Land Values and the Unearned Increment

Joseph Hyder: The Case for Land Nationalisation

Chapter VI: Land Values and the Unearned Increment

The ordinary progress of a society, which increases in wealth, is at all times to augment the incomes of landlords–to give them a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer as it were in their sleep, without working, risking or economising. What claim have they, on the general principles of social justice, to this accession of riches?
 John Stuart Mill, Principles of Political Economy, Book V., Ch. 2, § 5.

Will you bandy accusations, will you accuse us of overproduction? We take the heavens and the earth to witness that we have produced nothing at all. In the wide domains of created nature circulates no shirt or thing of our producing. He that accuses us of producing, let him show himself, let him name what and when, We are innocent of producing; ye ungrateful, what mountains of things have we not, on the contrary, had to consume and make away with ! ^Mountains of those your heaped manufactures, whatsoever edible or wearable, have they not disappeared before us, as if we had the talent of ostriches, of cormorants, and a kind of divine faculty to eat? Ye ungrateful – and did ye not grow under the shadow of our wings? Are not your filthy mills built on these fields of ours; on the soil of England, which belongs to – whom think you?
 Thomas Carlyle, Past and Present.

I have a bit of lowland at Greenwich, which, as far as I can see anything of it, is not money at all, but only mud; and would be of as little use to me as my handful of gravel in the drawer, if it were not that an ingenious person has found out that he can make chimneypots out of it; and every quarter he brings to me £15 of the price of his chimney-pots, so that I am always sympathetically glad when there is a high wind, because then I know my ingenious friend’s business is thriving. But supposing it should come into his head, in any less windy month than this April, that he had better bring me none of the price of his chimneys? And even though he should go on, as I hope he will patiently (and I always give him a glass of wine when he brings me the £15), is this really to be called money of mine?
     And is the country any richer because, when anybody’s chimney-pot is blown down in Greenwich, he must pay something over to me before he can put it on again?
John Ruskin, Fors Clavigera.

It will be thought an intolerable thing that men should derive enormous increments of income from the growth of towns to which they have contributed nothing – that they shall be able to sweep into their coffers what they have not produced – that they shall be able to go on throttling towns, as they are well known to do in some cases. It is impossible to suppose that the system will not be vigorously, powerfully, persistently, and successfully attacked.
 Lord Morley, speech at Forfar, October 4, 1897.

Those who toil not, neither do they spin, whose fortunes have originated in grants made long ago for such services as courtiers render Kings, and have since grown and increased while their owners have slept, by the levy of an unearned share on all that other men have done by toil and labour to add to the general wealth and prosperity of the country.
 Joseph Chamberlain, speech in 1883.

MUCH learned controversy has taken place concerning rival theories of rent, Ricardian and other; but the main facts, which are common knowledge are sufficient for all practical purposes. Whatever may be the factors, which determine its amount, economic rent may be simply defined as the annual price, which is paid for the use of land. 

But the question at once arises, does the term land include or exclude the improvements placed upon it, or made in it, in the course of the centuries since it was reclaimed from its wild state? For, if it be taken to exclude them all, then economic rent either docs not exist at all in the case of some agricultural land, or is at any rate considerably less than the rack-rent. If, for instance, we imagine that all farm buildings were burned to the ground, all land drains filled in, all farm roads destroyed, all fences rased, and the land returned to a state of nature, it is easy to see that, to bring it back to its present state, it might sometimes cost as much as, or nearly as much as, or even more than the whole of the amount of its present market value. 

Arguing this way, therefore, we find that it is often claimed by apologists of the landlord system that agricultural land is a manufactured article, and that economic rent of such land is a figment of the fancy. They contend that a farm is a manufactured product, and that the profits of the landlord are the profits of his ownership of the improvements, which have been made in it rather than of his ownership of the site. It is well, however, to note, in passing, that even those who deny or minimise the value of unimproved land in the case of farmlands, are constrained to admit that there is a substantial unimproved value in the case of town-land. Upon examination it is equally clear that agricultural land values are a substantial reality too. 

