perpetual pursuit of mere 
 subsistence. It makes civilization possible,"* by the pro- 
 duction 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 
 differences 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 geography'"), 
 differ inversely, one being better adapted to the pro- 
 duction 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 division of Labor than without it. 
 
 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 — 11 in corn and 11 in sugar 
 — as shown on Plate V, Chart A. Production in that 
 manner would ignore the opportunities afforded by na- 
 ture 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. 
 
PLATE V 
 
 
 CORN 
 
 SUGAR 
 
 TOTAL 
 
 MAINLAND 
 
 10 
 
 / 
 
 // 
 
 ISLAND 
 
 / 
 
 10 
 
 // 
 
 TOTAL 
 
 // 
 
 // 
 
 ZZ 
 
 CHART A 
 
 
 CORN 
 
 SUGAR 
 
 TOTAL 
 
 MAINLAND 
 
 Jio 
 
 
 
 ^0 
 
 ISLAND 
 
 
 
 ^<? 
 
 Jio 
 
 TOTAL 
 
 ZO 
 
 2^0 
 
 fo 
 
 CHART B 
 
 
 CORN 
 
 SUDAR 
 
 TOTAL 
 
 MAINLAND 
 
 10 
 
 10 
 
 ^0 
 
 ISLAND 
 
 /o 
 
 10 
 
 JIO 
 
 TOTAL 
 
 JrO 
 
 JIO 
 
 fO 
 
 CHART C 
 
TAXATION OF LAND VALUES 27 
 
 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, manufactur- 
 ing, transporting, storekeeping, professional employ- 
 ments, agriculture, or the incidental occupations. Min- 
 ute division of labor, instead of accounting for pov- 
 erty, makes it all the more unaccountable. 
 
 Section 2. — Trade. 
 
 But division of labor is dependent upon trade. If 
 trade w^ere wholly stopped there would be no division 
 of labor;"' if it be interfered with, division of labor is 
 obstructed. °' In Chart B on Plate V, which illustrates 
 the effect of division of labor without trade, the Main- 
 land 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."* The com- 
 parison" ° illustrates 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,'" 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 prin- 
 
28 TAXATION OF LAND VALUES 
 
 ciple 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 indi- 
 viduals that trade, and not communities or nations as 
 such.^^ 
 
 Section 3. — The Law of Division of Labor and 
 
 Trade. 
 
 Now, what is it that leads men to conform their con- 
 duct to the principle illustrated by Chart C? Why do 
 they divide their labor and trade its products? A sim- 
 ple, universal and familiar law of human nature moves 
 them. Whether men be isolated, or be living in primi- 
 tive communities, or in advanced states of civilization, 
 their demand for consumption determines the direction 
 of Labor in production.''^ 
 
 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 al- 
 ways determined the direction of his labor in produc- 
 tion.^' And when we remember that what Robinson 
 Crusoe was to his island in the sea, civilized man as a 
 whole is to our island in space, we may readily under- 
 
TAXATION OF LAND VALUES 29 
 
 stand the application of the same simple law to the 
 great body of labor throughout the civilized world/* 
 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 de- 
 sirable. 
 
 Chart A on Plate VI classifies about every kind of 
 Wealth that man requires, and also Personal Services 
 which do not crystallize in material products — such 
 services 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 them" 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 re- 
 pair old ones, and would scour the country for work- 
 
30 TAXATION OF LAND VALUES 
 
 ingmen 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 labor. What Personal Servants really do in 
 demanding food is to direct the expenditure of labor 
 to the production of food and food-producing imple- 
 ments and materials. Demand for consumption deter- 
 mines the direction of labor in production. We indi- 
 cate this point upon the chart by running a blue arrow 
 from Food-makers to the food reservoir, as in Chart 
 C, Plate VIL 
 
 No complaint may now arise of lack of work in 
 food-producing lines.'* 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 com- 
 pensated for making food by taking clothing from re- 
 tail stores in exchange for their unpaid claim against 
 Personal Servants. Clothing thereupon flows out of the 
 commercial reservoir to them as food flowed out to 
 Personal 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 
 salesmen. Demand for consumption has determined 
 
PLATE VI 
 
 CHART A 
 
 CHART B 
 
PLATE VII 
 
 CHART C 
 
 CHART D 
 
TAXATION OF LAND VALUES 31 
 
 the direction of labor in production. The yellow ar- 
 rows 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 Cloth- 
 ing-makers supply clothing, Food-makers can not 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 
 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 
 undertake to make it themselves. They are skilled in 
 making clothing; they are not skilled in other ways. 
 Accordingly they utilize the claim against Personal 
 Servants, which has now passed to their credit in ex- 
 change for clothing, by drawing from the commercial 
 reservoir the particular commodity they desire. Sup- 
 pose it to be shelter. They proceed as Personal Serv- 
 ants 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 Luxury-makers at work. Luxury- 
 makers then pass the claim over in exchange for serv- 
 
32 TAXATION OF LAND VALUES 
 
 ices, and Personal Servants redeem it by rendering 
 such services as Luxury-makers demand/ '^ Everybody 
 is now paid for his own products with the products 
 of others. Through similar demands for more or 
 better food, more or better clothing, more or better 
 shelter, more or better luxuries, more or better per- 
 sonal services, the interchanges may be perpetuated in- 
 definitely ;'° and these demands will be made until all 
 wants are satisfied — until involuntary poverty is abol- 
 ished." 
 
 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 VIIL 
 
 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 de- 
 termines the direction of his own labor in production 
 as truly as Crusoe determined his. The demands of 
 Personal Servants for food, of Food-makers for cloth- 
 ing, of Clothing-makers for sheltei, 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.*" 
 
 Let us now complete the illustration. When we be- 
 gan it we noted a distinction between Personal Serv- 
 ants, who render mere intangible services, and the 
 other classes, who produce tangible wealth. But essen- 
 
PLATE VIII 
 
 CHART E 
 
 CHART F 
 
PLATE IX 
 
 CHART G 
 
 WAGES 
 
 ^VCALTH:^ 
 
 LAND RENT 
 
 LABOR 
 
 CHART H 
 
TAXATION OF LAND VALUES 33 
 
 tially 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 therefore to distinguish the different kinds of 
 labor,*^ 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 fol- 
 low them in detail, or to illustrate their particular 
 movements in any simple way. And it is unnecessary. 
 The principle illustrated by the charts on Plate VIII is 
 the essential principle of all division of labor and trade, 
 however minute the details and intricate the move- 
 ments; and any person of ordinary intelligence who 
 wishes to understand will need only to grasp the essen- 
 tial principle as illustrated by the charts to be able to 
 apply it to the complex experiences of every-day indus- 
 trial life. All legitimate trade is the interchange of 
 Labor for Labor. *^ 
 
 Section 4. — Dependence of Labor Ujign^ Land. 
 
 We have now seen that division pf^ labor and trade, 
 the distinguishi ng charact eristics of civilization, not 
 only ioaxaaaJahor power, but grow out of a law of 
 human nature which tends, by maintaining a perpetual 
 revolution 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 
 
34 TAXATION OF LAND VALUES 
 
 if the circle flowed freely in accordance with the prin- 
 ciple here illustrated; work would abound until want 
 was satisfied. There must therefore be some obstruc- 
 tion. 
 
 That indirect taxes hamper trade, we have already 
 seen/° but the obstructiori must be more fundamental. 
 
 As we learned at the outset, all the material wants 
 of men are satisfied_solelx by Labor from Land. Even 
 personal services can not be rendered without the use 
 of appropriate land.** Let us then introduce into the 
 illustration, in addition to the different classes of La- 
 bor, the corresponding classes of Land-owning inter- 
 ests, indicating them by black balls as in Chairt 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 outflow of service, are respect- 
 ively offset by arrows that indicate a corresponding in- 
 flow of service; but the arrows that flow from the 
 various classes of Labor to the various Land-owning 
 interests are offset by nothing to indicate a corre- 
 sponding return. 
 
 What possible return coujd those interests make? 
 They do not produce the land which they charge la- 
 borej_s_for, using ; nature, prasudes. that. They_dQ. not 
 give value to it; Labor as a whole does that. They do 
 not protect- the community through the pplicei^ the 
 courts, or the army^. nor asaist.it_thrQwglL5chools and 
 post-ofSces.; organized society_.dQ£s_that.tp, the extent 
 to which it .ig^done, and the Land-owning interests con- 
 tribute nothing_toaiaid.it-.Q];h£!i than, a ^jaxt^of Iwhat 
 
TAXATION OF LAND VALUES 35 
 
 thej. exact JriiGL Labor.'" As between Labor interests 
 and Land-owning interests the arrows can be made to 
 run in only one direction. 
 
 Suppose, then, that as prnd uctive me thods^ improve, 
 the exactions of the Land-owning interests so expand 
 — so enlargaJJie-jdEaiaJEom labor — as tojoakaJLin- 
 creasingly. difi&cult. for any ^as&^oLm.orker.'JL .t.n. .ahtain 
 tVip T jinrl tVipy nppi] I'n nfflf f to. patisfv the demands 
 made upon them, for tJ3£^kiiuLoiJAr.eallJaJ]i£aLpiaduce 
 or service they render. Would it then be much of a 
 problem to determine the cause of poverty, or to ex- 
 plain hard times? Assuredly not. It would be plain 
 that poverty and hard tirnes are due to obstacles placed 
 by Land-owning interests in the way of Labor's access 
 to Land. 
 
 We thus see that in the civilized state as well as in 
 the primitive, the fimdamentaL cause of poverty is di- 
 vorce of^abqr^from Land.'* But the manner in which 
 that divorce is accomplished in civilized conditions re- 
 mains 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 prin- 
 ciple of Distribution, which is yet to be considered_ln 
 the development of the latter will be found the expla- 
 nation of the divorce of Labor from Land. 
 
 This chart reminds us that Labot-( human exertion), 
 by apphcation to Land (natural. materi als and fo rces 
 external j;a man), produces Wealth (the generic term 
 for all those things that tend to satisfy the material 
 wants of man), and soJjendsJxx-aholiab-poxerty. No 
 man's poverty can be abolished in any other way than 
 by his own labor, unless it be by gifts, or vulgar rob- 
 bery, or legalized spoils. 
 
 The illustration shows also that -Wealth. .distributes" 
 nltimately into Wages^^ (a fund made ug^ the aggre- 
 gate of the earnings of individual l aborers), which cor- 
 responds to Labor; and Rent** (a fund made up of the 
 aggregate premiums.,Ior^^a.ally desirable locations), 
 whic h correspo nds to Land.*" 
 
 Section 1. — Explanation of Wages and Rent. 
 
 It is differences in the desirableness~6f land that di- 
 vide Wealth into the two funds — Wages and Rent. 
 
 36 
 
TAXATION of: land VALUES 37 
 
 Labor naturally a pplies itself to that land from 
 which, considering_aJLthe_e2dstiag..aad.knowjx-circum- 
 stances, mos t Wealth can be produced with J east^ ex- 
 penditure nf lahnr inr.ce. Such land is the best. 5o_ 
 long as the b est la nd exc eeds demand for it, laborers 
 are upon an equality of opportunity, an3n^[e'enEire'~ 
 produ ct goes to each of th em ag "yV'ages in_2ro£ortion 
 to the labor iQrceJhsy-iespjestiYSbLSxpend. B ut when 
 
 some la borers must resort to land where, with an equal 
 expen diture of. la bor force , they produce less wealth 
 than those^ wJlo_ us^e^ the^Jbe,^^^^ The labo rers 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 jnight , obtai^ by .jKQrking _for 
 them s el.v.es-.upaa.-the~ftQQrer-iand. t Thus we have the 
 differentiation of Rent from Wages/Kent goes to land- 
 owners as such, irrespective of whether they labor or 
 not; Wages go to laborers^ such, irrespfective of 
 whether they own land or not.^ 
 
 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,'^ from 4 
 down to \. 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 
 to each space. Let it be assumed also that one space is 
 as accessible to Labor as another, and that the differ- 
 ences in their productiveness are known. Now to which 
 
38 TAXATION OF LAND VALUES 
 
 space would Labor first resort? Obviously to that 
 which would yield most Wealth to the given expendi- 
 ture 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 0. The laborers, as such, take the entire 
 product, dividing i t among th emselves in proportion to 
 their services. There is no Rent, because other labor- 
 ers find equally good opportunities to prbHuce^in the 
 unmonopolized (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.'^ 
 
 But if demand for land should continue until the 
 best space was monopolized,®' and some laborers were 
 forced to resort to the next, the best space would then 
 command a premium ;°* Re nt would rise and Wag es 
 would fall. Even though but few laborers were actu- 
 ally 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 elementary principle of Diatribution,^. that Wages 
 fall-and Rent rises as demand for land forces labor to 
 land.pf lower pradtictiveness.'"' The principle may be 
 more impressively illustrated by supposing that de- 
 mand for spaces in the chart advances so far as to in- 
 clude all the closed spaces, except part of the poorest 
 
PLATE X 
 
 CHART A 
 
 WAGES 
 
 RTNT 
 
 f 
 
 
 
 
 f 
 
 1 
 -J 
 
 ^ 
 
 / 
 
 ^ 
 
 n 
 
 
 
 
 
 
 CHART 
 
 B 
 
 
 
PLATE XI 
 
 WAGES 
 
 RFNT 
 
 J 
 
 r 
 
 J 
 
 
 
 
 J 
 
 Z 
 
 / 
 
 
 
 / 
 
 n 
 
 
 
 
 CHART C 
 
 WAGES 
 RENT 
 
 
 / 
 
 / 
 
 / 
 
 
 f 
 
 J 
 
 Z 
 
 / 
 
 
 
 
 >^-^ 
 
 / 
 
 0' 
 
 CHART D 
 
TAXATION OF LAND VALUES 39 
 
 productive one. See Chart D, Plate XL We now find 
 that all Wages have fallen to the level of Wages on 
 the poorest land that 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. °® 
 
 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 
 conditions being the same, than the like expenditure 
 of Labor force will produce from the best land to be 
 hdd for nothing. Rent takes up the difference.'^ 
 
 Section 2. — Nor mal Effect of Social P rogress Upon 
 ^ Wages and R ent. 
 
 In the charts on Plates X and XI the effect of social 
 growth is ignored."' We now illustrate that effect. 
 
 Social growth increases the productive power of La- 
 bor. 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 1.°" If the re were n o increased demand for 
 land, the effect on Wages and Rent would 'then be as 
 shown on Chart E, Plate XII. The productiveness^f 
 the poorest land in demand having risen from 1 (Chart 
 D on Plate XI) to 3 (Chart E on Plate XII), Wages 
 on all the la nd in use rise acco rdingly from 1 to 3. 
 They can not be less anywhere than at the place of 
 
40 TAXATION OF LAND VALUES 
 
 Ipast prnrlnrtrvPTiPss By the same econom ic law , Rent 
 remai ns at zero fo r the fourth space in the chart, that 
 of the least p roductiveness7and r ises in the other s p a g sg 
 respectively from.l. 2^m±USL7. iLaad.97.^ A little 
 study of the charts wi ll sh ow why. 
 r^he 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.^"" As a propor- 
 tion of product, not only does Rent tend to rise with 
 increased productive power, but Wages tend to fall.i 
 
 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 elifect) , 
 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.^"^. 
 
