Land Law Reform:

A Historic and Legal Justification of a Land Tax.

Mr. Chairman, ladies and gentlemen,—The subject of the laws relating to the ownership and occupation of the soil of this planet upon which we live has in all ages, and among all nations, both barbarous and refined, been a most fertile cause of controversy, dissension and strife. The fact that the right to an exclusive possession of that which is a prime necessity of human existence carries with it a formidable power over one's fellow men has at all times been vividly impressed upon the minds of men, and States and Empires have been wrecked, and populations decimated by wars, enkindled by that very same earth hunger in classes and individuals, which, in our own time, has caused such widespread misery and sorrow to millions of our fellow creatures.

The desire for an easy road to wealth and affluence, and the passion for power which in a greater or less measure appears to have always been an active principle in the human breast, have constantly prompted individuals and classes of men to endeavour to obtain exclusive possession of the lands of the nation within whose territorial limits they chanced to have been brought into existence, or, where such possession, or an acknowledgment of a right thereto had been already acquired, the most strenuous efforts have been made by the landholders to crush all attempts at reform, and to brand with disgrace and infamy all those who advocated the paramount right of the nation collectively to its own territory. Long before Tiberius Gracchus proposed his Licinian law for the formation in ancient Rome of a middle class of small landed proprietors, and down to this very hour, he who would advocate that the plainest principles of justice should be applied to the regulation of rights relating to the occupation and ownership of land has ever been assailed with every weapon which hatred or malice could forge, and with relentless vigour and persistency.

The simplest possible proposals for some diminution of the evils which the unrestricted individual ownership of land entails on the State, are denounced as intricate and impracticable; the mildest suggestions based on the primary principles of natural page 6 justice are characterised as revolutionary and immoral, and the distinguished thinker^* who has in recent years with such irresistible logical force and eloquence of expression, advocated the paramount right of all the citizens of a State to live upon the soil of their country, has been denounced as a spoliator who ought to be sent to herd with the predatory classes who are usually confined within prison walls. Now, in considering the question of the expediency and justice of a tax upon land values, I shall on this occasion confine myself to the task of proving that such a tax is not new or revolutionary; but that, on the contrary, it possesses the merit of immemorial antiquity, and has been firmly rooted in the legal and fiscal systems of many ancient and modern States. To do even this in anything like an exhaustive manner would require more time than it would be possible for me under present circumstances to bestow, and I must, therefore, necessarily content myself with placing before you a few salient facts which will at all events prima facie demonstrate the truth of the proposition which is foreshadowed in the title of my lecture, viz., that a land tax can be justified from a historic and legal stand point.

In order to prevent any ambiguity and to diminish the chances of misconstruction, it would seem desirable in the first place to define what I mean by what is commonly called a "land tax." And this I can do more clearly I think—paradoxical though it may seem—by stating what I do not mean by a "land tax." By a "land tax" I do not mean a special tax on those who are termed land owners. If a land tax such as I shall advocate and defend were imposed, no particular class of the community would bear any special burden, and yet such a tax might without difficulty suffice for all the needs of government. The truth of this will appear manifest later on. What I mean by a "land tax" is an appropriation by the State for State purposes of a portion of that wealth which the united labour and credit of the whole people of the State has created. I hold it to be a primary canon of justice that the collective body of the people of a State should equally with individuals have a right to the enjoyment of the fruits of their own exertions. No one now with a well balanced mind denies the right of private property in things, that is, the right of a man to enjoy that which his own powers have created. And it being conceded that an individual has an absolute right to possess that which he has earned by his personal effort, can it be legitimately denied that that which the collective body of the people have by concerted action created ought to be possessed and enjoved by the people collectively. (Cheers.)

It is quite an axiom that land values are created mainly, not bv the so-called owners of the land, but by the population to whose existence the usufruct of the land is an absolute necessity. (Applause.) An individual may, by the employment of labour which the possession of capital places at his command, add to the use and beauty and consequent commercial value of land, or he may add to page 7 its value by erecting fixed and irremovable structures upon it. But it is by the increase and concentration of population that that stupendous element of value is created which no individual effort, apart from the increase and contiguity of large masses of human beings, could attach to land. Now, that value which the population of a country, by increase and aggregation, spontaneously confers upon land ought to be devoted to the public wants of the nation, and not as at present be confiscated and diverted into the pockets of a class of persons who are erroneously termed landowners. (Applause.) And this brings me directly to the first principal consideration which I desire to lay before you this evening.

