'au3iivj-jv>' "aujnrsui "ja3/\ii^ii JO' 'av/3iivj-au' aU3llJ'3U" ^.OFCAllFOff^ .\\\EUNIVER%. ^lOSANCn^ 3 ?3 CP AavaaiH^ smmi^ ^OFCAKFOR^ ^tUBRARYQc. ^ .^1 I' CJ ,^V\EUNIVER% ^lOSANCEl^;^ '^<5fOJIlV3JO>' %1]DNVS01^ %a]AINn-3WV^ ,^.OFCAllFO% . ^ME UMIVERJ/a o ^/5a3AINfl3V\V^ ^lOSANCElfj> -< KAa3AINrt3UV* ^OFCALIFOff^ ^OFCAllFOff^ ^f^Aavaaniv^- >&Aavaaiiiv^ \WEUNIVERy//v ^HIBRARYQ^ ^tllBRARY^^ ^efore, the dominant form of the large holding is the tract which has held the greater part of its bound- aries undisturbed from Mexican times. Nevertheless, there has been enough "loose land" fragments broken off from the original estates and lesser independent areas to furnish not only most of tlie small holdings but also new consolidations into large holdings. In modern times there has been both concentration and division, each on a considerable scale. Imperial County, that sec- tion unique among California counties, shows but seven consolidations into areas of more than 2,000 acres each, the largest of these being only 5,917 acres, while on the other hand tlie average size of the farm holding has steadily diminished, lint in the other counties, though near the cities the demand for homes and small holdings has resulted in the breaking up, partial or entire, of a number of old estates, great wealth has contrived to "lay iield to tield" in the making of new consolida- tions of extensive areas. To the fact of the persistence of many of the old estates nuist be added the fact of the creation of many new ones, TiARGE LANDllOl.DlKGS IN SOITIIKUK CALIFORNIA. 15 Santa Barbara County shows tho jjreatost (1'KI"l.l)lX(;s I\ SOITIIKUN ( ALIFORNIA. 27 .i<:i(l(l. ami for suiiis alMtvc that amount 10 per cent of price at purchase, and nine annual payments with interest at (i per cent. The other form requires from the purchaser the construction of a dwelling house and the beginning: of residence on the land within ten months after purchase, the cultivation of one-quarter of the land within 22 months and of one-half within 46 months, with acquirement of water rights when necessary and continuous residence and cultivation during the life of the contract. Thi.s contract runs 19 years. Seven and one- half per cent of the price is payable at purchase, and the remainder is amortized into 19 annual installments each representing 8.29 per cent of the purchase price, the total embracing price and annually accruing interest. A tract, for instance, bought on January 1, 1918, would require the payment of $75 down and 19 annual payments of $82.90 each to and including January 1, 1937. The total payment would comprise $1,000 principal and $650.10 interest, or $1,650.10. It is probable that the Southern Pacific Land Company holds to these terms. The terms of the Imperial Valley Farm Lands Association are more flexible. At the beginning thej' were stated to be one-fifth down, with four equal annual payments and interest at 7 per cent. But according to the head of the concern, long time and small payments have been the rule, and even smaller payments and longer time have been granted in cases wherein the purchaser has agreed to improve and cultivate his land at once. A recent sale was of 320 acres on an initial payment of $3 an acre, and another of 160 acres, on an initial payment of $2 an acre, with the remainder of the initial payment extended to July 11, 1919. With two or three exceptions, says the same informant, no sale on which a first payment has been made has ever been cancelled. The Commission on Land Colonization and Rural Credits found that the time of payment in the various colony schemes of the state covered a range of from 3.2 to 11 years. In only three out of 20 of the colonies, however, was the time less than four years, and the average for all was 5.8 years. In no case found in southern California among selling com- panies, except the cases of the Imperial Valley Farm Lands Association and the Southern Pacific Land Company, is the ordinary contract time of payment more than four years. These selling companies are land mer- chants, buying and disposing of parcels of the commodity land, and naturally they want a quick turnover of their goods. For obvious reasons the Southern Pacific Land Company is an exception to this rule, and for other reasons so is the Imperial Valley Farm Lands Asso- ciation. Its source of revenue is evidently commissions, and it can afford to take a long chance in dealing with the buyer who can afford only small payments extended over a term of years. Yet even in the case of the other selling companies, there is great flexibility in the 28 COMMISSION OF IMMIGRATION AND HOUSING. cuforeeineiit of the terms. Each land raerehant will assert that none of his purchasers is ever harassed by a too rigid enforcement of the contract ; that whenever extended time is wanted it is granted ; that settlement of the land is the thing mainly desired, and that cancella- tions are avoided by all means not entailing an absolute loss to the company. The ample interest charge goes on, of course, on the extended time, and though it is an insignificant source of revenue when compared with the profits on the sale