 Section 3. — Significance of the Upward Tendency of 
 Rent. ~™" ^~~ 
 
 ""Nowrwhat is the meaning of the tendency of Rent 
 to rise with social progre ss, while Wages tend propor- 
 tionally-la Jail ? Does it not plainly indicate that if 
 Rent be treated as public r evenue, advanc es 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 capita l. improvementsJn ^iroductiy-e- power 
 
PLATE XII 
 
 WAGES 
 
 J J ~- 
 
 -J _.' ^„; 
 
 
 
 
 100 
 
 yo 
 
 /o 
 
 J 
 
 / 
 
 RENT 
 
 // f/' / 
 
 (J 
 
 
 CHART E 
 
 WACE5 
 RENT 
 
 i 
 
 
 
 
 
 1- 
 
 ? 
 
 ^ 
 
 / 
 
 ^ 
 
 ,/7 
 
 
 
 
 CHART F 
 
PLATE XIII 
 
 WAGES 
 
 RENT 
 
 -3 J 
 
 
 
 
 -#- 
 
 ■J 
 
 X 
 
 / 
 
 
 
 
 
 
 
 CHART G 
 
 VACES 
 RENT 
 
 J 
 
 -J 
 
 
 
 
 
 n 
 ■J 
 
 z 
 
 / 
 
 
 
 
 / 
 
 1/ 
 
 
 
 1 
 
 CHART H 
 
TAXATION OF LAND VALUES 41 
 
 will tend to make slaves of the maii}^ and masters of a 
 few? 
 
 Does it not mean that common ownership of Rent 
 is in harmony with natural social law, and that its pri- 
 vate appropriation is disorderly and destructive? 
 Caused and increased by social growth/"^ the benefits 
 of which should be common, and attaching to land, 
 which should be a common inheritance. Rent emphatic- 
 ally asserts itself as a natural fund for public ex- 
 
 penses^Y 
 
 If there be at all such a thing as design in the uni- 
 verse, then has it been designed t hat R ent, the earnings 
 of ind ividuals jointly a s a social whole, shall be taken 
 for the support oiA&Gommunity,, and that Wages, the 
 earning s of indivi duals as individ uals, shall "KTeft to 
 each indivi dual earner in proportion to the v alue of his 
 serske. 
 
 Section 4. — The Effect of Confiscating Rent to Pri- 
 
 vate Us e. 
 
 By giving Rent to individuals, society ignores this 
 just law.^°* 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-com- 
 ers take possession of the best land. Their doing so is 
 
42 TAXATION OF LAND VALUES 
 
 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 in- 
 spection of the chart itself. But the first-co mers — in- 
 stead oUgaving for others space they do not them - 
 sel ves need for'T JieTaJ^nTniartsB. C, D and E — now 
 
 appropriate-the-whQlfi-Qf-tJ jie best space^ usin^ only 
 par t hut c lai ming ownership of the re st. By dis- 
 tinguishing 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 appr opriating more 
 of the best space than is used?/SinipIy"tEat"^e ap- 
 propriators may secure the pecumary benefit of future 
 demami~lQX„ the best iand.X What will enable them to. 
 secure that? Our legal system of land monopoly, 
 which confiscates Rent fro m the CQmm ui;i;t y that earns 
 it_and gives .it_Jo_Jand;_owners_who, as^ land-owners, 
 e arn noth ing. ^"^ 
 
 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, thpy fin d, all of it ow ned. They are therefore 
 obliged to go upon poorer land or else to buy or rent 
 from ownersof the best. How much will they pay for 
 the best? Not more than 1 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 productive- 
 ness and the productiy.enesa-,Qf.il)SJiex£.,best, But if 
 the fir st-comers, reasoning that the next best land 
 
TAXATION OF LAND VALUES 43 
 
 will soon be scarce and theirs will then rise in value, 
 refuse to sell or-to rent~at ffia'frx'ajiati.Qn.lthe new- 
 comers must resort to land of the second grade, 
 though the best be as yet only partly used. Conse- 
 quently land of the first grade commands Rent before 
 it otherwise would. 
 
 As the seller's price under these circumstances is 
 arbitrary, it can not be stated in the charts j-^ut the 
 nonspeculative buyer's price is limited by the superior- 
 itjTof the best land over that which he can get for 
 nothing. YThe charts may be made to show this, as in 
 Chart G, Plate XIIL The inevitable effect is to make 
 Rent at the expense of Wa ges! As that effect is illus- 
 trateToy the chart, Rent rises from ( Chart F, Plate 
 ,XII) to 1 (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^^ lab-PX force, a rush is then made 
 for unap propriated lan d — 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.^"" We may suppose, for illus- 
 tration, that all the remainder of the second space of 
 Chart G on Plate XIII, and the whole of the third, are 
 thus appropriated. The effect is noted in Chart H 
 of Plate XIIL At this point Rent does not increase 
 nor Wages fall. The reason is that there is no in- 
 creased demand for land for use. The holding of in- 
 ferior land for higher prices, when demand for use is 
 
44 TAXATION OF LAND VALUES 
 
 at a standstill, is like owning lots in the moon — in- 
 teresting 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 suppl ied from the 
 
 open gp^rA.jiKkAak..yia]iAc.hiit 1 tn tkp-glv^r|, \^\\QX fqrrp, 
 
 or else f£Qd the better grades which are monopoliz ed. 
 That is, prod ucers must go to the frontier fo r free 
 land, being able tlierp tn prnHnrp n^ly ] to ^\]f unit of 
 laboE„ force; ox become tenants of the owners of th e 
 bet ter grad es, paying in annual rent the difference 
 betmeeiL- tlTe prodnc tiv.enesr7^''tTT'e nTefte^ l^n^T affii 
 that -(»f.4bfe-£EeeJand.al-the-irQritier.;,„Qi:Jjuy 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 geljnQr£lar_the,gixfia. expenditure of labor force 
 than he could get where land was fr ee. As illustrated 
 by the charts this would be only 1. IfJie.got more, 
 it would JiQt^be a s producer from or on.th e land ; it 
 would hf ac mnnnpnli^pr fif t-h^ l^nd. 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 1 as an item of Rent in parentheses on this 
 chart indicates potential Rent. Produceta-would-give 
 that much for the privilege of using th e space, but 
 owners hold out.igir better terms ;.theref pre neither 
 Rent nor Wages is actually produced,_though both 
 might be. The figure 1 as an item of Wages in paren- 
 
TAXATION OF LAND VALUES 45 
 
 theses on the same chart, indicates potential Wages — 
 the increase of the Wages fund that wmnnTesult 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 mon- 
 opoly of 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, own- 
 ership of land for speculative 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 
 plement nf snrial grnwtVi Let US now assume as before 
 (Chart E, Plate XII), that social growth has increased 
 the productive power of the given expenditure of la- 
 bor 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 1 when 
 applied to the poorest. 
 
 Labor would not be -benefited now — as it was when 
 with the same chart we illustrated the effect of appro- 
 priation of land only for use. Although muchj.ess land 
 is actually used (Chart J), Wages are only 1 in Chart 
 J, whereas they were 3 in Chart^^E; yet the only dif- 
 ference between these two charts is. that,,§JJ,_thg „jTion- 
 opolized Jand^^Chiart^Ej.s^^//3; M?di~.Wt!iJWL^iLO,L it 
 in OiajctJLas>.Ji6Z<ieawf-«fl/«4«j^. The prizes which ex- 
 pectations of future social growth dangle before the 
 
46 TAXATION OF LAND VALUES 
 
 cupidity of men as rewards of land monopoly, raise 
 demand for land so as to make it more than ever dif- 
 ficult 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 con- 
 sequently crowded out to the open space that originally 
 yielded nothing (Charts F, G, H and I), but which in 
 consequence of increased labor power now yields 1 
 (Chart J) — as much as the poorest closed space orig- 
 inally yielded — to the given expenditure of labor 
 force."^ Wages are 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 1 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 
 equiHbrium. This is sometimes alluded to as "the iron 
 law of Wages." They can not fall belowl, for that 
 would reduce labor power by starvation; but neither 
 can they rise above 1, nomatter^how great the increase 
 of productive ,p.p\yeX»,^.Q, long asjmonopolization of un- 
 used laaad. is permitted . and pays. 
 
 Some producers would continually be pushed back 
 to land which increased productive power would have 
 brought up in productiveness from to 1, and by per- 
 petual "jug-handled" competition for work, they 
 
TAXATION OF LAND VALUES 47 
 
 would so regulate the labor market that the given ex- 
 penditure of labor force, however much it produced, 
 could nowhere secure more than 1 in Wages"* — the 
 productiveness, 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 accus- 
 torned living without still further increase ofproduc- 
 tiv e power . Comp etition for work would then compel 
 all laborers to increas&ibdx£2£imdiJM;fijQiJal»JcJorce, 
 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."" Either 
 that, or they would be obliged to adapt themselves to 
 a lower scale of living.^^" In fact, they do both. 
 
 The incidental disturbances of general readjustment 
 are what we call " hard ti mes." ^^^ These_culminate in 
 a collapse of speculative land values, which Jets unused 
 land into .th&JiiarkeLat Jq,wxx. ,pxices,_and-.b3UC£ducing 
 Rent revives ind ustry. Thus increase of labor force, a 
 lowering of the standaras of living, and depression of 
 Rent,->xo-operate to bring on what we call "good 
 times."\ But n o sooner do "good times" return t han 
 renewedAdemands for-land-set- in. Rent rises again, 
 Wages fall again, and "hard times" duly reappear, 
 The end of every-~^exiod~ioi-.iihaj;d.4iiH€^- -finds Rent 
 higher and Wages lower, as a proportion of product 
 even if not as a quantity, than at the end of the pre- 
 vio«s-f»&riod.^^° 
 
 This result is produced by the disorderly system 
 
48 TAXATION OF LAND VALUES 
 
 under wVtir.h gnn'pty H^vprta 'Rfrjt from rnmmnn tO in- 
 
 dividualJlSSs. That, maladjiistrnfflt, ifi.th£ fundamental 
 ca use of poverty . And prngrpt;s, so lon g as the m alad- 
 justment rnntinupj;- instP-ad nf tending- iq remnve pnv- 
 erty as naturally progress should, actually generate s 
 amUntsasifies it. Pnvprtv persists w ith increase o f 
 
 prndiirtlu;e pnwer hpransp ]^n(\ ValUfiS - when Rent is 
 privat ely appropria ted, tend to even further increase. 
 There can be but one outcome : for individu a l s, suf- 
 fering and-iifigxadation ; for socie ty, lawlessn ess and 
 destructioujoj; decay. 
 
 Section 5. — Effect, of .Exi aining Rent for Common 
 
 Use^ ' 
 
 If society rptainpH .Rptit for r,ommnp„,purp9?figv,.aU 
 incentive, tn hold land for any other object than im- 
 mediate usq 'vypuM disappear. The effect may be illus- 
 trated 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 Chari J, Rent is. confeoalsd-tQ private use; 
 whereasjn_Chart K, Rent is taken up for common use. 
 All the labor force ind icated with red in CharF^'does 
 not more than utilize the space to the le ft and part of 
 the adjoining spare nn Chart K ihis WOUld elevate 
 Wages to what could be produced with the given la- 
 bor force from the poorer of the two spaces. Thus. 
 in the figurfiS-jof-the-char-tyW^ei' wouM rise from 1 
 (Chart J) to -SO (Chart K) ; and increase of Rent 
 
PLATE XIV 
 
 VACK 
 
 RtNT 
 
 / 
 
 / (/) / 
 
 i 
 
 
 T 
 
 <^ 
 
 J 
 
 ^ (/) <? 
 
 CHART I 
 
 VACtS 
 
 //(/)// 
 
 
 iJ^^Ml'x 
 
 
 10 . 
 
 ■'13^7 
 
 
 R[NT 
 
 // 
 
 // (/) ^ <? 
 
 CHART J 
 
PLATE XV 
 
 VACC5 SO JO 
 
 J 
 
 / 
 
 RENT SO 
 
 CHART K 
 
TAXATION OF LAND VALUES 49 
 
 would not enrich.Land-owners at the expense of other 
 intereat§*_hnt would enrich jthe_ y/hole_c2njnitmt^ 
 
 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-fo4i. Common Use. ——-- ~-~~ -"~ 
 
 To take up 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 col- 
 lecting public revenues. "Great changes can be best 
 brought about under old forms."^^* Let Jani be Jbeld 
 nominally_asJt is jjow. Let taxes be c ollected bv_J :he 
 same processes ,^3, now. But abolish all taxes except 
 those that fa ll upon actual and potent ial Rent, ,that is 
 to say, upon land value s. Nothing else is necessary. 
 Nor is anything necessary further except t o increase 
 land valnc; taxeJi»,..aS-JB.efflLinagaaSS. If all revenue 
 taxes were centralized upon land values (even within 
 the limitations of the narrowest needs of government 
 economically administered) it is doubtful if Jand-own- 
 ers could any. longer confiscate enough Rent to make 
 speculation-in,. land monopoly very profitable^ Though 
 some surplus w ere still absorbed by them,, the .ge^tfihg 
 of Wealth by producing it would be so much more 
 easy Jhaa. by confiscating Rent to prixaiSJigS«J<L.g&y 
 
so TAXATION OF LAND VALUES 
 
 nothing nf ^tc hping gn tnnrh tnr.ri» rpgppptaViV tl^g^ 
 
 speculatijon. in Jaad .jcaJufiS. would..iose.4xui£hniD£-its at- 
 traqtujeness. At any rate the q uestion of su rplus — 
 Rent in excess of the necessities of government e co- 
 nomica.lly^dnUQistered — may be readily decided when 
 the Single Tax principle, that Rent justly belon gs to 
 the comnmnitY .and Wages jg the lndividual, shal l have 
 been recognized by society to the extent o f the Sin gle 
 TaAnJMadied — to the extent, that i s. of the adoptio n of 
 
 Section 7. — A Reminder. 
 
 It is assumed, of course, that the reader of this 
 chapter understands that LaruLdoeajiQLjneaiLagricul- 
 turalland ainnp ; that Rent Hapc nnt mpan pavmpnt.<; by 
 tenants to-ownrrs iiMJxaipuwry ofibiiildiTiss or other 
 use nf the-sft nr other im,prnv^^T]^fi^f,g ; that Wealth does 
 not mean stocks and bonds or land; and that Wages 
 does not mean alone the pajmients that an employer 
 makes to hired workmen.^'' 
 
 Lest there be some such misapprehension, however, 
 frequent recurrence to Plates I to IV inclusive, and IX, 
 may be advisable. 
 