I broadly affirm that in no country and at no period of time, at all events within the historic epoch, has land been a subject of individual ownership, but that the land has always been regarded as fundamentally the property of the State, and has borne either wholly or partially the taxes necessary for the performance of the functions of government. (Applause.) It is true that this universal principle of law has oftentimes been evaded, lost sight of, or ostentatiously ignored by powerful men, but that the principle has always existed as part of the public law of the State, is an historic truth that is beyond question.

Professor Sheldon Amos, in his work, "The Science of Law"(6th Ed., p. 160), says :—"Land, as a subject of ownership, might indeed be treated as belonging to the class of things set apart for the service of the State, though in the earlier stages of the development of the community the quantity of land and the limited number of uses to which it is capable of being turned combined to keep this aspect of it out of sight. Yet, in fact, the relation of a State to its territory, which in modern times enters into the essential conception of the State, implies that the land cannot be looked upon, even provisionally, as a true subject of permanent individual appropriation. This view obviously commends itself from the mere facts that the land is the only indestructible commodity in the country having an existence co-extensive in duration with that of the State itself; and that the culture and produce of the national soil must always be a matter of urgent State concern, quite independently of all considerations of the classes of persons to whom, from time to time, the task of labouring on the soil is, as it were, delegated. A period may, however, arrive when the density of the population and the fixed limits of the national soil make this view of the essentially political character of the land not only plausible but irresistible. If the land is looked upon as susceptible of permanent appropriation by some persons, other persons must, by the same theory, be regarded as possibly excluded from it—that is, banished from the territory of the State. ... Whatever be the issue of the controversy as to the economical and social advantages of large and small farms, and however undoubted is the importance of security of tenure to the cultivators, still the paramount dominion of the State over every part of its territory is a fact which, in a high condition of social page 8 progress, cannot be emphasized too strongly, or made to be felt too universally and really." (Applause.)

Adam Smith, the father of political economy, thus discourses m his Wealth of Nations:—"It is the most absurd of all suppositions the supposition that every successive generation of men have not an equal right to the earth, and to all that it possesses. (Hear, hear.)

John Stuart Mill says:—"Property in land, if legitimate, must rest 011 some other justification than the right of the labourer to what he has created by his labour. The land is not of man's creation, and for a person to appropriate to himself a mere gift of nature, not made to him in particular, but which belonged as much to all others until he took possession of it is prima facie an injustice to all the rest." This great economist, in speaking of the antiquity of a land tax, states: "In most countries of Europe the right to tax as exigency might require an indefinite portion of the rent of land has never been allowed to slumber. In several parts of the continent the land tax forms a large proportion of the public revenues and has always been confessedly liable to be raised or lowered without reference to other taxes."

In England, from the earliest period of the monarchy, the Sovereign was in law the father of his people, and all historians agree that the whole land of the State belonged to the Sovereign representing the people. When what we must call alienations—because that is the term usually employed—were made by the King it was a mere tenancy that was parted with, a right of user and not the corpus of the soil itself. One of the greatest writers on our constitutional history, Professor Taswell-Langmead, thus describes the manner in which, what we would in colonial parlance call a Crown grant, was made in early times: On the grant of a fief, the tenant (niaik the word) was publicly invested with the land by a symbolical or actual delivery, termed iivery of seisin. He then did homage, so called from the words used in the ceremony, 'Je deveigne votre liomme.' Humbly kneeling before his lord, with sword ungirt and head uncovered, he placed his hands between those of his lord, and pronounced the words, 'I become your man from this day forward, of life and limb, and of earthly worship, and unto you shall be true and faithful and bear to you faith for the tenements I claim to hold of you.' The lord then kissed his vassal on the cheek and received the oath of fealty. For every portion of land of the annual value of £20, which constituted a knight's fee, the tenant was bound, whenever required, to render the services of a knight properly armed and accoutred to serve in the field forty days at his own expense." The same writer further says :—"Prior to the Conquest all lands had been subject to the trinoda necessitas. This obligation still continued. But after the feudal system of tenure had been fully established, all lands were held subject to certain additional obligations which were due either to the King from the oi iginal grantees or to the tenants in chief from under tenants."

