Various
Appletons' Popular Science Monthly, October 1899
Now let us turn to the Northwest Territories, where, according to Sir W. Crookes, there is practically no amount of land of any consequence available for wheat, and let us remember that the same authority limits the wheat area of Canada to a maximum of twelve million acres. The area of the three provisional districts, with which alone we will deal, is as follows, viz.: Assiniboia, 57,177,600 acres; Saskatchewan, 69,120,000 acres; and Alberta, 63,523,200 acres (these figures being exclusive of water surface), making a total of 189,820,000 acres. Some of this large area is possibly not particularly well adapted for agricultural purposes, but a careful examination of all available data on the subject justifies one in saying that fully one half is suitable for successful wheat cultivation, while in eastern and southern Assiniboia there are some 20,000,000 acres, in the valley of the Saskatchewan 14,000,000 acres, and in northern Alberta 15,000,000 acres that are especially adapted for the production of wheat as a staple crop. The area is so large and settlement at present so sparse, that it is impossible to do more than give its capabilities in general terms, founded on the opinions of experienced men who have traveled over it. Professor Saunders, Director of the Experimental Farm at Ottawa, than whom there is no better authority on the subject in the Dominion, told me that, from what he saw of the country in driving over it, he became more and more impressed every year with the vast area of good land in the Northwest, and no practical man has ever traveled through those regions but has been amazed at the prospect of their capabilities.
But we have not yet reckoned with the rich and fertile province of Ontario. This province has a land area of 140,576,000 acres, of which 11,888,853 acres were under cultivation in 1898, and of this latter quantity 1,437,387 acres, or twelve per cent, were in wheat, being an increase of 163,860 acres over the wheat area of 1897, and of 62,573 acres over the average of 1882-'98. According to the census of 1881 there were nearly 2,000,000 acres in wheat in 1880, but, under the influence of an unremunerative market, the area declined year by year until in 1895 there were but 967,156 acres so employed; since then, however, stimulated by a more profitable price, the area has increased by 470,471 acres, and an increase of twenty per cent upward is reported in the area for 1899. Fall wheat in this province is a very successful crop, having averaged in the last two years twenty-five bushels and twenty-four bushels per acre respectively, while the average for the period 1882-'98 has been 20.5 bushels per acre, so that nothing but a continuance of good prices is needed to largely increase the production of wheat in Ontario. In no part of the province, where agriculture is possible, has wheat failed to grow, but the area is so large that it would be unwise to put into figures the extent available for wheat cultivation, it being sufficient to show that a very large portion, if not indeed the whole, of the twelve million acres to which Sir W. Crookes has limited Canada could, other conditions being favorable, be supplied by Ontario alone.
The "trustworthy estimates" quoted by Sir W. Crookes limit, as has been stated, the wheat area of Canada to a maximum of twelve million acres under cultivation in twenty-five years; whence the estimates were derived or on what grounds they are entitled to be considered trustworthy there is no information; but is it of any consequence? Let them come from whatever source they may, are they not perfectly useless? The progress of wheat cultivation during the next twenty-five years does not depend upon any mathematical ratio of progression, but on the course of certain events absolutely unknown at the present time. The point is that Sir W. Crookes adopts these estimates and gives out to the world a statement, on the strength of them, that, in addition to the 3,500,000 acres at present in use, there are not more than 8,500,000 acres in Canada available for wheat cultivation – a statement calculated, if believed, to seriously damage Canada's prospects of settlement, and a statement that is as much at variance with the actual facts as it is possible for such things to be. Is it fair to the country for a man of such high standing and reputation to make such unfounded assertions? Five minutes' real consideration of the question would have convinced him that there are more than that number of acres in the province of Manitoba alone. The figures already given, which have been prepared from the most reliable available information, go to show that there are upward of seventy-five million acres of land in Canada especially adapted for the production of wheat, and this estimate is confined to those portions of the country which may be considered as essentially wheat-producing areas; and no account has been taken of the vast extent of land, not only in the provinces of Ontario and Manitoba and in the Northwest Territories, but also in the otherwise unnoticed provinces of Quebec, Nova Scotia, New Brunswick, Prince Edward Island, and British Columbia, that is not only suitable for the production of wheat, but on which a large quantity of wheat will undoubtedly be grown, which, entering into home consumption, will increase the exportable surplus.
I am well aware that there are a number of people who will say that my figures underestimate the resources of the country, but I would rather that it were so than indulge in figures that seem too extravagant to be realized; and if, in the future, it appears that the wheat area is larger than I have stated, then so much the better for Canada. I do not mind how much evidence can be brought to increase my figures, as long as I am satisfied that they can not be truthfully reduced.