 "Wealth-" Ls .the terhniral tej m, ,f nr l,f,har- proHnrts. 
 "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 
 
TAXATION OF LAND VALUES 51 
 
 produced Wealth) which remains after 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 Propress and Poverty, after rea ching his con- 
 clusion that the c ommand of the land , which is neces- 
 saryit^lifitbor, is in effect command of all the fruits"of 
 lab or save enough to enable labor to e xist, 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 con- 
 fused 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 afterward 
 clear.^^' 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 He nry George was r ight. Each new phase 
 of the social problem makes it still more clear that the 
 disorderly develnprnent nf nnr civilization is e^^lained 
 
 ■fiinflrina^^ntally not 1ly prP SSlire of pOpulatiOH. TIOT bv 
 
 the rplatinng nf employers and emplo ved. n pr by sc ar- 
 cit y of mo ney, nor by the drinking habits of the poor, 
 nor by individual differences in ability to produce 
 
 52 
 
TAXATION OF LAND VALUES 53 
 
 wealth, nor by an incompetent or malevolent Creator. 
 It is e xplained, as he has said, by "inequality in the 
 o wnership of land. And each new phase makes it 
 equally cle ar that the remedy fpr 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 i n liquor pro hibi- 
 tion or high lic ense ; nor jn technical educatio n ; nor in 
 anything else, however excellent for its own purpose, 
 short of approximate equality in the ownership of 
 lan37 Remove all thOiSe tivilt,, and land monopoly 
 would be so much the stronger. 
 
 Equ ality as to the use of Mother Earth, that a nd 
 that alone secures to every one an equal opportunity 
 to par tjcipate in production and full ownersh ip by 
 each producer of his own share. This is justice, this 
 is order. Unless our civilization have it for a founda- 
 tion, new forms of slavery will assuredly lead on into 
 new forms of barbarism.^ ^^ 
 
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 Lloyd Garrison the younger announced his con- 
 version to the Single Tax in a letter to Henry George, he 
 took pains to state that he did not believe it to be a pan- 
 acea, and Mr. George replied : "Neither do I ; but I be- 
 lieve 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. 
 
 54 
 
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 distin- 
 guished 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 un- 
 important 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 in- 
 dustry can not 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 ? 
 
 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 rev- 
 enues 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 de- 
 mand for,all our revenues. But the question of deficiency 
 
 55 
 
56 TAXATION OF! LAND VALUES 
 
 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 extrava- 
 gance? If only what was needed for an economical ad- 
 ministration 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 a money-making op- 
 portunity. 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 im- 
 provement 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, pro- 
 vided 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 the locality in such numbers as to make 
 land there scarcer and consequently 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 
 
JAXATION OF LAND VALUES 57 
 
 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 be- 
 came 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 building, 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 pre- 
 vent 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 de- 
 termined by the real estate market — ^by the demands of 
 the whole community — and not by occasional and arbi- 
 trary 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 sim- 
 ilarly affected. 
 
 Q. What would be the expense of collecting the Sin- 
 gle Tax as compared with that of collecting present 
 taxes ? 
 
 A. Much less. It is easier to assess fairly, and easier 
 to collect fully; the machinery of assessment and collec- 
 
58 TAXATION OF LAND VALUES 
 
 tion would be simpler and cheaper, and it would not en- 
 able first payers to collect 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. 
 
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 de- 
 note 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 rail- 
 road 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 nav- 
 igable river might be determined if it were private prop- 
 erty. 
 
 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. 
 
 59 
 
60 JAXATION of: LAND VALUES 
 
 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 adjustment, but would warn mortgagors 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 pos- 
 sible we purpose inducing the people to bring about a 
 condition in which land values will be taken for public 
 use and improvement values be left for private use. Per- 
 sons 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 can not complain in case they suffer 
 when the Single Tax comes into operation. They will 
 have had ample warning, and their misfortune will be 
 chargeable to their own negligence. 
 
 Q. Should the whole rental value of land be taken for 
 common use, or only enough for government purposes? 
 
 A. Only enough for government purposes. When the 
 people see that this method of taxation improves busi- 
 ness, increases wages, cheapens land, and generally pro- 
 motes prosperity, they will not hesitate to increase taxes 
 so long as public improvements are needed or public en- 
 terprises 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 appreciated 
 that all taxes are abolished save those which fall upon 
 rent, there is no danger of much more than is necessary 
 
TAXATION OF LAND VALUES 61 
 
 to induce them to collect the public revenues being left 
 to individual land-holders." 
 
 Q. How would the tax be collected from those who 
 neglected or refused to pay? 
 
 A. As taxes on real estate are now collected. Or, if 
 necessary 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 occupants 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 moneys represent labor products to which he has hon- 
 estly acquired a just title? This question is a legitimate 
 offspring of the theory that men should be taxed accord- 
 ing to their ability to pay, the merits of which are con- 
 sidered in chapters ii and iii. It is a question which may 
 also have been suggested by the fact that "bondholders" 
 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 "bondholders" and "men of money" 
 whom the questioner probably has in mind, are in fact 
 great landlords; that is to say, that their fortunes con- 
 sist of evidences of title to landed privileges. When land 
 values were taxed, the great source of unearned incomes 
 — land monopoly — would be practically abolished, and 
 bondholders 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 possessors or whatever you choose to call 
 
62 TAXATION OF LAND VALUES 
 
 him, o£ 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 oper- 
 ate, by taxing land yalues, 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. 
 
CHAPTER IV 
 
 ECONOMIC EFFECTS 
 
 Q. Would not the Singletax 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 Note 18 in Appendix. 
 
 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 con- 
 fused 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 own- 
 ers? 
 
 A. Much the difference that it makes to partners 
 
 63 
 
64 TAXATION OF LAND VALUES 
 
 whether they pay money into the partnership or to out- 
 siders. When tenants pay to the community they are 
 paying in part to themselves ; 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 com- 
 munity, 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 adding it to the price of his goods ? 
 
 A. No. Read Note 15 in Appendix. 
 
 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 the poor? 
 and how? 
 
 A. Constantly keeping the demand for labor above 
 the supply 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 em- 
 ployed by the government ? 
 
 A. No. But he has a right to have government se- 
 cure him in the enjoyment of his equal right to the oppor- 
 tunities for employment 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 interference 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 sav- 
 ings banks or insurance 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 observed 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 
 
 65 
 
66 TAXATION OF, LAND VALUES 
 
 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 pro- 
 portion to land values or otherwise? 
 
 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 pro- 
 portion to land values, 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 
 constantly bidding for workmen, instead of workmen con- 
 stantly 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 increase freely. 
 
 Q. What effect would the Single Tax have on immi- 
 gration? Would it cause an influx of foreigners from 
 different nations? 
 
 A. If adopted in one country of great natural oppor- 
 tunities, and not in others, its tendency would not only be 
 to cause an influx of foreigners, but also to make their 
 coming highly desirable. 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 ac- 
 cept the employer's terms ? 
 
 A. With employers continually hunting for men to 
 help them fill their orders, and bidding against one an- 
 other to get men, as would be the case under the Single 
 Tax, such a contingency would be in the highest degree 
 
TAXATION OF LAND VALUES 67 
 
 improbable. It is practically impossible. Nothing short of 
 a trust, an absolutely perfect trust, of all employers the 
 world over could cause it. Even then, plenty of very 
 useful land of all kinds being free and labor products be- 
 ing 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. 
 
CHAPTER VI 
 
 BUSINESS QUESTIONS 
 
 Q. Is not ownership of land necessary to induce its 
 improvement? Does not history show that private own- 
 ership is a step in advance of common ownership ? 
 
 A. No. Private use was doubtless a step in advance 
 of common 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 own- 
 ership 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 pos- 
 session of land, without profit except from use, promotes 
 improvement; private ownership, with profit regardless 
 of use, retards improvement. Every 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 capitaliza- 
 tion of ground rent; and 100 per cent, of capitalized 
 value would leave the owner only a moderate percentage 
 
 68 
 
TAXATION OF LAND VALUES 69 
 
 of annual ground rent — enough, however, for his serv- 
 ice 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 merchant at the fac- 
 tory or the jobbing house, is honesty, opportunity and 
 ability. He who will pay his debts if he can, and has an 
 opportimity 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. This basis of credit every 
 honest man would have if the Single Tax were in opera- 
 tion. 
 
 Q. Would the Single Tax benefit the debtor class? 
 If so, how? 
 
 A. It would. By abolishing monopoly of opportuni- 
 ties 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 insti- 
 tutions 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. 
 
 O. 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 mon- 
 opoly. 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 ? 
 
70 TAXATION OF LAND VALUES 
 
 A. All products are due wholly to union of land and 
 labor. Labor is the active force, land is the passive op- 
 portunity. Without both there can be no product. But 
 the part of a man's product 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 sys- 
 tem, but because the competitive system was still imper- 
 fect. Competition 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 extent that it did, every 
 one would get what he earned. 
 
 Q. Why does not labor-saving machinery benefit 
 laborers ? 
 
 A. Suppose labor-saving machinery were ideally per- 
 fect — 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 
 foundation — the bottom of a bay, a swamp, a river, or 
 a hole, is not. "Made land" does not differ industrially 
 from a house. Its materials are produced from one place 
 
TAXATION OF LAND VALUES 71 
 
 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 com- 
 munal 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 
 monopoly tend to increase 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 com- 
 petition and tends to lower profits. At the same time it 
 increases demand for land and tends to enhance the value 
 of that. It therefore can not 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 al- 
 lowed 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, 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 indi- 
 vidual. 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 without do- 
 ing the slightest work. As to the good will of a business. 
 
72 TAXATION OF LAND VALUES 
 
 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 capital and labor 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 offset the gains? 
 
 A. Possibly. But that has no bearing upon the ques- 
 tion. What men lose through investments in land, the 
 community does not gain; but what they gain the com- 
 munity does lose. As between land speculators and the 
 community, losses can not justly be charged against 
 gains. 
 
 Q. What is the difiFerence between speculation in 
 land and in other kinds of property? 
 
 A. If all the products of the world were cornered by 
 speculators, 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 specu- 
 lators, though everything else were free, the people would 
 immediately and thenceforth be dependent upon the spec- 
 ulators for a chance to live. That illustrates the differ- 
 ence. 
 
 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 
 
TAXATION OF LAND VALUES 73 
 
 ground rent or interest on purchase-money — is one of the 
 smallest items in every business ? 
 
 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 imple- 
 ments, are all received back, in the course of normal busi- 
 ness, 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 can not 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 expense which may break a thriv- 
 ing business down. Besides, it is not alone the ground 
 rent paid by the business man for his location that bears 
 down upon his business prosperity ; the weight of abnor- 
 mally 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 hke asking whether to a thirsty man water 
 or a cup is the more important. Land is a necessity, 
 money a convenience. 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 bookkeeping, and in a 
 very high degree it is so carried on. But we can not so 
 much as live, either in solitude or in society, without ap- 
 propriate 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." 
 
 Q. Would you let money escape taxation, and so fa- 
 vor money lenders ? 
 
 A. It is a curious fact that this question is most pop- 
 ular 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 dis- 
 courage money lending, and thereby 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 com- 
 munity'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 
 
 74 
 
TAXATION OF LAND VALUES 75 
 
 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 monopoly profits are often con- 
 founded with interest, and by force of association have 
 given to interest a bad name ; all these would be greatly 
 minimized if not wholly aboHshed by the Single Tax. It 
 is impossible to answer this question intelligibly to every 
 one 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, partly 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 pre- 
 miums 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 
 is really interest, and the Single Tax would tend to rid 
 society of them. But that advantage which the workmen 
 enjoy with implements and materials already earned, 
 over those who have yet to earn them, an advantage 
 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 pro- 
 duction can be or ought to be abolished. The value of 
 such advantages is part of 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. 
 
ye TAXATION OF LAND VALUES 
 
 A. Then your question does not turn upon the home 
 sentiment 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 abandon 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 community felt that special hard- 
 ship 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 dififers 
 radically. 
 
 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 se- 
 cure. 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 community for that value and for 
 nothing else. All that he produced from the land above 
 its value would be absolutely his, free even from taxa- 
 tion. The Single Tax is the method best adapted to mod- 
 ern 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. 
 
 77 
 
78 TAXATION OF LAl^ VALUES 
 
 Q. Is it right that land values should bear all the 
 taxes for the support of public institutions, while labor 
 products go untaxed ? 
 
 A. Yes. Public institutions increase the value of land 
 but not of labor products. Read Notes 20 arid 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 protec- 
 tion 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 monopoliz- 
 ing valuable land as it charges rich men. In either case it 
 confers a special privilege and should be paid what the 
 privilege is worth. The question 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 fac- 
 tors of production, why are they not equally entitled to 
 the product? 
 
 A. The laborer justly owns his labor, but the land- 
 owner can not 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 
 
TAXATION OF LAND VALUES 79 
 
 common property 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 offset 
 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. If land were no longer appropriated 
 except for use (and this would result from the opera- 
 tion 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 
 can not 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 com- 
 pensated ? 
 
 A. No. Land is for the use of all, and rent is caused 
 by the community. To legally vest land-ownership in 
 less than th6 whole, excluding those to come as well as 
 any that are here, is a moral crime against all the ex- 
 cluded. 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 perpetuity." 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 individual loss when titles are abolished ? 
 
 A. There is no sounder principle of law than that 
 
80 TAXATION OF, LAND VALUES 
 
 which, distinguishing the contractual from the legisla- 
 tive powers of government, prescribes that government 
 can not tie up its legislative powers. Now, land grants 
 and taxation are so clearly matters of general public pol- 
 icy that no one can successfully dispute that they are leg- 
 islative 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 re- 
 served 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. More- 
 over, notice was given when Henry George published 
 Progress and Poverty, and has been reiterated 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 re- 
 lied 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 expectations of appropri- 
 ating ground rent or a higher selling value are concerned. 
 Men can not 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 com- 
 pensate them for the loss. Read the chapter on "Com- 
 pensation" 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 indi- 
 vidual. Every member of a community has a right to 
 land and an interest in the rent of land. Under the Sin- 
 
TAXATION OF LAND VALUES 81 
 
 gle Tax both rights would be conserved. But under ex- 
 isting social institutions the only way of securing either 
 is to own land and profit by it. To refrain from doing 
 so would have no reformatory effect. It is a mental ec- 
 centricity to believe or profess to believe that institu- 
 tional wrongs and individual wrongs are upon the same 
 plane and must be cured in the same way — ^by individual 
 reformation. But individuals can not change institutions 
 by refraining from profiting by them, any more than they 
 could dredge a creek by refraining from swimming in it. 
 Institutional wrongs must be remedied by institutional 
 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 
 
 \. The word "tax" is used comprehensively in the 
 United States for local as well as State or national levies 
 for public revenue, except that custom-house exactions 
 are usually called "tarififs" or "duties." In Great Britain, 
 however, the word "tax" is usually understood to desig- 
 nate 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, tarifif, duty, excise, or license. 
 
