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The Pamphlet Collection of Sir Robert Stout: Volume 70

The Land Question. — To the Editor

The Land Question.

To the Editor.

Sir,—In continuation of my letter of the 6th, I will first deal with Mr. Ewington's misconception (No. 2), viz., that the single, tax would make the present owners mere tenants of the State. I will couple with this his belief that it would result in "rack-renting," of which he declares (May 26) that "Mr George and his disciples are trying to force that hateful system upon us," I will therefore endeavour to show that these two statements are not facts, and that, as regards the latter, the single tax is, on the contrary, calculated to abolish forever the rack-renting which now exists, I think I now see, from Mr. Ewington's writings, what are the causes which lead to these page 15 two statements.

The first statement, re converting owners into State tenants, is paused by two misapprehensions-The former one apparently arises from the misuse of a term which he, in common with most of our opponents, uses, He describes Henry George and his followers as "Land nationalises," whereas we are really "Nationalisers of ground-rent, I would ventare to-suggest, for greater clearness, the use of the latter term to writers who may in future desire to employ the word "nationalisers."

It is quite true that there are people properly called land-nationaliser, but we ought not to be confused with them. Their theory involves State-ownership of all land, and this would necessitate the State acting as the manager or agent for the land, just as the factor or steward of a large land—owner in England does, Alt dividing or re-grouping of lands, all letting to a tenant, or transferring from one to another, would be done by State officials; and of course, as "kissing goes by favour," it would result in endless corruption, friction, and delay. Let it be distinctly understood that single taxers disapprove of this method, and are, in fact, quite as much opposed to it as Mr. Ewington is.

The latter misconception (leading to-the State tenant view) is rendered the more singular by the fact that in his letter of April 28, Mr. Ewington queues from "Land Question," p. 32, showing that if it was taxed up to its lull value, the land would become virtually the people's, while the landlords would be left the absolute and unqualified possessors of their deeds of tille and conveyance! Nevertheless, anyone can see that to tax land up to its full rental value would amount to precisely the some thing as to formally take possession of it, and then let it out to the highest bidders."

The error arises from allowing no significance to the qualifying word virtualiy, in the above quotation, or to the two words, in effect, in the one with which he heads his letter of May 26, Mr. Ewington certainly has some justification afforded him in the foregoing quotation from "Land Question," by Henry George's inadvertent use of the decidedly misleading expression, "precisely the same thing," It is, however, abundantly clear that this is an inadvertence, seeing that the evidence from his writings shows that he means that the single tax would resemble State tenancy merely in its financial effect of securing to the community the ground-rental value. He carefully limits the comparison to the financial effect, by showing that it would have, none of the ether effects of ordinary renting, which include (1) a limited term; (2) insecurity of tenants, improvements; (3) the raising of rent on account of value added by the tenant'; and (4) a loss to the whole community, owing to inefficient cultivation, caused by insecurity of the tenants' position. The words "virtually' and in effect" limit the scope of the comparison of the single-tax regime with that of, a State tenancy, to their similarity as regards only the financial benefit to the community, A careful reader of Henry George would sever fall into such a misconception as Mr. Ewington has done.

Let us trace the course of the argument in "Progress; and Poverty," and we shall find that its sequence is quite complete. Henry George finds the main cause of poverty to be private land-ownership, and therefore comes to conclusion (p. 233) "we must make land common property." Then follow several chapters dealing with various aspects of the question, until we reach p. 286, where lye read, "But a question of method remains, how shall we do it?" At the bottom of p. 287 he begins to unfold his scheme. "I do not propose either to purchase or to confiscate private property in land. The first would be unjust, the second needless. Let the individuals who now hold it still page 16 retain, if they want to, possession of what they are pleased to call their land, Let them continue to call It their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent. Nor to take rent for public uses is it necessary that the State should bother with the lettingof lands, and assume the chances of the favouritism, collusion, and corruption that might involve. It is not necessary that any new machinery should be created. The machinery already exists, Instead of extending it, all we have to do is to simplify and reduce it" He then goes on to point out—"We already take some rent in taxation," and from that argues. "We have only to make some changes in our modes of taxation to take it all." His proposal actually to do so follows; "What I therefore propose is to appropriate rent by Taxation." And lastly, he indicates that his method of doing it would be "To abolish all taxation save that upon land values." Henry George further carefully guard, his scheme, as I have shown, from any supposed connection with the evils which would attend the letting of lands by a State department, as proposed by land nationalisers.

