The small parties of settlers which were planted at isolated spots on the vast perimeter of an unexplored continent grew into communities independent of each other and adopted varying institutions, despite all efforts of the British Government to impose uniformity. These different settlements provide interesting material for the student of social principles although the first two, at Sydney (New South Wales) in 1788, and Derwent River (Tasmania) in 1803, were convict communities living under conditions too artificial to provide examples of general implication. The next two settlements, however, were intended to be steps in regular colonisation; in fact, from the first of them, the Swan River scheme (Western Australia) 1829, eventually developed the city of Perth and from the second, the South Australian Association's Gulf St. Vincent settlement, 1833, came the city of Adelaide. Although the second undertaking consciously endeavoured to avoid the mistakes of the first, both set out to transplant the land tenure system of modern Europe - absolute ownership of a piece of the earth's surface - into a vast area of unoccupied territory. Under such simplified conditions the unalterable relationship between the economic elements, land, labour and capital, can be observed much more easily than in long settled communities where its effects are overlaid by complex legislation, material development and the domination of custom over thought. These two experiments thus constitute a chapter of universal history. They carry a message for every society which uses land, labour and capital; and this means every community in this world of ours.

In Western Australia:

The Swan River Colonists

The fortunes of the first expedition were analysed by the celebrated colonial theorist, Edward Gibbon Wakefield, in his book England and America with its appendix 'The Art of Colonisation,' published in 1833. Wakefield impressed John Stuart Mill and others with his theories and was destined to exert considerable influence on the early history of Australia and New Zealand. "At the Swan River," says Wakefield, "the first settlers had hardly landed before the Governor was requested to punish indentured labourers for refusing to work for those who had brought them from England ... Those who went out as labourers no sooner reached the colony than they were tempted by the superabundance of good land to become landowners."

Mr. Peel and his Capital

In South Australia:

The St. Vincent Gulf Colonists

Official vacillation was very marked in the Government's negotiations with Baron, Torrens, Whitmore and others who proposed settlements in the neighbourhood of St. Vincent Gulf after Captain Sturt's exploration of that district in 1830. Finally, the South Australian Association, under the chairmanship of Mr. W.W. Whitmore, M.P., and formed in 1834, put forward a plan designed by Wakefield to develop the country while avoiding the errors of the Swan River Scheme. The plan proposed that no free grants of land should be made but land should be sold at an upset price of not less than 12s. or more than 20s. per acre. The money so obtained should form a fund to give free passages to qualified labourers and mechanics with their wives and families, the colony to bear all its own charges and to have the principal management of its affairs.

Organised Land Speculation

The first Board of Commissioners worked for six months in an endeavour to sell the required quantity of land and, not being successful, tendered their resignations. In May, 1835, a new Board was appointed, and these Commissioners, being of the opinion that 12s. an acre was too low, fixed the price of the saleable land at 20s. an acre. In the result as might have been expected, not only were Wakefield's plans disrupted but the whole scheme was threatened with collapse. At that critical stage, a wealthy and far-sighted merchant, Mr. George Fife Angas, became interested in the possibilities of the situation. He formed a joint-stock company which offered to buy as much land in the territory as would enable the Commissioners to fulfil their obligations. But he laid down the condition that the price be reduced to 12s. an acre, and other concessions were demanded. The Commissioners reluctantly accepted the offer, and with the price reduced from £1 to 12s. per acre, the area of each "Land Order" was accordingly increased from 81 acres to 135 acres, each including one town acre. By November, 1835, the sales were completed and the Board was enabled to discharge its statutory commitments.

Land Value of Adelaide City

Prosperity - But for Whom?

Hence, in determining the proper price of public lands in the new colony, two points have to be considered: first, the price necessary to convey to the colony the number of labourers required to cultivate the land; and second, the price necessary to prevent the labourers so conveyed from acquiring property in land before they have worked for wages for a sufficient period. In order to accomplish the latter object it is not improbable that at an early period after the arrival of the Governor it may be desirable to raise the price of public lands to over one pound per acre."

Labour Denied Independence

The danger of men becoming independent did indeed loom large on the horizon of the Commissioners. And how would they avert it? "We venture to hope " they said "that your Lordship will approve of our having authorised the Colonial Commissioner to advance the price of public land, should the labourers conveyed to the colony by the Emigration Fund begin to cultivate small farms on their own account before the arrival of other labourers to work for hire in their stead."

