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     Every country has its own peculiar land question, and in each country that question passes through various phases determined by its industrial development; but everywhere the fundamental land question has, in the long run, been one of the adjustment of the population to natural resources, especially to the food supply. Sometimes the natural resources are plentiful and population is scant; but in time the land becomes relatively scarce, and expanding population finds it increasingly difficult to make a living. The pressure of population upon the means of subsistence has had a mighty influence on the course of history. It has led to great improvements in production as when man learned to cook his food, to domesticate animals, and to cultivate plants; as when in the 17th and 18th centuries the first steps in modern agriculture were taken and when in our own day science was methodically applied to agriculture. This pressure has led to great migrations, to the seizure of new areas containing better soil, better waterholes, better ports and ways of trade or mineral deposits. The land is the central fact in the life of every people unless it be those peoples whose national life is based on the unstable foundation of trade; and the first great question about the land is how best to make it feed and clothe and house the people,--how to make it most productive.

     But that is not the only question. There is also the problem of distribution, of the way the product is divided, and this is secondary only to production. Indeed in many ways it is more important than that of production because of its bearing upon that third aspect of the land question--the effect of the land system upon the kind of men it supports. Conceivably a plantation system operated by slaves, or a manor worked by serfs, might yield the greatest production; but we could not approve such systems because they must fail to produce the kind of men that makes a free state possible and permanent--strong, hopeful, independent, self-directing, men who know no master and are the master of none.

     The discussion today seems to center about the tenure of land, and the issue may be briefly put thus: What is the best form of land tenure from the point of view securing the highest permanent productivity of the natural resources, and at the same time secure the most ideal ends of justice in distribution and the development of the highest type of citizenship?

     If we seek an answer to these questions in history it seems to be in favor of private property in land. We began with common ownership and everywhere have gone to private ownership. This transaction occurred early among the Anglo-Saxons; it is only now taking place among the Russians. True, private property in land has been characterized as a cunning device of the strong for the subjugation of the weak; and there are instances of such an outcome; as when the free village communities of the middle ages (if there were such) were absorbed into the feudal system, and men were reduced to a servile condition from which it required centuries to free them. On the other hand private property in land has been the means of raising great masses of men to a position of freedom and independence. Certainly this has been true of the history of land holding in our own country; from the earliest colonization to our own time it has been the story of planting a land-owning, liberty-loving, independent population on the soil.

     The large plans of the great colonization companies and royal favorites who received grants of land with the hope of retaining possession of them failed in nearly every case. The only way the country could be peopled was to give those who came a share in the land; the only way to secure and maintain a body of laborers whose labor could be exploited by others, in the presence of abundant land, was to entice or steal them away from their homes beyond the sea and reduce them to bondage for a term of years or to the position of chattel slaves.

     Land ownership has from the beginning of colonization been a lure and a prize to the immigrant and to the frontiersman. The great colonizing companies had to reckon with this land-hunger of the people in order to secure settlers; the states which grew out of these companies had to reckon with it; and, when at the close of the Revolution the Federal government came in possession of a vast domain, there seems to have been no thought in the mind of any man but that the lands should be alienated. The only questions were as to how they should be sold, whether in large tracts or small, with a view to revenue or to getting families on the soil at the earliest possible moment.

     Within twenty years after taking possession of the western lands, the government threw to the winds all financial considerations and under pressure of western demands for free lands the price of agricultural lands was reduced to $1.25 per acre. A system of generous gifts to the states, already begun, was soon extended and the agitation at once begun for cheaper lands to settlers which eventuated in the Homestead Act of 1862. About the time this act was passed, the direct grant of

lands was begun to the railroads which within ten years surrendered to the railroad companies the right of 155 million acres of land as an encouragement to rapid construction.

     The philosophy back of this policy of swift alienation was simple. Our resources are "inexhaustable;" rapid development is desirable; this can best be secured by settling families on the lands; even if the lands are given away the patrimony of the state will not be impaired, but increased by the prosperity of its citizens. The social aspect of this philosophy can best be brot out by a quotation from a speech by Thomas H. Benton about 1823, favoring a reduction in the price of land to 25 cents per acre.

     "Tenantry is unfavorable to freedom. It lays the foundation for separate orders in society, annihilates the love of country, and weakens the spirit of independence. The farming tenant has, in fact, no country, no hearth, no domestic altar, no household god. (I think that is putting it too strongly). The freeholder, on the contrary, is the natural supporter of a free government; and it should be the policy of republics to multiply their freeholders, as it is the policy of monarchies to multiply tenants. We are a republic, and we wish to continue so, then multiply the class of freeholders,--pass the public lands cheaply and easily into the hands of the people; sell for a reasonable price to those who are able to pay; and give without price to those who are not."

