.

In 1902 Mr. Ralston was the American Agent having in charge the case of the Pious Fund of the California! against Mexico -- the case to open the Hague Permanent Court of Arbitration -- and as such the Government published his report. In 1003 he was Umpire of the Italian-Venezuelan Mixed Claims Commission and shortly after edited "Venezuelan Arbitrations of 1903" and a "Report of the French-Venezuelan Mixed Claims Commission under Protocol of 1902." In 1910 he wrote "International Arbitral Law and Procedure," and in 1922 "Democracy's International Law and Procedure." In 1926 through the Stanford University Press he published "The Law and Procedure of International Tribunals" and in 1929 "International Arbitration from Athens to Locarno." In 1930 the Ingram Institute published his "An Unshackled Civilization" and in 1931 "What's Wrong With Taxation?" (First Edition.) He defended Samuel Gompers, John Mitchell and Frank Morrison in the Huck's Stove and Range litigation. In 1878, when a compositor, he had represented the International Typographical Union at the Paris Exposition and in Italy. Mr. Ralston was President of the Hyattsville (Maryland) Commissioners in 1892, when was adopted fully for town purposes the plan of exempting improvements and personal property from taxation. In Maryland his greatest work was in drawing the present constitutional provision with reference lo taxation and in being the co-author of the best referendum provision in the United States. He was for twenty-six years attorney for the American Federation of Labor. Mr. Ralston has been lecturing and conducting a Seminar on International Arbitrations at Leland Stanford University, Palo Alto, California, since 1928. INGRAM INSTITUTE,-- Frederick F. Ingram, President

PREFACE

The ultimate truths which, in the opinion of this writer, control the operation of taxation within the States of the Union, have not received adequate discussion in any work appearing for a long time. It is true there have been published, following sound theories, short pamphlets, as well as treatises with a technical tinge and making little popular appeal. Important books have also appeared, discussing the land question and the relation of taxation to it. The reverse approach, -- with taxation in the foreground, -- has been much neglected since the work of Thomas G, Shearman, published nearly forty years ago, entitled "Natural Taxation."

Meanwhile, certain economists have given scanty and often grossly careless and inadequate treatment of the subject of land-value taxation. Their productions have generally revealed, a want of appreciation of its fundamental and inescapable principles. Their errors have received little analysis, and have for want of exposure influenced much current thought among legislators and taxing authorities. It is in an endeavor to place local taxation upon a firm and logical basis that this book is written. The hope of the writer is that the following pages will serve to clear up some of the mysteries of the subject, and to reduce it to a logical formula, appealing to the understandings of men.

It must be recognized by all familiar with the progress of recent study into the closely related subjects of taxation and the duties of landholders to the government that mankind owes a debt of gratitude to Henry George, author of i>Progress and Poverty, for the first clear indication of the way out of the morasses into which the world from time to time sinks. He has been justly styled one of the handful of great philosophers since the days of Plato. To his influence the writing of this book is to be attributed, though his course of argumentation has not been followed.

The writer is under deep obligation to Miss Opal V. Ralston, of San Francisco, and Dr. William G. Eggleston, of Oakland, California, for their painstaking and critical examination of the manuscript of this book before it took final form for the printer. Acknowledgment is also gratefully made to the Ingram Institute of San Diego, Calif., for facilitating this publication. -- JACKSON H, RALSTON. Palo Alto, Calif,, October, 1933.

FOREWORD

The prime purpose of this book is to deal with the subject of taxation. Examine critically the Standard Dictionary definition: "A tax is a compulsory contribution levied on persons, property or business for the support of the government." A bold and brutal statement.

Government should be but a co-operative institution developed for the better doing by all of that for which by reason of their weakness individuals separately have not the power to do for themselves. This we believe to be the only true foundation for its existence. We would have government made for the first time a real co-operation with the amounts paid to it an exact return for benefits experienced by the individual under its protection, and returned again to the individual according to the privileges he enjoys. -- JACKSON H. RALSTON.

CHAPTER I
INTRODUCTORY

Our Task

We have set before us a task of no small dimensions, that of bringing to light the true relations between the state and taxation. In pursuing this end it will be necessary to touch briefly upon the natural functions of government and to consider at length whence such an organism should derive its sustenance. Because this riddle has not been solved in a proper manner, we will find our civilization distorted through the workings of devices of its own creation. The first great duty of citizens of the commonwealth, we believe, is to correct the mistakes in this regard which it has persisted in making, and thus attain to a fuller liberty than we have known in the past.

Law As Governing All Nature

It is our belief that as surely as law directs and controls all the material operations of nature, just so surely are human affairs as affected by artificial institutions controlled by law superior to all ukases, decrees and statutes. Any violation of such law carries with it an inescapable punishment.

Let us start with law as controlling material things. We have no trouble in recognizing that there are certain great natural laws permeating the universe, such as those of gravitation, conservation of energy and the like. We know that the attributes of matter are equally universal. Everywhere fire burns and water drowns. The constant study of the physicist is to ascertain the laws directing and governing even the atom.