The Taxation of Unimproved Land Values
[A newspaper report on a lecture delivered in
Melbourne, Australia. Reprinted from The Bacchus Marsh Express,
6, June, 1897]
ON Tuesday evening last Mr. Max Hirsch addressed a large audience in
the Mechanics' Institute, Bacchus Marsh. The chair was taken by Mr. W.
E. Prosser, President of the local Debating Society, who explained
that the Society had invited Mr. Hirsch to address the public, and he
had selected for his subject "The Taxation of Unimproved Land
Mr, Hirsch entered upon his subject, by lauding the farming industry.
Every section of the community, he said, depended upon the farmers.
Manufacturers and artisans depended upon the farmers; so did all the
shipping interest. It would be easy to have too many of all other
occupations but that of the farmer, who looked to the markets of the
whole world. How was it that farming did not pay? The Age said
it was because the world's prices were too low. That was not the
solution. The prices would be high enough if the cost of manufactured
articles used by the farmers was not raised one-half by Protective
duties. That was a system of robbery. He would prove it from the
pamphlet issued by the Protectionist League. Mr. Hirsch then went
through the list of articles which the pamphlet said bore a duty which
benefited the farmer, and he ridiculed the mention of almonds, as so
few farmers grew them.
Bran was a miller's profit, not a farmers'. The duty on butter did
not raise the local price; it might just as well be said that an
import duty on wool would raise its price. Then there was dholl
mentioned; who grew dholl? He had to go to the dictionary to find out
what it was. Maizena and oatmeal were not grown by farmers, nor were
opium, tobacco and silk. Duties on these things were of no advantage
to the farmers. But the pamphlet said the farmers had gained £50,000
by the duty on wheat. Yet it was the great cry of Protectionists that
duties did not raise prices to the consumer. It was true that a duty
raised the price, but there was this difference that the manufacturers
were close" together and united, and could raise prices under the
protection of a duty, but the farmers were scattered and disunited and
could not do so. The farmers could only benefit by the duty in a year
of local scarcity. When they exported they had to take the world's
price, which was the local price also. Out of 20 years the duty on
wheat might benefit our farmers once in 2 years. It reminded him of
Dick Turpin, who used to give his victims 2/6 after he bad robbed
them. And the gain was not nearly so great as the pamphlet stated it
to be. It was l0d. per bushel last year, and 1/4 this year. The
pamphlet admitted that consumers paid one million and three-quarters
in protective duties.
Mark, the old contention that the manufacturer abroad, or importers,
paid these duties was now abandoned. In addition to that payment on
what was imported the local manufacturer increased his prices also. He
would quote Mr. Trenwith on this point. (Applause.) He could see there
were sympathisers with Mr. Trenwith present, but which Mr. Trenwith
were they applauding? On one occasion he stated in the House that
duties took toll of the outside man; on another he said that the duty
was paid by the local buyer in order that the local workman might get
higher wages than the one elsewhere. Which Trenwith did they applaud.
Perhaps both. (Applause.) For when once they erected an idol upon
prejudice they would bow down to it, whether its feet were of gold or
clay. An increased price meant robbery of every man who bought
protected goods. Did the protected manufacturers pay higher wages ?
The sweating dens of Melbourne gave the answer, and the minimum wage
laws. The working man got very few crumbs indeed, while the protected
manufacturers had a very full meal.
Mr. Hirsch then quoted the list he had published in the Argus
a few months ago of comparative prices at Hordern's, Sydney, and Foy &
Gibson's, Collingwood, for articles free in Sydney and dutiable in
Victoria, showing that the duty was added to the price. Mr. Hirsch
added a sketch of the taxed farmer's life, from the time he got up and
put on taxed socks to the time he went to bed between taxed blankets
and was allowed to enjoy untaxed sleep - the only thing free. The
whole of the Customs revenue apart from that upon j intoxicants was £900,000
a year. Everyone who paid that money in the first instance took toll
upon it from the consumer. The importers put on 20 per cent., the
retail dealer 33-1/2 per cent. In that way the £900,000 became £1,450,000.
Protective duties averaged 35 per cent., and locally manufactured
goods were increased 20 per cent, by that duty. Importers who handled
them got a profit on them. The total result was that the £900,000
which the Treasury got cost the consumer £4,900,000, as £4,000,000
went to the middle men of various kinds.