It is quite true that they are so mixed with improvement values that it may be difficult, or even impossible, to apportion them with mathematical exactitude. Fortunately, there is no necessity for doing so. For all practical purposes improvement values merge into land values after the lapse of time, and, even if they did not, that would be no argument in favour of private property in land. If A’s dog eats B’s chop, B cannot claim the dog as his property merely because he cannot extricate that which was unquestionably his property before it became an inseparable part of the dog itself. If A’s land swallows B’s improvements, the land does not become B’s property on that account. The sovereign right of a community to the control and ownership of the whole of the natural resources of the country upon which it has established itself, can scarcely be set aside because individual members of the community have improved them. When it decides to resume that control, as it has the right as well as the power to do at any time, it should of course compensate any interests, which have grown up with its permission. It should compensate for the improvements, and also for the land, paying the true market value at the time of the resumption. Upon doing this, it would do no wrong whatever. And, acting thus, it would act much more justly than private landlords themselves have done. 

For, by their practical (though not absolute) ownership of land, they have seized countless millions’ worth of improvements, which have been placed upon it by their tenants, and they have done so without paying a farthing in compensation for them. Those improvements have become theirs as part of the rent of the land, under an unfair system, it is true, but under which they have not hesitated to assert their so-called rights of ownership to the fullest extent that the laws, made by men of their own class, have allowed. 

In considering what is land value and what is improvement value, the element of time must always be kept in mind. The practice of the State in regard to patents or copyrights is one illustration. An inventor or author is given a certain definite time of absolute ownership in an invention or book, and in the course of that time he is presumed to be able to reward himself for his brainwork in bringing them into being. At the end of that time his exclusive right of ownership ceases, although the value of his work continues. He has had his reward. And so with a house constructed by a tenant under the leasehold system. In consideration of a low fixed rent payable for a certain term of years, he is supposed to be able to recoup himself for his outlay, and, if the term be of reasonable length, there is no doubt that he does so. 

In the same way it must be assumed that, beyond a certain moderate period, as to which no hard-and-fast line can be drawn, the value of improvements (whether made by the owners, or made by the tenants and legally confiscated by the owners) merges into the value of the land itself. 

To this extent, not for the purpose of confiscating anything, but in order to discover the true character of land values, there is no reason why the principles of the leasehold system should not be applied to agricultural landlords themselves, by assuming that their long possession of the land has enabled them to recoup themselves for any expenditure they or their predecessors incurred in draining, or fencing, or road-making, or the erecting of farm buildings, where such improvements have been made for more than a certain time, as, for instance (say) fifty or sixty years. 

In that time they have charged rents, which have probably covered both the interest on the capital sums expended, and a sinking fund as well for the repayment of the principal. The tenants’ rents have therefore paid for all the landlord’s improvements, which were made prior to (say) the last two generations. And not only this, but, in most cases, they were paid for at the time by the saved accumulations of past rents. For the landlords, therefore, to claim that all improvements are true improvement values and not land values, is to make a claim which cannot for a moment be sustained. Deducting, therefore, only the value of those improvements of more recent construction, as to which the rents charged may not have recouped the original cost, we find that the real land value even of agricultural land is much greater than it is usually assumed to be. 

If a professional valuer were called upon to separate unimproved from improved values, he would of course look at the matter in a different way. In the case of a leasehold estate, for instance, where the leases have fallen in, and all the houses have reverted to the ground landlord, a valuer would count house values as improvement values. But in reality they are rent of land. They are now the landlord’s property, although they were made by the tenant, simply because the land belonged to his predecessor in title when the leases were granted. They represent rent of land, pure and simple. They are rent as surely as is the annual ground rent that is paid in cash. The fact that they were paid in kind and not in cash does not affect their real character in the slightest degree. In the same way, and for similar reasons, the real economic value of agricultural land includes the value of many improvements, which have been long since paid for out of the rents received, although their usefulness still continues. 