 2. In the city of New York, according to the report 
 of the Tax Department for 1914, the value of improve- 
 ments that year was $2,855,932,518, whereas the value of 
 the land alone was $4,602,852,107. As the tax rate in New 
 York was about L8 per cent., it may be computed that 
 improvement taxes amounted to about $50,000,000, while 
 the taxes on land values amounted to about $82,000,000. 
 By reference to the fourth edition of this book, at page 
 69, note 2, it may be seen that the increase in improve- 
 ment values since 1910 was in round numbers only 
 $366,000,000, whereas the increase in land values was 
 $602,000,000. The former increase spells more building, 
 the latter less room for building. None of the foregoing 
 figures include either the value of special franchises, 
 $404,420,311 in 1914, or the value of the land and im- 
 provements of corporations, which was $186,654,976 in 
 that year. 
 
 3. "The general property tax" is common in the 
 
 85 
 
86 TAXATION OF LAND VALUES 
 
 United States and Canada; but there is a tendency in 
 both countries toward modification, it being generally 
 conceded that this form of tax is a bungling fiscal method 
 and hopelessly unfair in operation. To the general prop- 
 erty tax in the United States there are often added inheri- 
 tance 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 supple- 
 mented with other taxes in greater or less variety and 
 degree, some of which belong in the category of the gen- 
 eral property tax and some do not. Although personal 
 property is not exempt in the United States, personal 
 property taxes are extensively "dodged." For an excel- 
 lent presentation of this subject see the American Maga- 
 zine (New York) for December, 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 conspicu- 
 ous, although other Canadian cities, notably Edmonton, 
 Victoria and New Westminster, 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." 
 
 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 increment," as it is called, has been adopted in 
 moderate and varying forms. It seems to be attaining 
 
TAXATION OF LAND VALUES 87 
 
 popularity elsewhere. An "unearned increment" is an 
 increase of the capitalized value of the rental possibilities 
 of a given piece of land (over its previous capital value at 
 a given time or under given circumstances), in conse- 
 quence of social growth or other cause apart from the 
 owner's improvements, which enhances demand for it 
 and therefore augments its market price. The British 
 (Lloyd George) budget of 1909 imposed a tax of 20 per 
 cent, on "unearned increments." For example : A hold- 
 ing 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 ihcreased social value, and the government would 
 get £4,000. Some Singletaxers 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 landlord- 
 ism, 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 efifect would most likely be 
 to discourage efforts at promoting the single tax in places 
 where movements for the taxation of "unearned incre- 
 ments" offer the only present leverage, or the best, for 
 practical single tax work. True enough, unearned incre- 
 ment 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 na- 
 ture of the agitation. Everywhere opposed as confisca- 
 tion of private interests in land, it is everywhere de- 
 fended as the taking for the community of what belongs 
 to the community. Such agitations are especially pro- 
 motive of the full single tax idea. That "unearned incre- 
 
88 TAXATION 01? LAND VALUES 
 
 ment" 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 bur- 
 dens, which is another prime object of the single tax. 
 Their chief value, however, is their tendency to develop 
 an appreciation in public opinion 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 of 
 Cincinnati, in the Quarterly Journal of Economics for 
 August, 1911. Professor Brooks characterizes the Ger- 
 man law as "one of the largest and most significant prac- 
 tical applications of the single tax idea that has ever been 
 attempted ;" and to the objection that the "unearned in- 
 crement" 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 11 
 
 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 mani- 
 fold taxes now imposed, a single tax on the value of 
 land;" but the term did not become a distinctive name 
 until in 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 Labor candidate for mayor, and was de- 
 feated 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 August, 1887, it came to 
 
TAXATION OF LAND VALUES 89 
 
 tepresent the central idea of Progress and Poverty. 
 Coincident with the organization of the United Labor 
 Party the Anti-Poverty Society was formed ; and the two 
 bodies, one representing the poHtical and the other the re- 
 ligious phase of the idea, worked together until President 
 Cleveland's tariff message of 1887 appeared. In this mes- 
 sage 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 
 sentiment of the message. But many Protectionists who 
 had followed him, now broke away from his leadership, 
 and the United Labor Party and the Anti-Poverty So- 
 ciety 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 con- 
 siderable movement resulted, which, however, for some 
 time lacked an identifying name. This was the situation 
 when Thomas G. Shearman, Esq., wrote for The Stand' 
 ard an article on taxation in which he illustrated and ad- 
 vocated the land value tax as a fiscal measure. The ar- 
 ticle 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 "I'impot unique," 
 the name of the French physiocratic doctrine of the 
 eighteenth century, the names have no historical connec- 
 tion. See Life of Henry George, by Henry George, Jr., 
 chapter ix, p. 496 and 496 n. 
 
 9. "Land-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 Lloyd 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, 
 
90 TAXATION OF LAND VALUES 
 
 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 Lloyd 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 business 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 com- 
 parison with the value of city residence sites, the absurd- 
 ity 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 systems of taxa- 
 tion the farmer and the small home owner are compelled 
 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 difiference between site value and im- 
 provement value is much more definite than it is often 
 supposed to be. Even in what would seem at first to be 
 most confusing cases, it is easily distinguished. If in any 
 example we imagine the complete destruction of all the 
 improvements, we may discover in the remaining value 
 of the property — in the price it would after such destruc- 
 tion 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 computa- 
 tion for levying the Single Tax. The distinction is fre- 
 quently made in business life. Whenever in the course 
 of ordinary business aflfairs it becomes necessary to esti- 
 mate the value of a building lot or to fix royalties for 
 
TAXATION OF LAND VALUES 91 
 
 mining privileges, no difficulty is experienced, and sub- 
 staritial 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 improve- 
 ments, yet it could doubtless be done as easily and justly 
 as virith city or mining property. Unimproved land at- 
 tached 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 high- 
 way would always be available. It should not be forgot- 
 ten, either, that land for which the demand is so weak 
 that its site value can not be easily distinguished from 
 the value of its improvements must be land of but little 
 value. The objection that the value of land can not 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 
 can not be scientifically appraised. This objection was 
 demolished by W. A. Somers, for years a Minnesota 
 assessor, who invented the Somers system of scien- 
 tific land valuation. The Somers system won the con- 
 fidence of Tom L. 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 demonstration of its exceptional value. It is de- 
 scribed in The Public, of Chicago, at pages 604, 608 and 
 827 of volume xiii. Mr. Somers superintended the use of 
 his system by a corporation of Cleveland, Ohio, which is 
 engaged in the business of valuing land. This fact 
 raised against him the objection that he had "commer- 
 cialized" his system, and that the employment of his cor- 
 poration by tax authorities to assist them in their official 
 duties was a "farming out" of taxes. The objection ap- 
 pears to be far-fetched. It should be made known for 
 whatever it may be worth; but so far as Singletaxers 
 are concerned, the point is not whether the system has 
 
92 TAXATION OF LAND VALUES 
 
 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, testified strongly in the affirmative. 
 
 PART TWO, CHAPTER I 
 
 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 demanded from one person in the expec- 
 tation 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. i. ^"Direct taxes are those 
 which are levied on the very persons who it is intended 
 or desired should pay them, and which they can not 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. ^Taxes are direct 
 "when the payment is made by the person who is in- 
 tended to bear the sacrifice." Indirect taxes are recov- 
 ered from final purchasers. — Jevons" Primer, sec. 96. 
 ^"Indirect taxes are so called because they are not paid 
 into the treasury by the person who really bears the bur- 
 den. The payer adds the amount of the tax to the price 
 of the commodity taxed, and thus the taxation is con- 
 cealed under the increased price of some article of luxury 
 or convenience." — Thompson's Pol. Ec, sec. 175. ^Read 
 chapter iii, of book viii. Progress and Poverty. 
 
 13. Jevons defines the incidence of a tax as "the man- 
 ner in which it falls upon different classes of the popula- 
 tion." — Jevons' Primer, sec. pd. ^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 
 
TAXATION OF LAND VALUES 93 
 
 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 govern- 
 ment if public revenues were collected from them di- 
 rectly. 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 indirect taxation, would, if true, be 
 one of the strongest of reasons for abolishing it. It is 
 consistent neither with the plainest principles of democ- 
 racy 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 con- 
 stitute 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 purchas- 
 ers — 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 con- 
 sumers, 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 consumers. The prin- 
 ciple applies also when taxes are levied upon the stocks 
 or sales of merchants, or the moneys or credits of bank- 
 ers; 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 
 
94 TAXATION OF LAND VALUES 
 
 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 oth- 
 erwise 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 in- 
 crease in cost of production 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 busi- 
 ness, 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 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 con- 
 sumers. The monopoly manufacturer whose prices are 
 not checked by the cost of production, and are therefore 
 as a rule higher than competitive prices would be, may 
 find it more profitable to bear the burden of a tax that 
 leaves him some profit, thereby retaining his entire cus- 
 tom, than to drive ofif 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 Can- 
 ada 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. 
 
TAXATION OF LAND VALUES 95 
 
 Examples which may be cited in opposition to the prin- 
 ciple that import taxes are indirect, will upon examina- 
 tion prove to be of the character here described. Busi- 
 ness can not be carried on at a loss — not for long. There- 
 fore 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 gov- 
 ernment outside of the preservation of order, the mainte- 
 nance of the military arm, and the administration of jus- 
 tice." — Progress and Poverty, hook iv, ch. v. ■ 
 
 17. For a brief and thorough exposition of indirect 
 taxation, read George's Protection or Free Trade, ch. viii, 
 on "Tarififs for Revenue." 
 
 18. This is usually a stumbling-block to those who, 
 without much experience in economic thought, consider 
 land value taxation 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 difhcult and 
 so tend toward scarcity in the supply of products, which 
 stimulates prices ; but taxes upon land, provided the taxes 
 be levied in proportion to value, tend toward plenty in 
 the supply of land (meaning market supply of course) 
 because they make it more difficult to hold valuable 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. T["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. 
 
96 TAXATION OF LAND VALUES 
 
 I. |"A tax laid upon rent is borne solely by the owner 
 of land." — Bascom's Tr., p. 159. ^'Taxes which are 
 levied on land . . . really fall on the owner of the 
 land." — Mrs. Fawcetfs Pol. Ec. for Beginners, pp. 2op, 
 210. ^"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. T|"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 can not be transferred. A tax on commodities is 
 always transferred to the consumer." — Thorold Roger/ 
 Pol. Ec., ch. xxi, 2d ed., p. 285. ^J'Though the landlord 
 is in all cases the real contributor, the tax is commonly 
 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 produc- 
 tion and checking supply. But land is not a thing of hu- 
 man production, and taxes upon rent can not check sup- 
 ply. 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 supply of land. On the contrary, by compel- 
 ling 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, 
 subd. ii. IfSometimes 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. Mer- 
 chants can not charge higher prices for goods than their 
 competitors do, merely because they pay higher ground 
 rents. A country storekeeper whose business 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 
 
TAXATION 0]F: land VALUES 97 
 
 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. Tif- 
 fany'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 be- 
 cause the dealer has a reputation 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 on 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 aggre- 
 gate, and not out of each profit, that rent is paid. For 
 example : A cigar store on a thoroughfare supplies a cer- 
 tain 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 better cigars for 
 fifteen cents than his competitor of the low priced loca- 
 tion? 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 pre- 
 mium 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 volume 
 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 taxa- 
 
98 TAXATION OF LAND VALUES 
 
 tion, the loss would be finally borne by the owner of 
 the advantage which attaches to that site — ^by the land- 
 lord. Any attempt to shift it to tenant or buyer would 
 be promptly checked by the competition of neighboring 
 but cheaper land. T["A land tax, levied in proportion 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 Ricardo, 2d ed., 
 p. 10/'. ^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 un- 
 less 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 taxa- 
 tion 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 computations of 
 James R. Carret, the Boston conveyancer, which ap- 
 peared in Note 13 of earlier editions of this book. 
 
 PART TWO, CHAPTER II 
 
 19. It is often said, for instance, by its advocates, that 
 house owners should in justice contribute to the support 
 of the fire departments that protect them ; and it is even 
 gravely argued that houses are more appropriate sub- 
 jects for taxation than land, because they need protec- 
 tion, whereas land needs none. Read Note 24. 
 
 PART TWO, CHAPTER III 
 
 20. Land values are lower in all countries of poor 
 government than in any country of better government, 
 other things being equal. They are lower in cities of 
 
TAXATION OF LAND VALUES 99 
 
 poor government, other things being equal, than in cities 
 of better government. Land values are lower, for ex- 
 ample, in Juarez, on the Mexican side of the Rio Grande, 
 where government is poor, than in El Paso, the neighbor- 
 ing city on the American side, where government is bet- 
 ter. They are lower in the same city under poor govern- 
 ment than under improved government. Let the city au- 
 thorities anywhere pave a street, put water through it 
 and sewer it, or make any other improvement, and build- 
 ing lots in the neighborhood rise in value. Everywhere 
 that the "good roads" agitation has borne fruit in better 
 highways, the value of adjacent lands has increased. In- 
 stances 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. Land 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 can not be reproduced. Im- 
 agine an utterly lawless place, where life and property 
 are constantly 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 build- 
 ing is finally erected, however, and stocked. And now 
 what about this merchant's prices for goods? Compe- 
 tition 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 con- 
 temptuous 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 
 
100 TAXATION OF LAND VALUES 
 
 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 administration 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 des- 
 perately 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 transporta- 
 tion considered. Builders and iDuilding materials could 
 be had without difficulty, and stores would be cheap, 
 too. But land would he dear! Improvement in govern- 
 ment increases the value of land, and of land 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 con- 
 trol for transportation purposes over narrow strips of 
 land at terminals (especially at terminals), and between 
 terminals and along trading points. The value of this 
 right of way is a land value. The same is true of street 
 franchises, 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 propor- 
 tioned to the pecuniary benefits conferred upon him by 
 the public in raising and maintaining the value of his 
 holdmg. 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 Se- 
 lect Committee to Investigate Tax Assessments in the 
 District of Columbia, composed of Messrs. Tom L. John- 
 son, of Ohio, Chairman; Wadsworth, of New York, and 
 Washington, of Tennessee. Made to the House of Rep- 
 
TAXATION OF LAND VALUES 101 
 
 resentatives, May 24, i8p2. 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 
 Washington land-owners as a class thus appear to have 
 received back in higher land values, actually and poten- 
 tially, 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 de- 
 pendent upon government, -the landlord is in effect ex- 
 empt 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. For an extension of Congressman 
 Johnson's investigation work in Washington down to 
 1912, see "Report on Assessment and Taxation of Real 
 Estate in the District of Columbia," presented by the 
 Hon. Henry George, Jr., M. C, from the Committee on 
 the District of Columbia of the House of Representatives, 
 August 20, 1912, being Report No. 1215. 
 
 24. Take for illustration, two towns, one of excellent 
 government 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." 
 
 "Two hundred and fifty dollars a year !" you exclaim. 
 "Why, 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 department. If you go out after dark you 
 
102 TAXATION OF LAND VALUES 
 
 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 sidewalks 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 macadam- 
 ized 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 public 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 governed 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 fitness of things were not warped by famil- 
 iarity 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 for ?" 
 
 "What for?" echoes the assessor in surprise. "What 
 for ? Is not your house protected from fire by our mag- 
 nificent fire department? 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?" 
 
TAXATION OF LAND VALUES 103 
 
 "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 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 collect- 
 ing from me, I shall be paying 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." 
 
