RURAL PLANNING AND DEVELOPMENT 107 



No country can prosper which permits high land values to be cre- 

 ated by speculative means. When the value of land is increased as a re- 

 sult of expenditure of capital on improvements, that increase is a form 

 of wealth, but when it is increased by "boosting" and speculation it 

 is a tax upon industry. The real value given to land by improve- 

 ments, e.g., by the making of roads, may be much greater than the 

 cost of the improvements — yet the land-owner who makes the im- 

 provements is entitled to the full increase thus given to the value 

 of the land, and not merely to the return of his money. He is not 

 only entitled to it, but, if and when he sells the land at the full value 

 and leaves the district, he does not take away more than he has pro- 

 duced. Up to that point individual enterprise and speculation pro- 

 duce wealth. When beyond that point land is increased in price by 

 gambling the increase is fictitious and represents a tax on industry — 

 whether it be agriculture or manufacture. 



Why Farmers Have Been Indifferent 



The fact that most farmers own the land has made it difficult 

 for them to see the folly of speculation. Indeed, as speculation causes 

 the value of land to rise, it seems, on the surface, to help the farmer 

 by giving a higher selling value to his property. Then there are 

 many cases where considerable gains have been made by farmers as 

 a result of land speculation. These are known and widely advertised. 

 What is not so well known and is scarcely ever advertised is the irre- 

 parable injury suffered by the industry of agriculture as a whole. 

 Whether farmers be owners or tenants they have to debit their hold- 

 ing with the cost of the capital invested in it. If a farmer is owner 

 of his farm he has to pay interest on the mortgage, or he has to credit 

 his own capital with interest in lieu of the rent paid by a tenant. 

 In an economic sense there is "rent" even if the owner and the user 

 of the land be the same person. High land values mean increased 

 "rent" to the farmer or user, whether he be owner or tenant. 



Speculative land values also impair the security of land for 

 investment, and, by raising the assessment, increase the burden of 

 taxation. These and other evils are now beginning to be recognized 

 by farmers, as is shown by the policies being advocated by their 

 organizations in regard to taxation and control of land and other 

 natural resources. 



Speculation in Other Countries 



In other new countries land speculation is producing similar 

 results to those in Canada. There are the same complaints in Aus- 

 tralia and the United States regarding idle lands near railways, the 



