Senate Committee Interrogates Henry George — Part Three
|May 15, 2005||Posted by Staff under Archive, Progress Report, The Progress Report|
American Reform Leader Testifies for Justice
The Interrogation of Henry George: Part Three
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 Three: Senator Pugh is Full of … Doubt
Senator Pugh. We have a large public domain now, subject to settlement and cultivation under the homestead law — millions of acres of land unoccupied .
Henry George. Where is it?
Senator Pugh. Out in the western states and in the southern states.
Henry George. Practically, that is of but little use to people here. But the extent of our public domain is very much exaggerated. The best part of it has been taken. What is left, the millions of acres that figure in the Land Reports, comprise all the deserts, all the mountain chains, all the poor land. An immense amount of land that is carried on the books of the Interior Department as public land is really now in private hands, consisting of railroad land which has not been surveyed and patented, of land upon which various claims have been filed but not yet perfected, and of land held by ownership of the water. All through the western part of this continent water is scarce.
I know, for instance, of a ranch of a million acres which is for sale in this city. It will probably be taken to London and sold there. Nearly all of that million acres is government land, and it is not the legal title that is for sale, but virtual possession. What the parties have ohtained to by preemption and homestead entry is the banks of two streams. It is impossible to use that land for grazing (the only purpose that it is fit for) without access to the water. The man who commands the access to the water commands this million acres of land just as truly as though it were patented to him. All through the West enormous amounts of land are held in this way. That it is not an easy thing for a man who wishes to go upon government land to get any such land that he can use profitably is proved by the high rents that are paid. Men do not pay largely for what they can get for nothing. You will find that in all our new states arable land already commands a high price.
The rent of land in California, where it is rented on shares, varies from one-fonrth to one-half the produce. In the new Northwest the rent is usually one-half. In New Jersey I inquired, the other day, of a farmer in a part of the state where I happened to be, and he told me that the rent there was one-half. That is an enormous rent. Buckle, in his History of Civilization, estimates the rent in Ireland as one-fourth of the product — and Ireland has always been supposed to be a very highly rented country.
Senator Pugh. In the South you can find an abundance of rich land, uncultivated and unoccupied, which can be rented very much under that figure.
Henry George. There may be special reasons, there probably are special reasons, why the stream of immigration has not been directed to the South.
Senator Pugh. That is very true.
Henry George. All these considerations must be taken into account. But I have seen men who started out to find a piece of the public domain upon which to make a home and who have come back disheartened. The last time I came across the plains I met one family who had sold a farm in the Platte Valley and had gone away to the Pacific Coast and up into Oregon, and who were coming back, the man intending to go to work on a railway. I found a long train of Southwestern men from the Choctaw Nation who had been as far as Washington Territory and Puget Sound and who were coming back. You will find them passing and repassing in that way all the time, and you will find generally that the man who starts out to get himself a homestead on government land will find that the cheapest way to get it is to buy or rent.
The speculator keeps just ahead of the settler. Our laws, although intended to secure every man a home, have operated just the other way, just as have the land laws of Australia and New Zealand. A large business has been carried on, and is now being carried on, in the making of entries. A man files a preemption claim or a homestead entry, perfects it, and sells it out to a capitalist, and then goes on to repeat the operation.
I noticed tbe last time I came across the continent that at Council Bluffs there was an advertisement of one of these land-grant railroad companies posted up offering some 2,500 improved farms for sale. I take it that those improved farms were pieces of railroad land on which men had settled, on which they had paid something down, giving a mortgage for the balance, and which they had been obliged to abandon, the land reverting to the railroad company, which was again offering it for sale. A great deal of that land through the West is not fitted by nature for agriculture. There still exists “The Great American Desert,” although land-grant agents wipe it out of the maps.
Senator Pugh. Are not the unemployed classes very much increased in number, and is not the opinion that there is a scarcity of employment encouraged by the fact that the demand for employment is generally for particular kind of employment in a particular place? For instance, take this city or Boston, or Chicago, for an illustration. We find large numbers of people out of employment, and they say there is not a sufficient demand for labor; but when we come to inquire into the fact, we find that what they speak of is a demand for a particular kind of labor in a particular place, to wit, New York or any other of the cities. They could go elsewhere and find employment, but they demand employment in New York or Boston, or Philadelphia or Chicago, and they cannot find it there, although they could find it elsewhere if they were willing to go and seek it.
Henry George. All that you say may be true in individual cases, but it is not generally true. You will find today in all the cities unemployed men.
If you have any experience in these large cities, you are constantly beset by men who say to you, “1 want something to do; I am willing to do anything.” Such men are always walking our streets and tramping along our roads; some even in the best of times and when bard times come a great many. There may be at times, a surplus of labor in some branches of industry and not in others. That, under our present industrial system, is constantly likely to occur to some extent; but under a state of freedom it would be quickly relieved. Where too much of one thing was produced relatively to other things the price of that article would fall as compared with the prices of other articles, and capital and labor would naturally be attracted to the production of the others, thus quickly restoring the level.
There come times, however, when the supply of labor seems to be in excess of the demand, not in two or three occupations, but in all. In fact, to some extent this is true even in what we consider normal times. We are used to it. but it is really strange that there should ever be a seeming oversupply of labor when you consider that the real demand for labor is labor itself. The two hands are always accompanied by a mouth, and until human wants are satisfied, there must always be need for human labor. When you analyze trade you find that it is the exchange of commodities for other commodities, the exchange of the products of one kind of labor for the products of another kind of labor. so that it is really labor that creates the effective demand for labor.
The only explanation of these general depressions is to he found in the fact of the monopoly of the natural opportunitics for labor; in the fact that labor is shut off from access to the land, so that it is unable to employ itself. You said awhile ago that all men could not go to farming. It is certainly true that all men would not want to go to farming; but in every trade you will find some men who probably would go to farming if there were profitable opportunity. If you were to open today a large body of agricultural land within convenient distance of these cities, and make it free, you would find a grand rush for it; a rush which would relieve labor in almost every trade, by reducing the number of those competing for work, and which again would increase the demand for labor in these various occupations.
Now, I think these industrial depressions, that seem to spread over the whole civilized world like great waves, can ultimately be traced to the fact that land is not thus open to labor. I think we can see their genesis in this country. For instance, there is an era of stimulation. We go largely into railroad building; business is brisk; there seems to be a good demand for everything. Now, there is one thing, and only one thing. which, during all this time, rises in price, and that is land. Your city lots increase in value; your agricultural lands also. Wherever your railroad goes land jumps up three, four, five, or six hundred, or perhaps a thousand percent. Now, the rise in the price of land means that the man who wants to use the land must pay a greater premium for doing so. The raising of the price of land is the raising of a barrier between labor and its natural opportunities. Then you find that these high prices of land check building, check settlement, check improvement. Thus comes a check to production at the very foundation of the industrial system, the stratum on which all our industries rest; and necessarily this cessation of production causes a cessation or reduction of demand, of demand for other things. That, in other avocations again, checks production, and so the impulse runs through the whole industrial network and produces what seems to be paralysis everywhere, and in all occupations you have men idle who would gladly be at work.
Next week, the dumbest interrogator, Senator Blair, takes up the questioning and George tries to teach him a few basic definitions.
What is your reaction to Mr. George’s testimony? What would you add? Tell The Progress Report!