It is not intended to accuse Sir W. Crookes of deliberately misrepresenting Canada, but rather of almost criminal carelessness in the preparation of his case; but it is intended to accuse Mr. C. Wood Davis of the former offense and of intentionally garbling extracts from an official handbook issued by the Canadian Minister of the Interior in order to decry that country's wheat-bearing capabilities. By taking a line here and there which seems to serve his ends, and by leaving out everything that would have a contrary tendency, Mr. Davis, in his article in The Forum, makes it to appear that, according to the Minister of the Interior, the greater part of the Canadian Northwest is not only incapable of producing wheat, but is actually unfit for settlement, and summarizes his extracts by saying, "Available data do not show that any part of the Canadian districts named, except southern Manitoba and the eastern half of Assiniboia, is adapted to wheat culture, while they do show that over the greater part of these vast regions neither summer heats nor rainfalls are sufficient." This statement is false in every particular. The official handbook from which Mr. Davis professes to quote says of Manitoba that there are thirty-seven million acres available for active farm cultivation, giving therefore no warrant for the limiting of the wheat area to the southern part of the province. Mr. Davis quotes a line here and there about southern Alberta in order to convey the impression that that part of the country is good for nothing, whereas, while it is essentially a ranching and dairying country, producing a most luxurious and nutritious growth of native grasses, with a bountiful supply of water for irrigation purposes, by which means most satisfactory crops of grain and fodder are produced, it has never been contended that it is particularly well adapted for wheat-growing; but, on the other hand, Mr. Davis carefully omits all mention of northern Alberta, and has no room for the following remarks about it which appear on the same page of the handbook: "Northern Alberta is essentially an agricultural district; … the principal advantages of the district will insure settlement by immigrants who desire to engage in grain farming… The rainfall in northern Alberta during the summer months is sufficient to insure good crops." Concerning the district of Saskatchewan, Mr. Davis quotes a remark about some of the wooded portion being unsuited to the immediate requirements of settlement, as if it applied to the whole district, and deliberately omits the following: "The southern half of the district" (Saskatchewan) "is traversed from east to west by the Saskatchewan River, and the valley of this important stream, with the country immediately adjacent thereto, has long been famed as a desirable field for immigration." With reference to precipitation, Mr. Davis has so garbled his extracts as to convey the impression that the handbook states that over the greater part of the Northwest the rainfall is not sufficient for the pursuit of agriculture, whereas what the book really says is, "So far as the Canadian Northwest is concerned, out of about two hundred million acres of land between the Red River of the North to the Rocky Mountains, available for agricultural and pastoral purposes, not more than about one fourth, or fifty million acres in all, require the artificial application of water."
Mr. Davis's attempts to prejudice the interests of the Northwest by remarks on the severity of the climate do not need serious attention; the experience of the inhabitants and the annual production of the country speak for themselves, and it is well understood that mere thermometer readings afford little indication in themselves of the nature of a climate, and that temperatures unendurable in some countries are enjoyable, salubrious, and advantageous in others. It seems difficult to believe that Mr. Davis ever wrote the following sentence, but having written it, it would be well if he would take it to heart: "Truly 'honesty is the best policy' in the employment of statistics, whether by scientists, by plain people, or by professional statisticians; while the ability to eschew bucket-shop methods, to read correctly, to state facts and to state them clearly, and to criticise with intelligence and entire fairness, is especially desirable."
Sir W. Crookes is not content with reducing Canada's wheat resources to an insignificant minimum, but he must also retard as much as possible the development even of the small area that he admits to exist, for he says: "The development of this promising area necessarily must be slow, since prairie land can not be laid under wheat in advance of a population sufficient to supply the needful labor at seed time and harvest. As population increases so do home demands for wheat." To say that prairie land can not be laid under wheat in advance of population, and that as population increases so do home demands for wheat, are mere truisms, but it is incorrect to say that therefore the development must be slow. The rate of development depends entirely upon the rate of increase of population, and that increase depends upon the price of wheat, and the area of production will increase concurrently with the demand. According to Mr. Davis – and we will assume that his figures are in this case correct – the population in the United States in fourteen years from 1871 increased forty-four per cent and the cultivated area one hundred and twelve per cent, and, if that was the case, no estimates, however trustworthy, could have provided for such results.