And in the civilisations of Asia and Africa the same principle of national ownership of the soil has universally predominated, while in rude and primitive societies the right of all the inhabitants to the use and enjoyment of the land has ever been fully recognised.

M. de Laveleye, in his "Primitive Property," says:—"In all primitive societies the soil was the joint property of the tribes, and was subject to periodical distribution among all the families, so that all might live by their labour as nature has ordained. The comfort of each was thus proportioned to his energy and intelligence; no one, at any rate, was destitute of the means of subsistence, and inequality increasing from generation to generation was provided against. ... Freedom, and as a consequence the ownership of an undivided share of the common property, to which the head of every family in the clan was equally entitled, were in a German village essential rights. This system of absolute equality impressed a remarkable character on the individual, which explains how small bands of barbarians made themselves masters of the Roman Empire, in spite of its skilful administration, its perfect centralisation, and its civil law, which has preserved the name of written reason."

In India, as is well known, the State has always owned the land. Now, let us consider a few instances of land taxation, whereby it will be abundantly manifest that a land tax is the most ancient and the most universal of all species of taxation, and that it therefore ought to receive the strongest support of the Conservative, or "Stupid," party both in Great Britain and the Colonies. (Laughter and applause.) Gibbon tells us in his Decline and Fall of the Roman Empire (vol. ii. p. 235):—"The whole landed property of the Empire without excepting the patrimonial estates of the Monarchy) was the page 10 object of ordinary taxation; and every new purchaser contracted the obligations of the former proprietor."

Macaulay tell us (History of England) that "in 1689, 1690, and 1691, great sums had been raised on the land, and that "during a hundred and six years, a land tax bill was annually presented to Parliament, and was annually passed, though not always without murmurs from the country gentlemen. The rate was in time of war four shillings in the pound. In time of peace, before the reign of George the Third, only two or three shillings were usually granted and during a short part of the prudent and gentle administration of Walpole, the Government asked for only one shilling. But after the disastrous year in which England drew the sword against her American colonies, the rate was never less than four shillings. At length, in the year 1798, the Parliament relieved itself from the trouble of passing a new Act every spring. The land tax at four shillings in the pound was made permanent."

The following were the sums yielded by the land tax in England at the times stated. The difference in the value of money then and now must, of course, be taken into consideration. In 1566, £120,000; in 1598, £78,000; at the end of the reign of James I., £70,000; and in 1640, £50,000. Speaking of the land tax in England, Adam Smith says:—"In all the variations of the state of society, in the improvement and in the declension of agriculture; in all the variations in the value of silver; and in all those in the standard of the coin, a tax of this kind would of its own accord, and without any attention of Government, readily suit itself to the actual situation of things, and would be equally just and equitable in all those different changes. It would be much more proper to be established as a perpetual and unalterable regulation, or, as what is called a fundamental law of the commonwealth, than any tax which was always levied according to a certain valuation."

In Ancient Egypt the State took in the form of a land tax one-fifth of the gross annual produce of the land. In China, one-tenth of the produce has always gone to the State. In Prussia, the land tax has varied from twenty to twenty-five per cent, of the rental for lay proprietors to forty to forty-five per cent for ecclesiastical proprietors. In Bengal, before the days of the East India Company, the Government took one-fifth of the produce. Since the conquest of India by England the whole territory has been owned by the State, and the present land tax yields £22,000,000 per annum. This would now amount to £88,000,000 per annum had not an ai langement been entered into with the Zemindars by Lord Cornwallis in 1798 which was called "The Permanent Settlement, whereby the Zemindars were allowed to appropriate future increases of the rent paid by the ryots.