 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 com- 
 munity ought to get by the value of what it gives. 
 
 PART TWO, CHAPTER IV 
 
 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 obstruct the industry of the people, and discourage 
 them from applying to certain branches of business 
 which might give maintenance 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 
 
104 TAXATION OF LAND VALUES 
 
 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 manner 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 per- 
 son subject to the tax is put more or less in the power of 
 the tax gatherer." 
 
 29. This is Adam Smith's first maxim. He states i{ 
 as follows : "The subjects of every state ought to con- 
 tribute toward 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 re- 
 spectively enjoy under the protection of the state. The 
 expense of government to the individuals of a great na- 
 tion is like the expense of management to the joint ten- 
 ants 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 alter- 
 ing this maxim Henry George says {Progress and Pov- 
 erty, book viii, ch. iii, subd. 4) : "Adam Smith speaks 
 of incomes as enjoyed 'under the protection 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 prop- 
 erty is made possible by the state — that there is a 
 value created and maintained by the community, 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 community. It only exists 
 as the community exists. Scatter again the largest com- 
 munity, and land, now so valuable, would have no value 
 
TAXATION OF LAND VALUES 105 
 
 at all. With every increase o£ 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 taxation, which is in con- 
 flict with the principle of his fourth maxim. Mr. George 
 properly excludes it. 
 
 30. "Taxation which falls upon the processes of pro- 
 duction interposes an artificial obstacle to the creation 
 of wealth. Taxation which falls upon labor as it is ex- 
 erted, wealth as it is used as capital, land as it is culti- 
 vated, will manifestly tend to discourage 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. in, subd. i. 
 
 31. It is common, besides taxing improvements as 
 fast as 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 can not afford to pay 
 much. It is an absurd but perfectly legitimate illustra- 
 tion of the pretentious doctrine of taxation according to 
 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 commonly regarded as a signal for 
 increasing the tax upon it. 
 
 32. "All taxes upon things of unfixed quantity in- 
 
106 TAXATION OF LAND VALUES 
 
 crease prices, and in the course of exchange are shifted 
 from seller to buyer, increasing as they go. If we im- 
 pose 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 bor- 
 rower uses it in his business, he in his turn must get back 
 the tax from his customers, or his business becomes un- 
 profitable. If we impose a tax upon buildings, the users 
 of buildings must finally pay it, for the erection of build- 
 ings will cease until building rents become high enough 
 to pay the regular profit and the tax besides. If we im- 
 pose 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, hook viii, ch. 
 Hi, suhd. 2. 
 
 33. The under-appraisements so common at pres- 
 ent, and alluded to in Note 31, are possible because the 
 community, ignorant of the just principles of taxation, 
 does connive at them. Under-appraisements are not se- 
 cret crimes on the part of assessors; they are distinctly 
 recognized, but thoughtlessly disregarded when not actu- 
 ally insisted upon by the people themselves. And this is 
 due to the dishonest ideas of taxation that are taught. 
 Let 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-ap- 
 praisement of land would cease. No assessor can befool 
 the community in respect of the value of the land within 
 his jurisdiction. And with the cessation of general un- 
 der-appraisement, favoritism in individual appraisements 
 
TAXATION OF LAND VALUES 107 
 
 would also cease. General under-appraisement fosters 
 unfair individual appraisements. If land were generally 
 appraised at its full value, a particular unfair appraise- 
 ment 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 unfair- 
 ness, he is promptly and effectually silenced with a warn- 
 ing 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 taxa- 
 tion of his neighbor is to invite further discrimination 
 against 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 improvements, instruct him to ig- 
 nore 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 in- 
 ferred 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 can not give an estimate until he 
 examines the improvements. And if it is the highly im- 
 proved 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 jewel- 
 ers. 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 ex- 
 perts the agent should make an estimate of these miscel- 
 laneous values, and twenty others should do the same, 
 their several estimates would be as wide apart as ignorant 
 guesses usually are. And the richer the owner of the 
 
108 TAXATION OF! LAND VALUES 
 
 property the lower as a proportion 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 appraisements without leaving his desk at the 
 town hall. And there would be no material difiference if 
 the property in question were a farm instead of a build- 
 ing lot. A competent farmer or business man in a farm- 
 ing community can, without leaving his own dooryard, 
 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 pub- 
 lic benefits whose value attaches exclusively to land. 
 Communal development from whatever cause produces 
 the same effect. But as it is under the protection of gov- 
 ernment 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? Evi- 
 dently 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. in, subd. 4. 
 
 PART THREE, CHAPTER I 
 
 37. Not all charity is contemptible. Those charitable 
 people, who, knowing that individuals suffer, hasten to 
 
TAXATION OF LAND VALUES 109 
 
 their relief, deserve the respect and affection they enjoy. 
 That kind of charity is neighborliness ; it is love. And 
 perhaps in modern circumstances organization is necessary 
 to make it effective. But organized charity as a cherished 
 social institution is a different thing. It is not love, nor 
 is it inspired by love; it is simply sanctified selfishness, 
 at the bottom of which will be found the blasphemous 
 notion that in the economy of God the poor are to be for- 
 ever with us that the rich may gain Heaven by alms-giv- 
 ing. 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 rhyme : 
 
 "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, 
 entitled, "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 
 megaphones of public opinion. They are not regarded nor 
 
110 TAXATION OF LAND VALUES 
 
 do they regard themselves as people of any importance 
 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 squeezing and squirming humanity, and 
 with its cancerous tentacles touched the superincumbent 
 layers of manufacturing nabobs, merchant princes, rail- 
 road 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 steam- 
 ship 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 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 bur- 
 den 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 hu- 
 man 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 becomes 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 an- 
 chors, and delicate 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 facili- 
 ties of exchange and communication — sheep killed in 
 Australia eaten fresh in England, and the order given 
 by the London banker in the afternoon executed in San 
 Francisco in the morning of the same day ; could he have 
 cpnceived 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 
 
TAXATION OF LAND VALUES 111 
 
 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 imagina- 
 tion, 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 conditions he would have 
 seen arising, as necessary sequences, moral conditions 
 realizing the golden age of which mankind has always 
 dreamed. . . . More or less vague or clear, these have 
 been the hopes, these the dreams born cf the improve- 
 ments which give this wonderful century its pre-emi- 
 nence. . . . 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. . . . And, unpleasant as it may be to 
 admit it, it is at last becoming evident that the enormous 
 increase of productive power which has marked the pres- 
 ent century and is still going on with accelerating 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 fac- 
 tories where labor-saving machinery has reached i,ts most 
 wonderful development little children are at work ; wher- 
 ever 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 
 
112 TAXATION OF LAND VALUES 
 
 breasts ; while everywhere the greed of gain, the worship 
 of wealth, shows the force of the fear of want." — Prog- 
 ress 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 suf- 
 fered as a workingman were nothing as compared with 
 the fear for the future of his children that he felt when- 
 ever he thought of the repulsive surroundings, physical 
 and moral, in which, owing to his poverty, he was com- 
 pelled to bring them up. IfProfessor Francis Wayland, 
 Dean of the Yale law school, wrote in the Charities Re- 
 view for March, 1893 : "Under our eyes and within our 
 reach children are being reared from infancy amid sur- 
 roundings containing every conceivable element of degra- 
 dation, 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-pres- 
 ent examples of flagrant vice? Short of a miracle, how 
 could any child escape the moral contagion 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 character?" 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 hos- 
 pital, the workhouse and the prison, since the workers 
 therein become inoculated with trade diseases, mutilated 
 by trade appliances, and corrupted by trade associates 
 till no healthy fiber, mental, moral, or physical remains." 
 This testimony bears a distant date, but it is as true now 
 as when it was uttered; and similar testimony only re- 
 cently uttered is abundant. But no further citation is 
 necessary to arouse the conscience of the merciful and 
 
JAXATION of: land VALUES 113 
 
 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 favor- 
 ably 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 neighboring camp of 
 tramps to his house for breakfast. After breakfast 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. 
 Everything 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 jailbird. 
 I had no family to support, 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 
 
114 TAXATION OF LAND VALUES 
 
 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 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 society, why, 
 I have society. Tramps are good fellows — sociable fel- 
 lows, bright fellows many of them. Life 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 de- 
 tail of Bunyan's Pilgrim's Progress. There is, how- 
 ever, 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 unde- 
 serving comes from a growing feeling among those who 
 work hardest that, as Cowper describes it, they are 
 
 "Letting 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. Long 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. 
 
TAXATION OF LAND VALUES 115 
 
 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 dol- 
 lars in a world like this, where if they lose their inheri- 
 tance they may have no chance of earning a decent liv- 
 ing." This millionaire was Tom L. Johnson. What he 
 said was in reply to a question at a public meeting in St. 
 Louis in 1893. 
 
 44. "From whence springs this lust for gain, to grat- 
 ify which men tread everything pure and noble under 
 their feet ; to which they sacrifice all the higher possibili- 
 ties of life ; which converts civility into a hollow pretense, 
 patriotism into a sham, and religion into hypocrisy ; which 
 makes so much of civilized existence an Ishmaelitish war- 
 fare, 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 keen- 
 est pain is in poverty. For poverty is not merely depriva- 
 tion; 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 affections; 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-gratification 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 
 
116 TAXATION OF LAND VALUES 
 
 fear of want, mother or wife or children." — Progress and 
 Poverty, hook ix, ch. iv. 
 
 45. "There is just now a disposition to scoff at any 
 implication 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 
 augmenting and magnificence increasing, when victorious 
 legions were extending the frontier, when manners were 
 becoming more refined, language more polished, and lit- 
 erature rising to higher splendors — ^he would have been 
 a rash man who then would have said that Rome was en- 
 tering her decline. Yet such was the case. And who- 
 ever will look may see that though our civilization is 
 apparently advancing with greater rapidity than ever, 
 the same cause which turned Roman progress into retro- 
 gression is operating now. What has destroyed every 
 previous civilization has been the tendency to the un- 
 equal distribution of wealth and power. This same tend- 
 ency, operating with increasing force, is observable in 
 our civilization to-day, showing itself in every progressive 
 community, and with greater intensity the more progress- 
 ive the community. . . . The conditions of social 
 progress, as we have traced the law, are association and 
 equality. The general tendency 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 ex- 
 pression in the American Republic, where political and 
 legal rights are absolutely equal. . . . It is the pre- 
 vailing tendency, and how soon Europe will be com- 
 pletely republican is only a matter of time, or rather of 
 accident. The United States are, therefore, in this re- 
 spect, the most advanced of all the great nations in a 
 direction in which all are advancing, and in the United 
 
TAXATION OF LAND VALUES 117 
 
 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 wealth, 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 ab- 
 solute 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. Ex- 
 tremes 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 universal 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 government; 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 Caligula or Nero 
 raging among the rich patricians. . . . Now, this 
 transformation of popular government into despotism of 
 the vilest and most degrading kind, which must inevi- 
 tably result from the unequal distribution of wealth, is 
 not a thing of the far future. 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 
 
118 TAXATION OF LAND VALUES 
 
 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 founda- 
 tions 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, nar- 
 rowing and weakening. It is no longer that confident be- 
 lief 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 be- 
 ginning to accept the view of Macaulay and distrust that 
 of Jeflferson. 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 senti- 
 ment 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 a 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. 
 
 A6. "The power to reason correctly on general sub- 
 jects is not to be learned in schools, nor does it come with 
 special knowledge. It results from care in separating, 
 from caution in combining, from the habit of asking our- 
 selves the meaning of the words we use, and making 
 sure of one step before building another upon it — and, 
 above all, from loyalty to truth." — Henry George's Per- 
 plexed Philosopher, p. p. 
 
 47. "Harold Frederic, when the London correspond- 
 
TAXATION OF LAND VALUES 119 
 
 ent 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 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 needed not 
 the action of the Tories to breed that suspicion. In this 
 country as well as in England it is plain to any close ob- 
 server that the highly educated classes, or to speak with 
 more exactness, the highly tutored classes, when com- 
 pared with the common people, are in public affairs but 
 little better than fools. The explanation is simple. The 
 common people are philosophers unencumbered with use- 
 less 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. ^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 be- 
 ing asked the same question, went to the library and con- 
 sulted authorities, f "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 animal- 
 cula, 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 Philosopher, Introduction. 
 
120 TAXATION OF LAND VALUES 
 
 PART THREE, CHAPTER II 
 
 48. For it is ability or inability to satisfy his wants 
 that determines 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 intelli- 
 gent mind that no reasoning can be trusted which does 
 not distinguish a difference so radical. 
 
 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 con- 
 structs 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 pro- 
 duces 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 
 community of one the solitary individual performs all 
 the work necessary 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 proc- 
 esses 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 navi- 
 gation, of engineering, of farming, of storekeeping, of 
 baking, or what not, are steps or stages in bread-making ; 
 
TAXATION OF LAND VALUES 121 
 
 and every artificial object produced for the purpose of 
 facilitating 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 dehverer has accomplished his work regarding 
 it), is a finished object. The essential difference, then, 
 between the artificial objects that are classified as "prod- 
 uct" and those that are classified as "factors" is that the 
 former are finished and the latter are unfinished. % Pro- 
 fessor Marshall (Marshall's Prin., book ii, ch. Hi) di- 
 vides 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 u3ed for making goods of the second 
 order, such as the machinery for making milling ma- 
 chinery." He says we might carry the analysis further 
 if necessary, and so we might ; but though we dragged it 
 out into an interminable catalogue, every artificial item 
 beyond "goods of the first order" would be an unfinished 
 artificial object and for all purposes of economic reason- 
 ing nothing else. His own classification 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 impor- 
 tance 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 espe- 
 cially liable to abuse in this respect because they are also 
 loose colloquial words. The term "wealth" is a bewil- 
 dering example. It has been used to symbolize as of one 
 class such diverse things as building lots, houses, farm 
 sites, farm improvements, 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, instead of distinguish- 
 
122 TAXATION OF LAND VALUES 
 
 ing 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 im- 
 provements, and goods, it is a symbol for artificial objects; 
 by including slaves it symbolizes man; and by including 
 deeds, promissory notes, warehouse receipts, and book 
 accounts, it symbolizes nothing but evidences of legal title 
 as between individual men. When the same term is used 
 to include things so essentially dififerent as "Natural Ob- 
 jects 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. Pass- 
 ing the mill for a moment to analyze the grain, we find it 
 composed of a farmer, a farm site, and farming improve- 
 ments and implements. The farm site, like the mill site, 
 is land ; and the farmer, like the miller, is labor ; but the 
 improvements and implements, like the mill and the grain, 
 are unfinished wealth — Capital, and may be still fur- 
 ther analyzed. And so on. If analyzed to the last, every 
 constituent of bread, and every constituent of that con- 
 stituent, would resolve into Labor and Land. To follow 
 them step by step would be tedious work and require 
 much special knowledge. It would involve consideration 
 of factories and factory sites, stores and store sites, rail- 
 roads and railroad 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 product of Labor and Land ; or what in effect is the 
 same thing, in disregarding the necessary inference that 
 
