PUBLIC DISCUSSION

BEFORE

THE ASSESSMENT COMMISSION.

FIRST DAY.

Reception Room, Parliament Buildings, Tuesday, November 13th, 1900.

The Commission met at 10.30 a.m. Present, the following: The Hon. Mr. Justice Maclennan (Chairman), Hon. Mr. Justice MacMahon, Mr. Kenneth W. MacKay, Mr. Daniel Robert Wilkie, Mr. Thomas Henry MacPherson, Mr. Abraham Pratt,

The CHAIRMAN: I have a letter from Mr. Butler, one of our colleagues, saying he will not be able to be present to day, as he had occasion to go to Prince Edward Island on business and has not been able to return, so that all the Commissioners are present now whom we may expect to be present to day, and there is no reason why we should not, therefore, proceed to business. The subject which is fixed for to-day is the assessment of land, and the improvements therein respectively; and the Commission is now prepared to hear any gentlemen who are present who have any suggestions to make to the Commission upon that subject.

Mr. NICOL KINGSMILL, QC.: Mr. Chairman, there are a number of corporations and companies that are interested in the questions that are to come before this Commission, and they agreed together that they should be represented by counsel. The counsel that was selected for that purpose was Mr. Christopher Robinson, assisted by Mr. Hellmuth, Mr. MacMurchy and Mr. Lynch-Staunton, of Hamilton. Mr. Robinson is not able to be here to day owing to the unfortunate death of his sister, and so I just came here to make that statement of fact, and at the same time to say in regard to the first question that is on the programme, that of course those companies would be to some extent interested in reference to the assessment of land, and I would suggest that perhaps the evidence had better be heard as affecting those companies in regard to the assessment of land on the day on which the third question is brought before the Commission. would probably be more convenient.

The CHAIRMAN: Questions relating to companies?

That

Mr. KINGSMILL: The companies represented are the Canadian Pacific Railway, the Canada Southern, Toronto, Hamilton and Buffalo, and some smaller railways, the Consumers' Gas Co., the Toronto and London Street Railways, Great North-Western Telegraph Co, Bell Telephone Co, Toronto Electric Light Co., and some other small companies.

The CHAIRMAN: We must endeavor to go on with the first subject to-day as far as

we can.

Mr. JUSTICE MACMAHON : The subject is a very wide one outside of those who are asking for postponement, and whose evidence would be in regard to very special matters.

The OHAIRMAN: Your proposal, Mr. Kingsmill, is that what these companies may have to say to us should stand over until the third question comes up, is it?

Mr. KINGSMILL: Yes. It is so mixed up with the general subject, particularly in the case of railways, the question of their real estate is so mixed up with the general subject that I think it would be more convenient if they were heard together.

The CHAIRMAN: There is a difficulty about that, because what the companies may have to lay before us ought to be laid before us at a time when people of other views would have an opportunity of hearing and answering them.

Mr. KINGSMILL: I do not think that would be a difficult condition; if they had the views of these other people represented, I see no absolute necessity for their being represented the same day.

The CHAIRMAN: No; but those who would desire to present the opposite view ought to be able to be present to hear those views and answer them.

Mr. KINGSMILL: I fancy that those people would be probably those who would be interested in having the taxation made as large as possible. I fancy they will be represented always here-I mean those representing the municipalities.

Mr. JUSTICE MACMAHON: I suppose the general question might be presented first, then the special aspect by these corporations, and then whatever would come from the other side would be in reply, in opposition of the views expressed by counsel for these various corporations. I do not suppose there is any other way, because the subject is a very wide one independent of the special class you are representing.

Mr. KINGSMILL: I am not one of the Counsel for the corporations; I believe their opinion is that it would be more convenient if when they are representing their views about taxation of their franchise and property and so on, that the question of Real Estate should be taken up. That would be rather a special line as regards the property of corporations, and I think should not interfere with the Commission going into the general question to-day.

Mr. Justice MACMAHON: Oh no I suppose not.

Mr. KINGSMILL: I asked that the corporation might be heard about that subject when the other matter comes up instead of being here now. They are not prepared to go into the matter to-day.

