_If there is a rise in wages, rents are able to move forward because the workers can afford to pay a little more_.

If the opening of a new railway or a new tramway, or the institution of an improved service of workmen's trains, or the lowering of fares, or a new invention, or any other public convenience affords a benefit to the workers in any particular district, it becomes easier for them to live, and therefore the landlord and the ground landlord, one on top of the other, are able to charge them more for the privilege of living there." (Italics mine.)[15] But we cannot believe that the government of Great Britain, which draws so much of its support from the wealthy free trade merchants and manufacturers has been persuaded to adopt this new principle so much by the argument that a land rent weighs on the working classes, though it is true that the manufacturer may have to pay for this in higher _money_ wages, as it has by that other argument of Mr.Churchill's that it weighs directly on business.
"The manufacturer proposing to start a new industry," he says, "proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging far more than any foreign tariff in his export competition; and the land values strike down through the _profits of the manufacturer_ on to the wages of the workman.

The railway company wishing to build a new line finds that the price of land which yesterday was only rated at its agricultural value has risen to a prohibitive figure the moment it was known that the new line was projected; and either the railway is not built, or, if it is, it is built only on terms which largely transfer to the landowner _the profits which are due to shareholders_ and the privileges which should have accrued to the traveling public." (My italics.)[16] No doubt Mr.Churchill's failure to mention shippers was inadvertent.
It was a practical application of these business principles and chiefly in the interest of the employers, manufacturers, investors, and shippers, that the State decided, as a first step, to take 20 per cent of all the increase in land values from the present date and to levy an annual tax of one fifth of one per cent on all land held for speculation, _i.e._ used neither for agricultural nor for industrial nor building purposes.
The collectivist policy, that governments should undertake to reorganize industry and to develop the industrial efficiency of the population, is a relatively new one, however, and where non-Socialist Liberals and Radicals are adopting it, they do so as a rule with apologies.

For while such reforms can be considered as investments which in the long run repay not only the community as a whole, but also the business interests, they involve a considerable initial cost, even beyond what can be raised by the gradual expropriation of city land rents, and the question at once arises as to who is to pay the rest of the bill.

The supporter of the new reforms answers that the business interests should do so, since the development of industry, which is the object of this expenditure, is more profitable to them than to other classes.