NEGenWeb
Resource Center
On-Line Library

in size. Farms are growing larger and fewer. This tendency is decidedly marked in the older sections of our own state. For example, the number of farms in Nemaha county in 1910 was 163 less than in 1900; in Richardson county the decrease in number in the same decade was 318, and in Pawnee county 164. This growth in the size of farms does not completely show the tendency to concentration of ownership, as already suggested, for a single person may own many farms and keep adding to the number constantly.

      I know that farm management investigators are inclined to believe that the increase in the size of farms, and the consequent decrease in number, is due to a natural adjustment. When grain was harvested with a cradle many men were required to swing the cradles, but only a comparatively few to make the implements. Now that grain is harvested with wide-swath machines, fewer men are need to run the machines and more in the factories to make them. Large machinery has made it possible for one man to cover more ground. Fewer men are needed in the country.

      But we must not overlook the fact that many a field is joined to field from an investment motive, rather than from any conscious effort to attain a farm of a more efficient size. So long as this is true it will he difficult to tell how much of the increase in the average size of farms is due to the use of large machinery and how much to buying land for an investement (sic). Certainly the figures I have given show that a very large proportion of the land of the country is held in tracts much larger than the family size of farm, which the farm management experts tell us is the most profitable.

      Co-incident with the increase in the size of farms and the decrease in number has occured (sic) a sharp decline in rural population. In 1880, 70.5 per cent of the population of the United States was rural. In 1910, rural population had declined to 53.7 per cent. Rural population in the census classification includes the people of towns and villages of 2,300 inhabitants or less. This means that our farming population is considerably less than half of the total population of the nation.

      Urban population is growing much more rapidly than rural population. The disparity, therefore, is becoming worse. Between 1900 and 1910, rural population increased only 11.2 per cent, while urban population in the same period increased 30.9 per cent, or nearly three times as much. Five corn belt states, Ohio, Indiana, Iowa, Illinois, and Missouri, actually lost rural population. Twenty-eight counties in Nebraska lost rural population in that ten-year period. Three typical

old counties will serve as an example. In Nemaha county the loss in rural population was 15.6 per cent, in Richardson county 14.5 per cent and in Pawnee county 10.1 per cent. The solid southeastern part of Nebraska as far west as Hamilton county, excepting Lancaster and Seward counties, lost rural population. It is a striking fact that this is the region of the highest-priced land in the state.

      A steady and all-too-rapid increase in the proportion of farmers who are renters is another symptom that a land problem is upon us. In 1880, the proportion of farm tenants in the United States was 25.6 per cent. By 1910 it had reached 37 per cent. Nebraska in 1900 had 36.9 per cent of tenant farmers, and in 1910, 38.1 per cent. The increase was retarded by the opening of so many Kinkaid homesteads in the sandhills; that increase held up the proportion of farms operated by their owners. My guess is that the decade 1910 to 1920 will show a more startling increase in farm tenantry, in both state and nation, than has ever been shown in any other decade.

      But the average percentage of renters in Nebraska as a whole does not tell the story well. Our older counties have a much higher percentage than the average. Seven counties in this state have more than 50 per cent of renters on farms. They are Fillmore, Gage, Hamilton, Phelps, Polk, Thurston and York. Thurston county is peculiar, of course, in that the land there belongs to Indian owners who lease it to white farmers. Thirty-five other counties have between 40 per cent and 50 per cent of tenants. Indeed, all of the older counties of the state, where land is high in price, have a large proportion of renters.

      We are all acquainted with the larger effects of farm tenantry. The frequent moving interferes with community development along permanent lines. A renter cannot and does not take as deep an interest as a land-owning farmer in the institutions of the community--schools, churches, roads, co-operative enterprises--and as a consequence those communities in which renters predominate are likely to lag in these matters. Apparently, renters grow about as good crops as do land-owning farmers. One reason for this is that they have to hustle, because they must divide with the landlord. But they certainly do not have so good an opportunity to live an abundant life.

      The greatest evil and injustice of tenantry is the drain it makes on the rural community. From every rented farm a third or a half of the crop, or its equivalent in cash, must go to someone living off the farm. So far as the farm and the rural community are concerned the effect is as bad if the landlord lives in the county seat or a nearby

village as if he lived in London or Paris. It is perfectly obvious that a community of renters cannot have as much money for their own advancement or the upbuilding of the community as does a community of land-owning farmers. The effect of this drain of rents can be measured accurately by farm management surveys, and has so been measured by the Missouri Experiment Station.