Mr. Justice MACMAHON: I suppose the question of the land owned by the corporations is so intimately associated with the other matters in which they are interested that it would be somewhat difficult to sever them.

The CHAIRMAN: Perhaps you would undertake, Mr. Kingsmill, if we do what you suggest to put an advertisement of some kind indicating that that subject will be dealt with at a particular time.

Mr. KINGSMILL: Certainly.

The CHAIRMAN: It would seem that that would get over the difficulty that has presented itself to my mind, but I do not think we should discuss any subject here without everybody who is interested in that particular subject having an opportunity of knowing that it was to be discussed and heard.

Mr, KINGSMILL: That is quite right, I will make that advertisement.

The CHAIRMAN: Then that is understood, Mr. Kingsmill, then we are prepared to hear anybody else on this subject.

Mr. F. MACKELCAN, Q. C. I appear here representing the Ontario Municipal A880ciation, who have had several meetings and have discussed these subjects very fully and have embodied their views in a series of resolutions, and I desire to present those views from time to time in the course of investigation as embodying what representatives of the various towns and cities have agreed upon as their views of proposed amendments and changes in the Assessment Act.

The CHAIRMAN: What is this Association?

Mr. MACKELCAN: It is an association composed of the representatives of all the leading ciiies and towns of Ontario. The mayors of the cities or their representatives are members of the Association. They have met once in Hamilton, once in Toronto, and once in London. They meet annually or oftener as occasion requires.

The CHAIRMAN: They are associated for what purpose?

Mr. MACKELCAN: For the purpose of considering and advising upon the provisions of the Municipal and Assessment Acts as the united wisdom of the representatives of all these different municipalities may consider desirable in the public interest.

The CHAIRMAN: Their object is the improvement of municipal law?

Mr. MACKELCAN: Yes, and the members of it are mostly men of experience, not only the mayors of the different cities for the time being, but the permanent officers such as the Assessment Commissioners, Clerks, and sometimes the Treasurers of the Municipalities who have had some of them, almost life long experience on this subject and are able to bring to bear upon them the benefit of that knowledge derived from constant dealing with these matters.

The CHAIRMAN: Then you have something to propose with reference to the first subject?

Mr. MACKELCAN: Yes, sir, but gentlemen are here, I understand, representing the Single Tax, and those representing the present system of taxation would be very glad to hear what they have to say before we state our views to the Court. They desire to speak and we would be very glad to hear them.

The CHAIRMAN: Very well, who are the gentlemen ?

Mr. MACKELCAN: Mr. Thompson.

Mr. ALAN O. THOMPSON: Mr. Douglas has special information and he will be here in a few minutes.

CHAIRMAN: Mr. Douglas now desires to address the Commission. We shall be glad to hear him.

W. A. DOUGLASS, B. A.: Mr. President, and gentlemen of the Commission, what I want to say this morning I was anxious to illustrate by means of some diagrams. The caretaker promised to have an easel for me this morning, but unfortunately he has not come, and if he does not come, I may be a little embarrassed to make myself plain, because it is about as impossible as to teach Geometry without having diagrams. The first point I want to deal with in this paper, which I drew up so that we could follow consecutively so, was to show the discrimination of our present method of taxation. Two men take separate lots. The one converts that wilderness into a farm or into a garden; the other man holds his lot on speculation. At first the assessment is equal-a single tax on land value; but as soon as the farmer clears his farm he finds that he has to pay an increased taxation. He then puts up a fence-another tax. He then erects himself a little home-another tax. He puts up a barn to save his crop-another tax. He takes and drains that piece of swamp-another tax. He plants an orchard-an additional tax. He digs a well-another tax. He buys some implements-the law says he must again have an increase in his taxation. He tears down the shanty that he first built and he puts up something that he would call a home-and then the law says that his taxation is to be increased again. He tears down the old snake fence in front and puts up a beautiful picket ferce, he puts a line there, he plants shade trees, he adds to the beauty of the country-and the law says he must be taxed again. All this time the speculator escapes with the one tax; but on the man who improves the country we put the multiplicity of taxation. So that it is not at all uncommon to see one man retarding the growth of the country and the other man advancing the growth of the country and adding to its prosperity, and for every improvement that the settler makes his tax is increased. So that the present law acts in this way, that the better the man does for the country the worse the country does for him. Now we find the same discrimination in the cities. Suppose I come to this city with $50,000 and another man comes along with $50,000. He asks me what I am going to do with my means; I ask him what he is going to do. "Well, he says, "I am going to get a piece of land, on that I will erect some kind of industry; I will either build houses that people may have habitations or I will put up a factory in order that goods may be produced that we may add to the prosperity of the country I tell him that I will not do anything of the kind; I will secure some land on a location that I think is well situated, and I will wait till he and others and perhaps hundreds and thousands of others build up that little place until it becomes a great city; and without making the first improvement I may grow into an immense fortune, while the man who makes the improvement, who builds up the commerce, and employs labour, who uses his utilities as he should use them for the prosperity of humanity, for every improvement that he makes and for every pound of goods manufactured we increase his taxation. So that whether it be on the farm or whether it be in the city, we have that discrimination against the man who is industrious and productive, the man who uses his best brain and his best brawn for the welfare of humanity, and we tax him as though he were an enemy of humanity; while the man who produces nothing but stands in the way of pro