The exact amount of economic rent, which is enjoyed by the landlords it is impossible to tell. All calculations so far made are guesswork. We must await the results of the national valuation for an approximate record, and even that valuation will exclude a very large amount that is, strictly speaking, tribute payable for the use of land. Whether the total tribute amounts to £100,000,000 as is affirmed by some whose palpable object is to make it appear comparatively small; or £250,000,000, as is affirmed by others who are apt to err at the other extreme; or, as is more likely, some amount between the two – it is sheer tribute and nothing else. It represents no goods supplied and no services rendered. It is simply the price, which a landless nation pays to a minority of its members for their permission for the rest to work and live. 

As such it is unearned income. Of course, the money which bought the legal right to appropriate land rent for private purposes may have been, and undoubtedly often has been, money that was itself earned. But that is only to say that earned money has been invested to secure the power to take unearned money – unearned, that is to say, by its new owners. This is no condemnation of men for buying land so long as the law permits them to do so. Whatever condemnation there is applies to the system, not to the individuals, who naturally take advantage of it so long as it exists. 

The Simple Case of Minerals

A man buys the mineral rights of an estate. He may have honestly earned every penny of the purchase money by his own labour in the rendering of valuable services to his fellows. It represents work done by himself. But when he has invested it in buying a coalfield everything changes. He is no less worthy a man than he was before, but the character of his income is altered. He need not pay a farthing toward the cost of sinking the shaft, or of providing machinery for cutting the coal, or hauling it to the surface. If he does, it is as a capitalist and not as a landlord, and in such a case (but such cases are extremely rare) he is entitled to a reasonable return on his outlay. Acting as landlord, his function is simply this: to provide no working capital at all, and to take no part in the work of the mine, but to charge a certain dead rent, and a royalty on all the coal won by the capital of his tenants and by their employees. The question, therefore, is. What does he give for the money he takes? And the answer is, obviously and indisputably, absolutely nothing. He provides no capital, he renders no labour, and it certainly cannot be claimed that he provides the coal. Nature supplied that, perhaps before the first man was born. He does nothing and he supplies nothing, and, in strict justice, he is therefore entitled to nothing. The dead rent, the way-leaves, and the royalties, which are the perquisites of his position, as legal owner of the raw material, are entirely unearned by him. They belong to the rightful owner of the coal, the community, and not to him. And they ought to be received and spent by the community, and not by him. 

Mineral royalties are perhaps the simplest case of unearned wealth, but the same reasoning applies equally to the ground rent of a building site, or the economic rent of a farm, and to a rent which is payable for the landlord’s leave to shoot the game in the woods, and the deer or the grouse on the moors, or to catch the fish which swim in the rivers and the lakes. 

Unearned Increment
And now we come to a term which has given rise to much controversy, the expression “unearned increment,” which was used by John Stuart Mill to describe the increased value of land which arises from causes in which landlords, as such, have taken no part. That land rises in value because of an increase in the population or because of public expenditure, or even because of private expenditure on adjacent sites, is a fact that is not, and cannot be, denied. But, it is said, other property besides land rises in value for reasons quite outside anything that its owners may have done. Land, it is said, is not the only thing, which is liable to an unearned increment. This is, of course, quite true. None the less, there is a vital difference between the two cases, which is generally overlooked.

A man buys a picture. After a time he may perhaps sell it for ten times the sum it cost him. The difference is an unearned increment, but it is an unearned increment of an earned value. The original value of the picture represented the actual labour of the artist who painted it. That is the starting-point. And so it is with all products of human labour, but not with land. The same investor may buy a piece of land, and after a time he may sell it for ten times the sum it cost him. This is unearned increment of a value, which is itself unearned. That makes the whole difference between the two cases. The unearned increment of land is therefore a thing by itself, and in no respect differs from the original value to which the increment is added. The right of the community to the unearned increment of land exists simply in virtue of its right to the whole value that attaches to natural materials and opportunities. The man, therefore, who buys a first edition or a work of art that rises enormously in value because of its rarity, is in a very different position from one who buys the first necessary of life. For the former hurts no one by his ownership. The profit, which the market may give him he may properly call his. But the latter puts himself into a position to levy a toll upon the people for the use of the very first means of life itself. 

