Thus, in round figures, we get £106,000,000 as an estimate of the tribute which is paid to private owners for permission to use the area of the United Kingdom. As we have seen, 2,500 persons own one-half the whole area, while 38,200 persons own three-fourths of the area of England and Wales, so that the greater part of this income of £106,000,000 goes into few hands.

In view of the fact that the total income of the United Kingdom has been estimated at £1,840,000,000, it is at first surprising that the amount of this land rent is not larger than £106,000,000, and it is of interest to ask why it is, in view of the monopolization of so much of the whole area by so few people, that the land rents are not greater than they are.

The first explanation is the influence of free imports and cheap transport in putting at our disposal the harvests of the entire world. Cheap food for our people has spelt "loss" to the landowner. The landowners possess just as much land as before, neither more nor less, but as the produce which it yields is lower in price, they have been able to exact, for permission to produce the kindly fruits of the earth, a smaller rent. As our wealth has grown in the last generation the tribute paid to the owners of agricultural lands has grown less. Now that food is again appreciating in price the land tribute will on this account rise again.

But, while the rent paid for farm lands has fallen since the seventies, the rent paid for urban sites has increased, and, of course, a further portion of the whole area has passed from the first category into the second. The country-side has been increasingly deserted, and our big towns have grown,[26] both by their own natural increase, and by a continual influx from the villages and small towns.

How is it, then, that the landlords have not been able to exact a greater rent than about £57,000,000 for the use of urban sites? In the first place, while this sum may seem small in proportion to the total income of our people, it is very large in relation to the exceedingly small area for the use of which it is exacted. Almost the entire area of the United Kingdom is sparsely populated. It is an empty country dotted with small crowded spots called towns. When we reflect, then, that the land rent of the great empty country is £35,000,000, while the land rent of the crowded towns is £57,000,000, we see the latter item in its true light, as enormous in relation to the insignificant area for permission to use which it is paid.

In this connexion it is important to observe that an exceedingly large manufacturing business can be carried on upon a small piece of the earth's surface, measuring 50 feet by 100 feet, or only an eighth part of an acre. The whole of the manufacturing plant of the United Kingdom stands upon a base which cannot possibly amount to more than a negligible fraction of the whole area of the country. Thus, while the industrial has to bid high for the use of land, he needs, as a rule, but a very small piece for his purposes. The area needed for a tennis court is often sufficient for the base of a business in which 100 or 200 hands are employed and which draws a huge profit from their labour.

Or take the subject of housing. All the urban sites of the United Kingdom together occupy a negligible part of its area. If our 9,000,000 houses occupied half an acre each, as unfortunately they do not, they would account for but 4,500,000 acres out of our 77,000,000 acres.

But apart from the fact that the size of the area which yields urban land rents is exceedingly small, local rates are a perpetual charge upon land rents. The point is that, as the renter of fixed property is rated according to his rental, the size of the rental he is able to pay is in part determined by the amount of the rates. The higher the rates, the less rent he can afford, and therefore the less can the landowner obtain for the use of his land.

For the reason just stated, it is often argued that the landowner actually pays local rates.[27] The fact that he is unable to exact as much rent as though no rates existed is said to be equivalent to an actual payment by the landowner of the difference between the rent which he receives and the rent which he might receive. This economic doctrine is worth examination.

In the first place it is not only the rates which the occupier takes into consideration when he decides that he can afford to rent a certain property. He considers "rates and taxes." The Inhabited House Duty is taken into consideration fully as much as the poor rate. If it did not exist the tenant could afford to pay a higher rent.

Let us carry this a little further. What is the Inhabited House Duty? It is an Income Tax roughly proportioned to the size of a man's income by the size of the house which he inhabits. But there is another Income Tax, the Income Tax commonly so-called, levied at so much in the £ on incomes over £160 per annum. Is the Income Tax taken into consideration by a family man looking out for a house? Not directly, perhaps, in the same way that he adds the "rates and taxes" to the rent before deciding that he can afford a certain eligible residence, but indirectly there can be no question whatever that the Income Tax has great influence in deciding a man's rental. Indeed, the raising of the Income Tax from 6d. to 1s. may directly cause a man to leave a £60 house for a £50 house. We see, then, that if the landowner pays the local rates, he most certainly pays the Inhabited House Duty, and further that if he pays the form of Income Tax called the House Duty, it is at least arguable that he pays the Income Tax proper.

But that is not all. There is another determinant of the rent which a man can afford, and that is the price of gas. In and around London the variation in price is considerable, and the careful householder does not forget the fact when deciding whether to live North, South, East, or West. South of the Thames gas is cheaper than in the North. According to the doctrine under examination, therefore, the landowners North of the Thames must at least "pay" the difference between the two rates.

Again, on the same lines it might be argued that, as a rise in the price of building materials checks building and therefore makes a landowner ready to accept a lower rent for his land, the landowner actually pays the increased cost of building when materials rise.

And so we might proceed from one logical step to another until we arrived at the comfortable conclusion that, if the sole expense of a householder were his rent, he could pay his whole income as rent, and that, therefore, the real "loss" of the landowners is the difference between the entire income of the nation and the land rents which they now actually receive.

The whole truth of the matter is: For long years rates have been levied upon the occupiers of fixed property. Contracts as to the use or sale of land and the property affixed thereto have been made between man and man with full knowledge of the existence of rates. While, therefore, it is perfectly true that, but for the existence of local levies, the owners of the soil would be receiving a higher tribute than is actually the case, it is straining the meaning of language to say that they pay the rates, or that the rates are an actual burden upon them. In so far as present-day landowners have inherited their land from men who were given it by a worthless Sovereign or in any other way came by it without proper consideration, to talk of the burden of rates upon real property can scarcely excite sympathy. In so far as present-day landowners acquired their property for proper consideration or inherited it from those who so acquired it, the rates were taken into account when the price was paid, and no burden can therefore truly be said to exist. If to-day A gives £1000 for a piece of land he does so with full knowledge of local rates, and the seller gets less for his land because of his knowledge. Therefore, when A, in his turn, leases his land and a house built upon it to another person, he cannot allege that he bears the burden of the rates. Yet it remains true that, if the burden did not exist, the land would yield A a higher rent. In a word the rates have become a rent-charge upon the property.

To sum up the conclusions of this chapter, we have seen that while the total income of the nation is £1,840,000,000, the landowners take £106,000,000 as land rent, and that this amount would be much greater but for (1) the untaxed admission of competitive foodstuffs, (2) the very small area occupied by the towns, and (3) the levying of local taxation upon fixed property.