On an average, every head of a family paid £25 a year to
maintain Protection. He had been told that farmers were too poor to
pay this average. That might be so, but they made up for it by having
to pay duty on their tools of trade. And he paid again in loss upon
his exported produce because freights were higher in our ports than
they would otherwise be if imports came here freely. Freight for
export was 4 / per ton higher in Melbourne than in Sydney. The railway
freights had to be raised because locally manufactured rolling stock
cost so much more than the imported stock. Freights were much higher
here than in New South Wales, where they had a more scattered
population. Taking an average farm of 150 acres the loss on freights
alone was £11/13/4 per annum. Add that to the £25 for
duties, and it made over £36 per year of robbery of the farmer.
An anecdote had been related to him of a man who paid a visit to the
nether regions, and saw a number of carcases hanging up, and on
enquiring what they were was told that they were Protectionist
farmers, who were "too green to burn." And indeed they were,
or they would not stand this robbery. He would now show how to get rid
of the burden. The State must have a revenue. How ought it to be
raised when we get rid of the Protective duties? It should be raised
so that no man should make a profit out of the taxes. No man should be
fined because he had more mouths to fill; nor because he employed
labour. There was one class of the community which received benefits
for which it pave no return. This j was the land-owning class. This
was illustrated by a recent claim from Flinders street merchants to
the Minister of Railways to keep open some gates at the railway
station there, which he could well close, so far as public wants were
concerned, and thus save £700' per year. They pleaded that the
closing of the gates would injure their property. The Minister should
have told them that lie had no desire to do that, but he was not going
to exact from all the colony a payment of £700 a year in order to
benefit their property. If they wanted the gates kept open they must
pay the £700 per annum. He did not tell them this, but instead
kept the gates open. So it was with every service rendered by the
Government, whether it built railways or built roads; they all
increased the value of land, yet the Government did not get one penny
Nicholson's corner, containing 1-1/4 acres, opposite the Town hall,
was bought in Sydney before the gold fields by a man named Howie for £97.
He and his family died at sea. His brother inherited (his piece, and
thought so little of it that he never came to look at it. After the
gold fields broke out he was sought out and asked to lease the land.
He did so on most exorbitant terms for himself. For the last 30 or 40
years this man had been drawing an income of £10,000 from it,
which enabled him to live in a castle in Scotland, while all the
people of Victoria worked to enhance the value of his property.
The people of Victoria paid altogether four millions of rent to idle
landlords in England. That was why they had bad times. Surely it was
time they taxed the men who possessed this wealth. This they could do
by abolishing the present taxation and substitute for it a tax on the
unimproved value of all land. Exempt all improvements, and tax the
bare value, whether in the cities or the country. Then we shift the
burden from the over-taxed producer and maker of wealth to the
appropriator of the wealth after it is made.
In the Bacchus Marsh district. he was in formed that the average farm
contained 150 acres, valued at £6 per acre, of which £2
represented improvements. There were £133,000,000 worth of
unimproved land value in the colony, and be would put a tax of l-1/2d.
per pound on that. A farmer owning £600 worth of land would
therefore pay £3/15 per year, and be relieved of £36 of
Customs duties; and the Government would get as much as from the
Customs duties, for no middlemen would take toll from a land tax.
Under the present system of land assessment the most valuable land
paid nothing, while the farmer' paid a great deal. The magnificent
building in Collins street erected by the Equitable Insurance Co. cost
£250,000 to build, arid the land cost £365,000.
The company should pay 2,280 pounds tax on its land, but it not pay a
single penny. Under Protection, 570 farmers now paid 20,000 pounds a
year; under the single tax they would pay £2,280. He repeated
that the single tax would benefit every farmer by £33 a year.
That would benefit every producer in the colony. He asked them to look
at a very important matter. From every factory, and every walk of
life, came the demand that the world could not be allowed to go on as
it was now. The inventions and discoveries which made wealth were not
given to us to enrich the few only. Was Socialism to erect its prison
house on the wreck of our civilisation? There was too much Government
interference as it was; too much half-holiday legislation; too many
factory Acts; too many attempts to remove evils without touching their
All sorts of bribes were given to the people to support the
Government. Look at £140,000 given to the mining companies; £50,000
to distilleries; £100,000 to tobacco industry; £30,000 or £40,000
to agriculture. Look at the laws which were defeated, but which will
be introduced again to give the Government the monopoly of spirits, of
tobacco, of paper money. Laws to make every woman who wanted factory
work dependent upon the good will of a factory Inspector. All this
legislation was in the direction of Socialism. If they did not resist
it they would find that they had become the slaves of an official
Government. He asked them to rally round the Freetrade Democratic
Association, which was the only one that could defeat Socialism
because it recognised the evils which now existed and sought to remove
them by individual action. Equal opportunities for all would give
freedom and prosperity to all. (Applause.)