Unearned Decrement
Again, it is said, there is an unearned decrement in land values as well as an unearned increment. Of course there is. The cultivation of vast virgin wheat-fields on the prairies of the United States sent British farm values down with a run, for a time, just as the development of our towns has sent urban values steadily and continuously up. Some landlords have lost, others have gained; but landlords as a class are certainly richer than they were at the beginning of the agricultural depression. If all the land had been nationalised on the values that prevailed then, the State would certainly not have been the loser by the transaction.

All values are liable to fluctuation. Sometimes the movement is upwards, and sometimes it is downwards. Every owner of property takes the profit of the one movement, and suffers the loss of the other. A landlord may reasonably object to the State appropriating the increment, while leaving him to bear the burden caused by the decrement. But the whole of the present argument is in support of a proposal that the State should relieve him altogether of the ownership, paying him fairly what the land is worth when it is taken. Consequently all talk about the inequity of discriminating between increment and decrement is entirely irrelevant. 

Development Expenses
It is sometimes urged that landlords themselves often spend money in laying out their estates for building purposes, by making roads and so on. For all such expenditure they are entitled to a return. If a man takes a piece of land worth £1,000 as agricultural land and develops it by an expenditure of £10,000, and the land then sells for £20,000, he is entitled to regard £11,000 of that as his own property, plus a reasonable profit upon his outlay. All the rest is due, not to him, but to the community as a whole. He is not entitled to the whole of the increment simply because he has himself created a part of it. In doing so he has acted as a capitalist, not as a landlord. The fact that he expended his capital upon his own land makes no difference.

The Community’s Right To Land Values
Here it ought to be noted that the community’s claim to the value of land is not due to the fact that it is its own demand which creates the value, or to the fact that public expenditure adds to it. For the value of all things whatsoever depends on the public demand; yet some values are clearly legitimate private property. And not only public expenditure, in adding to the amenities of a whole district, but private expenditure on other sites is also a factor in creating land values. The construction of a railway by a private company sends land values up, and men who never spent a penny in railway construction reap the benefit. A man opens a factory, and building values go up because a new demand is created for house-room. Neither the railway company nor the private capitalist can claim a share in those land values which have come into being in particular places because of their enterprise. And, similarly, it is not a valid claim that land values belong to a community merely because of public expenditure. The claim is much broader than that.

The right of the community to the value of land arises simply out of its right to the land itself. By moral right the land belongs to the community because of its peculiar characteristics, because it is indispensable and un-makeable. Therefore, whatever value it has should be public property. That value may go down, or it may go up, or it may remain stationary. It is all the same. It should be public revenue, whatever it is, and however it may arise. And the only way to secure it is for the community to own the land, and thus to secure the whole of the profits which accrue from its ownership. The proposal to secure those profits without public ownership, by the taxation of land values, is dealt with elsewhere. 

Some of the biggest fortunes in the world have been made out of speculation in land. Let us therefore examine what land speculation is. It is the buying up of land in the expectation of an increment in its value, and it inevitably involves the withholding of it from use until that increment is realised. Future profit, not present income, is the sole object, which the speculator has in view. He holds on as long as he can, and where, as in our own country, he only pays rates on rent received, he can afford to hold on, as he only foregoes the interest on his investment. It is a deliberate gamble with the needs of the community for the first necessary of life. When the profit comes to him at last, it is the profit of a gambler – not the reward of labour. He has done nothing but wait. 

Of course, successful speculation in land requires the exercise of a certain amount of judgment. But in exactly the same way a gambler on the racecourse also requires judgment. Some men can tell better than other men what the chances of a particular horse may be of winning a race. But when, through superior astuteness in judging the probabilities (leaving sheer luck out of the question), he wins his bet, his winnings are in no sense earnings, and they are obviously made at the expense of men less astute (or less lucky) than himself. A land speculator may show wisdom in judging the probable growth of a town, and, by securing the land in a particular place, may achieve wealth, partly by reason of his own foresight. But he has done nothing to create it, and he has probably done much harm, by using his ownership as an instrument of extorting values from the people who have themselves created the whole of it, as well as in restricting opportunities for the employment of labour and capital in the meantime. 