gress of humanity whom we favor by keeping his taxation low all the time. So that there we have that extraordinary discrimination, that whenever a man goes to make an improvement, then we send the assessor to increase his taxation ; but let a man stand in the way of the progress of humanity-as did the Canada Company a great many years,—and by our system of assessment we give to those parties the greatest encouragement we can. The man who converts a desert into a garden, who makes the country bloom with fertility who employs labour and who spends his energies, his muscle and brain to bring forth pros, perity, against that man the taxes are turned as though he were an evil to be suppressed, while the man who turns the garden into a desert, who brings forth no crop, who employs no industry, who uses land for extortion that he may secure a crop without raising a crop, that he may gain product without producing, our taxation is all in his favour.

Another factor I wish to call attention to is the manner in which we assess for public improvements. A few years ago we built in this city a bridge across the Don, bringing a man east of the city easy access into the city. To the west we built subways under the railways so that we brought Parkdale into easy access. Bridges were built across the ravines so that that portion of the city was brought into easy access. These great improvements added vastly to the taxation of the city, so that on the citizens in general it meant 8 burden of taxation; but we all know the fortunes that were made in the speculations in the east and the speculations in Rosedale and the speculations in Parkdale. One man I heard of made $80,000 there in one year; and we know the speculative boom it gave rise to, which led to the awful disaster thereafter in the city. So that to make these lands accessible is a burden to the city in general, but it lifts other men away into great fortumes, so that the burden of one man becomes the fortune of another man; and in the large cities we see that same discrimination; we see that same defective taxation. When the settlers came first to this city there was no such thing as ground rent, but with every accretion to the population the ground rent has increased until today the ground rent in the centre of this city ranges from a dollar to two dollars or thereabouts per square foot, equivalent to 50 or 100 thousand dollars per acre per annum. Now we put two things parallel; every year that the population has been increased the taxation bill has been larger; every year the city has grown, the rent has been larger; therefore the increase of the city has had to bear two burdens at the same time-one to maintain government, another to maintain the ground lord. So that here we have the present method of taxation, instead of being equitably distributed so as to fall on the shoulders of every man, it crushes one portion of society down beneath the double burden and it lifts another portion to fortune continuing to the end of all time if our taxation is arranged as it is at present. I think if we investigate the cause for the present method of taxation, it will arise very largely from this idea that in this world there is only one value; that the values are all homogeneous-no difference whatever between them; and I scarcely wonder at that when I look over all the text books on economics nearly every one without exception teaching our boys that values are all alike, so that in every legislature, in every municipality we treat all values as if they were of exactly the same character. Now let us trace the growth of any city until we see the difference between two different things. When the first family goes into a city they build one house. For ease of calculation we will say it has a value of $1,000. Two families build two houses worth $2,000; 100 families 100 houses worth $100,000; and so on until we have the value of the dwellings in this city about 50 or 60 million dollars. One house $1,000, 2 houses, $2,000—the increased value there means that we have more houses; and the fact that we have an assessment of houses at the present time upwards of $50,000,000 in this city is an indication that we have far more houses than they have in Mimico, more than they have in Hamilton, or more than they have in any smaller town. So increased assessment means increased abundance of the products of industry. Parallel with that there is another movement going on in society all the time. I suppose there is scarcely a labourer ever goes to do a job in the world but his brain begins to wonder, "How can I do that more easily?" And it is that ambition in the heart of man which has lifted humanity from the condition of barbarism until we see the triumphs of science of the present day-"How can I do that work faster and easier?" From that ambition we have the steam engine, we have our factories, we have the marvellous production of to-day; so that when they go to work to produce they invariably aim at two things, How can we make them more abundant? and

