As a consequence of these counteracting influences, it appears that the share of the landowners has not increased disproportionately. The most comprehensive endeavour yet made to determine the growth and relative size of the different shares of the national product is embodied in Professor W. I. King's volume, "The Wealth and Income of the People of the United States," published in 1915. It estimates that the total annual income of the nation increased from a little less than two and one-fourth billions of dollars in 1850 to a little more than thirty and one-half billions in 1910, or slightly more than fifteen times. During the same period rent, the share of the landowners, advanced from $170,600,000 to $2,673,900,000, or about fifteen and three quarter times. In the year 1910, therefore, the landowners were receiving but a very small fraction more of the national product than their predecessors obtained sixty years earlier.[61] As to the relative size of the shares going to the different factors in 1910, the figures are even more remarkable. Wages and salaries absorbed 46.9 per cent.; profits, 27.5 per cent.; interest, 16.8 per cent.; and rent, only 8.8 per cent.[62] This was exactly the same per cent. that the landowners received in 1860. To be sure, these figures are only approximations, but they are probably the most reliable that can be obtained from our notoriously incomplete statistics, and they will deserve respectful consideration until they have been refuted by specific criticism and argument. In the opinion of their compiler: "The figures for wages and salaries are believed to be fairly accurate; those for rent are thought to have an error of not more than twenty per cent. The separation of the share of capital from that of the entrepreneur is very crudely done and no stress should be laid on the results. The total for all shares is thought to be more accurate than the mode of distribution, and for the last three census years should come within ten per cent. of the correct statement of the national income. For earlier years the error should not be over twenty per cent. at the outside."[63] If we make the maximum allowance for error in reference to the share of the landowner, and assume that the rent estimate is twenty per cent. too low, we find that it was still only ten and one-half per cent. of the total product in 1910, which represents an increase of less than three per cent. since 1850. It is significant that Dr. Howe, who has no bias toward belittling the share of the landowner, suggested as his minimum and maximum estimates of the land values of the country in 1910 figures which are respectively fifty per cent. below and only five per cent. above the amount taken by Professor King as the basis for his estimate of rent.[64] There is, consequently, a strong presumption that Professor King is right when he stigmatises as "absurd" the contention of the Single Taxer, "that all the improvements of industry result only in the enrichment of the landlord.... The value of our products has increased since 1850 to the extent of some twenty-eight billions of dollars, while rent has gained less than three billions. Evidently it has captured but a meagre part of the new production."[65]
There are strong indications, however, that the per cent. of the product going to the owners of land has increased considerably in the last twenty years, and that this movement will continue indefinitely. According to Professor King's calculations, the per cent. of the total product assignable as rent advanced from 7.8 in 1900 to 8.8 in 1910, which meant that during that period the national income increased only 70 per cent., while the share of the landowner increased 91 per cent.[66] It is true that a disproportionate advance in rent has occurred between other census years, only to be neutralised by subsequent decreases; but the present instance seems to include certain features which did not characterise any of the former gains in the relative share of the landowner. Since 1896 the prices of food products "rose most rapidly in the case of meat, dairy products, and cereals, which were derived directly from the land. The prices of raw materials show a like relation. Timber, grain, and other raw materials obtained directly from the land have risen rapidly in price, while semi-manufactured articles have increased less rapidly, or have decreased in price.... There is no parallel in any other field to the advance in those land values upon which civilisation most directly depends—timber lands, fertile agricultural land, and land in large commercial and industrial centres. The recent rise in land values has been little short of revolutionary."[67]
Between 1900 and 1910 the value of farm lands per acre in the United States advanced 108.1 per cent.[68] During the eight years beginning with July 1, 1906, the value of land in Greater New York increased something more than one-third; in the principal cities of New Jersey, and in Worcester, Washington, Boston, and Buffalo, somewhat less; in Springfield and Holyoke, considerably more. In the most recent ten years for which figures are available (since 1900 in every case) the land values of Milwaukee, St. Louis and San Francisco averaged only a slight degree of expansion, while those of Kansas City doubled, and those of Houston, Dallas, Los Angeles, and Seattle trebled. To quote Professor Nearing, from whose compilations these estimates have been summarised: "The total extent of the increase in American city land values may be hinted at rather than stated with any certainty. The scattering instances in which land and improvements are separately assessed led to the conclusion that in a large, well-established city, growing at approximately the same rate as the other portions of the United States, the land value is doubling in from ten to twenty-five years. In the new, rapidly growing city of the middle and far West and in some of the smaller cities of the East, the ratio of increase in land values is far greater, amounting to two-fold or even three-fold in a decade. In a few instances the rate of increase is much smaller, and in one case, Jersey City, land values over a period of seven years have actually decreased.... Nevertheless, the few available long range figures indicate a widespread and considerable increase in American city land values."[69]
The rise in the value of timber lands during the last thirty years has been, in the words of the federal investigators, "enormous." For the ten-year period ending in 1908, "the value of a given piece of southern pine taken at random is likely to have increased in any ratio from three-fold to ten-fold." About the same ratio of increase obtained in the Pacific Northwest, and a somewhat smaller increase in the region of the Great Lakes.[70] While a considerable decline has taken place since 1908, it is only temporary; for the demand for timber is notoriously increasing several times as fast as the supply.