But, generally, no foresight of any kind is required, for land values are a growth rather than a creation. The supply of land being inexorably limited by the law of Nature, and the demand for it being an ever-increasing one, the aggregate price charged for it is bound to show the same steady upward tendency. A few examples of the unearned increment may now be given. 

Hallam says, in his Europe During the Middle Ages, that arable land let in the thirteenth century for sixpence an acre, and meadow land for twice or thrice that sum. In the fourteenth century it was constantly obtained for twice or thrice that sum. But in the fifteenth century, says Thorold Rogers, it was valued at twenty years’ purchase. And by the middle of the seventeenth century the rent of land had increased twentyfold since the Middle Ages. Arthur Young estimated the value of agricultural land in England at £16,000,000. It is much more than that now. 

In the churchyard of Claverdon, Warwickshire, there is a monument to one John Matthews, who died in the reign of Henry VII., leaving land in the parish to defray the cost of necessary repairs to the church; and from time to time the rental of these lands has been inscribed on one side of this monument. Thus in 1617 it was £4, in 1707 £12, in 1825 £78, and in 1868 £130, which shows a substantial increment after making full allowance for the difference in the relative values of money at the different periods. 

The Times in 1802 recorded the purchase by the Duke of Bridgwater, of canal fame, of a small estate near Hatlield for £14,000 and the price of the timber, and his discovery of a spring upon it for which he had been offered £5,000 a year by the New River Company to supply London with water. 

Some London Cases
When the first Royal Exchange was built, in 1564, the site was bought for £3,532. The Great Fire of 1660 destroyed the building, but the land remained, and when the second Exchange was built a small addition was made to the site. This small piece cost £7,000, or twice as much as the whole of the original site did a hundred years before. In the next 230 years, the value of the land has increased 180-fold. It is now worth £1,250,000 at the very least.

When St. James’s Palace was built by Henry VIII., Hollinshed’s Chronicle tells us it was a goodly manor surrounded by “a faire parke well stocked with game for his greater comoditie and pleasure.” Great changes have taken place since then, and the surrounding district is well stocked with industrious rent-makers. 

Where Covent Garden Market now stands, bringing in a clear £15,000 annual profit to the Duke of Bedford, an ancestor of his let it in 1570 as “his porcyon or percell of the Pasture cummunely called Covent Garden,” and, not many years before that, it was the Garden of the Westminster Convent. 

Over 400 years ago an ex-pedlar left an acre of land in Lambeth to the parish. It was an osier bed, and its rent in 1504 was 2s. 8d. When this pedlar’s acre was bought by the London County Council for the new County Hall now building, the Lambeth Borough Council was drawing £1,800 a year for it, and the capital value paid by the County Council was £81,000. 

During the course of a public inquiry into the St. Mary-le-Strand parish charities, it was shown that a gift of land left in the year 1667 by Alice Loveday, of the then yearly value of £7, now produces no less than £2,257 per year. 

Pepys, in his Diary, under date December 3, 1667, tells of the making of the new street from Cheapside to the Guildhall. The Corporation had got an Act to enable them to levy a Betterment Rate where property was increased in value by the rebuilding of the City. And Pepys mentions a case where a man demanded £700 for a part of his land that lay right in the way of the new King Street, and wanted to escape paying for the two frontages that would be created. He was awarded £700 for the land taken and he paid it back as betterment. In 1905 a site measuring 4,080 feet of land in King Street was let by public auction for £2,225 per annum; or 11s. per foot per annum. A considerable unearned increment in 238 years! 

In the time of Queen Elizabeth there was a Crown farm of 430 acres in Pimlico, yielding a rent of £21 per annum. It has been covered by the tenants upon the leasing system. The late Duke of Westminster, in contradicting a statement that it yielded him £400,000 a year, mournfully confessed that it yielded him “only about half as much.” Since then many leases have fallen in, and amongst these is the well-known Gorringe site in Buckingham Palace Road, which showed a rise in the ground rent from £395 to £4,000, in addition to a line or premium of £50,000, which is equal to nearly £2,000 per annum more. A recent case showing the rise in the value of London land is the ground rent of Selfridge’s Stores, namely £10,000 per annum. 