TAXATION OF LAND VALUES 123 
 
 Land is the only implement of Labor. Many Socialists 
 insist that they do not ignore it ; but that, while acknowl- 
 edging Land to be the primary implement of Labor, 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 indispensable as land. Their rea- 
 soning 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 philoso- 
 phies, affords a better opportunity 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 explained 
 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 book- 
 keeping. For business accounts it is well enough to enter 
 under the head of "Capital" all objects or values that 
 serve as capital in the particular 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 ac- 
 count. Now, there can hardly be a more fundamental 
 economic difference than that which we distinguish by 
 the terms "natural" and "artificial." These terms dis- 
 tinguish such differences as that of metals in their orig- 
 inal state in the earth, from manufactures of metal ; and 
 while the manufacturer may properly account a mineral 
 
124 TAXATION OF LAND VALUES 
 
 deposit as part of his capital along with his machinery, 
 the 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 nat- 
 ural capital and artificial capital, that large corporations 
 are considered as capitalists only, and not as landlords. 
 In economic fact they may be enormously greater land- 
 lords 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 Land and Labor 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 as- 
 sented 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 Na- 
 ture, Labor and Capital as the factors of production, but 
 he describes Capital as a combination of Nature and 
 Labor. — Ely's Introduction, part ii, ch. Hi. 1| Say de- 
 scribed industry as "nothing more or less than human 
 employment of natural agents." — Say's Trea., book i, ch. 
 ii. ^ And though John Stuart Mill and numerous others 
 wrote of Land, Labor and Capital as the three factors 
 of production, as did Professor Jevons also, most of 
 them, like Jevons, recognized the fact, though in their rea- 
 soning they often failed to profit by it, that Capital is not 
 a primary but a secondary requisite. — Jevons' Pol. Ec, 
 sees. i6, 19. Tf Henry George says : "Land, Labor and 
 Capital are the factors in production. The term Land 
 includes all natural opportunities or forces; the term 
 
TAXATION OF LAND VALUES 125 
 
 Labor, all human exertion; and the term Capital, all 
 wealth used to produce more wealth. . . . Capital is 
 not a necessary factor in production. Labor exerted 
 upon Land can produce Wealth without the aid of Capi- 
 tal, and in the necessary genesis of things must so pro- 
 duce Wealth before Capital can exist." — Progress and 
 Poverty, book Hi, ch. i. ^Also: "The complexities of 
 production in the civilized state, in which so great a part 
 is borne by exchange, and so much 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, Land and Labor." — Id., ch. viii. IJ By intel- 
 ligent observers no authority is needed. In all the phe- 
 nomena of human life, whether primitive or civilized, the 
 lesson of the Chart stands out in bold relief. Nothing 
 can be produced without Labor and Land; 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 Land 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 con- 
 tact with or use nature." — Progress and Poverty, book i, 
 ch. ii. 
 
 59. "As commonly used the word 'Wealth' is applied 
 to anything having exchange value. But . . . Wealth, 
 as alone the term can be used in political economy, con- 
 sists of natural products 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. 
 
126 TAXATION OF LAND VALUES 
 
 PART THREE, CHAPTER III 
 
 60. If we imagine upon a lonely island a solitary man, 
 without capital, without clothing, without adequate shel- 
 ter, what would be our explanation of his poverty? We 
 could not say that it was caused by a superabundance of 
 goods — by "over-production" ; nor should we be any 
 more likely to attribute it to scarcity 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 required. 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 knowl- 
 edge, in inventive acuteness, in manual dexterity, and in 
 muscular power, and yet that he was scarcely if any bet- 
 ter 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 this man's 
 opportunities to use the island are restricted — ^the Labor 
 of the island and the Land 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 pri- 
 vate property, had granted the lone inhabitant permis- 
 sion 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 increased, we should 
 understand the cause of his poverty. And we should 
 advise him to find a way at once of throwing off that 
 cannibal'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 Land is essentially the own- 
 ership of the men who must use it. "Let the circum- 
 
TAXATION OF LAND VALUES 127 
 
 stances 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, hook vii, ch. ii. 
 
 Let us imagine a shipwrecked sailor who, after bat- 
 tling with the waves, touches land upon an uninhabited 
 but fertile island. Though hungry and naked and shel- 
 terless 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 Labor to the Land 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?" "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 any- 
 how ?" "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." "Cer- 
 tainly you are. Come right along up to my cabin." For 
 a time the two get along well enough together. But on 
 
128 TAXATION OF LAND VALUES 
 
 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 under- 
 stand that I am not your slave, and I won't 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 char- 
 ity is at an end. I have treated you better than you de- 
 served 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 satisfied 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 no- 
 tions of the "goo-goo" variety, he would propose arbitra- 
 tion, 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 perceptive 
 and red-blooded man, he would notify his comrade that 
 the privilege of owning islands in that latitude had ex- 
 pired. 
 
 62. While in the Pennsylvania coal regions several 
 years ago I was told of an incident that illustrates the 
 
TAXATION OF LAND VALUES 129 
 
 power of perpetuating poverty which resides in the mon- 
 opoly 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 in- 
 dustrious enough and thrifty enough not only to be will- 
 ing 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 poverty 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 controlled 
 the necessary Labor, and were willing to give it to abol- 
 ish their poverty ; but the necessary Land was placed be- 
 yond 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 civ- 
 ilized state are dependent upon accumulated capital as 
 well as upon land for opportunities to produce. See 
 bnte. Note 54, and post. Note 86. 
 
130 TAXATION OF LAND VALUES 
 
 64. Here are two men at a given point. Each 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 mile out and a mile back in one direc- 
 tion 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 efifects of a healthful cli- 
 mate. Protectionists who argue that there should be free 
 trade between villages, cities, counties and states in the 
 same nation, but protection for nations, thus making the 
 effect of trade to depend upon the invisible political 
 boundary line that separates communities, are like the 
 Negro woman who, when her house, without being phys- 
 ically moved, had been politically shifted from North 
 Carolina to Virginia by a change of the boundary line, 
 expressed her satisfaction in the remark that she was 
 very glad of it, because she "alius 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, un- 
 able 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 civi- 
 lized methods of supplying their wants. 
 
 67. Division of labor, whether adopted to take advan- 
 tage of the different varieties of land, or to secure the 
 benefits of special skill in labor, can not 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 inter- 
 ference. 
 
TAXATION OF LAND VALUES 131 
 
 68. It will be seen from this chart that the people of 
 the two places, by dividing their given expenditure of 
 labor in such manner 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 ob- 
 jects 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 cost of 
 effecting the trade is omitted. It does not affect 
 the principle. 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, how- 
 ever, that the nearer we get to no cost in trading the bet- 
 ter are we off. Hence, any tariff on trading, whether 
 domestic or fordgn, like railroad or shipping rates for 
 freight, is prejudicial ; for tariffs add to the cost of trad- 
 ing 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 pur- 
 pose. 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- 
 operation 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 exceedingly small com- 
 pared with the necessities of those who wished to con- 
 sume it, while in variety it would be very limited and in 
 quality of the very poorest kind. But by division of 
 labor, which has been carried to marvelous lengths and 
 is still developing, productive power is so enormously in- 
 creased that the annual wealth products of the present 
 
132 TAXATION OF LAND VALUES 
 
 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 and direct, nerves 
 for intercommunication, and various muscles for various 
 actions. As different parts of the bodies of men do dif- 
 ferent 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 eco- 
 nomic what digestion is to the physical body. To pro- 
 hibit 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 un- 
 known antiquity convey an unlooked-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 better to answer its ends." Re- 
 flection 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 mak- 
 ing 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 impov- 
 erish individuals or classes, depends upon the manner in 
 which the increased wealth is distributed. If they do so 
 tend, the remedy surely does not lie in the direction of 
 obstructing trade and smashing machines so that less 
 
TAXATION of: land VALUES 133 
 
 wealth may be produced with given labor, but in altering 
 the conditions that promote unjust distribution. 
 
 72. The term "production" means not creation but 
 adaptation. Man can not 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 pro- 
 duction. 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 Land ; con- 
 sumption is the returning back of those things to the 
 Land. \ "All labor is but the movement of particles of 
 matter from one place to another." — Dick's Outlines, p. 
 25. ^ "Production consists merely in changing things." 
 — Ely's Intro., part ii, ch. i; Mill's Prin., book i, ch. i, 
 sec. 2. 1[ "As man creates no new matter but only utili- 
 ties, so he destroys no matter but only utilities. 
 Consumption means the destruction of utility." — Ely's 
 Intro., part v, ch. i, p. 268. ^Production means 
 "drawing forth." — Jevons" Primer, sec. z/. "[["Man can 
 not create material things. . . . His efforts and sacri- 
 fices result in changing the form or arrangement of mat- 
 ter to adapt it better for the satisfaction of wants." — 
 Marshall's Prin., hook ii, ch. Hi, sec. i. ^ "It is some- 
 times said that traders do not produce; that while the 
 cabinet-maker produces furniture, the furniture dealer 
 merely sells what is already produced. But there is no 
 scientific foundation for this distinction." — Id. If "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 noth- 
 
134 TAXATION OF LAND VALUES 
 
 ing more than a disarrangement of matter which dimin- 
 ishes or destroys its utiHties." — Id. \ "In like manner as 
 by production is meant the creation not of substance but 
 of utility, so by consumption is meant the destruction of 
 utility and not of substance or matter." — Say's Trea., 
 book a, ch. i. T[ "All that man can do is to reproduce ex- 
 isting materials under another form, which may give 
 them a utility they did not before possess, or merely en- 
 large 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 aug- 
 mentation of utility." — Say's Trea., book i, ch. i. 
 
 73. Isn't it significant that while Robinson Crusoe had 
 unsatisfied 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. Imagine a man satisfy- 
 ing 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 
 transport 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. ^ 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 lives literally from hand to mouth. What is de- 
 manded for consumption in the present must be pro- 
 
TAXATION OF LAND VALUES 135 
 
 duced by the labor of the present. From current produc- 
 tion, 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 represent 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 la- 
 bor through ownership of his body, as in slavery, or a 
 franchise to confiscate the products of labor in general 
 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 notori- 
 ous cheat or in extraordinary bad luck, needs money iii 
 order to obtain goods at retail stores, provided he has or 
 can presently get profitable employment. All he needs 
 is employment, or an early prospect of employment, and 
 a reputation for honesty. There is therefore no unwar- 
 ranted assumption in the example, even if we exclude the 
 use of money from consideration. See Note 77. 
 
 76. Farmers, millers, bakers, ranchers, butchers, 
 fishermen, hunters, makers of food-producing _ im- 
 plements, food merchants, railroad men, sailors, 
 
136 TAXATION OF LAND VALUES 
 
 draymen, coal miners, metal miners, builders, bank- 
 ers who by exchanging commercial paper facili- 
 tate trade, together with clerks, bookkeepers, fore- 
 men, journeymen, common laborers, and other hired 
 workmen in all these various branches of food produc- 
 tion, find work seeking for them instead 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 em- 
 ployer. 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 this is not to limit 
 "hard times" to hired men. The real trouble with the 
 business man when he complains of "hard times" is that 
 people 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." 
 Let 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 de- 
 privation. But after a while hunger gets the better of him, 
 and he takes one of the nine jobs away from another 
 man by underbidding. 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 underbid- 
 ding. And so it goes aj;,ain and again until wages fall so 
 low that they but just support life. Then the poorhouse 
 or a charitable institution takes care of the tenth man, 
 who thereafter serves the purpose of a possible labor 
 
TAXATION OF LAND VALUES 137 
 
 competitor to prevent a rise in wages. Meanwhile, dimin- 
 ished purchasing power, due to low wages, bears down 
 upon business generally. But let there be ten jobs and 
 but nine men. Conditions would be instantly 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 de- 
 mand freely directed general production, there would al- 
 ways 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 ex- 
 plained : Personal Servants upon demanding food may 
 pay money for it. The retailers might thereupon pass 
 the money along, and it would ultimately return to Per- 
 sonal 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 pa- 
 per which is in effect the same as checks, let us illus- 
 trate that mode by a series of charts adapted from Je- 
 vons. ^We will begin with two traders, A and B. They 
 have no money, but every time that one demands any- 
 thing 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 primitive barter. It 
 may be represented by the following chart : 
 
 A B 
 
 In the civilized state, even in its beginnings, primitive 
 barter must be obstructive to trade, and it gives way to 
 
138 TAXATION OF! LAND VALUES 
 
 the use of currency — some common medium which is 
 taken for goods not because the taker wants it but be- 
 cause he knows that he can readily exchange it for the 
 goods that he does want. With currency in use, when 
 A wants anything of B he is not obHged to find some- 
 thing that B wants. All he needs is currency. Thus 
 currency reduces the friction of trading. 
 
 But as the volume of trade augments, demand for cur- 
 rency increases ; 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 primi- 
 tive barter. At this stage, when A wants anything 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 de- 
 mand 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, together with the dan- 
 ger and expense of transmission, evolves an extension 
 of bookkeeping. A common bookkeeper, called a "Bank," 
 is employed, and all need for currency disappears: 
 
 Balances are now settled by checks, and all accounts 
 are adjusted in the central ledger at the bank. 
 
TAXATION OF LAND VALUES 139 
 
 But the introduction of another group of traders, an- 
 other community, renews the demand for currency, and 
 another bank appears. Thus : 
 
 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 increases. Thus : 
 
140 TAXATION OF LAND VALUES 
 
 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 : 
 
 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 con- 
 stantly in the direction of doing away with it. It is 
 supposed 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 : 
 
lTAXATION of land values 141 
 
 MEW YORK 
 
 
 
 PAWS 
 
 
 Rio 
 
 These five cities are like the five banks. The book- 
 keeping 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 in the chart is 
 London. In this way the mobility of labor is in effect 
 enormously increased. Labor 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 employ- 
 ment by Luxury-makers, demand more food, which keeps 
 Food-makers at work ; Food-makers demand more cloth- 
 ing, which keeps Clothing-makers at work; Clothing- 
 makers demand more shelter, which keeps Shelter-makers 
 at work; Shelter-makers demand more luxuries, which 
 keeps Luxury-makers at work; Luxury-makers demand 
 more services, which keeps Personal Servants at work. 
 And so on indefinitely. If now we add progressive in- 
 vention, so that every one produces more and more 
 
142 TAXATION OF LAND VALUES 
 
 wealth with less and less labor, instead of finding pov- 
 erty upon the increase, instead of being harried by peri- 
 odical "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 ex- 
 change. And should we improve the verisimilitude of 
 the illustration by bringing 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 deter- 
 mines the direction of Labor toward the production not 
 only of that thing, but also of all the artificial materials 
 and implements, from the simplest tool to the most ex- 
 pensive and complex machines that are used in its pro- 
 duction. 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. 
 ^"This principle is so simple and obvious that it needs 
 no further illustration, yet in its light all the complex- 
 ities of our subject disappear, and we thus reach the 
 same view of the real objects and 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 satisfaction of his own desires ; we see that 
 although the minute division 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 producers 
 
TAXATION of: LAND VALUES 143 
 
 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, 
 hook i, ch. iv. 
 