Thus it will be seen from these few instances selected out of many, that a land tax has in almost every age and country been one one of the principal sources from which the revenue of nations has been derived. At the risk of wearying you I cannot forbear giving a ew figures to show the amount of the present taxation of land page 11 with improvements in the following countries. Of the general revenues the proportions contributed by the land are—In England, ten and a-half percent.; in France, twenty-nine per cent.; in Prussia, fifteen per cent.; in Holland, twenty-two per cent.; in Belgium, thirty-seven percent.; in Austria, twenty-six per cent.; in Hungary, thirty-eight per cent.

(Laughter.)

I confess that a tenure "until the world's rotten" would not seem to me of that unimpeachable character and solidity which a prudent money lender would now-a-days expect before he advanced his money, as there are always those who think not only that there is "something rotten in the State of Denmark," but that the process of decomposition has set in and considerably progressed in most other States as well. (Applause.)

Now, sir, perhaps I may be permitted to cursorily glance at some of the advantages which we may reasonably expect from the Land Tax, which I am fully persuaded the overwhelming majority of the people of New Zealand have determined shall be imposed by law in the first session of the new Parliament. (Loud cheers.) It will, in the first place, secure for the people at least a proportion of that increment of value which the increase of population and the expenditure of public money will attach to the land of the country in the future. The full significance of this necessary operation of a land tax can be but faintly realised without considering some of the stupendous figures which represent the colossal values given to land in the past by the energies and money of the whole people. Had no land ever been parted with in New Zealand, except by the reservation of a periodically adjustable state rent, we should now have had no debt, and our railways and public works to the good, and no taxation either by means of customs duty or in any other form; we should possess a free postal service, free Courts of Justice, and a revenue of at least £15,000,000 per annum to devote to the page 12 increase of the comfort and happiness of the general body of the people. (Applause.) Consider what might have been done with such a revenue! How the country might have been traversed from end to end by railways! What public buildings might have been erected ! What sanitary reforms in towns ! Pure water S Pure air ! Healthy houses ! What treasures of art might be secured and enjoyed! What parks ! What homes for the helpless and friendless, both young and old ! What libraries in every town and village! How our mines could be developed ! And, greatest and best of all blessings, the land, the source of life and wealth and power, our own, the inalienable property of every man, woman, and child in the country ! But, alas ! instead of all this there is danger that the statement of Pliny as to the cause of the downfall of the Roman Empire. "Latifundia perdidere Italiam may be only too true regarding this fair land unless speedy measures be taken to render the unproductive holding of great landed estates unlawful. (Cheers.) It has been calculated that since the repeal of Sir George Grey's Land Tax Act of 1878, the unimproved value of the land of the colony has increased over £20,000,000. If this be so, had the Land Tax not been abolished the whole of that capital sum, representing a revenue of £1,000,000 a year at five per cent., might have justly gone into the public exchequer to the great relief of this sorely overtaxed community. (Applause.)