One hundred and twenty acres of the Lisson Grove Estate let in 1340 at £10 per annum. Moorfields, now producing £60,000 a year, was let in 1300 at 4 marks per annum. Two hundred and seventy acres of the Portman Estate in 1512 was let at £8 per annum; it is now worth hundreds of thousands as bare land, apart from the houses. 

In the year of the great French Revolution the Baker Street and Edgware Road portion of the Portman Estate was developed, and in March 1888 the leases fell in. The aggregate rise in the value of the property was a million and a quarter pounds. This estate was bought in 1512 by a Mr. Portman, so that his family might have fresh milk when he was up in town attending Parliament. 

In 1552 the Churchwardens of St. Clement Danes bought twelve houses and land in Holborn from William Breton. They paid £160 for this property. The annual income derivable from it now is no less than £7,000, and the money is applied to the support of an almshouse with extensive grounds, a large grammar school, and a dispensary. 

The Dulwich College Estate is an example of the growth of land values in the suburbs of London. When Edgar Alleyn, an Elizabethan actor, died, he bequeathed a stretch of country land surrounding Dulwich village for the support of twelve poor scholars. By the expansion of London that land is probably worth £1,000,000 today. 

Three plots of land were bought in 1629 and 1643 for Campden’s Charity at Shepherd’s Bush. They were then worth £23 a year. In 1881 they were worth £3,600 a year, and the construction of the Central Tube Railway has since then sent up land values by leaps and bounds in that district. 

Another London example of the transition from agricultural values to building values is the case of the Kentish Town Estate. This was the Prebendal Manor of Cantelows. In 1768 this was tenanted by a Mr. A. Fitzroy, on a twenty-one years’ lease. Mr. Fitzroy’s brother, the Duke of Grafton, was Prime Minister, and an Act was easily passed vesting the estate in the then tenant in consideration of the payment of £300 a year to the Dean and Chapter of St. Paul’s. This estate extends from St. Giles’s parish through St. Pancras and Camden Town to Highgate. The value of this land today must be worth quite 10,000 times as much as the rent that was agreed on only forty-one years ago. 

Some years ago the present Lord Chancellor, Lord Haldane, said: 

“The land upon which London stands, if it were bare of houses, would be a big farm of 77,000 acres, worth at the outside not more than £77,000 a year. But the rent paid for the bare soil by the people of London, without the buildings, is almost exactly £16,000,000, or 200 times as much. I arrive at these figures through the quinquennial valuation, which shows that the rent of land and buildings is now nearly £40,000,000. But every year a valuation for poor-rate purposes is taken in each parish, and this enables us to find that the increase in the value of the land of London every year, without the buildings, is £304,000; every twenty years Londoners pay an increased ground rent of nearly £6,000,000. Who created that increased value? Not the landlords; not the tenants (for we have eliminated all improvements from our calculation); it is not due to natural advantages, but to the simple growth of the population. I hold that, if we had proper laws that £6,000,000 would belong to the people of London as a whole. The County Council rates of London are between £7,000,000 and £8,000,000 a year. In twenty years we might save the whole of this by securing the increment in the value of the soil on which London is built.”

When we turn to the big provincial centres of population we find the same steady rise of the unearned increment. 

In 1800 the population of the Liverpool area was less than 90,000. To-day it is approaching ten times as many. The growth of its population in numbers and wealth has been accompanied by a corresponding growth in the value of land.

In 1635 Lord Molyneux bought the Lordship of Liverpool for £450, and the Corporation took a 999 years’ lease of 1,000 acres in the Lord Street district at a fixed annual rent of £30. In 1856 this was valued at £50,000 per annum. In 1882 the Corporation Estate was assessed at £740,000. 