of the land itself it is one of the several compensations that enable the landseller to deal gently with the dilatory purchaser. BENEFICIAL USE OF LAND. It is certain that much of the tillable land in the large holdings lies idle in the face of insistent demand of many thousands of men for access to the soil. It is also certain that much of this land is not devoted to its most productive use. A survey of land conditions in San Diego County, with a view to increasing crop production, which was made by the local Food Admin- istration in the summer and fall of 1917, brought out the estimate that 62,571 acres of easily available farm land were then lying idle. The area under cultivation was then 43,992 acres in the staple crops, 3,000 acres in garden truck and 17,771 acres in fruits and nuts, or a total of 64,763 acres. The cultivation of the available land lying idle would thus have very nearly doubled the productive area of the county. Of the 62,571 idle acres, 39,011 were cleared but not irrigated, while of the remaining 23,560 acres the statement was made that all could be easily cleared. "Water was said to be then available for 4,812 acres and could readily be made available for 21,317 acres more, leaving 36,442 acres for dry farming. The greater part of this land was evidently contained in the large holdings. An inquiry into the agricultural use of lands in Los Angeles County was made for the County Council of Defense in the fall of 1917. It showed an irrigated area of 222,041 acres and a dry-farmed area of 221,212 acres, or a total in cultivation of 443,253 acres. An estimate was made of 286,331 unplowed acres capable of being dry farmed, and of 358,719 unplowed acres for which water might then, or at some later time, be obtained. The figures for cultivable land not in use seem extraordinarily high; and it is impossible, from data available, to con- firm them. But if the real total is even half of that given, it reveals a deplorable situation. Little or none of this land can be in the small holdings, since these are almost invariably acquired for use in agricul- ture. Some of it is public land, and some of it doubtless urban or suburban land; but the greater part of it is unquestionably comprised in the large holdings. LAKGK LANl)JI()l>I)lNCi.S IN SOUTHERN CALIFORNIA. 29 Report.s from field agents to the State Agricultural College in April, 1917, stated tliat of new land 4,000 acres in Lo.s Angeles County, 30,000 acres in Riverside County and 5,000 acres in San Bernardino County could be profitably plowed for summer fallow and that irrigation in southern California could be easily extended to an additional 100,000 acres. The results of these various investigations, made under radically differing conditions, can not be reduced to a definite statistical sum- mary. It is enough to say that they indicate large areas of usable land lying idle. Of land not devoted to its most productive use there are also extensive areas. Large holdings do not lend themselves to intensive cultivation. Where the small holder is thrifty with liis opportunities the large holder is prodigal; and what is tillable under the most modern conditions to the man who owns 20 acres is either untillable or unirrigable to the man who owns 10,000 acres. An expert on land conditions asserts that 18,000 acres on the great San Joaquin ranch, in Orange County, now dry farmed, could be watered from wells already in existence and con- verted into the most valuable land; and this estimate was raised to 25,000 acres by tbe field agents of the agricultural inquiry of April, 1917. On another tract in the same county, now marshy, it is estimated that proper drainage would make tillable 5,000 of the 6,900 acres. One may find these instances, though in varying degree, in every county. Large areas which would support in comfort a greatly increased rural population and add enormously to the riches of the commonwealth are withheld from their best use or from any beneficial use whatever. GENERAL OBSERVATIONS. 1. It thus appears that in the eight counties of southern California there are 279 holdings (reducible by allowing for duplications to about 255 holdings) each of more than 2,000 acres, comprising an aggregate of 4,893,935 acres. 2. It also appears that the Southern Pacific holdings in five of these counties aggregate 2,598,775 acres. 3. It also appears that of the total of nonrailroad and nonpublic lands in these counties, roughly approximated by the federal census figures of "land in farms" (4,587,581 acres), 2,295,140 acres, or 50 per cent, are owned in about 250 holdings. 4. It also appears that there are at least 32 private holdings each of more than 15,000 acres; that seven of these holdings exceed 50,000 acres each ; that one of them is of 101,000 acres and another of 183,399 acres. 