It has been perfectly true, as Sir W. Crookes says, that as the wheat area of Manitoba and the Northwest increased, the wheat area of Ontario and the eastern provinces decreased, but this was in consequence of the continued low price of wheat, which led the farmers of Ontario to turn their attention more and more to dairy and mixed farming, substituting hay and root crops for wheat and barley, until the province became a dairying rather than a cereal-producing country; but that this was a movement to suit the times, and that the area available for wheat is no less in consequence, is evidenced by the rapid increase in the wheat acreage in the last two years. The farmer produces what pays him best, and it is certain that before Sir W. Crookes's failure of the wheat supply comes to pass prices will have been such that every acre of land suitable for wheat and that can be spared from other uses will have been taken advantage of; and if this is not the case, then some other staple for food will have been substituted, which will necessarily change the whole economic situation as viewed at present.
It is also true that "thus far performance has lagged behind promise," but the reasons for this are the same, and in the low values we find a ready explanation of the apparent lack of progress. What inducement has the immigrant had of late years to take up land for, or the farmer to grow, wheat that he could hardly sell for the actual cost of production? And yet Sir W. Crookes would argue that because the land has not been utilized for this particular purpose the land can not be there, and that land upon which wheat once was grown, but which is now employed for other purposes, can never again be included in the wheat-bearing area.
Progress may appear to have been slow, but it has kept pace with the demand, and in any case has been considerably more rapid than Sir W. Crookes allows. He says, "The wheat-bearing area of all Canada has increased less than 500,000 acres since 1884," whereas the actual increase since 1880 has been over 1,100,000 acres, and since 1890 upward of 760,000 acres. The area under wheat in Canada in 1898 was 3,508,540 acres, so that Sir W. Crookes only allows for an increase of 2,500,000 acres in the next twelve years. Perhaps it will not be as much, but if it is not, it will only be putting the predicted day of famine still farther away, and will prove nothing more than the fact that the state of the market has not warranted any more extended cultivation.
The statements made by Sir W. Crookes about the wheat acreage in the States are as incorrect as those about Canada, for he says, in his letter to The Times of December 8, 1898, that "the whole wheat acreage in the United States is less than it was fifteen years ago," whereas the official figures for 1897 and 1898, which were before him at the time, told him that the wheat acreage in 1897 was 3,000,000 acres in excess of the average of the preceding fifteen years, and in 1898 was in the neighborhood of 5,000,000 acres in excess of any year in the history of that country. Do not the fluctuations in the wheat acreage of the United States in recent years prove conclusively that they were solely the result of the movement of prices, and had no bearing whatever on the question of exhaustion of land? Under the depressing influence of an unprofitable market, the wheat area fell from 39,900,000 acres in 1891 to 34,000,000 acres in 1895, but, under the stimulus of a substantial appreciation, increased again, in three years, to 44,000,000 acres. If, in spite of a rising and remunerative market, the area had remained stationary or shown signs of decrease, it would have been in order to call attention to the fact as indicating exhaustion; but when, in immediate response to a rising market, the area increases by leaps and bounds, the question of exhaustion becomes less and less one of actual probability, and more and more one of theoretical possibility. A precisely similar line of reasoning is applicable to the fluctuations in the province of Ontario, and goes to show just as clearly that the decrease in area has had absolutely no bearing on the wheat-producing capabilities of the province.
"A permanently high price for wheat is, I fear, a calamity that ere long must be faced," says Sir W. Crookes; but, with due deference to so great an authority, I believe that the day of a permanent high price for wheat is yet far distant. There will be appreciations undoubtedly, but the sources of supply as yet undrawn upon are so great that it will be long before those appreciations are of any prolonged duration; but in the meantime they mean periods of great prosperity to the farmer and therefore to the world. Is a higher price for wheat such an unmixed calamity, after all? Has the average consumer of wheat benefited by the low price of wheat of late years in proportion to the hardships endured by the producer? I think not. Let those who are qualified by literary and scientific knowledge point out if they will the possibility, or even perhaps the probability, of at some period in the future the time coming when there may be, if present conditions continue to exist, a scarcity in the wheat supply, and urge as strongly as they like the advisability of taking steps in good time to prevent such a calamity; but nothing is to be gained by frightening the world with predictions of evil based only on a series of unfounded assertions, mathematical calculations, and "purely speculative computations." When, if ever, the day of scarcity will come is unknown. That it is yet far off appears to be tolerably certain; but it is sufficient for the purposes of this article that it should be understood that Sir W. Crookes's statements concerning the wheat area of Canada are absolutely unreliable and incorrect, and that there are millions of acres of good wheat land waiting for occupation by the surplus population of the world, which, when under cultivation, will assist in deferring for many years the threatened day of famine.