Mr. Mark Kyle, J.P., asked if Mr. Hirsch would tax all forms of
wealth, as well as land.
Mr. Hirsch said he had the idea that ultimately all taxes would be
raised from land. But at present he would not look for so much as
that. He was a reformer, not a revolutionist. He recognised that at
present people could not rise to the level of absolutely just laws.
They must get 20 or 30 years time. He would abolish all customs
duties, except on narcotics. Then he would reduce railway freights.
Users should not be charged the cost of construction of the lines, any
more than the users of roads wore. He would charge the owners of the
land, which was increased in value by the railways. Next he would
advise that local rates be not raised from assessing improvements, but
from the land alone. No man should be taxed because he made
improvements, and thus gave employment. He would also impose an income
Mr. A. Robertson asked how Mr. Hirsch would ascertain the value of
invisible improvements - such as clearing.
Mr. Hirsch would take its visible value, which was often less than
the cost of clearing.
Mr. Robertson did not think that answer satisfactory, as it still
gave no reduction for the clearing.
The Rev. F. H. Gibbs, M.A., moved a vote of thanks to Mr. Hirsch. He
considered it was well deserved. Mr. Hirsch had given them some new
ideas. Political views were now widening, and such views as Mr. Hirsch
presented were valuable, although he supposed there was not a man
present who agreed with all his ideas.
Mr. Johns seconded the vote, and thought Mr. Hirsch had rather
deceived them by not adhering more to the subject of taxation of
unimproved land values, which was what they came there to hear him
Mr. Hirsch thanked them for the vote, and for their patient hearing.
He was very pleased to have had the opportunity given him by the
Debating Society of speaking to them, and he begged to move a vote of
thanks to the President of that Society, who had so efficiently
discharged the duties of chairman.
Mr. Prosser said the Society existed to promote discussions upon all
subjects, irrespective of personal opinions. They were very glad to
hear Mr. Hirsch upon this subject. (Mr. T. Heath: What subject?) No
doubt they did not all agree with Mr. Hirsch, but they were proud to
have bad him amongst them that evening, and to see so large an
A supper was afterwards held in the back hall, where light
refreshments were served, and a few toasts with numerous speeches were
The Rev. J. A, Stuart proposed the health of Mr. Hirsch, who
remarking that as the Premier of New South Wales felt it an honour to
have his health proposed by Mr. Hirsch, so he felt it an honour to
propose the health of Mr. Hirsch, who had given up a lucrative
employment solely for the purpose of endeavouring to influence men to
his way of thinking.
Mr. Hirsch said Victoria" had only one city, and there was a
great weakness of public opinion outside Melbourne. There was nothing
to keep it alive but Debating Societies.
WE have formed the opinion that Mr. Max Hirsch is a Freetrader because
he is a Single Taxer. The logical deduction from Freetrade is Anarchy;
and it is doubly so when allied with the Single Tax; trebly so when
State control of social environments is condemned, as it is by Mr. Max
Hirsch. We understood from him that, as he would not lodge his
executive force in the State, he did so in "voluntary
organisation." That either means nothing in the larger affairs of
industrial life, or it means Trusts, Syndicates, Pinkerton guards, &c.
Why this horror of the State as the policeman?
Mrs. Commandant Booth, of the Melbourne Salvation Army, recently
published a most excellent article in praise of the Police force as a
social agency of the most Samaritan and at the same time highly
intelligent and ethical character, and we endorse every word of her
remarks. Prejudice against force, created by a manhood suffrage
Parliament, under the impression that license means liberty, is
unworthy of an enlightened people. Yet that is the ideal which Mr. Max
Hirsch sets up. It is the most thoroughly impracticable one of which
we can form any conception in these days when international comity is
concentrated by electric telegraphs into intellectual Collectivism,
whether you like it or not; while commercial inter-relations, with the
aid of swift steamers, come very close behind.
The complexity of man, the individual, is increasing every day; the
interdependence of classes and communities is making marvelous
strides. Look at Japan, for instance; already conqueror of China, and
believed by many to be able to give Russia a shake, to say nothing of
By the way, Mr. Hirsch lamented that the "poor farmer" had
to bear the burden of a tax upon matches, among other things.
