"UNEARNED INCREMENT."

Dominion, Volume 2, Issue 568, 24 July 1909, Page 14

"UNEARNED INCREMENT."

iTo thb Editok.) Sir, —I have to thank you- for tho information contained in your reply to my letter of July 10. It is now quito dear that you did not impute the passage withip the inverted oommas to Henry George, but that you quoted them from Mr. W. 13. Mullock'a letter to the London "Timos" of May 13. Porinit me to state, however; that woro it not for your assuranco to tho contrary, tho reader might well havo concluded that you wero reprinting a quotation, from the writings of Henry ■ George, and hence, before . dealing with Mr. W. H. Mallock and your article, which was largely based upon his letter, I determined first to clcar the ground. In order to avoid even the semblance of unfairness, I reproduce the passago in full as it appeared in Mr. Mallock's letter in "Tho Times" and in your article:—

"In every progressive society the rent of land not only increases absolutely, but also relatively to tlie entire national incomo, .thus tending to absorb, aa fast as,they come into being,' overy addition to tho earnings of labour aad'of: capital,alike."

This passage- is, published by Mr. Mallock ill. inverted commas, and js , attributed to Henry George by obvious implication. Mr. Mallock, however, discreetly refrains from giving' his readers tho reference, and, as a matter of fact, ho could not do so, for Henry George never wrote either , tho words or the argument in the , passago. Lot tho reader carefully scan the words, and the first thing that will striko him as nonsensical is in the first liner—that rent . increases absolutely and relatively only in progressive societies. Tlie nest fallacy is that the validity, of the singletax theory dopends on the, proportion of rent to "tho entire national income." Everyone acquainted' with Gcorgo's writings knows that the proportion which rent bears to. national income'has nothing whatever to do, with the theory. Tho first'question to, settle is one of morals: To whom does rent rightfully belong? We answer that it belongs to the whole .people, but'that i'b a. quostion quite "apart from any arithmetical computation. Mr. to say the least, therefore, has proved that he grossly misapprehends the .question' upon which he presumes to enlighton tho readers of "The Times." . ■-" ■■''• '

There , is ono feature in Henry argument that lends an, appearanco -of accuracy to, Mr. Mallock's; alleged quotation. George does argue, as Adam .Smith argued before.him, that increasing population, enhances the effectiveness of labour. Two men working together.'will; accomplish more, than twice as much as one man working alone;' twenty menworking together will accomplish md*e thaji-. twenty times the result of one man's efforts, and so on. This i».so becaiise of, the specialisation of function, that springs from the subdivision of labour, and subdivision specialisation are .carried to greater and. g-reaetr lengths as population irioreases. But as this tendency becomes accelerated, so does the value of land advance, and, thus the increased efficacy of ; labour really, benefits, the landlord at the, expense both of, labour aad of capital. All this is;familiar to. readers of ■ Georgo, but it is something very different from the'"quotation" oited by Mr. Mallock, not one woird of which 1b correct. .

But even conceding for the sake of argument that Mr. Mallock has correctly stated, George's argument, what has he proved ? You tell ;iis that he has demonstrated the fallacy of . that argument; from . "official records." ■;You do hot tell us what theso records are. Neither does Mr. ,- Mallock;; but ,it is clear from his -letter, - that he 'relies on the' -returns. • Now, I would; point out- that . there - , are no correct records of the; value of; land in England. There never has been a valuation • of the lan'd 'of England sinco ':1652, in which year ,a : landtax,.of 4s. in tho - pound was imposed on "true annual rental." Even that valuation, however, was not a correct one,, since it included . land . houses and: other fixtures. But, apart from that important-fact, there has been no revaluation since 1652, and, accordingly, we find land-at Charing ■ Cross —land worth thousands per acre—valued today as agricultural land!' ;"We have," says Professor Goldwin Smith, "unfortunately, no

published statistics til % trustworthy kind no to tho proprietor/rbip of land atid the chaagos it una boon undergoing." ("Three English Statesmen," Appendix A.), Torn to pogo 72 of tho Financial Reform Almanac, 1608, and yon will read: "It it, of coureo/ impossible (/> givo mare than t mere approximation of tho vftldo of tho Jand of tno United Kingdom, apart from ' house*, oto. Thcro aro no real statistic* to Ktiidc ii 4," Yet Mr, Mallock proc«*]« nirinr to demolish Henry Goorgo from "official reeordo" that do not oxistl

Bat 1 shall bo told that Mr, Mallock ban quoted from the incomotax rtcords. Very well, What aro tho, income-tax records ? Tho income-tax is divided into five branches or schedules. Schedule A toucbos income from landed property, including houses; Schodule li, with' agricultural land, which H let; Schedule C, with incomes derived from foreign and colonial. investments; Schedule I), with income dervicd from trado or from profcosi&nal employment; and Schodnle E, with incomes derived from State employments, Now the critical reader will mark, firstly, thattho income-tax cannot give tho slightest hint of tho rental value of unused land, and, secondly, that the incomotax is applicable to incomes from foreign and oolonial • investments, The'income from foreign (omitting colonial) investments is now £65,000,000 per year, being just, double what it was thirty years ago. Yet, according to tbo illuminating Mallock, this is all to bo reckoned as "national income!'.' No ivondor ho finds that 'rent is a diminishing quantity when ho calculates the ever-in-creasing. volume,of income from abroad! To call that rent which is not rent, to omit unused land altogether; and to reckon income from foreign and colonial investments as being derived from "national income" can scarcely bo called clever. It' certainly is not honest. Yet it is contemptible jugglery .such as this to which opponents of land-value taxation aro driven! , I am fairly familiar with Mr., Mailock. You cannot read the English magazines without reading .sotno solemn., lucubration from Mr. Mallock on any possible subject ranging from Socialism to Ritualism. His most sympathetic critic: will scarcely' contend that he'has ever thrown much light upon anything. Like Lord Habbury, he lias much about tho aggression of trades' unionism, as exemplified .by the Trades Disputes Act. But he maintains a significant silence regarding the aggression mvolvod m the outrageous 'claims of. landowning. dnkes to exclude; the great mass of their feliow-mon from tbo land of their own country . Of the articlo you have based on Mr. Ma Jock s tissue of misrepresentation,;! coud say a ereat deal. - I have done sufficient, however, in exposing the flimsy foundation upon which you have based that article.--! am, etc., ■; , * ' 'P. J. O'REGAN. .July 13. .