     The soundness of this philosophy could not well be questioned as long as the conditions of the 1820's continued; but in the nature of things they could not continue. The near exhaustion of cheap lands became apparent about 1890. The country was "settled," the frontier which had been the dominating factor in our industrial and political life for nearly 300 years was gone. And, even ten years before that time, in 1880, when the Census first collected tenancy data, 25.6 per cent of the farms were operated not by freeholders but by tenants; in 1900 the percentage rose to 35.3; and in 1910 to 37. The grand dream of a country with every man who wanted a farm owning one and every farm operated by its owner has not been realized. The proportion of the landless population is greater today than it was when the Homestead act was passed,--and it is evident that it must grow greater with the lapse of time. We have sold our common lands; we have private ownership of them; but that ownership while widely distributed as compared with our other countries, tends to fall into the hands of a smaller and smaller proportion of the population.

     What has happened in our own country has happened in all the new territories opened in the new world. The public lands have passed into private ownership. The same trend has likewise been seen in European countries during the last 200 years: Crown lands have been alienated and communal lands have been divided. In England, Ire-

land, and Germany, there has been a strong movement toward breaking up large holdings and settling small owners upon the land. In Russia the demand of the peasants today is for a further alienation of crown lands and for the division of the large estates; in Italy, only a few days ago, in response to a popular demand, the government seems to have promised a new division of the lands; and at the present moment there are pending in Congress three or four plans for "rural colonization"--for getting families, by methods more or less paternal, upon their own piece of soil.

     But it would be unfair not to call attention to a counter-tendency in many directions today. In Germany the sale of public lands has been stopped and both state and communal governments are adding to their holdings. We have in recent years withdrawn millions of acres from entry; we have checked the sale of forest and mineral lands and are guarding the possession of power sites; and there are many earnest [advocates of the plan of withholding all public lands from further sale,]* as Nebraska did twenty years ago. But in spite of these new tenden- (*) -cies the answer of history to our inquiry is unmistakable. The common sense of mankind has been up to this time unequivocally for private ownership.*

     I have dwelt thus long on the history of land ownership because (1) when we see the same trend in all lands, in old countries and in new, in oligarchies and in democracies, the presumption is in favor of the soundness of the broad general judgment of mankind; and, (2) because, whether wise or unwise, the acts of our fathers performed in good faith, place limitations upon what we can do now.

     But suppose the verdict of history is for private ownership; in the presence of conditions which our fathers could not foresee, with free land gone, with an increasing of population making new demands on the land, with the certainty that this condition must increase rents, raise the price of land and produce a larger proportion of tenancy, shall we accept the verdict of history as final and say the question is settled? Are we estopped from asking, as Mr. Herron does, whether landlords as a class, are now worth to society what they are receiving from it in the form of rent? I do not think we are estopped; and if the question were put to me in that form I should agree with Mr. Herron that they are not. But this does not commit me to follow Mr. Herron in his general assault on the land values we have allowed to accumulate in private hands. One must feel himself bound in some degree by the past; and one must attack the unearned increment with discrimination. All landlords are not equally useless; some increments are earned; some land values are socially more significant than others; and these facts should be recognized in any program of land reform.

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* Two lines appeared to be "out of order", and have been rearranged.

     Defenders of the present land system let their defense rest largely on the effect of private ownership on production. Professor Filley does so; and he is right in pointing out the advantages of private ownership from the point of view of long-run production over the tenant system as we have it, at least. There seems to be agreement on this point. The tenants do not keep their share of live stock, they do not raise their share of grass, they raise more than their share of grain and where wheat and corn are both grown, they raise more than their share of corn. Owned farms are better conserved. While I am inclined to think it is easy to exaggerate the superiority of the owner in this respect over the tenant, it must be admitted that the land owner has in addition to his services as a pioneer, built better homes for himself than he has for his tenants and is more interested in a permanent agriculture. The same sort of case may be made out for the owner of mineral lands tho less strong; while for the owner of town sites there is no case at all. My point here is that private ownership is more defensible as to some kinds of land than as to others.

