The Success of our Land Policy. — In a rough, general way, our land policy has been a success, as is shown by the unprecedented and almost feverish development of the country in the last century, with the creation of a fund of taxable values which makes it an easy matter for the state governments to raise all the revenue which they need. But in some respects it has signally failed. In the first place it has not paid: more money has been spent for the purchase, survey, and care of the public lands than has been received from their sale and lease. In the second place, certain kinds of lands, as we have shown, should not have been alienated. And in the third place, our efforts to give land to the landless have bred an immense amount of corruption, fostered speculation, endowed private monopoly with public wealth, and pauperized whole communities. One has only to recall the recent convictions of public officers for land frauds, and to read the report of the Commission on Public Lands,—to which specific reference is given at the end of the chapter, - to appreciate the truth of all these charges. The desert land law and the commutation clause of the Homestead Act, they tell us, operate far too often "to bring about land monopoly rather than to multiply small holdings by actual settlers."

"In many localities, and perhaps in general, a larger proportion of the public land is passing into the hands of speculators and corporations than into those of actual settlers who are making homes." ... "Nearly everywhere the large landowner has succeeded in monopolizing the best tracts, whether of timber or of agricultural land." . . . "Your commission has had inquiries made as to how a number of estates, selected haphazard, have been acquired. Almost without exception, collusion or evasion of the letter and spirit of the land laws was involved.” ... “The fundamental fact that characterizes the present situation is this: that the number of patents issued is increasing out of all proportion to the number of new homes."

Possibly the most important lesson to be derived from the history of our landed domain is the vital truth that the government cannot give away valuable lands or sell them at prices far below their real value without subsidizing the speculator, endowing monopoly, and pauperizing the people. The poorer classes derive

no real benefit from this indiscriminate public charity. As Secretary of the Interior Hitchcock said in 1905, in discussing the Timber and Stone Act: 1 "Many transfers of land patented under this law are made immediately upon completion of title to individuals and companies. In this way a monopoly of the timber supplies of the public-land states is being created by systematic collusion. . . . It has been urged in behalf of this act that it enables poor men to enjoy the bounty of the government by obtaining tracts of land which they can afterwards sell with advantage. A careful study seems to show, on the contrary, that the original entrymen rarely realize more than ordinary wages for the time spent in making the entry and completing the transfer. The corporations which ultimately secure title usually absorb by far the greater part of the profit." When Uncle Sam was rich enough or was supposed to be rich enough to provide us all with a farm, the policy of giving away the public domain appeared to be in harmony with the principle of equality of opportunity. But when the supply is far below the demand, those who receive gifts by lot or similar methods are in receipt of special privileges. What once seemed fair has, in the course of economic evolution, become unfair and demoralizing.

Our conclusion may be formulated in the following general rule: only those lands should be wholly alienated whose use and development under private ownership lead neither to monopoly nor to exhaustion and waste. Or, in more concrete terms, remembering that the maxim applies only to those lands left to the government, and to the majority of cases, not to every specific case,

the rule for agricultural lands should be private ownership and management, for forest lands State ownership and management, for mining and grazing lands State ownership and private management under a lease or royalty system, by which the State shall secure a share of the profits and retain a large amount of regulation and control. In disposing of its lands the government should endeavor to charge value received, as gifts of valuable land, or sale at inelastic tariffs of prices which place an extreme valuation upon some tracts and an utterly inadequate valuation upon others, lead

1 Report of the Secretary of the Interior, 1905, p. 331.

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to speculation and monopoly, having most of the demoralizing features of a public lottery in which the prizes are distributed partly by chance and partly in accordance with the cunning, chicanery, and unscrupulousness of the participators. Under existing conditions the poorer classes of society get almost none of the valuable lands. Charge value received, and the people, the masses, get their share in the revenues flowing to the public treasury, in reduced taxes, and more generous expenditures for educational, protective, and developmental purposes.

Land Nationalization and Municipalization. In recent years both state and national legislation has shown a decided trend toward the adoption of methods which will yield both greater revenue and greater control of those varied forms of national wealth which we collectively designate "land." The object of this legislation is to prevent monopoly and give to society a share in the land values created by social growth. One of the most ingenious plans for securing this end ever proposed is the single-tax scheme defended with great eloquence and earnestness by the late Henry George. His scheme, usually called "the single tax," is stated thus in his own words, printed in his organ, The Standard:

"The Standard advocates the abolition of all taxes upon industry and the products of industry, and the taking, by taxation upon land values, irrespective of improvements, of the annual rental value of all those various forms of natural opportunities embraced under the general term 'land.'