5. It also appears that at least 666,886 acres of the 2,295,140 acres, or 29 per cent, are now or potentially tillable ; and that further develop- ment of water resources, the application of scientific farming methods 30 COMMISSION OF IMMIGRATION AND HOUSING. f^nd the reduction of large holdings into smnli holdings would consider- nbly incrense this tillable area. 6. It further appears that a considerable part of the land in these large holdings lies idle, that another considerable part of it is not devoted to its bCvSt use, and that much of that })art of it which is for sale is priced far above its productive value and offered under condi- tions which make its purchase by the average landseeker hazardous and by the poor man impossible. Much of the land in these great holdings is not for sale under any conditions; some of it is for sale in tracts of a size which renders it wholly inacce-sible to the man of small means wishing to make produc- tive use of it, and most of what is for sale is held at prices which pru- dence forbids the prospective cultivator to pay. With other commodi- ties a sluggish market and poor demand bring reduction of prices. But land, in large holdings is owned by men who can aflt'ord to wait ; who know that sooner or later the pressure of population upon the means of subsistence will force the purchase of their lands at their own prices. These prices are thus maintained in the face of a temporary lessened demand, and with the increase of population in the vicinity of the lands the prices are even advanced. Much of this purchasable land has been advertised, and is still being advertised, with gros-i misrepresentation. Much of it has been sold laider questionable pretenses. The great frauds practiced upon settlers in California form a chapter in the state's history which is an ineradi- cable disgrace. The spent savings and the toil of thousands of ruined lives have gone to the making of a few fortunes, and for all this deceit and robbery there has been little or no redress. Powerful interests stand determinedly in the way of any effective reform. The legislature of 1917 passed a law,, it is true, penalizing certain misrepresentations regarding land. But it was a weak and partial law a law aimed only at brokers in real estate and its passage by the legislature was probably acquiesced in, despite a show of opposition, by the exploiting land interests in the belief that it could not pass the courts. On this very ground that it was partial that it penalized in the broker what it permitted in the insurance company the Supreme Court declared it unconstitutional. The field was thus cleared for another campaign of frauds upon settlers. Large-scale ownership means, of course, tenantry or wage labor. Tenantry is a condition that arises from a complexity of factors, and wherever studied it shows baffling contradictions. One might expect to find little of it in Imperial County, where the farm unit is small and where there are only a few large holdings, the largest of them being less than 6,000 acre,-;. Yet tenantry flourishes here as nowhere else in southern C'alifornia, and it is increasing. The explanation is a climate LAKGE I..\M)U(1AHNG.S IX SOUTHERN CALIFORNIA. 31 wliii h the landowner seeLs to escape, the eoustant influx of impecunious fanners from the south, and the marvelous produetivity of a soil which brings high rentals from the cultivator, thus enabling the owner to live comfortably in some less torrid locality. One might expect to find iinuh tenantry in Ventura County, where there are many large holdings ;iiui where the dispasitiou not to sell land under any circumstances is common. Yet here one finds less tenantry than elsewhere. The f'xplanation is a psychological one, though based on economic factors. The owner prefers to "handle" his land himself; with wage labor to help him he expects greater returns from the soil through his own operation than tlirough operation by tenants; and though wage labor is reputedly a source of trouble and uncertainty, he chooses it as a means of sticking close by his land. It is thus tenantry here and wage labor there, according to particular circum.stance.s not always easy to determine; and though the laborer may become a tenant and the tenant an owner, such transformations itie too few and scattered to affect the general conditions. The great mass of the land is held by an insignificant few, who do with it as they will, and the ideal of a rural society composed of many small-unit owners, each a tiller of the soil the ideal of socially minded men in all times is one, so far as southern California is concerned, for which there is not the slightest present basis of hope. The need of moderately, large holdings for stock raising may be Mdmitted. Stock cannot ])e profitably raised on small areas of natural pasture. But the only effect so far of the Stock Raising Homestead law of December 29, 1916, granting grazing homesteads of 640 acres, has been to give a fresh impetus to land frauds. In many localities near the already large holdings of grazing land, employees of cattle companies have filed ui>on these homesteads with no intention whatever of ownership but only a turning the land over, when finally proved, to their employers. lint large holding>i of tillable land, or land in which even a moderate portion is tillable, are productive of a long train of social evils. To recount them in the face of the fact that they have been recounted with almast identical i)articnlarity by