     The critic of the present land system applies it to the test of justice in distribution. Mr. Herron does. And I agree with him that rent is a share of the product that goes to the owner of the better grades of land for which he renders no adequate service to society. It is true that anyone who gets a share of the product of labor without working for it is living off the producer, and this is its true of the owner of farm land as of the owner of a copper mine or a corner lot in the city. themselves perfectly worthy, who can own landanu (sic)

     Of course it is equally true of a large class of citizens who think themselves perfectly worthy, who own no land, perform no useful service, yet succeed in getting a living. But that is another story. We are now discussing the return to the land-owner for which he does not work. But it is only fair to discriminate between land owners even tho the nature of their return is the same. The owners of agrecultural (sic) land do render some service; part of their increment is earned. Moreover the ownership of such lands has certain social advantages as Mr. Filley has pointed out; and it is free from some of the disadvantages which flow from ownership of forest, mineral and city lands. For example, there have been many comfortable fortunes made from owning farm lands, but so far as I know none of those swollen fortunes which constitute a menace to democratic society. On the other hand collossal (sic) fortunes have been built on the ownership of those other kinds of land. There is a concentrated ownership of $800,000,000 of mineral lands in the hands of the Steel Trust alone and such ownership undoubtedly gives some degree of monopoly power. The Astor estate is now valued at 450 to 500 millions. Such accumulations are an offense in a democracy. Economically the effect of vast rents going to one man is the same as tho they were distributed

to many; socially, however, the effect is far different. While large holdings of farm lands are apparently still relatively few, there are enough cases now to cause alarm as premonitory of what may be expected in the future, unless we set our faces against such a tendency.

     It has been suggested in the course of the discussion this morning that the danger of large agricultural holdings is a bugaboo, that we ought to encourage rather than discourage such holdings in order to make use of men of large managing ability, just as we do in the industrial world; if a man can be found big enough to "swing a whole township" why not let him have a chance? Such a proposal shows a strange mis-reading of the signs of the times--a lack of comprehension of the true significance of the farm. It is just because centralized control under the factory system has been carried so far that it is of such first rate importance that the farms should be kept free from such control. Let us not close our eyes to the dangerous insecurities of the industrial situation. In the great industrial centers, where ability to do things on a large scale is utilized most fully, you have society divided into two hostile camps, those who control the jobs and those who are dependent upon jobs, the property owners and the propertyless, those who direct and those who are directed.

     The more highly industrialized a country becomes the greater its social and industrial instability. As a corrective to these serious conditions we need above all things a sound farm life where men own their jobs, direct their own labor, and are identified with the permanent vital interests of the neighborhood. There is little hope for these conditions under large scale ownership of agricultural land. If you want wide-spread respect for property you must see to it that there is a wide-spread ownership of property and this is especially true of landed property. There is every reason for keeping down the size of holdings; industrial, social, political reasons.

     All this is closely connected with the third test of the present land system: the effect it has on the breed of men, and upon political and social institutions. The single taxer condemns a land system that reduces half the rural population to a position of tenancy with all that implies as to shifting population, waste, and lack of equality. He has much to say of the effect the system has on the unequal distribution of wealth, and inequality of opportunity. The criticisms are weighty. But I am doubtful about the effect of the single tax remedy for these various evils. It would take away a fruitful source of inequality in wealth and opportunity. But what its effect would be on the stabil-

ity of rural communities I am uncertain. It seems to me, however, that it would make things rather worse than better. If the tax were unflinchingly applied so as to take up all the economic rent (and if all expenses of government are to be repaid out of rent it would all have to be taken), the state would be virtual owner and all cultivators would be tenants, with tenant rights in improvements etc. to be sure, but with security of tenure, only so long as tenants were willing to pay the rents fixed by political authority.

     And now turning to remedies. Here I find myself naturally occupying a middle ground. With Mr. Herron I recognize the peculiar character of landed property and the power it gives the owner to reap where he has not sown, to collect what he has not produced, in the form of rent. I agree with him that in progressive communities speculation on the rise in land values keeps the selling price so high that the ordinary rate of return can not be made on the "investment." But as was said a moment ago, I feel myself bound in a degree by the past. To destroy that property in land which we hace (sic) collectively encouraged, and which under the circumstances of our historical development was perhaps justified, simply does not square with my moral judgment. The gains from destroying those values must he greater and more certain than they now appear before I could accept the program of the middle-of-the-road single taxer.