That this upward movement in the value of all three kinds of land will continue without serious interruption, seems to be as nearly certain as any economic proposition that is dependent upon the future. Although millions of acres of arable lands are still unoccupied in the United States and Canada, the far greater part of them require a comparatively large initial outlay for draining, clearing, irrigation, etc., in order to become productive. Hence there is no likelihood that they can be brought under cultivation fast enough to halt or greatly retard the advancing values which follow upon the growth of population and the increased demand for agricultural products. In all probability the greater part of them will not come into use until the prices of farm products have risen above the present level. Obviously this supposes an increase in the value of all farm land, old and new. Nor is the adoption of better methods of farming likely to check seriously the upward movement. Between 1900 and 1910 the urban population of America increased 34.8 per cent., as against a gain of only 21 per cent. in the total population. This disproportionate growth in the number of the city dwellers will if continued make certain what is in any case extremely probable, a steady and considerable advance in urban land values and rents.
The circumstance that these remarkable increases in land values are a comparatively recent phenomenon has prevented them from receiving the attention that they deserve, either from the general public or from the students of economic and social problems. The total value of the land of the country has increased steadily from decade to decade, but so has the total value of capital, and even between 1900 and 1910 the increase in the share of the capitalist was exactly equal to the increase in the share of the landowner, that is, 91 per cent.[71] Those persons who complacently make such comparisons overlook the new and significant feature of the more recent advances in land value; namely, that they are due in only a slight degree to an expansion of the area of land under consideration. The increases of value quoted in the foregoing paragraphs are increases per acre and per urban lot, not increases derived from bringing new land under cultivation or new tracts within municipal limits. On the other hand, the increases in the value of capital, now as always, represent for the most part concrete additions to the existing stock of productive instruments. Except where monopoly holds sway, particular capital instruments, unlike particular pieces of land, do not increase in value. Hence the owner of a given amount of capital does not profit by the advance in the total value of capital as the owner of the average parcel of land profits by the general increase in the value of land. This means that all those consumers of products who are not landowners must pay an increasing tribute to those who are landed proprietors.
So much for the proportion of the national product which goes to the landowning class. Let us next inquire how the landowner's share, or rent, is distributed throughout the population. If it were equally divided among all persons, its increase relatively to the shares of the other factors would, from the social viewpoint, be a matter of considerable indifference. On the other hand, if it is secured by a minority of the population, and if that minority tends to become smaller as the share itself becomes larger, we have a socially undesirable condition.
In the twenty years between 1890 and 1910, the proportion of farm families in the United States owning farm land, mortgaged or unmortgaged, declined from 65.9 per cent. to 62.8 per cent.; the proportion of urban families owning their homes, encumbered or unencumbered, increased from 36.9 to 38.4 per cent., and the proportion of all families owning homes, encumbered or unencumbered, fell from 47.8 to 45.8 per cent. Of the homes owned by their occupiers, 28 per cent. were mortgaged in 1890, and 32.8 per cent. in 1910.[72] While a decline of two per cent. in the home owning and landowning families in twenty years, and an increase of almost five per cent. in the number of those families who hold their property subject to encumbrance, may not seem very serious in themselves, they indicate a definitely unhealthy trend. Not only are the landowning families in a minority, but the minority is becoming smaller.
Nevertheless, when we consider the amount of gains accruing to the average member of the landowning class, we do not find that it is unreasonably large. The great majority of landed proprietors have not received, nor are they likely to receive, from their holdings incomes sufficiently large to be called excessive shares of the national product. Their gross returns from land have not exceeded the equivalent of fair interest on their actual investment, and fair wages for their labour. The landowners who have been enabled through their holdings to rise above the level of moderate living constitute a comparatively small minority. And these statements are true of both agricultural and urban proprietors.
It is true that a considerable number of persons, absolutely speaking, have amassed great wealth out of land. It is a well known fact that land was the principal source of the great mediæval and post-mediæval fortunes, down to the end of the eighteenth century. "The historical foundation of capitalism is rent."[73] Capitalism had its beginning in the revenue from agricultural lands, city sites, and mines. A conspicuous example is that of the great Fugger family of the sixteenth century, whose wealth was mostly derived from the ownership and exploitation of rich mineral lands.[74] In the United States very few large fortunes have been obtained from agricultural land, but the same is not true of mineral lands, timber lands, or urban sites. "The growth of cities has, through real estate speculation and incremental income, made many of our millionaires."[75] "As with the unearned income of city land, our mineral resources have been conspicuously prolific producers of millionaires."[76] The most striking instance of great wealth derived from urban land is the fortune of the Astor family. While gains from trading ventures formed the beginning of the riches of the original Astor, John Jacob, these were "a comparatively insignificant portion of the great fortune which he transmitted to his descendants."[77] At his death, in 1848, John Jacob Astor's real estate holdings in New York City were valued at eighteen or twenty million dollars. To-day the Astor estate in that city is estimated at between 450 and 500 millions, and within a quarter of a century will not improbably be worth one billion dollars.[78] According to an investigation made in 1892 by the New York Tribune, 26.4 per cent. of the millionaire fortunes of the United States at that time were traceable to landownership, while 41.5 per cent. were derived from competitive industries which were largely assisted by land possessions.[79] The proportion of such fortunes that is due, directly or indirectly, in whole or in part, to landownership has undoubtedly increased considerably since 1892.