Spencer Heath Archive

Item 1226

Exchange between Francis I. duPont, P.0. Box 847 Wilmington, Delaware, and Heath at 434 West 120th Street, New York, beginning with duPont’s letter of August 21, 1937, followed by Heath’s reply of August 23, 1937.

 

 

 

 

Mr. Spencer Heath

The Poinciana

434 West 120^th St.

New York City

 

My dear Mr. Heath:                     August 21, 1937

 

I have yours of the 18^th. The three points referred to in your letter are what I thought you were saying in your paper. I am personally not entirely convinced of the truth of any of them. I seem, however, to have got a wrong impression of the last two, as per your letter. This must be due to one of two things, or perhaps to a mixture of both. Either my stupidity, or your lack of clearness in your presentation. I do not know whether I can think more clearly than the average real estate operator or not, but I am inclined to think I can. In any case, if I did not get your meaning it is doubtful whether the average real estate man would get it.

 

     Some years ago I used to know the poet, Edwin Markham, and he told me that sometimes he would spend a whole day on one or two lines in one of his poems. I also have read that Abraham Lincoln studied and revised his presentations with the view to making them clear to the lowest mentality in his audience, saying that if he did this, the others would get it all right anyhow.

 

     If you want to get your ideas understood by the people you are after you will have to make a special study of their point of view, and the motives which would induce them to read your papers, etc., etc. This, of course, is hard to do, but unless you do it I do not see much success for what you are after. I do not think you will ever convince the average real estate man or business man that indirect taxes on production are the detriment which you are trying to show they are.

 

Very sincerely,

 

    /s/ Francis I. duPont

FIduP/C

 

 

___________________________________

 

 

My dear Mr. duPont:               August 23, 1937

I thank you for your frank and straight letter. It means either that my ideas about rent and taxes are foolish or that I am not expressing them in a proper manner. I must either improve my expression or improve my ideas.

     I doubt if new truths are ever clearly stated at the beginning, and they never are clear to stupid people, however stated, even after they have accepted them. I have no hope to make any headway except with men of high intelligence and imagination and practical hard sense, like yourself. And I will make no headway with such persons, however clear my statements, unless my ideas happen to be right, or at least partly so.

     What I want the land-owning interest to learn is that:

     Ground rent is the only value there is to land. — No rent, no value. Hoped-for or expected rent is a hoped-for value, but it is not any present or certain value.

     They cannot get rent unless they give something for it that somebody makes or does and gives to the land. The only thing anybody can give to a vacant site is services, public services. (Anything else done to or on the site would be an improvement or a private service, paid for privately as the price of it and not to the site owner as ground rent.)

     The only thing a tenant pays rent for is what he gets — the public services he gets. (Just as a private tenant in a building or hotel pays for the private services he gets.)

     He pays for what he gets, and not for what is taken from him. Taxes are taken from him.

     He pays, therefore, for the service benefits given to the site he rents, less all the taxes taken from him and all the harm thus done to him.

     The proprietors can sell to their tenants only the difference between the good that is done to their territory and the harm that is done or permitted to be done by the territorial authority.

     The presence of unoccupied sites where there are public services (there being also idle capital and labor) proves that the harm being done to the sites cancels the services delivered; hence there are no net services and no rent is paid.

     If it were not for the harm done by government, all the territory served by government would yield rent.

     What makes rents low and scarce, land values few and far between, is the harm that government does. What makes the little rent and land value there is, is the good that government does.

     The remedy for idle capital and idle labor and for idle lands (sites) is to diminish governmental dis-services (which consist of taxation, the evil effects of taxation, and all of the evil things done by the expenditure of taxes) and thus enable its proper services to have a net value so that they can be sold.

    This is the only way to create rent. This is what proprietors should do. When they do it, the rent created by it will pay them for it.

     A farmer whose servants give him no wheat without garlic gets paid only for the good that is in the wheat, less the harm that is done by the garlic. If there is very much garlic he cannot sell the wheat at all. If all farmers have much garlic in their wheat very little of their wheat will be sold. They must cut down the garlic, or they cannot sell their wheat for enough to meet expenses. Taxation is to public services what garlic is to wheat.

     Merchants who sell food can get paid (in the long term) only for the good that is in it. If their servants poison or adulterate it they will get less for it. If all food is poisoned it will kill off their customers — and their trade. The merchants will not prosper until they take the poison out of the food. Public services are facilities indispensable for doing business — for exchange. Taxation is anti-exchange, poison to exchange, less violent than piracy but far more insidious, in the long term.

     If the public proprietors, landlords, do not take some of the harm out of public acts and expenditures, then the evil that is done will diminish their business by reducing their rents and occupancies until eventually taxation (with its political concomitants) will destroy all land values, and communities will again disband into roving barbarians, as they have done in the past.

     Now, Mr. duPont, please do not accept these ideas — and please do not reject them. But please do think about them. I am sure you will regard them as very important, if they happen to be true.

                                 Sincerely,