every land reformer from ancient lfel)rew times to the present, seems a needless waste of effort. It is enough for present purpases to say that they are recognized by every one who has not a material interest in the maintenance of exploitation througii tlie land, and that long ago (1879) this recognition was written into the constitution of California. The fact, according to Dr. Arthur Nichols Young, in his "The Single Tax Arovement in the United States," that this declaration was "pa.ssed with laugh^ for political reasons." does not lessen the enduring fact that it is an integral part iA' the organic law and might have been expected to exert some influence 32 COMMISSION OF IMMIGRATION AND HOUSING. on California legislation. But the policy and the practice of the state have been the contrary of what is therein expressly stated. The old concentration of land ownership which comes down from the Spanish- ]\rexican times has in a large degree persisted; and superposed upon this is the new concentration of ownership afforded by modern wealth. No statute or ruling by the state government, so far as known, has inter- posed any bar to this persistence of the old system or the development of the new. The influx of population has furnished an economic motive for breaking up large holdings in or about townsites into building lots and to some extent into small rural holdings. But otherwise law and economic conditions have made for the conservation and fostering of large holdings. A remedy, thoroughgoing and of immediate applica- tion, is needed. On the one hand, the holding of large areas of land should be made economically undesirable to the individual, the family or the corporation ; on the other hand, the intensive use of the soil, in small allotments, should be promoted by the state, through every means in its power. PART II. A CONSIDERATION OF REMEDIES. Against an evil so gross and so deeply rooted, and defended by interests so powerful and so uncompromising, any jiroposal of remedies must seem audacious. But no time offers so golden an opportunity as this, when the imperative obligation to our returning soldiers gives new emphasis to the need of opening up the land; and if nothing can now be done, then accomplishment must wait for some undiscernible time in the far future. Of the many proposals or plans so far advanced, the three which of late have been most in the public mind are : The recommendations of the State Tax Commision (1917) ; the colonization plan of the Land Settlement Board, and the proposal to institute an exclusive tax on ground rent (the single tax). THE TAX COMMISSION'S RECOMMENDATIONS. The report of the State Tax Commission covers a wide range of sub- jects relating to the general subject of taxation. It gives, however, a particular emphasis to the land pr()])lem, and for the elucidation of this problem it assembles a considerable body of valuable data. The Tax Commission i-epeats with approval the paragraph in the State Constitu- lion de])recating large holdings of unimproved land and further depre- cates the "liolding of large interests in improved land." But it is against anything which "will destroy any individual's accumulated property rights," and therefore it disapproves the proposal of the Aus- LARGE LANDHOLDINGS IN SOUTHERN CALIFORNIA. 33 tralian graduated laud tax. It favors, as has previously been men- tioned, a seientifie classification of lands, and it also favors the assess- ment of land at full value. It furthermore favors a tax on the future increase of land values, ' ' with a heavier burden to be placed upon unim- proved and undeveloped lands than is placed upon those that are l)encficially used. ' ' Ass&ssment at full value, which the Tax Commission ruefully admits to he as remote from accomplishment as ever, would assuredly be a step in advance. The scientific classification of lands is needed, but the urgency of a fundamental reform forbids delay. As to the proposed tax on the future increase in land values, the comment of the California League for Home Rule in Taxation seems sufficient. "We can see no reason," says that association, "for attempting to .discriminate between the future increased land values and the values which have heretofore accrued. Such values are of the same nature and produce the same economic effect irrespective of the time of their creation. ' ' The refusal of the Tax Commission to countenance any measure which "will destroy any individual's accumulated property rights," seems curiously anach- ronistic in this year 1918. In every nation under the sun what have heretofore been thought to be property rights are undergoing a trans- formation ; and that movement, far from having reached its crest, is from every present indication only at its beginning. THE LAND COLONIZATION PLAN. The history and plan of the Land Settlement Board are too well Imown to need any extended relation or description here. This plan offers good land, on small payments and long time. It brings to the settler financial assistance and instruction by the state. It frees the settler from the land shark, places him in a community, establishes rural institutions and