The Parliament Fields were assessed as agricultural lands at £40 per annum. Part of them was sold to the city for £100,000 by the Earl of Sefton, and he now draws £10,000 a year in ground rents from the remainder, that was farm-land sixty years ago. In 1847 the Corporation bought 53 acres of land adjoining the Newsham Estate for £20,000, or at the rate of 1s. 8d. per yard. Land in that district today fetches from 8s. to 10s. a yard. 

In 1839 the rateable value of Manchester was £478,618. In 1908 it was £4,234,129. In 1596, Sir Nicholas Mosley bought the manorial rights for £3,500. In 1845, a Mosley received £200,000 from the newly incorporated Borough of Manchester for what was left of those rights.

The Overseers still receive £10 a year in consideration of 44 acres of land over which the people had rights of pasture 300 years ago, but which are covered with bricks and mortar to-day. In 1833 the Improvements Committee bought 222 yards of land in the Parsonage at £2 a yard, 55 yards in Lower Mosley Street at 30s. a yard, and 7 yards in Fountain Street for £30. Eight years ago they paid £123 a yard for land in Corporation Street. From 1849 to 1855 the Markets Committee bought land for the Smithfield Market at from £2 15s. to £6 14s, a yard. They lately bought adjoining land at from £20 to £35 a yard. 

Some land in Cross Street was sold in 1881 for £20,080 for 334 square yards. In 1900 it was re-sold for double that price. In 1630, Humphrey Booth vested two meadows near Manchester in trust for charitable purposes. They were worth £19 a year. In 1901 the annual income from that land was £4,544. Forty years ago the Trafford Estates were worth £90,000, Twelve years ago the Trafford Park Estates Company bought them for £900,000. The hundred acres of the old racecourse were worth about £50,000 before the Ship Canal was begun. The Ship Canal Company paid £262,500 for them for docks. 

Prior to 1760, land to the north of the Old Nor’ Loch (now Princes Street Gardens) was feued at about l0s. per acre per annum. In 1766 it was feued to the City of Edinburgh at £7 per acre. In the next forty years it was let for building the new town at £20 per acre. In 1905 sites in Princes Street were estimated at a capital value of £1,000 per foot of frontage. A quarter of an acre, having 60 feet of frontage, was sold for £100,000.

In 1772 this same site was feued at £4 13s. 4d. annual rent, in addition to a lump sum of £153. In 1878 the Edinburgh Royal Asylum bought from the Cluny trustees 50 acres of hill ground, agricultural and pastoral, for £18,500, or £370 per acre. In 1886 another 10 acres were acquired from them at a feu duty of £25 per acre, or a capital cost of £625 per acre. In 1804, land was feued at £4 per acre along Leith Walk, which connects Edinburgh with Leith. Today these sites fetch from £40 to £300 per acre per annum. 

The immense difference between land and an ordinary money investment is shown by the following example.

In the year 1552 Birmingham and King’s Norton (an adjoining village) were offered, for the purposes of education, a choice of an annuity of £20, or a grant of land to the same value. King’s Norton chose the cash. Birmingham chose land, which was granted to them out of the funds of the Guild of the Holy Cross, which had been forfeited to the Crown by Henry VIII. The result of this endowment of the Birmingham Grammar School has been that, in addition to having utilised the growing income from the property during the time that intervened, the Trust has now an income of over £40,000 per annum from the ground rents, while King’s Norton still receives the sum of £20 per annum. 

A certain 6 acres of land between Lancaster Street and Aston Street was purchased in 1669 for £100, and changed hands in 1723 for £300. In 1878 the Birmingham Corporation purchased a portion of the land, containing about 4 acres, for £21,000. 

In 1884, in order to improve the drainage from the Stratford Road to the sewage farm, thereby improving the land all along the route, the mere right of way cost £7,100, the surface of the land being left intact and in as good a condition as before laying the sewer. 

About 1880 a lease fell in of a piece of land behind the Town Hall bordered by Edmund Street, Easy Row, Great Charles Street, and Congreve Street, which had been previously let on lease at an annual rental of £40 per annum. 