High Rents - Low Wages

Deliberate Aim of Colonial Policy

The Commissioners were not, of course, interested in any general principle of society, they were concerned only in administering a land-selling scheme for the benefit of its projectors; but they were impressed by their experience that control of land enabled them to control almost everything else and yet retain all the features of a free society as they understood it. "Without either slaves or convicts," says the Report, "capitalists of every description will obtain without cost, as many labourers as they wish to employ; and engagements which labourers may make for a term of service will be maintained. The means of securing all this is a proper price for the land." If one person has an instrument whereby he can secure a never-ending stream of others to work for him at low wages it is impossible to see what real difference it makes either to him or the labourers whether the instrument happens to be called slavery or land monopoly. The Commissioners were perfectly right, however, if they reasoned that because England was called a free country, therefore South Australia must be free; for the same land monopoly ruled and rules both.

Wakefield's system was in effect nothing more than an ingenious method of neutralising the advantage which workers might have obtained by moving from where land was monopolised to where it happened for the moment to be free. If the Commissioners deceived themselves on this matter they did no more than the countless millions before and since, who look only on the surface of events in their immediate vicinity, adopt that view of them which their neighbours adopt, and regard such things as abstract principles in public affairs, or the good of mankind in general, as idle and presumptuous speculations. The fact is, however, that even those who distrust any radical change, hoping thereby to maintain existing conditions, are bound to be disappointed.

Stubborn Opposition and the Outcome

In order to understand the kind of income that a tax on land values would touch, it is interesting to take one example, out of many similar examples investigated at the same time, going back to the chapter of history we have been examining. It must be emphasised, however, that where land value is treated as private property, as it is treated in almost all advanced countries, the same conditions apply.

Story of the Thorngate Estate

If Mr. Thorngate had in fact come to Australia and settled on the land he owned, he and his heirs would have had no more right to land value, which would have grown in the same way, than they enjoy as absentees; but it would have been more difficult to show that it owed nothing to their individual efforts. If in 1837, all the other inhabitants of Adelaide and district had returned to England and none had taken their place, they would have left Mr. Thorngate nothing to show for the £324 he had spent.

The Moral

The site value of any land is the expression of its superior advantages over those of the least profitable land in use. Site or land value depends entirely on the presence and activities of the people as a whole - as we have seen in the case of the Thorngate Estate - and to the community it rightly belongs. This is the basic principle of just land tenure; and its corollary is that everything produced by individuals singly or in voluntary collaboration remains entirely their property. By collecting land value by taxation and remitting other taxes the just harmony of land tenure, taxation and property right is automatically established; and the basic instrument by which one person can at present exploit another is destroyed.

Since the effects of land monopoly were so obvious in early Australia, one might have expected that an aroused public opinion would have demanded immediate redress. But that expectation would have ignored the countervailing influences.

The circumstances were that these emigrants came from a country where the private ownership of land and its resources was accepted as of the nature of things. At home the whole thought and energy of the emigrants had been directed to the immediate struggle to keep alive. Arriving in a country where rumour and imagination dwelt on the making of large fortunes, they would have been different from most other people if they had been especially interested in the purity of social institutions. Even if they suspected that they were being exploited, they could nurse the hope, in these rapidly changing conditions, of exploiting others in their turn. Wakefield's scheme required them to remain as hired labourers not for all the time, but only until others came to take their places.

Statesmanship of Sir George Grey

From his own observation Sir George Grey came to the conclusion that no individual had the right to own land value, which was public property, as the public produced it; and no government had the right to take from the individual, by taxation or otherwise, any part of the wealth produced by the individual; moreover, if every owner of land were obliged to pay its annual land value to the community, no man could own more land than he himself could use, and thus no man would be in a position to exploit others as he saw landowners exploiting the landless in so many parts of the world. To collect land value for public purposes, he knew, would check the land grabbing corporations with which he was well acquainted; it would liberate the producers in all lands, whatever their stage of development, and provide a continually increasing revenue in accordance with the material advance of each community.

These opinions were understood by others in Australia and New Zealand. In 1879, before Henry George's Progress and Poverty had appeared, Sir George Grey, as Prime Minister and leader of the New Zealand Liberal Party, passed an Act providing for ½d. in the £ tax on the (capital) unimproved value of land. This Act was rescinded by the Conservative Government of the following year, but it proved the prelude to similar Acts providing for small collections of land value, for state or local revenue throughout Australasia, South Australia in 1884 taking the lead. It is true that progress since then has been slow and fluctuating; as in other countries, extraneous events and currents of opinion have diverted attention from this essential reform. But Australasian example makes it impossible for opponents to assert that land value taxation is impracticable. Thus the later as well as the earlier history of Australia provides evidence of value to those in any country who see the paramount need to establish equal rights to land, the first requirement of human life.