The Essential Reform:
Land Value Taxation
In Theory and Practice
C. H. Chomley and R. L. Outhwaite
[Part 6 of 15]
There can only be the maximum production of wealth when the whole of
the labour force of the community is applied to all its natural
opportunities and in the most productive manner. This is far from
being the case now.
The farming land of the United Kingdom is for the most part
labour-starved. There are millions of acres devoted in the main to the
preserving of game, and tens of millions the potentialities of which
are only partially exploited. So far from the land supporting an
ever-increasing population, owing to science rendering increasingly
productive the labour of the land-user, we find the reverse to be the
case, and that the countryside is undergoing a steady process of
depopulation. The census returns show the following startling results:
--
(millions)
| England & Wales |
1861 |
1871 |
1881 |
1891 |
1901 |
Engaged in agriculture |
2.010 |
1.657 |
1.352 |
1.285 |
1.197 |
Agricultural labourers (including farm servants) |
1.072 |
0.898 |
0.847 |
0.759 |
0.595 |
Acreage under crops |
--- |
--- |
13.977 |
12.093 |
12.118 |
Under permanent grass |
--- |
--- |
13.471 |
15.097 |
15.399 |
| Great Britain |
|
Acreage under crops |
--- |
18.403 |
17.568 |
16.484 |
15.590 |
Under permanent grass |
--- |
12.435 |
14.643 |
16.433 |
16.827 |
Furthermore, the census returns for Great Britain show that between
1881 and 1901 the number of agricultural labourers employed fell from
983,919 to 689,292, a loss of 294,627. And during this period the
population of Great Britain increased by over seven and a quarter
millions. The "Report on the Decline in the Agricultural
Population of Great Britain," issued in 1896, says: "The
most important change which is referred to in the reports from
practically every county, from Cornwall to Caithness, is the laying
down of land to grass. The loss of 2,000,000 acres of arable land in
Great Britain in the twenty years 1881-1901 probably threw out of work
from 60,000 to 80,000 labourers at least during that period." It
is not for a moment to be supposed that this depopulation is due to
the land offering no opportunities for the further profitable
application of labour. Take, for example, the counties of Wiltshire
and Suffolk. The rural districts of the former county suffered a net
loss by migration of 20,000 people during the ten years 1891-1901.
This migration has gone on in particular in those parishes comprised
in the estate of the Earl of Pembroke, which totals about 40,000
acres. On this estate the farms average from 800 to 1000 acres apiece,
and in some cases are between 2000 to 3000. Each employs on an average
about 8 men, the average wage being 12s. a week without cottage, or
l0s. with. It is obvious that depopulation has not taken place in
these parishes because production from the land has reached that point
when no further workers can apply their labour to it and obtain in
return a livelihood. The 1000~acre farm employing 8 men and the
depopulation of the rural districts of Wiltshire should be viewed in
the light of the fact that Denmark sends to England butter, bacon, and
eggs of the value of over £15,000,000 per annum, and that nearly
half of the Danish farmers -- that is to say, about 120,000 -- gain a
liveliliood from holdings not more than 7 acres in extent.
So, again, in the case of Suffolk, the rural districts of which
county suffered a net loss by migration of 40,000 between 1891-1901,
it cannot be maintained that this was due to the labour-absorbing
potentialities of the land having been exhausted. The depopulation has
proceeded fastest in West Suffolk, and, taking the country round
Thetford, it may be said that there is an area of some 200,000 acres
devoted in the main to the preserving of game, where plutocrats have
turned out both the tenant farmers and the labourers so that the
pheasants may have an undisturbed existence. And even more astounding
still is the state of affairs existing at the very gates of the
world's greatest market. At Hatfield, on the Salisbury estate, we find
the 1000-acre farm existing within eighteen miles from King's Cross,
and within a quarter of an hour's run by train from the fringe of the
dense metropolitan population spreading in that direction. In the vale
of Aylesbury, within three-quarters of an hour's run, we find again
the 1000-acre farm, depopulation rapidly proceeding, the fertile land
passing out of cultivation into pasture. Where every acre should be
under spade culture, we find the Rothschild stag-hounds hunting carted
deer across a derelict waste. All round London will be found estates
held for sport by international financiers and other plutocrats of
indisputably humble origin when that origin is ascertainable, and who
in the holding of land for sport see a means of rising in the social
scale. The general condition of the countryside is that those in
occupation of the land are not exhausting its potentialities, and that
a multitude of men desirous of applying their labour to it are
prohibited from doing so. The reason why those on the land do not make
the best use of the soil is not far to seek. The land is mostly held
under a yearly tenure, and the land-user therefore dares not employ
the maximum of labour upon it so as to render it fully productive, as
to do so would result in the land-owner raising his rent. Hence the
farmer aims at getting as large an area as possible, so that he can
obtain a livelihood in the manner calling for the least expenditure on
his part of labour or capital. Therefore we get the 1000-acre pasture
farm, where every acre should be tilled as a garden. The small tenant
cannot exist under such a system. Quite prepared to pay for the use of
land as high and even a higher rent than the farmer, he is not
prepared to make his holding the concrete embodiment of years of
labour with the prospect of having his reward confiscated by a rise in
rent. The land-owners are largely content to hold their land
semi-utilised, awaiting the time when the pressure of population
outwards from the great centres shall have further enhanced its value.