makes farm life attractive. Within its limita- tions it has every possible merit; and it ought to be widely extended by immense funds, raised either by levy or by bond issues. No amounts prudently spent on this plan will be hazarded or lost : they can make, in the long run, only for a richer and more prosperous commonwealth. Nevertheless, it is a "plan with definite and obvious limitations. With its widest conceivable extension it can not meet all the requirements for the settling of the land. 1. It accepts necessarily the current speculative price of land. That is, nothing in the i)lan aims at tlie depression of this price or the cor- rection of the terms upon which lam! is generally sold to settlers in the state. The board, it is true, obtained favorable terms and no doubt a reduction in prit-e on the land which it bought; but it is notorious that any euneession made in this nuittcr has been prompted by the expecta- tion of a rise in land values in the vicinity of the settlements. In 34 COMMISSION OP IMMIGRATION AND HOUSING. response to the board's proposal to purchase land, many large land- iiolders (not less than 40, in 17 counties) hurried forward with offers of tracts aggregating 200.000 acres; and this eagerness was manifested in spite of the fact that the terms stated by the board were exception- iilly unattractive in the eyes of the average California land merchant. Thus, for any moditication of current terms and prices obtained by ihe board for its own settlers, there will be a corresponding increase in prices and stitfening of terms for settlers elsewiiere. The crying evil of high prices and short terms of payment throughout the state remains untouched. 2. Within its present scope it can not have the slightest effect on the land situation in California. According to the latest announcement, the 3,520 acres opened accommodate 53 farmers and 21 laborers, and the 2,500 acres later to be opened may swell the grand total to something like 100 farmers and 40 laborers. Of course the plan may be, as it should be, widely extended, but any extension within conceivable limits would still leave general conditions in the state only slightly affected. 3. It offers small encouragement to the poor man. A late statement is to the effect that the applicant for a farm must have at least $1,500 f-apital, and he is advised that the amount of from $2,500 to $3,000 would be still better. If the social purpose is to open the land of California to those who most need it, this plan assuredly does not meet the final test. 4. It offers no lodgment to the thousands of experienced farmers seeking new lands, whose independent spirit prompts them to reject the colony system, and instead to choose their own locations and to ])ractice their own methods of farming. As a demonstration, it is admirable; as an auxiliary of other plans it will prove of the utmost service; but it needs to be supplemented by general provisions making undesirable the ownership of large areas of land. THE SINGLE TAX. The proposal of the single tax, in one guise or another, comes recur- rently before the voters of California. The supporters of the proposed tax contend that it would l)reak up the large holdings and make land accessible to all. This is not the place for an exhaustive analysis of this proposal; but any treatment of the land problem which ignored a measure so insistently advocated would be incomplete. The tei*m "single tax" is confusedly used to cover a wide range of land ta.xcs. Obviously, a single tax is nothing if not single; and when a lax on land values shares its jilace in a revenue system Avith other taxes it should Ix' designalcd l)y some term that does not imply excjusiveness, I,\K(iK i,ANI)llUl.l)l.\(iS IN MJl THKKN CALIFORNIA. 35 For the tax i>iup()sayers diminish." These changes occurred under the opera- tion of comparatively low rates of taxation, though these were some- what increased for the year 1914-15. For the present year they have been increased by 20 per cent. Whether the market value of the lands changes or not, the value to the excess owner indubitably changes, and lie parts with some of his possessions. The third objection is an anachronism which better fits a long-past day. If a graduated land tax is discriminatory as between individuals or classes, so also is a graduated income tax or a graduated inheritance tax. Indeed, in the last analysis, any ad valorem tax is a class tax because it discriminates oji the basis of possessions. The proposed single tax itself is subject to the same criticism, since the amount collected from each individual would depend upon the value of the land holding. According to this theory of social relations, only such a tax as the poll tax would be unassailable, because under it Mr. John D. Rockefeller and a doUar-a-day common laborer would pay exactly the same amount, regardless of the dispHrity of their wealth. 