      At the rate of increase in farm tenantry which has taken place in the past 30 years we may look forward confidently to a time when all of the farmers of the country will be paying rent to landlords--if nothing is done to stop the tendency. That is the situation in England and Scotland today. It is a mistaken idea, too, to believe that those countries always have been that way. The purchase of land for speculation and investment was a greater factor in land monoply (sic) in those countries than the gifts of land handed out to favorites by ancient rulers.

      But it is not alone of farm land that I would speak. Farm land monoply (sic) does not begin to compare with monoply (sic) of land in cities and the monoply (sic) of forest and mineral lands, particularly from the standpoint of values. Thirteen families out of the 1,100,000 families in New York city own nearly one-fifteenth of the assessed value of the land in that city. The land owned by those thirteen families is worth $3,184,441,505. This is equivalent to the value of 24,878 sections of farm land at $200 an acre. That would make 691 townships, or more than 28 counties of the size of Seward and York counties in Nebraska. Equally glaring examples may be found in almost any of our great American cities. Myers "History of Great American Fortunes" gives a good treatment of this phase of our subject.

      A public report made a few years ago by the bureau of corporations shows the vast holdings of timber lands in the United States. According to that report, 1,694 timber owners hold in fee one-twentieth of the land area of the United States, or an area equal to two and one-half times the size of New England. Sixteen men hold 47,800,000 acres. Of the 82,500,000 acres granted to the Pacific railroads in the sixties, they still own about 40 per cent.

      Similar concentration of ownership obtains in mineral lands. Of the great coal deposits in Pennsylvania, West Virginia, Ohio, Indiana, Illinois, Missouri and Colorado, the greater part is owned by the same men who own the railroads. Community of ownership between the railroads and the coal companies is prohibited, but that does not prevent community of interest. The great iron ore deposits of the country are owned very largely by the United States Steel Corporation. Andrew Carnegie testified before a congressional committee in 1912 that there could be no new competition in the steel business, because the steel trust owned 75 per cent of the best iron ores in the

country. The copper trust is in the same position with respect to the deposits of copper in Utah and the Lake Superior region.

      It is needless to go farther. Those who care to pursue the study of land monopoly in the United States should read "Privilege and Democracy in America" by Frederic C. Howe, at present commissioner of immigration at the port of New York.

      Numerous remedies have been proposed for the symptoms of the land question as they have been manifested in rural communities. Not a few persons have fallen into the error, that desire to farm, is synonymous with ability to acquire a place to farm. They have said, therefore, that if social conditions are made right in the country, there will be no rural depopulation. A common belief is that by making tenant farmers prosperous thru educating them to better methods of farming and by helping them to buy and sell more advantageously thru co-operation they can become able to buy farms.

      Now, I am an enthusiast for every one of the things that have been advocated to cure the symptoms of the land question. I am employed in the promotion of a movement to advance the three-fold purpose of education, co-operation and better social life in the country. Yet I realize fully that this movement will not in itself solve the land question.

      Can anyone think of a decade in the history of the country when the condition of farmers was more improved thru new conveniences and comforts than in the decade between 1900 and 1910? At the beginning of that decade there was hardly a rural mail route in the state of Nebraska, and very few rural telephones. By the end of the decade most of the farmers had both rural free delivery and rural telephones.

      But what was the effect? We already have seen that rural population never before declined so rapidly, never did the proportion of farm tenants increase so rapidly or the number of farms decrease so much. The explanation lies in the fact that the price of land outran the increased advantages, and made it harder to acquire land for farming.

      Statistics published by the United States Department of Agriculture showed that the increase in the purchasing power of the crops grown on an average acre in the United States between 1899 and 1909 was 54 per cent. Farmers were gaining an advantage in prices that should have enabled tenants to become land owners and young men to acquire farms.

      But hold! In the same time, or to be exact between 1900 and 1910,

the price of farm land in the United States increased 118 per cent on the average-an increase in the net purchasing power of crops of 54 per cent and an increase in the price of land of 118 per cent. In Nebraska the increase in the net purchasing power of crops could not have been much more than the average for the country as a whole, but the price of land increased 231 per cent in the decade. In both state and nation the price of land outran the increased income from land.

      Just so may we expect rural improvements and better prices to result. They are reflected at once in the value of land, and usually with an increasing discount into the future. Rural prosperity may, therefore, have the very anomalous effect of causing a decline in rural population, an increase in the proportion of renters and a hastening of the tendency toward concentration of land ownership.

LAND--THE HERITAGE OF THE RACE

      Before I pass to the discussion of the remedy for the land problem, let me call attention briefly to the nature of land. It is the heritage of the race, a natural resource. Titles to land rest upon appropriation. No man has produced land. Somewhere in the past the title rests upon merely taking possession and holding possession. Land differs, therefore, from property the just title to which rests upon production, or the production of an equivalent that has been traded for the property owned.

