Alexander Hamilton on Land Values

William S. Rann

[Reprinted from The Public, 1900]

Here is an item for the admirers of Alexander Hamilton. In the Federalist, No. 12, on "The Utility of the Union in Respect to Revenue," advocating the adoption of the constitution because union would encourage commerce between the states which would otherwise interpose tariff barriers between one another, Hamilton says that the interests of agriculture and commerce "are intimately blended and interwoven," and adds:

It has been found in various countries that in proportion as commerce has flourished land has risen In value. And how could It have happened otherwise? Could that which procures a freer vent for the products of the earth, which furnishes new Incitements to the cultivation of land, which is the most powerful Instrument in increasing the quantity of money in a state-could that, in fine, which is the faithful handmaid of labor and industry in every shape, fail to augment the value of that article which is the prolific parent of far the greater part of the objects upon which they are exerted? It is astonishing: that so simple a truth should ever have bad an adversary, and it is one among- a multitude of proofs, how apt a spirit of ill-informed jealousy, or of too great abstraction and refinement is to lead men astray from the plainest paths of reason and conviction.

And again: Personal property is too precarious and invisible a fund to be laid hold of in any other way than by the imperceptible agency of taxes on consumption.

"Two truths are- told as prologues to the swelling act of the imperial theme," says Macbeth.

Strange that a man who could so clearly express two kindred truths should then proceed to advocate a revenue system which would restrict commerce and retard the increment of land values. Strange that even in that age he should fail to consider municipal as well as agricultural land values. And unfortunate that he should not have exerted his great influence to secure the total exemption of personal property from all taxation and the establishment of a revenue system which by freeing industry from all restrictions and raising public funds from a tax on land values would have tended constantly to increase at the same time the earnings of the individual and the earnings of society. Freedom of production increases land values and wages. Increased land values means more abundant social revenues. Increased wages means more abundant individual revenues. One hand washes the other.