THE WEALTH OF THE COMMONWEALTH 173 



would be put on the market provided, as is true, there is a possibility 

 of producing more coal than can be consumed. So on Spindletop 

 unrestricted competition crowded an area of less than 200 acres with 

 derricks drilling holes as thick as they could be set and caused an ex- 

 penditure of over $15,000,000, where a million should have been ample. 



Customs, such as that of paying royalty only on the coal mined, may 

 favor wastefulness. If the royalty were per acre foot, it would pay to 

 mine more closely, as I have said in my report on coal. Thus it is for 

 the state's interest that coal royalties should be per ton on coal in the 

 ground, not per ton of coal hoisted. This is practicable and done in 

 some coal fields. In the case of iron ore, too much property has 

 changed hands on the basis of the ore in the ground, as shown by 

 drilling. 



In the same way in Indiana it has been found necessary to pass laws 

 restricting the waste of gas or oil, because in so many cases it was 

 cheaper for the individual to save the one and waste the other, regard- 

 less of the effect upon the resources of the state or his neighbor's wells. 

 It would seem, therefore, that in relying upon competition as a cure 

 for the ills of the body politic or in attempting taxation of the ' un- 

 earned increment ' we should not fail to consider carefully the effect 

 of these remedies upon the development or conservation of those nat- 

 ural resources of the state which, once squandered, no financial or 

 political legerdemain can restore. 



I know that the questions here raised are difficult ones and I know 

 no panacea for all the wastes of the body politic. I might, indeed, 

 suggest that it seems to me that municipal or state ownership is too 

 often treated as synonymous with municipal and state operation and ex- 

 ploration. The Boston subway is a good illustration of public owner- 

 ship and private operation, which apparently works better than would 

 any other plan just now. I may perhaps remind you, too, that in 

 Mexico all mining is under a system of state leases, and in Canada 

 lumbering. State control under a system of wise leases, preventing 

 waste, would seem to be wise, when complete state ownership was not. 

 In the United States the policy has in general been for the state to 

 divest itself of the title to its lands with the resources, even though they 

 could be sold only for a song, and were mainly useful to be cut up into 

 lots to be given away with i free chickens.' Would not, in many cases, 

 a lease for fifty years or longer have been exactly as well? It is a fair 

 question, how far it is wise for a community to let its wealth go perma- 

 nently out of its own hands, and in particular into the hands of non- 

 residents. Non-resident property holders have been a source of friction 

 ever since the days of the nobleman who let out his vineyard to husband- 

 men and went into a far country. Harvard University years ago, in- 

 stead of selling Boston real estate outright, had a policy of letting it 

 on a 99-year lease. And of late every now and then a piece of prop- 