      Let me illustrate the difference between property in land and property in goods in another way. Values that attach to land, aside from improvements on or in the land, are community values. What would the ore lands held by the steel trust be worth if this were a nation of only 10,000,000 people, instead of 100,000,000? What would the coal lands be worth, or the timber lands? What would the highest-priced lot in the city of Lincoln be worth if nobody lived within fifty miles of it? How much would the best farm in the heart of Nebraska be worth if there were no settlement within 100 miles?

      It is population, markets, transportation systems, roads, schools, stable government and all of the other factors of civilization that make land values. An individual land owner is responsible for the value of his land, aside from improvements, only as he is a part of the community. And if he is not a part of the community, and has had nothing to do with its development, his land goes right on increasing in value just the same. Buildings decay, goods become moth eaten and rusty and animals become old and die, but in an advancing community the price of land keeps right on advancing.

      Fundamentally, the price of land is based upon the rent it will yield. The price is the capitalization of the annual rent. But in a

developing community there is always a discount into the future. Future returns are anticipated, so that the price of land in an advancing community always is in excess of the present returns capitalized at the going rate of interest. Thus, if land is yielding $5 an acre a year and the going rate of interest is 5 per cent, the price of the land will not be $100, but some figure considerably above $100.

      There are two reasons for this. In the first place, the safety of investment in land leads men to own it at a lower rate of return than they are willing to accept from other property. In the second place, the value of land in an advancing community is constantly increasing. The margin of value above that warranted by present returns is capitalized hope. This margin often is called speculative value for want of a better term.

      It has been found in farm management surveys made in cornbelt states that farm lands give a net return of about 3.5 per cent on their selling value. If the going rate of interest is 6 per cent this means that about 40 per cent of the selling price is "speculative value" or discount into the future. To buy land under such conditions a farmer would have to have enough cash to pay 40 per cent of the purchase price before the returns from the farm would carry the interest on the remainder of the debt.

      This condition will obtain so long as land ownership gives an opportunity to reap unearned increment. And even after land ceases to advance rapidly in price, a wide margin remains between the selling once and the capitalization of present returns. Thus the lands of England and Scotland for many years before the war, yielded about 3 per cent on their selling value.

      But poor men--renters and young farmers--cannot afford to own land with a wide margin of value based upon expectation. They cannot live and pay interest on increments yet unrealized. The margin of unproductive value in land will continue, therefore, to cause land ownership to be concentrated in the hands of men able to hold it for the rise in value or social distinction. That margin will cause a decrease in the number of land owners and an increase in the proportion of tenants. It will tend inevitably to rural depopulation far beyond the safety point from the standpoint of food production. It is the margin of unproductive value that drives men from the farms and makes renters of those who remain.

      Any effective and permanent solution of the land problem must go to the roots of the matter. It must he radical. Two radical remedies have been proposed--land nationalization and the single tax. Under land nationalization the government would buy the land, just as it is proposed to buy the railroads. The single tax method contemplates a shifting of taxes from personal property and improvements to land

values and a gradual increase in those taxes until practically the full rental value of the land is absorbed in taxes. That, of course, would leave the land practically no capitalized value aside from the improvements upon it.

      Between land nationalization with a fair system of leasing, and the single tax in complete operation, when both were fully established, I can see very little difference. But the approach thru the single tax is very much more practicable. Land nationalization would be a gigantic task. It would cause a revolution in our industrial life. On the other hand, the single tax can be applied gradually, thru a generation or more. It would leave titles where they are, with secure possession assured so long as taxes were paid; but an increasing proportion of the ground rent would go to the government.

      It would not be necessary to levy a tax upon land equal to the ground rent in order to begin realizing the benefits of the system. The first step toward relieving personal property and improvements from taxation and placing heavier taxes on land would be to discourage the holding of land for speculation and investment. It would cause land to he placed on the market, and that would tend to bring the price of land down more nearly to its value based upon present production.

      As I have shown, the unproductive margin in the price of land is the tenant-making, land concentrating and rural-depopulating factor.

Improvements should be encouraged. Land rather than improvements should bear the tax

---

80

PROCEEDINGS OF THE

      By placing a tax upon land sufficiently large to hold the ground rent going into private pockets down to a stationary figure, there would be no longer a margin of unproductive value. The basis for capitalized hope would be gone. In short, future increments in the value of land, which are produced by the community, would be taken by the community.

