"GOING, GOING, GONE!"

New Zealand Herald, Volume XXIX, Issue 8888, 26 May 1892, Page 3

"GOING, GOING, GONE!"

" For this simple device of placing all taxes on the value of land," would be in effect putting up the land at auction to whoever would pay the highest rent to the State."—Henry GEOUUE. Progress and Poverty," p. 309. „ '* Amen I"—Edward Withy. — -New Zealand Herald, sth May, 1592.

TO THE EDITOR. Sib,— Withy, like Henry George, appears to be unaware of the evil effects of " rack-renting." Both of them use the hated term with a' very light heart, but they will waste their eloquence in trying to persuade thoughtful men that a rack-renting State is better than a rack-renting landlord, acts are stubborn things, and they arc against Mr. George. As Mr. Withy dwelt fully on rack-renting, I must answer him, for Georgeism evaporates into thin air under criticism. , .. „ . First, let us see what rack-renting is ; and secondly, notice that Mr. George and his dicisples are trying to force that hateful system upon us. A rack-rent is the highest price which can be obtained for the use or land or tenements, when rents aie determined by free public competition at short intervals. That differs from rent fixed by custom, judicial decision, or individual landlords. Rack-rents in Karangahape Koad and elsewhere have ruined people. Many a landlord now lets or re-lets his premises to persons he knows and respects at a lower rental than he might get at auction. "It not unfrequently happens, says Frofecsor Fawcett, . • • that the claims ,ot an old tenant for consideration are not ignored, and there are many landowners who would not think of displacing an old tenant, although it might very likely happen that if the land were put into the market a somewhat higher rent might be obtained. But what {consideration would an old tenant get at public aucion if the tenants were compelled to compete openly against each other, sis they would have to do under Mr. George s system ? He admits that that would be the effect of single tax and land nationalsation. I want settlers and others to clearly realise that we should have no option but rackrenting, for single tax ''would be in effect putting 'up the land at auction to whoever would pay the highest rent to the State." If the land values were not _ auctioned there would be no security against favouritism, patronage, and corruption ; and if they were auctioned there could be no consideration, as now, for old tenants. It is one tiling for tenants to deal personally with landlords, and another thing to deal with tax gatherers who, however kind, cannot make allowances for bad reasons or old age. I therefore object to land nationalisation and single tax on the ground that " rack-renting would be the rule and not the exception, and because each tenant would have so little attachment to, and interest in, the soil, beyond his term of lease, that it would bo unduly exhausted, and its products consequently diminished. Henry George's " simple device is to apply to those lands which have been properly, acquired by cash buyers, immigrants, homestead settlers, and volunteers after fairly complying with the State s conditions. Surely Mr. Withy is making too big a draft on our credulity when he asks us to be consoled with the thought that speculative values will disappear. They will disappear, no doubt, for probably no one who can find ' auy other investment will lend or spend money on laod. And hespecially emphasises • the fabt that the single-tax will "be levied upon a public assessment' of value, from

