Spencer Heath Archive

Item 1233

Carbon copy of a letter from Heath at Roadsend Gardens, Elkridge, Maryland, to Mr. Francis I. duPont

January 23, 1939

Dear Mr. duPont:

I plead guilty on both counts: I certainly have not even tried to prove either the “economic advantage or the ethical propriety” of profits for holding land. For,

     No profits are created by holding land or by merely holding any kind of property — or gambling with it. Wealth is created only by doing things, not by mere speculation — taking hazards and doing nothing. Profits are created wealth or service values; not merely transfers of wealth. Profits are wealth created by management and supervision; the wages, if you like, of responsible administration.

     I am trying to explain how rent comes as payment for the administration of land or, more properly, of the public capital and services. It is true that rent receivers give only a meager administration to the public properties and services — only that final and most essential part of administration which consists in merchandising all the net benefits that arise from community operations. This is why rents, on the whole, are inadequate to maintain ownership and land values decline.

     If the owners of the duPont capital should give it no prior and other administration than the sales of its services and products do you not think its income, too, would decline? I do, and what is worse, there would be no revenue to pay for any other services but the sales service, and the business would have to be kept up in all other respects, if at all, by seizing property and services, just as the public business is now maintained — as long as it lasts.

     I do not propose to show land owners how to be ethical, I do propose to show them how to make money, and plenty of it, by giving more adequate administrative services — beyond the mere sales of its products — over the public capital and activities out of which their sales returns in the form of rents arise. Whenever services are sold (not seized or sneaked) ethics takes care of itself.

     I am also guilty of omitting to show “by what means landowners could be gotten together to do what you (I) advocate.”

     Once the more enterprising and alert among land owners become aware that their community plant and equipment, now so largely mismanaged by unsupervised employes, is already set up and only awaiting responsible administration to bring enormous rent incomes to them they will not need any further advice from me. They will get the right people, probably their lawyers, to draw up a good form of association or working organization for giving some proper attention to their community properties and operations. I believe there are such associations now /but/ they are organized and conducted mainly by men who have other and private businesses to attend to and not by the land owners who get all their revenue from the public business. The present organizations of the real estate interests are said to be aloof from the movements to improve public administration, confining themselves to working for laws and amendments to transfer tax burdens from the owners to the users of real estate, the users upon whose prosperity all rents depend.

     What land owners need to know is not how to organize but to get a new sense of direction. They must learn what services they are now giving their communities (sales services of the publicly created values) and what further administrative services they need to give if they would even maintain, not to say enhance, the community benefits reflected in the rental value of their lands — the “rentability” of their lands.

     Those who discover new chemical and mechanical processes or other new technique of service and profit are not often called upon to prescribe the type or mode of business organization necessary for carrying them out and merchandising their results.

     The sight of large profits is all that good business men need to have. Organization for it is a mere matter of routine.

     The world has never had any real and tangible benefits but what it got through business men creating and selling them — distributing them by exchange for value received, which is the only equitable way.

     I expect to send you before long advance copy of a further chapter entitled, “Private Property in Land Explained”

    

     I thank you for your continued interest.

Sincerely,