 79. There is no end to man's wants. ^"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 be- 
 comes 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 it. ch. Hi. ^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 con- 
 ditions. The demands of society as a whole determine 
 the degree of activity for each department of produc- 
 tion, 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 activit)' 
 upon his legs than upon his arms. But it is not neces- 
 sary 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 con- 
 sumption. The man, for example, who wants a coat, 
 and to get it makes shoes that he does not want, but 
 with which he hires some one to make him a coat, really 
 
144 TAXATION OF. LAND VALUES 
 
 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 in- 
 ducing others to make the things that he demands, in 
 order to exchange them for what he makes, really pro- 
 duces what he demands. But for his demands, supple- 
 mented 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 produc- 
 tion determines consumption i«tead of being determined 
 by it. The collection of corrlmodities in the market is 
 analogous to the collection of water in reservoirs for 
 the accommodation of inhabitants of cities. Water is 
 so collected in advance of specific demand, not to induce 
 the people to consume water, but because, being accus- 
 tomed 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 comm,ercial 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 re- 
 plenished in accordance with the demand upon it. And 
 this is equivalent to the proposition 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 
 
TAXATION OF LAND VALUES 145 
 
 keeps shoes in stock, and when he sells a pair buys an- 
 other Uke them. In either case the shoe dealer is pro- 
 viding 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 consump- 
 tion, and may sometimes precede it actually, as when 
 a new nostrum is placed upon the market, the fact re- 
 mains that general production in any direction rises and 
 falls with the rise and fall of general demand for con- 
 sumption — in other words, is determined by that demand. 
 And this law regulates the supply of wealth not only 
 as to quantity, but also as to quality and variety. 
 
 8L "This, then, we may say is the great law which 
 binds society — 'service for service.' " — Dick's Outlines, 
 
 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 partial or complete idleness, their wants go unsatis- 
 fied! Since producers are also consumers, and produc- 
 tion is governed by demand for consumption, there can 
 be no real overproduction until demand ceases. The ap- 
 parent overproduction which we see — overproduction 
 relatively to "effective demand" — is in fact a congestion 
 of some things due to an abnormal underproduction of 
 other things, the underproduction being caused by ob- 
 struction in the way of Labor. 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 un- 
 
146 TAXATION OF LAND VALUES 
 
 satisfied wants which they can reciprocally satisfy? Too 
 much competition! when competition and freedom are 
 the same. It is not freedom but restraint, not compe- 
 tition but monopoly, that obstructs the action and reac- 
 tion of demand and supply which we have illustrated in 
 the chart. 
 
 83. See Notes 15 and 16 of this Appendix, and cor- 
 responding text. 
 
 84. Demand for food is not only demand for all kinds 
 and grades of Food-makers, but also for as many differ- 
 ent kinds of land as there are different kinds of labor 
 set at work. So a demand for clothing is not only a de- 
 mand for Clothing-makers, a demand for shelter is not 
 only one for Shelter-makers, a demand for Luxuries is 
 not only one for Luxury-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, store sites, residence sites, office 
 sites, theater sites, and so on to the end of an almost 
 endless catalogue. 
 
 85. See Notes 23 and 24 of this Appendix, and cor- 
 responding text. 
 
 86. Persons with socialistic inclinations argue that 
 while it is true that Labor and Land are the only things 
 necessary in primitive conditions, Capital also is neces- 
 sary 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 bookkeepers 
 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 Singletax oppo- 
 nents in church and college whom the late Wm. T. Croas- 
 dale 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 pilman, in the following lines_; 
 
TAXATION OF LAND VALUES 147 
 
 "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 forerunners 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 
 
 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. Oilman 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 unobstructed industrial intercourse be- 
 tween laborer and laborer. These are the essential con- 
 ditions, the only conditions, of all production — even of 
 the most civilized. The root of the socialistic idea is 
 
148 TAXATION OF LAND VALUES 
 
 the thought that we are dependent for modern life upon 
 accumulated capital. This is a mistake. Modern life 
 depends, not upon accumulated capital, but upon accu- 
 mulated knowledge made effective by interchange of la- 
 bor. A laborer who operates some great machine seems 
 to be dependent upon the owner of his machine for op- 
 portunity to work; but the only people upon whom he 
 really depends are laborers who are competent co-oper- 
 atively 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 attributing 
 to accumulated capital the power that resides in land 
 and trade ; for to control these is to command the bene- 
 fits of accumulated knowledge. Since the production of a 
 machine precedes its use, the inference is almost irresisti- 
 ble, upon a superficial consideration, that opportunities to 
 labor and compensation for labor are governed by the ex- 
 isting supplies of machinery to which labor is allowed ac- 
 cess. 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 de- 
 voted to the maintenance of laborers. The inference is 
 wrong in either form. When we once grasp the essen- 
 tial truth of the law illustrated in the text, that the pro- 
 duction of subsistence, or machinery, or any other un- 
 finished 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, Labor and Land are the only 
 factors of wealth production. It is not Capital but Land 
 that supplies materials to Labor for its subsistence and 
 its machinery. Instead of capitalists supplying laborers 
 with subsistence and machinery, laborers themselves con- 
 tinuously produce subsistence and machinery from the 
 
TAXATION OF LAND VALUES 149 
 
 materials that land supplies. Capitalists neither employ 
 nor pay laborers ; laborers employ and pay one another. 
 IfKeir Hardie, the distinguished Labor member of the 
 British Parliament, once objected in a public speech that 
 while the Singletax considers the relation of men to 
 the land it ignores the relation of men to one another. 
 For the latter reason he considered himself as "more 
 than a Singletaxer." Mr. Hardie had evidently ignored 
 the fact that the Singletax includes the principle of free 
 trade; or else the fact that free trade, supplementing 
 free land, would accomplish with reference to the re- 
 lations of men to men what he criticized the Singletax 
 for ignoring. Free trade is that phase of the Single- 
 tax which considers the relation of men to men, even 
 as its other phase considers the relation of men to the 
 land. IfMuch of the socialistic misapprehension of the 
 Singletax is due to confusions of Land 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, op- 
 erates upon land values and machine values quite differ- 
 ently; and rights of ownership have a different moral 
 sanction and different industrial origins and economic 
 effects. For political purposes the difference between 
 land as the natural environment and opportunity for la- 
 bor and artificial tools as products of labor must be dis- 
 tinct. 1[Most of the so-called "capital" of our time is 
 not Capital in contradistinction to Land; it is land the 
 value of which is capitalized. In every effective instance 
 of the power of Capital over Labor, the capital men- 
 tioned consists of a commercial mixture of artificial cap- 
 ital and natural capital — of machinery produced by Labor 
 and land produced by Nature. The commercial mixture 
 is effected by means of evidences of title, such as rail- 
 
150 TAXATION OF LAND VALUES 
 
 road stocks which represent tracks, etc., (labor prod- 
 ucts), and grants of exclusive rights of way (land) ; 
 and it is the land titles hidden in those stocks that are 
 greatest if the railroad is at all a capitalistic menace. 
 To insist that Capital (as distinguished from Land) is 
 monopolistic because "capital," the commercial 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. IJThe object of 
 Socialism and that of the Singletax is the same — ^abo- 
 lition of the exploitation of labor. The Singletax pro- 
 posal proceeds upon the theory that abolition of land 
 monopoly will abolish exploitation of labor. Socialists 
 insist that abolition of capital monopoly also is neces- 
 sary. This is conceded by Singletax 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 Singletaxer responds that their "capital" proves 
 to be nearly all land when you investigate the source of 
 their incomes. Apart, however, from socialistic misap- 
 prehensions 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 Singletax 
 advocate would disagree ; but in so far as Socialism does 
 not make that limitation, the Singletax advocate agrees, 
 f The one solid rock upon which the Singletax theory 
 rests, moreover, 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. Be- 
 cause it rests upon land monopoly Capital is formidable ; 
 until land monopoly is abolished. Labor will be weak. 
 Karl Marx told the whole story in a few words when 
 in his Gotha-platform letter, reprinted in the International 
 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 cap- 
 
TAXATION OF LAND VALUES 151 
 
 italists." ^Read Progress and Poverty, book i, chs. 
 iii, iv, and v. Also read The Story of My Dictatorship, 
 chs. V, vi, vii, and viii. 
 
 PART THREE, CHAPTER IV 
 
 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 some other kinds of serv- 
 ice. 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. Tf'Wages is what goes to pay for the 
 trouble of labor." — Jevons' Primer, sec. jp. ^"His [the 
 manager's] share is called the wages of superintendence, 
 aiid although usually much larger than the share of a 
 common laborer, it is really wages of the same nature." 
 — Id., sec. 41. l["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 cap- 
 ital, and that part of the produce which goes to the sec- 
 ond of these factors is styled by them wages. . . . 
 It is important to keep this in mind. For in the stand- 
 ard economic works this sense of the term wages is 
 recognized with greater or less clearness only to be sub- 
 sequently 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." — Jevon/ 
 Primer, sec. 40. lf"The term rent in its economic sense 
 . . . differs in meaning from the word rent as com- 
 
152 TAXATION OFl LAND VALUES 
 
 monly used. In some respects this economic meaning 
 is narrower 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 build- 
 ings, 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 payments for the use of houses, farms, 
 etc., only that part is rent which constitutes the consid- 
 eration for the use of the land — that part paid for the 
 use of buildings or other improvements being property 
 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 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 in- 
 stead 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 interest 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 capabili- 
 ties 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. Un- 
 
TAXATION OF LAND VALUES 153 
 
 til 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 subdivi- 
 sion, just as the division of labor into skilled and un- 
 skilled would be. In our examination we have reached 
 the same point as would have been attained had we sim- 
 ply 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 in, ch. v. IfCare must be 
 taken not to confuse the hire of a house, commonly 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 premi- 
 ums for the varying advantages of different locations. 
 
 90. Land 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 ob- 
 vious that, other things being equal, farmers would pre- 
 fer 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 preferable 
 for most purposes of residence or business to lots -equally 
 good in other respects which are far away. Now, the 
 land that 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 can not be equally desirable. Some ex- 
 
154 TAXATION OF LAND VALUES 
 
 eels 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 production in the civilized 
 state requires that the producer shall have exclusive pos- 
 session of the land he needs. This necessity inevitably 
 gives to some people more desirable land than others 
 have, even though all should have an abundance. Conse- 
 quently 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 la- 
 bors with equal effort, skill, and intelligence. Or, if the 
 fertility of the land be the same, but its situation in ref- 
 erence to the market be such that the cost of transporta- 
 tion still preserves the relation of $5 to $4, the same 
 inequality 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 illus- 
 trated. 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 pre- 
 mium-commanding land. Rent can no more be turned 
 into compensation for individual 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 fraud, Rent always constitutes that part of Wealth 
 which is deducted from current production as premiums 
 for superior opportunities for production. Wages and 
 
TAXATION OF LAND VALUES 155 
 
 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 compensa- 
 tion for production, while Rent flows from Wealth to 
 land-monopolists in premiums for allowing Labor to pro- 
 duce Wealth from superior locations. Wages are appur- 
 tenant to Labor; Rent is appurtenant to Land. It is as 
 laborer that the individual takes Wages, but as land-mon- 
 opolist that he takes Rent. 
 
 91. A unit of labor can not 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 Labor force as an abstraction, intending 
 thereby to denote all the Labor of muscle and brain requi- 
 site 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 fertil- 
 ity 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. \ "The produce of labor consti- 
 tutes the natural recompense or wages of labor. In that 
 original state of things which precedes both the appropri- 
 ation of land and the accumulation of stock, the whole 
 produce of labor belongs to the laborer." — Smith's 
 Wealth of Nations, hook i, ch. viii. If "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 
 
156 TAXATION OF LAND VALUES 
 
 be had for nothing. 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 
 yield rent. And though the productiveness of my land 
 may decrease, yet if the productiveness of the land to be 
 had without charge decreases in 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 own- 
 ership 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 can not 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 compe- 
 tition." — Mill's Prin., book ii, ch. xvi, sec. i. If Rent 
 "considered as the price paid for the use of land is natu- 
 rally 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 cultivation," probably because the law of rent 
 was not understood with reference to any but agricul- 
 tural 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 ap- 
 
TAXATION OF LAND VALUES 157 
 
 >i 
 
 pears, Vaiges consists not of the entire product of labor, 
 but of io 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 pro- 
 duced, in proportion to the advantages which their land 
 respectively contributes to its production. This excess 
 is the premium. It is what constitutes Rent as distin- 
 guished from Wages. And both the amount of the gen- 
 eral fund Rent, and the amount of rent which each land- 
 owner obtains, are determined by the competition of La- 
 bor 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 
 thing in its principle of operation, as greater 
 capabilities attached to particular lands in conse- 
 quence of social development, good government, in- 
 dustrial improvement, etc., Rent would arise, and as a 
 proportion of the gross Wealth-product, would increase 
 as Labor 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 pro- 
 ductive land in use." — Progress and Poverty, book Hi, 
 ch. a. ^ 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 deter- 
 mines 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 de- 
 velopment, 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 production of Wealth, is it not a mistake 
 to say that these new capabilities will be added to Land 
 rather than to Labor?" In explanation of his question 
 he adds: "If new capabilities were added to all land, in- 
 
158 TAXATION OF LAND VALUES 
 
 eluding 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 particular 
 land as added to land in general. I might be understood, 
 therefore, as implying that they would be evenly instead 
 of differentially distributed in Rent. The statement 
 should be altered so as to read : "As greater capabilities 
 attached to particular lands in consequence of social de- 
 velopment, 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 increasing population upon the distribution 
 of wealth is to increase rent, and consequently to dimin- 
 ish 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 capa- 
 bilities otherwise latent, and by attaching special capabil- 
 ities 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 
 understood not as mathematical demonstrations, but sim- 
 ply as suggestive 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 previous chart, where the given ex- 
 penditure of labor is as well compensated 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, 
 
TAXATION OF LAND VALUES 159 
 
 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 dififerences in nat- 
 ural opportunity which different laborers, owing to varia- 
 tions in land, are obliged to accept. And, what in prac- 
 tice is more important, it is nature's method of measur- 
 ing the value to each individual of those advantages which 
 consist 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 wrongfulness of 
 Rent. Personal freedom necessitates Rent, for it neces- 
 sitates the private possession of land, and private posses- 
 sion of land, some locations being more desirable than 
 others, makes Rent inevitable. Nothing short of com- 
 munism 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 ? ^ "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 limita- 
 tion, 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 Perplexed Philosopher, p. 45. 1[ It is in 
 the adjustment of co-equal rights that Rent occurs. 
 
 98. "The effect of increasing population upon the dis- 
 tribution of wealth is to increase rent ... in two 
 ways : First, by lowering the margin of cultivation. Sec- 
 ond, by bringing out in land special capabilities otherwise 
 
160 TAXATION OF LAND VALUES 
 
 latent, and hy attaching special capabilities to particular 
 lands." — Progress and Poverty, book iv, chs. ii and Hi. 
 Tf "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 
 g;ives 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 particular part of it 
 stands to other parts are fixed. Man has no control 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 relations 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 Prin., 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 nec- 
 essarily 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 in- 
 creases." — Progress and Poverty, book Hi, ch. vi. 
 