"We hold that to tax labor or its products is to discourage industry. We hold that to tax land values to their full amount will render it impossible for any man to exact from others a price for the privilege of using those bounties of nature in which all living men have an equal right of use; that it will compel every individual controlling natural opportunities to utilize them by employment of labor or abandon them to others; that it will thus provide opportunities of work for all men and secure to each the full reward of his labor; and that as a result involuntary poverty will be abolished, and the greed, intemperance, and vice that spring from poverty and the dread of poverty will be swept away."

Mr. George's proposition rests upon an extreme application of the doctrines of individualism and natural rights. Man, he holds, has an inalienable and equal right to live, and consequently an inalienable and equal right to those natural agents which we call

land, and without which human life cannot exist. This right which attaches to the individual cannot be abrogated by law or custom, nor can it be alienated by one generation or set of law givers. Moreover, it is an equal right. A, B, and C each have a right to the soil, but A has no right to better soil than B or C; in consequence of which that part of land values which arises from the differential qualities of land belongs to society as a whole, and not to particular individuals. But the differential value of land expresses itself in the economic rent which it yields, and conse quently, if society seizes this rent by taxation, it will satisfy the demands of the doctrine of natural rights, while leaving the actual management and exploitation of land in the hands of individual. occupiers, thus avoiding the perils of direct public management.

Man also has an unalienable right, Mr. George held, to the fruits of his own labor. As the outcome of this right, Mr. George concluded that ordinary taxation upon property other than land, upon the product of labor as distinguished from land, the gift of God, is robbery. In his view it is as immoral to levy an ordinary tax as it is criminal to fail to tax that surplus which attaches to the better classes of lands, and which we call economic rent.

The policy embodied in Mr. George's scheme differs fundamentally from the policy which we have seen creeping into recent legislation. The latter purposes to reserve only a part of the value given to some forms of land by social development. Mr. George proposes to confiscate all of "the unearned increment." Most important of all, the former proposition applies only to the future unearned increment, and purposes only to take a part, and that only after fair notice is given. Mr. George proposes to take all the unearned increment, past and present, and that whether the present owners have been encouraged to believe that they might be permitted to appropriate the whole unearned increment or not. Herein lies the essential injustice of Mr. George's scheme. As a nation we have induced immigrants and settlers to take up lands, clear them, and develop them with their labor and toil, with the promise that the values thus created by themselves and their neighbors should belong to them. Their risks and their sacrifices have been great. Even if we assume that the State made a mistake

in pursuing this policy, the results of the mistake must be cheerfully borne by the party at fault, the State itself.

Mr. George not only proposes to confiscate all economic rent without compensation, and to abolish all other forms of taxation, but the assertion is made in explanation and justification of the policy that it will abolish poverty. Such a policy might, indeed, prevent landowners, who do not care to use their land, from keeping it out of the hands of those who would use it; but how it would effect all the other predicted blessings is difficult for most people to comprehend. In the first place, it is difficult to imagine how pure economic rent of agricultural land can be separated in practice from the annual value of the separable improvements on the land. But apart from this difficulty, the appropriation of economic rent by the public without compensation to the owners will probably never appeal to the conscience of the American public as a just thing to do. No abstract reasoning, based on "natural rights," will persuade a modern nation to so radical a step. This honestly and earnestly advocated policy is only one more illustration of the danger of basing social reasoning on any theory of "natural rights."

In cities it is easier to separate the pure economic rent from the earnings of improvements, such as buildings. Moreover, it is in cities that the principal evils attendant on private landholding are discoverable. Therefore the objections to land nationalization do not in the same degree apply to land municipalization. Many who will reject the one will favor the other. Even here, however, it is well to proceed very cautiously. Confiscation, at any rate, should not be tolerated. If great and expensive changes along this line should approve themselves to the people, the burden of the changes should be widely diffused throughout the community by means of inheritance and other taxes.1

Public Industries. In the beginning, let us briefly pass in review the principal classes of industrial enterprise in which the modern State engages for the satisfaction of other than State wants; because, obviously, we are not concerned with enterprises like the government printing office, the government navy yards,

1 See pp. 364 and 365 for further discussion of the single tax.