      My point here is that the benefits of the single tax in stopping rural depopulation and concentration of land ownership and making it possible for renters to acquire titles to land can be reaped without going so far as to cover all, or practically all, ground rent into the treasury. Nevertheless, I believe that ultimately all ground rent should be taken by the public, for it belongs by right to the public. To allow it to go into private pockets is to allow one part of the community to secure wealth at the expense of another part.

      The land question is bound to be much more an issue following the close of this war than it ever has been before. When the Civil war ended and the soldiers returned to find their places filled, they turned westward in large numbers and took up homesteads. But where will our returning soldiers go? The same question is being asked in every country now at war.

      The boys who have gone out to fight for their country may ask some very embarrassing questions when they return. Unless we set about to make the land the heritage of the race in reality, our soldiers well may think that instead of fighting for their land they have been fighting for someone's else land--for the holders of the title deeds will for the most part remain at a safe distance from the trenches.

      Our national aim in this war is to make the world safe for democracy. But political democracy is never safe where industrial democracy does not exist. Should we not prepare to go to the very heart of the matter and establish conditions in which men shall have equality of opportunity? Should we not proceed to adopt a system in which the privilege of collecting what belongs to the whole people cannot be bought and sold? It is not the time to ask "How would this affect my personal fortunes?" Rather it is the time to lay aside everything selfish and work for the cause of human brotherhood based upon justice and equality of opportunity.

      I believe many things have been said here that would tend to make a man think. Some advocate large farms and some are contrary minded. In New Mexico in one county twenty-seven men own that whole county and tenants are supposed to do the work, and they work on the following basis: They are financially indebted to the land holder and whenever they work off the debt they are out of a job. Then the next man comes along, becomes indebted to the land holder, and works until he gets out of a job. It is not likely that anybody in the United States would like that system; neither would the farmers of Nebraska defend the idea of one man owning from 50 to 100 sections of land.

      One of the greatest drawbacks to the tenant system is that it does not afford a stable and permanent rural population.

      One of the severest drains on the farmers of Nebraska has been the land agent and I can see no excuse for his existence. These men just shoulder a burden upon the succeeding fellow. If we could get together whenever we wanted to sell and sell without the aid of the land agent we would be a great deal better off, in Cheyenne county, I was told, there is lots of land that the land agent picks up and in six months or so he sells it for twice what he paid for it. Every time land is sold by an agent, an additional commission is added to its selling price. Gentlemen, who is benefited by the sale of the farms under such conditions, the land agent or the land owner? So far as my land is concerned I have lived on it for forty-eight years. It was homesteaded and so far as that farm is concerned, it is a place for me and my family to occupy and call home, and serves the purpose as well at $10 per acre as it would at $250.

      Gentlemen, there is so much in this subject for consideration this afternoon that we can not mention it all. We have a system of business in this country whereby certain members of our community, especially in cities, can charge what they please for their goods and services and at the same time put a price on our products, making it possible for the man in business to accumulate money faster than the farmer. It makes it possible for men in business to come out and buy our land. They will buy the farms away from the farmer. Hundreds and hundreds of farms in Nebraska are owned by men

living in cities. Why should the land be owned in that way? I don't see why men who are in a position to do these things, should be given a free rein. I am absolutely opposed to it, and I am opposed to any system that will permit any man or set of men becoming millionaires by the purchase or owning of land. If we could bring up a greater number of people on a plane of equality, we would be doing a great thing.

      Men and women from foreign countries have come to the United States for the very purpose of being rid of these conditions of oppression. They were under the impression that in the United States they could do this. Because someone is less efficient is no reason why he should be a slave to someone else. That is the principle in all these cases and matters of land ownership.

      The questions that Mr. Herron brought out, of control of mineral and lumber lands and the control of anything along that line, are very important and interesting. We made a very serious mistake in the past and we must begin to rectify it. In my county, Saunders, what were we doing in the early days? The Union Pacific railroad came along and got every other section for twenty miles and then the Burlington came along on the other side of the county and they got every other section. That was not all. The Union Pacific built a branch through the county and we gave them $140,000 for doing it. We have been giving away our lands to these great centralizers. But the big question arises, not how we came to do it, but how are we going to change it. What is the solution? I believe these things need much discussion. If no one else takes it up I hope this organization will give a whole day to it at its next meeting.

      As I have said, I don't see that there is a very bright prospect for the young man starting out and paying from $200 to $250 per acre for land. I don't see how he can do it and make a good profit when he has a high rate of interest to pay to the land owner. Let us get together on these matters.

      We are in an awful turmoil at present in national affairs, with everything unsettled. After the war is closed, which we confidently expect will happen soon, there will be many of these questions to be answered, and I think the farmer should keep himself informed on these matters.

---

© 2002 for the NEGenWeb Project by Pam Rietsch, Ted & Carole Miller