.TAXATION OF LAND VALUES 161 
 
 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 were common land. The discovery of 
 mines, the development of cities and towns, and the con- 
 struction of railroads, the irrigation of arid places, im- 
 provements in government, all the infinite conveniences 
 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 demand 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 prog- 
 ress would lower Wages as a proportion of total product, 
 it would increase them as an absolute quantity. IfThe 
 British critic quoted in a previous note, Mr. Madsen, sug- 
 gests 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 re- 
 sult of an economic argument," because economists ought 
 to be "able to say definitely how wages will be affected 
 by tracing definite causes to their effects and stating posi- 
 tively whether wages will rise or fall." Political economy 
 as a science is one of tendencies. Economists may tell 
 what the general tendency of given general conditions 
 will be ; but they can not tell what specific effects will oc- 
 cur, for all the facts are not available. They can predict, 
 for illustration, that if one man be given an absolute mon- 
 opoly of the planet with power to retain it, he will be sup- 
 ported by the labor of other men ; but they can not tell 
 what proportion each will give him nor how much he will 
 get. The comparison of proportional with quantitative 
 wages is considered with some fullness by Henry George 
 in Progress and Poverty, book iv, chapter iv. The pri- 
 mary efifect of labor-saving improvements is doubtless to 
 delay the need for lower grades of land ; but the second- 
 ary efifect — ^though the first in point of time, if general 
 
162 TAXATION OF LAND VALUES 
 
 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 our- 
 selves 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 benefit to wages. This is 
 true as a tendency; and it is because it is true as a tend- 
 ency that, under the influence of the expansiveness of 
 human desires and the consequent intensity of monopo- 
 lization of land, it is not true as a fact of actual experi- 
 ence. Able to get a larger quantity of wheat with less 
 labor, we continue doing the same labor, thereby increas- 
 ing our production of wheat, in order to swap the excess 
 for sealskin coats, or other objects of previously ungrati- 
 fied desires. The efifect is a tendency to an increase in 
 the demand for wheat land, and consequently to an in- 
 crease 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 be- 
 comes a city. The public revenues required are enor- 
 mous, and so are the land values. ^ 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 de- 
 crease with social progress ?" The question results from 
 inattention to the point noted in Note 101 (96 of third edi- 
 tion) 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 
 
TAXATION OF LAND VALUES 163 
 
 fall, as a proportion of product. But as the product is 
 greater, so the individual'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 introduced, 
 giving the increasing values of land to individuals instead 
 of the community, a speculative pressure sets in. Land 
 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. Conse- 
 quently 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 re- 
 duction of wages; it is social progress under land mon- 
 opoly. 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 decline 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 distinguished 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 Earn- 
 ings. And how can society be justly supported in any 
 other way than out of its own earnings ? ^Criticizing 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 na- 
 tion 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 
 
164 TAXATION OF LAND VALUES 
 
 what Note 98 of the third edition (the first paragraph 
 of Note 103 of this edition) means? The critic may have 
 been misled by the idea of public service, assuming that 
 this term implies that Rent is determined by service ren- 
 dered 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 common service 
 which every individual renders to the whole, over and 
 above what he renders to himself, when he engages in 
 specialized production. It is a social or co-operative phe- 
 nomenon — is Rent; and although the more fertile spots 
 will yield Rent when others do not, this is true only in co- 
 operative (t. e., specialized) industry. Even then, the 
 proportion of Rent due to exceptional fertility (including 
 mineral deposits, etc., in that term) is probably 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 ques- 
 tion, '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. 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 of national life it everywhere stands out. 
 I bow to this arbitrament and accept this test." — Prog- 
 ress and Poverty, book vii, ch. i. The reader who has 
 been deceived into believing that Henry George's propo- 
 sition is in any respect unjust, will find profit in a perusal 
 of the entire chapter from which the foregoing extract 
 is taken. IJAs an illustration of the weakness of the 
 opposing position, the argument advanced by one of the 
 
TAXATION OF, LAND VALUES 165 
 
 most distinguished men of his time may be read to advan- 
 tage. It will be found in Land and Its Rent, by Gen. 
 F. A. Walker. General 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 General 
 Walker was not strongly logical may be inferred from 
 his controversy of 1883 with Henry George, which is 
 reproduced in the Appendix to George's Social Prob- 
 lems; that he was strong neither logically nor morally 
 in reference to civic relationships is evident from the final 
 paragraph of his preface to Land and Its Rent, men- 
 tioned above. Alluding there to his discussion of Henry 
 George's views in the body of Land and Its Rent, Gen- 
 eral Walker says : "For the spirit in which he discusses 
 the views of a writer who deliberately proposes that gov- 
 ernment shall confiscate the entire value of landed prop- 
 erty, without compensation to those who, under the ex- 
 press sanction and encouragement of government 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 sanc- 
 tion and encouragement of government," for General 
 Walker gives no reason for considering landed property 
 especially sacred. It follows, if General Walker thought 
 straight morally and reasoned straight logically, that 
 every honest man would resent as an insult any proposi- 
 tion 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 or in morals? If slavery exists, govern- 
 ment must not abolish it without compensating slave own- 
 
166 TAXATION OF LAND VALUES 
 
 ers! . And this, notwithstanding that Abolitionists who 
 have always opposed it, and slaves who have been 
 born or kidnaped 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 confiscate 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 of property whatever, 
 if inherited or bought "under the express sanction and 
 encouragement 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. 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 work- 
 man 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 
 continuous payment — what would be called "ground 
 rent." But actual or potential Rent may always 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. Land which has the power of yielding 
 Rent to its owner will have a selling value, whether it be 
 
TAXATION OF LAND VALUES 167 
 
 used or not, and whether Rent is actually derived from it 
 or not. This selling value will be the capitalization of its 
 present or prospective power of producing Rent. In fact, 
 much the larger proportion 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 condition is 
 expressed in the chart by the blue color. ^"The capital- 
 ized value of land is the actuarial 'discounted' value of all 
 the net incomes which it is likely to afford, allowance be- 
 ing 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. p. "The value of land is com- 
 monly 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. 1|"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 exchanging 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 our- 
 selves the reason of . . . variations in . . . value . . . 
 we see that things having some form of utility or desira- 
 bility, 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 difficulty or ease 
 of getting them, which determines value, depends on the 
 amount of labor which must be expended in producing 
 
168 TAXATION OF LAND VALUES 
 
 them ; i. e., bringing them into the place, form and condi- 
 tion 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. Land 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 gen- 
 eral principle, 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 struc- 
 ture 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 ; while 
 the value of things not produced by labor, but neverthe- 
 less susceptible of ownership, is in the same way resolva- 
 ble 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 Eastern 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 Econ- 
 omy, book ii, ch. iii, observes with reference to improve- 
 ments in agricultural implements which diminish the ex- 
 pense of cultivation, that they do not increase the profits 
 of the 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 cultivation." This 
 
TAXATION OF LAND VALUES 169, 
 
 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 commodi- 
 ties, the tendency of increasing price to draw forth addi- 
 tional supplies, can not 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 engag- 
 ing in production. If it were possible to continuously re- 
 duce wages until zero were reached, it would be possible 
 to continuously increase rent until it swallowed up the 
 whole produce. But as wages can not 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 can not have the same scope to ad- 
 vance rent in countries where wages and interest are al- 
 ready 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 speculative advance 
 of rent to overpass the limit where production would 
 cease, is, I think, shown by recurring seasons of industrial 
 paralysis." — 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 invariably precedes each of these seasons of indus- 
 trial 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 downward tendency of wages (or a rise in the 
 cost of living, which is the same thing) in all depart- 
 
170 TAXATION OF LAND VALUES 
 
 ments 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 distin- 
 guished 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 subdivided and trade is intricate, it is impossi- 
 ble 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 gen- 
 erally is so divorced from land as abnormally to glut 
 the labor market and make men's sale of their labor for 
 almost anything the buyer offers, the alternative of star- 
 vation. Laborers may be as truly enslaved by divorcing 
 Labor from Land as by driving laborers with a whip. 
 
 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 reasonable. I have frequently had occasion to tell 
 of the necessity under which the city of Cleveland, Ohio, 
 
TAXATION OF LAND VALUES 171 
 
 found itself, of paying a land-owner several thousand 
 dollars for the right to swing a drawbridge over his land. 
 When I described the matter in that way, the story at- 
 tracted no attention; it seemed perfectly reasonable to 
 the ordinary lecture audience. But when I described the 
 transaction 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 explain the 
 difference, except as a matter of custom? To the same 
 effect was the question of the Rev. F. L. Higgins to a 
 friend. While stationed at Galveston, Texas, Mr. Hig- 
 gins fell into a discussion 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 gov- 
 ernment should vest in a corporation title to the Gulf of 
 Mexico, so that no one could fish there, or sail there, or 
 do an3rthing in or upon the waters of the Gulf without 
 permission from the corporation. Would that be right ?" 
 "No," answered the friend. "Well, suppose the corpora- 
 tion 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 unborn. 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 mor- 
 als?" "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?" 
 
 lis. The late Thomas G. Shearman, Esq., of New 
 York, author of the famous magazine article on "Who 
 
172 TAXATION OF; LAND VALUES 
 
 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 ex- 
 penses of American government — Federal, State, county 
 and municipal. TfMr. 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 cap- 
 ital value is the capitalization in the market of annual 
 value, and a tax estimated upon capital values would be 
 paid out of or constitute a deduction from annual val- 
 ues. 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 calcula- 
 tion) in a land market where commercial 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 mis- 
 take. Although the old rate would not on the lower 
 capital value raise the old revenue, a higher rate would, 
 and without making any difference to the taxpayer. For 
 instance : A tax of 3 1/3 per cent, on the lower capitaliza- 
 tion of $1,200 in the above illustration would yield $40 
 to the public and leave $60 to the taxpayer; 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 
 
TAXATION of: LAND VALUES 173 
 
 annual ground rent value to leave to the taxpayer margin 
 sufficient only to pay fairly for land management, and 
 to leave no sufficient basis for injurious speculation 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 calcu- 
 lated at 45 per cent, upon its capital value in a market 
 where commercial interest rules at 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 figures are offered as pre- 
 cise, except for purposes of simple illustrative calcula- 
 tion, but they are not far from what may be reasonably 
 regarded as approximate. l[Mr. Alex. W. Johnston, an 
 Australian writer on economics (author of Law 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 — "only a partial and half-hearted appli- 
 cation 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 capi- 
 talized 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 Abra- 
 ham Lincoln as saying that "nothing is settled until it 
 is settled right." Sound doctrine that ; but Mr. Johnston 
 
174 TAXATION OF LAND VALUES 
 
 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 he rendered as 
 "one blessed thing after another" — ^blessed if in the right 
 direction and the reverse if in the wrong direction. Be- 
 fore anything now wrong can be settled right, we must 
 begin to settle it right. In countries where the land mar- j 
 ket 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 logsl 
 with the thick end of the wedge. ^Whether the sin- ' 
 gle tax ever should or would pass from a tax estimated 
 on capital values to one estimated on annual ground 
 rents, is a question for the future. The time to deter- 
 mine this will be when the people have so clearly rec- 
 ognized 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 Limited" has made con- 
 siderable practical progress since the text of this book 
 was originally written, twenty-one 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 giv- 
 ing it serious consideration, 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 Land-Value Taxation in Prac- 
 tice, an Australian book, obtainable at "The Single Tax" 
 office, Melbourne, Victoria. Owing to the author's un- 
 timely 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, 
 
TAXATION OF LAND VALUES 175 
 
 Illinois, U. S. A., since April 9, 1898. In producing 
 prosperous conditions the "Single Tax Limited" wher- 
 ever 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 Progress and Poverty. These 
 teach that improvements in government 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 commen- 
 surately, speculation in land will tend to revive. All 
 this was anticipated by Henry George when he wrote 
 as follows in chapter ii of book viii of Progress and 
 Poverty: ". . . it will not be enough merely to 
 place all taxes upon the value of land. It will be nec- 
 essary, where rent exceeds the present governmental rev- 
 enues, comraensurately to increase the amount demanded 
 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 understood, 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 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 landholders." IfThe objection 
 that upon the first applications of the "Single Tax Lim- 
 ited," land owners begin after a while to reap their old 
 advantages, is no argument against the "Single Tax Un- 
 limited." 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 
 
176 TAXATION OF. LAND VALUES 
 
 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 ?" f Some 
 helpful investigations into the sufficiency of land value 
 taxation have been made in recent years. Among the 
 publications reporting these are the Blue Books of the 
 British government, reports of the British Land Enquiry 
 Committee, the annual reports of the Tax Department 
 of New York City, and data of taxation in Oregon coun- 
 ties procured under the direction of Wm. S. U'Ren, 
 of Oregon City, Oregon, and W. G. Eggleston, now 
 of San Francisco. 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 Limited." Another 
 us'eful publication in this connection is Benjamin C. 
 Marsh's Taxation of Land Values in American Cities, 
 the Next Step in Exterminating Poverty," which is pub- 
 lished 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 Land Ques- 
 tion, prepared by James Dundas White, LL. D., M. P., 
 and published by the Land Values organization of Lon- 
 don (20 Tothill St. and 376 Strand). 
 
TAXATION of: land VALUES 177 
 
 116. This idea of the concealed picture was graphic- 
 ally illustrated with a story by James G. Maguire, at 
 that time a judge of the Superior Court of San Fran- 
 cisco and afterward a Member of Congress from Cali- 
 fornia, 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 win- 
 dow of a store, looking 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 : 
 
 " '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 outlines 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 can not make out a cat. I can see noth- 
 ing 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 crank, a little impatiently, 'look 
 
178 TAXATION OF LAND VALUES 
 
 at those sprouts at the foot of the tree, and the grass. 
 They make the cat's claws.' 
 
 "After a rather deHberate examination, I reported 
 that they did look a little like a claw, but I couldn't con- 
 nect them with a cat. 
 
 "Once more the crank came back at me. 'Don't you 
 see 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 landscape 
 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 Singletax agitation. To "see the cat" is 
 to understand the Singletax. 
 
 PART THREE, CHAPTER V 
 
 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 ma- 
 terial 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 sla- 
 very in place of that which has been destroyed; that is 
 bringing political despotism out of political freedom, and 
 must soon transmute democratic institutions into anarchy. 
 It is this that turns the blessings of material progress 
 
TAXATION OF LAND VALUES 179 
 
 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. Civ- 
 ilization so based can not continue. The eternal laws 
 of the universe forbid it. Ruins of dead empires testify, 
 and the witness that is in every soul answers, that it 
 can not be. It is something grander than Benevolence, 
 something more august than Charity — it is Justice her- 
 self that demands of us to right this wrong. Justice that 
 will not be denied ; that can not be put off — ^Justice that 
 with the scales carries the sword." — Progress and Pov- 
 erty, hook X, ch. V. 
 
ilillilil