What I have here traced out ought to be sufficient to refute Mr. Ewington's first statement, and to dispose finally of the assertion frequently made by others, that Henry George proposes to take away people's land. It must surely have made it clear that his proposal is limited to the taking of all ground rent by taxation. On p. 116 of "Progress and Poverty," he carefully defines this rent as being the charge for the use of bare land, and therefore as including no charge for the use of "buildings, machinery, fixtures. etc."

The second statement by Mr Ewington is that he fears this tax on ground rent would amount to "rack renting." It is surprising that he can have so misread this (terrible) book as to have conjured up such vision of a "destructive competition amongst tenants" till rents became "abnormally high." Let us consider the principal evils of existing rack renting as affecting—firstly the tenant, and secondly the community. I take it, firstly, that the tenant suffers in two ways, both of which are made possible by his tenancy having a limit of time; the landlord is able to, and often does, raise the rent because the tenant has improved the property; and, again, if the tenant determines his own occupancy he loses the bulk, if not the whole, of his improvements, I take it, secondly, that the community suffers owing to land not being made as productiva as possible on account of the want of absolute security for the improvements made by the tenant.

Do these evils attach to the single tax scheme? No. It would give the permanence of tenure which is desirable, and absolute security for all improvements. Moreover, the ground rental upon which the tax would be levied could, under no circumstances include any charge for use of improvements, Neither could the fear of being turned out operate upon a cultivating owner as it does now upon a tenant, inducing him to give more rent than is lair in order to avoid the greater loss which would be caused by a disturbance of his tenure. His ground rental value would be fixed by a public assessment which could be judicially appealed against. Next, how would it affect the interests of the community? It would appear to be quite obvious that the confidence engendered by conferring absolute security upon the operations of all cultivators and other users of land, coupled with the absence of all industry hindering taxes and the expense of the necessary gatherers of them, would lead to a much larger production, and what is more important still—to a much more equitable distribution, of necessaries, comforts, refinements? and stored-up" wealth.

page 17

It will thus be apparent that the most searching and impartial way of viewing it cannot make the incidence of the single tax, whether considered in relation to the user of land or to the community as a whole, comparable to the existing" system of "rack-renting," This disposes of Mr. Ewington's second statement.

Let me briefly summarise the general position under the proposed new order of things. The single tax would gradually bring about the nationalization of ground rents, and would involve a public assessment of them and the striking of a rate or tax at so much in the £. The tax would increase year by year, as other taxes were remitted. No one would be turned out of his land, and no one who made a beneficial use of his land would be thereby induced to sell it. Land tenure under the single tax would be perpetual, because freehold, but would be subject to a tax varying as the ground rental varied, The buying and selling of land would be left to individuals just as at present; they would sell land and improvements together) as they do now. In the past the buyer has had to take the chance of his land (i) decreasing in value, (2) maintaining its value, or (3) rising in value, quite independently of his own exertions; under the new regime the uncertainty would almost wholly disappear. A future buyer of land and improvements would therefore purchase with the knowledge that his risk of 5oss by depreciation, or his chance of profit by a rise in value, would be almost entirely eliminated. No improvements which he might subsequently add would cause an increase in his taxation. His prospects as a bona-fide settler upon land would be in every particular more favourable than at present.

No one under these circumstances would be likely to buy land to hold it out of use in the hope of making a profit out of a rise in value. Could it be a bad thing for the cultivator or other user to miss the speculator from his path?

Neither would an investor buy land to let it to tenants in the hope of being able to increase the rent from time to time, or to charge it on their improvements. Could it be bad for users if the ground landlord disappeared?

It would, however, be quite likely that a man of capital would buy land in order to place a "brick and mortar" investment upon it, and to let it to tenants, This is done now upon private leaseholds, and upon City Council and Harbour Board endowments, in face of the certainty that the whole or a large part of the value of such buildings would "fall in" to the land-owner at the end of the term. The security of the buildings in future would be absolute, Under the present system the rent is a fixed amount; under the one proposed the tax on the ground rental value would vary according to the market value from time to time. The absence of the speculative element would deter some from, and encourage others in, making such investments. The buildings would certainly be of a more substantial character.

There are several points not yet dealt with, and for which I would ask you to give me further space, if you do not think the request unreasonable.

I am, etc.,

Edward Withy.