40 COMMISSION OF IMMIGRATION AND HOUSING. THE GRADUATED TAX IN AUSTRALIA. There is a considerable literature on the subject of the Australian taxes. The statement by Niel Nielsen, Trade Commissioner to America for New South Wales, printed in the report of the State Tax Gom- )nission, summarizes the important particulars of the state and federal land-tax laws. A land valuation tax was instituted by New South Wales in 18%. This is not a griaduated tax in the sense that it provides for a series of graduations in rates. It does, however, establish two grades land of an unimproved value below $1,250, which, whether an individual holding or a part of a large holding, pays no tax, and land of an unim- proved value above that amount, which pays 2 cents a year on each $4.86. Mr. Nielsen says : This was a small beginning, and the provision for the exemption was perhaps economically incorrect, but it had a wonderful effect. Land was immediately put to higher uses so that the tax might be paid from profits and not from its capital value, and the transition occurred so rapidly that the land so taxed did not decrease in value but actually increased in value in direct ratio to its higher uses. These increased values provided a greater taxable capital value, and the result was not only increased production but by its greater use increa.sed values to the land and consequently increased revenue for the state. The experiment had been tried and found effective. From this moment the system started to extend until today every shire through- out the land and every municipal area, with the exception of a very few of the large cities, derive the whole of their revenue from unimproved laud value taxation. The shires' councils can not collect taxes except from the unimproved value of the land ; the municipal areas councils have the right to collect taxes both from the unimproved value, which is mandatory, and from the annual rental value, which is optional, but in actual practice the greater number of them collect only on the unimproved values. The federal land tax dates from 1910. It is a tax to provide for the defense of the commonwealth. It exempts lands of an uniniproved value up to $25,000, and levies a tax of one penny in the pound, or 2 .cents, on each $4.86, on values up to $75,000; 4 cents on values over $75,000 and up to $150,000 ; 6 cents on values over $150,000 and up to $225,000 ; 8 cents on values over $225,000- and up to $300,000 ; 10 cents on values over $300,000 and up to $375,000, and 12^ cents on higher values. By a new law (1918) these taxes are raised 20 per cent. J 'It will be seen," writes Mr. Nielsen, ''that this defense land tax does not fall upon the small landholders at all, but upon the large land- holders it presses very heavily, and it is meant to so press on them' that they will disgorge some of the large and valuable areas which they have l)ecome possessed of." A GRADUATED TAX IN CALIFORNIA. No more than a mere outline of a graduated tax applicable to Cali- fornia will be here attempted. The elaboration of a detailed plan may lie made later. As, moreover, this inquiry relates only to rural land, LARGE LANDHOLDINGS IN SOUTHERN CALIFORNIA. 41 with a particular application to land now tillable or presumed to be susceptible to cultivation at some future time, the applicability to urban land of the suggested proposals will not be discussed. But that large aggregate of land, agricultural or near-agricultural, which because of its proximity to centers of population has got beyond an agricultural classification, may fairly be included. No one can map the margin of cultivation. On the one hand it extends to the fringes of the desert, and on the other hand it penetrates the high-priced lands within toAvn and city limits. In and about Los Angeles cultivation continues on land for which probably $2,000 an acre would be refused. Much of this land belongs to o^vners of large holdings, and its already inflated pijice is constantly pushed upward in spite of a sluggish market. Its present income, consisting of rentals from tenant cultivators, is a mere tem- porary' by-product availed of while the owner waits for its sale at a high figure. With the bubble of inflation pricked out of it and its partition compelled by a valuation tax, some of it at least much of it perhaps would for years, until overlapped by the city's growth, furnish secure livings to owner cultivators instead of furnishing income wrested by idle owners from tenant cultivators. A law embodying the proposals here suggested ought also to be made to apply to mineral and timber lands; but because they do not come within the scope of this inquiry I have left them out of consideration. As elsewhere, the basis of a graduated tax in California would have to be value and not acreage. Mere acreage, especially in this state: counts for nothing. Moreover, as in the basis employed in Australia, it should be unimproved value, rather than improved value. The deter- mination confessedly involves difficulties, as does every other determina- tion relating to the land. A discrimination in favor of "beneficially used" land, which is often advocated, would but add to the diffi- culties, since even so preposterous an employment of land as the pasturing of a cow on a million-dollar acre might be put forward as an instance of beneficial use. The State Tax Commission, in its advocacy of a tax on future increases