A small portion near Congreve Street was bought for the Mason College for £30,000, and the adjoining corner in 1882 was bought for £30,000 as a site for the then Birmingham Liberal Club. 

In April 1888 the Post Office bought its present site near the Town Hall. It paid £2,000 for the extinction of a licence, and, when the licensee got a licence for the adjacent site, £2,000 was promptly added to the value of the site. 

Sheffield is another example of the growth in the value of land due to industrial expansion. The most important part of Sheffield belongs to the Duke of Norfolk. The Corporation has bought £600,000 worth of land from the Duke, and it had to pay £526,000 for his manorial market rights. Between 1815 and 1840 his rent roll doubled.

Sir J. Tudor Walters, in the course of a debate in the House of Commons on April 10, 1907, upon a motion in favour of giving powers to public authorities to purchase land at a price based upon its taxable value, said, with reference to Leicester, that he took the trouble some time ago to carefully collect figures from conveyances and legal documents as to the value of unbuilt-on land adjacent to houses, and he found that between 1872 and 1902 the value had increased to such an extent that the increase, if capitalised at 3 per cent., yielded a sufficient sum of money not only to pay the entire rates of the borough, but to leave a considerable sum of money for distribution among the ratepayers.

A very illuminating paper was published in the Land Agents’ Record for March 18, 1899, by Mr. John Hepper, on “Leeds from a Surveyor’s Point of View.” Land which was offered in 1862 at about £6 los. a yard sold in 1893 at £30 a square yard. In East Parade land has gone up from 32s. per yard to £15 5s. a yard in 1897, and to £24 10s. in 1899. Some land near the City Square fetched £75 per square yard in 1897.

The enormous development of the coal-fields in South Wales has made the fortune of men like the Marquis of Bute at Cardiff and the Earl of Plymouth at Barry, apart from any outlay on their part. In 1832 the total rateable value of Cardiff was only £14,034. It is now nearly a hundred times as much. The ground rents have proportionately increased, and the houses themselves will revert to the ground landlords. Cathays Park was bought by the Corporation from the Marquis for £169,000, and it was previously rated at £174. Barry practically had scarcely an existence for long after 1832. It is now a gold-mine for its noble owner. To the same owner belongs Grangetown, a suburb of Cardiff. In 1852 it had but one house. Today there are between 3,000 and 4,000 houses there, which will become Lord Plymouth’s houses when the leases expire.

A few facts about the Rochdale glebe estate are instructive. It contains about 250 acres.

In 1291the income was5134
In 1535     “55000
In 1763      “80000
In 1813 the tithes were sold by auction for63,42600
In 1825 the income was2,60000
In 1866       “4,0000
In 1893     “9,34200

The Torry Estate, 182 acres, was sold for £15,000 in 1859. In 1875 it realised £29,000. In 1901 the Harbour Commissioners paid £56,507 for only 8½ acres of it.

The foregoing are only a few out of many instances which might be given to show how public expenditure and private enterprise, together with the continuous increase in the numbers of the population, express themselves in terms of rent, and pour ever-expanding streams of unearned golden wealth into the coffers of the lords of the soil. Every public improvement, every new invention, swells their riches without their contributing a hand’s turn to produce them. 

When the Thames bridges were freed of toll at the public expense, when the wages of the Woolwich Arsenal employees were raised by the War Office, when the railways displaced the stage-coach, when the electric tram superseded the old horse-cars, the rent of land went up as if by an iron law of nature. And this steady flowing of rental tribute into private pockets is undoubtedly one of the chief causes, along with a general rise of prices due to other factors, which is making it harder and harder for the masses to achieve a fair reward for their labour, but, fortunately, there are signs that an educated democracy is opening its eyes at last to the great fact, so long obscured from them, that their poverty does not arise from any scarcity of the good things of life, but simply from inequitable social arrangements. And out of that growing consciousness, assisted by the disinterested help of those who do not themselves suffer, but who sympathise with those who do, the movement for the abolition of the inequitable system of private property in land is bound in time to attain its just purpose.