Spencer Heath Archive

Item 1218

Carbon of a letter from 434 West 120th Street, New York, to Charles G. Baldwin, 522 Munsey Building, Baltimore MD

February 13, 1937

 

Dear Charles:

Many thanks for your note from Greenwich, Conn., and the copy of Christian Science Monitor with your letter in it.

     I think your letter is fine. It goes at the matter from the standpoint of good business, which to me is exactly the same thing as high idealism put into practice.

     I think, however, the best place to try to organize the land-owning interest is where they are already most organized, — that is, in the large cities where they have active real estate associations and where there is the most division of labor between the land owning and the land using interests. The more single the interest is the more possible it is to teach them to pursue and develop their particular interest. The beautiful thing about it is that their interest is the one interest that can only be served and advantaged by the enhancement and encouragement and advancement of every other interest. They are the only pressure group whose private and particular interest can be served only by the advancement of the public and general interest.

     However, I think it should be the aim of the land owning interest not to pay any taxes but to abolish all taxes, beginning with those taxes which do not maintain any public services and therefore do not produce any rent. Their reward for this would be a tremendous restoration of rents and land values. Before the abolition of taxes reached the point of impairing any essential public services the rent fund would be so enormous that it would be no burden to take over the financing of all necessary and productive services. This would abolish all the remaining taxes and this last abolition would more than restore in rents all that it took to finance the public services.

     It is a mistake to suppose that the land-owners need to go into their present flat pockets for anything to support the government. All they need is to restore their rents by abolishing taxes and every dollar of taxes abolished without impairment of essential public services will of itself create much more than a dollar’s worth of rent. When the time comes for them to do any financing of the public services they will be so flush with funds that they will be looking for good sound and profitable investments and they will find this in the field of public services themselves. In this field they will become the investors, supervisors and administrators and the rents which they will collect for such well financed and wisely administered and supervised services will so far exceed what it costs them to provide these services that they will find themselves carrying on not only the largest but also the most profitable business in the world. And this is the business that should be the most profitable, for it will give scope for the exercise of the highest type and capacity of administrative services (labor).

     I think the organized land owners should take action looking to the reduction of all necessary taxation on business and the use of land. This will revive production and employment, check speculation in rising prices (caused by scant production), and so their income will be raised out of that very great increase in general production which will establish the need and constitute the demand for public services and thus raise rents and the value of land.

     The enlightened self-interest of the land-owning interest demands that it build its own rents by abolishing the taxes, penalties and restrictions on trade that destroy the demand for land, keep it largely out of use and pull its income down and down. When we consider how much well-located land is out of use and cannot be profitably used under present tax conditions, we can realize how pitifully small present ground rent is in reference to all the land that receives public services and therefore ought to have a value and yield rent.

     I have prepared a somewhat extensive article with a view to its possible publication in some real estate journal in which I set out in much detail exactly what the business of land owning is and how it may be profitably conserved and administered. I think you will be interested in this and will send it to you as soon as I have some fair copies.

     Many thanks for remembering me and the ideas I have tried to bring forward. I expect to be in Baltimore right after the 22nd and hope to see you.

Sincerely,

Spencer Heath