It is said by a recent writer that a colonist—now a member of the Legislative Council—purchased a large section of land from a native for a bottle of rum. The present value of that land, as assessed, is over £100,000. Now, who created that value, and to whom does the difference between the value of a bottle of rum and £100,000 rightfully and morally belong? (A voice—"The people;" and cheers.) This instance of public wealth going into private pockets is almost as striking as the case of Manhattan Island, upon which the city of New York now stands. It is stated that Manhattan Island was originally purchased for twenty-three dollars. Now its rental alone amounts to millions annually, while its capital value is of fabulous amount. Reflect for a moment upon what England might be if the land tax, in the shape of rent, went into the coffers of the Chancellor of the Exchequer instead of into the hands of private individuals. The total revenue of England from all sources at the present time is about £87,000,000. But the rent of the land alone, nearly all of which goes into private pockets, is £300,000,000 a year. (Cries of "Shame.") In a little over two years the whole National Debt might be paid off out of rent alone; and how the whole nation might be really born again to a new life and a new world if the representatives of the people had that colossal revenue to disburse for the public benefit! But now four-fifths of that sum goes into the pockets of 7,000 landowners, who are supposed to own over seven and a half million acres of the national soil, and yet in the wealthy city of Glasgow 41 families out of every 100 live in a single loom, and beyond these 41, thirty-seven families out of every 100 live in two rooms. ("Shame.") One-half of England is owned by page 13 2,250 persons who levy tribute upon the men of England whose blood and treasure are poured forth like water to repel the invader from that land which they imagine is their country, but in which they are virtually as homeless as any foreign foe. (Cheers.) Tiberius Gracchus, his heart moved with indignation at the state to which the great landowners had reduced their fellow-citizens, thus addresses his countrymen :—"Men of Rome, you are called the lords of the world, yet have no right to a square foot of its soil ? The wild beasts have their dens, but the soldiers of Italy have only water and air.'5 How truly similar words might be addressed to the millions in England at the present time ! That England, where, amid the pomp and pageantry and glitter of unbounded wealth, lurks the grim spectre of extremest poverty, with the unutterable woes that follow in its train; that once "Merrie England," which has been described as 'the Paradise of the rich,' but which has now become the Purgatory of the poor. (Cheers.) I have said that one of the first results of a land tax would be that the unearned increment of land values would be gradually absorbed by the colony. The next great result would be the discouragement of great landed estates. The ownership of large tracts of the soil of the country by a few individuals is not only economically injurious, and attended with grave social evils, but it is a standing menace to liberty. (Hear, hear.) The possession of land means the posssession of undue political power, however democratic the constitution of the State may be. (Applause.) And this power may be used to still further exalt its possessors, and to depress the mass. Just take an instance which recently occurred in the House of Representatives, whereby it will be seen what foes to liberty many of the large landowners are when their private interests are concerned. A Bill was introduced by one of the Ministers at the instigation of a number of Canterbury squatters, nominally for the purpose of endeavouring to suppress the rabbit nuisance. It was called, I think, "The Rabbit Nuisance Act Amendment Act, 1890." .Nothing could be more innocent than the title. And yet, what do you think its provisions were? When Sir George Grey told me their substance before showing me his copy of the Bill, I confess, notwithstanding my knowledge of Sir Georges usual caution and accuracy, I was a little incredulous. But in the plainest possible terms the Bill constituted a vast number of formerly innocent acts crimes of the gravest nature. It enacted that the doing of things which in all times and countries have been absolutely lawful, and attended with no moral stigma, should render a person liable to a minimum punishment of one year's imprisonment, with hard labour. ("Shame.") It took away the right of trial by jury, and placed every man's liberty in so-called offences under the Bill, at the mercy of two Justices of the Peace. Thus, for any one to possess a live rabbit, tame or wild, was a crime punishable with at least one year s imprisonment, with hard labour. Imagine a little child for keeping a pet rabbit being sent to herd with criminals for a year! ("Shame.") Well, had it not been for the page 14 sleepless activity of Sir George Grey—(cheers)—the measure would have passed in that form. Gentlemen, depend upon it that those who have acquired such an enormous extent of the public land in the colony by the methods which we know so well, the "ways that are dark and the tricks that are vain," are not friends of liberty. They care not for freedom but for wool. (Cheers.) The race of large landowners in this colony must be opposed firmly, steadfastly, and unfalteringly, and in the contest our strongest supporter and staunchest ally is that noble little animal whose hostility to the land monopolist Acts of Parliament are impotent either to allay or diminish. Let us say, "God bless bunny," and determine that he shall not be exterminated, even to placate Canterbury gridironers. (Loud laughter and applause.) Within die past few weeks I travelled in the train from Wellington through to New Plymouth, and beheld one of the most fertile districts in the colony. For over two hundred miles there are rich plains, and valleys, and hills. But who are their occupants? Sheep, and not men! A district that might support a teeming population in comfort and prosperity is mainly held in large tracts for pasture. The land monopolist, especially if he be an absentee, is a man with whom scant ceremony in the matter of taxation should be employed. His exactions from the general body of the people are rapacious and fundamentally dishonest, and his utility in the economy of the State, after the primitive stages have been passed, is a negative quantity. An old rhyme says—

"Some men are born for great tilings,
Some are born for small;
Some, it is not recorded
For what they are born at all."