Dr. Sven Hedin, in his account of travel through Asia, mentions as the most remarkable feature in the central region of internal drainage (in which the rivers drain into inland lakes) "the process of leveling which goes on unceasingly. The detritus which results from the disintegrating action of the weather, and the more or less mechanical agency of the wind and water and gravity, is constantly being carried down from the mountains all round its borders toward the lower parts of its depressions, and being deposited there. In this way the natural inequalities in the configuration of the ground are being gradually smoothed away." Mr. Curzon refers to the same phenomenon in the central districts of the Pamirs – the process being the exact reverse to that where the streams hew out deep ravines in their course to the sea-going river.
BEST METHODS OF TAXATION
By the Late Hon. DAVID A. WELLS
PART III (concluded)
The universal and admitted failure of the general property tax to attain good results and the great difficulty, indeed the impossibility, of reducing it to a form in which it can operate with efficiency and an approach to justice, must lead to its abolition and the gradual substitution of other and more simple taxes. However well adapted to a community in which the taxable property was in evidence and easily assessed for purposes of taxation, it becomes antiquated, unequal, and inquisitorial in a people where credit and credit investments have been highly developed, and where the greater social activities, whether in commerce or industry, transportation or production, are conducted by corporations issuing various kinds of securities, none of which can easily be reached by a taxing authority away from the center of incorporation. To undertake to include these securities, evidences of debt, or obligations in a general property tax is to invite evasion, put a heavy inducement on concealment, and, whenever effective, to give rise to shocking inequalities of burden. The widow and orphan, whose property is in the hands of a trustee, pay the full tax; in any other direction the holder of stocks or bonds, money or notes, escapes according to the elasticity of his conscience. The very exemptions recognized by law give an opportunity for new evasions, based upon analogy or upon some technicality under which the business is conducted. Bonds of the United States, the legal-tender notes, or money are beyond the reach of State authorities for the purpose of taxation. In the same category come also all imported goods in original packages, in the possession of the importers, and all property in transit. These exemptions alone amount to thousands of millions of dollars, and the tendency has been to increase the number of items exempted. But every such exception under the law adds to the burdens of the honest taxpayer, and every evasion of taxation also renders his charge the greater. Here is not distributive justice, but concentrated injustice.
Another large proportion of the personal property owned by the citizens of the State is of the most intangible character, and in great part invisible and incorporeal, such, for instance, as negotiable instruments in the form of bills of exchange, State, municipal, and corporate bonds, and, if actually situated in other States, exempt from taxation where they are held; acknowledgments of individual indebtedness, and a number of similar matters. All property of this character is, through a great variety of circumstances, constantly fluctuating in value; is offset by indebtedness which may never be the same one hour with another; is easy to transfer, and by simple delivery is, in fact, transferred continually from one locality to another, and from the protection and laws of one State to the sovereignty and jurisdiction of some other. It is not to be wondered, therefore, that all attempts to value and assess this description of property have proved exceedingly unsatisfactory, and that nearly every civilized community, with the exception of the States of the Federal Union, have long ago abandoned the project as something wholly inexpedient and impracticable.
The differences among the States in the interpretation of residence, of the situs of the property taxed, are also an objection to this system and an obstacle to its application. The want of uniformity can not be abolished by enactments of law, because absolute uniformity of laws would not insure as uniform interpretation of their provisions. The rules for assessment are uniform for the officers of a State, but the returns made involve such differences in the application of the rules that one is forced to the conclusion that a misunderstanding of the spirit of the law exists, coloring differently the view of each returning officer. Discrimination against the county or municipality and discrimination against the individual are to be met at every turn. No wording of the law can eliminate this personal judgment of each assessing authority, and the supervision of the returns by State boards of equalization has introduced an even greater departure from justice, as a majority, based upon selfish interests, may be had, and its decision may readily be defended as based upon good and sufficient reasons. An appeal to the last resort, the higher courts, may produce redress against unjust assessments, but each case must be decided upon its merits, and only under very exceptional circumstances – as in the recent case at Tarrytown, New York, where striking and general, even personal, spite had been shown in the tax levy – can a number of taxpayers find it their interest to combine and carry the question into the courts for adjudication.