So the present system enables monopolists to lock up the land against
would-be users and makes industry impossible of maximum extension.
Before considering if the taxation of land values will alter this
state of affairs, we have to consider its immediate causation. This is
to be found in the fact that the monopoly ownership by a comparatively
few men of the soil, which is limited in extent, places them in a
position to dictate terms when bargaining with would-be users. The
land-owner can temporarily withdraw his land from use without
suffering, and to the man whose livelihood depends upon having access
to it this is a pressure he cannot resist. Thus the land-user is at a
cruel disadvantage when bargaining with the land-holder. The
immediately practical thing to be done is to set up economic forces
which will make the land-holder as anxious to have the land-user as
the land-user is to get his land. This the taxation of land values
will achieve, for it will penalise the land-holder who keeps land out
of use, and by making land available will give users a better
opportunity to get fair terms when bargaining for any particular area.
To demonstrate that this is so we may consider what would happen as
regards an English land-holder were a land values tax of 2d. in the
pound on capital value levied upon his land. The Duke of Rutland holds
in England about 60,000 acres of a capital unimproved value of say £2,000,000.
At 2d. in the pound he would pay £16,666 annually. The land
values tax levied in New Zealand on estates of over £200,000 is 2
per cent., and at this rate the Duke of Rutland would be called upon
to pay £40,000 per annum. Now on the Duke of Rutland's estates in
Leicestershire there are 24 parishes, of which 17 suffered a decline
in population between the years 1891-1901. Men are eager to get land
in small areas, but are denied the opportunity. The land is largely
under pasture and is only semi-utilised, the farmer being on yearly
tenure. As things are at present the Duke of Rutland merely suffers a
possible loss of revenue by withholding his land from use. He will
not, or cannot, provide the capital for its proper working, and will
not give terms that would induce others to do so. But were the tax
imposed he would not only suffer this loss, but be contributing to the
Treasury, in respect of his idle land, at the rate of about £1400
per month. Obviously the Duke would have an inducement now that did
not exist before to get as many men as possible to produce wealth from
his estate, and consequently to offer terms to attract them. Their
position would be rendered all the more secure because of what would
be happening as regards other land-owners. In the adjoining county of
Nottinghamshire there the "Dukeries," a great tract of
country largely held for the preserving of game, and alongside, in
Derbyshire, ducal estates so link up that we find four dukes, near
neighbours, who own in Great Britain about 400,000 acres. These
monopolists would all be feeling the pressure of the tax and all would
be in search of land-users; so land-users all over the Kingdom would
have a call made upon them and be in a position to make better terms
than at present. Stress is laid upon this economic effect of the tax,
because it will be seen that under such circumstances as these it
would be impossible for landlords to shift the tax on to their
tenants. Instead of being able to increase rents, they would probably
have to reduce them.
The extraordinary extent to which the land of Great Britain has been
monopolised by a few men and held out of full use will entail
subdivision and reconstruction when a land values tax is imposed. It
has been estimated that 70 men own half Scotland, that 2250
proprietors hold 15,000,000 acres in England and Wales, or half the
cultivable area, and that in the United Kingdom 525 titled monopolists
hold 15,000,000 acres of the total area. As the land values tax would
be falling upon every acre from Cornwall to Caithness, whether in
London or in the smallest hamlet, it is evident that the proprietors
of these vast estates would have to put every acre to its fullest use
or make way for those who would. Deer forests comprising millions of
acres, great estates held for sport, town areas held for a rise, would
become a source of ruin instead of present pleasure or future profit.
So everywhere the land-owners would be seeking men to render
productive their acres, hastening to offer terms calculated to attract
capital and labour, or else parting with their land to others.