in land values, admits the difficulty of di.stinguishing improved from unimproved land, and suggests the refer- ence of the decision to a "central tax body." A necessity, however, in the fixing of values is the determination of what is tillable land land that is actually or potentially agricultural. P'or this determination we cannot wait for new federal soil surveys, nor for the proposed classification of lands by the state. There is, however, a test that is of immediate practicability and that is the legal purchase offer. If the appraisers and the assessors can not determine what is tillable land, the purchase offer can find it with sureness and dispatch. Let the law define as tillable anything, outside of mineral and timber lands, for which any one offers to pay as much 42 COMMISSION OF IMMIGRATION AND HOUSING. as $25 ail acre, and the work of classification will proceed automatically. New Zealand has set a precedent for this mode of individual deter- mination, by an appraisal law which gives each owner the right to make his own appraisal, but also gives to any other individual or to the state the right to take the land at its appraised value, plus 10 per cent. There should be a norm or standard rate of taxation for all holdings within a considerable range of values say from $5,000 to $25,000. Below this there should be a reduced rate say one-half. ' At the other extreme a heavy graduation of rates should begin. As the increased rate on the higher values would discourage large holdings, so the reduced rate on the lower values would foster home-owning on small acres. This gradation, while operating against all large holdings, would still allow holdings of greater acreage in the purely agricul- tural districts unaffected by urban values than in the vicinity of cities. The exemption of improvements on small farm holdings is strongly urged by many persons other than single taxers. For reasons which have already been given this contention seems to have been pressed to an absurdity. Nevertheless a distinction may well be made between improvements, on the one hand, of moderate value which serve as aids to the owner cultivator, and on the other hand, improvements of great value which serve as a means of profit from the labor of others. In other words, the improvement which is a part of the equipment f the self -producer is in a very different category from the improvement which forms a part of the capital of the employer. It might be expe- dient to exempt the former to the maximum of $3,000. Since many of the large holdings are an aggregate of areas in more than one county, the surtax would have to be collected as a state tax. The law would have to require a declaration from each landowner as to his holdings in counties other than the county of his residence. The state would have to provide for the proper returns from the county assessors. No extra machinery would be needed for the collection of the surtax, which on information from the state as to the individual's holdings in other counties could be collected by the various tax col- lectors in the county of residence. Attempted evasions of the tax by hiding a part of one's holdings in the name of a corporation could be met in various ways. A suggested method is to provide that owner- ship of stock in a corporation be regarded as equivalent to the owner- ship of land to the extent that land values constitute part of the assets of the corporation. THE POLICY OF STATE AID. The graduated land tax does not in itself, of course, include state aid to the prospective settler. In this respect it is subject to the same criticism as is the single tax. Nevertheless, the policy of state aid has LARGE LANDHOLDINGS IN SOUTHERN CALIFORNIA. 43 been adopted by all of the countries that have seriously attempted to deal with the land problem. In particular, it has been carried to great lengths by the governments of New Zealand and the Australian States of New South Wales and Victoria. It has already been adopted in California in the plan of the Land Settlement Board, and it should be extended to include purchase and settlement outside of that plan. CONCLUSION. The general principles and incidence of the graduated land tax are well understood, and there seems no reason for any further amplifica- tion in this place. This summary is therefore closed with the sugges- tion that after fifty years of agitation in this state, action of some sort is imperatively needed; and that unless this action is taken soon by the responsible forces of the state in accord with a high standard of social justice, it may be taken by irresponsible forces more intent upon expropriation than equity. INSTITUTE OF INDUSTRIAL RELATIONS UNIVERSITY OF CALIFORNIA LIBRARI Los Angeles THE LIBRARY LOS AI^ ^i-ummo/t. V3J( UFO/ n lan-: University of Caiifomia SOUTHERN REGiONAL LIBRARY FACILiTY 405 hiilgard Avenue, Los Angeles, CA 90024-1388 Return this material to the library from which it was borrowed. IJUITi 5 SEP 171997 S" mi ^El n o AR" LIF r 0i lO a* oiaw ^-SfOJIlYDiO^ 5^ ^OFCAUFOJ?^ *%Aavaan#N r/^ ^lOS^AKCEl^^ 9 i i ^IMCEl^^ "^AMAiNnatf^^ ,. . ^lUBRARYQc. ^ i3 imw JiUJWVMir *'ja3/\mir3i>'- ^