Prosperity Wipes Out One Utopian's Dream

Ronald Smothers

[Reprinted from the New York Times, 30 December, 1990]

FAIRHOPE, Ala.. Dec. 28 - The end of the year is tax time here and it Is perhaps fitting that the busiest place in town is the office of the city's largest landowner and taxpayer, the Fairhope Single Tax Corporation.

The corporation is the successor to the 28 people who moved from Iowa in 1894 and established Fairhope as a utopian colony. The community was based largely on the Ideas of Henry George, a 19th-century journalist and economist who excoriated land speculation as a great evil of the time and the cause of poverty and inequality in society.

George argued that land ought to be held as a public trust by the community rather than in private hands, and that it should be leased for homes, farms, factories and stores. And that is what is done In Fairhope, with the corporation owning about 4,300 acres, about a third of all the land here. The corporation leases it to about 1,300 homeowners, business owners and farmers.

The tenants pay a single annual tax to cover the costs of public services like water, roads, electricity, schools and parks. The tax is based solely on the value of the land and not on the value of buildings, crops, or businesses.

Perched on a gully-riven bluff called the Ecor Rouge.or Red Cliffs, overlooking Mobile Bay, Fairhope stands as a tribute to George's ideas on urban planning and land use. Because of the corporation's control of the land, the town has open vistas, open beaches and abundant parkland.

In other interesting ways time, progress and prosperity have drowned out the envisioned utopia. Fairhope is clearly no longer the haven of radical political experimenters and artists that it once was. Recent lawsuits filed by residents have attacked the tax-setting practices of the corporation, or the "colony" as it is often called.

Some critics, pointing to steep tax increases on some farmland, suggest that even the corporation has become infected by the greed and land-lust that George despised. It is still a wonderful and beautiful place to live, they said, but Fairhope has lost its sense of mission.

"It was once a place of radical ideas that now votes Republican and gave Ronald Reagan huge margins some years ago," said Paul Gaston, a history professor at the University of Virginia whose grandfather, Ernest B. Gaston, was one of the town's founders. "It was once a place where people came to try to solve social problems. Now it is a place where people go to escape social problems."

The offices of the Single Tax Corporation were abuzz this week with activity as people trooped in and out.

The tax system of its utopian founders lingers in Fairhope, Ala. and the corporation's secretary, Gale W. Rowe, sorted through tax bills.

This time of year, when the corporation finishes collecting and begins to turn over about $470,000 to the various taxing authorities in the area, is the time when the George legacy is most obvious.

With the exception of their Federal Income tax, all leaseholders truly pay a single tax, from $500 to $1,000, for a multitude of services.

And even though the corporation does not own all of the town, the single lax concept has influence other purely local tax decisions. "You know we don't have a sales tax in Fairhope partly because the corporation has worked to oppose one," Mr. Rowe said. He noted that the corporation still required those wanting to join to pay the same $100 fee that was required in 1894 and to take a short course instructing them in the principles of Henry George.

This feature along with the annual collection procedure makes Fairhope the "purest" of the Georgist communities around, said Pat Aller, assistant director of the Robert Schalkenbach Foundation, a New York City-based organization that promotes and publicizes George's views. There were never very many laboratories for George's view and today two others - Arden, Del and Free Acres, N.J. - still exist.

"But Georgist practices and ideas are fading or have already faded in those communities," Ms. Aller said.

Founded at a time of unbridled individualism of robber barons and laissez-faire capitalism, Fairhope was one of a number of utopian experiments tried around the country. But its location in the South was unusual.

"There were not a lot of utopian communities in the South since most such communities had as a premise that they had to spring from free men and women," said Steven Suitts, head of the Southern Regional Council, a non-profit educational organization. "That was a very hard premise to find in the South with its agrarian and low-wage economy and its history of slavery."

Mr. Rowe said that from the beginning the colony made a lot of compromises and adaptations in order to survive and it is likely that those adaptations helped doom its success as a laboratory of the single tax idea.

For one thing, the founders decided that they would open up the colony's land so that it could be leased by people who were not members of the corporation. The idea, Mr. Rowe said, was that eventually these people would see the wisdom of George's approach and freely join. But that never happened and today, only 10 percent, or those on 1,360 leaseholds, are members of the corporation. At one time members were given the first opportunity to lease any new property, but today membership has no special privileges.

M r. Gaston said another compromise was to incorporate the colony as the town of Fairhope in 1908, an attempt to blunt opposition that had grown over the fact that only corporation members and not nonmember leaseholders could vote on colony decisions. The community was being viewed warily by those in the state capital as some sort of "communist community." But in creating the town, the town mixed leased land with deeded property and the mixture of two kinds of land ownership proved a problem over the years.

"The colony and its association dominated things for a long time but eventually the larger community overtook the colony," said Mr. Gaston.