which ' booming,' as a result of speculative conditions, would be absent." We know something about officially assessed values. One day in such a Court would materially shake Mr. Withy's faith. In the Court in Auckland, on 10th instant, one owner actually sold his land out and out to the valuer for one-sixth of the assessed value. There is considerable excessive valuation, and thousands of persons submit to it merely because they are too indolent, ignorant, or badly ofl to appeal, for it involves a loss of time and money to appeal. . Having carefully considered this question of a "rack-rent, 1 feel sure that single-tax would cause the same destructive competition amongst tenants which now prevails in many branches of trade. Tenants, rich and poor, would bid against each other for particular parcels of land, rent would be forced abnormally high, some tenants could not pay, the members of the district would be set to work, and rents would have to be remitted, as was done in South Australia, when about a half-a-million was remitted. As the rent which the people could afford to pay to the State-landlord would depend on a reasonable return on capital invested and labour expended, it follows that if there were inadequate returns the stipulated rent could not be paid, and then any deficiency in our requisite annual four millions sterling would have to be made up with either extra taxes on the land-users who could pay, or on improvements, or on articles of consumption. That contingency is possible, for Mr. Withy admits that he cannot tell what the rent would produce, and yet he wants society to take a leap into the dark which might prove a bottomless pit of industrial destruction. Mr. George's proposal is not to abolish rent, for it cannot be abolished, but for the State to confiscate it. Many deluded persons who frantically clap and shout " hear, hear!" at meetings, think they would have no rent to pay if land nationalisation prevailed, and the delusion is cunningly encouraged, because, as Henry George admits, " Even the most prejudiced can be relied on to listen with patience to an argument in favour of making someone else pay what they are now paying."—"The Land Question," p. 41. . , ... Let us now examine the grounds of Mr. Withy's belief in the advantages which Mr. George's system would confer on the merchant, the cottacrer, and the farmer. First, tho merchant He owns, say, premises in Queen-street, the bare land of which, without improvements, would let for £300 a-year. That letting or using value would then go to the State, not to himself. Mr. Withy says tliat his exemption from Customs duties, stamp duties, taxes on improvements, and all other taxes, would make him a gainer—that is to say, his £300 direct tax would be less than he pays now, and he would do more trade, because customers would be better off. I question that. It is a mere assumption. Mr. Withy does not even know how much the tax would yield, j or whether that £300 contribution would not have to be increased. He assumes that brisk trade would result from the removal of discouragements to all improvements.' ! The effect on the merchant can only be j ascertained by seeing how working men and | farmers would be affected. Therefore, conj sider, secondly, the working man. His cottage allotment, being worth an annual | value of, say, £3, that sum would go to the State, but his wages would fall i as we see when we consider the probable | effects of single tax on the farmer—the i backbone of the country. Mr. Withy would have the owner of thv Queen-street site, worth £300 a-year, consok himself at the thought that increased trade under communal holding of land would compensate him for the loss of the £300, but suppose the allotments to belong to an old man or a widow, and is his or her only source of income, through having invested all their savings in that site as a provision for old age; then the confiscation of it to the State would make him or her a pauper! The ground rent being confiscated, and the buildings belonging to another person, the lessee, there would be nothing for the owner —except the Costley Home. Again, Mr. Withy wants the_ manual labourers to regard the £3 rent of his cottage allotment as a small sum, but that is not all lie would lose, the worst of it is what His Holiness Pope Leo XIII. has pointed out, and it is this : it would confiscate the workingman's saved wages. " It is surely undeniable that when a man engages in remunerative labour, the very reason and motive of his work is to obtain property, and to hold it as his own private possession. If one man hires out to another his strength or his industry, he does this for the purpose of receiving in return what is necessary for food and living: he thereby expressly proposes to acquire a full and real right, not only to the remuneration, but also to the disposal of that remuneration as he pleases. Thus, if he lives sparingly, saves money, and invests his savings, for greater security, in land, the land, in such a case, i 3 only his wages in another form -, and, consequently, a workingman's little estate, thus purchased, should be as completely at) his own disposal as the wages he receives for his labour. But it is precisely in this power of disposal that ownership consists, whether the property be land or moveable goods. The Socialists, therefore, in endeavouring to transfer the possessions of individuals to the communitystrike at the interests of every wage-earner, for they deprive him of the liberty of disposing of his wages, and thus of all hope and possibility of increasing his stock and bettering his condition in life.' On a question of abstract justice 1 would— and know that millions of wage-earners would—rather trust the Pope's opinion than Henry George's. And now as regards the Mr. Withy's "simple device" would work dire and utter ruin, and if the farmer does not thrive the wage-earner and worker cannot. Let it be written in lurid characters and burn itself into the minds of all who have anything to lose, that laud nationalisation without compensation means confiscation of land values, destruction of freehold tenure, and absolute free trade. Under such conditions how could New Zealand be saved front ruin unless all other colonics and countries also adopted the simple device?" Single tax means one tax —a tax on land and nothing else. Our local manufacturers and farmers who are now " protected" by tariffs could be no longer so protected. There would be no Customs duties. Foreign boots, _ clothes, printing, carriages, furniture, biscuits, soap, candles, zincwork, saddlery, and other things ' would be poured into our free ports; but our farmers and manufacturers could not send their products to the sister colonies or foreign markets because of the heavy protective duties imposed to keep them out of the markets. Victoria, for instance, virtually prohibits our farm produce and manufactures. She would stock our market, our farmers could not sell, and the market being glutted their prices would be unremunerative. In addition to that it is very certain that, with cheap living, the present rate of wages could not be kept up long; because, if it were, there would soon flock here, to participate in the high wages and cheap living, so many workers that wages would necessarily fall. _ . , We now have in the colony 2570 industries, employing 29, persons, who earn £2,209,859 a year. What the farmers pay I cannot say, but our industrial ami agricultural interests would suffer seriously. If Mr. Withy's scheme be carricd out our landowners, farmers, manufacturers, and wage-earners will be ground between the upper and nether millstone of land nationalisation and single tax. Farmers find it hard enough now to get a living, and I fail to see how the " simple device" of making landowners pay all the taxes would make their lot better. To my mind it is like trying to save a burning house by throwing on kerosene. That is why I oppose it. Thanking you, sir, for so much space in your valuable vaper.— am, etc., F. G. Ewisgton