How can we make them cheaper and cheaper? If time permitted I could give you a remarkable example of how these principles work, but the general statement will be unquestioned because we have simply to open our eyes and see it. Therefore if we watch labour when producing, we find it always actuated by these two motives-abundance and cheapness. Now suppose I were to draw a map of the city of Toronto of the area we have at present, and we imagine the first settler landing at the bay there, there was all the land any man wanted. Then the population increased a hundred times there was a hundredth part less. If we go to the most dense part of the population we find a thousand people crowded on to one acre. Now when we look at the production of houses, of furniture, of railroads, we find that it is always multiplication-more and more abundance. When we come to land we find it is always division and subdivision and further subdivision. By the very necessity of nature we must use less and less and less land. That is the one thing we have to economize; but as land is growing less and less and less, its value is advancing to higher and higher figures until they become sometimes marvellous. In this city the highest assessed value is $3,000 per foot frontage, equivalent to somewhere between one million and a million and a half dollars per acre. The highest rental I hear demanded in this city was equivalent to $96,000 per acre per annum, or in round numbers $100,000 per acre per annum. So that here we have movement in the growth of the city, 80 far 88 the land is concerned, which is continually a movement to greater and greater and greater scarcity and greater and greater dearness. So that in society we find these two movements always present at the same time in every city-that labour makes abundant goods, more abundant and more cheap; while population inevitably makes land more dear and more scarce. Here is a movement to greater abundance greater cheapness; on the other hand to greater scarceness and greater dearness. The one movement is a movement all the time to greater and greater riches-riches in goods; the other movement is a movement all the time to greater and greater poverty in the land. Now that is one difference. We can see at once that that difference is not a difference in degree; it is just the same difference that we have in multiplication and division, between asset and liability, between debit and credit. But more important difference yet, the one that I would more particularly impress, would be the source of there two values. Suppose I ask the value of this house. A few years ago it was stone in the quarry, it was lumber in the woods, and under those circumstances the value might be put at perhaps two or three hundred dollars.

CHAIRMAN: I think, Mr. Douglas, you are stating a great many varied general propositions to us that are quite unnecessary to be stated to us. We apprehend the greatest part of what you have said now.

Mr. DOUGLASS: Do you wish me to condense my remarks?

THE CHAIRMAN: Yes, I do; our time is limited and we have a very large field to go over, a great many gentlemen to hear, and I hope you will have some consideration for us. You may take it for granted that we apprehend those general principles that you have stated. I do not refer to your opening remarks, which were quite pertinent and proper, but you are laying a very broad foundation with matters with which we are all familiar.

Mr. DOUGLASS: The fact now to which I want to call your attention, and which I think is essential to this discussion, is this fact: that when we look at the buildings, the goods, the machinery, the railroads, and ask, Whence the value of those goods? We know that they came only by the hand of industry and by the brain of skill. But if I ask, Whence came the value of the land in the centre of this city, the value of the land in Chicago or New York? Why is it that New York has a higher value than Chicago, Chicago than Toronto, Toronto than Hamilton, Hamilton than Mimico? There we come to a very great and important truth. We know very well that the value of the land in those locations depends, not upon the knowledge and skill or the thrift or the ability of the owner of those lands, but upon the presence of the community. Now, I emphasize that one fact. The queries at once indicate the essential difference between the source of the value of labour products and the value of the land. The first is due to individual energy, the second is due to communal organization. When the fire swept away the buildings of Chicago, it annihilated the value of the products of industry, but it still left unscathed the value of the land. lf, therefore, we raise the question as to the proper