It is because of this economic effect of land values taxation that
the system has been adopted by Australasian Governments desirous of
promoting closer settlement. That the tax has had this solvent effect
upon large aggregations of land is now an established fact, as will be
shown in a subsequent chapter. Not only has it led to what has been
termed "voluntary subdivision," but, by making proprietors
anxious to get rid of great estates, it has enabled Governments to
acquire land for subdivision on reasonable terms. In New Zealand
1,122,125 acres have been purchased at an average of about £4 per
acre, and in New South Wales during 1908, 284,000 acres were acquired
at an average of £3, 10s. per acre. On the other hand, in England
and Wales we find that 23,000 would-be small holders have applied for
land and only 1000 applicants have been satisfied: 13,000 acres
purchased have cost at the rate of £32, l0s. per acre. Because of
land being held up the Small Holdings Act is likely to prove a
complete fiasco, and just where subdivision is most required, that is
where land is being held in the largest areas and the countryside is
being depopulated in consequence, the Act is wholly inoperative. On
the other hand, it is just in such districts that land would be made
available by the operation of the tax, for the effect would be to make
the great landed proprietors, who are now the most bitter opponents of
the Act, anxious to facilitate its operation.
Some results to be anticipated in the way of increased production
from land being made available may now be indicated. In the first
place, attention may be directed to the possibilities of expansion. On
the one hand, we see huge areas of untilled acres, actually locking in
great industrial centres, and even the first city of the world itself,
and, on the other, we find food products being poured into these
centers from the uttermost parts of the earth.
This process of importation has been greatly accelerated during the
last twenty-five years, owing to the increase of the people. The
importations are not the full measure of the potential consuming
capacity of the population, as is shown by the fact lat there are
millions living on the minimum on which life can be sustained.
And during the period in which demand has so stupendously increased,
and has come to be satisfied in part from land the world over, little
blessed by nature, from drought-stricken areas and snow bound regions,
2,000,000 acres of the fertile arable lands of Great Britain have gone
out of cultivation -- that is to say, between 1881-1901. It is not
suggested that these importations could be obviated were the land of
the United Kingdom put to its fullest possible use; but when
land-users, even so far afield as Australia, can at a profit sell
their products in England, while there are idle acres in England
itself, it is clearly due to the existing monopoly system. Rather than
suggest that the object to be aimed at is to obviate imports, we would
hold that there are millions insufficiently fed and that British land
should feed them. Why, if it pays to produce butter in Australia in
districts hundreds of miles from the sea-board, and send it by way of
the costly freezing process 14,000 miles to be sold in London, would
it not pay to produce butter on derelict yet more fertile acres in
England? Why would it not pay when Denmark can profitably send each
year £15,000,000 of dairy produce to Britain, and 120,000 people
can gain a livelihood from farms not exceeding 7 acres in extent?
Natural causes obviously do not prohibit, but how the land system
operates to do so may be illustrated from the following incident. A
short while ago an enthusiast in the matter of co-operation took at
his own expense a number of North of England tenant farmers to
Denmark, and showed them the remarkable achievements that had been
effected there by the co-operative system as applied to dairying. On
their return the farmers gave this public-spirited gentleman a dinner
as a token of appreciation. When the dinner was over, a member of the
party rose to express the thanks of his comrades and to voice their
views. He summed up by saying that they had been much impressed by all
they had seen, but that, on talking the matter over amongst
themselves, they had come to the conclusion that were they to set to
work and introduce such a system as they had seen, the result would be
that their rents would be raised, and that consequently it would be as
well to do nothing.
That their decision was a wise one from their own point of view
cannot be gainsaid, but it must be obvious, even to the most
prejudiced1 that a system which penalises progress and offers a
premium to obsolete methods minimises production, and that from its
reform a transformation in rural conditions might be expected. When
idle capital and idle labour can be applied to idle acres on terms
which assure that the reward shall not be filched by the still idle
landlord but shall go to the producers, the production of wealth from
the soil will be enormously increased and waste lands turned be into
gardens. And it must be borne in mind that, the less naturally fertile
the soil, the more essential it is that the producer shall have
security to possess what he creates. The less nature has the more the
user must do. He must make the land productive by his labour and
skill, manure it, fertilise it, make, in fact, the soil a labour
product. And none of these things can he do with profit to himself
unless the value he creates be assured to him. There are imported
yearly into Great Britain millions of pounds worth of fruit, and yet
it is possible to travel hundreds of miles over the great estates of
England and never see an orchard and seldom a fruit-tree. For who
would be so foolish as to plant an orchard on a yearly tenure? On the
allotments so much as a currant-bush is seldom to be seen, and the
labourers explain that they would not buy and plant fruit-trees when
they have only a yearly tenure of the allotment and a weekly tenure of
the cottage, which, if taken away, means in most cases expulsion from
the village.
So as the land values tax will break up the system of landlordism
that now makes empty the countryside, it must result in an enormous
increase in the production of wealth from the soil. More especially so
since when it is levied the State will be in a position to remit
burdens now falling upon land-users and to render services to promote
their enterprise.
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