     This, however does not mean that nothing should be done to check the evils we can all recognize; and this can be done without a shock to the moral sense. "Suppose," said John Stuart Mill, one of the greatest moralists as well as the greatest economist of the 19th century, "Suppose that there is a kind of income which constantly tends to increase, without exertion or sacrifice on the part of the owners, whom the natural course of things progressively enriches

     In such a case it would be no violation of the principles upon which private property is grounded, if the state should appropriate this increase of wealth, or part of it as it arises. This would not properly be taking anything from anybody, it would merely be applying an accession of wealth, created by corcunlstances (sic), to the benefit of society, instead of allowing it to become an unearned appendage to the riches of a particular class. Now this is actually the case with rent. And this leads him to the definite proposal to leave the property that has been allowed to fall into the hands of landowners without subjecting it to any special tax; but to so adjust taxes that future increases in rent shall go into the public treasury.

     King's estimate of the rent for the U. S. in 1910 was $2,673,000,000. The expenses of government state, national and local for that year were $2,591,800,00. Wealth and income,343,158.

     This program seems to me just and desirable. It would at once remove that speculative element in the value of land of which the single-taxers complain.; which makes it so difficult for a young man to buy because the selling price is always based on an anticipated increase in earning power which may not come for some years. If we had begun that policy with the new century, we would have kept the average value of farm lands at $15.57 per acre. Not having done so they rose to 32.40 in 1910, to $40.85 in 1915, and to $45.55 in 1916; and you know what has happened to land values since 1916. It can not be urged that the landlords are entitled to this vast increase in land values for "pioneer services," or as a reward for "foresight" or "intelligence." It is simply so much velvet that has come to the owners for which no adequate service is rendered to society.

     Moreover the rents that are left in the hands of landowners may very properly be subjected to a special tax. Here I should go further than Mill. If we are to have a tax system it ought to be arranged in such a way as to require those who support the government to contribute in proportion to their ability. Now it is a crude tax system that places the same tax on all kinds of property or on all kinds of income; for all kinds of property are not equally significant of the owner's ability to pay taxes; and the same is true of different sorts of income. This fact is recognized in the English income -tax law. That law classifies incomes according as they are "earned" or "unearned." They are "earned" if they are acquired as wages or salary or as profits through active participation in business; they are "unearned" if derived from invested funds, from sleeping partnerships, or from the rent of land and upon these incomes an additional tax is lexied (sic). That is a proper discriminating use of the taxing power. And in the face of increasing taxes it will be incumbent on us to adopt such methods in our own tax systems.

     If there are reasons for taxing away future increments in the value of agricultural land or in subjecting incomes from agricultural rents to a heavier tax, the reasons are greatly strengthened as we come to deal with mineral lands, power sites, town sites and the like. As pointed out above the increment in these lands is more completely an unearned one than is the case with agricultural lands, and there are, moreover, social reasons for attacking this kind of land values that do not hold for agricultural lands.

     There is one case where the unearned increment should be dealt with in more drastic fashion. We are now engaged in the valuation of the railroad property of the country to serve as a basis for rate making, or, it may be, for condemnation purposes. One of the big items in value of these roads is that of the right-of-way and terminals.

     The railroads are contending for a valuation that will give to them not what they put into the acquisition of these lands, but what they are now worth. It looked for a while as tho the courts were going to allow them to include not only the increase in the value of their lands but two or three times the value of contiguous lands in order to give them what they called the "railroad value" of their lands. The supreme court has denied that preposterous demand; but it is still an unsettled question whether they are to have the increased value over the original cost, upon which, to base charges. The determination of that question involves hundreds of millions of dollars. Much of this land was given the companies to be devoted to a public use, to enable them to carry on a public service. Any lands they may own not employed in transportation they have the same right to enjoy the increment from as other land owners,--but not one dollar of the increase in the right of way ought to be admitted to the valuation, not because the railroad is a corporation but because the land is devoted to a public use, monopolistic in character, and because the corporation is entitled only to a reasonable return and ought to make that return on the transportation business and not as a land speculator.

     No pretense is made that the suggestions here made are a "solution" of the land problem. Confessedly they are only partial and ameliorative. There is no pretense at offering a panacea. The plan proposed, however, of stopping the further rise in land values by means of a tax which shall take up the unearned increment as fast as it raises, would in my opinion be a great and wise step. It would be wise as a measure of taxation, it would make it easier for men to buy land, and it would safeguard the interests of the future. It is not a purely academic proposal. Already the principle of "increment taxation" has been adopted in many German cities and by the German Empire; and in 1909 it was upon the introduction of this principle into the British budget that Lloyd George made his great fight, and won. These laws, however, take but a small part of the increment. If we are in earnest about land reform, the principle should be applied unflinchingly with the purpose of absorbing all future increments.

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© 2002 for the NEGenWeb Project by Pam Rietsch, Ted & Carole Miller