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after equalization, in 1891, was $1,275,832,510. If the total local state and national tax bad been levied on the valuation the rate would have been about $2.00 on the $100, or two per cent upon all property at very nearly, at least, its true valuation. This is a very serious burden, which tends to increase annually as we require more and more of our local governments, and as a nation concern ourselves more with the affairs of mankind.

The tax levied in 1891 in California for state purposes alone was $4,873,848. Had this tax been levied on city and town lots alone the rate would have been $1.39 on $100. Had it been levied on all real estate, without improvements, the rate would have been 63 cents on $100, in these and other similar supposed cases, no other property being taxed. The actual rate levied on all property in the state, for state purposes only, was 44.6 cents on the $100.

A somewhat clearer view may be obtained by arranging some of these figures, subject to the assumptions in the test, in tabular form.

The single-tax theory applied to United States and California valuations of 1890, the California assessment being that of 1891, and the total taxation as given in census returns of 1890:

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In 1890 there was collected of ad valorem taxes in the United States about $3.00 from real estate and improvements to $1.00 on personal property. Assuming that California farmers paid the average tax on personal property, a farmer owning land and improvements assessed at $6,000 should have been assessed on $2,000 personal property.* Of his total realestate assessment, if he was an average man, $5,160 should have been upon land, and $840 upon improvements. Under laws as they are he was taxed, for state purposes only, at the rate of 44.6 cents on $100 and his total tax was $35.68. Under the single tax he would have paid 63 cents upon the $100 on the valuation of his land only, which was $5,160, and his tax for state purposes would have been $32.50. This being the tax of the average man, it would appear that farmers having the best land would pay somewhat more than they now pay, and those having the poorest land considerably less. It seems to me quite probable that this would be the usual result. It seems evident to me that if all taxation was collected from city and town lots, the tax would exceed the rental value.

The proposal to confine taxation to land valuest is more than a century old, but it seems also to have been original with Henry George, who, in "Progress and Poverty," without being aware of the earlier proposals, first brought it prominently before the world. As already stated, Mr. George advocated the single tax as a means of social reform rather than as a method of raising revenue, and his discussion, from a fiscal standpoint, is not satisfactory. While the work of Mr. George is neces

*The personal property taxed in California in 1890 was 16 per cent of the real estate and improvements. In the rural districts it was more and in cities less. It is not, however, likely that it was anywhere near 33 per cent as assumed in the tax. In 1861 the personal property assessed was 49.62 per cent of real estate, from which it has declined regularly to 14.03 per cent in 1896.

Single taxers draw a sharp distinction between "land" and "land values." They would tax no land for which, exclusive of all improvements which are the result of man's labor, the user could not, after defraying all expenses, including his own labor, afford to pay a cash rent. This rent, whatever it might be, would be the tax.

sarily controversial, it is brilliant, and bears evidence of earnest conviction. Of the innumerable "replies" to Mr. George, all that I am familiar with are too ill-tempered to be commended to the general reader. While I think him entirely in the wrong as a social philosopher, it seems to me that the convincing reply can only come from one who to the necessary ability adds the same earnest desire for the welfare of the unfortunate classes that is evident in the life and work of Mr. George.

CHAPTER IV.

THE FARMER AND THE CURRENCY.*

F I have sheep to spare and need wheat I do not have to find one who has wheat to sell and needs sheep; whoever needs sheep will give me money and with the money I can buy wheat. One of the functions of money in this transaction is that of a "medium of exchange." In common language I am said to turn my sheep into money and my money into wheat.

In regard to money as a medium of exchange there are always questions of convenience arising, as, for example, with reference to its form, denominations, and the like, and with respect to paper money, the question of responsibility--that is whether it shall be issued by banks or government-seems to me connected mainly with this function; with this exception, however, which has been discussed in another chapter, there is no "Question of the Day" in regard to money as a medium of exchange; such questions as arise are settled by the authority whose duty it is to deal with them, with little or no concern on the part of the public.

The usefulness of money as a medium of exchange, however, involves one characteristic which all good money possesses, and without which it is not good money; it must be something which every one is willing to take in exchange for whatever he has to part with. I do not mean something which some are willing to take, or all are willing to take for some things, or which all ought to be willing to take, but something which as a matter of fact all are willing to take at all times.

The only substances which all men are willing at all times

*See also Book Fourth, Chapter I and Appendix G.

to take in exchange for all commodities are the precious metals-gold and silver. These constitute what is called international money because they are recognized as money by all civilized nations. Considered merely as instruments of exchange these metals constitute the best money.

Instead of the metals themselves, promises to pay the metals, in the form of notes issued by responsible governments or banks, are more convenient when large sums are involved, and are preferred by some for use even in small amounts; these constitute good money so long as they can as a matter of fact be exchanged at any time for the metals which they represent, and so long as everybody believes they can be so exchanged. Such notes constitute what is called "representative money." If, as a matter of fact, they can not be exchanged, on demand, for what they represent, these notes are not really good money, even though they are believed to be, and perform the office of good money until their true character is discovered. A counterfeit note does the work of good money until it is found to be counterfeit, when it immediately loses its value.

A note that can really be exchanged for the metal it represents is not good money if any one to whom it is offered doubts whether he can get coin for it on demand or fears that he might not be able to make the demand. No farmer in the United States doubts that if he should present a note of the Bank of England at the counter of the bank he would get gold for it, but he can not go to the Bank of England, and he may not find any one who can conveniently send it there, and, not being familiar with its appearance, he might fear that it might be counterfeit, and so might be unwilling to receive it, even although actually good; a United States "greenback" would be in a similar situation in England, while each will circulate freely in its own country. No merely representative money is therefore "international money," although the notes of contiguous nations often circulate readily among themselves, as those of France and Belgium and the United States and Canada do to-day. Circumstances, however, are at any time liable to arise to prevent the convenient return of repre

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