Senate Committee Interrogates Henry George — Conclusion
|October 12, 2002||Posted by Staff under Archive, Progress Report, The Progress Report|
American Reform Leader Testifies for Justice
The Interrogation of Henry George: Conclusion
We are pleased to present a record of little-known testimony given to the United States Senate by the economist and social reformer Henry George. George testified as part of the investigation conducted in 1883 by the Senate Committee Upon the Relations Between Labor and Capital.
Part Five: The testimony concludes. What was achieved? As a result of the committee’s hearings, a smal bill restricting contracts with immigrant laborers was passed — obviously not supported by Henry George. And one other outcome — the Bureau of Labor Statistics was first established. That Bureau has compiled and provided valuable information for over 100 years.
Henry George is continuing to be patient with Senator Henry W. Blair of New Hampshire (1834-1920), a conservative Republican.
Senator Blair. But it is the power to combine that land with human labor and with wood, with brick, with mortar, with various other things, which in combination constitute a building that renders it valuable.
Henry George. The power to erect a house on it?
Senator Blair. Thc power to have a house erected upon it; the power to convert it to an available purpose.
Henry George. Not [at] all. If you had a piece of land in the interior of Africa you could erect a house on it?
Senator Blair. You would not have the power of utilization in that case; you would have only the power of waste. Land has no value until von can utilize it.
Henry George. But you can utilize it. You will find in small towns large edifices as good as many in Paris or New York. but you do not find the erection of those edifices gives equal value to the land underneath. What gives value to the lot is that its owner has the power to command a large revenue from it. No matter how rich land may be, no matter how well situated it may be, or how available it may be, it is worth absolutely nothing until somebody is willing to pay a premium for its use. That constitutes the value of land. Now the value of a horse, or of clothes, or of anything else comes from the human labor expended in producing it, in creating it, to speak metaphorically; but no human labor created the land. It existed before we came into the world and it will exist after we are gone. It is the field of our exertion. That is the difference between land and other kinds of property….
Senator Blair. I do not undentand how you make your distinction between the land itself as property and the superstructure which is upon it, or between the land and the implements that are essential in order to carry on production for the supply of human wants. In other words, I think that in claiming that land should be owned in common you substantiallv claim that all property which supplies human wants should be held in common.
Henry George. Not at all. As a matter of right, or as a matter of expediency, whichever way you take it, there is a very clear and broad distinction. That distinction is that this property which is the result of labor is properly the reward of labor. You rightfully own your coat; I rightfully own mine, because I have got it from the man who made it and have paid him for it. Nobody can show me a title of that kind to land. So far as the question of expediency goes, to make property which is the result of labor common would be to destroy the incentive to production. If I had to divide whatever I produced with everybody I would have very little or almost no inducement to produce anything. To take from a man that which is the result of his own labor, his own exertion, is to check his desire to labor. But, no matter bow much you might make the value of land common, you could not check the production of land; you could not make land any less valuable. It would still have all the properties that it had before.
Our present system of taxation, for instance, is a discouragement to the production of wealth. We tax a man according to what he has done, according to what he has added to the wealth of the community. Now, it is really a good thing to add to the wealth of the community. No matter how selfish a man may be be cannot keep it all to himself. The more there is, the more, other things being equal, we can all get; and it ought to be the effort of everybody to stimulate production as far as possible. But instead of that we tax men for producing; we tax a man for getting rich; we tax a man for his economy. What we ought to do is to tax man according to the natural opportunities which they have and do not use. Take that building over there. According to my notion that building is an ornament and a convenience to the city. It does not injure anybody. It is better that there should be a building there than an unsightly vacant lot; therefore I would not tax the man one cent for putting up that building, but I would tax him upon the value of the land upon which the building stands. Under such a system of taxation the man who has that fine building upon his lot would not pay any more taxes than the man who has this vacant lot with the ugly fence around it, and the effect would be to stimulate building, and to induce the holders of the land to take a lower price for it or to let it to somebody who would use it.
Senator Blair. You would still tax upon the value of the land, you say. Upon its value at what time? Upon the value in a state of nature, or upon the value with all the surrounding improvements?
Henry George. Upon the value at the time the taxation was imposed. For instance, I would tax it in 1883 according to the value of the land in 1883 if the particular building upon it were swept away by fire.
Senator Blair. Then all the land, occupied or unoccupied, would be taxed upon that primary valuation?
Henry George. Certainly. Here you have an enormous population crowded onto one-half of this island. The population is denser in these downtown districts around us here than anywhere else in the world.
Senator Call chimes in. Except in the Eastern countries.
Henry George. They do not build in our way in the Eastern countries. They build low there. Notwithstanding this crowding, if you take a ride up on the Sixth Avenue Railroad you will find any quantity of land in a state of nature, hut if you want to build a house upon it you will be met by the owner who will demand $5,000 or S10,000 or S25,000 for a lot. You pay that and put up your house, and then along comes the tax gatherer who taxes you for the house, for the improvement you have made, for the increased accommodation you have furnished for the people of this city as well as for yourself, and in all probability he taxes you more on the value of the house or on the value of the land on which the house stands than he taxes the other land beside it which is lying vacant. I think that is the general rule all over the United States, that the occupied land, especially where it is in the hands of small owners, is taxed even on its value as land, higher than that which is lying beside it unused. We ought, on the contrary, to discouage the dog-in-the-manger business, these people who are doing nothing themselves to improve the land and are preventing others from doing anything.
Senator Blair. I was going to ask you whether you would confine taxation of occupied land to the value of the land before it was occupied?
Henry George. Not at all. I would tax it whether it was occupied or not so long as it had a value.
Senator Blair. Would you tax any other forms of property?
Henry George. I would not. I do not think it would be necessary. I would say to the people, “Produce all you can. The more everybody produces the more there will be to divide, and the more each can get for his share.”
Senator James George of Mississippi. In your theory you disconnect the improvements entirely from the land?
Henry George. Certainly.
Senator Blair. And you would make the land common property?
Henry George. That would be in substance making it common, but I would not in form make it common. I would let the present holders call it their land, just as they do now.
What would you say to the Senators? What would you ask Henry George? Tell The Progress Report!