(Laughter.) I apprehend the poet had in his mind our land monopolists when he wrote the sentiment in the last two lines. The clamant requirement of New Zealand is a large population of the yeoman class settled 011 the land. (Hear, hear.) If the country were settled there would be no rabbit nuisance, and the large sums now annually purloined from the public to prevent the depredations of bunny 011 the grasses of the wool kings would be saved to the Treasury. A large export of wool which comes from runs of 50,000 acres in extent is no indication that the prosperity of the country is being promoted. (Cheers.) Some think that an increase of national wealth, 110 matter how distributed, is necessarily an unmixed good, and that men who labour are to be regarded as mere machines to whom only such wages should be given as would supply the lowest animal wants. But the true conception of a prosperous State presupposes a fair distribution of the comforts of lile among all classes of the people. A state of things, in which the great mass of the people are divorced from the soil, and in which the the growth of a race of nomads is fostered like the wool shearers or Australia and New Zealand and the "harvest hands" of America, would, if long tolerated, ultimately end either in periodic revolutions or a relapse of the masses into barbarism. And this is a page 15 question which every voter in the country ought to put to himself when about to exercise his franchise, "Are we to degrade our people to the level of Mongolians and negroes, or to raise them up as a superior order by true scientific conceptions of human life and human happiness?" It is in the power of the electors to decree that the future population of New Zealand shall not consist of a few hundred great landlords and millions of serfs and vassals, but that the land shall be tilled by a brave and hardy race of freemen, who, in the words of Isaiah, "shall plant vineyards and eat the fruit of them; they shall not plant and another eat." (Loud cheers.) It is further in the power of the electors to determine that 110 foreign power or corporation shall come in here among us and close up the land of the country until the necessities of the people compel them to pay such a tax or penalty as such power or corporation shall think fit to demand. (Cheers.) I have no hesitation in saying that special legislation ought to be employed for the purpose of preventing the recently formed New Zealand Estates or Assets Company from swallowing the future increment of value of the great estates to be taken over from the Bank of New Zealand. (Cheers.) The holding of land by corporations is, in the words of an eminent jurist, "abhorred" by the law of England, and in all ages special laws of a stringent character have been passed regarding the acquisition of landed property by corporations. If there were a law in New Zealand that no company or corporation other than a municipal corporation should acquire or possess land of a greater area than, say, twenty acres, it would be an incalculable benefit to the country and the people. (Cheers.)

Gentlemen, a time will shortly arrive when a great responsibility will devolve on each one of you. In a very few weeks, probably, you will be called upon to exercise the most sacred right of a free citizen of the British Empire. To you it will be given to

"Mould a nation's State decrees
And shape the whisper of the Throne."

You will be asked to determine what shall be the destinies of New Zealand for three years, years which may mark an epoch of blessing or of sorrow in your country's history, and cause the memory of the Parliament you will create to be revered or execrated by many future generations. Are you going to lie listless and apathetic in that crisis which approaches and to allow skilful enemies to rivet upon you fetters which it may require a generation of struggle to shake off? Or, are you going, by earnest and organised and unwearying effort, to sweep from your Senate House the puppets of financial rings who now scatter your resources and betray your liberties? Let every man amongst you think and feel that upon his individual vote depends the issue of the coming election. Let each one determine that the palsying band of a bank parlour shall no longer blight and perish the Liberal legislation of this country, but that the free, unfettered, and unequivocal expression of the people's will shall receive the sanction and the seal page 16 of law, and secure for New Zealand a future of peace, prosperity, and happiness widely diffused.

Mr. Napier resumed his seat amidst prolonged applause.

The Chairman (Mr Gerald Peacocke) stated that Mr. Napier would now be prepared to answer any questions which any member of the audience might desire to put.

After a short interval, no questions being submitted, Mr W. Duncan, J.P., proposed a hearty vote of thanks to Mr. Napier for his eloquent and admirable lecture, which he hoped would be printed and widely read.

Mr. H. W. Farnall seconded the motion, and it was put and carried.

Mr. Napier returned thanks, and proposed a vote of thanks to Mr. Peacocke for the efficient manner in which he had performed the duties of Chairman.

This was seconded and carried by acclamation, and the meeting dispersed.