Imperfect in theory, the machinery of the general property tax is imperfect. With at present fully two thirds of the personal property of the State exempted from taxation by law or by circumstances growing out of its condition, or the natural depravity and selfishness of the average taxpayer, and with a large part of the other third exempted by competing nations or neighboring States, what becomes of the theory so generally accepted in the United States that in order to tax equitably it is necessary to tax everything? A very slight examination leads to the conclusion that it is the most imperfect system of taxation that ever existed; that, with the exception of moneyed corporations, it is a mere voluntary assessment, which may be diminished at any time by an offset of indebtedness which the law invites the taxpayers to increase ad infinitum, borrowing on pledge of corporate stocks, United States bonds, legal-tender notes, etc., all exempt from taxation; that its administration in respect to justice and equity is a farce and more uncertain and hazardous than the chances of the gaming table; and that its continuance is more provocative of immorality and more obstructive of material development than any one agency that can possibly be mentioned. A stringent enforcement only leads to greater perversions and a wider evasion. A lax enforcement does not reduce its inequalities and general want of application to actual conditions.10
The problem, then, is what taxes to introduce in place of this confessed failure of the general property tax.
There can be little doubt that the desire for greater simplicity in taxation is generally felt, and in part put into practice. The mass of various kinds of imposts, added without any system or real connection or relation one to another, has often resulted in so large a number of charges on Government account as to defeat itself. The French taxes at the end of the last century, with their added fault of inequality and injustice in distribution, led naturally to the theory of a single tax – the impôt unique of the physiocrats – which did not become a fact, yet registered the protest against the multiplicity and crying oppressiveness of the remains of feudal dues and fiscal experiments undertaken under the stress of an empty treasury. So it has been noted at the present time that where an opportunity has offered there is a tendency in European countries to simplify their taxes, and, as in the case of Switzerland, prepare the way for income and property taxes. It is a greater dependence on such direct taxes in place of indirect taxes that has distinguished the great fiscal changes in recent years. Germany may have wished to establish a brandy monopoly, and Russia may resort to a monopoly of the manufacture and sale of distilled spirits. But England increases her death duties, France and the United States seek to frame acceptable taxes on income, and Switzerland succeeds in modifying her system in the line of direct taxes.
There is an earnest movement in favor of a single tax on the value of land, exclusive of other real property connected with it. As involving a question of abstract justice the proposition has much in its favor, but it can not be denied that practical obstacles oppose its adoption. The recent commission on taxation in Massachusetts thus treats of it: "It proposes virtually a radical change in the ownership of land, and therefore a revolution in the entire social body. In this form of taxation all revenue from land alone is to be appropriated – that is, the beneficial ownership of land is to cease. Whether or not this system, if it had been adopted at the outset and had since been maintained, would have been to the public advantage may be an open question, but it would certainly seem to be too late now to turn to it in the manner proposed. In any event, it involves properly not questions of taxation, but questions as to the advantage or disadvantage of private property in land."11
If securities are to be taxed, the methods adopted should avoid a double taxation, and an attempt to reach capital outside of the State. It is evident that a State, like Massachusetts, which taxes the foreign holder of shares in its corporations as well as the shares of foreign corporations held by its own citizens, is inviting a dangerous reprisal from other States. "Wherever the owner may be, if the corporation is chartered within the State the Commonwealth collects the tax on the shares. Wherever the corporation may be, if the owner is within the State the Commonwealth also collects the tax (in theory of law at least)." If this be the best possible system, and it is supposed Massachusetts assumes it to be, general double taxation would follow its adoption by the other States. The effort to carry this rule into practice proves its injustice as well as futility. The most searching and inquisitorial methods of seeking such property will not avail to reach a good part of it, and this results in adding inequality of burden to its other difficulties. Evasion is too simple a process to be unused, and the heavier the rate of tax the greater will be the resort to evasion and even to perjury, express or implied. The fundamental cause of the failure lies in this, "the endeavor to tax securities, which are no more than evidences of ownership or interest in property, and which offer the easiest means of concealment and evasion, by the same methods and at the same rate as tangible property situated on the spot."
This inherent difficulty can be cured only by abandoning the attempt to tax directly securities or evidences of debt, representing ownership or interest in property beyond the limits of the taxing authority. In the case of the securities of home companies they may be readily taxed at the source, but in the case of foreign corporations it is only by methods almost revolting in their injustice and treatment of the taxpayer that even a partial success can be secured. The dependence upon the sworn statement or declaration of the taxpayer is known to be extremely faulty and to offer a premium on untruthfulness. So long as this dependence is retained in whole or in part in a system for taxing personal property, the results must be unsatisfactory. The most judicious, even if it seems the most radical, remedy is to abandon the taxation of securities. Certainly it would be well to put an end to the Massachusetts plan of taxing securities representing property outside of the State, for that involves double taxation wherever it has been possible to impose the tax. What can be reached only by methods at all times trying and difficult, and sometimes very demoralizing, should not be permitted to remain a permanent feature of the revenue system of a State.