Considering that he can buy, in any township in Victoria, Japanese
matches at 2d. per dozen boxes, this tax cannot be very burdensome. A
good deal of what Mr. Hirsch said as to those burdens was of an
extremely fanciful compound multiplication character, and even if
accurate it is most unwise to pander to class prejudices by
identifying any class of the community as specially subjected to
taxation imposed upon everybody. Even if it were true (which it is
not) that farming pursuits are the backbone of any country in these
days, farmers as a class are not separated from other interests. What
does the fact that there are 1,000 young men applicants now for 25
vacancies in the Police force mean? Probably more than half of those
applicants are farmers' sons. How many more are there in various
trades and occupations throughout Australia?
The problem of keeping Victoria solvent as a self-governing State has
been no easy one to solve, and Mr. Hirsch's crude proposals to resolve
a highly complex civilisation into Fiji elements of simplicity in
growing wheat, wool, &c., would relegate the colony to very much
the status it had in the old Henty days of whaling settlement on
Portland Bay. The fact that every nation in the world has been
Protectionist ; that most of the leading countries are so now; and
that not even Great Britain is wholly Free-trade, proves that
Protective principles are as essential to self-government as clothing
is to civilised man. It was a defect in Mr. Hirsch's address that,
although he attacked our mundane Cosmos in its two most essential
characteristics of aims and methods of Government, and methods of
taxation, both fiscal and territorial; and condemned its net results
as unable and unworthy to continue, yet he said not a word; about what
may be called the middle distance of methods of production and of
distribution. He had a good deal to say about middlemen's profits, but
what about their losses, and who pays for them? What does he suppose
created the crisis of 1893 but excess of Individualism?
Passing to the question of land taxation proposals it is quite a
mistake to say that land is the source of all wealth. We know that 99
people out of 100 believe that it is, and that delusion led Mr. Henry
George and all his disciples astray. Even if it were the source of all
wealth you would have to define where and whose wealth it is before
you can equitably tax it. "The world's market" is a phrase
which has more than one meaning. It means,' for one thing, world-wide
fluctuations of demand and price, creating instability of broad acres
values. But, apart from that, land has no other inherent value
anywhere than as a source of food supply; and the value of that
depends upon the value of the "life" which food sustains;
and the value of that life constitutes "wealth" in all forms
known to a luxurious civilisation, from diamonds to food grains.
Therefore, the farming class anywhere is at least two removes "sustaining
all other classes," even if a start from first principles could
be obtained. While, seeing that the farming class everywhere is a
shuttlecock of the " world's market, "in the last analysis,
it is absurd to build upon farming pursuits as the corner-stone of any
Great Britain is very markedly and even cruelly disdaining to do
anything of the kind at the present moment. And so far from looking to
land as a sustainer of a single tax it is specially relieving it of a
good deal of local taxation which falls upon other forms of realised
wealth. That is the proper course to take. Land, after all, is only
the working capital of the man who utilises it. He should not be
penalised in the slightest degree in that work simply because his
capital is spread out to all beholders, and is not concealed in
interest-bearing securities, or in some of the many forms of property.
Many a publican derives a greater profit from his bar than a squatter
does from his run; and a proposal to single-tax the former would meet
with our entire approval, until the State takes possession of all the
drink traffic, wholesale and retail, which it will do the moment that
the inevitableness of State Socialism, as the only salvation of our
civilisation, is understood. And the idea of taxing the natural or
unimproved value of land is quite a delusion. There is no such thing.
j A multiplicity of factors give value j to land, and none of them are
"natural" or unimproved.
It is possible to exempt some specified improvements, but a number
must remain, such as nearness to lines of traffic, or to a railway
station, and exempting improvements is really of the character of
lengthening the blanket at the bottom by cutting a piece off the top
to sew on to it. If improvements are exempt the corpus has to bear a
heavier tax, or the community throws away its assets. Take Mr.
Hirsch's special instance of the Equitable Insurance corner. If, as he
says, the community at large has given an unearned increment value to
that site, it has also given an unearned increment value to the
utilisation of it by a palatial building. The tax-paying capacity of
the property depends upon its earnings as a whole, and its assessment
for taxation should be similarly determined. It is only juggling with
words to do anything else. In the
Century Magazine for July, 1890, there is an article by Mr.
Edward Atkinson upon the Single Tax, a reply by Mr. Henry George, and
a rejoinder by Mr. Atkinson, who has by far the best of the argument.
He very pithily says: -" Land itself will not provide for its
own taxation." That disposes of the whole argument for the Single
Tax, which Mr. George bases upon the statement that -" Land is
not produced by man;" neither is the atmosphere, but it is just
about as foolish to talk of taxing the latter as the former apart from
the use which man the unit owner or occupier, and man the community,
make of both.